EBIT leap in a challenging first half-year thanks to gain from the SteelcoBelimed joint venture

Ad hoc announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange

Zug, August 19, 2024 – The METALL ZUG Group posted net sales of CHF 181.2 million in the first half of 2024 (previous year: CHF 228.4 million). Thanks to the gain of CHF 66.6 million in connection with the joint venture between Belimed and Steelco, the operating result (EBIT) rose to CHF 60.4 million (previous year: CHF 6.9 million). The financial result amounted to CHF -1.4 million (previous year: CHF 8.7 million) and net income stood at CHF 56.6 million (previous year: CHF 12.6 million).

The Metall Zug Group achieved another milestone in the first half of 2024, which was again challenging. The new joint venture SteelcoBelimed commenced operations on June 7, 2024, after the clearance of the respective relevant authorities was granted and the transaction was closed. The teams of Belimed Infection Control, the Belimed Life Science Group and the Steelco Group are now working on the specific target picture with regard to the offering and organizational structure. Metall Zug remains invested in the combined company in the long term and holds a 33% stake in SteelcoBelimed.

Belimed Infection Control and the Belimed Life Science Group were fully consolidated in the consolidated financial statements of the Metall Zug Group until June 7, 2024. Since then, Metall Zug AG’s share in the net income of the SteelcoBelimed Group has been reported in the financial result of Metall Zug AG. Metall Zug generated a one-off and EBIT-relevant book gain of CHF 66.6 million from the transaction. 

The Metall Zug Group posted net sales of CHF 181.2 million in the first half of 2024 (previous year: CHF 228.4 million), whereas the Belimed divestment effect accounted for a decline of CHF 19.9 million in total. At CHF 60.4 million, EBIT recorded a significant leap compared to the prior-year period of CHF 6.9 million. This is a result of the book gain of CHF 66.6 million from the combination of Belimed (Infection Control and Life Science) with Steelco. Adjusted for this one-time effect, EBIT declined by CHF 13.2 million. The main reason for this is the significantly lower operating result of Medical Devices. The financial result amounted to CHF -1.4 million (previous year: CHF 8.7 million) and includes the proportional net income of the V-ZUG Group (30% share), the Komax Group (25% share) and, since June 7, 2024, the SteelcoBelimed Group (33% share). Net income rose considerably to CHF 56.6 million (previous year: CHF 12.6 million). Despite negative EBIT (before the book gain), it was possible to generate a positive cash flow from operating activities amounting to CHF 6.7 million (previous year: CHF 6.9 million) thanks to the reduction of net working capital. The equity ratio rose to 80.5% (December 31, 2023: 75.5%).

Net sales in the Medical Devices Business Unit amounted to CHF 81.6 million in the first half of 2024, which was below the same period in prior-year of CHF 93.9 million. Taking currency effects into account, this corresponds to an organic decline in sales of -11.8%. This is mainly due to the Simulation and Biometry areas, where demand was down year-on-year. On the other hand, there was a noticeable recovery in order intake in the US market and a positive development in the area of General Diagnostics, although this will only be reflected in sales in the second half of the year. As a result of lower sales volume and due to increased investments in Marketing & Sales and Research & Development, EBIT amounted to CHF 2.4 million in the first half of 2024, which is well below the prior-year figure of CHF 12.6 million. Cost savings in other areas could only compensate for this to a limited extent.

In the Infection Control Business Unit, demand normalized compared to previous years. Nevertheless, due to a low order backlog at the beginning of the year, the Business Unit generated net sales of CHF 68.7 million, which is below the previous year's level of CHF 88.5 million. However, Belimed reached pleasing growth in the Digital business area, driven by the more than 1 000 devices now connected to the SmartHub digital platform and moderate growth in the Service and Consumables business areas. Taking into account the divestment effect amounting to CHF -14.9 million and excluding currency effects totaling CHF -1.9 million, this translates to a -3.5% decline in organic sales. At CHF -3.9 million, EBIT for the first half of 2024 is above the prior-year level of CHF -4.4 million. Despite optimizations to the cost structure, EBIT again fell short of the profit zone owing to the decline in sales.

