In the first half of 2014, Swisslog increased order intake compared with the prior-year period to MCHF 298.3 (+13.2%) and net sales to MCHF 319.5 (+4.4%). EBIT rose 13.0% to MCHF 6.1, while the net result climbed 9.5% to MCHF 2.3. For the entire fiscal year, Swisslog expects net sales to be as much as 5.0% higher than the previous year and an EBIT margin of between 2.5% and 3.0%.
Swisslog performed as expected given the difficult economic environment in its main markets, although there were differences in performance between the two divisions. Swisslog Group’s high order intake from the second half of 2013 carried over into the first half of 2014 and increased 13.2% compared with the prior year (+16.6% in constant currencies) to MCHF 298.3. The order backlog was strong at MCHF 520.9 (+15.6%, or +18.8% in constant currencies). Net sales climbed 4.4% (+7.4% in constant currencies) to MCHF 319.5. Operating profit before interest and taxes (EBIT) rose 13.0% (+24.1% in constant currencies) to MCHF 6.1, while the EBIT margin increased to 1.9% (previous year: 1.8%). The net result for the first half of 2014 was MCHF 2.3 (+9.5%, or +23.8% in constant currencies).
Healthcare Solutions: headwinds continue in the US
The Healthcare Solutions division (HCS) continues to face difficulties in its main North American market. Hospitals remain reluctant to invest due to uncertainty surrounding the healthcare reform instituted by the Affordable Care Act and the general budget situation. The division’s order intake fell compared with the prior year to MCHF 91.5 (‑9.5%, or ‑5.7% in constant currencies). Net sales declined 7.0% (‑3.2% in constant currencies) to MCHF 98.0, while EBIT dropped 23.2% (‑18.8% in constant currencies) to MCHF 5.3. The division’s EBIT margin amounted to 5.4% (previous year: 6.5%). The Asia region and the Middle East continued to show impressive growth.
Warehouse & Distribution Solutions: maintaining momentum in order intake
The Warehouse & Distribution Solutions division (WDS) maintained its momentum from the final months of the past year and increased its order intake. All told, order intake rose 27.6% (+30.5% in constant currencies) compared with the prior-year period to MCHF 207.2. The healthy order intake and order backlog are starting to lift up net sales, which went up 10.6% (+13.1% in constant currencies) to MCHF 221.9. Unlike the previous year, additional project implementation expenses were not recognized during the period under review. In addition, Swisslog succeeded in collecting part of a receivable from its project business that had been written off long ago. Overall, it raised its EBIT from MCHF 1.7 to MCHF 4.7 (+176.5%, or +194.1% in constant currencies), and its EBIT margin from 0.8% to 2.1%. Most of its business growth was concentrated in the Asia-Pacific region and, to a lesser extent, North America. Market conditions in Europe, by contrast, remain challenging.
Further improvement expected in second half-year
Swisslog invested in the future despite the challenging environment. For example, it increased its workforce to 2 300 employees (+5.3%) in line with order and net sales growth, especially in the operational activities of WDS. It also invested heavily in software in order to further strengthen its solution and product portfolio.
Thanks to a healthy order backlog and fundamental market trends driving demand for automation solutions in both divisions, Swisslog expects the second half-year to be even stronger. Over the entire 2014 fiscal year, Swisslog expects net sales to be as much as 5.0% higher than the previous year and an EBIT margin of between 2.5% and 3.0%.