HALF-YEAR REPORT 2021

notes to the half-year report

as at June 30, 2021

General principles

This unaudited, consolidated half-yearly financial statement of the Feintool Group is based on the individual financial statements of the Group companies as of June 30, 2021, which were prepared in accordance with uniform accounting policies, and released for publication by the Board of Directors on August 17, 2021.

With the exception of the changes to the accounting principles outlined below, the consolidated half-year result has been created according to the same valuation guidelines as the annual financial statement of December 31, 2020 and corresponds to the International Financial Reporting Standards (IFRS) in accordance with IAS 34 Interim Financial Reporting and the requirements of SIX Swiss Exchange. This half-year report does not include all the information and disclosures that are disclosed in the annual report of the Feintool Group as of December 31, 2020, and for that reason should be read in conjunction with it.

The consolidated half-yearly financial statement is shown in Swiss francs (CHF), rounded to the nearest thousand. It is produced in German and English. The half-yearly financial statement in German is the authoritative version.

CHANGES TO THE ACCOUNTING PRINCIPLES

With the exception of newly issued or revised Standards and Interpretations, which are applicable or have been modified in the reporting year, essentially the same accounting policies were applied as in the previous year.

On January 1, 2021, Feintool introduced the following new (adapted) Standards and Interpretations:

  • IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2
  • IFRS 16 – COVID-19-Related Rent Concessions
  • Feintool is either unaffected by these changes, or the changes have no material effect on its financial position, results of operations or cash flows.

    FUTURE CHANGES TO ACCOUNTING PRINCIPLES

    Feintool constantly examines the effects of newly published accounting principles on the Group’s financial position, results of operations or cash flows.

  • IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract (January 1, 2022)
  • Annual Improvements to IFRS Standards 2018-2020 (January 1, 2022)
  • IAS 16 – Property, Plant and Equipment (January 1, 2022)
  • IFRS 3 – Reference to the Conceptual Framework (January 1, 2022)
  • IFRS 17 – Insurance Contracts (January 1, 2023)
  • IAS 1 – Classification of Liabilities as Current or Non-current (January 1, 2023)
  • IAS 8 – Definition of Accounting Estimate (January 1, 2023)
  • IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies (January 1, 2023)
  • Feintool is assessing the impacts of the revised Standards and Interpretations. Based on its initial findings, Feintool does not foresee any significant impacts on its financial position, results of operations or cash flows.

    key estimates

    The preparation of the consolidated half-yearly financial statements requires that the management makes assessments and assumptions which influence the amounts of assets and liabilities, the statement of contingent receivables and liabilities, as well as income and expenditure. Areas in which estimates have a significant influence on the carrying amount include the calculation of provisions, the economic useful life of the fixed assets, the assumptions of the “value in use” calculation for goodwill, the expected future cash flow from capitalized development costs, the valuation of long-term construction contracts, the assessment of expected and deferred taxes, and the actuarial assumptions in the calculation of pension obligations. These estimates may differ from the actual results and hence have a significant impact on the Group’s financial position, results of operations or cash flows.

    Management and Board of Directors believe that the planning principles and assumptions are realistic.

    CONTINGENT LIABILITIES/PURCHASE COMMITMENTS

    The contingent liabilities arising from received funding, which has certain conditions attached, amount to CHF 3.8 million (previous year CHF 3.0 million).

    Feintool owns properties at some locations that are either contaminated or suspected of being contaminated. Under the supervision of the local authorities, Feintool is remediating these plots of land to remove the corresponding pollution and contaminants. Based on our current assessment, these activities are not expected to have a significant impact on the Feintool Group’s net assets, financial position, or results of operations.

    At the end of the reporting period, Feintool was not involved in any other court proceedings. However, disputes relating to product liability, promotional activities, labor law and unfair dismissals, anti-trust law, securities trading, sales and marketing practices, health and safety, environmental and tax-related claims, state investigations and copyright law are always a possibility. Such proceedings could result in substantial claims being brought against Feintool that may not be covered by insurance policies. Feintool believes, however, that any such proceedings would not have a significant effect on the Group’s financial position, operating results or cash flows.

    The Feintool Group has undertaken to purchase property, plant and equipment amounting to CHF 31.8 million (previous year CHF 36.7 million).

