FEINTOOL GROUP
Sales performance in line with the market – operating profit (EBIT) slightly positive
Significant recovery in the second half of the year and seven percent operating profit (EBIT)
Key figures at a glance
(ongoing operations only)
1) In the 2020 financial year, the company agreed to a change in benefits in the Swiss pension plan and a curtailment due to the staff reduction measures, which had a positive one-off effect of kCHF 6 253 on comprehensive income for the period in accordance with IAS 19 (amount excl. deferred tax assets of kCHF 1 376). In addition, due to capacities no longer required at two plants, an impairment loss on manufacturing equipment totaling kCHF 5 932 was recognized (amount excl. deferred tax assets of kCHF 1 384). In this overview, EBITDA, EBIT, the group result, the profit margin, and earnings per share are presented without these effects.
2) In financial year 2016, the Swiss pension fund approved an amendment to the regulations, which, according to IAS 19, had a positive impact on the consolidated statement of comprehensive income in the previous period to the tune of kCHF 7 083 (amount excl. deferred taxes of kCHF 1 629). The EBITDA, EBIT, net earnings, net return on sales as well as earnings per share are shown in this overview without this effect.
3) Board of Directors’ proposal
“Slightly positive operating profit despite the massive decline in sales due to the COVID-19 pandemic”
“Strong recovery in the second half of the year: Sales development in line with the market, seven percent operating profit”
Financial Review
as at December 31, 2020
BUSINESS PERFORMANCE
General
The consolidated financial statements for 2020 apply to Feintool International Holding AG and its subsidiaries. They cover the period from January 1 to December 31, 2020.
COVID-19 pandemic
Feintool has been significantly affected by the COVID-19 pandemic worldwide, albeit to varying degrees both regionally and over time.
At the end of January – during the Chinese New Year – the Chinese government restricted people’s freedom of movement within China. As a result of government orders, the scheduled closure of both Feintool plants for the holiday was extended from one to around four weeks. Although production could have been resumed at the end of February, the plants were not able to achieve a stable level of production until the second half of March due to gaps in the supply chain, disruptions in interregional travel, and a lack of employees (as a result of existing travel restrictions). From April on, both the situation on the Chinese market and production at Feintool’s plants stabilized. Export demand from Europe and the United States was almost completely nonexistent until the end of May, however. In the second half of the year, the negative impact of the COVID-19 pandemic diminished significantly in China. The domestic market recovered nicely. Additional challenges arose during the ramp-up of new products, however, as travel restrictions prevented assistance from other plants.
Due to the various government orders issued as a result of the COVID-19 pandemic and the massive slump in car sales, every single European automaker closed its factories over the course of March. Production was halted for between four and six weeks. The lack of demand forced Feintool to cut back its own production in a very short time and even led to the closure of entire factories. Unlike in China, the subsequent ramp-up was sluggish. It was not until the end of May that production was able to resume more or less on schedule, albeit with output lower than usual. In the second half of the year, the situation also normalized in Europe, even though European sales figures for the year as a whole remained well below the previous year’s levels. European production was increasingly stabilized thanks to rising demand for luxury vehicles from China.
On the last weekend of March, many US states issued stay-at-home orders. If a company was not deemed essential, production was halted. This order also applied to the states of Ohio and Tennessee, where Feintool’s American plants are located. As a result, production in North America was suspended until the end of May. Unlike in Europe, however, the ramp-up in June was extremely swift, especially at the Tennessee plant, which mainly produces products for SUVs and light trucks – models that sell particularly well in the United States. Sales figures largely recovered in the second half of the year. As a result of supply bottlenecks at steel manufacturers – caused by the rapid recovery – the second half of the year was characterized by operations at an extremely hectic pace and additional costs. These difficulties will continue in the first quarter of 2021.
The last locations to be hit by the effects of the pandemic were the two plants in Japan. Although production there did continue uninterrupted throughout the pandemic, the lack of export demand meant that sales virtually failed to materialize in the months of May until July. The situation in Japan also improved in the second half of the year, although sales figures remained well below the previous year’s levels through the end of the year.
