Media release on annual results 2013

Turnaround at EBIT level



Niederwangen, March 31, 2014, 07:00 – The 2013 financial year saw the Adval Tech Group achieve two key objectives: an improvement in its operating result and a reduction in its debt. In 2013, Adval Tech posted operating earnings before interest and taxes (EBIT) of CHF 6.5 million (2012: CHF -3.5 million) and in doing so accomplished the targeted turnaround at EBIT level. In terms of net debt, the Group improved its position by more than CHF 37 million to CHF 67.9 million (2012: CHF 105.3 million). The fact that, at CHF -22.0 million (2012: CHF -15.4 million), the net result remained well within negative territory during the year under review is mainly attributable to the liquidity-neutral effects of the deconsolidation of the companies sold off. The deconsolidation had a positive impact on the Adval Tech Group’s equity ratio, which rose to 29% as of the end of 2013 (end 2012: 23%).

 

As part of the focusing strategy approved in 2012, the Adval Tech Group has simplified its organizational structure and is now concentrating its energies in clearly defined areas of business. In the field of components, 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. One result of the focusing strategy was the merger of the sites in China: in 2013, Adval Tech closed down components production in Xiamen and mold-making operations in Shanghai and concentrated all operations in Suzhou. Additionally, Adval Tech sold its site in Querétaro (Mexico) as well as the medical technology production activities in Suzhou.

 

Development of key figures

At CHF 278.8 million, the Adval Tech Group’s total income for 2013 fell by only 0.3% compared with the previous year’s figure of CHF 279.6 million. The Group generated around 70% of sales in the Components segment and around 30% in the Molds segment.

 

Despite the deconsolidation of the two companies sold, 2013 saw the Adval Tech Group increase its operating earnings before depreciation (EBITDA) by more than 50% to CHF 25.7 million (2012: CHF 16.9 million), and the EBITDA margin rose from 6.0% to 9.2%. EBIT improved from CHF -3.5 million in 2012 to CHF +6.5 million in 2013. The largest contributions to this positive performance came from the Swiss company Styner+Bienz FormTech AG in the Components segment and FOBOHA GmbH (Germany) in the Molds segment.

 

The Group posted a clearly negative net result of CHF -22.0 million (2012: ‑15.4 million) which is mainly due to the liquidity-neutral effects of the deconsolidation of companies disposed of. In the year under review, Adval Tech reduced its debt in line with its target. In July 2013, the Group sold its business in Mexico (Omni Manufacturing Services S.A. de C.V., Querétaro) and its medical technology activities in China (Adval Tech Medical (Suzhou) Co. Ltd.) to the US company Phillips-Medisize. Adval Tech was also able to sell the properties no longer required for operations in Muri (Canton Aargau, Switzerland) and Xiamen (China). In total, Adval Tech reduced its debt by CHF 37.4 million during the period under review. This puts the Group in a much better starting position for its future development.

 

Segment results

In the Components segment (metal and plastic) total income of CHF 193.7 million was around CHF 25 million below the previous year’s figure of CHF 218.3 million. In currency-adjusted terms, the decline was negligibly smaller. This reduction is primarily attributable to the sale of the two companies in China and Mexico and to the portfolio adjustments which have been initiated in China (plastic) and Hungary (metal). The cost-cutting programs enabled the segment to raise its EBITDA to CHF 11.7 million (2012: CHF 10.5 million) and this despite the fact that the disposals led to the loss of a substantial part of its sales.

 

With total income of CHF 89.7 million, the Molds segment exceeded the prior-year figure of CHF 67.6 million by more than 30%. The segment increased its EBITDA by CHF 8.0 million to CHF 12.1 million (2012: CHF 4.1 million). Group company FOBOHA in Germany was able to exploit in particular the backlog demand in the US market and posted a significant improvement in earnings. The restructuring measures in the mold-making operations in Switzerland and the merger of the two mold-making sites in China also had a positive impact on the segment’s results.

 

Adval Tech will provide detailed information on the annual financial statements and an initial review of the Group’s development in the current year at its press conference in Zurich on Tuesday, April 29, 2014. The Annual General Meeting of Adval Tech Holding Ltd will be held on May 22, 2014.

 

Key figures

2013

2012

Change

in %

 

 

 

 

 

Total income (CHF millions)

278.8

279.6

-0.8

0%

Net turnover (CHF millions)

269.0

268.8

0.2

0%

Operating earnings before depreciation (EBITDA)

 

 

 

 

(CHF millions)

25.7

16.9

8.8

52%

Operating earnings (EBIT)

 

 

 

 

(CHF millions)

6.5

-3.5

10

n.a.

Net result (CHF millions)

-22.0

-15.4

-6.6

n.a.

Free cash flow (CHF millions)

 37.8

1.1

36.7

n.a.

Number of employees on December 31

 1,720

2,239

-519

-23%


Background information about the Adval Tech Group

Adding value through innovation – that’s what 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 series parts, subassemblies, systems and tools. As a supplier and value-adding partner, Adval Tech covers the entire value chain: from product design and the development of series parts through construction and production of the necessary tools and molds to entire production systems and the resulting manufacture of components.

 

Contact

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

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

 

Agenda

April 29, 2014 – Media release: Publication of the annual report 2013

April 29, 2014 – Conference for financial analysts, ConventionPoint, SIX, Zurich

April 29, 2014 – Press conference, ConventionPoint, SIX, Zurich

May 22, 2014 – General Meeting of Shareholders in Berne

August 2014 – Announcement of semi-annual results 2014

 

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


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