V-ZUG HOLDING AG
V-ZUG Holding AG / Key word(s): Annual Results Media release dated 15 March 2022 / Ad hoc announcement pursuant to Art. 53 LR Zug, 15 March 2022 - The V-ZUG Group continued its growth trajectory in the 2021 financial year. Net sales once again saw a significant jump of 9.5% (CHF 623.7 million; previous year CHF 569.4 million), as did the operating result with +27.5% (CHF 62.7 million; previous year CHF 49.2 million). Thanks to these record sales, the medium-term double-digit EBIT margin target was achieved ahead of schedule in the year under review. This gratifying result was driven above all by continued high demand in the Swiss Market and strong growth in international business. The second half of the year was marred for the V-ZUG Group, as it was for the entire industrial environment, by the challenges posed by the intensifying supply chain situation and the associated increase in purchase prices for materials and logistics services. The V-ZUG Group is still expecting a positive sales performance in excess of +6% for the 2022 financial year, thanks to full order books in Switzerland and across our International Markets. For the latter, sustained sales growth in excess of 10% per year is expected over the next few years. Major uncertainties persist in relation to the war in Ukraine and to developments in supply chains and purchase prices, whereby the latter is not expected to ease much before the end of 2022. Accordingly, the EBIT margin in the first half of 2022 is expected to be within the realm of that of the second half of 2021. Subject to any relevant and lasting geopolitical upheavals, the Group is aiming for an EBIT margin of 10% for the full 2022 financial year, given the high sales and revenue expectations and effective cost control.
Another significant rise in operating result V-ZUG Group's net sales rose compared with the previous year, standing at CHF 623.7 million (previous year CHF 569.4 million), with both the Swiss Market (+5.4%) and strong growth in the International Markets (+40.5%) contributing to this. Internationally, both the own-brand business (+26.5%) and the OEM business (+91.9%) performed exceptionally well. Furthermore, for the first time in its history, V-ZUG delivered more than 500,000 appliances to its customers in a single calendar year. At CHF 62.7 million, the operating result (EBIT) was 27.5% higher than the previous year's figure of CHF 49.2 million. With an EBIT margin of 10.0% (previous year 8.6%), the V-ZUG Group reached its medium-term target of a double-digit EBIT margin as announced as part of its stock market listing for the first time. Operational productivity as measured by the EBITDA margin increased to 15.2% (previous year 14.0%). As mentioned in the 2021 Half-Year Report, rising materials prices and supply shortages - particularly of microprocessors - resulted in a significant drop in the EBIT margin from 12.4% in the first half of 2021 to 7.7% in the second half of the year, particularly as sales price increases did not take effect until the fourth quarter of 2021. In the 2021 financial year, the V-ZUG Group's cash flow from operating activities totalled CHF 63.5 million (previous year CHF 99.4 million), and free cash flow (after investment activities) totalled CHF 9.0 million (previous year CHF 42.0 million). The difference from the previous year is primarily due to higher stock levels and tax payments alongside continuing high levels of investment. As at 31 December 2021, the balance sheet of the V-ZUG Group showed a strong equity ratio of 72.9% (previous year 70.9%) and cash and cash equivalents incl. securities of CHF 117.3 million (previous year CHF 107.8 million). 2021: second year of COVID-19, rising costs and supply chain challenges Despite the ongoing COVID-19 pandemic and the increasing materials shortages and bottlenecks in logistics capacities, production stoppages were mostly avoided in the reporting year. Given the adverse circumstances, delivery times remained acceptable for dishwashers and good for all other product categories. Price increases on purchasing materials and logistics services have forced us to adjust sales prices. The first price increase took place in October 2021 and a further increase will take effect in April 2022. Additional price increases will be unavoidable in the coming months. Our effective Health & Safety policy minimised the number of COVID-19 cases and isolation-related absences across the V-ZUG Group companies in the reporting year. Employees at the Zug and Arbon sites also had the opportunity to get vaccinated on-site. 2022 outlook: V-ZUG is well placed to seize opportunities