Adval Tech : April 16, 2019 | Adval Tech consolidates its position as a global module supplier to the automotive industry

Media release Adval Tech Group 2018 annual financial statements and outlook for 2019

Niederwangen, April 16, 2019, 7.00 a.m. - With net profit of CHF 8.8 million and EBIT of CHF 12.4 million, the Adval Tech Group confirmed the long-term positive trend in financial year 2018. This is due in particular to the systematic implementation of the focusing strategy and to measures aimed at increasing productivity. As already stated on March 21, 2019, the group posted total income of CHF 198.2 million in 2018 (2017: CHF 207.9 million), EBITDA of CHF 20.7 million (2017: CHF 19.2 million) and an EBIT margin of 6.2% (2017: 5.1%). At the Annual General Meeting on May 23, 2019, the Board of Directors will propose a payment from capital contribution reserves of CHF 4.20 per share.

In recent years, the Adval Tech Group acquired several large orders which will ensure capacity utilization at individual sites for years to come. As an industrial partner to the automotive industry, Adval Tech is developing from a components supplier to a supplier of systems and modules, from a parts manufacturer to a one-stop shop with development capabilities, from a Europe-focused to a global partner; and from a supplier to second-tier providers to a direct provider.

Total income

The Adval Tech Group generated total income of CHF 198.2 million in 2018 (previous year: CHF 207.9 million). Volumes were influenced by the sale of Adval Tech Thailand and the decline in demand due to the delayed introduction of the new process for testing exhaust emissions in the automotive industry in Europe.

The Adval Tech Group generated 71% of its sales with customers in Europe (2017: 72%). Asian customers accounted for 12% of sales (2017: 12%), Latin American customers for 11% (2017: 9%) and North American customers for 6% (2017: 6%).

The net turnover of the Swiss subsidiary Adval Tech (Switzerland) AG - in particular as regards the sale of transfer presses (technology business) - as well as the Hungarian subsidiary Adval Tech (Hungary) Kft., which produces plastic parts for automotive manufacturers, and the subsidiaries in China and Malaysia, were pleasingly high.

Profitability

EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to CHF 20.7 million in the year under review (previous year: CHF 19.2 million, +8 %). The EBITDA margin was 10.5 % (2017: 9.2 %). EBIT (earnings before interest and taxes) amounted to CHF 12.4 million (previous year: CHF 10.7 million, +16 %), corresponding to an EBIT margin of 6.2 % (2017: 5.1 %). Adjusted for currency and divestment effects, the EBITDA margin was 10.1 % and the EBIT margin 5.9 %. The biggest contribution to the operating result came from Adval Tech (Switzerland) AG, Niederwangen, Adval Tech (Hungary) Kft., Adval Tech (Suzhou) Ltd. and Adval Tech (Malaysia) Sdn. Bhd. The overall result is all the more pleasing when one considers that in 2018 an important customer of the subsidiary in Germany had to file for insolvency. Thanks to the professional and rapid response of Adval Tech's local management, the loss was reduced to around CHF 0.3 million.

Net profit for 2018 amounted to CHF 8.8 million (2017: CHF 8.7 million, +1%). While the sale of the operations in Thailand reduced the result by CHF 3.7 million due to recycling of goodwill to income statement, the one-time payment of CHF 2.9 million posted in the first half in connection with the sale of the Molds segment had a positive impact on the net profit.

Investments and net current assets

In 2018 the Adval Tech Group invested CHF 10.4 million (2017: CHF 17.4 million) in property, plant and equipment, primarily for stamping presses, injection molding machines and the expansion of the production area in Hungary. Cash flow from operating activities amounted to CHF 13.7 million in 2018 (2017: CHF 14.5 million), operating free cash flow to CHF 11.3 million (2017: CHF -2.6 million) and free cash flow to CHF 12.5 million (2017: CHF -5.1 million). Net current assets (trade accounts receivable, inventories and trade accounts payable) stood at CHF 26.0 million at the end of December 2018 (December 31, 2017: CHF 36.8 million). Net current assets accounted for 18.1% of total income at the end of December 2018 (December 31, 2017: 19.3%).

Equity ratio and dividend payout

The Adval Tech Group improved its equity ratio from 67.8 % at the end of 2017 to 68.8 % at the end of 2018. At the Annual General Meeting on May 23, 2019, the Board of Directors will propose a dividend of CHF 4.20 per share.

Outlook

In the light of the uncertainties in the automotive industry Adval Tech expects a challenging and volatile market environment in 2019. Adval Tech sees rising demand for components for networked vehicles, autonomous driving, shared mobility and electrification as potential growth drivers. Great opportunities are also opening up with the introduction of new materials in lightweight construction concepts and the further development of the group into a global module supplier.

The Adval Tech Group is not giving specific guidance on total income and EBIT in 2019.

Key figures	2018	2017	Change
Total income (CHF millions)	198.2	207.9	-4.7%
Net turnover (CHF millions)	191.3	200.3	-4.5%
Operating earnings before depreciation EBITDA (CHF millions)	20.7	19.2	+8%
Operating earnings EBIT (CHF millions)	12.4	10.7	+16%
Net profit (CHF millions)	8.8	8.7	+1%
Free cash flow (CHF millions)	13.7	14.5	-5.5%
Number of employees on December 31	1,288	1,399	-111
Dividend (CHF)	4.201)	4.00	+0.20

1) 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.

Download Media release

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

Contact

Markus Reber, CFO, phone [phone], [e-mail]

Valeria Poretti, Head Corporate HR/Communication, phone [phone], [e-mail]

Download annual report

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

Agenda

May 23, 2019, Annual General Meeting 2019

End of August 2019, Announcement of semi-annual results 2019

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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