Massive travel restrictions are still in place between the continents, in some cases even outright travel bans. These restrictions hinder mutual support between plants, especially during the ramp-up of new products. The maintenance and repair of production lines is also affected if this requires the services of external service technicians.
Feintool attempted to compensate for the loss of contribution due to the slump in sales by cutting costs at all locations. In Europe, the company primarily reduced labor costs through the implementation of short-time work arrangements. In the United States, three-quarters of employees had to be temporarily laid off or furloughed. Many of these measures only had an effect after a delay. Because of this, the results for the second half of the year are presented below in a separate section alongside the results for the year as a whole. The second half of the year illustrates Feintool’s operational situation following the implemented adjustments.
One-off effects
In the fall of 2020, the Board of Trustees of the Swiss pension plan decided, together with the pension trust, to restructure the pension plan. The reorganization will take place, on the one hand, through increased contributions by the pension trust in the reporting year and over the coming years and, on the other hand, through the gradual reduction of the conversion rate applicable to future pensions. The reduction of the conversion rate as well as the decreased number of insured employees (“Curtailment”) had a one-off positive effect on labor costs in the amount of CHF 6.2 million.
Due to the global economic slowdown, some customers have insourced certain production processes or certain products into their in-house production. As a result, certain production lines at individual Feintool companies are no longer being fully utilized. These assets were impaired by a total of CHF 5.9 million and thus adjusted to the new circumstances.
Unless expressly stated otherwise, the following information applies to Feintool’s operational activities excluding these one-off effects.
Orders received and order backlog in the capital goods business; expected releases in high-volume parts production
The global economic slowdown caused by the COVID-19 pandemic led to a massive slump in the capital goods business. Global overcapacities and the temporary shutdown of many industrial sites caused a significant decline in orders received. The Fineblanking Technology segment received orders with a value of CHF 32.5 million (previous year: CHF 60.8 million), a decline of 46.1 % adjusted for currency effects. Orders from the System Parts segment accounted for CHF 7.9 million (previous year: CHF 10.2 million) of this total. As a result, third-party orders received fell by 51.0 % to CHF 24.5 million (previous year: CHF 50.5 million) in the local currency. With a share of 24.5 % (previous year: 16.9 %), the importance of the System Parts segment once again increased and it remains the segment’s largest single customer.
The order backlog fell by 53.5 % to CHF 10.7 million (previous year: CHF 23.0 million). The current order backlog is insufficient and represents a workload of less than three months. The employees of the assembly plant in Jona will be on short-time work schedules until further notice.
Expected releases in the high-volume parts segment over the next six months totaled CHF 253.1 million (previous year: CHF 265.2 million). As a result, this figure only declined by 4.6 % year over year, reflecting the recovery in the second half of the year. Since customers can adjust or even completely cancel their releases under certain conditions, this indicator is not particularly reliable in times of extreme volatility.
Net sales
The global economic slowdown as a result of the COVID-19 pandemic also had a significant impact on Feintool’s annual results. Consolidated sales in the reporting currency fell by 22.2 % to CHF 492.0 million (previous year: CHF 632.7 million). In the reporting year, currency effects – especially in the US dollar – had a negative impact of CHF 19.8 million, equal to 3.1 %. As a result, Feintool recorded a sales decline of 19.1 % expressed in local currency. Both segments suffered a significant decline in sales: the press and tool business shrank – adjusted for currency effects – by 40.6 %, the parts business declined in local currency by 15.7 %. The System Parts segment generated 93.6 % of third-party sales (previous year: 90.1 %), the highest figure since Feintool was founded.
