Annual Report 2020 the Komax Group Is a Pioneer As Well As the Market and Technology Leader in Auto- Mated Wire Processing Solutions
Total Page:16
File Type:pdf, Size:1020Kb
PIONPIONEEPIONEEEERRR ANAANDNDD TECTETECHCHH-- NNOLOGYNOLOGYOLOGY LLEADLEEADERADERERR Annual Report 2020 The Komax Group is a pioneer as well as the market and technology leader in auto- mated wire processing solutions. It is aiming to consolidate this leading position and set the pace on the trends that are important today, such as electric mobility and autonomous driving. To this end, it is channeling above-average investment into research and development. Komax has set itself ambitious targets for the period up to 2023 – for growth and profita- bility. Through its business strategy, which is geared to long-term success, Komax aims to create sustainable value, an approach which also benefits its shareholders. KEY FIGURES 2020 2019 +/− in % in TCHF Order intake 345 349 408 682 –15.5 Gross profit 199 860 258 930 –22.8 in % of revenues 61.0 62.0 Investments in non-current assets 25 811 54 448 –52.6 Free cash flow 15 435 –36 886 –141.8 Net working capital1 155 232 188 860 –17.8 in % of revenues 52.5 47.0 Total assets 452 089 481 236 –6.1 Net debt 92 426 106 224 –13.0 m Revenues in CHF 328 (2019: 418m) Operating profit (EBIT) in TCHF 80 000 20% % 60 000 15% 14.0 14.1 13.5 3.7 40 000 10% RONCE 5.8 (2019: 8.4%) 20 000 3.4 5% 035 254 424 069 254 24 67 55 55 11 2016 2 2017 2018 2019 2020 EBIT EBIT in % of revenues Shareholders’ equity in TCHF 2 095 320 000 100% Headcount as at 31.12.2020 240 000 75% (31.12.2019: 2 211 employees) 68.9 62.3 160 000 60.8 50% 50.8 52.3 80 000 25% 174 178 604 486 640 246 258 244 236 281 2016 2 2017 2018 2019 2020 –0.34 Shareholders’ equity Shareholders’ equity in % of total assets Basic earnings in CHF (2019: 3.44) Group earnings after taxes (EAT) in TCHF 50 000 15% 40 000 12% ppts 10.8 30 000 10.3 9% 9.9 – 1. 2 20 000 6% Foreign currency impact on the EBIT margin 3.2 10 000 3% (2019: –0.8 ppts) 221 703 101 787 1319 13 38 42 51 – 0.4 – 2016 2 2017 2018 2019 2020 EAT EAT in % of revenues R&D expenditure in TCHF 50 000 15% 40 000 12% 30 000 9.9 9% 9.0 8.6 9.1 7.4 20 000 6% 10 000 1 Net working capital: receivables plus inventories 3% 071 668 531 756 051 less current liabilities. 41 2 Since the start of 2017, the consolidated financial 29 36 41 29 statements have been drawn up in accordance with 2016 2 2017 2018 2019 2020 Swiss GAAP FER. The 2016 figures have been revised accordingly. R&D R&D in % of revenues ANNUAL REPORT 2020 CONTENTS ANNUAL REPORT CORPORATE FINANCIAL REPORT GOVERNANCE Shareholders’ letter 61 Consolidated financial 02 statements COMPENSATION 88 Locations REPORT Financial statements of 04 73 Komax Holding AG Market and innovation 128 10 Five year overview Interview with 139 Chairman and CEO 26 Global megatrends 30 Business model and strategy 34 Board of Directors and Executive Committee 42 Sustainability and social responsibility 46 Information for investors 57 01 ANNUAL REPORT 2020 SHAREHOLDERS’ LETTER DEAR SHAREHOLDER The coronavirus pandemic (CHF 408.7 million). Customer demand remained solid in par- ticular for solutions linked to new technologies such as autono- posed a significant challenge mous driving and e-mobility, and/or which play a role in further increasing the level of automation in wire processing. Revenues for the Komax Group in 2020 were down 21.6% to CHF 327.6 million (2019: CHF 417.8 and had a substantial impact million). This revenue result was attributable to a sizeable or- ganic decline (–20.8%), acquisition-driven growth (+2.6%), on the result for the year. The and negative foreign currency effects (–3.4%). The market situation improved gradually from mid-2020 on, so much so slump in demand in the auto- that both order intake (first half 2020: CHF 143.8 million, sec- motive industry triggered a ond half 2020: CHF 201.5 million) and revenues (first half 2020: CHF 145.2 million, second half 2020: CHF 182.4 mil- sizeable decrease in order lion) were significantly higher in the second half of the year intake and revenues. Thanks than in the first, with the last few months of 2020 in particular contributing to this increase. to the swift implementation of Global decline in revenues comprehensive cost-cutting The decline in revenues was considerable in all regions and, measures, Komax proved at –32.8%, was most substantial in North/South America. The impact of the coronavirus pandemic was felt last of all in this the robustness of its business market area. Accordingly, the recovery also set in later here than in other regions and was, in fact, still outstanding in model, recording EBIT of South America. Komax registered its lowest