Bystronic AG (BYS) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the Conzzeta Half Year 2020 Earnings Conference Call. At our customer's request, this conference will be recorded. [Operator Instructions] For this call, you will be guided by Michael Willome, Group CEO; and Kaspar Kelterborn, Group CFO. May I now hand you over to Michael Stäheli, Head of Investor Relations, who will lead you through this conference. Please go ahead, sir.

Yes. Good morning, everybody. Welcome to our half year analyst call. I'm joined by Michael Willome and Kaspar Kelterborn, Group CEO and Group CFO. They will answer your questions after the presentation. I draw your attention to our disclaimer on Slide #2. And with this, I hand over to Michael, who will start his presentation on Slide #4.

Thank you very much, Michael. Michael Willome speaking. I'm happy to present you the H1 results 2020. As we have written in the title, within an unprecedented pandemic environment, I think for all of us and especially also for Conzzeta, it was a situation which was really unprecedented. It was a crisis or it still is partially. But if you think about the month of March until May, it was a fully fledged crisis. I have never seen something like this. What is it required for us? Number one -- there were 3 items. Number one, we have to take the measures against the corona disruptions we were facing. That means, first of all, to safeguard all our people -- the health of our people, to rearrange working schedules to make sure that all the government regulations are followed in the plant but also in the offices. We had to start immediately on March 15. Basically, we started to take costs down. We took decisive measures to take the costs down. We secured our cash position with daily cash management. So all these types, I would call it, corona emergency measures, number one. Number two, as you know, we are in a massive transformation of our group. We are selling 3 business units, and we are preparing Bystronic for a new positioning in the market. I will come later to the progress in these projects. But as you have seen, Schmid Rhyner has been successfully disposed and closed end of February. And the other 2 units, I will tell you afterwards. So that was our, let's say, work #2, continue with our strategy execution. Number three, and even in difficult times and in Conzzeta, we have the strong belief that every crisis is also an opportunity. We are continuing, and despite corona and despite our strategic agenda, we make our business units stronger and more resilient. I can give you some examples for this. We opened Bystronic -- the Chicago new experience center assembly factory. We opened a converting center in Duderstadt. We made an acquisition with Weber Laserservice, which is our former distributor for Bystronic in Benelux. We added more than 30 people for this. We are investing into innovation pipeline. I will show you some very nice examples afterwards for FoamPartner. So we see whatever the strategic context, but we will improve our business unit performance for now and for the years to come. So 3 wide-range challenges we had during H1. They will continue into H2, but I think we are all in a more experienced situation, how to deal with the situation as we have been probably end [ H1 ]. What was the result in the numbers? We have sales now at CHF 576 million. That is minus 16% overall for the whole company. Bystronic is in a slightly better situation. It comes from the fact that the order book was relatively full by the end of the year when we entered the crisis. And this order book, of course, we can execute. We can work on it and sell it to the customers. The order entry then, and that's the difference, the other 2 business units or the entry, they were then weaker in April -- March, April and then started to increase again, which means with the usual delay between order entry and turnover, which is about 2 to 4 months, that you will see weaker sales numbers than later in the year, which means basically June, July and August. FoamPartner was affected mainly by the automotive market. The other markets were much more resilient. But automotive exposure, closed factories, the OEMs worldwide were mainly closed for several weeks. Mammut the same situation, and that is also why our results on the EBIT terms is definitely not a good one. But your main and still really predominant sales channel, it's just closed, and it's not minus 10% or minus 20%. It's minus 100%. It's simply closed. Nothing happened. If this situation happens to you, it is a very difficult situation, not only financial-wise but also from the supply chain point of view. We have to rearrange all the supply chain. We have the summer collection that have to still come into the channel. We have to push with our maximum force all the digital means we have and so on. So this was probably the most complex and disruptive situation we faced in our group. The sales also in March -- early March and the program to counter all these effects, and we put it under the name of cash cost complexity. And I would emphasize that it is in this order. In the crisis, first is cash. Kaspar Kelterborn will also talk about this afterwards, what we did, the