The severe market downturn caused sales in the System Parts segment to decline by 19.1 % to CHF 464.3 million in the reporting year (previous year: CHF 573.9 million). Negative currency effects totaled CHF 19.6 million, resulting in a 15.7 % decline in the segment’s sales expressed in local currency. In Europe, parts sales declined by 18.0 %, from CHF 332.7 million to CHF 272.9 million. Currency effects had an impact of CHF 8.5 million; in local currency, sales in Europe thus declined by 15.4 %. Business in North America shrank by 26.3 % in the reporting currency to CHF 127.9 million. The currency effect of the US dollar in the amount of CHF 8.4 million had a negative impact on sales, resulting in a 21.4 % sales decline in local currency. Significantly lower steel prices, which Feintool passes on to its customers, are included in this sales decline; as a portion of sales, lower steel prices accounted for a reduction of around USD 10 million, which corresponds to approximately 5 %. Sales in Asia fell by 6.5 % to CHF 66.5 million. Currency effects had a negative impact of CHF 2.8 million. Business in Asia, adjusted for currency effects, declined by 2.6 %. While sales in Japan declined by 23.4 %, the two plants in China were able to increase sales by about 13 % each. On the one hand, the Chinese market was the fastest in the world to recover from the COVID-19 pandemic, and on the other hand, several new products are being launched in China, which had an additional positive impact. In the parts business, net sales by region changed only marginally. Europe generated 58.4 % of sales (previous year: 57.6 %), and thus was once again responsible for more than half of all parts sales. The contribution to sales by the American plants in the United States fell to 27.4 % (previous year: 30.1 %), partly due to the weakening US dollar. Asia’s share of sales rose to 14.2 % (previous year: 12.3 %) thanks to growth in China due to new products. The regional breakdown shown here is dependent on the location of Feintool’s direct customers. In the parts business, many products are exported further after having been incorporated into modules or entire vehicles. This results in a much more balanced picture in the regional breakdown by continents when considering “sales to the final customer".
Net sales in the Fineblanking Technology segment fell sharply to CHF 44.2 million (previous year: CHF 74.7 million). The translation effects of foreign currencies are negligible in the capital goods segment. Intercompany sales with the System Parts segment increased slightly to CHF 12.6 million, but rose significantly as a percentage of the total to 28.5 % (previous year: 16.0 %). Sales to third-party customers decreased by 49.7 % to CHF 31.6 million.
Overall, the Feintool Group sold products and services with a total value of CHF 274.4 million in Europe, slightly decreasing the region’s share to 55.8 % (previous year: CHF 356.7 million or 56.4 %). With sales of CHF 134.7 million, or 27.4 % of total sales (previous year: CHF 181.3 million or 28.6 %), the percentage of sales generated in North America also declined. Sales in Asia decreased to CHF 82.9 million, thus increasing this region’s share to 16.8 % (previous year: CHF 94.7 million or 15.0 %). Sales in Switzerland amounted to CHF 5.7 million or about one percent.
Key cost items
Material is by far the largest cost component for Feintool, whereby material costs also include costs for external processing of parts such as heat-treating or coating. In the reporting year, the material-to-sales ratio decreased from 46.9 % to 44.2 % – taking changes in inventories into account – and the cost of materials totaled CHF 217.5 million (previous year: CHF 296.8 million). The reporting year was marked by extremely volatile steel prices. Over the course of the year, steel prices fell, in some cases significantly, before rising sharply again towards the end of the year. Owing to price escalation clauses in many customer contracts and intensive negotiations, Feintool was able to pass on most of these fluctuations to its customers. Changes in the product mix and efficiency improvements in the production process ultimately caused the decrease in the material-to-sales ratio.
Labor costs – excluding one-off effects – totaled CHF 159.0 million (previous year: 194.4 million). Significantly lower sales and massive fluctuations in capacity utilization caused an increase in labor costs as a percentage of sales from 30.7 % to 32.3 %. Short-time work arrangements at all of our European plants, furloughs and layoffs in North America helped to make labor costs more flexible. That said, most of the staff-related measures only take effect after a certain period of time has passed (due to notice periods, severance payments, etc.). It also proved impossible to reduce indirect costs to the same extent as the decline in sales, resulting in an increase from 14.0 % to 16.1 % of sales. In addition, new employees were also hired at plants with many new products. Overall, the company was unable to fully compensate for the negative effects experienced in the first half of the year during the second half.