and overcome challenges Demand for household appliances increased as a consequence of the COVID-19 pandemic, particularly in the Swiss Market, but this is expected to normalise at a high level in the 2022 financial year. V-ZUG is anticipating net sales to grow by more than 6% in 2022 as a result of the exceptionally full order books, price adjustments in Switzerland as well as growing market penetration and full order books in International Markets. There are still many uncertainties around supply chains and purchase prices. As a result, significant resources will still need to be spent in 2022 on ensuring production and delivery levels. The purchase price situation also means that sales prices will need to be adjusted. Overall, this situation is not expected to ease much before the end of 2022. As in the second half of 2021, the EBIT margin is expected to remain modest in the first half of 2022. Subject to any major and lasting geopolitical upheavals, the V-ZUG Group is aiming for an EBIT margin of 10% for the full financial year, given the high sales and revenue expectations and effective cost control. All transformation projects will continue as planned. The strong performance of the business in the past financial year resulted in the Group achieving some of the medium-term targets announced as part of the stock market listing ahead of time (EBIT margin >10%; organic growth between 2 and 3%) and being well on the way to achieving others (doubling international business within five years compared with 2019). As part of revising its medium-term plans, the V-ZUG Group has now established the goal of achieving annual organic net sales growth of 3% at Group level by 2026, including annual organic net sales growth of over 10% in the International Markets, and an EBIT margin within the range of 10 to 13%. There have been no fundamental changes to the dividend policy announced in the context of the stock market listing. As such, in light of continued significant investments in developing new products and digital solutions, further expansion of the International Markets, marketing and the transformation of the production site in Zug, the Board of Directors is proposing to the Annual General Meeting that no dividend be paid for the 2021 financial year. Unusual dynamism on the Swiss Market and thriving international progress The short-term economic recovery driven by continuing high demand led to strong sales in 2021 in a normally rather steady Swiss Market environment. Compared with the previous year, net sales rose by 5.4% and totalled CHF 529.1 million (previous year CHF 502.1 million). As a result, V-ZUG can claim market leadership in Switzerland. In the service business, the V-ZUG Group maintained a level of service that met high customer expectations and the company's service promise, and complied with COVID-19 Health & Safety measures. In addition, the SIBIRGroup AG further expanded its strength in the all-brand service area. The international growth strategy continued to bear fruit in 2021. Net sales increased by 40.5% to CHF 94.6 million (previous year CHF 67.4 million). This result is due to continued excellent growth in the own-brand business (+26.5%) with net sales of CHF 67.0 million (previous year CHF 53.0 million) and significant increases in the OEM business, with net sales of CHF 27.6 million (previous year CHF 14.4 million). The associated increase in the contribution margin from international business drove further growth in the International Markets, again resulting in a positive contribution to V-ZUG's structural costs. The presence of the V-ZUG brand in major metropolitan areas around the world continued to expand with the opening of new V-ZUG Studios (showrooms). The new V-ZUG Studio in London was completed at the end of 2021, but due to the ongoing COVID-19 pandemic, the grand opening will take place at the end of March 2022. In addition, a V-ZUG Studio is scheduled to open in Paris in the second quarter. This will be followed by the V-ZUG Studio in Sydney in the third quarter and the V-ZUG Studio Vienna in the fourth quarter. New products, new business models, new digital solutions The launch of the new Excellence Line was a highlight for V-ZUG last year and was extremely well-received by customers and distribution partners both in Switzerland and in International Markets. The Excellence Line will be expanded in April 2022 with the new 'PowerSteam' - a world first from V-ZUG, with an innovative, multi-application combination of steam and microwave technology that combines fast, precision cooking with tried and tested reliability and guaranteed top results. In