measures and what was the outcome. The second one is cost, also cost in a way of short-term cost measures that you have to count immediately. But also, you have to think -- and I will come to this at the end of my presentation, you have to think about the rightsizing of the business because I think we all assume that the boom year '18 or even '19, they will take time to come back. And this will not just happen by the end of 2020 or in '21, we flip the switch and everything is beautiful again. So you have to make sure that your cost structure and your processes are in line with the business prospects for the next 2 years, meaning 2021 and 2022. And that is an action which we already undertook in March of 2020. Short term, as I said, plus long-term thinking about end of basically 2022. The last thing is complexity. Complexity in a crisis or industrial in -- the unprecedented crisis is not the time to be complicated. What means complexity reduction? It means we are pushing our digital business that in a way is simpler, that is the easier to handle, if you have the need for it. We are pushing digital sales. We are pushing digital cooperation with our customers, with our employees, with our partners. That is a totally different way of working, but it reduces dramatically complexity. We went that far that we changed organizational structures. We took complexity. We took layers out. We streamlined our organization. We streamlined our project portfolio, less projects and only the really critical ones that we are going forward. You can streamline operations in the factory, just really -- just a few examples on how we see complexity reduction. What is most important is, and I mentioned this before, that we are still investing into our businesses, mainly on the digital side. That is the main impact you see at Mammut but also in the other 2 businesses. I will come later to a few examples. But digital, in a way, we are happy for the crisis impact because digital, like in the whole world owes that concept of a huge [indiscernible] We're right here in the second bullet that the group transformation is on track. I think that is a statement that is important for you, and I'll come to it afterwards in the details. How does the business continue now into H2? We have seen a notably improved results from the low point in April. April was clearly, in most business units, the low point. And I can tell you that June was very close to previous year. I can already tell you, after having seen the July results, which are very encouraging. On the regional level, the U.S. are still suffering the most. Europe is recovering slowly. And in Asia, we are in many aspects already ahead of previous year, I think, especially in China. What happened is quite encouraging and is in a way surprising how fast China is developing in a positive way right now. I would go then to Page #5. You're familiar with this slide. That's the slide we produced on December 9, 2019, when we announced our transformation of the group. I would only draw your attention on 2 little changes. We have, on the one hand, divestment Mammut and divestment FoamPartner to come. We were always under the assumption that divestment of FoamPartner might take a bit longer and goes into 2021, and we're under the assumption that Mammut pre-corona we would close the deal at the end of 2020. Now the corona situation has changed it in a way that we are very confident to come to a conclusion for FoamPartner during 2020. And we will have more time -- we will need more time to divest Mammut. I can tell you here a short update for Mammut. We have a strong interest. We have more than 50 inbound interested parties. That is, of course, without any valuation and without any talks right now because we are not on the market. We will decide soon when exactly we go to the market. The current plan is we go to the market with Mammut in September or in October. But as we always said, subject to market condition, we would call it now subject to pandemic conditions. It is clear that, in Mammut, you have more private equity players into the game, maybe a bit less of strategic players, even from the 55 or more than 50. They are both -- also family offices are involved. But this -- the international component, you have there, it requires that we have to put this for a few months on hold now. We are finished with all the preparations for Mammut, and we are ready to go to the market, and we will decide when it's the right moment. As I mentioned, I'm still hopeful for September/October of this year. With FoamPartner, we could anticipate the whole situation slightly. We have finished our preparations. We are in discussions with interested parties. Also here, I can confirm you a very high interest. Here, I have more visibility on potential valuations, on potential timing. And that's why we adjust this year the time line, and we are really positive that we might have a good deal as we do it usually at Conzzeta. If you remember, the glass business [indiscernible] by the end of 2020. There were interested parties and I think is a really reasonable and good discussion. Our fourth topic in a way after 3 disposals is the new positioning of Bystronic. We are working