Consolidated Financial Statements 2020
of the Mikron Group

Consolidated income statement

CHF 1,000Note2020 2019 
Net sales4.1257,819100%327,553100%
Change in work in progress/finished goods -2,684 984 
Capitalized own production 0 1,006 
Material costs and subcontractors4.2-94,473 -120,256 
Personnel expenses4.3-124,328 -134,409 
Other operating income4.41,433 1,560 
Other operating expenses4.4-46,459 -54,222 
Depreciation of tangible assets5.5-8,304 -6,885 
Amortization of intangible assets5.6-2,127 -1,375 
Recycling of goodwill6.4-962 0 
Operating result -20,085-7.8%13,9564.3%
      
Financial result4.5-2,289 -474 
Ordinary result -22,374-8.7%13,4824.1%
      
Non-operating result4.6-687 161 
Loss/profit before taxes -23,061-8.9%13,6434.2%
      
Income taxes4.7986 -4,877 
Loss/profit -22,075-8.6%8,7662.7%
      
Net earnings per share – undiluted -1.35 0.54 
Net earnings per share – diluted -1.35 0.54 

The accompanying notes form an integral part of the consolidated financial statements.

Consolidated balance sheet

CHF 1,000 Note 31.12.2020 31.12.2019
Current assets
Cash and cash equivalents 38,420 37,992
Current financial assets 5.1 2,021 6,152
Accounts receivable 5.2 18,959 21,889
Inventories 5.3 56,085 61,171
Net assets from customer projects 5.4 38,514 40,764
Other current receivables 4,917 4,800
Prepaid expenses 5,770 5,276
Total current assets 164,686 59.4% 178,044 61.5%
Non-current assets
Tangible assets 5.5 75,644 73,781
Intangible assets 5.6 3,758 5,224
Investment property 5.7 27,912 28,415
Deferred tax assets 5.9 5,126 4,048
Total non-current assets 112,440 40.6% 111,468 38.5%
Total assets 277,126 100.0% 289,512 100.0%
Current liabilities
Short-term financial liabilities 5.10 14,205 11,527
Accounts payable 20,362 20,205
Net liabilities from customer projects 5.4 41,625 39,621
Short-term provisions 5.11 16,463 9,791
Other current liabilities 3,360 3,536
Accrued expenses 5.12 19,593 18,969
Total current liabilities 115,608 41.7% 103,649 38.5%
Long-term liabilities
Long-term financial liabilities 5.10 10,116 10,063
Long-term provisions 5.11 818 509
Deferred tax liabilities 5.9 5,065 6,071
Total long-term liabilities 15,999 5.8% 16,643 5.7%
Shareholders’ equity
Share capital 5.13 1,671 1,671
Treasury shares -3,212 -3,658
Capital reserves 95,595 95,830
Retained earnings 51,465 75,377
Total shareholders’ equity 145,519 52.5% 169,220 58.5%
Total liabilities and shareholders’ equity 277,126 100.0% 289,512 100.0%

The accompanying notes form an integral part of the consolidated financial statements.

Consolidated statement of shareholders' equity

     Retained earnings 
CHF 1,000NoteShare capitalTreasury sharesCapital reservesAccumulated profitsGoodwill recognizedTranslation adjustmentsTotal share-holders’ equity
Balance at 01.01.2019 1,671-4,09299,15868,963-962-429164,309
         
Profit 2019    8,766  8,766
Translation adjustments      -961-961
Distribution to shareholders   -3,257   -3,257
Change in treasury shares5.13 434-71   363
Balance at 31.12.2019 1,671-3,65895,83077,729-962-1,390169,220
         
Loss 2020    -22,075  -22,075
Translation adjustments      -3,046-3,046
Recycling in connection with the discontinuation of Mikron Berlin GmbH     9622471,209
Change in treasury shares5.13 446-235   211
Balance at 31.12.2020 1,671-3,21295,59555,6540-4,189145,519
         

The accompanying notes form an integral part of the consolidated financial statements.

Consolidated statement of cash flow

CHF 1,000 Note 2020 2019
Cash flow from operating activities
Loss / profit -22,075 8,766
Depreciation and amortization 5.5, 5.6 10,431 8,260
Recycling of goodwill 6.4 962 0
Revaluation of investment property 5.7 503 493
Net gain (-)/loss (+) on sale of non-current assets 4.4 115 -156
Changes in provisions 5.11 7,021 4,160
Changes in deferred taxes 4.7, 5.9 -2,442 2,378
Other non-cash items 434 1,033
Movement in accounts receivable 2,450 1,917
Movement in inventories 4,077 3,847
Movement in net assets/liabilities from customer projects 4,302 -11,383
Movement in accounts payable 3,203 -8,913
Movement in other receivables and prepaid expenses -733 -837
Movement in other current liabilities and accrued expenses 927 -2,284
Cash flow from operating activities 9,175 7,281
Cash flow from investing activities
Investments in tangible assets 5.5 -14,382 -9,349
Divestments of tangible assets 5.5 328 571
Investments in intangible assets 5.6 -946 -1,962
Divestments of financial assets 5.1 4,000 10,688
Cash flow from investing activities -11,000 -52
Cash flow from financing activities
Distribution to shareholders 0 -3,256
Increase (+)/repayment (-) of financial liabilities 5,125 8,603
Repayment (-) of finance lease liabilities -2,136 -1,902
Interest received 101 339
Interest paid -479 -418
Cash flow from financing activities 2,611 3,366
Effect of exchange rate changes on cash and cash equivalents -358 -170
Net cash flow 428 10,425
Increase (+)/decrease (-) of cash and cash equivalents 428 10,425
Cash and cash equivalents at beginning of period 37,992 27,567
Cash and cash equivalents at end of period 38,420 37,992

The accompanying notes form an integral part of the consolidated financial statements.

Notes to the Consolidated Financial
Statements 2020 of the Mikron Group

1. General information

1.1 Business operations
Mikron Holding AG and its subsidiaries (together the Mikron Group) develop, produce and market automation and machining systems that enable extremely precise and productive manufacturing processes. Rooted in the Swiss culture of innovation, the Group is a globally leading partner to companies in the automotive, pharmaceutical, medtech, consumer goods, writing instruments and watchmaking industries.

The two business segments, Mikron Automation and Mikron Machining Solutions, are based in Switzerland (Boudry and Agno). The company has additional production facilities in Germany, Singapore, Lithuania, China and the US. The 1,350 employees of the Mikron Group can draw on over 100 years of experience in the production of high-precision systems for large-series product manufacture. Mikron Holding AG shares are traded on SIX Swiss Exchange (MIKN).

1.2 Basis of preparation
The consolidated financial statements have been prepared in accordance with Swiss GAAP FER as a whole, including Swiss GAAP FER 31, applying the principle of historical cost accounting. Exceptions to this rule are deferred taxes that are calculated from valuation differences or tax loss carry-forwards and the applicable tax rate, marketable securities reported as current assets, derivative financial instruments and investment properties, which are reported at fair values.

1.3 Events after the balance sheet date
The Board of Directors approved the consolidated financial statements at its meeting of 8 March 2021. The approval of the consolidated financial statements by the Annual General Meeting is scheduled for 23 April 2021.

