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SCHWEIZER published the full report for the 2020 financial year and confirms the preliminary figures. The SCHWEIZER Group achieved consolidated sales of EUR 98.3 million in the 2020 financial year, exceeding the projected sales of between EUR 87 and 93 million.
Earnings before interest, taxes and depreciation (EBITDA) of EUR -9.5 million (previous year: EUR +0.1 million) with an EBITDA ratio of -9.7 percent were in line with the expectations for 2020 that had been specified in July 2020.
Marc Bunz, Chief Financial Officer of Schweizer Electronic AG, comments: "In view of the challenges posed by the COVID-19 pandemic and the transformation process of our most important customer group - the European automotive industry - and the current expansion of our new high-tech plant in Jintan (China), we achieved a lot in the 2020 financial year. Of course, we are not satisfied with a decline in total annual sales of -18.6 percent and an EBITDA ratio of -9.7 percent. However, we are well prepared for the future due to the successful implementation of restructuring measures in Schramberg and the expansion of capacity thanks to our plant in China."
Development of sales
With sales of EUR 29.3 million in the fourth quarter of 2020, the development of sales has recovered significantly in comparison to the previous quarters of the year. Particularly characteristic of this positive development is the increased demand from automotive customers with a 73.5 percent share of turnover from September onwards. The share of sales in the non-automotive sector developed also positively, rising to 26.5 percent (2019: 23.8 percent).
Operating margin and operating result
Gross profit on sales amounted to EUR +0.4 million (previous year: EUR +12.6 million). The gross margin fell from +10.5 percent in the previous year to +0.4 percent. The main reasons for the decline were, on the one hand, the production costs of EUR 15.8 million for the newly built plant in Jintan (China), which were included in the cost of sales for the first time, and the negative gross earnings contribution generated by the new plant as a result of the ramp-up phase. On the other hand, the main reason for the lower gross profit is the decline in business volume due to the coronavirus pandemic.
Special expenses from the restructuring and a bad debt loss of EUR 2.9 million and the start-up losses of the new plant in Jintan (China) of EUR 8.3 million impacted upon EBITDA (earnings before interest, taxes and depreciation) in 2020. EBITDA amounted to EUR -9.5 million in 2020 (2019: EUR +0.1 million), which corresponds to an EBITDA ratio of -9.7 percent (previous year: +0.1 percent). Adjusted for these factors affecting earnings, EBITDA amounted to EUR +1.7 million.
For 2021, the Executive Board expects a significant recovery of sales figures, whereby the dynamics of SCHWEIZER's recovery will largely depend on two factors, in addition to the further development of the coronavirus pandemic:
First and foremost is the continued positive development of the new plant in Jintan (China) and the technology qualifications and important certifications planned for 2021. The further development of the new plant in China will enable SCHWEIZER to become more international and broaden its customer base.
The second important factor for the development of the company will be the stability of supply chains in the global context. A sustained shortage of components can lead to a limitation in both customer demand and supplier offers.
Based on forecasts for the development of the global economy, the PCB market and SCHWEIZER's new structure of a German-Chinese PCB group, the Executive Board expects sales growth of between 20 and 30 percent in 2021 and an improvement in the EBITDA ratio to 0 to -6 percent in terms of sales.