Gurit warns of lower wind sales, notches automotive contract

The company shutters plants in Canada and China due to lower wind demand, but wins a contract to supply automotive components to Italy.

Gurit (Zurich, Switzerland) reported 15.4 percent higher net sales of 287.2 million Swiss francs (CHF) for the first 9 months of 2012 over the same prior-year period, driven by a strong progression in wind energy, automotive and marine sales. The recently reduced outlook in the wind energy market, especially in the U.S. and China, due to overcapacities, price pressure and the expiration of the U.S. wind production tax incentives, forces Gurit to adapt its production capacity. The company therefore is mothballing its prepreg production in Canada and China and will reduce its global work force by some 150 employees. The related restructuring costs, including impairment charges for fixed assets mainly, are estimated to amount to approximately CHF 12 million, of which some CHF 3 million will be cash effective. Net sales for the full year 2012 are expected to be around CHF 355 million and the
full year operating profit margin including all restructuring charges is forecast to be in the range of 2 to 4 percent of net sales. Excluding all the one-off charges, the operating profit margin for the full year should, however, almost reach the guidance provided earlier.

For 2013, Gurit expects significantly lower sales to the wind energy market, but a strongly growing automotive business thanks to additional customers and larger car body part series, as well as increased material shipments for industrial applications in marine and some upside potential in aerospace. The component business around engineered structures is also expected to grow markedly, with opportunities on tidal turbines, composite parts for modular bridges
and lightweight applications for buses. Gurit’s tooling business suffered in 2012 from the low investment activity in the wind energy market, but is expected to recover slightly compared with 2012, and the company is exploring opportunities beyond wind, according to its report.

On October 29, Gurit announced it has continued to extend its customer base in automotive with the addition of its first supply contract into Italy. The prototype deliveries will commence towards the end of 2012 and the multi-year series production will start in the first half of 2013. The project will result in the manufacture of several components on the same platform and total sales in the region of 3 million euro. These parts will be manufactured in Gurit's recently expanded automotive composite car body parts facility, based in the UK.

Martin Starkey, managing director for Gurit Automotive, added “Securing our first series program in Italy continues to reinforce our position as the leading tier 1 carbon fiber body component manufacturer in Europe. 2013 will be a landmark year for Gurit Automotive with three class leading vehicles employing our technology all in series production.”