Ad hoc announcement pursuant to Art. 53 LR
Positive first-half result – Tornos benefits from increasing growth momentum in target markets
Moutier, August 12, 2014 – The Tornos Group made further steps towards a return to financial health in the first half of 2014. Both new orders and sales improved significantly compared to the previous year, enabling the company to record a positive half-year result. The second half of 2014 will see the launch of new standard-segment products.
New orders in the reporting period amounted to CHF 102.0 million and were therefore 20.2% above the value of the prior-year period (2013: CHF 84.9 million). Net sales developed similarly, coming in at CHF 90.3 million, a rise of 18.4% compared to the prior-year figure (2013: CHF 76.3 million). Accordingly, the Group achieved a positive net result of CHF 0.6 million (attributable to owners of the parent), compared to a net loss of CHF 11.9 million in the prior-year period. At EBIT level, a profit of CHF 1.1 million (2013: CHF ‒8.5 million) was recorded. EBITDA amounted to CHF 2.9 million (2013: CHF ‒6.4 million).
The improvement in the operating result is attributable to systematic efficiency improvements, higher utilization of production capacity, and improved margins. Streamlined management of sales activities and the adjusted product mix, which includes an increasing proportion of new products, resulted in a rise in gross margin to 29.2%.
While sales volume increased strongly, operating costs came in at CHF 25.7 million, a decline of CHF 2.1 million on the prior-year period that included short-time working compensation of CHF 1.0 million. This results in a sustainable cost reduction of CHF 3.1 million or 10.6% compared to 2013.
Thanks to targeted measures, operating cash flow amounted to CHF 15.3 million (2013: CHF –0.9 million), and net cash improved from CHF 0.7 million as at December 31, 2013 to CHF 16.5 million. The substantial inflow of liquidity was above all attributable to the reduction in net current assets, with accounts receivable declining despite the growth in sales. Additionally, an increase in advance payments by customers as well as reduction in stock strengthened the positive effect.
Significant recovery in southern Europe, Asia enjoying increasing growth momentum
Around three quarters of new orders in the first half of 2014 came from customer projects in Europe. The growth in new orders in Switzerland, Germany, and, in particular, southern Europe was pleasing. A number of customer projects that have continually been postponed month after month were completed. The main growth drivers in Europe were the core segments automotive and medical/dental technology.
Asia too benefited from a substantial rise in demand. A new sales and service location with exhibition space was opened in Dongguan in southern China.
Outlook
Tornos is resolutely continuing its efforts to restore itself to full health. The targeted internationalization of the Group enters a decisive phase this year. New products are coming to market from the production sites in Asia, which means that customers outside Europe also have access to a range of standard machines that is tailored to the needs of the market, something that Tornos could not offer in the past. The new, modern production facility in Xi'an (China) will be occupied in this autumn. Key components requiring a high level of expertise will continue to be manufactured in Switzerland and then installed in machines at the Group's different production sites.
Tornos will be presenting its latest-generation products at a large number of trade fairs during the second half of the year, particularly IMTS in Chicago (USA), AMB in Stuttgart (Germany) and BIMU in Milan (Italy).
Comparable business development is anticipated for the second half of the year, assuming the usual seasonal slowdown over the summer months. On the assumption that the economic environment does not change significantly, the prospects from today's perspective of achieving a balanced operating result for the year as a whole look promising.