Feintool International (FTON) H1 2024 earnings summary

Executive summary

• Net sales declined by 13.3% year-over-year to CHF 390.1 million, mainly due to significant weakness in Europe, while Asia and the US saw double-digit growth.

• Strengthened global market position as a high-precision parts supplier, with major expansion initiatives in India, Hungary, and the US, and a long-term roadmap for Switzerland involving production relocation to the Czech Republic.

• EBIT dropped sharply to CHF 0.2 million from CHF 12.2 million a year ago, with a net loss of CHF -3.2 million, a significant improvement from the prior year's net loss of CHF -21.4 million.

• Cost-cutting and restructuring programs accelerated, including a 10% workforce reduction and relocation of high-volume production from Switzerland to the Czech Republic.

• Expansion in hydrogen technology and fineblanking centers of excellence, with new orders in these areas.

Financial highlights

• Group sales for H1 2024 were CHF 390.1 million, down from CHF 450.0 million in H1 2023, with a 24.8% drop in Europe, 16.1% growth in the US, and 10.9% growth in Asia.

• EBITDA margin fell to 7.0% from 8.9% in the prior year, with EBITDA at CHF 27.2 million.

• EBIT margin dropped to 0.1% from 2.7% in H1 2023, with EBIT at CHF 0.2 million.

• Free cash flow was negative at CHF -15.4 million, reflecting higher investments and lower operating cash flow.

• Net debt increased to CHF 55.0 million, and equity ratio improved to 61.5%.

Outlook and guidance

• 2024 guidance suspended due to program modifications by OEMs, weak industrial business, and low visibility.

• Mid-term target for 2026 remains EBIT above 6%, with ongoing restructuring and efficiency initiatives to drive profitability.

• Order book at the end of H1 2024 has a life cycle value of CHF 5.7 billion.