Gurit full year 2023 report highlights steady growth in wind, marine and industrial businesses

Gurit (Zurich, Switzerland) reports net sales of CHF 459.9 million ($521.7 million) for the full year 2023. The company notes that wind customers last year were cautiously investing again and won new orders for future onshore and offshore projects. The company also saw profit growth in its marine and industrial business, winning some first significant orders with European boatbuilders and recycled PET panels for multiple industrial applications in the U.S.

Gurit reached an operating profit of CHF 20.3 million ($23 million) with a margin of 4.4% of net sales. Adjusted operating profit was CHF 20.6 million ($23.4 million) or 4.5% of net sales. Net profit amounted to CHF 4.0 million ($4.5 million) in 2023. Driven by improved cash flow generation, net debt decreased by CHF 24.1 million ($27.3 million). For 2024, Gurit expects profitability to further increase thanks to its global footprint.

Moreover, net sales increase by 0.5% at constant exchange rates versus the prior year. Net sales of continued operations were CHF 459.9 million/$521.4 million (+2.7% at constant exchange rates or -5.9% in reported CHF). Excluding acquisition effects, total group sales grew by 2.6% at constant exchange rates.

Wind Materials achieved net sales of CHF 307.1 million ($348.2 million) for 2023. This represents an increase of 1.9% at constant exchange rates compared to 2022 and contains a contribution of CHF 99.4 million ($112.7 million) from Structural Profiles (Fiberline Composites). Market share gains for Western customers in core materials have been partly offset by lower volumes for Chinese customers, in an effort to improve margins. During the year, long-term agreements have been signed with major OEMs.

Manufacturing Solutions achieved a turnover of CHF 51.3 million ($58.1 million), which represents a decrease of -0.3% at constant exchange rates compared to 2022. The year, particularly the first half, saw Western customers releasing more investments in incremental blade manufacturing capacities. Selectivity was applied in the Chinese market to keep capacity for projects with higher added value. Innovative applications as ship rotors emerged nicely.

Marine and Industrial reports net sales of CHF 101.6 million ($115.2 million) for 2023. This is an increase of 7.1% at constant exchange rates compared to 2022. Traditional products like prepreg and Corecell are maintaining a strong position in the market as well as generating new sales in developing areas like the subsea industry; likewise, Gurit’s recycled PET foam is said to be gaining shares in existing markets while growing in recognition as a material option in new applications. Industrial opportunities are expanding, for example through the promotion of PET panel solutions in transportation and construction applications.

For the calendar year 2023, Gurit reached an operating profit margin of 4.4%. Excluding divestment effects, restructuring and impairment charges, the adjusted operating profit margin is 4.5%. This compares to an adjusted operating profit margin of 2.3% in the calendar year 2022. Net profit for the year 2023 amounted to CHF 4.0 million ($4.5 million). This equals earnings per listed share of CHF 1.59 (2022: CHF 1.98).

Cash flow and balance sheet

Gurit achieved a net cash flow from operating activities of CHF 37.7 million/$42.7 million (2022: CHF 16.2 million/$18.4 million). Capital expenditures amounted to CHF 11.3 million ($12.8 million) in 2023 compared to CHF 15.2 million ($17.2 million) in the previous year.

Gurit continued to mainly invest into PET extrusion capacity as well as a new plant for carbon fiber profiles in India. The equity ratio reduced to 28.3%, from 31.0% in the previous year, mainly due to the offsetting in equity of Goodwill resulting from the Fiberline acquisition, according to the Swiss GAAP FER Gurit accounting policy.

Net debt decreased by CHF 24.1 million ($27.3 million) due to the improved cash flow generation. In addition, improved cash management reduced gross debt further, which is now CHF 38.8 million ($44 million) below the previous year.

Strengthening its U.S. business

Gurit closed the acquisition of Texas-based FX Composites, a core material finishing and kitting operation and logistic hub, on Feb. 29, 2024. This addition to Gurit’s footprint will be an enabler for growth in the U.S. market, by establishing a visible and versatile hub to serve the needs of U.S. customers for marine and industrial applications. The entity will operate within these two business unit.

Outlook

Gurit is pursing its strategy in the wind industry to increase market shares with Western customers, due to its global footprint, and to be more selective in China. In 2024, Western markets are foreseen to grow slowly, but steadily. This increase will be mostly offset first by lower costs of input materials — like carbon fiber — transferred to customers, and second by a stricter margin approach in China. Altogether, Gurit believes that this strategic change will have a positive impact on profitability.

For its marine activities, the company expects medium to large projects to maintain its position, with smaller projects softening slightly. In the industrial segments, Gurit is confident that growth will accelerate, driven by the increasing demand for recycled PET foam.

Considering the above, Gurit expects a back-end loaded 2024 with net sales between CHF 435-485 million ($493-550 million) and an adjusted operating profit margin of 5-8% (respectively CHF 460 million/$521 million and 4.5% in 2023).

For a complete table of key financial figures, visit this link.