Order books full, but profit halved

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Peter Spuhler (64) probably imagined his last appearance as CEO of Stadler Rail differently. It took over a small 20-employee rail vehicle factory in Bussnang TG 34 years ago and turned it into a global company with 14,000 employees today. But it’s an incredible success story that was carried far away by the presentation of business figures at headquarters in Bussnang TG on Wednesday morning.

Spuhler’s Stadler Rail disappointed: At CHF 75.1 million, profits in 2022 were almost half cut from the previous year. The group also missed analysts’ sales expectations. The stock has since dropped nearly 8 percent. The profit margin is only 5.5 percent.

Currency development ruins the result

Once again Spuhler was able to report a record number of new orders worth CHF 8.56 billion. With CHF 22 billion, the order books are fuller than ever.

As Spuhler regretfully points out, there are several reasons why the outcome was not better “over which we have no influence”. Supply chains still cause problems for the group. Added to this is the geopolitical situation regarding the Ukrainian war, which, meanwhile, has significantly increased the prices of raw materials and energy.

Due to high inflation abroad, Stadler Rail was also forced to substantially increase wages at its factories in Germany, Poland and Spain. But the biggest problem for the Swiss group is the strong Swiss franc. Exchange rate developments alone had a negative impact of CHF 140 million on last year’s result.

troublesome analysts

But ultimately, investors are primarily concerned with the final result. When it comes to profit margins, Stadler Rail goes astray. “We are also sorry for the disappointing results. But we are doing everything we can to re-improve it,” Spuhler says at the end of the presentation.

When Spuhler suddenly returned to the top position in May 2020, he wanted to get the struggling big company back on the path to success. However, the target margin of 8 to 9 percent had to be pushed into the future several times. The group now wants to enter this snow zone in 2025.

Several hundred engineers are missing from the group

It is an open question whether Stadler Rail will turn the corner as intended by then: the group management around Spuhler’s successor, Markus Bernsteiner (55), is doing everything for it. “We have increased the efficiency of our processes at the St. Margrethen plant by a double-digit percentage,” says Bernsteiner. In the next sixteen months, it also wants to optimize processes in other plants and thus save costs. They also want to drive innovation with suppliers. There will be no layoffs. On the contrary: as Spuhler emphasizes, the group does not have several hundred engineers worldwide.

Spuhler will continue to be present as Chairman of the Board at the next presentation of business figures. If the general conditions are surprisingly brightened by then, then again with more positive news.

Source :Blick