Oerlikon delivers solid profitability
In the second quarter of 2015, Oerlikon GroupÂ´s order intake increased by 1% to CHF 731 million compared to CHF 724 million in Q2 2014. Â¨We delivered solid profitability for the second quarter despite an increasingly challenging market environment.
In the second quarter of 2015, Oerlikon GroupÂ´s order intake increased by 1% to CHF 731 million compared to CHF 724 million in Q2 2014.
Â¨We delivered solid profitability for the second quarter despite an increasingly challenging market environment. In the first half of the year, we increased our service revenues, strengthened our footprint, built up our business in adjacent markets and kept up our innovation momentum. We have progressed with our strategic initiatives in line with our strategy that is fully endorsed by the newly composed Board of Directors,Â¨ said Dr Brice Koch, CEO of the Oerlikon Group. Â¨One year after the acquisition of Metco, the Surface Solutions Segment is now our largest Segment. After successfully integrating the core functions and key operations of its two brands, Oerlikon Balzers and Oerlikon Metco, business at the Segment is moving toward normal operations. As a Group, we will continue to focus on increasing the value we provide to our customers with our technologies and services, and thereby sustain our profitability.Â¨
Oerlikon Group second quarter review
In the second quarter of 2015, the GroupÂ´s order intake increased by 1.0 per cent to CHF 731 million compared to CHF 724 million in Q2 2014. The GroupÂ´s sales amounted to CHF 781 million in Q2 2015, at the same level as in Q2 2014. At constant exchange rates, sales increased by 5.9 per cent to CHF 827 million. Group EBITDA stood at CHF 132 million, correlating to an EBITDA margin of 16.9 per cent. This marks the 14th consecutive quarter where the EBITDA margin exceeded 15 per cent. The solid operating profitability benefited from the GroupÂ´s ongoing operational excellence initiatives and prudent cost management. EBIT for Q2 2015 stood at CHF 86 million (Q2 2014: CHF 92 million). The second quarter performance resulted in a rolling 12-month Oerlikon Group ROCE (Return on Capital Employed) of 10.4 per cent.
In the second quarter, Oerlikon succeeded to extend the maturity of its syndicated credit facility to June 2017 at adjusted favorable interest rates that reflect both the current interest rate environment and the improved corporate risk profile of the Group.
The Surface Solutions Segment recorded strong top-line results and profitability, attributed to the Metco acquisition and also to underlying organic growth. The Manmade Fibers Segment stabilised order and sales for Q2 2015 to around the same levels seen in Q1 2015, and maintained good operating profitability at mid-teen percentages for the third consecutive quarter despite the ongoing market normalization. The Drive Systems Segment reported orders, sales and operating profitability below prior-year level due to ongoing weakness in the agriculture, mining and oil & gas markets, but sustained its operating profitability sequentially thanks to operational excellence initiatives gaining traction.
The Vacuum Segment increased order intake year-on-year, but sales and operating profitability were lower compared to the previous year due to more demanding market conditions and a step-up in investments in operational excellence initiatives.
Oerlikon Group half-year overview
For the first half of 2015, order intake increased by 8.7 % to CHF 1 524 million while sales increased by 4.8 % to CHF 1 563 million year-on-year. EBITDA came in at CHF 263 million, corresponding to a margin of 16.9 % while EBIT stood at CHF 172 million. Net income amounted to CHF 87 million.
In the first six months of 2015, Oerlikon successfully closed the divestment of the Advanced Technologies Segment, focusing the Group on its core businesses. It also strengthened its global reach and support for customers through its own new sales and services sites or distributor sites in the Americas (Canada, USA, Argentina, Chile, Colombia and Peru)