SFS Group stock drops amid sales uncertainty, margin concerns

Published 07/03/2025, 11:42

Investing.com -- SFS Group’s (SIX:SFSN) stock dropped more than 6% on Friday after the company confirmed its preliminary 2024 financial results but withheld sales guidance for the year ahead, citing continued uncertainty in key end markets. 

Analysts at Jefferies noted that while margins are expected to remain stable at 11.6%—below consensus expectations of 12.3%—the lack of a sales forecast could weigh on investor sentiment.

The Swiss-based manufacturer, which specializes in fastening systems and precision components for industries such as construction, electronics, and automotive, reported a 1.7% year-on-year decline in full-year sales to CHF 3.04 billion. 

Despite cost-cutting efforts, EBIT dropped 2% to CHF 350 million, reflecting weaker demand in certain segments. 

Engineered Components was a relative bright spot, with EBIT growing 25% year-on-year to a margin of 13.8%, but this was offset by a 22% EBIT decline in Distribution & Logistics, where margins slipped to 9% from 11.1% a year earlier.

Earnings per share fell 9% to CHF 6.21, but the company maintained its dividend at CHF 2.50 per share, representing a 40% payout ratio. 

On the cash flow front, SFS saw a notable improvement, with operating cash flow up 20% to CHF 375 million and free cash flow surging 61% to CHF 217 million.

Jefferies analysts said cost control and cash are good, but no revenue outlook means core market problems. 

Investors want demand recovery, especially in industrial and construction, where slow activity keeps inventories high.

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