EQS-Adhoc: Media release dated 22 July 2021 / Ad-hoc release in accordance with Article 53 of the listing rules ? V-ZUG Group - a strong first half of 2021
Zug, 22 July 2021 - The V-ZUG Group recorded a very successful first half of 2021, posting an above-average increase in net sales (CHF 308.3 million; previous year's period CHF 258.6 million) and a gratifying operating result (CHF 38.3 million; previous year's period CHF 12.9 million) thanks to sustained high demand, and building on its strong performance in the second half of 2020. Both the domestic Swiss market, driven by an exceptional demand, and our sales growth in the international markets across all regions (Europe, Asia/Pacific and North America) contributed to this encouraging result, with sales growth of around 19%.
For the second half of 2021, the above-average demand in the Swiss market is anticipated to return to a more normal level. There is considerable uncertainty regarding restricted capacity and resulting price increases for virtually all purchased materials and logistics services. Due to this volatile situation, the V-ZUG Group is refraining from making a forecast for its 2021 annual results.
V-ZUG Group's net sales rose compared with the previous year's period, standing at CHF 308.3 million (previous year's period CHF 258.6 million). Both the domestic Swiss market (+12.9%) and the international markets in all three regions (Europe +56.4%, APAC +87.6% and North America +98.4%) contributed to this significant growth in sales. At CHF 38.3 million, the operating result (EBIT) was 196.6% higher than the same period last year (CHF 12.9 million). Operational productivity (EBITDA margin) also increased, from 10.7% in the previous year's period to 17.4% in the first half of 2021.
In the first half of 2021, the V-ZUG Group's cash flow from operating activities amounted to CHF 13.6 million (previous year's period CHF 25.4 million), and free cash flow (after investment activities) totalled CHF -12.7 million (previous year's period CHF?-0.6?million). The deviation compared with the previous year's period is mainly attributable to the increase in current assets. Strategic projects have progressed in line with plans, and have been funded entirely from the Group's own resources. With an equity ratio of 71.7% and cash and cash equivalents of CHF 95.7 million, the balance sheet remains strong.
Extraordinary demand in Switzerland and strong growth in international sales
Boosted by increased consumer activity was an unexpected consequence of the COVID-19 pandemic, the demand for household appliances has grown significantly since mid-2020. In the first half of 2021, despite considerable challenges relating to the procurement of materials and components, the V-ZUG Group was able to meet the significantly increased demand to a great extent, seamlessly building on its above-average performance in the second half of 2020.
In the first half of 2021, the V-ZUG Group benefited from strong demand in its domestic Swiss market and recorded extraordinary sales growth in all product groups.
In the international markets, the V-ZUG Group increased net sales in the first half of 2021 to CHF 43.7 million (previous year's period CHF 24.3 million). The own-brand business contributed to this trend, with sales growing by CHF 11.6 million or +69.4%. After a temporary slowdown in the 2020 financial year, the OEM business recovered significantly. The opening of two further ZUGORAMAs (showrooms), in London and in Paris, is planned for the second half of 2021.
Enthusiasm for the new Excellence Line
The introduction of the new Excellence Line this year is a highlight for V-ZUG. The Excellence Line will undergo a phased launch in the international markets. The launch took place in Europe at the beginning of May 2021, and will be followed by launches in Hong Kong, Singapore and Australia in autumn 2021, and finally in the People's Republic of China at the beginning of 2022.
Based on initial feedback from the markets, the new appliances are being well received both by specialist retailers and by end customers in terms of their design and their functionality. The design is also delighting experts around the world. As a result, the Excellence Line ovens and steam cookers have received the "Best of the Best" Red Dot Award for Product Design 2021, one of the best-known awards for design and innovation worldwide. In addition, the Excellence Line and the AdoraDish V6000 dishwasher with OptiLift have received this year's iF DESIGN AWARD.
No significant production stoppages, few COVID-19 cases
In the first half of 2021, the V-ZUG Group was once again able to avoid production stoppages to a great extent and maintain its delivery capability, some minor delays notwithstanding. Thanks to effective precautionary measures, there have been very few cases of COVID-19 and quarantine-related absences across all V-ZUG Group locations since the end of February 2021. At its operating sites in Zug and Arbon, V-ZUG has taken part in voluntary mass COVID-19 testing, with a weekly testing rate of up to 500 employees. At the Arbon site, employees have also had the opportunity to be vaccinated at their workplace.
Due to the pandemic, practically all partner, customer and shareholder events took place virtually again in the first half of 2021. This led to certain cost savings compared with the pre-COVID situation.
In the first half of the year, the V-ZUG Group also had to deal with pandemic-related challenges and uncertainties in procurement and supply chain management. In addition to supply bottlenecks and procurement difficulties, the second quarter of the year also saw the start of a noticeable increase in prices for raw materials, components and logistics capacity.
Site transformations in Zug and Arbon/Sulgen proceed on schedule
At the beginning of 2021, planning permission was granted for the final production building of the new vertical factory in Zug ("Zephyr Ost"). Construction work started on the new building in May 2021, and it is due to be handed over to operations by autumn 2023, following completion and operational expansion.
