Press Release: Feintool increases sales and operating profit

Feintool International Holding AG / Feintool increases sales and

operating profit. Processed and transmitted by Nasdaq Corporate

Solutions. The issuer is solely responsible for the content of this

announcement.

The technology company looks back on a positive financial year again:

Compared to the previous year, sales increased in 2017 to CHF 612.3

million; organic growth in local currency is 8.1%. The operating

earnings (EBIT) increased by 15.7%* in local currency compared to the

previous year, to more than CHF 46.3 million. The operating margin

amounted to 7.6%.

Organic higher sales

The global automotive industry continued to grow in 2017. Feintool

benefited from this positive industry trend and grew - despite the

challenging conditions - by outpacing the market in every relevant

region.

The Feintool Group generated sales of CHF 612.3 million in the 2017

financial year, which corresponds to an increase of 10.9%. Adjusted for

currency and acquisition effects, the company achieved growth of 8.1%.

Turning to the corporate divisions, the System Parts segment, in which

Feintool is globally active with the high-volume production of precise

fineblanked and formed components accounting for the largest share of

sales. In the reporting year, the segment grew in local currency by

13.4% to CHF 547.4 million, thus generating just under 90% of the

consolidated sales. This increase is primarily due to the increased

sales volume of new products in Europe in comparison to the previous

year and in the acquisition of the forming plant in China.

In the Fineblanking Technology segment, in which Feintool provides

comprehensive technological solutions for fineblanking, sales totalled

CHF 91.4 million. The slight 1.3% drop in local currency compared to the

previous year is due to a geographic shift towards Asia where generally

presses are equipped with less features.

EBIT rose sharply

All segments and regions made a positive contribution to the operating

profit this year as well. The Feintool Group generated an operating

profit (EBIT) of CHF 46.3 million, which is an increase of 10.7% in

local currency. The operating business achieved an EBIT margin of 7.6%.

The System Parts segment achieved an EBIT of CHF 52.6 million and an

EBIT margin of 9.6%. The sales growth due to the good situation of the

automotive industry and new launches or ramp-ups of many products led

once again to higher capacity utilization at most companies, which had a

positive impact on margins overall. The programs for increasing

efficiency at all locations and higher added value have supported this

pleasing development.

In the Fineblanking Technology segment investment goods business,

Feintool generated an operating profit of CHF 4.0 million. The margin

fell to 4.4% compared to the previous year. The main reason for this

development is the intentional increase in research expenses of CHF 7.0

million as an investment in the future as well as changes to the product

mix towards presses with less features.

Group result has risen

Feintool generated a consolidated net income of CHF 27.7 million overall,

which equates to a margin of 4.5%.

Numerous orders and expected releases

The expected releases from our customers in the series parts business

over the next six months total CHF 264.0 million. This means that this

value increased by 9.5% and is now again at a record high at the end of

the year. Accordingly, our customers expect a thoroughly positive market

environment in every region.

Orders received in the Fineblanking Technology segment rose by 17.2% to

CHF 100.6 million, with CHF 17.9 million stemming from the System Parts

segment, which was significantly less than in the previous year.

Third-party orders received thus rose substantially, by 44.5%, to CHF

82.7 million. As a result, the orders backlog increased by 29.4% to CHF

45.4 million, with CHF 7.1 million being from intragroup orders. The

order inventory is thus amounts to about eight months.

Dividend distribution as planned in the previous year

In view of the positive financial results as well as the stable net

assets and financial position, the Board of Directors will therefore

propose to the General Meeting on April 24, 2018, that it pay a dividend

of CHF 2.00 per Feintool share from capital contributions.

Expansion of market capacity

In April, Feintool acquired a forming plant from the Schuler Group;

currently its sales are ramping-up. Additional investments and

expansions are planned in the next two years. The acquisition allows

Feintool to close the strategic gap and now offer sophisticated forming

applications in all important automotive markets, thus continuing to

expand its market position.

