Fastening Systems (FS) achieved a reduced result in 2023 compared to the previous year. Over the course of the financial year, the segment was negatively impacted by a weakened market environment with occasionally high inventories across the entire value chain. In the USA, the Construction division expanded its market presence with three additional distribution locations. The Riveting division was integrated into the organization of the EC segment with effect from January 1, 2024.
While market demand in the first half of the year was stable, the construction industry cooled off in Europe and North America over the course of 2023. This was triggered by a downturn in key economic regions caused by high inflation and steadily rising interest rates. Supply chain bottlenecks from during the COVID-19 pandemic led to high inventory levels throughout the entire supply chain during the year under review. This resulted in more intense competition. In this challenging environment, the Construction division managed to nearly make up for the decline in orders for new construction projects through the sale of products for renovation of building envelopes. The attractive offering based on competent advice, a range of tailored products and services and a systematically high delivery capability enabled a competitive edge also in this changed economic environment.
The good growth seen in the second half of 2022 continued in the application area of riveting solutions for the automotive industry. The business continues to use its good positioning as a manufacturer of automation solutions to its advantage: Automated processing solutions – which are designed for industrial and large-scale productions and can be individually configured and installed in robot applications – meet the requirements of the automotive industry with respect to highly efficient and automated production processes in a targeted manner. However, demand in most areas where riveting solutions are used, including sustainability-driven applications such as heating and thermal technology, deteriorated over the course of the year.
Sales in the segment amounted to CHF 615.3 million in the period under review, which corresponds to a reduction of –4.6% compared to the previous year. Sales in the first half of the year were 15.9% higher than the figure for the second half of the year. In organic terms, a sales increase of 0.7% was achieved. Strong currency effects negatively impacted the development by –5.3%.
Key figures Fastening Systems in CHF million | 2023 | +/–% | 2022 | 2021 |
Third–party sales | 615.3 | –4.6 | 644.9 | 574.9 |
Sales growth comparable | 0.7 | |||
Net sales | 626.3 | –4.9 | 658.8 | 589.6 |
EBITDA | 108.7 | –18.0 | 132.5 | 120.4 |
As a % of net sales | 17.4 | 20.1 | 20.4 | |
Operating profit (EBIT) | 93.1 | –19.9 | 116.3 | 102.3 |
As a % of net sales | 14.9 | 17.7 | 17.4 | |
Operating profit (EBIT) adjusted | 93.1 | –19.9 | 116.3 | 102.3 |
As a % of net sales | 14.9 | 17.7 | 17.4 | |
Average capital employed | 312.8 | 5.5 | 296.4 | 263.0 |
Investments | 21.5 | 56.9 | 13.7 | 9.9 |
Employees (FTE) | 2,450 | –4.4 | 2,564 | 2,510 |
ROCE (%)1 | 29.8 | 39.2 | 38.9 |
1EBIT adjusted in % of average capital employed
Efficient processes and prudent cost and price management have enabled the segment to maintain a good profitability. The EBIT margin for the period under review amounts to 14.9%, which falls comfortably within the defined target range. In the second half of the year, the EBIT margin declined by 2.9 percentage points compared to the first half. This is mainly attributable to the deterioration in demand.
On July 1, 2023, the Construction division acquired the fasteners business and other product lines of Connective Systems & Supply, Inc. (CSS), which is located in the region of Denver (USA). This geographical area is considered to be a major region of growth in the United States. The business generated sales of USD 15 million in 2022 with around 20 employees. In organizational terms, the business was incorporated into the Triangle Fastener Corporation (TFC) within the Construction division. CSS is maintaining its local presence and SFS has absorbed the entire workforce. The management team previously in place will remain in charge of both locations. TFC also opened an additional distribution location in San Antonio (USA).
With over 25 locations in the United States, TFC serves as a supplier of fastening systems and other products in the construction industry. TFC’s expansion of its market presence represents a systematic continuation of its growth strategy through the establishment of new or acquisition of existing distribution locations.
_width-1240.jpeg)
The Riveting division, which specializes in applications related to riveting technology, mainly serves customers in the industrial manufacturing and automotive industries with its portfolio of blind rivets, nuts and processing tools. In most cases the same production processes are used as in the EC segment. To guarantee a strong customer focus and better leverage cross-selling potential as well as both operational and application-oriented synergies, the Automotive and Industrial divisions were complemented with the respective end-market-specific business areas of the Riveting division. This change was implemented within the organization on January 1, 2024. Accordingly, the EC segment’s reporting will present the results of the former Riveting division starting with the Half-Year Report 2024 and the FS segment will report exclusively on the Construction division. The growth and profitability targets of the FS segment will remain unchanged.
Thomas Jung took over responsibility for the Construction division from Arthur Blank as of January 1, 2024. Thomas Jung also joined the Group Executive Board through his appointment as divisional head. He will continue to live in the United States. Arthur Blank, who has been with SFS since 1983, took charge of Corporate HR and Communications.
_width-1240.jpeg)
The partnership between SFS and Salmon Evolution lays a cornerstone for the future of aquaculture. Salmon Evolution sets a new benchmark for sustainable agriculture and innovation in the fish farming industry. SFS’s solution ensures employees’ safety when working in the rough maritime climate.