Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Will the first half of 2024 be the peak in terms of depreciation, given the continued increase despite CapEx retreating? A: The current high depreciation is due to peak investments in healthcare plants in India and the US. CapEx will not continue to dip in the long term as we need to maintain our facilities. The impact of depreciation on PPE is not immediately visible due to a CHF22 million CTA adjustment.
Q: Can you provide more details on the timeline for new products like electro-active polymers to generate meaningful revenues? A: We have business wins in battery applications and innovations in connectors. Electro-active polymers have potential in automotive interiors and other industries. These innovations are not expected to impact short-term P&L but are seen as midterm opportunities.
Q: What is your deleveraging speed for 2024, and where do you see net debt to EBITDA by year-end? A: We aim to continue deleveraging to increase financial flexibility. Our goal is to achieve an equity ratio of around 40% versus liabilities of 60%.
Q: Are you still committed to the midterm profitability guidance of 18% to 21%? A: Yes, the midterm guidance remains, but achieving it depends on the fruition of projects, particularly in the healthcare business, over a three to five-year period.
Q: How is the pricing developing in Healthcare Solutions amid underutilization and destocking? A: Volume decline is in the double-digit million range, while price increases are in the mid-single digit range. Prices are influenced by raw material and energy costs, as well as the value we bring to customers.
Q: What is the current thinking on the connectors business, given its slower-than-expected start? A: We are expanding regionally, particularly in Europe, leveraging synergies with our mobility business. Growth is expected as BEV market share increases, despite current slower-than-expected market growth.
Q: How confident are you in reaching an EBIT margin above 22% by 2028 in Healthcare Solutions? A: Confidence is based on a growing project funnel with high-value applications and filling overcapacities. The shift from low to high-value applications is expected to drive profitability.
Q: Is the weakness in the connectors business more related to destocking or recessionary trends? A: It's a combination of both. There's a slowdown in e-mobility ramp-up and recessionary trends, particularly in the US, affecting standard application plugs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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