on our strategy. We'll go through several approvals then, and we will present it to you in fourth quarter of 2020. I will come afterwards to a few of the key topics of this new strategy. But also here, we are progressing according to plan. In view of this whole transformation is also the role of the corporate center where we have added some 25 people. And here, we are also working and everything goes on plan and on schedule. Some of this function would have to be integrated, or let's say, newly built at Bystronic. Some functions on a Conzzeta level will be phased out over the time. But also here, all the preparations, all the planning and discussions with each individual and employees are progressing according to plan and according to what the people also need to have information. I go on then into Bystronic to Page #7. You see here, and that is, in a way, the best result, as I mentioned before, from sales. It is minus 12%, owed to, as I mentioned, to a relatively strong backlog. We went into the crisis or we went into the year. We came out with a, I would mean rather respectable EBIT margin of 7.1% for H1, and also here, you see in bullet point #3, you see the order entry is now minus 20% comparable to H1. We have a backlog that is about CHF 200 million, slightly more, which is minus 17% against year-end '19. And if I can tell you also the June of last year number, that was CHF 250 million. So it's also more or less in line. We have about CHF 40 million less of backlog end of June as compared to last year. Where does this come from? It comes mainly from April, minus 42%. I think that is the situation the whole industry was affected in April. I think nobody really in his sane mind would buy a laser machine. But still 60% did it. 42% did not do it. We have then a recovery. May was better than April. June was better. And in June, we had almost the previous year level. If I can tell you now, July and the coming months, we don't know how it developed. I can only tell you that trend is in our favor. The trend is improving, and the trend is getting better and better. What will happen in the next month, I cannot say. Maybe there was some catch-up in June. But as I said, the trend is indicating a good recovery. One KPI that we are very careful in following, these were all the cancellations. And here, I can tell you that we talked about a very low number of about CHF 2 million we have in order cancellations. That means people that really simply can't do the order. All the others they waited. They might have postponed, or they actually really did, and this you can see because we still sold CHF 373 million. So these people, they actually appreciated customers. They bought our products. Also on the highlights, you can see that, mainly, of course, the sales numbers are down, but there are pockets of growth. Korea was a pocket of growth, which also is very nice because we are investing in Korea. I'll come to this later. And Germany, a market where we always underplayed against our dominant competitor. Germany also, in this crisis situation, showed some growth. I go then to Page #8. Here, I would like to draw your attention on the right side. Let's start maybe with the picture I mentioned before, the new digital client engagement. It was fascinating how our engineers, IT people and basically the whole population of Conzzeta within really, really short time developed IT tools. And we all work with teams and all these things. But there was much more behind this. So we did -- for the customers, we did training, everything online, remote. But in a way, it's almost as if you are there. And I think a few of the virtual product launches and client training, they will also go on after the crisis, which of course, will have a positive impact on our cost structure. So this, we have launched this in a short time. This was appreciated by our employees with this employee training. We did all the types of meetings, but especially, I was impressed that client training and really virtual product launches. As I mentioned before, as a third priority, even in this difficult pandemic situation, we are going to improve our businesses basically as if nothing happened. We opened our U.S. assembly factory in Chicago. We did the groundbreaking of the experience center in Korea, which again corresponds nicely to the sales growth we have in Korea. I think, here, we are betting on the right market, Korea. It is an industrial empire, Korea, and it will stay like this in their core industries of electronics, shipbuilding and cars. We acquired, in Benelux, our dealer Weber Laserservices, which is a major step to have a better coverage to our customers and to have all this in our own hands and not through a distributor. I mentioned the virtual product launches and really the digital collaboration. I think, here, we invested quite something. And as I mentioned, a few of those items will also stay after the COVID crisis. On the left side, you see several new launches, which were well received by the market and which is a natural continuation of our strategies with the bronze, with the silver and with the goal lines with automation and with software as the main priorities. I go then to Page #9. Page #9, I