Stratec, a German developer of systems for in-vitro-diagnostics, experienced a significant decline in its share value on Wednesday. This came after the company adjusted its guidance for 2023 and revealed that preliminary figures for the first half of the year were lower than expected.
Lower Sales Expectations for 2023
Stratec now projects that sales for the full year will either remain stable or experience slight growth at constant exchange rates. This is a revision from the previous estimate of 8-12% growth. The company cites volatile customer order behavior as one of the factors contributing to this uncertainty.
Decreased Earnings Margin
The adjusted earnings before interest and taxes (EBIT) margin is now forecasted to fall between 10% and 12%, down from the previous guidance of 12-14%.
Disappointing First Half Results
Stratec reported lower-than-expected results for the first half of the year, indicating a decline in demand. Sales for this period amounted to 125 million euros ($140.4 million), down from EUR137.2 million in the same period the previous year. Additionally, the adjusted EBIT margin for the first half was 5.6%, compared to 15.4% in the prior year.
Hope for Recovery in Second Half
While Stratec anticipates sales to recover in the second half of the year, it acknowledges that the volume may be reduced due to factors such as decreased orders and delivery backlogs. Despite these challenges, Stratec remains optimistic.
Compensation Package Pending
Stratec also expects to receive a compensation package that has not yet been included in its guidance. This compensation is related to a discontinued system solution by one of its customers, which was in an advanced stage of its lifecycle.
Final Figures to be Published
Stratec will publish the final figures for the first half of the year on August 9th.