In the System Parts segment, labor costs decreased by CHF 31.1 million to CHF 135.0 million. The ratio of labor costs to sales rose from 28.9 % to 29.1 % in the reporting period. Efficiency improvements, particularly at the newer plants in China and at the Oelsnitz plant, had a significant positive impact. The setup of a new plant in the Czech Republic continues to have a disproportionate impact on labor costs. Overall, labor costs were kept almost constant in proportion to sales – despite a massive decline in sales.
In the Fineblanking Technology segment, labor costs fell by CHF 4.1 million to CHF 16.6 million. As a percentage of net sales, labor costs increased significantly from 27.7 % to 37.5 %. The massive sales decline is the main reason for this increase. In this technology-driven segment, it was much harder to make labor costs more flexible than in the parts business. In addition, Feintool intensified its R&D activities, particularly with regard to the production of metallic bipolar plates for fuel cells.
Thanks to extensive cost-cutting measures, other operating expenses fell by CHF 11.7 million to CHF 66.5 million. As a percentage of sales, however, this figure rose slightly to 13.5 % (previous year: 12.4 %). Many components of operating expenses, such as lease payments or IT expenses, do not vary substantially in relation to sales. Other operating income decreased again slightly to CHF 1.3 million. In the reporting period, Feintool sold a property no longer used for operational purposes, resulting in the loss of the corresponding rental income beginning in August.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) fell significantly by CHF 14.4 million, equal to 21.3 %, to CHF 53.2 million in the reporting period. This figure includes a negative currency effect of CHF 2.9 million. At 10.8 %, the EBITDA margin for the financial year stood slightly higher than in the previous year. The company was able to compensate for the significant decline in sales resulting from the coronavirus-related global economic slowdown on the cost side. Taking one-off effects into account, operating earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled CHF 59.5 million, corresponding to an EBITDA margin of 12.1 %.
Depreciation and impairment
Depreciation and amortization increased significantly in the reporting period, namely by 3.0 % to CHF 50.3 million, caused by the significant capital expenditures in previous years. Relative to sales, amortization/depreciation rose from 7.7 % to 10.2 %. At CHF 43.3 million, capital expenditures stood slightly below depreciation/amortization for the first time in several years. Due to overcapacities as a result of the global economic slowdown at two European manufacturing sites, an additional one-off impairment loss of CHF 5.9 million was recognized in the reporting period.
Operating profit (EBIT)
Feintool generated operating earnings before interest and taxes (EBIT) of CHF 3.0 million (previous year: CHF 18.9 million). The negative currency effect at the EBIT level amounted to CHF 0.8 million. The company succeeded in bringing the ratio of costs to sales in line down to the EBITDA level, but it is not possible to influence depreciation and amortization in the short term. Feintool’s highly capital-intensive business model inevitably increases the volatility of its operating earnings as a result of largely fixed depreciation and amortization. As a result, the EBIT margin stood at only 0.6 % (previous year: 3.0 %). Taking one-off effects into account, operating earnings before interest and taxes (EBIT) totaled CHF 3.3 million, corresponding to an EBIT margin of 0.7 %.
Operating earnings generated by the System Parts segment fell by CHF 6.5 million, or 27.9 %, to CHF 16.7 million (previous year: CHF 23.2 million). The reason for this was the massive sales decline. Despite significant efficiency improvements and cost-saving measures, it was only possible to partially compensate for the shortfall in gross profit. Thanks to the cost-cutting measures, however, the EBIT margin in the parts business fell by only 0.4 % to 3.6 %.
Thanks to efficiency improvements, the European plants recorded an increase in EBIT to CHF 7.4 million despite a significant sales decline, and made the largest contribution to the result in the reporting period. The American plants contributed an EBIT of CHF 6.4 million to the total result. In Asia, EBIT rose to CHF 3.0 million. The two Chinese plants showed a significant improvement, with higher sales thanks to new products.
The Fineblanking Technology segment, on the other hand, suffered from the slump in sales and posted a loss of CHF 4.9 million (previous year: EBIT of CHF 0.7 million). Research expenses were similar to the previous year, coming in at CHF 4.4 million. Activities in this area will continue unchanged – as an investment in the future – despite the difficult environment.
