OC OERLIKON: spin-off fantasy takes flight!

The industrial group OC OERLIKON has published its annual figures and the share has taken off. The company can look back on a rather difficult financial year 2023. Sales shrank by -7.4% to CHF 2.69 billion and order intake by -17.8% to CHF 2.46 billion. Of the two divisions, Polymer Processing Solutions, which focuses on the textile industry, suffered in particular due to the difficult economic environment. The currency-adjusted organic decline of -5.9% to a still good CHF 1.17 billion was characterized by the decline in the filament business of Polymer Processing Solutions. By contrast, the Surface Solutions division increased its organic sales by +7% to CHF 1.52 billion! The acquisition of Riri also contributed to this; as expected, the currency impact here was also negative. The decline in sales also left its mark on profits. Operating profit (EBITDA) fell by -13.4% to CHF 444 million and the corresponding margin by -1.1% to 16.5%. At CHF 23 million, net profit was still a quarter of the previous year's figure, partly due to one-off effects. In view of the reduced profit, the dividend is to be cut by 15 centimes to 20 centimes per share. However, the figures presented met analysts' estimates!

With these business figures, OC OERLIKON showed that its dependence on the global economy is considerable, particularly with regard to China. Polymer Processing Solutions, which focuses on the textile industry, is therefore struggling and no longer really fits in with the corporate strategy. Management is now planning to spin off this unit in the next 12 to 36 months. Investors are beginning to realize that the split OC OERLIKON should be worth considerably more. The company should find the right time for the spin-off, which means that the upward movement that has started is only in its infancy! Our price target remains at CHF 5.75!