SCHMOLZ + BICKENBACH lowers guidance for fiscal year 2019
by David Fleschen
SCHMOLZ + BICKENBACH, a global leader in special long steel, today lowered its earnings guidance for the 2019 financial year on the basis of preliminary figures for the second quarter of 2019. The company is now forecasting adjusted EBITDA of between EUR 130 million and EUR 170 million.
Contrary to the Group's expectations, the global economy continued to lose momentum in the second quarter as a result of ongoing trade conflicts and political uncertainties. Demand from key end markets especially from the automotive industry was restrained in the wake of the economic slowdown. The order backlog continued to decline, although in individual cases the normalization of customer inventories was reflected in new orders.
Based on the preliminary figures, SCHMOLZ + BICKENBACH expects sales volumes to fall by around 16% and revenue by 11% in the second quarter of 2019 compared to the second quarter 2018. Furthermore, adjusted EBITDA of EUR 40.5 million will be lower than in the prior-year quarter (EUR 84.9 million).
In view of unresolved trade conflicts and political uncertainties, visibility with regard to future business development is unusually low, which is why SCHMOLZ + BICKENBACH is currently not in a position to narrow the range for the guidance. Both a marked recovery and a sustained economic slowdown are possible scenarios. From today's perspective, the Group expects demand to gradually recover only towards the end of the year 2019. As a result, the forecast published at the beginning of the year is no longer achievable. Adjusted EBITDA is now expected to be between EUR 130 million and EUR 170 million (previously EUR 190 million and EUR 230 million). The final results for the second quarter of 2019 will be published on August 7, 2019.
Source: Schmolz + Bickenbach, Photo: Fotolia