Adval Tech Holding AG

Earnings Release • Apr 18, 2012

News Details

Ad-hoc | 18 April 2012 07:00

Adval Tech Group will increase its focus

Adval Tech Group will increase its focus

Niederwangen, April 18, 2012, 7.00 a.m. – As reported on March 21, 2012, the Adval Tech Group has not achieved the targeted improvement in earnings in the 2011 financial year. The strong Swiss franc had a heavy impact on the Group. Based on the strategy review requested by the Board of Directors and carried out by the interim CEO of the Adval Tech Group, Stephan Mayer, Adval Tech will increase its focus on the market with a simplified organizational structure in future. René Rothen, who until now has been Head of the Automotive Segment, will be the new CEO. He will replace Stephan Mayer during the course of 2012. The Annual General Meeting of Adval Tech Holding AG is being postponed from May 10, 2012 to June 19, 2012.

The total income reported by the Group was CHF 31.8 million or 10% down on the prior-year figure (CHF 316.7 million) at CHF 284.9 million in 2011. If prior-year total income is also adjusted for the currency effects, continuing operations however grew by around 10%.

At CHF 14.3 million, operating earnings before interest, tax, depreciation and amortization (EBITDA) was CHF 9.9 million down on the prior-year figure (CHF 24.2 million). As a result, the EBITDA margin shrank from 7.7% to 5.0%. After adjustment for currency fluctuations and the discontinued operations in Muri, Merenschwand and Bern, the margin improved by CHF 1.2 million year on year. With operating earnings before interest and taxes (EBIT) of CHF -5.0 million (previous year: CHF 1.6 million) and a net loss of CHF 16.3 million (previous year: loss of CHF 10.9 million), Adval Tech has not reached its goals for 2011.

Automotive Segment

In the Automotive Segment, total income was 10% or CHF 16.3 million down on the prior-year figure of CHF 157.0 million at CHF 140.7 million in 2011. After adjustment of the prior-year figures for the segment’s discontinued operations in Merenschwand and Bern (CHF -24.7 million) and currency effects (CHF -13.3 million), total income did not decline as mentioned, but actually increased by CHF 21.7 million or 18%. EBITDA were a positive CHF 6.6 million, but around CHF 5.3 million lower than in the previous year (CHF 11.9 million). Adjusted for currency effects and discontinued operations, EBITDA improved by CHF 1.2 million.

Medical & Consumer Goods Segment

In the Medical & Consumer Goods Segment, total income also fell below the prior-year figure of CHF 161.3 million to CHF 150.9 million. After adjustment of the prior-year figures for the segment’s discontinued operations (CHF -1.2 million) and currency effects (CHF -19.8 million), total income did not decline by CHF 10.4 million, but actually increased by CHF 10.6 million or 8%. At CHF 6.4 million, EBITDA in the Medical & Consumer Goods segment were down significantly on the prior-year figure of CHF 11.1 million. After adjustment of the results for currency effects and discontinued operations, EBITDA increased by CHF 0.5 million. In its Molding Technology Division Adval Tech improved earnings significantly in local currency terms. In the business with medical components, on the other hand, upfront expenditures incurred to set up the sites in Mexico and China weighed on earnings. In the Consumer Goods Division, earnings also deteriorated at the sites in China.

Strategy implementation

Thanks to acquisitions and collaborations, the Adval Tech Group now has a worldwide presence. In the current economic environment implementing this strategy systematically is taking longer than planned and, during the phase when we are establishing a presence, is depressing our earnings to a greater extent than expected. An analysis of Adval Tech’s development potential carried out by interim CEO Stephan Mayer as a result of the unsatisfactory earnings situation indicates that the Group has excellent opportunities to further develop its business in all of its areas of activity. “Thanks to innovative technologies and an above-average range of products and services along the entire value chain, we currently have great potential for development in all of our areas of activity worldwide,” says Stephan Mayer. Nonetheless, all business areas require significant investments, which Adval Tech cannot afford to make all at once.

