Ad hoc announcement
Significant increase in new orders
Moutier, November 4, 2014 – Driven by successful product launches as well as existing products, levels of new orders remained encouraging, up substantially on the previous year.
Order intake in the first nine months increased by 28.7% compared with the prior-year figure (2013: CHF 115.6 million) to CHF 148.8 million. This indicates that the marked year-on-year rise in demand for Tornos machines in evidence since the start of 2014 continued over the summer months.
Favorable response to new mid-range products – demand for multi-spindle machines from Moutier still strong
Complementing the high-end products made in Switzerland, the mid-range products from the Group’s manufacturing sites in Asia, first unveiled to the market this summer, are being positively received by customers. Particularly in Asia and at the leading IMTS trade show in Chicago (USA), the reaction from users in this sector has underlined their strong interest in these easy-to-operate machines. A gratifying number of orders have already been received. The products also met with lively interest at top trade fairs AMB in Stuttgart (Germany) and BIMU in Milan (Italy) at the end of the third quarter, additionally bolstering new orders in Europe for the rest of the year.
Steps underway to make manufacturing more flexible – high backlog of orders providing solid basis
The goal of outsourcing a much higher proportion of manufacturing operations to allow Tornos to respond more flexibly to fluctuations in demand is part of the strategic plan. Determined efforts to build the necessary network of suppliers able to satisfy Tornos’ very high precision standards are proving more time-consuming than originally envisaged. Despite temporary hires to ramp up capacity and due to seasonal constraints, machine output could not yet entirely match the upturn in demand for Tornos products. Owing to a further year-on-year increase in order intake, the backlog of orders grew to CHF 51.8 million, stretching into the second quarter of 2015.
Consequently, net sales for the first nine months amounted to CHF 126.3 million (prior-year period: CHF 102.8 million), representing an increase of 22.9%. This led to an operating result (EBIT) of CHF ‒0.8 million (2013: CHF ‒15.2 million) at the end of September 2014. Tornos continues to aim for a balanced operating result for the year as a whole, based on IFRS as well as on Swiss GAAP FER accounting standards.
Switch to Swiss GAAP FER accounting standards
Tornos Holding Ltd. has been using International Financial Reporting Standards (IFRS) since 2002. The company switches from IFRS to the Swiss GAAP FER accounting standards. The decision marks Tornos’ wish to adopt a more pragmatic set of standards with comparable information content which are in line with the needs of a medium-sized international company and entail less complexity and fewer costs. Transparent, true and fair reporting will continue to be guaranteed under Swiss GAAP FER. The changeover will have a positive impact on the operating result in the amount of approximately CHF 2.2 million. Compared to the figures mentioned in the Half-year report 2014, the balance sheet will be relieved from activated development cost (intangible assets) and activated deferred tax assets amounting to approximately CHF 7.1 million. Furthermore, pension plan liabilities recognized in accordance with IAS 19R of approximately CHF 21.0 million are to be removed from the balance sheet. The Annual Report 2014 is to contain a reconciliation statement.
As a consequence of the changeover to Swiss GAAP FER accounting standards, Tornos Holding Ltd. will need to transfer from the Main Standard to the Domestic Standard segment of SIX Swiss Exchange in compliance with the latter’s requirements. SIX Swiss Exchange has approved Tornos Holding Ltd.’s respective application. The last day of trading in the Main Standard is scheduled for November 21, 2014, and the first day of trading in the Domestic Standard for November 24, 2014.