interim report 2017

and to accommodate the growing size of wind blade moulds was started in the first six months of the year. In addition, Gurit was able to win a major w...

0 downloads 45 Views 332KB Size
interim report 2017

Gurit Interim Report 2017

Facts at a Glance

Gurit achieves net sales of CHF 175.2 million; operating profit increases by 11% to CHF 21 million and reaches 12% of net sales in the first half-year 2017.

Sales by End Market 1HY 2017 Composite Materials 74 % (75 %) Tooling 20 % (20 %)

Wind Energy 40 % (40 %)

Key Figures Consolidated Income Statement 1HY 2017 (in CHF million)

Net sales Operating profit

Composite Components 6 % (5 %)

Other Material Markets 34 % (34 %)

Net profit

175.2 21.2 15.3

(Prior-year period)

Key Figures Consolidated Balance Sheet (in CHF million)

Total assets

thereof Current assets

Total liabilities

thereof Current liabilities Equity

Equity ratio

2

Sales Dynamics 1HY 2017 over 1HY 2016 (at constant rates)

30.06.2017 31.12.2016

249.3 249.1 169.6

166.6

56.2

58.3

193.2

190.8

51.9

54.7

77.5 % 76.6 %

Composite Materials Wind Energy -3.0 % Other Material Markets -0.4 % Composite Components 14.8 % Tooling 0.5 %

Business and Financial Review Gurit Interim Report 2017

First Half-Year 2017: Strategic Progress, Exceptionally Strong Operating Profit, Small Dip in Sales Dear Shareholders, Gurit was able to achieve further progress in its strategy deployment in the first six months of the year. Among the major achievements were the acquisition of PH Windsolutions to complement the Gurit Tooling product and service offering, the foundation of a joint-venture for global balsa wood supply from Indonesia to secure product resources and quality manufacturing for Asia, and the long-awaited completion of material qualification for a global aerospace manufacturer in August 2017. Mixed market conditions experienced across our target industries led to a temporary dip in sales, especially in the Indian wind energy market, while profitability was increased further in the first half of the year, mainly due to efficiency gains and product mix effects. The target for the second semester 2017 is to capture the market opportunities resulting from the strategic achievements, to accelerate market and relative share growth across industries and regions and to utilize newly available capacities at best in order to achieve organic growth and profitability within the guidance range for the full-year

Rudolf Hadorn, Chief Executive Officer (left) Peter Leupp, Chairman of the Board of Directors (right)

2017.

Strategy Deployment 1HY 2017 Pursuant to the Company’s mid-term strategy to develop the wind, aero and automotive businesses with priority, the main focus of the strategy deployment in the first half-year 2017 was placed on strengthening of the Company`s current product range.

In the Composite Materials business unit, integration of the acquired PET business in Volpiano, Italy, into the Company`s structural core materials offering was one of the main tasks in the first six months of 2017. In addition, Gurit renewed its distribution agreement with Maricell S.r.l., an Italian producer of PVC structural foam, until December 31, 2020 with further extension options, which creates a mid-term perspective for all business participants. Furthermore, the Company signed an agreement to form a 3

Gurit Interim Report 2017

Business and Financial Review

joint venture for balsa wood production in Java, Indonesia, which assures a strong, high-quality source of balsa wood from the Asian-Pacific region to the global Gurit customer base. Subsequent to the reporting period, the Company signed a licensing contract with the Armacell Group under which Gurit is granted a global license for the patented ArmaFORM® PET GR technology until the expiry of the patent rights. The ArmaFORM® PET GR foam core technology enables manufacturing of extruded PET foam from 100% recycled (post-consumer) PET materials and supports customers across industries in their endeavor to increase usage of sustainable advanced composite materials across applications. Furthermore, Gurit was pleased to announce successful completion of material qualification for a global aerospace manufacturer for existing aircraft types on August 11, 2017. The Composite Components business unit succeeded in winning a new contract for the production and supply of carbon fiber-based exterior car body panels to an Italian premium automotive OEM in the first half-year 2017. Total value of the two-year contract is at around CHF 9 million and supply is scheduled to start in January 2018. The market interest for Gurit automotive products continues to be strong and the Company is very confident to be able to gain more business wins in the remainder of the year to build a base for future growth along its strategic ambition. The Tooling business further strengthened its technology position with the acquisition of PH Windsolutions Inc, a specialist in innovative wind blade mould automation systems, related installation and associated customer service especially in the Americas and Europe. The acquisition widens Gurit`s addressable customer base and also helps to achieve full global presence for Tooling, especially in the Americas region. Furthermore, set-up of yet another, larger production hall of 8500m² at the Tooling premises in Taicang, China, to increase production capacity and to accommodate the growing size of wind blade moulds was started in the first six months of the 4