2. Significant accounting policies

2.1 Consolidation

2.1.1 Scope and method of consolidation
The consolidated financial statements include Mikron Holding AG, Biel, and all Swiss and foreign subsidiaries which the parent company, directly or indirectly, controls either by holding more than 50% of the voting rights or by some other form of control. These entities are fully consolidated. All intercompany transactions and relations between the consolidated companies are offset against each other and eliminated. Profits on intercompany transactions are eliminated. Capital consolidation is based on the purchase method applied to the annual financial statements of all consolidated entities, prepared as at December 31 and determined according to uniform accounting policies. The Mikron Group does not have any shareholdings with voting power of less than 50%. The list of Group companies can be found here. In the year under review there were no changes (prior year: two) in the group of consolidated companies.

2.1.2 Acquisition of Group companies
New companies acquired by the Mikron Group are reported in the consolidated financial statements from the date of obtaining control. The net assets acquired are valued at actual values and consolidated applying the purchase method. Intangible assets not previously capitalized are not valued or recognized. Any difference between the higher purchase price and the net assets acquired (goodwill) is offset against shareholders’ capital.

2.2 Business segment reporting
The Mikron Group is organized by business segments which are grouped according to the types of products and services they provide.

For the purposes of reporting, the following business segments have been identified:

  • The Mikron Machining Solutions segment comprises the two divisions Mikron Machining and Mikron Tool. The Mikron Machining division is the leading supplier of customized, highly productive machining systems for the manufacturing of complex high-precision components made of metal such as turbocharger housings, injection nozzles and ballpoint pen tips. The Mikron Tool division develops and produces the therefore necessary high-performance cutting tools. These are regarded as some of the best in the world and are also used on other manufacturers’ machines. To date, Mikron Machining Solutions has developed and commissioned over 7,000 machining systems. Its international customers operate in the following industries: automotive, electronics and telecommunications, medtech, consumer goods, construction/building and pneumatics and hydraulics. Mikron Machining Solutions employs around 550 people and is headquartered in Agno (Switzerland). It also has sites in Rottweil (Germany), Monroe (USA) and Shanghai (China).
  • Mikron Automation is the leading partner for scalable and customized assembly systems – from the first idea to the highest performance solutions. Mikron’s expertise and proven track record guarantee the most productive solution to assemble customer products at each stage of their lifecycle. To date, Mikron Automation has installed more than 3,500 assembly and testing systems worldwide. Its international customers operate in the following markets: pharmaceutical, medtech, automotive, electrical/electronics, consumer goods and construction/building. Mikron Automation currently employs around 750 people and is headquartered in Boudry (Neuchâtel), a region that is regarded as the heart of the Swiss watchmaking industry. It also has sites in Berlin (Germany), Kaunas (Lithuania), Denver (USA), Singapore and Shanghai (China).
  • The Corporate Service segment reports information on Mikron’s holding, management and finance companies. The Corporate Service supports the individual Group companies as well as the Board of Directors and Group Management in their management and control functions. It also reports income and expenses related to a non-operating industrial property, which is fully leased to third parties. Eliminations on Group level are presented together with the Corporate Service.

2.3 Foreign currency translation
Foreign currency transactions are translated into the local currency using the exchange rate prevailing on the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at year-end exchange rates are recognized in the ­income statement.

The consolidated financial statements are reported in Swiss francs. For consolidation purposes, assets and liabilities are translated into Swiss francs at the exchange rates on the balance sheet date. The income statement and all cash flows are translated at average rates for each period. Differences between the translation of assets and liabilities and the income statement are recognized in equity. Exchange differences on long-term intra-Group loans with equity character are likewise taken directly to Group equity.

The most significant exchange rates for the Group in the year under review in Swiss francs were:

Currency Average rate Average rate Closing rate Closing rate
2020 2019 31.12.2020 31.12.2019
1 EUR 1.07 1.11 1.08 1.09
1 USD 0.94 0.99 0.89 0.98
1 SGD 0.68 0.73 0.67 0.72
1 CNY 0.14 0.14 0.14 0.14

2.4 Disclosure of related party transactions
Related parties are defined as companies or persons that exercise significant influence over Mikron or that are controlled by the Group. The Ammann Group, the Board of Directors, Group Management and the pension fund of Mikron Group are defined as related parties. All significant trans­actions, outstanding balances and, if applicable, contingent liabilities are disclosed in note 6.5 to the consolidated financial statements.

2.5 Assets and liabilities

2.5.1 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, current bank and postal accounts, as well as deposits held at call with a bank or other financial institution with maturities of 90 days or less, and are shown at nominal value.

2.5.2 Financial assets
Marketable securities, derivative financial instruments and term deposits with maturities of more than 90 days are reported as current financial assets. As all marketable securities are investments of excess cash that are available for sale, they are considered to be current financial assets independent of any maturity longer than one year. Term deposits are valued at nominal value less any ­impairment. Marketable securities and derivative financial instruments are measured at fair value and any
changes in fair value are presented in the financial result.

2.5.3 Receivables
Receivables are carried at nominal value. A provision for bad debt risks is established for cases where the Group faces an objective risk of not collecting the outstanding amount. Factors such as information on financial difficulties being experienced by the debtor and overdue payments (more than 30 days overdue) are used to assess whether or not there is a bad debt risk. Changes in provisions are recognized as other operating expenses.

2.5.4 Inventories
Raw materials and other supplies, as well as goods purchased, are carried at weighted average cost, and finished products at the lower of costs of conversion (standard costs), including directly attributable production costs, or fair value less costs to sell. Settlement discounts are recognized as financial income. Additionally, downpayments from customers are disclosed as a deduction and prepayments to suppliers as an increase of inventories. Provisions are made for slow-moving items. Obsolete items are written off.

2.5.5 Customer projects
Customer projects for machining and assembly systems are accounted for using the “percentage of completion” method. The respective stage of completion is determined by individually measuring the work performed to date, based on the costs incurred compared to the total estimated costs. Costs to date and realized revenues calculated by reference to the stage of completion are con­tinuously recognized in the income statement. On the balance sheet, projects in progress – offset by prepayments and progress payments from customers – are recognized as net assets or net liabilities from customer projects.

Projects for which no specific customer contract exists yet are capitalized as work in progress until delivery and disclosed as inventory. They are measured at the lower of costs of conversion (standard costs), including directly attributable production costs, or fair value less costs to sell. Net sales and profit are recognized at the time of delivery.

Immediate provision is recognized in the income statement for present or foreseeable losses on customer projects.

2.5.6 Tangible assets
Property consists of production and office buildings. Tangible assets are measured at historical cost and depreciated over their estimated useful lives. The exception to the rule is land, which is not depreciated. Added value expenses are capitalized and depreciated over the corresponding useful life. Expenditure on repairs, maintenance and replacements is charged directly to the income statement.

The straight-line depreciation rates are determined by the expected useful life, taking into account operational use and technical ageing. The estimated useful life is as follows:

Years
Real estate 30–45
Leasehold improvements over the duration of the lease agreement
Equipment and installations 12–25
Furniture 8–12
Machinery 5–10
Other 2–7

2.5.7 Intangible assets
Items which qualify as intangible assets mainly comprise development costs, purchased software and patents.

