2020

21.04.2020 – Adval Tech Holding AG

Adval Tech affected by the repercussions of the coronavirus crisis

Media release

Adval Tech Group 2019 annual financial statements and outlook for 2020

Adval Tech affected by the repercussions of the coronavirus crisis

Niederwangen, April 21, 2020, 7.00 a.m. – With net profit of CHF 8.7 million and EBIT of CHF 10.3 million, the Adval Tech Group performed well in a difficult market environment in the 2019 financial year. As already stated on March 27, 2020, the group posted total income of CHF 178.9 million in 2019 (previous year: CHF 198.2 million), EBITDA of CHF 18.4 million (previous year: CHF 20.7 million) and EBIT of CHF 10.3 million (previous year: CHF 12.4 million). As a result of the coronavirus and the associated government regulations and economic repercussions, Adval Tech has closed down its production activities at several sites and partly introduced short-time working. The Board of Directors, the Executive Management and the managing directors of the Adval Tech subsidiaries have taken a voluntary fee and pay cut as of April 2020 to show their solidarity with the employees who are working reduced hours. At the Annual General Meeting on May 14, 2020, the Board of Directors will propose a dividend of CHF 2.70 per share.

The key market of the Adval Tech Group, the automotive industry, finds itself in the midst of sweeping changes. Technical, social and economic developments have fundamentally altered demand and the buying behavior of market participants. In this challenging environment, the Adval Tech Group once again achieved a healthy result last year with an EBIT margin of 5.8%. Adval Tech was once again able to secure several significant long-term orders in 2019.

Total income and net turnover

In 2019, the Adval Tech Group posted total income of CHF 178.9 million (previous year: CHF 198.2 million). The decline is due in part to the sale of Adval Tech Thailand in August 2018, but also to the general decline in demand in the automotive industry.

Net turnovers of Swiss subsidiary Adval Tech (Switzerland) AG were encouraging, especially sales of transfer presses (technology business). So too were those of Hungarian subsidiary Adval Tech (Hungary) Kft., which produces plastic parts and assemblies as a direct supplier to auto manufacturers.

Profitability

EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to CHF 18.4 million in the year under review (previous year: CHF 20.7 million). The EBITDA margin was 10.3% (2018: 10.5%). EBIT (earnings before interest and taxes) amounted to CHF 10.3 million (previous year: CHF 12.4 million), corresponding to an EBIT margin of 5.8% (2018: 6.2%). Adjusted for currency effects, the EBITDA margin was 10.3% and the EBIT margin 5.8%. The biggest contribution to the operating result came from Adval Tech (Switzerland) AG, Niederwangen,

Adval Tech (Hungary) Kft. and Adval Tech (Malaysia) Sdn. Bhd. Net profit for the Group came to CHF 8.7 million (2018: CHF 8.8 million).

Investments and net current assets

In 2019 the Adval Tech Group invested CHF 8.1 million (2018: CHF 10.4 million) primarily for stamping presses, injection molding machines and the expansion of the production area in China. Cash flow from operating activities amounted to CHF 4.2 million in 2019 (2018: CHF 13.7 million), operative free cash flow to CHF 3.8 million (2018: CHF 11.3 million) and free cash flow to CHF -4.0 million (2018: CHF 12.5 million). Operating net current assets (trade accounts receivable, inventories and trade accounts payable) stood at CHF 34.7 million at the end of December 2019 (December 31, 2018: CHF 26.0 million). Operating net current assets accounted for 20.2% of total income (December 31, 2018: 18.1%).

Equity ratio and dividend payout

The Adval Tech Group improved its equity ratio from 68.8 % at the end of 2018 to 77.8 % at the end of 2019. At the Annual General Meeting on May 14, 2020, the Board of Directors will propose a dividend of CHF 2.70 per share.

Outlook

The economy is severely affected in many areas around the world due to the coronavirus. This is particularly the case in the automotive industry. It is not yet possible to predict the medium and long-term consequences of this crisis. The Adval Tech Group is not giving specific guidance on total income and EBIT in 2020.

Measures in connection with the coronavirus

The Executive Management of the Adval Tech Group is monitoring the situation regarding the spread of the coronavirus very carefully, and is constantly re-evaluating the effects on the Adval Tech Group and the order situation. Its top priorities are the health and safety of employees and the ability to deliver to customers. Adval Tech is temporarily closing down its production activities at several sites until further notice. The sites in Niederwangen (Switzerland) and Endingen (Germany) are operating at a minimum production level. Adval Tech has brought in short-time working at some companies, operations and departments. The Board of Directors, the Executive Management and the managing directors of the Adval Tech subsidiaries have taken a voluntary fee and pay cut as of April 2020 to show their solidarity with the employees who are working reduced hours. The Adval Tech Group has taken all the necessary measures to overcome the crisis to the greatest possible extent and to ensure liquidity.

Key figures

2019

2018

Change

Total income (CHF million) 2)

178.9

198.2

-9.7%

Net turnover (CHF million)

173.6

191.3

-9.3%

Operating earnings before depreciation EBITDA (CHF million) 2)

18.4

20.7

-11.1%

Operating earnings EBIT (CHF million) 2)

10.3

12.4

-16.9%

Net profit (CHF million)

8.7

8.8

-1.1%

Cash flow from operations (CHF million)

4.2

13.7

-69.3%

Number of employees on December 31

1179

1288

-109

Dividend (CHF)1)

2.701)

4.20

1) Proposed by the Board of Directors

2) Alternative Performance Measure, see Annual Report 2019, pages 78 and 79, Note 3

Background information about the Adval Tech Group

Adding value through innovation – that's what Adval Tech stands for. The Adval Tech Group is a global industrial supplier of technologically sophisticated components and subassemblies made of metal and plastic. It focuses on selected activities, especially in its main target market, the automotive industry. As a supplier and value-adding partner, Adval Tech covers the entire value chain from product development to prototyping, to mold and tool development, and through to component production and assembly.

Download media release

www.advaltech.com/en/group/investors/company-news/ad-hoc-notices

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 14, 2020, General Meeting of Shareholders 2020 (limited attendance)

End of August 2020, announcement of semi-annual results 2020

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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