Datwyler “cautiously optimistic” despite 33% decline in earnings

Altdorf, Switzerland – Datwyler Group has seen a 33% year-on-year decline in annual earnings (EBIT) to CHF80.2 million (€85 million), due mainly to a rationalisation programme launched in the final days of last year. 

Net revenue for the full year fell 3.8% to CHF1.10 billion, compared to CHF1.15 billion reported the year before, Datwyler announced 6 Feb.

Datwyler linked the earnings decline to the “one-off costs” associated with the ForwardNow programme which had a negative impact of CHF37.9 million on the results in the reporting year. (ERJ report)

Over the medium-term and in a normal operating environment, the Swiss group said it expected revenue growth “in the higher single-digit percentage range and an EBIT margin of 17% plus.”

In light of market forecasts, Datwyler said it was “cautiously optimistic and expects to see a continuous increase in revenue and profitability.”

In terms of sales, Datwyler said it experienced “a weak environment” in four out of five of its relevant markets and a negative currency impact of 2.4%.

In the 'healthcare solutions' segment, customers continued reducing their safety stocks last year, leading to a 5% revenue decline to CHF446 million.

The strongest impact came from the loss of revenue from high-margin components for Covid-19 vaccines, said Datwyler.

Due to lower demand and negative currency effects, earnings for the segment fell 17% year-on-year to CHF61.8 million before being adjusted for rationalisation, Datwyler noted.

However, the Swiss group said it was “well-prepared for an expected market recovery” in the health solutions segment, having optimised processes at its production sites and reduced the complexity of workflows.

Amid a “largely weak” market environment, the 'industrial solutions' business reported a 27% decline in earnings to CHF33.2 million, on 3.4% lower revenue of CHF664.8 million in 2024.

Here, Datwyler said the global production of passenger cars was down slightly during the year and volume growth in battery electric vehicles was slower than originally expected.

In addition, the oil and gas industry was dominated by high levels of uncertainty and caution ahead of the US elections.

Initially, Datwyler said the segment posted an increase of 22% in earnings to CHF56 million, but this was reduced to CHF33.2 million due to the transformation programme.

As for the 2025 outlook, Datwyler said it expected “a gradual improvement” in the market environment.

“The healthcare solutions business area is seeing a gradual recovery in incoming orders and is confident that the low point in customer destocking has passed,” it said.

For automotive parts, Datwyler said most forecasts indicate that there will be slight growth in car production.

However, it added, growth in the area of hybrid and battery electric vehicles will be “well above the market average, especially in China.”

“The mobility business unit has significantly increased the proportion of newly acquired customer projects for electrified applications particularly in the important Chinese market,” the Swiss group said.

In the connectors business unit, it added, “the proportion of attractive high-voltage applications in new projects has increased strongly.”

Given “the new US government’s latest position”, Datwyler said it expected to see rising demand from the energy industry.

“Issues such as general economic trends… and increasingly protectionist policies of the new US government are uncertainty factors,” said Datwyler.

However, with its own production sites in Asia, Europe and Americas, the group said it was “well positioned for this scenario [the introduction of trade barriers].”