In the first half of 2024, the Technologycluster & Infrastructure Business Unit made progress in the development of real estate projects, the site network and infrastructure. Although construction costs increased, putting pressure on project budgets, the Business Unit was able to increase EBIT from CHF 0.8 million to CHF 1.7 million in the first half of 2024 compared to the previous year. Milestones in the development of the site in the first half of 2024 were the laying of the foundation stone for the SHL-Südtor project, the resumption of project planning in connection with the Pi timber high-rise and the opening of KunstCluster Zug in the Hall 11 on the Tech Cluster Zug site that became vacant. The sustainability projects financed by the Greenhouse Gas Fund are also progressing according to plan.

The Reporting Segment Others posted net sales of CHF 32.8 million in the first half of the year (previous year: CHF 50.1 million) and EBIT of CHF 60.2 million (previous year: CHF -2.1 million). The significant increase in the operating result is primarily a result of the aforementioned book gain amounting to CHF 66.6 million from the combination of Belimed and Steelco. Belimed Life Science recorded a decline in demand in the sterilizer division and was confronted with scheduling challenges in processing the project pipeline in the washer division as well as with project delays on the part of some customers. As a result, Belimed Life Science generated significantly lower net sales than in the same period of the previous year and the operating result fell into the negative zone. The Gehrig Group increased net sales compared to the previous year, despite the challenging market environment and the discontinuation of the “Care and Hygiene” divisions in 2023 and the “Coffee” division at the beginning of this year. The increase can be attributed in particular to the positive developments in the “Customer Service” and “Thermal cooking” divisions. However, due to additional costs in connection with the discontinuation of “Coffee” division and for ongoing digitization projects, the Gehrig Group failed to achieve a positive operating result.

Outlook
It is difficult to issue a guidance for the second half of 2024, particularly due to the economical and political uncertainties. Order intake in the Medical Devices Business Unit increased slightly in the first half of 2024 compared to the prior-year period, thus a slight increase in sales can be expected for the second half of the year. Owing to the continuing high cost base in the area of research and development, the Metall Zug Group's overall operating result (EBIT) is expected to remain flat in the second half of the year.

Key figures of the Metall Zug Group
With regard to the comparability of the income statement and the cash flow statement, it should be taken into account that in 2024 only the net sales and EBIT contributions of Belimed Infection Control and Belimed Life Science up to the deconsolidation date, June 7, 2024, were included. In addition, the previous year's figures were adjusted (restatement). Detailed explanations are available in the notes to the financial report for the first half of 2024.

About the Metall Zug Group
Metall Zug is a group of industrial companies headquartered in Zug. The Group has around 1,000 employees and comprises three Business Units:

• Medical Devices (Haag-Streit Group)
• Technologycluster & Infrastructure (Tech Cluster Zug AG, Urban Assets Zug AG)
• Others  (Gehrig Group AG and Metall Zug)

In addition, Metall Zug holds anchor participations in the listed V-ZUG Holding AG (30%), the listed Komax Holding AG (25%) and SteelcoBelimed AG (33%), a joint venture with Miele. The holding company Metall Zug AG is listed in the Swiss Reporting Standard of SIX Swiss Exchange in Zurich (type B registered shares: securities number 3982108, ticker symbol METN).

Legal Notes
The expectations expressed in this announcement are based on assumptions. Actual results may vary from those anticipated. This announcement is published in German and English. The German version is binding. Metall Zug AG processes personal data in accordance with its privacy statement available under: https://www.metallzug.ch/en/datenschutzerklaerung.

or: investorrelations@metallzug.ch 

This announcement is available at https://www.metallzug.ch/en/medien/medienmitteilungen and the 2024 Half-year Report and investor presentation at https://www.metallzug.ch/en/investoren/geschaeftsberichte-praesentationen.