addition, V-ZUG will be launching the new 'CombiCookTop' - the second generation of the hob with an integrated extractor. V-ZUG is currently running pilot projects to assess a new business model - renting washing machines to business customers. The rental appliances remain the property of V-ZUG, which provides any maintenance and service required during the rental period. At the end of the rental period, the appliances are returned, and any reusable components are recycled, promoting a sustainable circular economy. In the 2021 financial year, the V-ZUG Group launched several new digital solutions as well as new releases of existing apps. At the heart of these is the 'V-ZUG Home' app, with expanded functionalities and content - and easier link-up to the digital cook assistant for recipes and menu planning ('V-Kitchen') - making it the ideal complement to the new Excellence Line. Sustainability with a holistic focus At V-ZUG, digitalisation plays an important role when it comes to sustainability and in raising awareness among end customers about the environmentally friendly use of V-ZUG appliances. Measuring our ecological footprint and creating life cycle assessments was another key task for the V-ZUG Group in the 2021 financial year. This created the basis for the V-ZUG Group to align its commitment to climate action with quantifiable targets and clear priorities. Even under the new, significantly stricter energy efficiency regulations, 58% of the reclassified appliances sold by V-ZUG in the reporting year were in the top three energy efficiency classes (A - C). Production sites are kept CO2-neutral by preventing and reducing emissions and through the 'V-Forest' reforestation project as part of voluntary offsetting. The associated compensation amounts are financed by a CO2 fund, built up from a voluntary internal CO2 levy for each tonne of CO2 emitted. V-ZUG pursues a holistic approach to sustainability, which is embedded in V-ZUG's corporate culture and forms an integral part of the V-ZUG brand. As part of this, an equal pay analysis was carried out in accordance with the Gender Equality Act and confirmed that V-ZUG in Switzerland is a fair employer that pays men and women equally for equal work. V-ZUG's increasingly diverse workforce is also reflected in the increasing number of women overall (around 23%) and the proportion of women in senior management roles (23.6%). Real estate projects and site transformation progressing At the Zug site in November 2021, the new enamelling coating technology system was approved for production in the 'Zephyr Hangar' building. Furthermore, after receiving the building permit at the beginning of the year, construction began in May 2021 on the final building of the new vertical factory, 'Zephyr Ost', which will optimise logistics and production processes in Zug. The operating equipment installation and commissioning at the new refrigerator factory in Sulgen, which had been under way since autumn 2020, was completed on schedule and production gradually started in January and February 2022. Key figures
About the V-ZUG Group "Bringing simplicity into your home and creativity into your kitchen." V-ZUG is Switzerland's leading brand in household appliances and also markets its products in selected premium markets abroad. V-ZUG has been developing and manufacturing kitchen and laundry appliances in Switzerland for more than 100 years and offers comprehensive service in all of its markets. The SIBIRGroup AG, which focuses on the Swiss-wide provision of all-brand service and the sale of household appliances, is another part of the V-ZUG Group. The V-ZUG Group currently employs around 2,200 people. The holding company V-ZUG Holding AG is listed in the Swiss Reporting Standard of SIX Swiss Exchange in Zurich and represented in the Swiss Performance Index (SPI) (securities number 54 248 374, ISIN CH0542483745, ticker symbol VZUG). Key dates
Further information
Adrian Ineichen
Patrik Leisi This media release / ad hoc announcement is available at www.vzug.com/ch/en/investor-relations-news and the 2021 annual report is available at www.vzug.com/ch/en/financial-reports. Legal notes The expectations expressed in this media release / ad hoc announcement are based on assumptions. Actual results may deviate from these assumptions. This media release / ad hoc announcement is published in German and English. The German version is binding. V-ZUG Holding AG processes personal data in accordance with its privacy statement, which is available at www.vzug.com/ch/en/privacystatement. Ad hoc / media release (pdf) End of ad hoc announcement |
1302319 15-March-2022 CET/CEST