    BASIS OF CONSOLIDATION

    The consolidated half-yearly financial statements encompass the half yearly financial statement of Feintool International Holding AG, Lyss (Switzerland), in addition to the half-yearly financial statements of all Group companies in which Feintool International Holding AG directly or indirectly owns more than 50 % of the voting rights or which it controls in any other way. A list of all the subsidiaries is contained in the Annual Financial Report of December 31, 2020, page 90.

    FINANCIAL COVENANTS

    Feintool has a syndicated loan of CHF 120 million (previous year CHF 120 million), a promissory note in the amount of EUR 75 million (previous year EUR 65 million), bilateral credit loans and several leasing and rental contracts (more details in the Annual Financial Report of December 31, 2020 note 19). On June 30, 2021, the company had utilized CHF 68.6 million of the syndicated loan.

    The syndicated loan, the promissory note loan, and the bilateral loan agreements contain covenants customary in the market, in particular:

  • A minimum equity ratio
  • A minimum profitability level
  • A minimum amount of liquid assets plus unused lines of credit with banks
  • In the event that the group or individual companies fail to comply with these covenants, the banks would have the right to terminate the loans at short notice. As of June 30, 2021, all of the covenants were met. As of June 30, 2021, Feintool had CHF 67.4 million (previous year: CHF 68.0 million) of unused, confirmed lines of credit with banks.

    Seasonality

    The business segments of Feintool are subject to no significant seasonal fluctuations. The earnings arising from contract assets recognized over a specific period of time are distributed over the period.

    The Feintool Group used the following exchange rates in the half-years:

    06/30/2021

    12/31/2020

    06/30/2020

    Closing rate

    Average rate

    Closing rate

    Average rate

    China

    CNY 100

    14.2776

    14.1557

    13.4471

    13.6248

    Eurozone

    EUR 1

    1.0980

    1.0974

    1.0802

    1.0643

    Japan

    JPY 100

    0.8354

    0.8366

    0.8540

    0.8963

    Czech Republic

    CZK 100

    4.3079

    4.2471

    4.1163

    4.0175

    USA

    USD 1

    0.9239

    0.9142

    0.8803

    0.9645

    1 Segment information

    1.1 Products and services 1st HY 2021 in CHF 1 000

    Fineblanking Technology

    System Parts

    Total segments

    Finance/Other

    Eliminations

    Total Group

    Net sales

    21 111

    285 341

    306 452

    -3 832

    302 620

    – Intercompany income

    -1 183

    -2 649

    -3 832

    3 832

    Total net sales – Group 1)

    19 928

    282 692

    302 620

    302 620

    EBITDA before extraordinary effects

    -1 128

    49 190

    48 062

    -3 482

    115

    44 695

    One-off effects in the half year 2)

    3 005

    7 639

    10 644

    10 644

    EBITDA after extraordinary effects

    1 877

    56 829

    58 706

    -3 482

    115

    55 339

    Depreciation and amortization

    -906

    -24 473

    -25 379

    -1 247

    1 123

    -25 503

    Impairment of tangible assets 3)

    -8 289

    -8 289

    -8 289

    Operating profit (EBIT) before amendments

    -2 034

    24 717

    22 683

    -4 729

    1 238

    19 192

    One-off effects in the half year 2)3)

    3 005

    -650

    2 355

    2 355

    Operating profit (EBIT) after amendments

    971

    24 067

    25 038

    -4 729

    1 238

    21 547

    Financial expenses

    -6 665

    Financial income

    3 656

    Income taxes

    -5 376

    Net income attributable to Feintool Holding shareholders

    13 162

    Assets

    60 077

    622 402

    682 479

    269 572

    -239 694

    712 357

    Net working capital 4)

    14 383

    73 680

    88 063

    15 518

    -29 162

    74 419

    Investments in property, plant and equipment/intangible assets (incl. leases)

    1 040

    20 866

    21 906

    806

    0

    22 712

    Number of employees

    140

    2 373

    2 513

    33

    2 545

    1.2 Geographical areas 1st HY 2021

    Switzerland

    Europe excl. Switzerland

    America

    Asia

    Total

    Total net sales – Group 5)

