Oerlikon posts strong Q3 results with record level of order intake in Surface Solutions division
November 4, 2021
Oerlikon Group, Pfäffikon, Schwyz, Switzerland, has released its third quarter results, with total order intake increasing by 61% year over year to CHF 835 million, reportedly driven by the record level of order intake in Surface Solutions and the group’s polymer division. Sales improved across all regions, rising 17.2% to CHF 695 million. At constant exchange rates, group sales increased by 15.7% to CHF 686 million.
Operational EBITDA for the third quarter improved by 25.9% to CHF 117 million, and the EBITDA margin improved by 110 basis points to 16.8%. Q3 operational EBIT was CHF 61 million, or 8.7% of sales (Q3 2020: CHF 42 million; 7.1%). The margin improvements are attributed to higher sales and the benefits of cost actions executed by the group.
Group Q3 EBITDA was CHF 115 million, or 16.6% of sales (Q3 2020: CHF 88 million, 14.8%), and EBIT was CHF 58 million, or 8.3% (Q3 2020: CHF 36 million, 6.0%).
“Our robust Q3 results confirm our strategy of focusing on sustainable innovation, profitable growth and disciplined capital allocation,” stated Dr Roland Fischer, CEO, Oerlikon Group
The current environment is facing challenges arising from supply chain disruptions, the energy crisis in China, the COVID-19 pandemic and political tensions. Oerlikon is said to be actively managing and mitigating the impact from these challenges, supported by its broad customer and supplier base worldwide. Based on the strong Q3 2021 results, Oerlikon confirms its group guidance for the full year 2021, with expected sales of around CHF 2.65 billion and an operational EBITDA margin of approximately 16.5%.
Oerlikon Surface Solutions
Q3 order intake increased by 29% to CHF 332 million and sales increased by 15% to CHF 323 million. This is noted as down to the division’s ability to further capture business alongside year-over-year market recovery.
Operational EBITDA improved notably by 41.5% and the EBITDA margin by 340 basis points, reportedly driven by positive operating leverage and continued cost control. Operational EBIT was CHF 19 million, or 6% of sales. The division’s unadjusted Q3 EBITDA was CHF 58 million or 18% of sales (Q3 2020: CHF 37 million, 13.1%). EBIT was CHF 18 million or 5.5% of sales (Q3 2020: CHF -6 million, or -2%).
In the third quarter, Surface Solutions saw an increase in demand across end markets, although, as anticipated, supply chain bottlenecks impacted some markets (e.g., automotive). Despite that, the division noted continued recovery in the automotive sector, tooling and general industries, as well as an initial soft recovery in aerospace, compared to the previous year.
Supply chain disruptions are expected to extend into the first half of 2022 and result in some delays and postponements of projects in the short term, though the division is actively taking action to mitigate the impacts of these challenges. Over the medium to long term, the growth prospects for the businesses remain intact.
The report also noted that Dr Helmut Rudigier, Oerlikon CTO is planning to retire at the end of 2021. Effective January 1, 2022, the Executive Committee will consist of five members: Dr Roland Fischer, CEO; Philipp Müller, CFO; Anna Ryzhova, CHRO; Dr Markus Tacke, CEO, Surface Solutions; and Georg Stausberg, CSO and CEO, Polymer Processing.
In an effort to align R&D closer with market and customer needs, the division CTOs will also lead and manage the R&D and technology innovation of their respective divisions from January 1, 2022, onwards.