Development costs relating to new or significantly improved products and processes are capitalized only when they are technically and commercially feasible and when the Group has sufficient ­resources for their implementation. Expenses related to smaller development projects or early stage developments as well as product maintenance are taken to the income statement as an expense. Capitalized development costs are recognized at cost less accumulated amortizations and impairments (see note 2.5.9). The maximum estimated useful life is 5 years.

Other intangible assets are reported in the balance sheet at acquisition value less accumulated amortizations and impairments (see note 2.5.9). The estimated useful life of software is basically 3 to 5 years, for ERP licenses up to 10 years and for patents 5 to 10 years.

2.5.8 Investment property
Property held as a financial investment includes production and office buildings which are rented out to third parties. Investment properties are reported at market value. The Mikron Group currently owns a property in Nidau, Switzerland, with a market value of CHF 27.9 million as at 31 December 2020. The fair value of the property is reviewed annually as per the balance sheet date and adjusted if necessary. Revaluations are recognized in the income statement.

2.5.9 Impairment of non-current assets
Tangible and intangible assets are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. An impairment loss is recognized at the amount by which an asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s net selling price and its value in use (net present value of estimated future cash flows). The recoverable amount is determined for each asset separately or, where this is not possible, for the cash-generating unit to which the asset belongs. A reversal of impairment is recognized if the review of the recoverable amount reveals none or only a reduced impairment.

2.5.10 Lease contracts
Agreements that substantially transfer all the risks and rewards of ownership to the lessee are ­accounted for as finance leases. Assets held under finance leases are recognized as tangible assets at the lower of fair value at the time of acquisition and the net present value of the future lease payments. The corresponding liability to the lessor is included in the balance sheet as a financial liability. Lease payments are apportioned between financial expenses and reduction of the lease obligation. Assets under finance leases are amortized over their estimated useful lives.

Operating lease payments are treated as operating expenses and charged to the income statement as incurred.

2.5.11 Payables
Payables are measured at nominal values.

2.5.12 Financial liabilities
Short-term and long-term bank borrowings and loans are recognized at nominal value. Derivative financial instruments are measured at fair value and any changes in fair value are presented in the financial result.

2.5.13 Provisions
Provisions are recognized only if the company has a present obligation to a third party as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and the obligation can be sufficiently reliably estimated. If the time factor has a significant impact the amount of the provision is discounted.

2.5.14 Deferred taxes
Deferred income taxes are recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases and are accounted for using the liability method. Deferred tax assets from capitalized tax loss carry-forwards are ­valued at the respective applicable tax rate. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are only recognized to the extent that it is probable that future taxable profit will be available to offset against these assets.

Deferred tax assets and liabilities are calculated at the rate that is expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that are valid at the balance sheet date.

2.5.15 Employee benefits
There are a number of employee benefit plans in existence within the Group, each of which is aligned with local conditions in the country in question. They are funded by means of contributions to legally independent employee benefit schemes (foundations, insurance). An annual evaluation is made to see if an economic benefit or an economic obligation exists for the Mikron Group. Any such amount would be recognized in the balance sheet. The net periodic expense to be recognized in the income statement is equal to the contributions made by the employer plus any changes to the economic benefit or obligation.

2.6 Income statement

2.6.1 Revenue recognition
Net sales comprise the sale of products as well as the rendering of services. Sales are recognized if it is probable that the economic benefits will flow to the Group and the amount can be estimated reliably. Sales revenue is recognized upon transfer of the risks and rewards of ownership of the goods to the client. Cash discounts granted to customers are treated as reduction of sales.

Pro rata net sales and profits on projects for customer contracts are recognized in accordance with note 2.5.5 on the basis of the percentage of completion and of the estimated total profit for the project.

Service sales are recognized when the intervention has been completed.

2.7 Share-based payments

No share purchase plan is in place for Mikron Group employees. Refer to note 5.13 for shares granted to Group Management and the Board of Directors. The long-term incentive plan foresees granting shares to Group Management in the extent of achieving certain financial targets as per the financial medium-term plan, refer to note 4.3. The Board of Directors is granted a fixed number of shares as part of the annual compensation.

3. Risk Management

The Mikron Group applies a central risk assessment system which covers both strategic and operational risks. All identified risks are given a rating (based on probability of occurrence and extent of potential losses) and recorded in a risk inventory. Based on this risk inventory, the Board of ­Directors conducts a review, at least once a year, of whether the risk governance and reduction measures in place are adequate for the company’s needs. Ongoing monitoring of the risk inven­tory is the responsibility of Group Management.

Accounting and financial reporting risks are monitored and reduced through a suitable internal control system.

The Group’s activities expose it to a variety of financial risks: market risks (primarily foreign exchange risks), credit risks and liquidity risks. The Group’s financial risk management program ­fo­cuses on reducing financial market risks with the potential to adversely affect its financial performance.

Financial risk management is carried out by the centralized Treasury department in close cooperation with the Group companies on the basis of guidelines issued by the Board of Directors.

3.1 Foreign exchange risks

The Group is globally active and conducts transactions in a variety of currencies. Exchange rate fluctuations can therefore have a significant impact on the result. Exchange rate risks exist in future business transactions, in assets and liabilities recognized on the balance sheet and in net investments in foreign companies with a functional currency other than the Swiss franc.

The Group companies’ currency risks stemming from future business transactions are consolidated by Group Treasury and hedged centrally. To neutralize the risk, income in a given foreign currency is offset against expenditure in the same currency. Group Treasury hedges economically between 25% and 100% of the net cash flows in prospect for the next 12 months for EUR and USD. Forward contracts are the main instrument used for hedging. Gains and losses arising from the valuation of forward contracts at fair value are recognized in the financial result. The Group does not apply hedge accounting.

The Group has investments in foreign operations, whose net assets are exposed to foreign cur­rency translation risks. Currency exposure arising from the net assets of the Group’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currencies.

The table below shows the impact at the balance sheet date of a possible shift in the most relevant foreign currency rates against the Swiss franc on the valuation of financial instruments including intra-Group receivables and liabilities. The indicated impacts are based on the assumption that the Swiss franc increases in value against the listed currencies. In the event of a devaluation of the Swiss franc, an inverse impact applies.

CHF 1,000Possible shift in
currency rates
Impact on
net earnings
Impact on shareholders’ equity
from translation adjustments
  2020201920202019
Euro (CHF/EUR)-10%-529-1,051302-1,762
US dollar (CHF/USD)-10%-1,139378-3,118-2,684

3.2 Interest rate risks
Interest rate risks result from changes in interest rates which could have a negative impact on the Group’s financial position, cash flow and earnings situation. Interest rate exposure is basically limited, owing to the low level of external financing and the conservative investment policy. The interest rate exposure is managed centrally. As at 31 December 2020 and 2019 respectively, no derivative financial instruments were being held to hedge any interest rate risks.

