Financial performance from the CFO's perspective

Solid financial performance and high cash flow generation

After two excellent years with strong top-line growth, HUBER+SUHNER had to manage a decline in volumes in 2023 in a challenging business and negative currency environment. Thanks to our strong market vertical diversification and proactive cost management, we were still able to achieve a satisfying profitability of 9.1 %, i.e. within our EBIT medium-term target range of 9–12 %. In the reporting period, the Swiss franc appreciated against all the world’s major currencies. This fact remains a challenge for our business model and will trigger further optimisation programmes. The effective tax remained at a low level thanks to the high business substance in Switzerland and other tax benefits from various countries.

The CHF 116 million cash flow from operating activities is very strong evidence of resilient cash conversion ability. As of 31 December 2023, net liquidity amounted to CHF 163 million. This cash foundation provides the basis for further investments in innovation, production equipment, or acquisitions.

Performance, resilience and sustainability in global sourcing

After two consecutive years with substantial price increases, the sourcing organisation was able to reduce overall material costs (currency neutral) compared to the previous year. Further improvements were achieved by extending payment terms with suppliers and by reducing critical dependencies from single-source suppliers. During 2023, we onboarded more than 600 additional production material suppliers to our IntegrityNext sustainability platform as part of a qualification process. With this process, HUBER+SUHNER was able to confirm that more than 75 % of our production material spend is in line with applicable due diligence obligations.

Stable dividend policy

The solid financing based on a strong balance sheet lays the foundation for a sustainable profit-oriented dividend policy with a targeted payout ratio of 40–50 % of the Group’s net income attributable to HUBER+SUHNER shareholders. The proposed dividend per share for the reporting year 2023 amounts to CHF 1.70, corresponding to a payout ratio of 49 %.

Share buyback programme successfully completed

On 30 March 2023, HUBER+SUHNER concluded its share buyback programme by reaching the targeted buyback of HUBER+SUHNER shares in the amount of 5 % of the share capital. The shares acquired under this programme will be proposed for cancellation by means of a capital reduction at the Annual General Meeting on 27 March 2024.