Adval Tech Holding AG

Earnings Release • Aug 28, 2015

News Details

Ad-hoc | 28 August 2015 07:00

Strong Swiss franc drives net loss

Strong Swiss franc drives net loss

Niederwangen, August 28, 2015, 7.00 a.m. – For the Adval Tech Group, the first half of 2015 was influenced primarily by the difficult foreign exchange situation. The group generates around 95% of its turnover abroad and over 35% of its costs in Switzerland. The currency-induced pressure on margins was therefore considerable, following the Swiss franc’s substantial appreciation in mid-January. Despite the difficult currency situation, the Adval Tech Group succeeded in achieving a double-digit EBITDA margin again for the first time since 2007. With total income of CHF 110.6 million (1H 2014: CHF 127.0 million), the Group generated EBITDA of CHF 11.3 million (1H 2014: CHF 12.5 million), EBIT of CHF 4.3 million (1H 2014: CHF 5.3 million) and a consolidated loss of CHF -2.8 million (1H 2014: profit of CHF 1.6 million). The Adval Tech Group is targeting a currency-adjusted EBIT margin in line with 2014 for the current financial year.

The 13% fall in total income is due in roughly equal measure to the foreign exchange developments and the postponement of some large-scale projects in the Molds segment. This resulted in a slight shift in the sales breakdown of both segments of the Adval Tech Group. Components accounted for 68% (up from 65%) and Molds for 32% (down from 35%). Adval Tech achieved this gratifying EBITDA margin of 10.2% (1H 2014: 9.8%) through ongoing productivity improvements, strict cost controls and by exploiting additional synergies. In terms of EBIT, the highly unfavourable currency situation had an even greater impact for Adval Tech. Without the negative currency effects, Adval Tech would have been able to lift EBIT by CHF 0.1 million despite the lower total income and to improve the EBIT margin by 0.4 percentage points. The negative net profit is primarily due to the strong Swiss franc.

In the first half of 2015, the Components segment (metal and plastic components) generated total income of CHF 75.6 million (1H 2014: CHF 83.4 million). This corresponds to a decline of CHF 7.8 million (-9.4%) or CHF 3.7 million in currency-adjusted terms. Thanks to the successfully implemented cost-cutting drive and efficient cost controls, the Components segment nevertheless posted EBITDA of CHF 5.7 million (1H 2014: CHF 5.9 million). In currency-adjusted terms, this figure is CHF 1.1 million above the year-back figure. The Components segment lifted the EBIDTA margin by 0.4 percentage points to 7.5%.

In the first half of 2015, the Molds segment, which trades under the name FOBOHA, generated total income of CHF 35.8 million (1H 2014: CHF 44.8 million). This corresponds to a decline of CHF 9.0 million compared with the prior-year period. CHF 4.0 million of this is due to the currency trend. The delay of some projects until the second half at the Germany and China sites also impacted on the result. At CHF 4.1 million, the EBITDA figure for the Molds segment was CHF 1.7 million below the prior-year figure of CHF 5.8 million. This results in an EBITDA margin of 11.5% (1H 2014: 12.9%). In currency-adjusted terms, the segment’s EBITDA was only CHF 0.8 million below the 2014 figure.

Outlook

Thanks to the systematic implementation of its focusing strategy the Adval Tech Group now has a lean organizational structure, which enables it to react quickly and efficiently to changes in the market. The Group intends to achieve future growth both organically – in business with automobile manufacturers and their direct suppliers, e.g. by expanding into Mexico – and with related applications. It is also examining the possibility of achieving growth through targeted acquisitions.

The strong Swiss franc remains a major challenge and has made it more difficult to win new orders for the Swiss sites. The Group is therefore forced to partially revise its original forecasts for 2015. Adval Tech is now targeting a currency-adjusted EBIT margin in line with 2014 for the current financial year. However, given the present exchange-rate conditions it will probably be very difficult for the Group to achieve a positive net result.

Key figures	1 st half of 2015	2 nd half of 2014	1 st half of 2014
Total income (CHF million)	110.6	120.0	127.0
– Components Segment	75.6	81.0	83.4
– Molds Segment	35.8	41.3	44.8
Net turnover (CHF million)	104.8	114.9	124.7
EBITDA (CHF million)	11.3	10.8	12.5
– Components Segment	5.7	4.3	5.9
– Molds Segment	4.1	5.2	5.8
EBIT (CHF million)	4.3	3.6	5.3
Profit (+) / loss (-) (CHF million)	-2.8	0.3	1.6
Operative free cash flow (CHF million)	-5.1	0.9	-1.2
Number of employees (full-time units) as per balance sheet date	1,551	1,603	1,680
– Components Segment	1,157	1,227	1,314
– Molds Segment	378	361	349

Contact

Valeria Poretti-Rezzonico, Head Corporate HR/Communication, phone +41 31 980 82 66, valeria.poretti@advaltech.com

Markus Reber, CFO, phone +41 31 980 82 70; markus.reber@advaltech.com

Background information about the Adval Tech Group

Adding value through innovation – that’s what Adval Tech stands for. Adval Tech is the partner of choice – for high-volume components manufactured in metal and plastic and for high-performance molds for the production of plastic components. In the components business, Adval Tech focuses on the automotive market and on related applications. Adval Tech’s principal markets in the mold-making segment are consumer and personal care, packaging, medical and automotive. Adval Tech covers the entire value chain as a one-stop-shop, from product development to prototyping, to mold and tool development, and through to component production and assembly.

Publication of 2015 Semiannual Report

The 2015 Semiannual Report will be published at the same time as this media release:

http://www.advaltech.com/en/group/investors/reports/

Agenda

End of March, 2016 – Announcement of the results for the 2015 financial year

April 26, 2016 – Conference for financial analysts and press conference on annual report 2015

April 26, 2016 – Publication of the annual report 2015

May 19, 2016 – General meeting of shareholders 2016

Except for the historical information contained herein, the statements in this media release are forward-looking statements that involve risks and uncertainties.