3.3 Price risks
The consolidated financial statements report at year-end short-term financial assets mainly related to high-quality Swiss franc bonds with a maturity of up to five years, which are measured at fair value. As a result of the short duration, price changes are reduced but could nevertheless significantly impact the financial income of the Group at the balance sheet date. The Group currently has no financial instruments which are exposed to changes in commodity prices.

3.4 Credit risks
Credit risks arise from the possibility that the counterparty to a transaction may not be able or willing to discharge their obligations, thereby causing the Group to suffer a financial loss. Counterparty risks are minimized by only concluding contracts with reputable business partners and financial institutions.

Relationships with customers are subject to credit checks. In addition, Group Management monitors outstanding payments on accounts receivable through monthly reporting procedures. The necessary allowances are made locally.

3.5 Liquidity risks
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Prudent liquidity risk management includes maintaining sufficient cash and cash equivalents, the availability of funding from an adequate amount of committed credit facilities, and the ability to close out market positions.

The required flexibility in funding for the project business of the Group is primarily achieved via adequate liquidity reserves. As at the end of the year, significant headroom (cash and cash equivalents, current financial assets and unused credit facilities) is available to the Mikron Group. A credit agreement worth CHF 50.0 million with a bank consortium exists, which is available for bank guarantees to secure advance payments from customers and for fixed advances. Under the new credit agreement, it is also possible to additionally draw mortgage on two production facilities of up to CHF 20.0 million, of which none was drawn as of 31 December 2020. At 31 December 2020, guarantees of CHF 28.2 million (prior year: CHF 18.5 million) were issued. At one production site in Switzerland, a COVID-19 loan and a COVID-19 plus loan were secured for potential cash-needs of up to CHF 8.3 million, of which CHF 3.0 million were drawn as of 31 December 2020.

Group Management monitors the Group’s liquidity status on the basis of three months’ rolling cash flow forecasts.

The table below summarizes the maturity profile of the Group’s financial liabilities at the balance sheet date based on contractual undiscounted cash outflows. The undiscounted cash outflows only consider the repayments of the principal of the bank borrowings and of the principal of the finance lease liabilities excluding any interest payment.

CHF 1,000 Maturity Total and interest rate by currency
Note Less than 1 year 1–3 years 3–5 years Over 5 years CHF % EUR % USD %
At 31.12.2019
Bank borrowings 5.10 9,392 4,446 0 0 9,000 1.5 4,838 3.7
Finance lease liabilities 5.10 2,135 3,530 2,087 0 4,890 2.1 2,862 2.4
Derivative financial instruments (notional amount) 6.1 5,413 0 0 0
Total 16,940 7,976 2,087 0
At 31.12.2020
Bank borrowings 5.10 12,156 4,474 1,300 600 14,500 1.2 4,030 3.7
Finance lease liabilities 5.10 1,854 2,967 775 0 3,261 2.0 1,975 2.1
Derivative financial instruments (notional amount) 6.1 18,046 0 0 0
Total 32,056 7,441 2,075 600

4. Details of the consolidated income statement

4.1 Net sales

CHF 1,000 2020 2019
Automation and machining systems (from customer projects) 181,005 227,332
Automation and machining systems (other) 216 227
Cutting tools 39,973 46,840
Service 36,625 53,154
Total net sales 257,819 327,553

4.2 Material costs and subcontractors

CHF 1,000 2020 2019
Raw materials and components -89,975 -113,173
Subcontractors -4,498 -7,083
Total material costs and subcontractors -94,473 -120,256

4.3 Personnel expenses

CHF 1,000 2020 2019
Salaries and wages -105,524 -115,765
Social charges -12,781 -12,798
Pension expenses -6,023 -5,846
Total personnel expenses -124,328 -134,409

A performance-based number of shares, measured against the financial medium-term plan, are granted to Group Management. The shares are transferred to the members after approval by the General Meeting and are blocked for a period of at least three years. The Board of Directors will propose to the next General Meeting an allocation of 15,228 shares to the members of Group Management as long-term incentive compensation 2020. The share price for the valuation at year-end was CHF 5.40. An amount of CHF 0.1 million has been expensed.

In 2020, a total of CHF 9.8 million of short-time work compensation and government support was received.

4.4 Other operating income and expenses

CHF 1,000 2020 2019
Gain on sale of non-current assets 120 196
Other income 1,313 1,364
Total other operating income 1,433 1,560
Production- and project-related expenses, including shipping -11,984 -17,093
Marketing and sales -3,854 -9,086
Real estate -8,875 -8,854
Personnel-related expenses, including company cars -4,393 -5,832
Information technology -6,046 -6,148
Capital and other taxes (excl. income taxes) -672 -697
Loss on sale of non-current assets -235 -40
Other expenses -10,400 -6,472
Total other operating expenses -46,459 -54,222

The project-related expenses include the change in provision for future losses from customer ­projects (see note 5.4).

4.5 Financial result

CHF 1,000 2020 2019
Financial income 2,709 4,990
Financial expenses -4,998 -5,464
Total financial result -2,289 -474
Interest income 101 339
Interest expenses -479 -418
Total interest result -378 -79
Exchange gains 2,602 4,067
Exchange losses -3,745 -4,270
Other financial income 6 584
Other financial expenses -774 -776
Total other financial result -1,911 -395
Total financial result -2,289 -474

4.6 Non-operating result

CHF 1,000 2020 2019
Rental income 694 1,588
Income from property-related services 529 1,122
Total non-operating income 1,223 2,710
Owner-related expenses -613 -895
Expenses for property-related services -794 -1,161
Total non-operating expenses -1,407 -2,056
Revaluation -503 -493
Total non-operating result -687 161

4.7 Income taxes

CHF 1,000 2020 2019
Current income tax -1,456 -2,499
Deferred income tax -2,442 -2,378
Total income taxes 986 -4,877
Earnings before taxes -23,061 13,643
Income tax at average tax rates 4,381 19% -2,865 21%
Income tax at other rates 1,842 111
Impact of non-capitalized loss carry-forwards -7,380 -796
Release of / capitalization of tax losses -54 -1,984
Tax credits 1,948 1,159
Change in tax rate -64 -474
Other taxable effects 313 -28
Total income taxes 986 4% -4,877 36%

The applicable tax rate for the Group is 19% (prior year: 21%). This corresponds to the average income tax rates of the individual Group companies in each jurisdiction.

4.8 Restructuring costs

Mikron Group’s Board of Directors has decided in the second quarter of 2020 to discontinue the machine business in Rottweil and to redimension the machine business in Agno in the Mikron Machining Solutions business segment as well as to discontinue the automotive industry related operations in Berlin and Lithuania in the Mikron Automation business segment. Subsequent to the half-year disclosure 2020, the sale of the subsidiaries in Berlin and Lithuania was reversed. While the Board of Directors has decided to continue the operations in Lithuania, the operations in Berlin had materially been seized by the end of 2020. Therefore, the items previously offset in equity were recycled through the income statement even though formally the company is still in existence and part of the consolidation. The one-time impact on the Mikron Group’s income statement from the restructuring is summarized below.

