With the consistent implementation of its strategy Autoneum made considerable operational progress and further expanded its position both as market and technological leader in 2012. In the reporting year, Autoneum significantly lifted its net sales, by 13.4% to 1 907.7 million CHF, due to its global presence. EBIT doubled from 34.9 million CHF to 75.5 million CHF, net profit increased substantially from 2.3 million CHF in the previous year to 28.7 million CHF. All four Business Groups reported a positive EBIT and significantly outstripped the market development in net sales. Autoneum thereby reached important interim objectives in its first full year of independence.
- Increase of net sales by 13.4% to 1 907.7 million CHF.
- EBIT doubles to 75.5 million CHF, putting the EBIT margin at 4.0%.
- Net profit increases by 26.4 million CHF to 28.7 million CHF.
- Earnings per share rise strongly to 2.41 CHF.
- Return on net assets (RONA) exceeds the cost of capital (WACC) for the first time.
- Board of Directors submits a proposal to approve the first-time payment of a dividend of 0.65 CHF per share.
- 2013: Increase of net sales expected to exceed the growth of global automobile production. Continued focus on consistent implementation of the strategy and on a further noticeable improvement of the operating results. Key factors are the adjustment of capacities in Europe due to declining demand as well as investments in the expansion of capacities in the growth markets.
The 2012 automotive year was shaped by dynamic development in North America and the automobile growth markets as well as by enormous challenges in Europe. Seen overall, global light vehicle production grew by 6.1% to 81.5 million vehicles. Autoneum considerably raised its net sales in the reporting year by 13.4% to 1 907.7 million CHF (previous year 1 682.4 million CHF). Autoneum increased its net sales in local currencies in all regions, thereby outstripping the market development significantly in some cases. This above-market growth was primarily boosted by Autoneum’s global presence in the automobile markets, its broad customer portfolio with attractive vehicle models, and its position as a technological leader. These factors all represent a distinct competitive advantage.
Operating profitability improved considerably
Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 38.8% to 144.6 million CHF (2011 104.2 million CHF), which equals 7.6% of net sales. Earnings before interest and taxes (EBIT) improved greatly from 34.9 million CHF to 75.5 million CHF, putting the EBIT margin at 4.0% (previous year 2.1%). The decisive factors were the Operational Excellence program, the related reduction in costs and increase in productivity, and higher overall volumes. All four Business Groups reported a positive operating result (EBIT) for the reporting year.
Development of the Business Groups
In Europe, automobile production contracted in 2012 by 5.9% year-on-year to 15.8 million vehicles. In contrast, the net sales of Business Group Europe improved by 0.8% in local currencies. At 880.8 million CHF (previous year 888.0 million CHF), Autoneum generated net sales in Swiss francs just slightly down on the previous year’s figure in a sagging European market. This success was mainly driven by new customer orders from premium brand manufacturers. They compensated for the contraction in sales primarily reported by Southern European manufacturers. Autoneum successfully absorbed the uneven development in the European markets and actually recorded gains in market share. The operating result (EBIT) of Business Group Europe improved significantly to 1.4 million CHF (2011 –12.2 million CHF) or 0.2% of net sales thanks to consistent exploitation of the available potential for improvement.
Automobile production in North America increased by 17.4% to 15.4 million vehicles. In the same period, the net sales of Business Group North America increased by 32.5% in local currencies and by as much as 39.0% in Swiss francs to 794.0 million CHF (previous year 571.3 million CHF). This sales growth was primarily triggered by large-volume new production start-ups and an advantageous mix of models. In this connection, nine out of the ten best-selling models in the US market in 2012 featured Autoneum acoustic and thermal management systems. EBIT doubled from 29.9 million CHF to 60.1 million CHF, which equals 7.6% of net sales (2011 5.2%). The marked increase in volumes brought the plants almost to the limit of their capacity, resulting in additional costs for overtime and special transport runs that were offset by operational progress.
In Asia (without Japan), automobile production rose by 8.1% in 2012 to 31.4 million vehicles. The net sales in Swiss francs generated in this region rose by 8.3% to 99.4 million CHF (previous year 91.8 million CHF). Even adjusted for the effects of production losses in Japan and Thailand in 2011 as a result of natural disasters, Autoneum generated volume growth. The slump in sales experienced by Japanese automobile manufacturers as a consequence of political tension between China and Japan also constrained Autoneum’s sales in China. Business Group Asia managed to partly make up for these losses with new production start-ups and an increase in the volumes sold to European and American customers. EBIT increased to 8.8 million CHF (previous year 5.8 million CHF) or 8.9% of net sales (2011 6.3%).
Although automobile production in the SAMEA market region (South America, Middle East, Africa) dropped by 5.3% to 9.4 million vehicles, Business Group SAMEA’s net sales in local currencies increased by 7.5% year-on-year. Sales were boosted by the growth in volumes experienced in the stronger second half of the year in South America, even though trade barriers in Argentina continue to hamper business. At 140.0 million CHF, net sales in Swiss francs were on a par with the previous year (2011 140.6 million CHF). At 2.8 million CHF, EBIT was down on the previous year (7.2 million CHF). This is primarily due to low volumes throughout the year in Brazil and the effects of high inflation in Argentina that could not be passed on to the customers in full. The EBIT margin shrank to 2.0% of net sales.
Net profit improved substantially
At 54.0 million CHF, Autoneum’s net profit before taxes for 2012 was substantially better than in 2011 (12.6 million CHF). This is primarily due to the considerable improvement in the operating result. As in 2011, the financial result benefited from persistently low interest rates. Net profit increased by 26.4 million CHF to 28.7 million CHF. In spite of measures to optimize income taxes, taxes on income were still affected by the unequal distribution of pre-tax results among the subsidiaries. The return on net assets (RONA) improved to 9.5% (previous year 4.1%) and thus exceeded the weighted average cost of capital (WACC) of 8.7% (previous year 9.0%). As a result, Autoneum earned more than the cost of capital employed in 2012, thereby reaching an important financial milestone ahead of target. Thanks to the active and disciplined management of the operating assets, the balance sheet total as of December 31, 2012, was reduced noticeably in spite of the strong growth in sales. The equity ratio, including subordinated loans, increased to 34.1% (2011 31.3%), cash and cash equivalents at the end of the year amounted to 75.3 million CHF (previous year 64.9 million CHF), and net debt declined by 20.5% to 123.0 million CHF (2011 154.8 million CHF). Earnings per share rose strongly to 2.41 CHF (previous year: –2.13 CHF).
Diversification of financing structure
By successfully placing a 125.0 million CHF bond issue, Autoneum was able to diversify its financial resources, extend the financing terms and take advantage of the favorable capital market environment just 18 months after the listing on SIX Swiss Exchange. The bond has an interest coupon of 4.375% and a term to maturity of five years.
Distribution of first dividend planned
Given the positive results, the Board of Directors decided to submit a proposal to the Annual General Meeting of April 17, 2013, to approve the first-time payment of a dividend of 0.65 CHF per share. This will allow the shareholders to participate in the financial success of Autoneum in 2012. The distribution of 3 million CHF would be made from the capital contribution reserve.
Growth of global automobile production is likely to weaken to just 1.4% in 2013. This is explained in large measure by a further significant decline in production in Europe, which will be particularly marked in the South European countries.