The 180th anniversary of Burckhardt Compression marks a successful
start to the Company's latest Mid-Range Plan, with notable
achievements in order intake, sales, and operating income. Based on
these results and positive mid-term market trends for sustainable
energy solutions, the Company is raising its sales guidance for
2027. Fabrice Billard, CEO of Burckhardt Compression, says: "In
2023, Burckhardt Compression surpassed again CHF 1 billion in
orders and achieved new record sales and operating income despite
economic challenges. These successes highlight our leadership in
applications for the transition to more secure and sustainable
energy sources."
Strong sales growth - Profitability increase in both
divisions and at Group level Order intake for the Group
reached CHF 1'124.7 mn, a decrease of 11.3%, respectively 6.2% net
of currency translation effects. Despite a currency headwind of 7.7
pp, sales were up by 18.4%, at CHF 982.0 mn, driven by a 31.3%
growth in the Systems Division. Gross profit margin reached 26.7%,
a reduction of 2.8 pp compared to the previous year, due to the
increased share and less favorable product mix of the Systems
Division. Research & Development expenses increased by CHF 2.7
mn to CHF 26.6 mn to support the development of new applications.
Selling, marketing, and general administrative expenses amounted to
12.2% of sales, a significant reduction of 1.9 pp year-on-year.
This highlights the leverage and effectiveness of SG&A spend,
which is part of the Mid-Range Plan. Other operating income and
expenses (net) were CHF 5.4 mn (prior year: CHF -8.6 mn, including
some one-off provisions). The consolidated operating income (EBIT)
rose substantially by 27.8% to CHF 121.4 mn. The Systems Division
increased its EBIT margin by 1.2 pp, the Services Division by 2.5
pp. The higher weight of the Systems Division in the sales mix led
to an overall increase of the Group EBIT margin of 1.0 pp to
12.4%.
Value creation further enhanced - Significant dividend
increase proposedFinancial expenses slightly below last
year and a similar tax rate of 23.7% led to a net income of CHF
90.1 mn, which exceeded the previous year’s figure by 28.7%.
Accordingly, earnings per share attributable to Burckhardt
Compression Group shareholders rose from CHF 20.64 to CHF
26.63.Value creation was also further enhanced, with Return on Net
Operating Assets (RONOA) increasing from 25.7% to 30.1%. Total
equity increased to CHF 297.9 mn (+36.3 mn), while the equity ratio
slightly increased to 28.0%. Based on these results, the Board of
Directors will propose at the Annual General Meeting a dividend of
CHF 15.50 per share, an increase of 29.2% compared with the
previous year. This is within the Group's overall attractive
dividend policy of a 50% to 70% payout.
Energy transition having a positive impact on all market
segmentsIn a market showing varying trends across end
applications, the Systems Division achieved a strong order intake
of CHF 780.2 mn. As expected, the Company saw a normalization of
the exceptional levels observed in the previous year related to
liquefied natural gas (LNG) tankers in the marine segment. On the
other hand, the fiscal year 2023 period saw the market related to
liquefied petroleum gas (LPG) tankers on the rise again. New
applications related to the energy transition are developing in all
market segments. For instance, the demand for compressors to
produce ethylene-vinyl acetate (EVA) continued at a robust pace,
supported by stronger mid-term expectations for the global solar
panel market. In addition, hydrogen presents many opportunities
along the value chain, and Burckhardt Compression sees a rapid
emergence of green-hydrogen-based applications, like green ammonia.
Other applications, like biogas and sustainable aviation fuels, are
also starting to scale up. The Company expects to win a significant
share in these new markets in the coming years, underpinning the
upward revision to the Group's Mid-Range Plan sales guidance for
2027.
Services further growing in local currenciesIn
a market characterized by regional disparities reflecting the local
economic situation, the Services Division achieved an order intake
of CHF 344.6 mn. Corrected for exchange rate translation effects,
this represents a growth of 2.9%, following an above-average
increase of 9.7% in the prior year. The Asia-Pacific market
remained strong, while the European market decreased due to
economic and political uncertainty, especially in Germany. On a
global basis, the Services Division's presence in the marine market
is increasing strongly, benefiting from a growing installed base, a
strong service network, and new offerings. Orders for digital
products and services continued at a strong pace, building on the
positive momentum of the previous year.
Further growth and transformation, with sustainability
at the core of the Group’s strategyThe fiscal year 2023
marks a successful start to the Company's Mid-Range Plan. This
strategic plan has sustainability at its core, with implications
for target markets, R&D projects, capital investments,
operational KPIs, and long-term incentive plans for management. It
is based on four pillars: strengthening the core business,
transforming, and building new growth avenues, operational
excellence, and further enhancing the business foundations.