The nonoperating units produced costs of CHF 9.0 million (previous year: CHF 6.5 million). On the one hand, isolated additional expenses were incurred related to the pandemic (e.g. the development of an improved IT infrastructure), on the other hand, an impairment loss of CHF 0.7 million was recognized on a property not used for operational purposes. In addition, rental income was reduced by the sale of a property in the summer of the reporting period.
Financial result
The net financial result of CHF -5.3 million increased significantly year over year (previous year: CHF -3.7 million). Adjusted for currency effects, the negative net financial result increased by CHF 0.6 million to CHF -4.8 million. Despite higher average net debt, interest expenses increased only slightly. Other financing costs increased significantly in connection with the various financing arrangements and the temporary suspension of covenants on the syndicated loan. The high volatility in various currencies led to currency losses of CHF 0.5 million in the reporting period (previous year: currency gains of 0.6 million). As a result, net debt at the end of the reporting period stood at CHF 146.9 million, CHF 6.1 million higher than at the end of the previous period (CHF 140.8 million). The ratio of net debt to EBITDA increased to 2.8× (previous year: 2.1×) as a result of the significantly lower EBITDA and the slight increase in net debt. Including one-off effects, this figure stands at 2.5×. This means that the company has met all of the covenants, i.e. both the renegotiated and the original covenants, in all of its loan agreements as of December 31, 2020.
Taxes
Tax expenses for the Feintool companies totaled CHF 2.0 million. On the one hand, many Feintool companies achieved solid results, which led to a tax burden. On the other hand, some companies suffered losses as a result of the sharp decline in sales (particularly in the Czech Republic, Switzerland, and China). In countries where loss carryforwards expire relatively quickly, these losses are not capitalized. As in previous years, this affected the effective tax expense by CHF 2.4 million (previous year: CHF 1.8 million). This results in a situation in which Feintool is reporting a tax expense even though earnings before taxes is negative at CHF 2.0 million.
Net income
All in all, including the one-off effects, this resulted in a consolidated loss of CHF 3.9 million (previous year: consolidated profit of CHF 10.7 million). Excluding one-off effects, the consolidated loss would have been CHF 0.3 million higher.
ADDITIONAL INFORMATION ON THE SECOND HALF OF 2020
The COVID-19 pandemic had a massive impact on the first half of 2020 starting in February/March. In the second quarter, Feintool took a number of measures to safeguard liquidity and adjust its cost structure to the new circumstances. Together with the market recovery – albeit still below the previous year’s level – this painted a much brighter picture for the second half of 2020. This section provides an overview of Feintool’s business in the second half of the year with the aim of presenting Feintool’s current situation. The same period in the previous year is used as a basis for comparison. The one-off effects are not taken into account.
Net sales
Consolidated sales in the second half of the year fell by 7.0 % in the reporting currency to CHF 279.7 million (previous year: CHF 300.8 million). Currency effects had a negative impact on sales in this period of CHF 10.8 million, equal to 3.6 %. As a result, Feintool recorded an organic sales decline of 3.4 % in local currency. In this context, the two segments performed differently. The press and tool business also contracted significantly in the second half of the year – adjusted for currency effects – by 32.0 %, but the parts business declined by only 2.8 % in the same period in the reporting currency. In local currency terms, the segment actually recorded slight growth of 1.1 %. The System Parts segment generated 95.4 % of third-party sales in the second half of the year.
Thanks to the market recovery, sales generated by the System Parts segment only declined by 2.8 % to CHF 266.8 million (previous year: CHF 274.5 million). Negative currency effects totaled CHF 10.6 million. In local currency, sales in the segment thus increased by 1.1 %. In Europe, parts sales declined by 0.5 % in local currency, from CHF 155.5 million to CHF 152.2 million. Business in North America shrank by only 0.8 % in local currency to CHF 74.6 million. Significantly lower steel prices, which Feintool passes on to its customers, are included in this sales decline, meaning that in quantitative terms the company also achieved a slight increase in sales in the United States in the second half of the year. Sales in Asia increased – adjusted for currency effects – by 10.5 % to CHF 42.0 million. While sales in Japan decreased by 14.2 %, the two plants in China were able to increase sales by more than 20 % each. On the one hand, the Chinese market was the fastest in the world to recover from the COVID-19 pandemic, and on the other hand, several new products are being launched that had an additional positive impact.
