Engineering industry Georg Fischer grows significantly thanks to acquisition of Uponor

The industrial corporation Georg Fischer (GF) achieved significantly higher sales in the first half of the year than in the previous year thanks to the acquisition of Finnish company Uponor. However, the company shrank organically. It felt some headwinds.

Specifically, GF generated sales of CHF 2.4 billion (+23%) in the first six months of the year, as the company announced on Thursday. However, in organic terms - i.e. excluding the major acquisition Uponor - this resulted in a decline of 3.2 percent.

Order intake rose sharply - also as a result of the acquisition - and reached CHF 2.4 billion (CHF 1.93 billion). Incidentally, the new division resulting from the acquisition has been called GF Building Flow Solutions since April and no longer GF Uponor.

Operating profit (EBIT) improved by 5.4 percent year-on-year to CHF 194 million (previous year: CHF 184 million). The corresponding margin was still 8.0 percent (PY 9.4%). Meanwhile, the comparable EBIT - excluding Uponor - amounted to CHF 220 million with a margin of 9.1 percent, as the company wrote.

Finally, net profit attributable to shareholders fell by around 21 percent to 97 million (previous year: 123 million). The figures missed the estimates of the analysts surveyed by AWP.

Looking ahead, the company is now being more specific. Previously, it had merely stated that a gradual improvement could be expected over the course of the year. Barring unforeseen events, GF expects profitability for the full year 2024 to be within the strategic target corridor (comparable EBITDA margin 13-15% and comparable EBIT margin 10-12%).

With the addition of Uponor, GF had formulated these medium-term targets as part of its "Strategy 2025". The sales target was also increased by around half a billion Swiss francs to between CHF 5 and 5.5 billion, including acquisitions. The target for the return on invested capital (ROIC) is between 20 and 24 percent.

And indeed, the company has now written that an acceleration in business momentum observed in the second quarter sets the course for "solid" results for the year as a whole.

SDA