Feintool increases sales and operating profit
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.
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
|Change in %||Change in local currency|
|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|
|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|
Expected releases of high-volume parts production
Orders received third (investment goods)
Order backlog third (investment goods) (Fineblanking Technology segment)
*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.
Feintool in brief