SFS Group AG "After share price performance - we downgrade to Neutral" (Neutral)

研报英文原文证据摘录

SFS Group AG "After share price performance - we downgrade to Neutral" (Neutral)

SFS Group AG UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: Will SFS's earnings momentum slow down in H2 26E?

Yes, according to our analysis. SFS enjoyed good organic sales growth of +4-5% over H2 25 and H1

26 (historic 10 year average c3%). The comps are getting tougher from H2 26E and we expect the

consumer electronics sales cycle to normalise (SFS confirmed this in the results call). While remaining

resilient on diversification & execution benefits, we expect organic sales growth to fade towards +2-

3% y/y in H2 26E vs H1 of +4% y/y with margins to be at best flattish y/y (mix benefits

easing/ annualizing). This overall will result in a slowdown of earnings momentum. SFS also stated in

the results call that the company does not expect a material acceleration in industrial production in

Europe over the next 6-9 months.

Q: Can SFS reach its medium-term EBIT margin target of 12-15%?

Yes, we forecast SFS's 2026-28E EBIT margin to range between c12.5-13.5 (versus trough margins in

2023-24 of 11-12%) being in line with its medium-term target of 12-15%. This sustainable

acceleration should be supported by on average solid end markets, limited incremental pricing

pressure risks in automotive and self help on cost efficiencies (with the company targeting to add

c80bp EBIT margin by end of 2027E versus 2025). Product mix with a stable to mildly increasing share

of higher margin consumer electronics (new customer model launches) is supportive we think.

UBS VIEW SFS has good market positioning in end markets such as construction, consumer electronics,

automotive and medical devices.