GF Piping Systems
The division saw lower demand in its Building Technology and Gas Utility business, however, its presence in growth markets and segments, such as high-end microelectronics production and process automation for water reclamation and treatment, made up for it. Sales amounted to CHF 1'065 million in the first half of 2023 (2022: CHF 1'094 million), representing an organic increase of 4.2%. The operating profit came in at CHF 141 million (2022: CHF 158 million), for an EBIT margin of 13.2% (2022: 14.4%).
In June, GF Piping Systems announced it had received Intel’s EPIC Distinguished Supplier Award, a milestone that highlights the division's customer focus and commitment to excellence, and rewards a consistent level of strong performance.
With its state-of-the-art manufacturing layout for the production of process automation applications, its clean room for pre-fabrication and the modern training center, the newly inaugurated site in Yangzhou (China) is ready to meet the increasing customer demand for sustainable solutions.
In July 2023, GF Piping Systems received the EcoVadis gold medal for its sustainability performance. This award positions the division among the top 5% of companies assessed worldwide.
GF Casting Solutions
Growth in sustainable mobility reached an all-time high, with 86% of high-pressure die casting lifetime order intake related to e-vehicles. Sales reached CHF 471 million (2022: CHF 449 million), an organic increase of 20.0%, due in part to strong demand for e-vehicles. Operating profit increased substantially to CHF 35 million (2022: CHF 14 million), for an EBIT margin of 7.5% compared with 3.2% in 2022. The division is increasingly recognized for its innovation strength and capabilities to produce mega castings, which are a key differentiator in the production and assembly of e-vehicles. The ramp-up of the factory in Shenyang (China) is also progressing according to plan.
GF Casting Solutions earned its first EcoVadis gold medal for its sustainability performance in March 2023. This award positions the division among the top 4% of companies in the "Casting of Metals Industry" segment.
GF Machining Solutions
Considering the current demanding macroeconomic environment, GF Machining Solutions achieved a good order intake of CHF 461 million (2022: CHF 478 million), resulting in a book-to-bill ratio of 1.1. Sales reached CHF 426 million in the first half of this year (2022: CHF 431 million), organically up 3.7%, thanks to a rebound in the aerospace sector, where global order intake returned to pre-COVID-19 levels. Operating profit reached CHF 20 million (2022: CHF 17 million), leading to an EBIT margin of 4.7% (2022: 4.0%), supported by a strong MedTech segment and a high share of innovative solutions in the EDM technology.
The division continues to be an industrial technology leader, pursuing its strategy to strengthen customer experience and service offerings, including digital services.
GF Machining Solutions launched new high-performance laser machines for applications in several segments. One of these applications is anti-scratch surfaces on plastic components, where laser textured molds make it possible to reduce plastic coating chemicals, a big step in the sustainability journey of its customers.
Tender offer launched to acquire leading Finnish company Uponor
On 12 June 2023, GF announced its voluntary recommended cash tender offer to acquire the Finnish company Uponor, which, if successful, will pave the way for GF to become a global leader in the Water and Flow Solutions business, and increase its resilience and growth prospects. This is a transformative step for GF, which, upon successful completion, will accelerate the execution of its Strategy 2025 to drive profitable growth. The transaction is expected to close in Q4 2023.
Outlook for the full year 2023
The present volatile environment is likely to persist in the short term, but with a different situation per market segment. GF Piping Systems is dealing with a subdued worldwide construction industry, and gas utilities in Europe and Asia are facing headwinds. At the same time, the industrial segments are continuing to enjoy good momentum globally. GF Casting Solutions' good position in the e-vehicle and high-end segments is expected to support its business, also in the second half of the year.
GF Machining Solutions faces subdued ICT markets, especially in China, but MedTech and aerospace order intakes are solid.
Overall, GF is set to benefit from strong positions in resilient market segments. In particular, the sustainability needs of our customers continue to offer excellent long-term business opportunities. Barring unforeseen circumstances, for the full year 2023 GF expects to achieve organic sales growth in line with its Strategy 2025 and an operating profitability within the Strategy 2025 corridor (EBIT margin 9-11%).
GF uses certain key figures to measure its performance that are not defined by Swiss GAAP FER. Comparability to similar figures presented by other companies might therefore be limited. Additional information on these key figures can be found at www.georgfischer.com/en/investors/alternative-performance-measures.html.