Sealing Solutions unit bolsters Datwyler's first half results

ALTDORF, Switzerland—Datwyler Group's Sealing Solutions division posted a strong first half that helped to counter difficulties elsewhere in the group.

Datwyler Holding A.G. posted a 2.1 percent year-on-year drop in EBITDA to $111.3 million, on first-half net sales of $663.8 million, 3.8 percent higher than in the same period last year.

Over the six months to June 30, Datwyler said an acceleration in profitable growth at its Sealing Solutions division largely offset declines in its Technical Components division.

"Demand for sealing components within the automotive industry in China and for prefilled syringes in the health care market segment proved to be particularly dynamic," the Swiss group reported Aug. 11.

On the other hand, Datwyler's Europe-focused Technical Components division suffered a drop in revenue caused by "persistently weak" demand in the business-to-consumer segment.

"The Datwyler Group is growing profitably and is on track for the year as a whole," CEO Dirk Lambrecht said in a statement. "Despite higher raw material prices and a drop in revenue at our subsidiary Nedis, we managed to keep operating profitability at the previous year's level."

At the Sealing Solutions division, net revenue rose 9.7 percent to $432.8 million, while the operating result (EBIT) increased 7.8 percent to $81 million, according to Datwyler's financial results.

"Higher raw material prices as well as spending to stimulate growth prevented profits from growing further at this juncture," the group said.

Datwyler's growth projects include the start-up of a new health care products plant in the U.S. and initial investments in the new mixing plants in the Czech Republic and Belgium.

"The construction of the new U.S. plant is on schedule, while certifications by customers in relation to the two new mixing plants are likely to be completed by the end of 2017," the firm said. "Additional capacity expansion measures are in the pipeline to encourage growth."

Datwyler noted that the automotive market segment had posted "very strong revenue growth," particularly in China. Market penetration of diesel vehicles with selective catalytic reduction technology is continually increasing, leading to a sharp rise in sales of sophisticated sealing components, the group said.

While the Technical Components division increased revenue in the core business-to-business segment, demand was down in the business-to-consumer segment. Overall, net revenue fell 5.8 percent to $231 million , while EBIT slumped to $1.54 million from the prior year's $9.5 million.

For 2017 as a whole, Datwyler expects to maintain first-half growth rates, and group net revenue to come in between $1.31 billion and $1.35 billion, and an adjusted EBIT margin to approach a 14 percent target.