    3 353

    162 493

    85 088

    51 686

    302 620

    thereof Germany

    113 738

    thereof USA

    59 804

    thereof Japan

    14 338

    thereof China

    32 936

    Fixed and intangible assets

    37 439

    230 163

    67 695

    91 525

    426 822

    1.3 Products and services 1st HY 2020 in CHF 1 000

    Fineblanking Technology

    System Parts

    Total segments

    Finance/Other

    Eliminations

    Total Group

    Net sales

    22 927

    197 513

    220 440

    -8 177

    212 263

    – Intercompany income

    -5 499

    -2 678

    -8 177

    8 177

    Total net sales – Group 1)

    17 428

    194 835

    212 263

    212 263

    EBITDA

    -2 772

    14 442

    11 670

    -3 056

    -617

    7 997

    Depreciation and amortization

    -838

    -23 776

    -24 614

    -1 919

    1 115

    -25 418

    Operating profit (EBIT)

    -3 610

    -9 334

    -12 944

    -4 975

    498

    -17 421

    Financial expenses

    -8 816

    Financial income

    6 288

    Income taxes

    2 422

    Net income attributable to Feintool Holding shareholders

    -17 527

    Assets

    66 394

    581 830

    648 224

    265 459

    -227 539

    686 144

    Net working capital 4)

    9 203

    64 632

    73 835

    20 259

    -18 696

    75 398

    Investments in property, plant and equipment/intangible assets (incl. leases)

    500

    22 202

    22 702

    644

    -1 859

    21 487

    Number of employees

    164

    2 170

    2 334

    29

    2 363

    1.4 Geographical areas 1st HY 2020

    Switzerland

    Europe excl. Switzerland

    America

    Asia

    Total

    Total net sales – Group 5)

    1 178

    122 774

    56 635

    31 676

    212 263

    thereof Germany

    84 587

    thereof USA

    41 014

    thereof Japan

    12 153

    thereof China

    18 637

    Fixed and intangible assets

    55 321

    220 466

    73 884

    89 151

    438 822

    The following footnotes are applicable to the 2021 and 2020 half-year periods.

    1) Total Net Sales include “Sales from products transferred over time” about CHF 9.4 million (prior year CHF 7.5 million). The net sales have been recognized in the Fineblanking Technology Segment. The remaining net sales in this segment mainly consist of tool sales and services.

    2) In the 2020 financial year, Feintool received a loan of USD 8.4 million under the PPP program in the United States to mitigate the impact of the COVID-19 pandemic. In the first half of 2021, the government assured the company that this loan would not have to be repaid. Feintool also received CHF 3.0 million in immediate aid from the Swiss government in the first half of 2021 to mitigate the effects of the COVID-19 pandemic.

    3) Due to capacities no longer required at a plant, an impairment loss on manufacturing equipment totaling CHF 8.3 million was recognized in the first half of 2021.

    Segment reporting is in accordance with internal reporting, and the one-time effects demonstrated have thus been factored into the group performance assessment by the Board of Directors and the management.

    4) Net working capital comprises trade receivables, inventories, net assets of construction contracts and prepaid expenses and accrued income less trade payables, advance payments received from customers and accrued expenses and deferred income. The remaining receivables and liabilities is included in the calculation for “Finances/Other”.

    5) Net sales is allocated to countries based on the customer’s domicile.

    The following explanations on the segment information apply to the financial years 2021 and 2020.

    The Fineblanking Technology segment comprises the development, manufacture and sale of presses, tools, peripheral systems and all related services.

    The System Parts segment develops, produces and sells high-precision system components and assemblies using fineblanking and forming technology as well as electro lamination sheet stamping. The segment also sells production-specific tools to third-party customers. The production and internal sale of tools is also included in this segment.

    “Finances/Other” essentially comprises the figures for Feintool International Holding AG, the German sub-holding company Feintool Holding GmbH and in the previous year the sub-holding company HL Holding AG.

    The operating profit/loss comprises all operating income and expenses directly attributable to the individual segments. This includes all cross-segment expenses, which are charged directly. Feintool’s financing is undertaken at the Group level. Financial expenses and income, financial liabilities as well as taxes, are therefore reported only at the Group level and do not appear in the segment reports.

    There is no reconciliation of data in management reports and data contained in the financial reports, as internal and external reporting are subject to the same valuation principles.

