March 3, 2020 / 6:45 AM / a month ago

Oerlikon posts full-year results below consensus, cites tough market conditions

(Reuters) - Swiss industrial group OC Oerlikon (OERL.S) on Tuesday reported full-year revenue and core profit that were below analysts’ expectations, citing challenging market conditions, leading to lower demand in its surface solutions business.

Full-year revenue declined to 2.59 billion Swiss francs (2.11 billion pounds), while earnings before interest, taxes, amortisation and depreciation (EBITDA) dropped to 366 million francs, which was below the expectations in a company-compiled consensus of 2.61 billion francs and 397 million francs, respectively.

“While our 2019 results were resilient, the challenges across our end markets remain,” Chief Executive Roland Fischer said, adding that geopolitical uncertainties, trade tensions and the potential economic impact from the coronavirus are also of concern.

The Swiss company’s largest segment, surface solutions, whose products include coatings for automotive components and surfaces of electric car brake discs, reported an EBITDA decline of 17.3%.

Suppliers to the automotive industry have struggled with declining car sales, which led to cost cutting measures related to auto production, including German engineering company Bosch, [ROBG.UL] and automotive supplier Continental. (CONG.DE)

For 2020, Oerlikon expects order intake and sales to be between 2.5 billion and CHF 2.6 billion francs and EBITDA margin before exceptional items to improve to 15.0%-15.5%.

The company said that while the geopolitical and trade uncertainties will be an ongoing concern, it is too early to assess any impacts from the coronavirus outbreak on the global economy and the end markets.

In 2019, the company employed 27% of its staff in Asia-Pacific and the region accounted for 46% of group sales.

Reporting by Bartosz Dabrowski in Gdansk; Editing by Kim Coghill & Shri Navaratnam

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