would focus on the middle part of our strategy. That is kind of a teaser for you for our strategy presentation, which will follow later in this year. Value-creating growth. We are working on increasing our portfolio, at least reviewing our portfolio, what exactly are our offerings. As you know, we are a traditional company with bending and cutting. We are enlarging this now into the digital space with software. We are going to put a lot of emphasis on service. We are looking -- if we need new categories of equipment to enlarge the portfolio. We are looking into coverage. We found out in our strategic analysis that a lot of deals we do not anticipate. So we are starting to engage digital marketing tools to see where there is basically a machine or a system, a smart factory solution in need with the client. And we are still, right now, we are losing out on several of these opportunities. And in a way, that's the easiest and fastest way to participate to increase our participation rate. I think the other topic of software on the automation, you are very well aware. And I want to ask you to be a bit more patient for this then until later in the year when we present the strategy. If you look on the right side, I can tell you that there will be also on an organization level for Bystronic, there will be rather important changes to the situation, so it's not more of the same. The strategy will change relatively in a stronger impact the situation. We will most certainly cost out the regional organization. Regional organizations, they have the positive aspects. You're closer to the market. You are faster. You can react on client needs. So we're going into this direction. We will have an increased focus on service across all geographies. You can expect here that our service business will be rather independent, accountable, responsible unit how we can service. Right now, we can service a little bit in evening after we have sold the machine. At 5 o'clock, we think about service. We have increased our service rate of more than 20% now. But I think here, there's a very good potential if we do this properly and if we do it a bit differently as we have done it in the past. But here, again, news in the strategy that I think as you see in several machine or escalated producers in Switzerland or globally, we will choose an approach which has proved to be very successful in such companies and which so far we did not deploy yet but really do it. The solutions part, the digital part, that is something we have started. But also here, we will improve massively our positioning and also our investment into these capabilities. But again, more to come later. We go then to our special chemical specialties, Schmid Rhyner. I go to Page #11. Schmid Rhyner has been disposed, as I have mentioned. So I might draw your attention on Page #30. I can tell you the numbers. If you look at Schmid Rhyner as at FoamPartner only, we had CHF 116 million of sales. The EBIT was even better than as you see here. The EBIT of FoamPartner alone was CHF 2.2 million or 1.9% of EBIT return on sales, which shows you that the end of Schmid Rhyner was not overly successful, but what was really successful is the amount. And you can see it in the onetime gain of more than CHF 48 million we made on this transaction. And why did Altana pay a reasonable price to us because, like all our businesses, they are good businesses. And the same will happen with Mammut and this FoamPartner. You see the revenue is 20% below. That is slightly worse than Bystronic. That really comes -- a big portion comes from mobility. Everything around automotive is 35%. Logically, our living and care business and our specialist business is better. But also here, not only in Mammut, we have massive disruptions, operational disruptions, which we have to reorganize our supply chain. We have factories closed in the U.S. We had them closed in China, in Germany and in France, which, of course, put the total stop to the whole production, and we have to reengage with the customer and restart all the supply chain, which also partially, like in Bystronic, results in an increased safety stock or increased inventory levels. Also, because of safety stock we need on the input side but also on the output side because customers sometimes are not prepared to take our goods and postpone this delivery. I mentioned already in the last bullet point the Converting Center. We are going ahead with our strategy on both parties because we believe it's the right strategy. We opened it in to the shops, and I show you on the next page a few pictures of this. I would like again to mention the business recovery in Asia. We can see it in all our 3 business units, but I would say, predominantly, we can see it in FoamPartner, where Asia is running on very strong cruise, especially in terms of profitability. I go to Page #12, some of the examples I have mentioned before. We opened the new Converting Center in Duderstadt. I remind you that it's the old main factory in Europe of [ auto block ], our acquisition 3 years ago. We closed Stadtallendorf and all FoamPartner sites on June 30 according to plan and without any headache. We moved things to Duderstadt, and we have the