    2 Financial result and derivative financial instruments

    1st HY 2021

    1st HY 2020

    2.1 Financial expenses

    in CHF 1 000

    in CHF 1 000

    Interest expense

    1 986

    1 589

    Other finance costs 1)

    737

    633

    Foreign exchange losses

    3 942

    6 594

    Total financial expenses

    6 665

    8 816

    1) Besides bank charges, other financial expenses include annual amortization of establishing cost for the promissory note/syndicated loan, market making costs and valuation expenses from hedging.

    1st HY 2021

    1st HY 2020

    2.2 Financial income

    in CHF 1 000

    in CHF 1 000

    Interest income

    69

    58

    Other financial income

    4

    Foreign exchange gains

    3 583

    6 230

    Total financial income

    3 656

    6 288

    2.3 Fair value hierarchy

    Feintool has measured financial instruments at fair value and uses the following hierarchy to determine fair value:

    Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

    Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

    Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

    Feintool holds only financial instruments in Level 2. These include currency forwards.

    Fair values

    2.4 Derivative financial instruments outstanding

    in CHF 1 000

    positive

    negative

    Contract volumes

    Futures contracts

    31

    14

    4 356

    Currency instruments

    31

    14

    4 356

    Total derivative financial instruments as at 06/30/2021

    31

    14

    4 356

    Futures contracts

    2

    202

    Currency instruments

    2

    202

    Total derivative financial instruments as at 12/31/2020

    2

    202

    Currency instruments primarily relate to the hedging of foreign-currency risks in euros. The life of the foreign exchange futures is a few months.

    2.5 Fair Values

    The carrying amounts of the financial assets and liabilities do not differ materially from their fair values.

    3 equity

    06/30/2021

    06/30/2020

    3.1 Authorized capital

    in CHF 1 000

    in CHF 1 000

    Start of period

    1 482

    Expired

    -1 482

    Created 1)

    10 000

    End of period

    10 000

    1) According to the decision of the Annual General Meeting of April 20, 2021, the Board of Directors is authorized to create capital up to a maximum amount of CHF 10 000 000 as required through the issue of up to 1 000 000 new shares, each having a nominal value of CHF 10. The new shares are to be paid up in full. The Board of Directors is authorized to restrict or exclude subscription rights under certain circumstances. The new shares can be issued in one or more stages. The approval is limited to a period of two years. The authorized capital will expire on April 19, 2023.

    06/30/2021

    06/30/2020

    3.2 Major shareholders

    Date of notification

    Number

    Share of capital

    Number

    Share of capital

    Artemis Beteiligungen I AG und Michael Pieper

    09/20/2018

    2 473 349

    50.32 %

    2 473 349

    50.32 %

    Geocent AG1)

    07/15/2013

    400 285

    8.14 %

    400 285

    8.14 %

    1) The notice dated July 15, 2013, comprised 400 285 shares or 8.97 % of the corresponding share capital. Following the capital increase on September 20, 2018, 400 285 shares correspond to a capital share of 8.14 %.

    4 dividend

    A dividend was not distributed for the 2020 financial year (previous year: CHF 0).

    5 Events after the balance sheet date

    Feintool issued a promissory note of EUR 35 million with maturities of three, five and seven years. On the one hand, the technology group thus secures the refinancing of the EUR 25 million tranche expiring in July 15, 2021 and on the other hand it enables Feintool to secure a part of the investments for its growth strategy in the coming years at favorable conditions.

