Fri, Feb 9th 2024
Ems-Chemie navigates a tough year with declining sales and profits amid cautious consumer behavior and a robust Swiss franc, adjusting its shareholder distributions.
Ems-Chemie encountered significant headwinds in 2023, marked by a downturn in consumer confidence and the impact of a strong Swiss franc. Under the leadership of SVP National Councillor Magdalena Martullo-Blocher, the company disclosed a 10.4 percent drop in sales to CHF 2.19 billion. When adjusted for currency fluctuations, the decline stood at 4.6 percent.
A substantial portion of the company’s revenue stems from its polymer products, which are essential in the automotive sector and contribute to around 60 percent of Ems-Chemie’s turnover.
These polymers are crucial in manufacturing various products, from car components to ski boots and gaming consoles. Despite resolving the automotive industry’s chip shortage, Ems-Chemie noted a reduction in customer inventories driven by decreasing orders.
Coupled with the strong Swiss franc and general market hesitancy, it overshadowed gains from new business ventures.
The company witnessed a decline in profitability for the second consecutive year, with operating profit (EBIT) falling 19.4 percent to CHF 493 million, influenced by economic and currency challenges. This decline also affected the EBIT margin, which dropped by 2.5 percentage points to 22.5 percent. Net profit experienced a 13.8 percent reduction, settling at 461 million francs, leading to a dividend payout of 16.00 francs per share, down by 4 francs from the previous year.
Looking ahead to 2024, Ems-Chemie anticipates net sales to hover around the previous year’s levels, with a slight improvement in the operating result (EBIT). However, the company predicts a challenging economic landscape, especially in the year’s first half, attributed to subdued consumer sentiment in Europe.
In response to these market conditions, Ems-Chemie is broadening its market engagement efforts, boosting its technical sales and development teams across all regions by over 120 employees. This expansive technical sales initiative resonates well with customers, indicating early successes.
Furthermore, Ems-Chemie is advancing its investment program, initiated in 2021, without deviation. Notably, a new large-scale plant boasting significantly reduced energy consumption has recently commenced operations at the main facility in Domat/Ems, aligning with the company’s strategic focus on efficiency and sustainability.
©Keystone/SDA
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