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Annual Report 2016

SYSTEM PARTS SEGMENT

The business with fineblanking and forming parts is benefiting from the continued growth of automobile production, and Feintool is thus supporting manufacturers' most important technology trends. In this context, it is pleasing that Feintool has once again grown more strongly than the market.

With sales of just under CHF 480 million (+9.4 %), the System Parts segment has continued on its course for growth and also increased its share of the total turnover of the Feintool Group to 87 %. The growing global car production was accompanied by increased demand for fineblanked and formed components. By focusing on these areas of application, not only the existing parts business grew, but also the new developments for the automobile industry and its trend towards efficient gear boxes and lightweight components. This led to a greater order volume, which includes fineblanked camshaft adjusters that change the valve timing of valve controls of four-stroke engines and increase the efficiency of the engine.

Relocation in Europe

Last year, System Parts in Europe was marked by extensive relocation activities of a total of six fineblanking presses, processing systems and more than 140 tools. All four fineblanking locations in Switzerland and Germany were involved in this major project. Triggered by the decision on January 15, 2015 by the Swiss National Bank to raise the minimum exchange rate of CHF 1.20 against the euro, we are concentrating at the production location in Lyss on a smaller number of customer orders with higher output quantities in combination with specialized technologies – this reduces the number of customers for the Swiss operation from 40 down to 15. The largest proportion of orders was relocated to the locations in Germany, in particular Oelsnitz (Saxony).

This far-reaching decision supported the development of Feintool in its results: at the Lyss location, in addition to our core competence in fineblanking, we are mainly concentrating on the expansion of secondary processes such as double-disc grinding and tempering in conjunction with a high degree of automation for complex car parts. The newest production location of Oelsnitz is now virtually at capacity after the expansion and relocation. Following the expansion and renovations, the plant has developed into an advanced Feintool location. The modern infrastructure, generous production possibilities and the well-qualified employees have made the plant fit for the future.

In the face of the anticipated long-term growth in the automobile sector in Europe, Feintool System Parts will expand its production capacities. Accordingly, a building site has been acquired in Most (Czech Republic) for an additional location, where production is planned to start in the middle of 2018. The focus of the new location will be the production of more basic and less complex fineblanked components. Feintool sees considerable market potential in this, and is using it to meet customers' wishes for a global supplier that is close to the customer.

The forming division of Feintool System Parts in Europe is and remains a stable and successful arm. The completion of the Ohrdruf (Germany) plant's expansion has created the prerequisites for further growth in the area of forming.

Positive result in China

Our production location in the Chinese city of Taicang (near Shanghai) developed very nicely; it continues to participate in the growing automobile boom and showed a profit for the first time last year. The outlook for the location is very positive. In order to create the necessary capacities for the site, we have expanded the production space by renting an additional xxxx square meters. We need this additional space in particular for further processing measures such as double-disc grinding.

The situation in the USA is more complex. The business situation for the Cincinnati production facility, which was still good in 2016, will diminish in 2017, since some customer projects were discontinued last year and it is not yet certain whether these can be compensated for at the necessary level.

The situation at the forming location in Nashville is more positive. The new 1600-ton multiple-stage press that was put into operation enabled Feintool to invest in additional essential production capacities here, which will also keep the plant on the road to success in future.

Feintool is growing stronger than the market

Taking Feintool as a whole, its growth once again outpaced the market in the relevant regions1. In China, the increase in car production of 13.9 % is accompanied by the sales increase of Feintool System Parts of 15.6 %. In Europe, car production rose by 2.8 %, and Feintool sales in the same period grew by 14.4 %. The situation in the USA is also positive; production increased by 1.4 % and Feintool booked a boost in sales amounting to 2.6 %. On the Japanese market, which has been weakening for several years, Feintool sales are in the black at 12.5 %, while the production figures in Japan continued to fall, by 0.6 %.


1Source for automobile production: IHS AUTOMOTIVE