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) increased significantly by CHF 12.4 million, equal to 37.8 %, to a total of CHF 45.2 million in the second half of the year compared to the same period last year. At 16.2 %, the EBITDA margin in the second half of the year was significantly higher than in the same period last year (10.9 %). The slight sales decline due to the economic slowdown was more than compensated for on the cost side.
Earnings before interest and taxes (EBIT)
Feintool generated operating earnings before interest and taxes (EBIT) of CHF 20.4 million in the second half of 2020 (same period in the previous year: CHF 8.3 million). Thus, the EBIT margin stood at 7.3 % (same period in the previous year: 2.8 %). This solid result is due, on the one hand, to the market recovery and, on the other, to rigorous cost-cutting measures. These savings are not permanent in certain areas, so that a slightly higher cost base is to be expected in the future.
Operating earnings generated by the System Parts segment increased by CHF 15.2 million to CHF 26.1 million in the second half of 2020, which is more than double the EBIT generated by the segment in the same period last year. Significant efficiency improvements and rigorous cost-saving measures more than compensated for the slight decline in sales. Thanks to these measures, the EBIT margin in the parts business increased by 5.8 % to 9.8 %.
The Fineblanking Technology segment suffered a loss of CHF 1.3 million in the second half of 2020 (same period in the previous year: a loss of CHF 0.6 million).
Net income
Feintool thus doubled its consolidated net income in the second half of the year to CHF 13.6 million (same period in the previous year: CHF 6.0 million). Accordingly, the profit margin stood at 4.9 % (same period in the previous year: 2.0 %).
CONSOLIDATED BALANCE SHEET
Total assets decreased by CHF 29.2 million, equal to 4.1 %, to a total of CHF 677.1 million (previous year: CHF 706.3 million). The sharp decline in the value of the US dollar relative to the reporting currency had a significant impact on most items.
Current assets decreased slightly year over year from CHF 233.1 million to CHF 231.9 million. The individual items developed quite differently in some cases, however. Receivables decreased only slightly to CHF 82.1 million (previous year: CHF 85.0 million) due to strong performance toward the end of the year. As a percentage of sales, receivables again increased significantly from 13.4 % to 16.7 %. The low level of sales in the first half of the year had a major impact on this figure. The age structure of receivables improved slightly in the reporting period, with 20.1 % being overdue in the reporting period (previous year: 24.2 %), of which 43.8 % were overdue by less than 30 days. Inventories and contract assets decreased by CHF 16.2 million to CHF 78.0 million. Prepaid expenses and accrued income increased to CHF 8.2 million. Cash and cash equivalents increased by CHF 17.8 million to CHF 61.3 million due to numerous payments received in the closing days of the reporting period.
Operative net working capital decreased slightly by CHF 2.2 million to CHF 68.9 million and thus amounted to 14.0 % of sales (previous year: 11.2 %). The slump in sales in the first half of the year had a significant negative impact on this key figure. Due to the strong second half of the year, the absolute figure is solid and in line with the previous year’s level. The significant decrease in inventories had the strongest effect.
Non-current assets decreased significantly by CHF 27.9 million, equal to 5.9 %, to a total of CHF 445.2 million. In operational terms, the strongest impact came from property, plant, and equipment, which declined by 6.4 % to CHF 334.9 million in spite of another high level of capital expenditures totaling 43.3 million. Impairment losses of CHF 5.9 million on assets whose capacities are no longer required due to insourcing of production steps by customers exacerbated this decline. Intangible assets decreased by CHF 4.4 million to CHF 91.5 million. All of the company’s intangible assets, such as capitalized research and development costs, capitalized goodwill (from acquisitions), land use rights, or capitalized software, contributed to this decline. Financial assets increased slightly and now total CHF 4.2 million, the majority of which are customer tools used in the group’s own production departments and amortized by the customer over their entire useful life. Deferred tax assets decreased by CHF 2.4 million to CHF 14.6 million.