year. In addition, Gurit was able to win a major wind turbine OEM as new customer for its Tooling business. The new customer placed a first set of orders for wind blade mould systems at a total contract value of some CHF 11 million to be produced and supplied in 2017.

Research & Development Investments in R&D in the first six months of 2017 were largely at the same level than in the previous-year period. Expenditures for R&D projects are foreseen to increase in the second half-year 2017 and will be related to the further enhancement of product properties of the Company`s synthetic structural core materials, mainly PET and SAN, as well as aerospace materials and the Gurit Composite Components efforts to industrialize the automotive exterior parts business further.

Market Environment and Demand Situation 1 HY 2017 Demand in the global wind energy industry was quite disparate in the first six months of the year. While newly installed capacity in Europe and North America was in line with expectations and came in at a fair level, the Asian-Pacific region showed a slower than anticipated pace. The amount of newly installed capacity in India, in particular, was significantly lower than projected and seen in the prior year due to the new rules in governmental wind power tendering which are from today`s perspective expected to create a strong demand pause until late fall 2017. Composite materials sales to the wind energy market in the first half-year of 2017 in total declined by -5.9% (currency-adjusted: -3.0%) as compared to the first six months of 2016 and accounted for 39.5% of total Group sales (1HY 2016: 40%). Production of wind turbine blade moulds and related equipment (Gurit Tooling) recorded a good first half-year with slight currency-adjusted growth over

Business and Financial Review Gurit Interim Report 2017

the previous year`s record level. The multi megawatt turbine blade mould demand in China, in particular, rose markedly with mould sizes in the range of mid70 to 80 meters. Demand for mould systems was at a continued pleasing level from both local and international customers. Overall, demand in the Tooling business is expected to be even slightly stronger in the second semester than in the first half of 2017. Sales of composite materials into other material markets in total declined by 3.1% (currency-adjusted: -0.4%) year over year. In the aerospace business, the overall order situation and number of aircraft built was favorable and resulted in a good demand situation and single-digit revenue growth for Gurit. The ongoing product qualification program with a major aircraft manufacturer was successfully concluded on August 11, 2017 and is expected to generate first smaller revenue contributions in the second half of the year. Demand in the global marine industry continued to show a mixed picture. Whereas the North American region experienced a certain rebound, Europe and Asia were characterized by an ongoing hesitating order situation and a lack of large builds. Overall, Gurit was able to maintain its market share in the first six months of the year. Due to the limited visibility in the marine business, Gurit does currently not expect the market situation to change significantly in the second semester of 2017. Material sales to the automotive industry grew slightly in the single-digit range year over year, although on a low overall revenue level. In the automotive components business, the Company returned to growth and was able to secure yet another contract for the production and supply of car body panels to start in January 2018. The composite component programs on hand developed as planned and underlined the Company’s technological excellence and superiority in terms of its manufacturing concept and production quality. Furthermore, the continued good level of available OEM programs

presents encouraging future prospects for the business. As of June 30, 2017, the Group’s order situation was stable.

Key Financial Figures 1HY 2017 and Business by Segments Gurit achieved Group net sales of CHF 175.2 million for the first half of 2017. This represents a currency-adjusted decrease of -0.5% and -3.9% in reported Swiss francs over net sales of CHF 182.3 million for the first six months of 2016. Acquisition-adjusted (PET business in Volpiano, Italy), net sales decreased by -4.7% over prior year in reported Swiss francs.