CHF 1,000 2020 2019
Inventory write-off -2,559 0
Work in progress write-off -1,519 0
Termination benefits -5,953 0
Operating expenses -4,262 0
Additional depreciation and amortization of fixed assets -802 0
Recycling of goodwill -962 0
Restructuring costs impacting the operating result -16,057 0
Recycling of translation adjustments -247 0
Restructuring costs impacting the financial result -247 0

5. Details of the consolidated balance sheet

5.1 Financial assets

CHF 1,000Note31.12.202031.12.2019
Bonds 2,0216,119
Derivative financial instruments6.1033
Total current financial assets 2,0216,152
The bonds of CHF 2.0 million (prior year: CHF 6.1 million) comprise Swiss franc bonds with a maturity of less than one year.

5.2 Accounts receivable

CHF 1,00031.12.202031.12.2019
Accounts receivable19,63822,287
Allowance for doubtful accounts-679-398
Total accounts receivable18,95921,889
As at the balance sheet date, accounts receivable (including allowance for doubtful accounts) past due for 30 days and more amounted to CHF 2.2 million (prior year: CHF 2.1 million).

5.3 Inventories

CHF 1,00031.12.202031.12.2019
Raw materials and components21,57523,357
Work in progress17,92417,645
Finished and trading goods16,96819,780
Prepayments to suppliers3,6611,828
Prepayments from customers-4,043-1,439
Total inventories56,08561,171

The provision for slow-moving inventories amounts to CHF 20.2 million (prior year: CHF 17.1 million).

5.4 Customer projects

CHF 1,000 31.12.2020 31.12.2019
Projects in progress – costs incurred 165,733 161,996
Recognized profits less recognized losses 42,627 48,301
Prepayments from customers -211,471 -209,154
Total net assets and liabilities from customer projects -3,111 1,143
Net assets from customer projects 38,514 40,764
Net liabilities from customer projects -41,625 -39,621
Total net assets and liabilities from customer projects -3,111 1,143

The stage of completion, determined by the costs incurred to date compared to the total estimated costs, was approximately 57% on 31 December 2020 (prior year: approximately 58%). At the balance sheet date, the Mikron Group had 192 projects in progress (prior year: 186 projects) with an average volume of CHF 1.9 million (prior year: CHF 1.9 million). As at 31 December 2020 there were no retentions by customers (prior year: none).

5.5 Tangible assets

CHF 1,000 Undeveloped real estate Real estate Machinery Equipment and installations Down payments and assets under construction Others Total
At cost
Balance at 01.01.2019 3,603 89,058 75,996 20,990 3,483 3,329 196,459
Additions 0 176 8,482 1,249 7,299 158 17,364
Transfers 0 230 2,439 370 -3,039 0 0
Disposals 0 -546 -5,486 -777 0 0 -6,809
Translation adjustments -2 -65 -595 -141 -8 -73 -884
Balance at 31.12.2019 3,601 88,853 80,836 21,691 7,735 3,414 206,130
Additions 0 161 -74 343 11,173 27 11,630
Transfers 0 0 4,640 1,343 -5,877 0 106
Disposals 0 -29 -2,895 -2,645 0 -36 -5,605
Translation adjustments -38 -1,030 -231 -230 -38 -57 -1,624
Balance at 31.12.2020 3,563 87,955 82,276 20,502 12,993 3,348 210,637
Accumulated depreciation
Balance at 01.01.2019 0 -56,541 -55,340 -17,981 0 -2,400 -132,262
Depreciation 0 -1,926 -3,401 -1,368 0 -190 -6,885
Disposals 0 507 5,152 652 0 0 6,311
Translation adjustments 0 11 291 123 0 62 487
Balance at 31.12.2019 0 -57,949 -53,298 -18,574 0 -2,528 -132,349
Depreciation 0 -1,896 -4,874 -1,352 0 -182 -8,304
Disposals 0 28 2,555 2,553 0 27 5,163
Translation adjustments 0 148 135 175 0 39 497
Balance at 31.12.2020 0 -59,669 -55,482 -17,198 0 -2,644 -134,993
Net book value
Balance at 31.12.2019 3,601 30,904 27,538 3,117 7,735 886 73,781
Balance at 31.01.2020 3,563 28,286 26,794 3,304 12,993 704 75,644
Of which finance leases
Balance at 31.12.2019 0 0 10,051 0 986 0 11,037
Balance at 31.01.2020 0 0 8,548 0 0 0 8,548

At the balance sheet date, the Group had entered into CHF 2.8 million of capital commitments to purchase tangible assets (prior year: CHF 4.3 million). In the depreciation of the financial year 2020, depreciation of CHF 0.4 million were included from the restructuring measures taken.

In 2020, the Group acquired no tangible assets (prior year: CHF 4.5 million) on a financial leasing basis.

5.6 Intangible assets

CHF 1,000 Capitalized development costs Software Assets under construction Others Total
At cost
Balance at 01.01.2019 3,628 21,105 1,031 689 26,453
Additions 0 1,399 276 0 1,675
Transfers 0 588 -588 0 0
Disposals 0 -1,891 0 -325 -2,216
Translation adjustments 5 -94 0 0 -89
Balance at 31.12.2019 3,633 21,107 719 364 25,823
Additions 0 422 363 0 785
Transfers 0 38 -144 0 -106
Disposals 0 -721 0 0 -721
Translation adjustments -111 -117 0 0 -228
Balance at 31.12.2020 3,522 20,729 938 364 25,553
Accumulated amortization
Balance at 01.01.2019 -3,053 -17,790 0 -669 -21,512
Amortization -288 -1,077 0 -10 -1,375
Disposals 0 1,891 0 325 2,216
Translation adjustments -5 77 0 0 72
Balance at 31.12.2019 -3,346 -16,899 0 -354 -20,599
Amortization -287 -1,830 0 -10 -2,127
Disposals 0 721 0 0 721
Translation adjustments 111 99 0 0 210
Balance at 31.12.2020 -3,522 -17,909 0 -364 -21,795
Net book value
Balance at 31.12.2019 287 4,208 719 10 5,224
Balance at 31.12.2020 0 2,820 938 0 3,758
Of which finance leases
Balance at 31.12.2019 0 0 0 0 0
Balance at 31.12.2020 0 0 0 0 0

At the balance sheet date, the Group had not entered into capital commitments to purchase intangible assets (prior year: CHF 0.1 million). In the amortization of the financial year 2020, amortization of CHF 0.4 million were included from the restructuring measures taken.

5.7 Investment property

CHF 1,00020202019
Balance at 1 January28,41528,908
Capitalized expenditures00
Revaluation-503-493
Balance at 31 December27,91228,415
   
Original acquisition cost43,37443,374

The Mikron Group is the owner of a property in Switzerland (land and building) that is leased to third parties. Related income and expenses are reported in the non-operating result (see note 4.6). The property is reported at market value, last reviewed on 31 December 2020. The discounted cash flow method was used for the valuation. The valuation with the discounted cash flow method was supported by an additional valuation of the ongoing development project. A discount rate of 5.0% was applied (prior year: 5.0%).

At the balance sheet date, the Group had no (prior year: none) capital commitment in relation to the investment property.

