Media release Adval Tech Group 2017 annual financial statements and outlook for 2018

Adval Tech confirms positive trend

Niederwangen, April 24, 2018, 7.00 a.m. – Posting net profit of CHF 8.7 million, the Adval Tech Group continued to build on its long-term positive trend in 2017. The Group has been debt-free since the sale of the Molds segment in 2016 and is proceeding with the systematic implementation of its focusing strategy, concentrating on the automotive market. As already explained in detail on March 23, 2018, in the 2017 financial year the Group generated total income of CHF 207.9 million (previous year: CHF 227.1 million), EBITDA of CHF 19.2 million (previous year: CHF 22.4 million) and EBIT of CHF 10.7 million (previous year: CHF 8.3 million). This gives an EBIT margin of 5.1% (2016: 3.7%).With regard to year-on-year comparisons, the significant changes to the Group’s scope of consolidation must be borne in mind. Firstly, the results for the divested Molds segment are no longer included in 2017 statements; secondly, the figures for Fischer IMF are included for the full year in 2017, whereas in the previous year they were only included in the consolidated accounts from April (i.e., for nine months only).Putting key figures for the 2017 financial year on a basis that can be compared with 2016 (i.e., estimate including Fischer IMF for 12 months, excluding Molds segment) results in growth of CHF 20.4 million in total income (+10.9%), a rise of CHF 3.2 million in EBITDA (+20.0%), and an increase of CHF 6.2 million in EBIT (+137.8%).At the Annual General Meeting the Board of Directors will propose a payment of CHF 4.00 per share out of the capital contribution reserve.



Adval Tech is well positioned in the global automotive industry as a partner for metal and plastic components and is well equipped for the future thanks to a lean organization and a very solid balance sheet structure. The Group is ready for profitable, qualitative growth. Adval Tech acquired several large orders in 2016 and 2017, which will ensure capacity utilization at individual sites for years to come.

 

Total income

In 2017, the Adval Tech Group generated total income of CHF 207.9 million (comparable basis 2016: CHF 187.5 million, +10.9%). Revenues from the sale of tools for the production of components from the OEM business in Mexico and Hungary contributed around CHF 20 million to total income. In 2017, the Adval Tech Group generated most of its turnover (72%) with customers in Europe (2016: 65%). Asian customers accounted for 12% of turnover (2016: 14%), customers in Latin America for 9% (2016: 9%) and customers in North America for 6% (2016: 12%).

 

The performance of the Swiss subsidiary Adval Tech (Switzerland) AG (formerly Styner+Bienz FormTech AG) was very pleasing. This company produces rotationally symmetrical metal parts at the site in Niederwangen and also sells transfer presses as a sideline. The subsidiary in Hungary (plastic components for OEMs), Adval Tech (Germany) GmbH & Co. KG (formerly Fischer IMF), which was acquired in April 2016, and Adval Tech (Malaysia) Sdn. Bhd. also developed positively. In some countries, especially Thailand, volume sales were still affected by the overall contraction in economic output. The performance of Adval Tech do Brasil was marked by increased challenges in the industrialization of the projects acquired.

 

Profitability

Higher total income, lower material inputs, and rigorous cost discipline, especially in the relocation of various production facilities, had a positive impact on the profitability of the Adval Tech Group. EBITDA was CHF 19.2 million in 2017. The EBITDA margin was 9.2% (2016: 9.9%). EBIT was CHF 10.7 million, giving an EBIT margin of 5.1% (2016: 3.7%). Net of exchange rate effects, EBITDA was CHF 18.7 million and EBIT was CHF 10.2 million. That is particularly pleasing given that in the past a substantial proportion of the operating result came from the Molds segment, which was sold at the end of August 2016.

 

Investments

The Adval Tech Group invested CHF 17.4 million in property, plant and equipment in 2017 (2016: CHF 7.6 million), primarily for the components business and the associated new orders. Adval Tech invested heavily in infrastructure expansion at several sites in 2017 – for example, in new presses in Brazil and Germany and additional injection molding machines in Mexico, together with expansion of the related infrastructure. In Hungary, Adval Tech split its subsidiary Adval Tech (Hungary) Kft. into two separate legal entities at the start of 2017. The plastics business continues to operate under the old name Adval Tech (Hungary) Kft., while the metals business now operates as Adval Tech (Hungary) Plant 2 Kft. In addition, Adval Tech consolidated the production of metal components in Hungary in a new production building with some 5,000 square meters of space in the direct vicinity of the plastic components production plant.