Gurit Composite Materials Presented with Mixed Market Conditions The Composite Materials segment achieved net sales of CHF 129.7 million in the first half of 2017 (1HY 2016: CHF 136.0 million). This represents a decrease of -1.8% on currency-adjusted basis and -4.6% in reported Swiss francs. Sales to the wind energy market dropped by -3% on a currency-adjusted basis (-5.9% in reported Swiss francs) to CHF 69.1 million in the first six months of 2017 (1HY 2016: CHF 73.5 million). Revenues with other material markets (Marine, Industrial, Automotive Materials) decreased by -0.4% on a currency-adjusted basis (-3.1% in reported Swiss francs) to CHF 60.6 million in the first half of 2017(1HY 2016: CHF 62.5 million).

Gurit Composite Components Back on Growth Track The Composite Components segment (automotive parts, land transportation components and structural engineering) reported sales of CHF 9.8 million for the first half-year 2017 as compared to CHF 9.4 mil5

Gurit Interim Report 2017

Business and Financial Review

lion in the first six months of 2016. This represents an increase of 14.8% on a currency-adjusted basis (+4.3% in reported Swiss francs).

of production equipment as well as for an additional, larger production bay at the Company`s Tooling premises in Taicang, China.

Gurit Tooling on Target Following the 2015 and 2016 record years, sales of wind turbine blade moulds and related equipment in the first six months of 2017 came in well and above our estimate at the beginning of the year. Revenues increased by 0.5% on a currency-adjusted basis (–3.3% in reported Swiss francs) to CHF 35.6 million (1HY 2016: CHF 36.8 million).

With an equity ratio of 77.5% at the end of June 2017 compared to 76.6% at the end of December 2016, Gurit`s balance sheet remains very solid.

Strong Operating Profit Despite the challenging market environment in the Composite Materials business, Gurit was able to achieve a further improved operating profit of CHF 21.2 million in the first six months of 2017 (1HY 2016: CHF 19.1 million). The operating profit margin accordingly rose to 12.1% of net sales compared to an operating profit margin of 10.5% of net sales for the first six months of 2016. Profitability in particular benefited from the continued good turnover in the tooling business as well as a favorable product mix in the composite materials business and a marked improvement in the automotive components business. Moreover, the ongoing operational improvements contributed to the exceptionally strong profitability level.

At the end of June 2017, the Company employed a global workforce of 2,237 full-time equivalents (FTE) as compared to 2,156 FTE`s as of December 31, 2016. New staff was mainly hired in the Tooling business as well as at the Company`s Corecell™ production site in Magog, Canada.

Outlook Overall, Management confirms to reach a low singledigit revenue growth for the full year 2017 under the assumption that the Indian wind energy market will return to growth in the fourth quarter of the year. The wind energy industries in Europe and the Americas are anticipated to see a fair amount of newly installed capacity in the second half of 2017. Operating profit margin is expected to reach the upper end of the guided range of 8 to 10 percent of net sales, including an anticipated non-recurring one-time expense in the range of around 1% of annual operating profitability.

Yours sincerely, Gurit Holding AG Gurit reports a net profit of CHF 15.3 million for the first half-year 2017 (1HY 2016: CHF 14.1 million). This represents an increase by 8.6% and equals to earnings per listed bearer share of CHF 32.78 (1HY 2016: CHF 30.16).

Operating Cash Flow and Balance Sheet In total, Gurit generated a positive net cash flow from operating activities of CHF 11.1 million in the first half-year 2017 (1HY 2016: CHF 12.6 million). Capital expenditures amounted to CHF 4.0 million in the first six months of 2017 (1HY 2016: CHF 7.5 million) and were used for replacement and upgrading 6

Peter Leupp Chairman of the Board of Directors

Rudolf Hadorn Chief Executive Officer

Interim Consolidated Financial Statements Gurit Interim Report 2017

Consolidated Income Statement

In CHF 1000

Net sales Other operating income Change in inventories of finished and unfinished goods Material expense Personnel expense Other operating expenses Impairment (charges) / reversals, net Depreciation Amortization Operating profit Finance expense Finance income Ordinary result Non-operating and extraordinary result Profit before tax Income tax expense Profit for the half-year