    addresses of our operating companies

    as at June 30, 2021

    Company

    Address

    Phone/Fax

    Mail

    Switzerland

    Feintool International Holding AG

    Industriering 8
    3250 Lyss
    Switzerland

    Phone +41 32 387 51 11
    Fax +41 32 387 57 81

    feintool-fih@feintool.com

    Feintool Technologie AG

    Industriering 3
    3250 Lyss
    Switzerland

    Phone +41 32 387 51 11
    Fax +41 32 387 57 80

    feintool-ftl@feintool.com

    Feintool Technologie AG

    Grünfeldstrasse 25
    8645 Jona
    Switzerland

    Phone +41 55 225 21 11
    Fax +41 55 225 24 04

    feintool-ftl@feintool.com

    Feintool System Parts Lyss AG

    Industriering 53
    3250 Lyss
    Switzerland

    Phone +41 32 387 51 11
    Fax +41 32 387 57 79

    feintool-pbel@feintool.com

    Europe

    Feintool System Parts Ettlingen GmbH

    Englerstrasse 18
    76275 Ettlingen
    Germany

    Phone +49 7243 320 20
    Fax +49 7243 320 240

    feintool-pbee@feintool.com

    Feintool System Parts Jena GmbH

    Löbstedter Strasse 85
    07749 Jena
    Germany

    Phone +49 3641 506 100
    Fax +49 3641 506 300

    feintool-pbej@feintool.com

    Feintool System Parts Jessen GmbH

    Rehainer Strasse 14
    06917 Jessen
    Germany

    Phone +49 3537 272 0
    Fax +49 3537 272 222

    feintool-psej@feintool.com

    Feintool System Parts Most GmbH

    Havran 164
    435 01 Havran
    Czech Republic

    Phone +420 733 589 070

    feintool-pbem@feintool.com

    Feintool System Parts Obertshausen GmbH

    Ringstrasse 10
    63179 Obertshausen
    Germany

    Phone +49 6104 401 0
    Fax +49 6104 401 204

    feintool-pfef@feintool.com

    Feintool System Parts Ohrdruf GmbH

    Ringstrasse 13
    99885 Ohrdruf
    Germany

    Phone +49 3624 335 0
    Fax +49 3624 335 200

    feintool-pfeo@feintool.com

    Feintool System Parts Oelsnitz GmbH

    Hoffeldstrasse 2
    09376 Oelsnitz
    Germany

    Phone +49 3729 830 299 0
    Fax +49 3729 830 299 111

    feintool-pbeo@feintool.com

    Company

    Address

    Phone/Fax

    Mail

    Americas

    Feintool Equipment Corp.

    6833 Creek Road
    Cincinnati, OH 45242, USA

    Phone +1 513 791 00 66
    Fax +1 513 791 15 89

    feintool-ftu@feintool.com

    Feintool Cincinnati, Inc.

    11280 Cornell Park Drive
    Cincinnati, OH 45242, USA

    Phone +1 513 247 01 10
    Fax +1 513 247 00 60

    feintool-pbuc@feintool.com

    Feintool Tennessee, Inc.

    2930 Old Franklin Road
    Antioch, TN 37013, USA

    Phone +1 615 641 77 70
    Fax +1 615 641 79 95

    feintool-pfut@feintool.com

    Asia

    Feintool Japan Co., Ltd. (Equipment)

    Atsugi Plant, 260-53,
    Hase, Atsugi City
    Kanagawa Prefecture,
    243-0036 Japan

    Phone +81 46 247 74 51
    Fax +81 46 247 20 08

    feintool-ftj@feintool.com

    Feintool Japan Co., Ltd. (System Parts)

    Atsugi Plant, 260-53,
    Hase, Atsugi City
    Kanagawa Prefecture,
    243-0036 Japan

    Phone +81 46 248 44 41
    Fax +81 46 247 20 08

    feintool-pbja@feintool.com

    Feintool Japan Co., Ltd. (System Parts)

    Tokoname Plant, 178 Ikeda, Aza
    Kume, Tokoname City
    Aichi Prefecture,
    479-0002 Japan

    Phone +81 569 44 04 00
    Fax +81 569 44 04 35

    feintool-pbjt@feintool.com

    Feintool Automotive System Parts (Tianjin) Co., Ltd

    No 216 Jingsi Road, Tianjin Kong
    Gang Economic Zone
    300308 Tianjin, P. R. China

    Phone +86 22 5926 58 38
    Fax +86 22 5926 58 38

    feintool-pfct@feintool.com

    Feintool Precision System Parts (Taicang) Co., Ltd.

    No 15 Qingdao East Road
    Taicang 215400, Jiangsu
    Province, P. R. China

    Phone +86 512 5351 51 86
    Fax +86 512 5351 54 32

    feintool-pbct@feintool.com

    Feintool Fineblanking Technology (Shanghai) Co., Ltd.

    Bld. No. 27,
    No. 1525 Minqiang Road,
    Shentian High-Tech Park,
    Songjiang District
    201612 Shanghai, P. R. China

    Phone +86 21 6760 15 18
    Fax +86 21 5778 66 56

    feintool-ftc@feintool.com

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