Duderstadt now Converting Center, which is actually not only a converting center, but it has even the capabilities to be a pilot plant, and we can do more things than we could have done before in essential way everything under one roof in Duderstadt. So also on the innovation side, you will be much stronger because you have pilot plant capability. We built or we opened a new warehouse in Changzhou in China. This has the advantage that it can optimize our working capital because everything is now on site, and we can eliminate costs because we have several external warehouses, which we could close down now. As you know, since 5 years, we are engaging heavily in business excellence programs in all business units, that I would say, in such an unprecedented crisis, the whole business excellence program worked very much to our help. And I would mention, especially here in the FoamPartner environment, when you talk about yields and productivity, this helped us a lot to achieve this positive result we could achieve with almost the CHF 2.2 million EBIT in FoamPartner in this really, really difficult environment. On business IT, also, we continue to invest. We have improved again our Salesforce CRM software, initiated steps on an SAP HANA implementation in Duderstadt and Wolfhausen. And we, of course, increased our marketing upgrades in this environment where online and social media are absolutely key and crucial, and not only for Mammut, but also for industries like for [ U.S. in ] foam and laser machine. I go to Page #13, and this page is actually one of my favorite pages, and it's a totally different situation as you compare to maybe 3 or 4 years ago. The new management at FoamPartner, they managed to have a really innovative pipeline of sustainable foam products and solutions. I read the title now. But our pipeline is 3-digit millions heavy. Our pipeline will deliver in the future. It is starting to deliver already now. You have fascinating new products, and it is not such a boring business for your [indiscernible] foam as some people might think. You have for the electric cars, you have for battery relief, you have new phones -- newer foam, so you have less heat. You have a better deep storage in the car, so you need less battery. You have light weight, which also helps to relieve the battery. [ Registry ], let the new product on the market for us. We look massively into renewables into sustainability. You have now a product over major, also for the mobility segment for headliners and interior panels, where we can reduce our crude oil input by 20%, which is extremely valued by our customers. We have RegiSeal, a new product for sealing of equipment on machines, also low emission also under the topic of sustainability. And we have something which is right now, in corona, a very booming business. And these are motor homes and caravans, and we have here some solutions for lightweight mattresses, which will, of course, also apply to all type of mattresses. But right now, motor homes and caravans are pretty much sold out, so this will help or help the business right now. I find this an important slide, as I mentioned, because that is something which FoamPartner at this level and at this pace, actually never has had before. We go then to Mammut. That is Page #15. As I have mentioned a few times, the most complex business we have right now and we still have in our group is Mammut. Mammut has a huge complexity because it has long chains. It has long chain from original designing of a product, sourcing until the delivery to the customer via also magnitude of channels, which offer other business units. They have less channels, and they have clearly less complexity in that business. It's a fascinating business, but it's a complex business. Now we have here sales of minus 29%. That is very, very unsatisfactory, of course. We do not compare us anymore against previous year. I think nobody should compare too much against previous years, especially on pharmaceuticals. We cannot compare against any budget, so we compare mainly against our peers. And as you see that our peers, they are usually 5 to 10 percentage points weaker than we are, and they're going into the minus 35 to minus 45, so I think this whole industry suffered massively in the height of the crisis. I would call it in April -- March, April and May. Now we went out with this minus 29%. I can also give you the minus 36% in the second quarter, which was the lowest quarter I think we have ever had here. Now the profit, minus CHF 23 million. That is something which, of course, also is highly unsatisfactory. But again, 2 reasons. The one is also mentioned, our main distribution channel, more than 2/3 still both via -- our -- via any type of stationary business was simply closed. And the second one, we have disrupted supply chain out of several countries, which have to be reorganized and which we are still in the process of being reorganized. Now to the bright side of things. As you know, 3 years ago, we started with our digital engagement. We have our web shop. We have our customer database. We have to wait how we start doing the planning, how to exit the customer ecosystem to link the customers in a digital way. And I