Note 4

Earnings per share Basic earnings per bearer share Diluted earnings per bearer share Basic earnings per registered share Diluted earnings per registered share

Half-year ended June 30, 2017 unaudited

Half-year ended June 30, 2016 unaudited

175 184 3 3 920 – 86 430 – 40 389 – 26 096 – 80 – 4 436 – 456 21 220 – 1 600 830 20 450 – 20 450 – 5 131 15 319

182 256 15 3 072 – 91 361 – 42 158 – 25 725 – 2 165 – 4 427 – 394 19 113 – 1 671 1 227 18 719 – 18 719 – 4 615 14 104

CHF 32.78 CHF 32.78 CHF 6.56 CHF 6.56

CHF 30.16 CHF 30.16 CHF 6.03 CHF 6.03

The accompanying notes form an integral part of these interim consolidated financial statements.

7

Gurit Interim Report 2017

Interim Consolidated Financial Statements

Consolidated Balance Sheet In CHF 1000

At June 30, 2017 unaudited

At December 31, 2016 audited

At June 30, 2016 unaudited

32 905 439 64 250 6 340 14 146 51 554 169 634

38 646 112 61 329 7 237 13 134 46 190 166 648

21 136 362 70 751 9 758 8 783 52 668 163 458

1 066 2 595 70 237 5 799 79 697

822 2 911 72 980 5 756 82 469

805 3 305 74 238 5 561 83 909

249 331

249 117

247 367

267 28 25 017 3 908 21 899 801 51 920

1 446 597 22 742 4 313 24 429 1 169 54 696

4 183 1 076 29 005 5 899 22 621 1 562 64 346

– 3 335 920 4 255

103 2 553 962 3 618

– 1 619 1 102 2 721

56 175

58 314

67 067

Share capital Capital reserve Treasury shares Hedging reserve Currency translation adjustments Offset goodwill Retained earnings Total equity

23 400 1 836 – 110 349 – 44 862 – 26 690 239 233 193 156

23 400 11 196 – 88 – 221 – 40 725 – 26 690 223 931 190 803

23 400 11 196 – 88 – 733 – 38 735 – 26 690 211 950 180 300

Total liabilities and equity

249 331

249 117

247 367

Assets Cash and cash equivalents Derivative financial instruments Trade receivables Other receivables Prepayments and accrued income Inventories Current assets Other receivables Deferred income tax assets Property, plant and equipment Intangible assets Non-current assets Total assets Liabilities and equity Borrowings Derivative financial instruments Trade payables Other payables Accrued liabilities and deferred income Provisions Current liabilities Derivative financial instruments Deferred income tax liabilities Provisions Non-current liabilities Total liabilities

The accompanying notes form an integral part of these interim consolidated financial statements.

8

Interim Consolidated Financial Statements Gurit Interim Report 2017

Consolidated Cash Flow Statement Half-year ended June 30, 2017 unaudited

Half-year ended June 30, 2016 unaudited

15 319

14 104

80 4 892 770 5 131 38 – 92

2 164 4 821 394 4 615 –8 – 885

– 4 666 – 6 560 – 834

– 7 175 – 2 968 802

971 – 357 14 692 – 267 – 3 357 11 068 – 3 391 50 – 643 – 331 – 4 315 – 1 174 – 9 338 – 926 – 11 438

2 716 – 688 17 892 – 473 – 4 826 12 593 – 7 134 15 – 401 – 423 – 7 943 – 5 080 – 7 006 – 611 – 12 697

Net change in cash and cash equivalents

– 4 685

– 8 047

Cash and cash equivalents at the beginning of the half-year Net change in cash and cash equivalents Exchange losses on cash Cash and cash equivalents at the end of the half-year