 

In Endingen, a second production building with around 10,000 square meters of space was constructed and taken into service. This now also houses the Adval Tech Group's competence center for all metals applications for the automotive industry involving laser-welding technology. The components production previously located in nearby Sasbach was transferred to the new building.

 

Cash flow and net current assets

The cash flow from operations was CHF 14.5 million in 2017 (2016: CHF 15.0 million). The free cash flow was –CHF 5.1 million (2016: CHF 110.6 million, most of which was attributable to the sale of the Molds business). The free cash flow was influenced by higher capital expenditures for property, plant and equipment than in the previous year (including around CHF 11 million for the two buildings in Hungary and Germany). At the end of December 2017, net current assets (trade accounts receivable, inventories and trade accounts payable) stood at CHF 36.8 million (December 31, 2016: CHF 34.9 million). Net current assets accounted for an unchanged 19.3% of total income.

 

Dividend distribution

At the Annual General Meeting on May 17, 2018, the Board of Directors will propose a payment of CHF 4.00 per share out of the capital contribution reserve.

 

Outlook

As a global industrial partner for top-quality, advanced metal and plastic components, general global economic trends and the present uncertainty in various areas have a fairly direct impact on Adval Tech. The situation in the Adval Tech Group's main market, the automotive industry, is very heterogeneous at present and it is difficult to predict how it will develop. While in OEM business Adval Tech can participate in record volume sales of certain premium brands, greater restraint is currently visible in the tier one business. Here, Adval Tech’s presence mainly comprises safety components, which are used in a wide range of models. Adval Tech's goal for 2018 is to extend its global marketing activities further and to complete the planned relocation of production operations to Germany and Hungary. For the many new products, the motto is: “Right first time”.

 

Adval Tech expects the market environment to remain equally challenging in 2018. The Group is confident it will continue to build on the positive trend of the past few years. The Adval Tech Group is not giving specific guidance on total income and EBIT in 2018.

 

 

 

When making comparisons with the previous year's results, it should be noted that there has been a significant change in the scope of consolidation. Firstly, the results of the divested Molds segment are no longer included in 2017. Secondly, the figures for Fischer IMF are included for the whole of 2017, whereas in the previous year they were only included in the consolidated accounts for nine months (April to December).

 

Key figures

2017

Comparable basis 20161)

 

Change in comparable basis

2016

Total income (CHF millions)

207.9

187.5

 

+20.4

227.1

- Components segment (CHF millions)

n.a.

 

 

 

180.3

- Molds segment (CHF millions)

n.a.

 

 

 

48.62)

Net turnover (CHF millions)

200.3

 

 

 

231.9

Operating earnings before depreciation EBITDA (CHF millions)

19.2

16.0

 

+3.2

22.4

- Components segment (CHF millions)

n.a.

 

 

 

14.1

- Molds segment (CHF millions)

n.a.

 

 

 

6.42)

Operating earnings EBIT (CHF millions)

10.7

4.5

 

+6.2

8.3

Net result (CHF millions)

8.7

 

 

 

39.7

Free cash flow (CHF millions)

14.5

 

 

 

15.0

Number of employees on December 31

1,399

 

 

+58

1,341

Dividend (CHF)

4.003)

 

 

 

41.00

 

1) Comparable basis: incl. Fischer IMF for 12 months, excl. Molds segment (estimate)

2) Consolidated for eight months

3) Proposed by the Board of Directors


Background information about the Adval Tech Group

Adding value through innovations – that’s what Adval Tech stands for. Adval Tech is the partner of choice for high-volume components manufactured in metal and plastic. Adval Tech focuses on the automotive market and on related applications. 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.

 

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

 

Download annual report

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

 

Agenda

May 17, 2018, Annual General Meeting 2018

End of August 2018, Announcement of semi-annual results 2018

 

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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