On the liabilities side, debt decreased by CHF 13.2 million to CHF 383.2 million. Trade payables, tax liabilities, and other liabilities decreased by CHF 14.7 million and totaled CHF 68.6 million. Deferred income, current and non-current provisions, and deferred tax liabilities fell by CHF 7.4 million to CHF 56.3 million. Liabilities for employee benefits (IAS 19) decreased significantly by CHF 15.0 million to CHF 50.1 million. The decision to reduce the pension conversion rates in the Swiss pension fund had a positive impact of CHF 5.4 million. In addition, the Swiss companies paid a restructuring contribution of CHF 4.8 million to the pension fund. The smaller workforce due to the decline in sales also had a positive impact (CHF 0.8 million). The revaluation of employee benefits recognized directly in equity had a positive impact of CHF 4.1 million.
Interest-bearing debt increased by CHF 24.0 million to CHF 208.2 million. CHF 67.0 million of the interest-bearing liabilities were of a short-term nature, whereby the syndicated loan in the amount of CHF 63.7 million is presented as long-term in line with economic conditions. A promissory note loan in the amount of EUR 25.0 million matures in July 2021, which caused the increase in current interest-bearing debt. Noncurrent interest-bearing liabilities totaled CHF 141.2 million for the reporting period. This includes a COVID-19 loan from an American bank in the amount of CHF 7.4 million. Taking available cash and cash equivalents into account, net debt increased slightly by CHF 6.1 million to CHF 146.9 million (previous year: CHF 140.8 million). With CHF 126.9 million in cash and cash equivalents and available, confirmed lines of credit, Feintool has considerable financial flexibility (previous year: CHF 89.0 million).
Shareholder’s equity stood at CHF 293.9 million on December 31, 2020 (previous year: CHF 309.9 million). The equity ratio decreased slightly from 43.9 % to 43.4 %. The Statement of Changes in Equity shows that the consolidated loss from operating business reduced shareholders’ equity by CHF 3.9 million. Currency translation differences of CHF 15.4 million had a strong negative impact, whereas the revaluation of employee benefit obligations had a positive impact of CHF 4.1 million. The other items had a slightly negative effect overall (CHF 0.8 million).
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flow from operating activities totaled CHF 37.8 million, less than half of the previous year’s figure due to the significantly lower result. In contrast to the previous year, net working capital increased by CHF 3.7 million in the reporting period (previous year: decrease of CHF 13.9 million), in particular due to strong sales at the end of the year. At CHF 40.3 million (previous year: CHF 51.8 million), cash flow from investing activities decreased again by 22.2 % compared to the previous year. This amount primarily flowed into property, plant, and equipment. Overall, this resulted in a negative operating cash flow of CHF 2.4 million (previous year: cash inflow of CHF 30.2 million). Feintool was barely able to finance its capital expenditures from operating cash flow in the reporting period.
EMPLOYEES
The number of employees (excluding trainees) decreased by 71 to 2 570 in the financial year. In addition, 100 young people (previous year: 91) are currently with our company as trainees. The System Parts segment had 2 385 employees, which corresponds to a decline of 57 employees. The plants in China hired 67 new employees during the reporting period as a result of new projects. In the United States, the two plants employed 11 more people at the end of the year than 12 months earlier. At the height of the COVID-19 pandemic in the second quarter, the U.S. companies employed a total of about 430 fewer people than at the end of the year. The number of employees in Europe and Japan decreased by 134 due to the market slowdown. The Fineblanking Technology segment had 152 employees at the end of the year (-18 compared to the previous year). A total of 33 employees (+3) work in units that are not directly involved in the operating business. Feintool had 1 558 employees in Europe at the end of 2020, equal to 60 % of the total workforce, and 130 fewer than in the previous year. Of these, 376 were employed in Switzerland (previous year: 404). In the United States, the number of employees rose by nine to 555 (equal to an increase of 22 %), while in Asia the number increased by 51 to 457 (equal to an increase of 18 %).