The construction of the new refrigerator factory building in Sulgen was completed in autumn 2020. Since then, a phased handover to operations has been taking place, involving extensive installation activities. Full commissioning will take place at the beginning of 2022.
Due to its strong balance sheet and net liquidity, V-ZUG continues to be in a position to finance the far-reaching transformation projects, including the aforementioned upgrade of its own production and office premises, on its own and without additional external funds.
Gradual introduction of new digital solutions
This year, V-ZUG has introduced several digital solutions onto the market. For example, the V-ZUG Home app was updated for the launch of the new Excellence Line. Both proven functionalities and a whole range of new areas of application are now available in conjunction with the latest generation of appliances. A digital assistant has also been created in the form of "V-Kitchen" (www.v-kitchen.ch), offering enthusiastic cooks?support throughout the entire cooking process. Partners in this initiative include Swissmilk, Wildeisen, Farmy and Tiptopf.
"V-Connect" has been developed specifically for managed buildings in order to make servicing even more efficient. Using an app, caretakers can network older appliances up to 20 years of age in order to receive an even faster and more targeted service. And finally, 'V-Upgrade' enables users of V-ZUG Adora Line washing machines and dryers to retrospectively acquire additional functionality.
Sustainability report published
At the end of April 2021, the V-ZUG Group published its sustainability report for the 2020 financial year, with the aim of communicating transparently in this important field. The 2020 Sustainability Report is available at: www.vzug.com/ch/en/nachhaltigkeit_overview.
The fact that V-ZUG products achieve top marks with regard to sustainability is evident, even during the ongoing switch to the new energy efficiency classes. Based on the new, significantly more stringent energy efficiency criteria, V-ZUG continues to achieve the highest energy efficiency class A with the AdoraWash V6000 and the AdoraDish V6000.
For the second half of 2021, the above-average demand in the Swiss market is anticipated to return to a more normal level, while continued solid sales growth can be expected in the international markets. There is considerable uncertainty regarding the deteriorating situation in supply chains. In particular, restricted capacities are leading to price increases for almost all purchased materials and logistics services, which requires a corresponding increase in sales prices in October 2021. The circumstances also remain tense regarding the supply reliability in our supply chains. Keeping our production and delivery capability intact will of course continue to be a high-priority task. Against the background of this volatile situation, the V-ZUG Group is refraining from making a forecast for its 2021 annual results.
Key figuresCHF million (excl. FTE) H1?2021 H1 2020 Change Group ? ? ? Net sales 308.3 258.6 19.2% Currency-adjusted ? ? 18.8% EBITDA 53.7 27.6 94.9% as a % of net sales 17.4% 10.7% 680 bp Operating result (EBIT) 38.3 12.9 196.6% as a % of net sales 12.4% 5.0% 740 bp Group net result 34.0 11.3 201.2% as a % of net sales 11.0% 4.4% 670 bp Cash flow from operating and investing activities -12.7 -0.6 n/a Cash and cash equivalents 95.7 65.1 46.9% Balance sheet total 596.6 514.3 16.0% Shareholders' equity 427.5 361.6 18.2% as a % of balance sheet total 71.7% 70.3% 140 bp Number of employees (FTE) as at?30.06. 2,066 1,963 5.3% Segments ? ? ? Household Appliances ? ? ? Net sales 308.3 258.6 19.2% Currency-adjusted ? ? 18.8% Operating result (EBIT) 36.4 11.5 216.9% as a % of net sales 11.8% 4.4% 740 bp Real Estate ? ? ? Operating result (EBIT) 2.4 1.9 28.9%
About the V-ZUG?Group
"Bringing simplicity into your home and creativity into your kitchen."
V-ZUG is Switzerland's leading brand in household appliances and also markets its products in selected premium markets abroad. V-ZUG has been developing and producing kitchen and laundry appliances in Switzerland for over 100 years and offers a comprehensive service in all markets.?The SIBIRGroup AG, which focuses on all-brand services and the sale of household appliances throughout Switzerland, is another part of the V-ZUG Group. The V-ZUG Group currently employs around 2,000 people.
V-ZUG Holding AG is listed in the Swiss Reporting Standard of SIX Swiss Exchange in Zurich and is represented in the Swiss Performance Index (SPI) (securities number 54 248 374, ISIN CH0542483745, ticker symbol VZUG).
15 March 2022 Publication of the 2021 Annual Report 28 April 2022 Annual General Meeting
Adrian Ineichen CFO Phone: + 41 58 767 60 03
Patrik Leisi Head Legal & Compliance / Investor Relations Phone: + 41 58 767 60 03
The expectations expressed in this media release are based on assumptions. Actual results may vary from those anticipated. This media release is published in German and English. The German version is binding. V-ZUG Holding AG processes personal data in accordance with its privacy statement available at:?www.vzug.com/ch/en/privacystatement.