SFS expects the 2019 market to be volatile given trade tensions between the US and China and the recent slowdown in global economic activity. A healthy project pipeline means it still expects top-line growth of 3-5% in 2019. It also expects negotiations on strategic collaboration with Triangle Fasteners Corporation in the USA to conclude shortly.
Taking into consideration the uncertain economic situation, SFS expects the adjusted EBIT margin for financial 2019 to be in a range from 13-15%. The Group will incur one-off costs for the commissioning of a new manufacturing platform in Nantong, China but also expects accounting gains on the disposal of real estate.
SFS Group achieved solid sales growth of 6.5% in the 2018 financial year, lifting its consolidated sales to CHF 1,739 million. Growth for the period was broadly based and the Fastening Systems segment showed the strongest development. Growth in the second half was slower than in the first half, partially due to a strong comparison base and partially due to an unexpected decline in demand during the fourth quarter, especially from customers in the automotive and electronics industries.
Group operating profit increased by 4.2% to CHF 243.1 million. Profitability improved considerably during the second half (EBIT margin of 14.4%) compared to the first half (EBIT margin of 13.6%). The EBIT margin for the year stood at 14.0%, slightly below the comparable year-ago margin of 14.3%. This contraction is primarily attributed to sales mix effects arising, for example, from the stronger growth rates of the Fastening Systems and Distribution & Logistics segments and the strong decline in demand during the final quarter of the year. Net profit for the year rose by 21.9% to CHF 193.9 million, which corresponds to 11.2% of net sales.
Since October 2018 SFS Group has been engaged in discussions on a strategic collaboration with Triangle Fasteners Corporation in USA and says the negotiations are well advanced with final results expected in the next few weeks.
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 15 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.