The 9% decline in total income to CHF 127.0 million (1H 2013: CHF 139.4 million) reflected missing sales from companies in Mexico and China that were sold or shut down in the past year. Net of this CHF 17 million effect, the Adval Tech Group posted a CHF 4.6 million (4%) increase in total income in the first half of 2014. The two segments' shares of total income shifted from 76% to 65% for Components and from 24% to 35% for Molds. At CHF 5.3 million, Adval Tech's earnings before interest and taxes (EBIT) were nearly double the figure for the first half of 2013 (CHF 2.8 million).

Liquidity

In 2013 the Adval Tech Group reduced net debt by a total of CHF 37.4 million, significantly improving the basis for the Group's future development. At the start of July 2014, Adval Tech rolled over its expiring credit facility with two big Swiss banks to a new contract with four banks, three in Switzerland and one in Germany. The credit limit remained at CHF 85 million, with a term of three years. At least CHF 15 million is to be amortized by the end of 2016.

Segment results

In the Components segment (metal and plastic components), total income of CHF 83.4 million was CHF 22.2 million below the prior-year figure of CHF 105.6 million. This was attributable primarily to the sale of two companies in China and Mexico, the closing of a plant in China and ongoing streamlining of the Group's portfolio. Thanks to the implementation of a cost-cutting program and to extremely efficient cost management, the segment generated EBITDA of CHF 5.9 million (1H 2013: CHF 7.0 million) despite this sharp reduction in total income, representing an improvement in the EBITDA margin by 0.4 percentage points to 7.1% (1H 2013: 6.6%).

The Molds segment generated total income of CHF 44.8 million in the first half of 2014, an increase of CHF 8.6 million over the CHF 36.2 million for the comparative period of 2013. This growth is attributable mainly to higher demand on the American market, where the segment has identified significant pent-up demand that has generated record volumes for the facility in Germany. At CHF 5.8 million, EBITDA was CHF 1.9 million ahead of the figure for the prior-year period (CHF 3.9 million), resulting in an EBITDA margin of 12.9% (1H 2013: 10.8%).

Branding

With the dissolution of the divisions in 2012 and the systematic simplification of its organization, Adval Tech has also standardized the profile of the various Group units. In the future the Adval Tech Group will use only three brands: Adval Tech for plastic components, Adval Tech Styner+Bienz for metal components, and Adval Tech FOBOHA for molds and tools. Implementing the new strategy will entail renaming certain companies. In the Molds segment, the first changes were made in early March 2014. In the Components segment, Adval Tech has begun renaming companies in Asia.

Outlook

The Adval Tech Group is steadily evolving from an all-rounder to a specialist. In the second half of 2014 it will continue to devote its full energies to systematically implementing its focusing strategy, concentrating on mold making and selected activities in the metal and plastic components business, and successfully completing the restructuring projects already begun.

To what extent the Molds segment will continue to benefit from booming US demand in the coming months remains unclear. In any case, the segment will focus marketing efforts on other markets to prepare for the end of the boom. The Components segment has set itself the target of containing the decline in total income resulting from streamlining its portfolio as far as possible. To this end it is further expanding marketing activities, especially in Asia.

Given stable economic conditions and exchange rates in the second half of the year, Adval Tech expects significantly higher EBIT for fiscal year 2014 than for 2013. The Group is still aiming for a positive net result for the year.