As expected, net sales in the first half year were impacted by a temporarily reduced demand for wind blades in China in 2021 as a result of the expiry of the Chinese wind feed-in tariffs by year-end 2020, and by an accelerating decrease in balsa demand and price. The Marine and Industrial markets have rebounded strongly to pre-COVID-19 levels and Aerospace has stabilized at low levels.
Composite Materials achieved net sales of CHF 118.2 million for the first half of 2021. This represents a decrease of -12.9% at constant exchange rates compared to the first half of 2020. The decrease is mainly due to lower Wind demand in China and globally reduced volumes and prices in balsa while Marine and Industrial markets are back to pre-pandemic levels. While the company believes the slowdown in China is temporary, it also assumes that the trend to replace balsa by PET is permanent and adjusts its balsa operations accordingly.
Kitting recorded net sales of CHF 95.2 million for the first half of 2021. This is a decrease of -13.7% at constant exchange rates compared to the first half of the prior year. Kitting net sales were also negatively impacted compared to prior year due to the slowdown in China as well as lower material pricing. In order to fully capitalize on its co-location synergies, Gurit is on track to relocate its entire Kitting operation from the U.S. to Mexico.
Tooling saw an increase in first half of 2021 net sales by 19.6% at constant exchange rates compared to the first half of 2020 to CHF 55.4 million. The strong growth is mainly due to the timing of orders of western wind turbine OEMs and blade manufacturers in the first quarter of this year, while for the second half-year the company anticipates a weakening of the tooling market in general and particularly in China.
Aerospace net sales in the first half of 2021 amounted to CHF 14.2 million; this corresponds to a decline by -23.7% at constant exchange rates compared to the first half of 2020. While the Business Unit faced a sharp decline compared to prior year's pre-COVID-19 levels in the first quarter, sales have stabilized at low levels, necessary cost adjustments have been executed and the Business Unit sees a sales increase of 6.0% compared to the second half of 2020.
NET SALES
|
First Half Year
|
in MCHF
|
HY 2021
|
HY 2020
|
Change in reported CHF
|
Change @ constant HY 2021 rates
|
Net sales by markets:
|
|
|
|
|
Composite Materials
|
118.2
|
134.1
|
-11.8%
|
-12.9%
|
Kitting
|
95.2
|
110.5
|
-13.9%
|
-13.7%
|
Tooling
|
55.4
|
45.8
|
20.9%
|
19.6%
|
Aerospace
|
14.2
|
18.2
|
-22.0%
|
-23.7%
|
Elimination
|
-24.3
|
-27.5
|
|
|
Total continued
operations
|
258.6
|
281.1
|
-8.0%
|
-8.5%
|
Discontinued
operations
(Composite Components)
|
0.0
|
2.1
|
-100.0%
|
-100.0%
|
Total
Group
|
258.6
|
283.2
|
-8.7%
|
-9.2%
|
|
|
|
|
|
Operating profit
|
18.6
|
31.3
|
|
|
Profit for the period
|
10.3
|
22.0
|
|
|
Operating Cashflow
|
19.3
|
25.6
|
|
|
Capital expenditures
|
13.8
|
11.8
|
|
|
Equity in % of total
assets
|
47.4%
|
38.5%
|
|
|
Profitability
Gurit reached an Operating
Profit of CHF 18.6 million with a margin of 7.2% which includes expenses of CHF 7.4
million to adjust the balsa footprint and consolidate the kitting operation for
America in Mexico. In addition, the company faced significant start-up costs
for its new PET extruder facilities. The Profit for 1HY of 2021 amounted to CHF
10.3 million and 4% margin of net sales. This equals to earnings per
listed bearer share of CHF 25.61 in 1HY 2021 (1HY 2020: CHF 47.13).
Cash Flow and Balance Sheet
Gurit achieved a Net Cash
Flow from operating activities of CHF 19.3 million (CHF 25.6 million
in 1HY 2020) mainly due to lower profit in 2021 compared
to 2020. Capital expenditures amounted to CHF 13.8
million during 1HY 2021 compared to CHF 11.8 million for the first
half of the previous year. Major growth capacity investments were
made in Mexico and India.
Outlook
For the year 2021, Gurit expects a revenue of
around CHF 500 million and an operating profit margin of around 8% including
restructuring charges. Adjusted for these one-time charges operating profit
continues to be expected in the range of 9-11%. The perspectives for renewable
wind energy remain positive.
After the strong wind market in 2020, Gurit
expects a transition period until the market continues to grow strongly again,
supported by major offshore capacity expansions globally and a strong domestic
China market. The long-term outlook remains unchanged however, driven by
increased demand for renewable energy and commitments from governments to reach
carbon neutrality targets.
Gurit to join WindEurope
As part of its commitment to driving innovation
and sustainability and to strengthen its position as key supplier to the Wind
Industry, Gurit joins WindEurope, a trade association that promotes the
development of wind energy with various innovation and sustainability
initiatives.
Online publication of Half Year Results and
media/analyst online conference
On Tuesday, August 17, 2021 Gurit Management
will discuss the results of the First Half-Year 2021 interim report in a public
webcast at 09:00 AM CEST. The presentation will be held in English and
will be accessible at www.gurit.com/Investors/Webcasts .
Under the same link an archived version of the
public webcast will be made available. Analysts and journalist are invited to
participate in the private Q&A conference call upon prior registration via investor@gurit.com
A Capital Markets Day for investors,
analysts and financial media representatives is scheduled to take place on August
31, 2021 in Zurich. Participants are kindly invited to register at https://gurit-event.com/
About Gurit
The subsidiaries of Gurit Holding AG,
Wattwil/Switzerland, (SIX Swiss Exchange: GUR) are specialized on the
development and manufacture of advanced composite materials, composite tooling
equipment and core kitting services. The product range comprises structural
core materials, fibre reinforced prepregs, formulated products such as
adhesives, resins as well as structural composite engineering. Gurit supplies
global growth markets such as the wind turbine industry, aerospace, marine, rail
and many more. Gurit operates production sites and offices in Australia,
Canada, China, Denmark, Ecuador, Germany, India, Italy, Mexico, New Zealand,
Poland, Spain, Switzerland, Turkey, United Kingdom and the United States.
www.gurit.com
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are protected by law.
Forward-looking statements:
To the extent that this
announcement contains forward-looking statements, such statements are based on assumptions, planning and forecasts at the time
of
publication
of this announcement.
Forward-looking statements always involve uncertainties.
Business
and
economic risks and developments,
the conduct of competitors, political
decisions
and other factors may cause
the actual results
to be materially
different
from the assumptions, planning and
forecasts at
the time of publication of this announcement. Therefore,
Gurit Holding AG does not
assume
any responsibility
relating to forward-looking statements contained in this announcement.