Shares in SFS Group experienced a decline on Tuesday following the company’s downward revision of its guidance for 2023. However, despite the effects of destocking in its end markets, the company reported higher earnings and sales for the first half of the year.
At 0803 GMT, shares were down 3.7% at CHF108.60, having reached CHF106.20 earlier in the trading session.
The Swiss fastener company now expects full-year sales to range between 3.1 billion and 3.3 billion Swiss francs ($3.60 billion-$3.84 billion), as compared to its previous revenue forecast of CHF3.2 billion to CHF3.3 billion. It also anticipates an earnings before interest and taxes margin of approximately 12% in 2023, adjusting its mid-term guidance from 12%-15%.
SFS cited higher costs and uneven capacity utilization as contributing factors that affected profitability in the first half of the year.
For the January-June period, the company achieved a net income of CHF131.0 million, up from CHF129.6 million during the same period in 2022. Earnings before interest and taxes also rose to CHF189.9 million from CHF162.9 million.
SFS’s sales for the first half amounted to CHF1.57 billion, a significant increase from CHF1.22 billion in the previous year, primarily due to the acquisition of Hoffmann in May 2022.
To streamline its operations, the company has planned an internal reorganization that involves integrating specific areas of its riveting division into its automotive and industrial divisions based on their respective end markets. Additionally, it will merge its industrial and medical divisions. These changes will take effect at the beginning of next year, with Urs Langenauer set to replace Alfred Schneider as the head of SFS’s expanded automotive division.
