So far, companies in Switzerland have hardly expected their business activities to be adversely affected in the current year. The optimism is contrasted with sharply fallen share prices.
The CEO of SFS, Jens Breu, does not expect any impairment because of the war in Ukraine.
The unexpected war in Ukraine is also putting Swiss companies’ crisis management to the test. Can the previous expectations – mostly characterized by great confidence – regarding the course of business still be met? How are customers reacting to the new environment, and what is happening to the already strained supply chains in industry in many places?
Detailed forecasts – despite everything
Uncertainty has increased noticeably. But unlike when the pandemic broke out two years ago, hardly any Swiss industrial group seems willing to openly admit this to the public. Companies such as OC Oerlikon, Bucher Industries and VAT, which held their balance sheet media conference last week, gave surprisingly detailed information on the expected course of business – with a view to both sales and the development of profitability. And optimism continued to dominate everywhere.
The fact that Russia and, to an even greater extent, the Ukraine, are insignificant as sales markets and production locations for Swiss industrial companies probably contributes to the demonstratively expressed composure. The share of group-wide sales is only in the low single-digit percentage or even in the per thousand range.
Schweiter dances out of line
On Friday, two other industrial groups, SFS and Schweiter Technologies, commented on the expected course of business. But while the management of the SFS Group, which specializes in the manufacture of precision metal parts, also dared to give a concrete outlook, Schweiter’s management did not want to commit itself to expected sales and the operating margin, even in response to inquiries from media representatives and analysts. Anyone making a forecast in the current environment is reading coffee grounds, said Heinz Baumgartner, head of the Steinhausen-based specialist for products made of composite materials.
The experienced manager, who will hand over his position to Roman Sonderegger next May after almost 14 years, justified his reluctance by saying that at the moment no one could assess the effects of the war. Who knows whether there will be further shortages of raw materials, additional increases in material prices and further disruptions in the supply chains.
As a manufacturer of facade elements, Schweiter uses a lot of aluminum, for example. At the moment there is a certain supply and no supply problems, but with the best will in the world he cannot estimate whether this will also be the case in the future, said Baumgartner.
Last year, Schweiter increased sales by 6 percent to CHF 1.2 billion. At CHF 111 million, the second-best operating result (EBIT) in the company’s history was achieved. In the previous year, this figure was almost CHF 140 million, thanks in part to booming business with plexiglass panes to protect shop employees or receptionists from coronavirus infections.
SFS trusts in consumers’ willingness to spend
With an EBIT margin of 15.9 percent, last year’s performance at SFS is also impressive. For the current year, the company is targeting a value of 13 to 16 percent with sales growth of 3 to 6 percent. The CEO Jens Breu does not expect any impairment due to the current geopolitical situation. Metal parts from SFS are used in cars, smartphones and construction, among other things. Consumer confidence is crucial and this is intact, said Breu.
Investors in the Swiss industrial sector, on the other hand, no longer seem to be as comfortable as in many other sectors. SFS shares fell more than 8 percent on Friday. Schweiter securities were downgraded by more than 3 percent. Compared to last year’s highs, the prices of the two titles have fallen by 18 and 33 percent respectively.