Datwyler launches “comprehensive" action plan to revive business growth

Altdorf, Switzerland – Datwyler is launching a ‘business transformation’ initiative for 2025-2027, the Swiss rubber-based products maker said in an 18 Dec announcement to the Swiss Exchange.

Called ForwardNow, the programme is intended to “accelerate” growth in sales and earnings: improving annual profit by around CHF24 million (€26 million).

The four-point plan is in response to “persistently challenging markets, rapidly changing customer needs and technologies, as well as geopolitical uncertainties.”

In particular, said Datwyler, over the past two years demand in the healthcare market has remained “subdued due to the reduction of safety stock by customers, despite intact long-term growth trends.”

Furthermore, recovery in the automotive market and volume growth in battery electric vehicles are progressing more slowly than originally expected, the statement continued.

Datwyler aims to address these challenges by reducing its cost base: “rightsizing and realigning production and industrialisation capacities to meet the needs of specific regions and markets.”

The Swiss group ’s sales organisation will, meanwhile, be systematically directed towards market segments and customer groups offering profitable growth opportunities.

Another programme element is to focus the portfolio on high-value products and innovations that enable Datwyler to “reduce internal complexity and deploy its resources more effectively.”

Finally, Datwyler will “unlock significant synergies through a gradual adjustment of its organisational structure, the introduction a unified process framework, and company-wide standards.”

The transformation programme is expected to result in one-time costs of around CHF38 million in fiscal 2024, of which around CHF9 million will be attributed to “extraordinary impairments”.

Datwyler added that it anticipates cumulative profit improvements of about CHF52 million over the course of the three-year programme.

For fiscal 2024, Datwyler forecast sales to come in “slightly” down year-on-year, though earnings (EBIT) margin, adjusted for one-time costs, is expected to be slightly above the prior year’s figure.

The group said it will provide further explanations regarding the transformation programme at its media and investor conference on 6 Feb 2025, with the presentation 2024 annual results.

For its fiscal 2023, Datwyler reported earnings down 20% year-on-year to CHF 120.4 million on sales about level at CHF1.1 billion (ERJ report).