5.8 Employee benefits

All employees in Switzerland are insured through the Mikron pension fund, which is a foundation under Swiss law and legally independent of the Mikron Group. With a few exceptions, all employees in Switzerland are obliged to join the pension fund. The contributions are based on the annual salary and are accumulated in individual retirement accounts. Upon retirement (at age 65 for men and 64 for women), a lump-sum benefit may be drawn. Otherwise, a pension is paid out on the basis of a specified conversion factor.

Economic benefit/economic obligation and pension expenses

CHF 1,000 Surplus/deficit 31.12.2019 Economic part of the organization Change from prior year in the current result for the period Contributions concerning the business period Pension expenses 2018
31.12.2019 31.12.2018
Pension institutions without surplus/deficit 0 0 0 0 -4,973 -4,973
Total 0 0 0 0 -4,973 -4,973
CHF 1,000 Surplus/deficit 31.12.2020 Economic part of the organization Change from prior year in the current result for the period Contributions concerning the business period Pension expenses 2019
31.12.2020 31.12.2019
Pension institutions without surplus/deficit 0 0 0 0 -4,890 -4,890
Total 0 0 0 0 -4,890 -4,890

The information on the economic benefit as at 31 December 2020 is based on the last annual financial statements of the Mikron pension fund preceding the balance sheet date, i.e. the financial statements as at 31 December 2019. As at 31 December 2019, the Mikron pension fund reported a coverage rate of 117.1% (prior year: 114.9%). According to the pension fund’s provisional accounts, the coverage rate is expected to have increased by about 0.5% in the 2020 financial year. The number of active insureds decreased in 2020 by about -10% (prior year: increase of about 7%). Contributions matched pension expenses during the relevant reporting period.

For the employees in countries other than Switzerland there are no material pension plans with an employer’s obligation to contribute except for state-run social insurance.

5.9 Deferred taxes

CHF 1,000 2020 2019
Statement of changes in deferred tax liabilities
Balance at 1 January 6,071 6,165
Set-up and reversal of temporary differences -1,056 -688
Change in tax rate 64 766
Translation adjustments -14 -172
Balance at 31 December 5,065 6,071
Statement of changes in deferred tax assets
Balance at 1 January 4,048 6,494
Change in capitalized tax loss carry-forwards -505 -3,579
Set up and reversal of temporary differences and change in tax credits 1,874 1,159
Change in tax rate 0 -34
Translation adjustments -291 8
Balance at 31 December 5,126 4,048

Deferred tax liabilities mainly result from temporary differences in the measurement of customer projects, the valuation of inventories and the market valuation of the investment property.

The deferred tax assets of CHF 5.1 million (prior year: CHF 4.0 million) result from accumulated tax loss carry-forwards that were capitalized, valuation differences and available tax credits. Due to uncertainties that future taxable profit will be available to offset against these assets, tax loss carry-forwards amounting to CHF 110.5 million (prior year: CHF 63.3 million) were not capitalized. Applying local tax rates results in a maximum potential tax benefit from non-capitalized tax loss carry-forwards of CHF 24.0 million (prior year: CHF 13.4 million).

5.10 Financial liabilities

CHF 1,000Note31.12.202031.12.2019
Short-term financial liabilities   
Bank borrowings 12,1569,392
Finance lease liabilities 1,8542,135

Derivative financial instruments

6.11950
Total short-term financial liabilities 14,20511,527
    
Long-term financial liabilities   
Bank borrowings 6,3744,446
Finance lease liabilities 3,7425,617
Total long-term financial liabilities 10,11610,063

The investment property and four of the production facilities were mortgaged for liquidity management purposes. The mortgage on the investment property and two production facilities have been drawn down, while the draw-down of the mortgage for two further production facilities is only expected during 2021. Details of the mortgages are given in note 6.2. The leasing liabilities relate to purchased machines used in production.

CHF 1,000 31.12.2020 31.12.2019
Financial liabilities, expiring
– not later than 1 year 14,205 11,527
– later than 1 year but not later than 3 years 7,441 7,976
– later than 3 years 2,675 2,087
Total financial liabilities 24,321 21,590

The new credit agreement with a bank consortium (refer to note 3.5) was signed in June 2020 and is valid until June 2024. The agreement secures financing in the form of bank guarantees (avals) and provides potentially required liquidity at standard market conditions. The contractual covenants have been met since the commencement of the agreement.

5.11 Provisions

CHF 1,000WarrantiesEmployee incentiveFuture costs for projectsRestructuringOthersTotal
Short-term provisions      
Balance at 01.01.20191,8493712,81107745,805
Additions3,6202066,37512670511,032
Utilization-1,663-337-2,7120-580-5,292
Reversal-1,1110-7820-5-1,898
Reclassification long-/short-term0220000220
Translation adjustments-22-2-500-2-76
Balance at 31.12.20192,6734585,6421268929,791
Additions3,2631571,3087,9091,56314,200
Utilization-1,359-411-557-2,0590-4,386
Reversal-1,067-38-1,9910-179-3,275
Reclassification long-/short-term0178000178
Translation adjustments-16-2-10074-1-45
Balance at 31.12.20203,4943424,3026,0502,27516,463
       
Long-term provisions      
Balance at 01.01.20190413000413
Additions0318000318
Reclassification long-/short-term0-220000-220
Translation adjustments0-2000-2
Balance at 31.12.20190509000509
Additions01106300641
Reversal0-159000-159
Reclassification long-/short-term0-178000-178
Translation adjustments0-30805
Balance at 31.12.2020018006380818

Warranty provisions are related to sales of products and services and are based on experience. The employee incentive provision is related to the long-term incentive plan. Future costs relate to customer projects with final acceptance where remaining work is outstanding before the warranty period starts. The restructuring provision is related to expected costs until the end of the settlement of the obligations from employments and other contracts. The other provision is materially related to expected costs from legal risks of projects.

5.12 Accrusals

CHF 1,00031.12.202031.12.2019
Accrued expenses19,55218,931
Current income tax payables4138
Total accrued expenses19,59318,969

The accrued expenses of CHF 20.0 million (prior year: CHF 19.0 million) mainly consist of accruals in relation to employees’ annual leave entitlements, overtime and bonus totaling CHF 11.8 million (prior year: CHF 10.6 million). Additionally, there were outstanding trade payables, and accrued income taxes of CHF 0.3 million (prior year: CHF 1.0 million).

5.13 Shareholders’ equity

Share capital
The share capital as at 31 December 2020 amounts to CHF 1.7 million (prior year: CHF 1.7 million) and consists of 16,712,744 registered shares with a par value of CHF 0.10 per share.

As of 31 December 2020, there are two shareholders with investments of more than 5% in voting rights (Ammann Group Holding AG, Berne 41.9%; Mr. Rudolf Maag, Binningen, 14.1%). No other single shareholder holds 5% or more of the voting rights.

Treasury shares
In 2020 the company granted 26,935 treasury shares to Group Management (prior year: 20,610) and 20,000 treasury shares to the Board of Directors (prior year: 25,000) at no consideration, sold no shares (prior year: none) and acquired no treasury shares (prior year: none). At 31 December 2020 Mikron Holding AG, Biel owned 337,875 treasury shares (prior year: 384,810 shares). The valuation difference of granted treasury shares was booked to capital reserves instead of retained earnings. The previous year was restated accordingly.

