V-ZUG HOLDING AG V-ZUG Group - Full-year results 2023
13 March 2024
V-ZUG increases profitability despite a difficult market environment - the focus on differentiation begins to bear fruits.
Agenda
- Overview
- Differentiation Strategy
- Sustainability
- Financial Information
- Outlook
- Investment Case
- Q&A
1. Overview: Full-year 2023 at a glance
Challenging market situation characterised by low demand doesn't stop V-ZUG from investing into its future
Improved profitability with lower net sales
-
Net sales: CHF 585.4 million
(- 8.0 % vs. prior year / - 7.2 % FX neutral) - EBIT improved on a low level: CHF 16.8 million (CHF + 6.5 million vs. prior year)
- EBIT margin: Full year at 2.9 %
- EBIT margin: 2H23 at 4.1 %
- Positive free cash flow: CHF 18.2 million
Strategic transformation on track
- Differentiation / positioning of V-ZUG as a premium brand is paying off
- Evolution of the product portfolio
- International expansion
- Quality excellence programme
Sustainability - comprehensive non-financial reporting
- Circular economy factory operates as prototype
- Business model "Product as a Service" contributing to longevity and circularity
- Over 30 product life cycle assessments showing measures to reduce the environmental footprint
- CO2 compensation web shop also accessible in international markets
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1. Overview: Navigating a rapidly changing business environment
Manage the challenging market situation - stay customer focussed - Simplify V-ZUG
Supply chain
Pandemic-relateddisruptions boom
Destocking
Investments in differentiation to mitigate adverse impact from external factors
2019 | 2020 | 2021 | 2022 | 2023 | ||
Net sales | Projected net sales with 3 % annual growth | |||||
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1. Overview: Main market challenges in 2023
Continued low market demand and full inventories on partners' side leading to low volumes
Market situation - after a pandemic-related boom in 2021/2022 and supply shortages in 2022 followed by high purchase price increases, market demand was low in almost all markets due to:
- Uncertainty and imponderability regarding the worldwide economy, inflation/interest rate development, geopolitics
- Destocking activities of trade partners
Thus, the markets, and in particular the Swiss Market, have showed the following developments:
- New builds: Slowdown due to interest rate hikes, planning uncertainties and slower processing of building permits
- Renovation: Currently under-indexed after pandemic-related boom; gradual return to normal situation
- Replacement: Stable
Procurement prices - levelled out early 2023 but remained on a high level; no more spot-market purchases needed as of March 2023
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1. Overview: Delivery performance back on track
After supply chain issues in 2022, V-ZUG is back to unrestricted delivery capability since February 2023
Readiness as wished FY23
91%
0% | 100% |
Postponement (median) in days
20
15
10
5
0
1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
Delivery as promised - FY23
96%
0% | 100% |
Delay (median) in days
20
15
10
5
0
1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
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1. Overview: Measures to reduce operating costs
The initiative "Simplify V-ZUG" has been launched in Q2 2023 and continues to yield results
Short-term measures - 2023
- Temporary workforce has been reduced based on lower volumes
- Reduction of holiday and overtime balances
Mid-term measures - 2023-2025
- A program to address the structural cost base in conjunction with a further increase of agility has been launched in Q3 2023; cost savings are going to be channeled in initiatives fostering profitable
▪ Vacancies are only selectively filled, recruitment | growth |
activities by and large suspended | ▪ Continuous efforts to improve gross profit |
▪ Projects have been reprioritized |
In addition to cost-reduction measures, marketing and sales efforts have been increased.
Brand and products are well positioned to benefit from a market recovery; in Switzerland as well as in International Markets.
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1. Overview: Net sales development
Share of International Markets lower due to Europe and OEM business
Net sales in CHF million | ||||
700 | ||||
15.2 % | 18.4 % | 17.8 % | ||
600 | 11.8 % | |||
500 | ||||
400 | ||||
300 | ||||
200 | ||||
100 | ||||
0
2020 | 2021 | 2022 | 2023 |
Switzerland | International Own Brand | International OEM |
% International Markets in % of net sales
International own brand | ||
Net sales by region in CHF million | Net sales: - 7.8 % | |
FX neutral: - 1.3 % | ||
30.6 | ||
48.2 | ||
- 18.5 % | ||
+2.8 % |
25.2
- 21.9 %
585.4 481.4
- 8.0 % - 7.3 %
(FX neutral: - 7.2 %)
Switzerland | Europe w/o CH | Americas | Asia/Pacific |
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1. Overview: Gross profit improved
Sales price increase and less spot buys compensate lower volumes and higher COGS
+ 34 | -12 | +1.9% |
-39
196 | + 21 | 200 | |||
2022 | 2023 | ||||
Gross profit | Sales price | COGS | Volume | Spot buys | Gross profit |
in CHF million
Sales Prices
- Full year impact of sales price increases in 2022 and 2023
Volume
- Low demand due to geopolitical uncertainties, increased interest rates and inflation leading to low customer mood
- Destocking by trade partners during 2023
COGS / Spot buys
- Full year impact of purchase price increases between 2022 and 2023; stabilizing during 2023
- Increased inventory valuation adjustment
- No more use of spot buys as of March 2023
The deviation figures to prior year are approximations and must be understood in terms of magnitude.
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Disclaimer
V-ZUG Holding AG published this content on 12 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 March 2024 05:44:04 UTC.