38 646 – 4 685 – 1 056 32 905

29 831 – 8 047 – 648 21 136

In CHF 1000

Profit for the half-year Adjustments for: Impairment charges / (reversals), net Depreciation and amortization Finance income and expense, net Income tax expense Net losses/(gains) from disposal of fixed assets Other non-cash items Working capital changes (excluding the effects of acquisitions and disposals of subsidiaries): Change in trade receivables Change in inventories Change in other receivables and prepayments and accrued income Change in trade and other payables and accrued liabilities and deferred income Change in provisions Cash generated from operations Finance cost, net paid Income tax paid Net cash flow from operating activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Loans granted, net of repayments Net cash flow from investing activities Repayments of current borrowings Distribution to shareholders Purchase of treasury shares Net cash flow from financing activities

Note

5

The accompanying notes form an integral part of these interim consolidated financial statements.

9

Gurit Interim Report 2017

Interim Consolidated Financial Statements

Consolidated Statement of Changes in Equity In CHF 1000

Balance at January 1, 2016 Profit for the half-year Changes in hedging reserve Currency translation adjustments Total income and expense for the half-year Distribution to shareholders Usage of treasury shares for share-based compensation Share-based compensation Purchase of treasury shares Total transactions with shareholders Balance at June 30, 2016 Profit for the half-year Changes in hedging reserve Currency translation adjustments Total income and expense for the half-year Share-based compensation Total transactions with shareholders Balance at December 31, 2016 Profit for the half-year Changes in hedging reserve Currency translation adjustments Total income and expense for the half-year Distribution to shareholders Usage of treasury shares for share-based compensation Purchase of treasury shares Total transactions with shareholders Balance at June 30, 2017

Note

5

5

The accompanying notes form an integral part of these interim consolidated financial statements.

10

Share capital

Capital reserve

23 400 – – – – – – – – – 23 400 – – – – – – 23 400 – – – – – – – – 23 400

18 216 – – – – – 7 020 – – – – 7 020 11 196 – – – – – – 11 196 – – – – – 9 360 – – – 9 360 1 836

Interim Consolidated Financial Statements Gurit Interim Report 2017

Treasury shares

Hedging reserve

Currency translation adjustments

Offset goodwill

Retained earnings

Total equity

– 49 – – – – – 572 – – 611 – 39 – 88 – – – – – – – 88 – – – – – 904 – 926 – 22 – 110

– 1 317 – 584 – 584 – – – – – – 733 – 512 – 512 – – – 221 – 570 – 570 – – – – 349

– 32 453 – – – 6 282 – 6 282 – – – – – – 38 735 – – – 1 990 – 1 990 – – – 40 725 – – – 4 137 – 4 137 – – – – – 44 862

– 26 690 – – – – – – – – – – 26 690 – – – – – – – 26 690 – – – – – – – – – 26 690

198 368 14 104 – – 14 104 14 – 572 36 – – 522 211 950 11 926 – – 11 926 55 55 223 931 15 319 – – 15 319 22 – 39 – – 17 239 233

179 475 14 104 584 – 6 282 8 406 – 7 006 – 36 – 611 – 7 581 180 300 11 926 512 – 1 990 10 448 55 55 190 803 15 319 570 – 4 137 11 752 – 9 338 865 – 926 – 9 399 193 156

11

Gurit Interim Report 2017

Interim Consolidated Financial Statements

Notes to the Consolidated Financial Statements 1. General information Gurit Holding AG is a public limited company incorporated and domiciled in Switzerland whose bearer shares are listed on SIX Swiss Exchange; the registered shares are mostly in firm hands and are not listed.

2. Basis for preparation and accounting policies These unaudited interim consolidated financial statements of the Group for the half-year ended June 30, 2017, have been prepared in accordance with the Swiss Accounting and Reporting Recommendations (Swiss GAAP FER). They comply with the complementary recommendation for listed companies relating to interim reporting (Swiss GAAP FER 31, paragraphs 9 to 12). The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual consolidated financial statements as at December 31, 2016. The accounting policies are consistent with those of the annual financial statements for the year ended December 31, 2016. These unaudited interim consolidated financial statements were signed off by the Board of Directors on August 15, 2017, for publication.