Feintool has also invested in Europe in order to better serve the

growing automotive market. In 2017, we began the construction of a new

plant in Most, located in the Czech Republic between Dresden and Prague.

The new location will contain the entire fineblanking process, with a

focus on high-volume parts production and spare parts. When production

starts at the end of 2018, around 60 employees will be working there.

Feintool looking to seize market opportunities

With a view to exploiting rapidly any market opportunities that present

themselves, Feintool's Board of Directors will propose to the Annual

General Meeting on 24 April 2018 the creation of authorized capital

amounting to 600,000 shares, equivalent to 13.4% of current share

capital, with the possible exclusion of subscription rights for existing

shareholders.

Change in the Board of Directors

In connection with the sale of the entire investment held by Dr. Thomas

Muhr and Muhr und Bender KG (Mubea) in Feintool International Holding AG,

Dr. Thomas Muhr and Dr. Rolf-Dieter Kempis, members of the Board of

Directors to date, will not stand for re-election. On April 24, 2018,

the Board of Directors will propose to the General Assembly that Norbert

Indlekofer be elected as a new member. Mr. Indlekofer was a

long-standing top manager at Schaeffler, a German supplier for the

automotive and mechanical engineering industries, and most recently CEO

Automotive at Schaeffler AG. The proven expert in the field of

automotive powertrains is now a member of boards of directors and

supervisory boards of several international companies.

Positive outlook

We expect the positive development of business to continue in financial

year 2018, although in a market environment characterized by political

uncertainties. Overall, we expect sales of CHF 630 to 650 million and an

EBIT margin of 7.5 to 8.0%.

*In the previous year, the Swiss pension fund adapted the provisions to

the current general conditions (life expectancy, interest rate

expectations, etc.). This resulted in a one-off positive effect of CHF

7.1 million on the operating earnings and a positive effect of CHF 5.5

million for net income. All previous year and comparable figures in this

report are presented without this effect.

Overview of key financial indicators

2017 2016 Change in local

in CHF in CHF Change currency

million million in % in %

Net revenue of the Feintool Group 612.3 552.2 10.9 10.2

Fineblanking Technology segment 91.4 92.7 -1.4 -1.3

System Parts segment 547.4 479.3 14.2 13.4

Earnings before interest, taxes, depreciation, and

amortization (EBITDA) without one-off effect* 83.2 76.0 9.5 8.6

Earnings before interest, taxes, depreciation, and

amortization (EBITDA) 83.2 83.1 0.2 -0.6

Operating profit (EBIT) without one-off effect* 46.3 41.3 12.0 10.7

Fineblanking Technology segment* 4.0 4.3 -7.8 -7.5

System Parts segment* 52.6 44.4 18.7 17.5

Earnings before interest and taxes (EBIT) 46.3 48.4 -4.4 -5.5

Consolitated net income without one-off effect* 27.7 26.6 4.3 3.5

Consolidated net income 27.7 32.1 -13.5 -14.1

Total assets 597.4 530.7 12.6

Shareholder's equity 255.2 229.9 11.0

Net debt 81.9 16.2 405.5

Expected releases of high-volume parts production

(System Parts segment) 264.0 240.9 9.6 6.0

Orders received third (investment goods)

(Fineblanking Technology segment) 82.7 57.2 44.6 44.7

Order backlog third (investment goods) (Fineblanking

Technology segment) 38.3 19.1 100.5 100.8

Employees 2 485 2 239 11.0

Trainees 81 68 19.1

*In the previous year, the Swiss pension fund adapted the provisions to

the current general conditions (life expectancy, interest rate

expectations, etc.). This resulted in a one-off positive effect of CHF

7.1 million on the operating earnings and a similar positive effect of

CHF 5.5 million on the Group's net income.

All the information on the Feintool annual results for 2017 can be found

in the 2017 Annual Report, which is available online at

http://www.feintool.com/unternehmen/investor-relations.html

Feintool in brief

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March 06, 2018 01:00 ET (06:00 GMT)