Monday 29. October 2012
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New focus on two divisions:
Sealing Solutions: combining the present Pharma Packaging and Sealing Technologies Divisions
Technical Components: current division offering leading online/catalogue distribution brands - Leading competitive and market positions providing a strong foundation for continued global growth
- Cabling Solutions Division to be sold to Pema Holding AG (majority shareholder of Dätwyler Holding Inc.) for CHF 95 million
- Cash inflow to be used for further growth in the Group
- Datwyler also planning to issue straight bond of approx. CHF 100 million to 150 million to fund additional growth
- Potential synergies to be realised within the Sealing Solutions Division (about CHF 10 million as of 2015)
Datwyler is streamlining its Group structure and will now focus on high-growth, high-margin businesses. To achieve this, the present Sealing Technologies and Pharma Packaging Divisions will be combined to form the new Sealing Solutions Division, while the current Cabling Solutions Division will be sold to Pema Holding AG (majority shareholder of Dätwyler Holding Inc.).
"By concentrating on the two divisions Technical Components and Sealing Solutions, Datwyler is consolidating forces and focusing its growth strategy on attractive markets", comments Paul Hälg, CEO of the Datwyler Group. "In both businesses, we will continue to expand our leading positions in current markets and enter new market segments in the medium term."
Cabling Solutions Division to be sold to Pema Holding
AG
Despite a difficult industry environment, Datwyler has
built up strong regional niche positions with Cabling
Solutions in recent years. In 2011, the division generated
net revenue of CHF 240.9 million and operating profit
(EBIT) of CHF 4.6 million (1.9% EBIT margin). From today's
point of view, Cabling Solutions has only limited potential
to further increase value within the Datwyler Group. For
this reason, the entire division will be sold to Pema
Holding AG for CHF 95 million. Being a private owner, Pema
is better placed to successfully develop and expand the
Cabling Solutions operations. Pema Holding AG will take
over all facilities and the entire workforce of the Cabling
Solutions Division. The operational management and Datwyler
trade name will also remain unchanged and ensure
continuity. Agreements to use the trademarks and for other
management services have been signed with Dätwyler Holding
Inc. Hanspeter Fässler will serve as Chairman of the new
Board of Dätwyler Cabling Solutions AG. He is also a
Director of Pema Holding AG and Dätwyler Holding Inc.
During a transition phase, the Datwyler Group's CEO and
CFO, Paul Hälg and Reto Welte, will also serve as Directors
of Dätwyler Cabling Solutions AG. Johannes Müller will
continue to head the Cabling Solutions business as CEO, but
will leave the Executive Management of publicly listed
Dätwyler Holding Inc. at the end of 2012.
Impartial valuation reports to set the price
As Pema Holding AG and Dätwyler Holding Inc. are related,
the two parties commissioned two impartial valuation
reports (KPMG and Deloitte) to set the price of the Cabling
Solutions Division. Those Directors of Dätwyler Holding
Inc. who also serve on the Board of Pema Holding AG
abstained from voting. In his capacity as the Bearer
Shareholders' Representative on Dätwyler's Board of
Directors, Ernst Lienhard considers the price to be
appropriate and fair for the publicly listed Group and
approved the acquisition by Pema Holding AG. The
transaction is not subject to any conditions and will be
completed on 31 December 2012. In the Datwyler Group, the
transaction will generate a cash inflow of CHF 95 million
and lead to a one-off accounting gain estimated at about
CHF 3 million in 2012.
Combining the Pharma Packaging and Sealing Technologies
Divisions
The Datwyler Group's structure will be further streamlined
by combining the two divisions Pharma Packaging and Sealing
Technologies to form the new Sealing Solutions Division.
The industrial logic behind the initiative to combine the
two present divisions is mainly to consolidate materials
and engineering expertise as well as manufacturing and
process skills. Over the years, the two divisions' factors
for success have increasingly converged. On the sales side,
both divisions hold leading positions, providing bespoke
products in the global markets addressed. Both divisions
are extremely quality conscious and have high-volume,
highly automated manufacturing processes. Added to that,
they have very similar supplier structures in procurement
of raw materials and production equipment.
Enhancing competitiveness and increasing profitability
The new Sealing Solutions Division operates its own
high-performance manufacturing facilities located in the
three principal economic regions: Asia, Nafta and Europe.
One example is the new pharmaceutical components plant in
India, which has recently been getting mass production up
and running. The acquisition of Zhongding, China's leading
manufacturer of sealing components for the automotive
industry, has also been completed. Datwyler will combine
the best of both worlds in the new Sealing Solutions
Division and consequently expects to realise potential
synergies of about CHF 10 million as of 2015. By
consolidating operations, especially in the areas of
management and administration, know-how and development,
procurement, manufacturing and global expansion, the
company will be able to enhance competitiveness and
increase profitability.
Sealing solutions for current and new global markets
The new Datwyler Sealing Solutions Division employs some
5,000 people at 17 facilities of its own and will generate
annual revenue of more than CHF 600 million from 2013
onwards. An EBIT margin range of between 11% and 14% is
targeted. These figures include the Zhongding and Hankook
companies acquired in China and Korea on 12 October 2012.
The new Datwyler Sealing Solutions Division will be headed
by Dirk Lambrecht, the current CEO of the Sealing
Technologies Division. Guido Wallraff, the current CEO of
the Pharma Packaging Division, will be responsible for
Global Business & Customer Relations in the new division.
He will therefore leave the Executive Management of
publicly listed Dätwyler Holding Inc. with immediate
effect. Today, Datwyler supplies rubber sealing solutions
to the global pharmaceutical, diagnostics, automotive,
civil engineering and portioned food (Nespresso) markets.
