SFS confirms upturn in business activity
News – 9 September 2020
Business at SFS has picked up in the ongoing third quarter compared to the second-quarter levels amid persisting volatile economic environment. Given the risk of a second massive wave of COVID-19 infections worldwide, the outlook for the fourth quarter remains subject to considerable uncertainty. SFS plans to expand its location in Heerbrugg (Switzerland) to realize growth projects. This investment project documents SFS' good competitive position and innovation leadership.
After a significant downturn in the second quarter in the wake of the COVID-19 pandemic, business at SFS picked up during the first two months of the current third quarter. Sales for July and August extended the recovery that commenced in June. Business with customers in the automotive industry that had been affected the most by precautionary measures, showed the greatest improvement during these two months. Compared to the corresponding numbers from the previous year, total Group sales for July and August declined by mid-single-digit percentage figures. While sales in local currency at the Fastening Systems and Distribution & Logistics segments almost matched the prior-year levels, the Engineered Components segment was about 10% below the prior-year level. Earnings in all three segments have shown positive developments in the ongoing third quarter.
Given the growing risk of a second big wave of COVID-19 cases worldwide, the forecast for the fourth quarter is fraught with considerable uncertainty. Against this background, SFS is leaving its forecast for the second half given with the company’s first-half results unchanged despite the aforementioned positive developments and corresponding upward revision potential.
More detailed information can be found in the presentation for today’s SFS Investor Day ( link to the presentation).
Additional capacity to be created for growth projects in the automotive business
Over the years SFS has successfully positioned itself as a preferred development partner for customers in the automotive industry. Trends towards greater comfort, safety and efficiency and, in general, trends associated with autonomous vehicles are spurring innovation. The ongoing electrification of vehicles, including vehicle brake systems, is an attractive and growing business area, in which SFS has established a leadership position. SFS's successful acquisition of new projects for assemblies used in electronic brake systems lays the groundwork for further growth.
In order to realize the acquired customer projects, SFS is investing in the expansion of its production capacities with an additional production facility at its Heerbrugg location (Switzerland). The investment volume for the new building will amount to CHF 25−30 million. Preparations are already under way and construction is scheduled to begin in early 2021. With this investment project the company continues its efforts to focus its operations in Switzerland on particularly know-how-intensive and innovative products that require capital-intensive and highly automated processes.