For this reason, the Adval Tech Group is planning to narrow its area of business and focus its efforts on selected fields of activity with a global reach. In order to gain enough time for this change of direction and thus take advantage of development opportunities in all lines of business, the Group intends to strengthen its capital base. It will provide information well ahead of the next Annual General Meeting. To allow sufficient time to draw up a solution and make decisions, the meeting is being postponed from May 10, 2012 to June 19, 2012.

Adval Tech will remain a listed group with global operations in future. However, its organizational structure will be simplified and streamlined. The previous divisions are being dissolved to enable the Group companies to operate in closer proximity to the market and to be managed more directly. The Group is being divided into the areas Components and Molds and, within these areas, organized by geographical markets. In doing so, Adval Tech will increase its focus and make better use of synergies. The plan is also to integrate the activities of Omni Plastics (Xiamen) Co. Ltd, China, into Omni Plastics (Suzhou) Co. Ltd, China.

Personnel changes

With effect as of December 1, 2011, the Board of Directors appointed Stephan Mayer as interim CEO of the Adval Tech Group. The Board has now selected René Rothen, who until now has been Head of the Automotive Segment, as the new CEO. He will replace Stephan Mayer during the course of 2012. René Rothen is a strong and very experienced manager who will ensure continuity and will help to focus Adval Tech’s activities more closely. On May 1, 2012, Valeria Poretti-Rezzonico, who has been Head of Human Resources & Communication since 2008, will join Group Executive Management. On the same date, the previous head of the Molding Technology Division, Harald Folk, will step down from Group Executive Management and will fully concentrate on the further development of AWM Mold Tech AG.

Outlook

For 2012, Adval Tech anticipates an increase of 4-7% in total income over 2011. In particular, several large projects in the automotive market due to reach the full production phase this year will have a positive impact on sales. The Adval Tech Group is confident that it will achieve a turnaround at EBIT level this year, provided that no further negative developments occur in the relevant capital markets and economies. Adval Tech also anticipates a considerable improvement of the net result.

Dividend

In light of the unsatisfactory results, the Board of Directors will propose to the Annual General Meeting that no dividend should be paid.

Key figures	2011	2010	Change
Total income (CHF millions)	284.9	316.7	-10%
– Automotive Segment	140.7	157.0	-10%
– Medical & Consumer Goods Segment	150.9	161.3	-6%
Operating earnings (EBITDA) (CHF millions)	14.3	24.2	-41%
– Automotive Segment	6.6	11.9	-45%
– Medical & Consumer Goods Segment	6.4	11.1	-42%
Operating earnings (EBIT) (CHF millions)	-5.0	1.6	n.a.
Net result (CHF millions)	-16.3	-10.9	n.a.
Operative free cash flow (CHF millions)	-4.7	-1.6	n.a.
Number of employees on December 31	2491	2470	+1%
– Automotive Segment	762	782	-3%
– Medical & Consumer Goods Segment	1710	1669	+2%

Background information on the Adval Tech Group

Adding value through innovation – that’s what the name Adval Tech stands for. As a global technology and process partner Adval Tech focuses on the complementary technologies of metal stamping and forming and plastic injection molding. In selected markets in the automotive, medical technology and consumer goods sectors, Adval Tech is a leading global supplier of volume components, subassemblies, systems, tools and special machinery. As a value-adding partner Adval Tech covers the entire value chain: from product design and the development of volume components through design and production of the necessary molds and dies to complete manufacturing systems and the resulting production of components. Adval Tech trades on the markets under the names of AWM, FOBOHA, Omni, QSCH, Styner+Bienz and Teuscher.

Contact

Stephan Mayer, CEO: Phone +41 31 980 82 76; stephan.mayer@advaltech.com

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

Download annual report

http://www.advaltech.com/en/group/for-investors/publications/annual-report.html

Diary

June 19, 2012: General meeting of shareholders in Bern

August 2012: Announcement of the results for the first half of 2012

Disclaimer

This document contains specific forward-looking statements. Such statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers should not rely on forward-looking statements. The company assumes no responsibility to up-date forward-looking statements or to adapt them to future events or developments.