Reserves
The statutory or legal reserves which may not be distributed amount to CHF 0.9 million (prior year: CHF 0.9 million). In the year under review, foreign currency translation adjustments of CHF -0.8 million (prior year: CHF -0.6 million) on loans with equity character in foreign currencies (EUR and SGD) were posted directly to shareholders’ equity.

6. Other notes

6.1 Derivative financial instruments

For economically hedged future business transactions in foreign currencies, the Group uses financial instruments. As at the balance sheet date, the Group held the following forward exchange contracts:

CHF 1,000Replacement value Contract equivalentContract equivalent
by due date
 positivenegative 0–3 months3–12 months1–5 yearsover 5 years
Balance at 31.12.20193305,4133,7721,64100
Balance at 31.12.2020019518,04616,3811,66500

All instruments are mainly denominated in euros and US dollars.

The replacement values are disclosed as financial assets (Note 5.1) or short-term financial liabilities (Note 5.10).

6.2 Assets pledged as security for liabilities

CHF 1,000 31.12.2020 31.12.2019
Real estate (including investment property) pledged as security for liabilities 59,397 62,875
Collateral securities – nominal 97,114 98,335
Loans and mortgages utilized 18,530 13,838
Other assets pledged as security for liabilities 63,548 66,037
Finance lease liabilities (machinery, licenses) 5,596 7,752

As part of the financing arrangements, the existing borrower note was deposited as collateral for the mortgage on one production facility in the United States. The borrower notes for the investment property and one production facility in Switzerland were deposited as collateral as the underlying mortgage agreements were signed and the mortgage partially called off.

The credit limits made available by the bank consortium were secured by guarantees of CHF 77.0 million. Additionally, the existing borrower notes were deposited as collateral for two production facilities in Switzerland.

In addition, machines and licenses acquired under the terms of leasing agreements were pledged.

6.3 Off-balance sheet lease commitments

CHF 1,000 31.12.2020 31.12.2019
Off-balance sheet lease commitments, payable
– not later than 1 year 3,714 2,982
– later than 1 year but not later than 3 years 3,496 3,769
– later than 3 years but not later than 5 years 1,718 1,286
– later than 5 years 3,138 3,672
Total off-balance sheet lease commitments 12,066 11,709

The future lease payments are mainly related to non-cancelable operating leases for office and production facilities and office equipment. The leases have varying terms and renewal rights.

6.4 Goodwill offset against shareholders’ capital

CHF 1,000 2020 2019
At cost
Balance at 1 January 962 962
Disposals -962 0
Balance at 1 January 0 962
Accumulated amortization
Balance at 1 January -962 -962
Disposals 962 0
Balance at 31 December 0 -962
Theoretical value 31 December 0 0

The goodwill results from the acquisition of IMA Automation Berlin GmbH (now: Mikron Berlin GmbH) on 1 March 2012. The operations at Mikron Berlin GmbH materially seized as of 31 December 2020 and the company will be discontinued. The related goodwill amortization was recycled into the income statement in 2020.

6.5 Related party transactions

The transactions with related parties and companies consist of commercial business transactions conducted at standard market conditions. These mainly concern relationships with a small number of customers and suppliers.

CHF 1,000 2020 2019
Other operating expenses -26 -27
CHF 1,000 31.12.2020 31.12.2019
Other current receivables and prepaid expenses 6 6
Accounts payable 6 5

The Mikron pension fund owns no shares (prior year: none) of Mikron Holding AG.

6.6 Impairment test on Group level

The Group’s equity of CHF 145.5 million exceeded the Group’s market capitalization of CHF 90.2 million at 31 December 2020 (prior year: CHF 113.0 million). An impairment test was performed using a discounted cash flow model with assumptions approved by the Group’s Board of Directors. The impairment test supported the equity of the Group as a whole. An additional impairment test was performed for the Mikron Machining division. The test showed that the value of the divisions fixed assets is covered by its recoverable amount.

7. Information by segment

7.1 Information by business segment

CHF 1,000 Machining Solutions Automation Corporate / Eliminations Total Group
2020 2019 2020 2019 2020 2019 2020 2019
Net sales – third party 96,188 151,401 161,631 176,641 0 -489 257,819 327,553
Net sales – Group 134 62 20 529 -154 -591 0 0
Total net sales 96,322 151,463 161,651 177,170 -154 -1,080 257,819 327,553
Operating result -21,556 1,109 1,109 12,917 362 -70 -20,085 13,956
Earnings before interest and taxes (EBIT) -21,556 1,109 1,109 12,917 -325 91 -20,772 14,117
CHF 1,000 Machining Solutions Automation Corporate / Eliminations Total Group
31.12.2020 31.12.2019 31.12.2020 31.12.2019 31.12.2020 31.12.2019 31.12.2020 31.12.2019
Assets excluding cash and cash equivalents and current financial assets 117,010 140,497 136,759 116,669 -17,084 -11,798 236,685 245,368
Cash and cash equivalents 5,461 3,435 13,950 14,376 19,009 20,181 38,420 37,992
Current financial assets 0 0 0 106 2,021 6,046 2,021 6,152
Total assets 122,471 143,932 150,709 131,151 3,946 14,429 277,126 289,512

7.2 Information by geographical segment

CHF 1,000 Net sales
 20202019
Switzerland14,96932,760
Europe102,360145,657
North America96,11780,799
Asia/Pacific31,22857,497
Others13,14510,840
Total net sales257,819327,553

8. Net earnings per share

8.1 Weighted average number of shares

Number 2020 2019
Issued shares at 1 January 16,712,744 16,712,744
Issued shares at 31 December 16,712,744 16,712,744
of which treasury shares -337,875 -384,810
Adjusted for weighted average -13,850 -14,870
Weighted average number of shares – basic 16,361,019 16,313,064
Effect of dilution 0 0
Weighted average number of shares – diluted 16,361,019 16,313,064

8.2 Computation of earnings per share

CHF 1,000, except for per share information20202019
Net earnings-22,0758,766
Weighted average number of shares – basic16,361,01916,313,064
Net earnings per share – undiluted-1.350.54
Weighted average number of shares – diluted16,361,01916,313,064
Net earnings per share – diluted-1.350.54