Initially, Datwyler wants to build on its leading
competitive and market positions as a strong foundation for
continued global growth in the current markets. Then in a
second phase, the company plans to enter new markets, such
as medical, chemical or oil and gas solutions, through
organic growth and acquisitions. In addition, Datwyler
intends to extend its materials expertise to new materials,
similar to what has been successfully done in the
collaboration with Nespresso. The markets that can be
addressed over the medium term have a total volume in
excess of CHF 4 billion.
Technical Components to remain a growth business
Datwyler will also continue to pursue its growth strategy
in the Technical Components Division as before. Building on
the division's previous companies, Distrelec and
Maagtechnic, the Group has acquired Swedish-based Elfa
(2008), German-based Reichelt Elektronik (2010) and
Dutch-based Nedis (2012) over the past four years. This has
positioned Datwyler as one of Europe's leading
online/catalogue distributors of IT, electronic and
engineering components and accessories. With the addition
of Nedis, the Group is now present in all European
countries, although it does not yet rank among the leading
suppliers everywhere. In future, Datwyler is seeking to
increase market penetration in all countries covered, both
by acquiring more businesses and by launching existing
Datwyler brands in additional countries. The multibrand
concept will allow Datwyler to serve different customer
groups concurrently in the same geographical markets. The
markets that can be addressed over the medium term have a
total volume in excess of CHF 8 billion.
Multibrand concept to systematically capitalise on
synergies
As online/catalogue distributors, Datwyler's brands provide
a link between more than 1,000 suppliers and over half a
million active customers. With its size and presence,
Datwyler will benefit from the trend where international
business customers are increasingly seeking to optimise
their supply chain management by buying as much of their
purchasing volume as possible from the fewest possible, but
most reliable suppliers. While deliberately maintaining and
developing several brands on the market side, Datwyler is
systematically capitalising on synergies in procurement,
product management, logistics, IT and marketing. The
Datwyler Technical Components Division employs some 2,000
people at 34 facilities of its own and will generate annual
revenue of more than CHF 700 million from 2013 onwards. An
EBIT margin range of between 10% and 13% is targeted. These
figures include the Dutch-based Nedis Group acquired on 3
September 2012. The Technical Components Division will
still be headed by Markus Heusser as before.
Two strong and complementary divisions
Datwyler's two future divisions have different business
cycle profiles, thus reducing fluctuations in the Group's
margin. In particular, the pharmaceutical and Nespresso
operations (together making up nearly one third of the
Group's revenue in future) are largely unaffected by
general industrial cycles and enjoy stable growth. Both
divisions generate attractive, double-digit EBIT profit
margins that can be increased even further with continued
expansion of markets and applications.
A financially strong Datwyler Group with new EBIT
targets
By putting the new Group structure in place, Datwyler wants
to capitalise even more on attractive growth opportunities
in the European distribution markets and global sealing
markets in the future. It has sufficient resources to fund
the planned organic growth and further acquisitions. In
2012, the Group's liquidity will increase by CHF 132
million from the announced sale of properties in the canton
of Uri and from the divestment of the Cabling Solutions
Division. Datwyler also plans to issue a straight bond of
approximately CHF 100 million to 150 million in nominal
value over the weeks ahead. In addition, Datwyler has
credit facilities of more than CHF 300 million available
and holds more than 1.5 million treasury shares. Given the
strong balance sheet structure with a high equity ratio,
additional debt capital could be raised, if required. The
concentration on high-margin businesses allows Datwyler to
increase its previous EBIT margin targets. For 2013, the
Group is raising the target range to between 10% and 13%,
with planned revenue of more than CHF 1,300 million. Given
its technological leadership and strong market positions,
the Datwyler Group is seeking to generate CHF 2 billion in
revenue and an EBIT margin of between 12% and 15% by 2017.
Further information:
To discuss the latest news, a press and analyst conference
will be held tomorrow, 30 October 2012, at 10:00 hours at
the Park Hyatt Hotel, Beethoven-Strasse 21, 8002 Zurich (in
German), and a conference call (in English) at 15:00 hours
CET. Speakers: Datwyler CEO Paul Hälg and Datwyler CFO Reto
Welte.
Datwyler Group ( www.datwyler.com)
The Datwyler Group is a focused industrial component
supplier with leading positions in global and regional
market segments. With its technological leadership and
bespoke solutions, the Group delivers added value to
customers in the markets served. Datwyler concentrates on
markets that offer opportunities to create more value and
sustain profitable growth. The Technical Components
Division is one of Europe's foremost high-service
distributors of IT, electronic and engineering components
and accessories. The Sealing Solutions Division is a
leading supplier of bespoke sealing solutions to global
market segments, such as the automotive, pharmaceutical and
civil engineering industries etc. With a total of more than
50 operating companies, sales in over 100 countries and
more than 7,000 employees, the Datwyler Group generates
annual revenue in excess of CHF 1,300 million. The Group
has been listed on the SIX Swiss Exchange since 1986
(security number 3048677).
Enquiries: Guido Unternährer, Head of Corporate Communications, +41 41 875 19 00
Photos (in print quality): www.datwyler.com > Media > Image Library
Financial Calendar
25 January 2013: Announcement of 2012 revenue
15 March 2013: Annual Press Conference and Analyst
Conference
This press release contains forward-looking statements that reflect the Group's current expectations regarding market conditions and future events and are therefore subject to a number of risks, uncertainties and assumptions. Unanticipated events could cause actual outcomes to differ from those predicted and from the information published in this release. All forward-looking statements in this press release are qualified in their entirety by the foregoing.
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