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OC Oerlikon Polymer-Processing Separate Consideration


Shares of OC Oerlikon surged following the company’s announcement to explore options for separating its polymer-processing business, marking the final phase of a strategic streamlining initiative.

Positive Stock Movement

As of 0951 GMT on Tuesday, shares saw a 4.6% increase, reaching CHF4.07. Despite this rise, the stock has still experienced a 30% decline over the past year.

Strategic Direction

OC Oerlikon revealed its intention to evaluate potential separation strategies for its polymer-processing division from its surface-solutions division. This decision signifies the culmination of a transformation journey that commenced in 2014, with the company streamlining from five divisions to concentrate solely on providing coatings for sectors such as automotive, oil and gas, aerospace, and power generation.

Planned Timeline

The implementation of this separation is projected to take place within the next 12 to 36 months, coinciding with the anticipated recovery of the polymer market.

Organizational Restructuring

Upon the completion of this pivotal step, Oerlikon will be moving away from its executive-chair model.

Financial Report

The company’s fourth-quarter results were influenced by a downturn in the polymer market. Operational earnings before interest, taxes, depreciation, and amortization decreased to 100 million Swiss francs from CHF127 million in the corresponding period of the previous year. Sales for the quarter also saw a 14% decline to CHF633 million, while orders dropped by 17% to CHF552 million.

Future Projections

For the year 2024, OC Oerlikon anticipates a high single-digit percentage decrease in organic sales, factoring in currency fluctuations. The operational Ebitda margin is forecasted to range between 15.0% and 15.5%. Growth in surface solutions is predicted to counterbalance the decline in polymer processing.

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