believe -- we always believe that is the future. But definitely here, the pandemic, in a way, helped to massively accelerate this progress. And if you can see also, I'll say, we have digital sales, plus 93%. So we practically doubled our business. If you have here the number of plus 74%, the difference is 74% including marketplaces, such as the Zalando for Amazon and our own channel, which is always for us the grand prize, to get the people into our own mammut.com channel, and that almost doubled, which I believe is a very significant success also if you look at the opportunities going forward. Some people are surprised that we didn't have so much of inventory write-downs. I can tell you that we did have inventory write-downs higher by some CHF 2 million than compared to last year but no massive numbers. That is due to 2 facts. Fact #1 is that we could reorganize our supply chain relatively fast. And fact #2 is that we do what the whole industry is doing. That is moving the collections into the next year. That means that our collection -- our summer collection '20 will be rolled over to large parts into summer '21. And obviously, then the renewal rate in '21 will be much smaller than usual, but we will help our sales like this, and I think that is a trend like it is done in the whole industry. The last bullet point is a very important one. It's an internal one that may have huge impact on the external world and especially on our clients. We reorganized our structure -- our organizational structure, used the moment in this pandemic environment to do this. We have now separated within the sales department. We have brand and consumers. They take care, for instance, about all the social media, all this digital engagement, direct channels, all this plus the brand. And we have one department that is responsible for the product, including the supply chain. Now what does this help? This helps that we have a client view that's reflecting how the client is served end to end. It has a second advantage that you gain speed and has the third advantage that you have accountability. You remember our problems in our supply chain in 2019, which costed us CHF 7 million of profit last year. This accountability, I have to admit, were partially missing, and that is now reflected in the new organization because there's one person at the end, one department called product, they're responsible for the product, their sourcing and their delivery. We have a few restructuring methods because, again, use the moment to do this. We were reducing some of our outlets, especially in Korea. Korea proves to be an ongoing difficult market with low margin. So we took the moment, and we acted here and reduced our exposure. I go then to page number -- the next one, 16, I believe -- it is 16. So here are a few examples what we are doing to strengthen this business resilience. I mentioned some of them, the growth in own digital, 93%. I think this is a highly positive number. We will have digital sales this year of more than CHF 40 million. I remind you that we started not even 3 years ago with all our digital business. We have operational excellence, applied also in Mammut. The end-to-end processes have been redefined. Again, that is a very good example to reduce complexity in such a major complex business. We took the opportunity and reduced this process, this complexity in our internal processes. If you look at the -- I mentioned it before, we downsized several operations. We combined operations, and we thought this is a good moment to do these things. I mentioned Korea, but you can also think about several outlets in Germany, where we have locations, for instance, of stores, which were not ideal. And we took the moment to go out finally out of these locations or operations. And last and very much -- very much not least, our We Care strategy, found a lot of applause, I would say, from our clients, B2B clients and direct B2C clients. I'll give you one example. It's not only about wood or stain repellent, which are ecologically friendly, which is a big, big topic in the industry in many years, where we are also pursuing, of course, to the most extent possible. But it is also smaller things related to this pandemic. We have made a decision that we do to relieve our supply chain that we do change or even cancel orders, but we only cancel orders at our suppliers which have not been produced yet. I think that was an important message. And here I think we differentiated a bit to some of our competitors. We took all the orders that have been produced. Because in the future, you still have to work with all these suppliers. Some of these suppliers, they are in Asia. They are in Baltic states, North Africa. They're in countries where life is not always so easy. And especially during corona times, life became even more difficult. So we took a decision on the We Care that all the produced goods we are taking which has a certain impact on our net working capital, but we find ways, especially throughout digital channels, to sell this to the customers again. I believe that mid-term, this strategy will pay off because it will give us a much better relation with our key and core suppliers. I go then to Page #17. You