Burckhardt Compression made tangible progress across these
pillars. For instance, expanding the offering in the marine Service
business has led to substantial growth in this segment and supports
the Group’s strategic ambitions to strengthen the core business.
With the Company's focus on transforming and building new growth
avenues, new products have been launched to serve the hydrogen
mobility and energy market. New services, like BC ACTIVATE, were
also successfully launched to help customers optimize their
compressor fleet's reliability and greenhouse gas footprint. On the
operational excellence front, Burckhardt Compression continued to
leverage its asset base in all factories to grow sales by more than
30% in the Systems Division without significant capital
investments. Moreover, the further rollout of the Group’s Customer
Relationship Management (CRM) system in the Services Division
enhances its business foundations. Finally, while growing sales by
26% in local currencies, the Company reduced its greenhouse gas
emissions (Scope 1 and 2) by 5.1%, a positive step on its path
towards reaching net zero (Scope 1 and 2) in 2035.
Guidance for fiscal year 2024 – Further sales growth,
reaching the CHF 1 bn thresholdBurckhardt Compression
enters the fiscal year 2024 in a challenging geopolitical
environment but with a solid order backlog, a strong balance sheet,
and good momentum in both divisions. Based on the strong order
intake of the past two fiscal years, the Company expects:
- Sales between CHF 1.0 bn and CHF 1.1
bn at the Group level
- EBIT-margin similar to fiscal year
2023
- Second half stronger than first
half, due to the distribution of project deliveries
Amidst the ever-changing global geopolitical backdrop, the Group
will continue to actively monitor the situation and any potential
impact it may have on the business.
Raising sales guidance for 2027Based on the
faster than expected progress in its Mid-Range Plan and new growth
opportunities linked to the energy transition in all its market
segments, Burckhardt Compression is raising its guidance for
2027:
- Sales guidance increased from CHF
1.1 bn to CHF 1.2 bn, driven by an expected increase in the Systems
Division
- EBIT-margin guidance of both divisions increased by 1 pp to
6-9% for the Systems Division and 23-26% for the Services
Division.
- Given the increased weight of the Systems Division in the sales
mix, the operating margin bracket for the Group remains at
12-15%
Change in the Board of DirectorsAfter 12 years,
Dr. Monika Krüsi decided not to stand for re-election as a member
of the Board of Directors of Burckhardt Compression Holding AG at
the upcoming Annual General Shareholder Meeting. As a successor,
the board of directors will propose to the shareholders the
election of Tatiana Gillitzer (1968). Mrs Gillitzer, a US citizen,
is a business leader with over 25 years of working and management
experience in international organizations. Provided she is elected,
the Board of Directors plans to appoint her as a member of the
Nomination and Remuneration Committee.
The annual report 2023 and further information on the fiscal
year 2023 are available on the website on:
www.burckhardtcompression.com/financial-reports.
Further information:Stefan Hoher, Head of Corporate
Communications & BrandingTel. +41 52 261 52 81;
stefan.hoher@burckhardtcompression.com
Burckhardt CompressionBurckhardt Compression
creates leading compression solutions for a sustainable energy
future and the long-term success of its customers. With its brands
Burckhardt Compression, PROGNOST, SAMR Métal Rouge and Shenyang
Yuanda Compressor, the Group covers a full range of reciprocating
compressor technologies and services. Founded in 1844 as an
engineering workshop in Basel, Burckhardt Compression developed its
first single-stage and dry-running reciprocating compressor in
1883. Since then, the Group has continually developed and
reinvented itself, adapting to the developments of its key markets
petrochemical/chemical industry, gas transport and storage,
hydrogen mobility and energy, industrial gas, refinery, as well as
gas gathering and processing. With its headquarters in Winterthur,
Switzerland, Burckhardt Compression is represented on all
continents with 36 subsidiaries, three manufacturing and five
assembly sites worldwide.
SIX Swiss Exchange: BCHNFurther information at
www.burckhardtcompression.com, LinkedIn
Burckhardt Compression Holding
AGFranz-Burckhardt-Strasse 5, 8404 Winterthur,
SwitzerlandPhone: +41 52 262 5500
Photos accompanying this announcement are available
at: https://www.globenewswire.com/NewsRoom/AttachmentNg/d4b288fe-bcd4-4d11-b4c5-993f27ff2674https://www.globenewswire.com/NewsRoom/AttachmentNg/d3310551-8de3-4a57-ab51-2d455e56d5bchttps://www.globenewswire.com/NewsRoom/AttachmentNg/b0b70b63-29b1-4aa4-85a0-65eef9aa86b3
A video accompanying this announcement is available
at https://www.globenewswire.com/NewsRoom/AttachmentNg/7d61639c-9914-4089-89b1-40d102f6eb85
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