3. Exchange rates The principal exchange rates versus the Swiss franc were as follows:

1 USD 1 EUR 1 GBP 1 CAD 1 CNY



12

June 30, 2017

December 31, 2016

June 30, 2016

ø Half-year 1 2017

ø Half-year 1 2016

0.9578 1.0929 1.2422 0.7354 0.1412

1.0190 1.0720 1.2577 0.7581 0.1467

0.9803 1.0865 1.3133 0.7537 0.1475

0.9948 1.0764 1.2516 0.7455 0.1447

0.9821 1.0960 1.4085 0.7384 0.1503

Interim Consolidated Financial Statements Gurit Interim Report 2017

4. Segment information

In CHF 1000

Net sales by segments Composite Materials Composite Components Tooling Total net sales

Half-year ended June 30, 2017 unaudited

Half-year ended June 30, 2016 unaudited

129 714 9 823 35 647 175 184

135 992 9 417 36 847 182 256

Gurit disclaims the disclosure of segment financial operating results as such disclosure would bear the risk of significant competitive disadvantages. The target markets, in which most business units, especially Tooling and Composite Components, operate are relatively confined market niches and the product offering of these two units is relatively homogeneous. Most of the main direct competitors in the markets in which those segments operate are either not stock exchange-listed or do not disclose the relevant comparable segment information. As a result, disclosure of the performance of these segments would lead to significant competitive disadvantages.

In CHF 1000

Net sales by regions of destination Europe Asia Americas Rest of the world Total net sales

Half-year ended June 30, 2017 unaudited

Half-year ended June 30, 2016 unaudited

73 047 62 730 31 442 7 965 175 184

69 615 67 473 30 226 14 942 182 256

5. Distribution to shareholders In accordance with the resolution of the Annual General Meeting of Shareholders held on April 12, 2017, an amount of CHF 9 360 000 (CHF 4.00 per registered share and CHF 20.00 per bearer share) has been distributed to the shareholders on April 20, 2017, out of “reserves from capital contributions.” Payments in 2016 amounted to CHF 7 020 000 (CHF 3.00 per registered share and CHF 15.00 per bearer share).

6. Contingent liabilities A Swiss real estate property formerly owned and operated by Gurit is currently subject to an environmental investigation by the authorities. The remediation of the identified contamination is expected to require a substantial amount of economic resources, but the range of the financial impact cannot be assessed as of the date of this report. The ongoing investigations shall identify, amongst others, the cause of the contamination. Based on the information available today and Gurit's internal analysis involving external expert advice, Management is of the opinion that the environmental contamination had not been caused by Gurit.

13

Gurit Interim Report 2017

Investor Relations

Investor Relations Share Capital The share capital of Gurit Holding AG is divided into: 240 000 registered shares at CHF 10.00 par value 420 000 bearer shares at CHF 50.00 par value

Securities no. 185 039 Securities no. 801 223

Par value adjusted to CHF 50.00, this results, purely arithmetically, in a total of 468 000 shares.

Stock Market Trading The bearer shares are listed on SIX Swiss Exchange. Prices are published in the Swiss daily and financial press as well as in electronic price information systems under the following symbols or numbers: Bearer share: Reuters Telekurs Securities no. ISIN

GUR.S GUR 801 223 CH0008012236

Internet/E­mail Alerts For additional information, please visit the Gurit website at http://www.gurit.com/Investors Sign-up for e-mail alerts on Gurit is available at http://www.gurit.com/Investors/News-Subsription

14

Important Dates Gurit Interim Report 2017

Important Dates October 23, 2017

Press Release on Q3-2017 sales End of January 2018

Press Release on FY 2017 sales March 2018

Presentation full-year results 2017 Analyst / Media conference Online publication of Annual Report 2017 April 2018

Annual General Meeting

Imprint Gurit Holding AG, Wattwil, Switzerland c/o Gurit Services AG, Thurgauerstrasse 54, CH-8050 Zurich Tanja Moehler, Group Communications / Investor Relations This report contains forward-looking statements that include risk and uncertainties regarding the future global business developments that cannot be influenced by the Company.

Gurit Holding AG Ebnater Strasse 79 9630 Wattwil Switzerland www.gurit.com