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Gurit`s Composite Materials Business achieved solid results in its various market areas. Wind material demand grew by 3.1% in 2018 over 2017 in reported Swiss Francs and was able to increase its sales in the second half of 2018 by 13% versus the first half. Demand in Europe and especially North America was good, while in China and India wind industry demand was soft. The Marine superyacht and leisure markets witnessed healthy growth. The same applies to Industrial markets, mainly supported by good demand in North America and Europe. In total, net sales in the Composite Materials Business increased by 6.1% (currency-adjusted: 4.1%) year-on-year from CHF 198.9 million in 2017 to CHF 211.1 million in 2018.
The newly acquired JSB business unit, now Gurit Kitting, contributed CHF 28.9 million to the 2018 net sales for a period of 2.5 months since the acquisition in mid-October 2018. This contribution represents the major share of the acquisition effect for the Gurit net sales growth reported.
Gurit`s Tooling Business reported yet another excellent year. Winning a new major global customer and solid sales in the existing customer base created this sales momentum. Net sales increased by 29.1% (currency-adjusted: 27.0%) to CHF 118.5 million in 2018 compared to net sales of CHF 91.8 million in 2017.
Gurit’s Aerospace Business reported net sales of CHF 49.9 million, which represents an increase of 5% (currency-adjusted 2.6%). Slower build rates of a major European OEM recovered in the second half-year and have been supported by increasing demand from an American OEM.
Gurit`s Composite Components Business reported net sales of CHF 16.9 million in 2018 compared to net sales of CHF 22.3 million in 2017. This represents a sharp decrease of 24% in reported Swiss francs (-26.5% on a currency-adjusted basis). The abrupt demand decline in Gurit’s biggest car part volume program in the first six months and the slow start-ups of several new programs in the second half year of 2018 caused this sales reduction versus 2017. As communicated on December 19, 2018, Gurit decided to re-structure and divest its Composite Components Business. This decision was taken due to the growth momentum in the automotive market – in particular automotive light weighting – has not been as dynamic as expected and Gurit has decided to further focus its business portfolio.
Sales by geographic location
Sales of material and part supply showed Europe once again as the largest destination for goods delivered, but the sales ratio in the Asia-Pacific (APAC) region has been almost matching Europe in 2018. Deliveries to Europe accounted for 37.6% of total Group sales in 2018 (2017: 40.1%); sales in APAC increased to 36.6% of total Group sales in 2018 from 35.8% in 2017. Goods delivered to the Americas accounted for 19.1% of total Group sales in 2018 (2017:19.3%) while supply to the rest of the world amounted to 6.7% (2017: 4.8%).
Profitability hampered by automotive components business
Gurit reached an Operating Profit of CHF 28.6 million in 2018 with a margin of 6.7% of net sales which compared unfavorably to the 2017 margin of 10%. In the Continued Operations the operating profit reached CHF 45.4 million with an 11% margin to net sales, which is in line with the 10.9% margin achieved in the fiscal year 2017 but higher in absolute terms by CHF 8.5 million. Gurit incurred significant losses of CHF 16.8 million in its automotive components business due to operating losses, restructuring provisions and impairments in both the UK and Hungary sites as part of the announced restructuring in the UK. The Profit after tax (incl. minorities) of Gurit in the fiscal year 2018 accounted to CHF 19.9 million and 4.7% of net sales. In the fiscal year 2017, Gurit had achieved a higher margin of 6.9% of net sales. This equals to earnings per listed bearer share of CHF 42.96 in 2018 (2017: CHF 53.32).
Cash Flow and Balance Sheet
Gurit generated a positive net cash flow from operating activities of CHF 19.4 million. The net operating cash flow is lower than in 2017 (CHF 30.6 million) due to the 2018 automotive business losses and the net working capital increases caused by business growth and customer late payments during the month of December 2018. In order to fund the acquisition of JSB (Gurit Kitting), Gurit had increased borrowings and therefore the net cash position in 2017 of CHF 32.7 million reversed to a net debt position of CHF 80.0 million at year-end 2018. Gurit intends to reduce the net debt starting with the calendar year 2019. At year-end 2018 the Gross debt to EBITDA ratio stood at 2.93 times, while the Net debt to EBITDA ratio stood at 1.83 times. The Equity ratio was reduced from 71.1% at year-end 2017 to 33.8% at year-end 2018 due to the goodwill out of the Gurit Kitting acquisition being immediately offset against equity after transaction closing. Capital expenditures were slightly higher than in 2017 and amounted to CHF 15.3 million in 2018 (2017: CHF 12.0 million).
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Key financial figures
in million CHF
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2018
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2017
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Change in reported CHF
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Change @ constant 2018 rates
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Net sales by markets
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|
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Wind Energy
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132.2
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128.2
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3.1%
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0.7%
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Other Material Markets
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78.9
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70.7
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11.6%
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10.4%
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Composite Materials
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211.1
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198.9
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6.1%
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4.1%
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Kitting
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28.9
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0
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|
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Tooling
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118.5
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91.8
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29.1%
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27.0%
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Aerospace
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49.9
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47.5
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5.0%
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2.6%
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Components
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16.9
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22.3
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-24.0%
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-26.5%
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Total net sales
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425.3
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360.5
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18.0%
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15.7%
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Operating profit
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28.6
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35.9
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EBIT
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27.6
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35.9
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Profit for the period
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19.9
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24.9
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|
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Operating cashflow
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19.4
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30.6
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|
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Capital expenditures
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15.3
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12.0
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|
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Equity in % of total assets
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33.8%
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71.1%
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|
|
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Thereof
Continued operations:
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|
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Net Sales
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410.6
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340.0
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Operating Profit
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45.4
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36.9
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|
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EBIT
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44.4
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36.9
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Profit for the period
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36.9
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25.8
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Outlook 2019
Gurit expects to exceed 500 million CHF in net sales in the calendar year 2019. The operating profit is expected to be in the target range of 8-10%. This is considering some automotive components operating losses still to be incurred up to the point of divestment and the profitability of the newly acquired Gurit Kitting business being below Group average.
Annual General Meeting of Shareholders on April 9, 2019
The Board of Directors will propose to the Annual General Meeting of Shareholders (AGM), scheduled for April 9, 2019, to distribute a total of 9.4 million CHF to shareholders – this corresponds to 20.00 CHF per listed bearer share. The full invitation to the AGM including all motions proposed by the Board of Directors will be available for download from March 7, 2019 onwards at: http://www.gurit.com/Investors/AGM
Online publication of Annual Report 2018, Media/Analyst conference and inter- national Webcast today, February 28, 2019
The GuritAnnual Report 2018 is available online at www.gurit.com/investors/reports
Management will discuss the results today in further detail at a joint media and analyst conference at 09:00 a.m. CET. The conference will take place at the Zurich Marriott Hotel, Neumuehlequai 42, CH-8006 Zurich. As always, the presentations will be held in English and will also be accessible as webcast on the following URL where an archived version will later be available for download:
http://www.gurit.com/Investors/Webcasts
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