First-quarter report 2024 (January - March 2024) of the EMS Group Donnerstag, 25. April 2024 - 05:50
(Ad hoc announcement pursuant to Art. 53 LR)
- Weak global economic development
- Successful sales offensive with profitable new business
- Sales volumes and net operating income (EBIT) above previous year
- Strong Swiss Franc hampers net sales development
- Energy prices cause rising raw material and freight costs
The EMS Group, active worldwide in the business areas High Performance Polymers and Specialty Chemicals and with its companies combined in EMS-CHEMIE HOLDING AG, achieved net sales of CHF 545 million (614) in the first three months of 2024. While a significantly stronger Swiss Franc hampered net sales development, the global sales offensive, launched in 2023, already delivered pleasing results with profitable new business in the first quarter of 2024. Sales volumes and net operating income (EBIT) exceeded previous year.
As expected, the global economy remained subdued in the first quarter of 2024. Consumer mood remained depressed, particularly in the main markets Europe and China. Energy, raw material and freight costs, rising again due to current geopolitical conflicts, are making price increases unavoidable.
Already at the end of 2023, EMS was preparing for a persistently weaker global economy. In the restrained market environment, EMS consistently focuses on broader market development with specialties and innovations. The proven strategy with development and expansion projects for new business with profitable specialty products will be continued.
Contrary to the general trend, EMS decided in 2023 already to massively expand sales and technical development in all three regions of Asia, America and Europe, with over 120 additional employees. With this broadly based technical sales offensive, customers are currently provided with innovative solutions for cost reduction, CO2 savings and new innovative technologies such as electric cars. The new, comprehensive development offering with accelerated implementation meets significant customer demand and is already showing initial success. Despite a weaker economy and unfavorable exchange rates, it was possible to increase sales volumes and net operating income (EBIT) compared to previous year.
In the main area of High Performance Polymers, EMS was able to continue its successful strategy of specialty products and solutions to reduce costs, weight, energy and CO2 emissions for customers, and successfully implemented these in international markets. The global market position was strengthened.
The Specialty Chemicals division also generated new business with innovations and was able to strengthen its market position.
Outlook
For the business year 2024, EMS expects the economic environment to remain challenging. Geopolitical conflicts and the delay in interest rate cuts are likely to continue to dampen demand. Higher energy prices will cause raw material and freight costs to rise further.
EMS consistently pursues its sales offensive and successful growth strategy with specialties. Innovative solutions, focusing on cost, fuel, energy and CO2 savings are continuously realized with customers, and global market positions are expanded. EMS considers itself in an excellent position to develop the numerous opportunities arising in the markets through innovation, thereby generating disproportional growth.
To meet growing customer demand, EMS is pursuing the investment program announced in 2021, with over CHF 300 million to increase capacity and energy efficiency at the main site in Domat/Ems (Switzerland). A further large-scale plant, with a newly developed manufacturing process that reduces energy consumption by half, was taken into operation in the first quarter of 2024.
EMS also holds a benchmark position for customers with regard to sustainability. EMS itself is already CO2 neutral (Scope 1 and Scope 2) and certified in accordance with ISO 14001, EcoVadis Gold and International Sustainability & Carbon Certification (ISCC). Together with its global suppliers, EMS is implementing numerous projects to reduce their CO2 emissions (Scope 3) to achieve its own net-zero target by 2050.
For 2024, EMS continues to expect net sales at previous year's level and net operating income (EBIT) slightly above previous year.