Globally demanded competencies from Central Switzerland

We have been investing in Swiss second-line stocks for our clients since 1996. Since Daetwyler has been listed on the Swiss stock exchange since 1986, it was part of the initial portfolio of our Reichmuth Pilatus second-line fund more than 25 years ago.

Daetwyler is the leading manufacturer of high-quality and system-critical elastomer components. The company operates worldwide and employs around 8,000 people at more than 25 locations. For example, the Nespresso capsules are produced at the plant visited in Schattdorf. It is also home to mold making and the Research & Development Center. Daetwyler produces over 100 million components per day worldwide.

Daetwyler has had an eventful history spanning more than a hundred years. The company started out as a producer of heels for Swiss military shoes, evolved into a manufacturer of car and bicycle tires, and changed into a specialized niche supplier of high-quality elastomer components. The company is the market leader in its niches. This is the case, for example, in the healthcare sector with its first-line technology or in the automotive sector, where more than every second car in the world uses parts from a Daetwyler factory. Like Reichmuth & Co, Daetwyler is also regionally anchored and strongly influenced by its owner family. So we have parallels to each other.

In his presentation, Daetwyler’s CFO Walter Scherz showed us the company’s long-term strategy and core competencies. The company has a simple and focused structure on the two core markets Healthcare Solutions and Industrial Solutions. They are so well positioned to gain market share in the future. Especially also because they invest enough resources in research and development to keep it that way.

In a second part, we were able to visit the production and mold making facilities under the guidance of Reto Burkard, the managing director of the Schattdorf plant. Over 530 employees work daily on a production area of more than 20,000 m2. It was interesting to see how coffee capsules are produced in billions in a highly automated process. We were impressed by the production speed in combination with the high precision.

We would like to express our sincere thanks to Daetwyler for allowing us and our guests to gain these insights.

Our assessment of Daetwyler Holding

Daetwyler has a long and eventful history behind it. With the focus on the two business segments, we believe Daetwyler is now better positioned than ever before. The upward price exaggeration during the Corona pandemic has been corrected and Daetwyler is now valued more attractively again. With a history of more than one hundred years of adaptability and change, we are convinced that Daetwyler will also master possible new challenges around technological change in the automotive sector or regulatory discussions around aluminum coffee capsules with flying colors. In the small-cap sector, we prefer companies that are market leaders in their niches and are well managed. They should have a solid balance sheet and, at best, a long-term oriented anchor shareholder. All this applies to Daetwyler and we would use the current share price weakness to gradually build up positions.