drops in sales in CHF 11.3 million despite the Asia (–9.5%) and Africa (–12.2%). Asia witnessed the most rapid improvement in the market situation, which was almost adverse circumstances. back at the prior-year level towards the end of 2020. In Europe, Komax posted revenues that were down 23.4% on the 2019 figure. At the mid-year point, the decline amounted to 32.4%, the biggest drop of all the regions. In evidence for several years already, the trend among wire manufacturers towards relocating part of their production to North Africa due to a The automotive industry, in which Komax generates around growing shortage of personnel in Eastern Europe continued 80% of its revenues, was drastically affected by the corona- in 2020. virus pandemic in 2020. Many automotive plants were shut The coronavirus pandemic also made itself felt in the other down for a number of weeks, operating at reduced capacity market segments in which Komax operates. Aerospace was utilization levels over several months. This resulted in only especially hard hit, recording even bigger falls than the auto- 74 million vehicles being produced worldwide in 2020 accord- motive industry. Of all the market segments, industrial fared ing to analyses by IHS Markit, a drop of some 15 million ver- best in the crisis year of 2020. Industrial customers such as sus 2019. This marked decline in production volumes left control cabinet manufacturers, for instance, remained fo- many Komax customers facing excess capacities. As a con- cused on increasing the level of automation and thus produc- sequence, they significantly scaled back their investments in tivity in wire processing, investing in Komax solutions as a automation solutions, which correlate directly to the number result. of vehicles produced. Its broad product portfolio and customer proximity al- Comprehensive cost-cutting measures lowed Komax to keep the decline in demand within limits, Given the lack of volume business in particular in 2020, a however, and it recorded an order intake of CHF 345.3 million. business which makes a disproportionately high contribution This represents a decrease of 15.5% on the previous year to Komax’s operating profit (EBIT), EBIT declined by 53.2% 02 ANNUAL REPORT 2020 SHAREHOLDERS’ LETTER to CHF 11.3 million (2019: CHF 24.0 million). The EBIT margin In 2020, Komax invested primarily in the completion of the narrowed from 5.8% to 3.4%, with negative foreign currency new production and development building at its headquar- effects accounting for a contraction of 1.2 percentage points ters in Switzerland. The move into the building took place in in the margin compared with the previous year. In the first half the first half of the year, and April saw the first machines be- of 2020, when the market situation was even worse, EBIT ing produced there. The extension building, in which Komax amounted to CHF –4.7 million (second half 2020: CHF 16.0 invested over CHF 75 million between 2017 and 2020, is de- million). signed as a vertical factory with total floor space of more than Since Komax reacted swiftly, putting in place comprehen- 20 000 m², spread across a lower ground floor, ground floor and sive cost-saving measures as early as the first quarter of the five stories. As the move to the new building allowed Komax year, it was able to mitigate the negative financial repercus- to give up a rented site, it now operates just two locations in sions. Action taken included structural adjustments, the intro- Switzerland. duction of short-time working, a reduction in external services (e.g. research and development), and a downsizing of posi- Waiver of dividend tions around the world. Overall, Komax reduced its workforce In accordance with its strategic goals, every year Komax by around 10%, although a number of employees at various seeks to distribute 50%–60% of Group earnings after taxes companies will not leave the Group until the first half of 2021. to its shareholders. Since this result was negative in 2020, the As a consequence of the cost-saving measures, research Board of Directors is proposing to the Annual General Meeting and development expenditure decreased to CHF 29.8 million to be held on 14 April 2021 that the distribution of a dividend (2019: CHF 41.5 million) or 9.1% (2019: 9.9%) of revenues, be waived. which is roughly in line with the strategic target of 8%–9%. Despite this considerable scaling back of the spend on inno- Outlook vation, which was due primarily to short-time working, Komax The crisis year of 2020 showed that customers continue to launched a number of new products in 2020, thereby under- target a significant increase in the level of automation in wire scoring its technology leadership.