Report of the Statutory Auditor

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5-Year Financial Summary

in CHF million, except number of employees 2020 2019 2018 2017 2016
Key performance data
Order intake 1) 267.3 288.5 362.3 278.9 243.6
Net sales 257.8 327.6 314.7 248.5 256.0
Order backlog 1) 161.6 157.4 195.7 157.2 122.9
Research and development 6.5 10.4 11.6 8.8 7.1
Number of employees (end of year) 1) 1,331 1,486 1,398 1,275 1,249
Investments incl. acquisitions of subsidiaries – net 12.0 18.5 15.9 10.2 8.7
Earnings
EBITDA 1), as % of net sales -8.9 -3.5% 22.9 7.0% 22.2 7.1% 11.2 4.5% 12.6 4.9%
EBIT 1), as % of net sales -20.8 -8.1% 14.1 4.3% 13.9 4.4% 2.8 1.1% 4.1 1.6%
Operating result, as % of net sales -20.1 -7.8% 14.0 4.3% 12.7 4.0% 1.3 0.5% 2.8 1.1%
Ordinary result, as % of net sales -22.4 -8.7% 13.5 4.1% 11.7 3.7% 0.8 0.3% 1.8 0.7%
Loss/profit for the year, as % of net sales -22.1 -8.6% 8.8 2.7% 12.2 3.9% 1.2 0.5% 2.3 0.9%
Cash flow
Cash flow from operating activities (incl. changes in net working capital), as % of net sales 9.2 3.6% 7.3 2.2% 20.1 6.4% 15.6 6.3% 12.8 5.0%
Operating free cash flow (prior to acquisitions and changes in current financial assets) 1) -5.8 -3.5 8.2 7.0 5.3
Balance sheet
Balance sheet total 277.1 289.5 289.5 265.7 251.8
Current assets 164.7 178.0 185.0 170.5 158.2
Non-current assets 112.4 111.5 104.5 95.2 93.6
Current liabilities 115.6 103.6 110.0 95.7 68.6
Long-term liabilities 16.0 16.6 15.2 12.7 26.8
Shareholders’ equity, as % of balance sheet total 145.5 52.5% 169.2 58.5% 164.3 56.8% 157.3 59.2% 156.3 62.1%

Alternative Performance Measures

In external communications, Mikron discloses performance measures that are not defined in Swiss GAAP FER. The description and, where applicable, the calculation from performance measures as per Swiss GAAP FER are listed below. All values listed in CHF.

Order intake

Order intake includes all customer orders for goods and services received from customers, irrespective of whether the goods and services have been delivered or not. Blanket orders are only recognized as order intake when the goods are being called off.

Order backlog

The order backlog represents that part of the cumulative past order intake that has not yet been recognized as sales at the current balance sheet date. The order backlog equals the amount of sales that will, applying the current exchange rates of the orders, be realized when all open customer orders are concluded. The order backlog of customer projects managed applying the percentage of completion method corresponds to the order intake less the accrued sales according to the stage of completion of each project.

EBITDA

The earnings before interest, taxes, depreciation and amortization (EBITDA) represent the total of the operating and non-operating result, adding back the depreciation for tangible assets, the amortization for intangible assets and the revaluation of the investment property.

EBITDA 2020 2019 Reference
Operating result -20,085 13,956 Consolidated income statement
+ Non-operating result -687 161 Consolidated income statement
+ Depreciation of tangible assets 8,304 6,885 Consolidated income statement
+ Amortization of intangible assets 2,127 1,375 Consolidated income statement
+ Recycling of goodwill 962 0 Consolidated income statement
+ Revaluation investment property 503 493 Note 5.7
EBITDA -8,876 22,870

EBIT

The earnings before interest and taxes (EBIT) represent the total of the operating and non-operating result.

EBIT 2020 2019 Reference
Operating result -20,085 13,956 Consolidated income statement
+ Non-operating result -687 161 Consolidated income statement
EBIT -20,772 14,117
+ Restructuring costs 16,057 0 Note 4.8
Adjusted EBIT -4,715 14,117

Operating free cash flow

The operating free cash flow represents the total of the cash flow from operating activities and the cash flow from investing activities, the latter excluding the investments in and divestments of financial assets.

Operating free cash flow 2020 2019 Reference
Cash flow from operating activities 9,175 7,281 Consolidated statement of cash flow
+ Cash flow from investing activities -11,000 -52 Consolidated statement of cash flow
– Investments in financial assets 0 0 Consolidated statement of cash flow
– Divestments of financial assets 4,000 10,688 Consolidated statement of cash flow
Operating free cash flow -5,825 3,459

Free cash flow

The free cash flow represents the total of the cash flow from operating activities and the cash flow from investing activities.

Free cash flow 2020 2019 Reference
Cash flow from operating activities 9,175 7,281 Consolidated statement of cash flow
+ Cash flow from investing activities -11,000 -52 Consolidated statement of cash flow
Free cash flow -1,825 7,229

Net working capital

The net working capital is the net amount of the current assets and the current liabilities that stand in relation to the business activities.

Net working capital 2020 2019 Reference
Accounts receivable 18,959 21,889 Consolidated balance sheet
+ Inventories 56,085 61,171 Consolidated balance sheet
+ Net assets from customer projects 38,514 40,764 Consolidated balance sheet
+ Other current receivables 4,917 4,800 Consolidated balance sheet
+ Prepaid expenses 5,770 5,276 Consolidated balance sheet
– Accounts payable 20,362 20,205 Consolidated balance sheet
– Net liabilities from customer projects 41,625 39,621 Consolidated balance sheet
– Short-term provisions 16,463 9,791 Consolidated balance sheet
– Other current liabilities 3,360 3,536 Consolidated balance sheet
– Accrued expenses 19,593 18,969 Consolidated balance sheet
Net working capital 22,842 41,778

Net debt

The net debt compares financial assets and financial liabilities.

Net debt 2020 2019 Reference
– Cash and cash equivalents 38,420 37,992 Consolidated balance sheet
– Current financial assets 2,021 6,152 Consolidated balance sheet
+ Derivative financial instruments 0 33 Note 5.1
+ Short-term financial liabilities 14,205 11,527 Consolidated balance sheet
– Derivative financial instruments 195 0 Note 5.10
+ Long-term financial liabilities 10,116 10,063 Consolidated balance sheet
Net debt -16,315 -22,521

Equity ratio

The equity ratio corresponds to the Group’s total equity divided by the balance sheet total.

Equity ratio 2020 2019 Reference
Total shareholders’ equity 145,519 169,220 Consolidated balance sheet
Total assets 277,126 289,512 Consolidated balance sheet
Equity ratio 52.5% 58.5%

Number of employees

The number of employees is the total of the full-time equivalent of all employees. The total headcount is higher than the Group’s full-time equivalent as not all employees are working full-time.

Information on Share Capital

2020 2019 2018 2017 2016
Number of shares1)
Registered shares 16,712,744 16,712,744 16,712,744 16,712,744 16,712,744
Total 16,712,744 16,712,744 16,712,744 16,712,744 16,712,744
Key figures per share in CHF2)
Loss/profit -1.35 0.54 0.74 0.07 0.14
Cash flow from operating activities 0.56 0.45 1.21 0.94 0.77
Shareholders’ equity 8.89 10.37 9.90 9.41 9.36
Distribution to shareholders 0.00 0.20 0.05 0.05 0.05
Share price SIX Swiss Exchange
At 31 December 5.40 6.76 6.76 7.30 6.10
High/low close during business year 6.58–4.20 9.26–6.02 10.45–6.40 7.61–5.80 6.80–5.34

1) All shares are entitled to dividends/distributions.
2) Based on the weighted average number of shares

Trading volume (daily average)
In the 2020 fiscal year the average daily trade volume was 5,537 shares (prior year: 10,765 shares).

Share performance
as %