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14.08.2020 06:59:41

Press Release: Feintool: Significant decline in sales

The technology group Feintool recorded a significant decline in sales in

the first half of 2020 due to the COVID-19 pandemic. Compared to the

previous year, sales fell by 36 percent to CHF 212 million. This

resulted in an EBIT loss of CHF 18 million. Feintool is minimizing the

economic impact of the pandemic by implementing actions such as cost

cuts, postponing capital expenditures, short-time work schedules and

staffing reductions, and strengthening the group's liquidity. From

today's perspective, Feintool expects slightly higher sales and

significantly improved profitability in the second half of the year.

The Feintool Group generated net sales of CHF 212.3 million in the first

half of 2020. The System Parts segment's parts business shrank by 34.0%

to CHF 197.5 million in the reporting period. Sales in the Fineblanking

Technology segment fell by 47.0% to CHF 22.9 million. EBITDA fell by CHF

26.8 million, equal to three-quarters, down to CHF 8.0 million. Due to

the high level of depreciation and amortization, Feintool posted

negative operating earnings (EBIT) of CHF --17.4 million in the first

half of 2020. This corresponds to a decline of CHF 28.0 million. The

slump in sales - caused by the COVID-19 pandemic - had a significant

negative impact on both segments.

In the Fineblanking Technology segment, significantly lower sales

ultimately resulted in an operating loss (EBIT) of CHF 3.6 million. In

this context, Feintool continued to invest heavily in research and

development as an investment in the future. The System Parts segment

also suffered an EBIT loss in the first half of the year. Operating

earnings fell significantly by CHF 21.6 million to CHF --9.3 million.

Due to the considerable uncertainties that remain in place regarding the

extent of the pandemic and the high volatility of demand, it is

currently not possible to conclusively predict the overall impact on

sales and earnings for the full year 2020.

Crisis management measures

These developments are having a corresponding impact on Feintool's

planning and staffing levels. In this context, the group implemented

different measures depending on the region and country. In Europe, all

plants and key departments have been on short-time work schedules since

April. The size of the workforce will decline this year due to employee

turnover.

In the United States, a large part of the workforce was furloughed in

the spring in accordance with the labor market regulations in effect

there. As the plants are now seeing signs that the order situation is

recovering, a large portion of the workforce has been called back in to

work. In China, the number of employees is actually going to increase

due to the launch of new products.

In addition to HR measures, various actions were taken to further cut

costs. For example, selected capital expenditures were stopped or

postponed to a later date, available production capacities were used to

insource manufacturing processes, and the company also optimized its

inventories of raw materials and products. Cost management has led to

significant savings at all plants without jeopardizing the group's

ability to ship its products. In general, however, the same thing

applies in this regard as well: Feintool is facing different conditions

and market trends in the various regions and has introduced different

measures accordingly.

Looking toward the future with optimism

Despite the current uncertainties surrounding COVID-19 and the crisis in

the automotive market, Feintool is optimistic about the future. In

recent months, Feintool has stepped up its involvement in the megatrend

of e-mobility with its mainstay of electro lamination stamping in

Germany and China. This should put Feintool in the right position for

the expected development in this drive technology, enabling it to

benefit from the predicted global growth in e-mobility over the next few

years. For the hybrid drive market segment, which is also global, the

volume of orders, especially in Europe and China, has risen

significantly in recent months and is expected to increase further in

the second half of the year. In the medium to long term, significant

global growth is also expected in this market segment. We are also

encouraged by the fact that in the first six months we have won projects

for existing and new customers in the automotive industry in all regions

of the world and that significant new product start-ups in the areas of

fine blanking and forming are pending.

In general, due to our long-term and sustainable strategy, we expect our

position in the European, US and Asian markets to strengthen further,

especially in the coming months. In addition, despite all the measures

taken to contain the COVID-19 crisis, we are continuing to pursue

forward-looking development projects. For example, we believe the

production of bipolar plates for fuel cells holds great potential.

We are confident and optimistic that we are well prepared for the

challenges that lie ahead in the coming months. Feintool has healthy

liquidity and is financially well secured. We have concluded a new

credit agreement with our principal banks in Switzerland and Germany

which will ensure our operational and financial flexibility in the

current challenging environment.

Thanks to its broad technological base and numerous attractive projects,

Feintool can now take advantage of the opportunities arising in the

future from new drive technologies for vehicles. This area of focus is

key to our future strategic development.

Changes to the executive board

Feintool CFO Thomas Bögli will retire next year and leave the

company at the Annual General Meeting in April 2021. His successor will

be Samuel Künzli. The 35-year-old, who is originally from Eastern

Switzerland, holds a Swiss Federal diploma in auditing and most recently

worked for Stadler in Bussnang as Swiss Division CFO.

Guidance

Due to the considerable uncertainties that remain in place regarding the

extent of the pandemic and given the high volatility of demand, it is

not currently possible to conclusively predict the overall impact on

sales and earnings for the full year 2020. From today's perspective,

Feintool expects slightly higher sales in the second half of

the year and significantly improved profitability thanks to the

cost-cutting measures the company has implemented.

Overview of key financial indicators

January 1 to June January 1 to June Change in

30, 2020 30, 2019 Change local

currency in

in CHF million in CHF million in % %

--------------------------- ----------------- ----------------- ------ -----------

Net sales Feintool Group 212.3 331.9 -36 -33.3

--------------------------- ----------------- ----------------- ------ -----------

-- Fineblanking Technology

segment 22.9 43.2 -47 -46.8

--------------------------- ----------------- ----------------- ------ -----------

-- System Parts segment 197.5 299.4 -34 -31

--------------------------- ----------------- ----------------- ------ -----------

EBITDA 8 34.8 -77 -75

--------------------------- ----------------- ----------------- ------ -----------

Operating earnings (EBIT) -17.4 10.5 -265.3 -269.2

--------------------------- ----------------- ----------------- ------ -----------

-- Fineblanking Technology

segment -3.6 1.2 -389.3 -389.7

--------------------------- ----------------- ----------------- ------ -----------

-- System Parts segment -9.3 12.3 -175.8 -179.2

--------------------------- ----------------- ----------------- ------ -----------

Group result -17.5 4.7 -476.1 -509.1

--------------------------- ----------------- ----------------- ------ -----------

Free Cashflow -19 -4.9 -287.8

--------------------------- ----------------- ----------------- ------ -----------

Orders received -- capital

goods 11.8 27 -56.2 -56

--------------------------- ----------------- ----------------- ------ -----------

Orders backlog -- capital

goods 12.3 23.8 -48.2 -48.1

--------------------------- ----------------- ----------------- ------ -----------

Change in

30.06.2020 31.12.2019 Change local

currency in

in CHF million in CHF million in % %

--------------------------- ----------------- ----------------- ------ -----------

Total assets 686.1 706.3 -2.9

--------------------------- ----------------- ----------------- ------ -----------

Shareholder's equity 282.8 309.9 -8.7

--------------------------- ----------------- ----------------- ------ -----------

Net debt 162.5 140.8 15.4

--------------------------- ----------------- ----------------- ------ -----------

Employees 2 363 2 641 -10.5

--------------------------- ----------------- ----------------- ------ -----------

(MORE TO FOLLOW) Dow Jones Newswires

August 14, 2020 01:00 ET (05:00 GMT)

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