Adval Tech Group's 2021 Annual Report After a successful 2021, Adval Tech is well equipped to meet the major global challenges

Despite a difficult environment, Adval Tech again succeeded in acquiring new, promising orders last year. Demand in the automotive industry recovered significantly. However, the industry was severely affected by the shortage of raw materials and individual vendor parts as well as the associated massive price increases and supply bottlenecks. With targeted measures, the Adval Tech Group achieved a significant year-on-year improvement in EBITDA1), EBIT1) and net profit in 2021, despite the very difficult conditions.

Total income1) und net turnover

The Adval Tech Group generated total income1) of CHF 170.8 million in 2021 (previous year: CHF 140.8 million, +21.3%). This corresponds to the level of 2019, i.e. the level before the coronavirus crisis. Net turnover from the sale of components rose from CHF 108.4 million (2020) to CHF 133.4 million in 2021. Along with the figures for the automotive industry, the sales trend at Adval Tech (Grenchen) AG, which manufactures components for the medical technology and consumer goods sectors, and at Adval Tech (Malaysia) Sdn., which likewise operates in the consumer goods industry, were very encouraging. This also applies to the increase in sales of high-speed presses at Adval Tech (Switzerland) AG, Niederwangen.

At 74%, the Adval Tech Group generated most of its turnover in 2021 from customers in Europe (2020: 74%). Asian customers accounted for 11% of Adval Tech's turnover (2020: 11%), Latin American customers for 8% (2020: 10%) and North American customers for 6% (2020: 5%).

Profitability

The Adval Tech Group generated earnings before interest, tax and depreciation (EBITDA1) of CHF 17.0 mil­lion (2020: CHF 15.2 million), corresponding to an EBITDA margin of 10.0% (2020: 10.8%). Earnings before interest and taxes (EBIT1) amounted to CHF 9.2 million (2020: CHF 6.7 million). The EBIT margin was 5.4% (2020: 4.8%).

Investments and net working capital

In 2021, the Adval Tech Group invested CHF 3.7 million in property, plant and equipment (2020: CHF 3.4 million), for example for injection molding machines in China and Mexico, the expansion of the plant in Mexico and production equipment in Switzerland and Germany. Cash flow from operating activities came to CHF 17.3 million in 2021 (2020: CHF 6.1 million). Free cash flow1) stood at CHF 13.6 million (2020: CHF 3.5 million). This significant increase is mainly due to the higher cash flow from net working capital, the higher net result and the continuing investment restraint.

Operating net working capital1) (trade accounts receivable, inventories and trade accounts payable) stood at CHF 44.9 million at the end of December 2021 (December 31, 2020: CHF 41.4 million). In relation to total income1), operating net working capital1) changed from 27.8% at the end of December 2020 to 28.7% at the end of December 2021. The main factor in the accumulation of operating net working capital1) is the increase in inventories in the components business, partly in order to ensure supply capability.

Equity ratio and dividend distribution

At 78.3%, the Adval Tech Group's equity ratio at the end of 2021 was still slightly higher than in the previous year. At the Annual General Meeting on May 19, 2022, the Board of Directors will propose that a dividend of CHF 2.00 per share be distributed (CHF 1.00 per registered share from capital reserves and CHF 1.00 per registered share as an ordinary dividend from retained earnings).

Outlook

It is very difficult to provide an outlook for 2022. The major uncertainties associated with the coronavirus pandemic and the availability of vendor parts and raw materials, particularly in the automotive industry, remain. The war in Ukraine has again significantly exacerbated the situation and extended the correspond­ing risks to other areas. Over the coming months, car manufacturers will be forced to deal with scenarios in which they have to curb production or even close it down temporarily. Despite the good order situation, in many cases this also means planning uncertainty and the threat of interruptions in production for the Adval Tech Group. The Group is therefore refraining from issuing a specific outlook for 2022 and will continue to exercise restraint with regard to costs and capital expenditure. It will continue to focus on implementing the acquired projects right first time.

1) Alternative Performance Measure, see Annual Report 2021, page 77
2) Proposed by the Board of Directors

Background information about the Adval Tech Group

Adding value through innovation - that's what Adval Tech stands for. The Adval Tech Group is a global industrial supplier of technologically sophisticated components and subassemblies made of metal and plastic. It focuses on selected activities, especially in its main target market, the automotive industry. As a supplier and value-adding partner, Adval Tech covers the entire value chain from product development to prototyping, to mold and tool development, and through to component production and assembly. Headquartered in Switzerland, the Adval Tech Group operates a total of nine production plants. These are located in Switzerland, Germany, Hungary, China, Malaysia, Mexico and Brazil.

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Agenda

May 19, 2022 - General Meeting of Shareholders 2022 (without presence)

End of August 2022, announcement of semi-annual results 2022

Contact

Markus Reber, CFO, phone +41 31 980 82 70, markus.reber@advaltech.com

Valeria Poretti, Head Corporate HR/Communication, phone +41 31 980 82 66, valeria.poretti@advaltech.com

Except for the historical information contained herein, the statements in this media release are forward-looking statements that involve risks and uncertainties.