can see here the chart of the monthly sales. One little detail maybe it's interesting to see. Number one, of course, it goes up and up. That's good. Number two, you see it only started really in September '17. That is not long ago. And I think we have achieved a lot, and we are prepared for much more because they have now the basis. And we have now, as you always say, the industry has a scalable model right now. Now the peaks, and that's the third detail here, the peaks, they were always in wintertime. Now if you look, the peak from now is in summertime. I think that is a big change, and that shows you how is the potential also then for the next wintertime, for the winter season 2021. I think that is something very interesting to note. It's not only the sales, the 93% up, but also we are measuring all the KPIs on our digital performance. We have -- our traffic is up. The conversion rate is massively up. That means that the customers are actually buying. The ones who are visiting the site actually buying. The return rate is going down by 5 percent point. That is something where the team is very proud of because returns, of course, they are costly and they block logistics. We have some Eiger Extreme sales program, which also has a big successes in very short time also to relieve with our supply chain CHF 1 million sales and something which also I believe is quite a differentiator. It's local adventure. You only look at the title of this booklet we produced, "Limit your travel, not your adventures." I think that was very well received by our clients. You can see that the response. We got 4.5 million Instagram users are reached, 450,000 athletes joined. And also here, if you make comparison with our peers or even the wide appeals, they haven't got the [indiscernible] of this world, I think our ratios are quite attractive. And if you only look also at our client data base, in H1 2020, we could add 60,000 client records. And at one point, this will turn into sales. I think here also on this community building, which is key for a brand like Mammut, I think we could do in this crisis, we could do major programs. With this, I would like to hand over to Kaspar Kelterborn, who will guide you through the financial results, and we are over then to Page #19. Kaspar, please.

Well, thank you, Michael, and good morning to everybody also from my side. So I start my discussion on the financial results, as Michael just said, on Slide #19. On this slide, you see our reported numbers for the first half of 2020, and the comparison of these numbers is influenced by the recent 2 bigger transactions, such as the disposal of the glass business in the first half of 2019 and the disposal of our Schmid Rhyner business in the first half of 2020. The divestment gains of these transactions are CHF 30.6 million for glass and CHF 48.1 million for Schmid Rhyner. If we look at the numbers on a comparable basis, that you see that we achieved net revenues of CHF 576 million, which is 16% below previous year. Very obviously and as Michael already explained, our businesses were largely affected by this global COVID-19 pandemic. We had a revenue decline in all regions, such as 18 -- such as minus 18% for Europe, minus 15% for Americas and minus 11% for Asia. Now out of the revenue, we generated an adjusted EBIT of CHF 1.8 million, including the divestment gain of Schmid Rhyner. The reported EBIT was close to CHF 50 million, as you can see on the chart. Of course, this adjusted EBIT performance is driven to a great extent by the missing top line. And we prevented the loss with our measures to contain the financial impact of this pandemic, which I will discuss in a minute. It is also worthwhile to mention here that the divestment gains are free of tax. With this, the group result for the reporting period was CHF 46.6 million. And with lower minorities, the earnings per share was CHF 21.96. Two other important KPIs are the net operating assets and the operating free cash flow. Most KPIs were also notably impacted by the pandemic, and it is a combination of effects that led, for example, to that significant operating free cash outflow of CHF 40.2 million in the first half of 2020. I will give some detailed comment on this development later on. Finally, we managed an ongoing strong net cash position of CHF 238 million. And our equity ratio, despite these challenging time, remained at the high level of 72.2%. With these remarks, let me go into the details on net sales, EBIT and our liquidity. Please turn now to Slide #20. On this chart, we show you the net revenue bridge with the key elements compared to previous year. The total decrease of net revenue was CHF 194 million. And out of this, close to CHF 125 million or approximately 66% can be attributed to volume and price losses. As Michael presented, we had lower revenue in all 3 segments driven by less client activities but generally also with increased margin pressure. The adverse impact for changes in scope consolidation was CHF 38.9 million or 2.9%, driven by the 2 divestments. And finally, we had an adverse FX impact of CHF 30.3 million or 3.9%. Now let me give you some additional comments on the quarterly revenue trend. Our top line dropped on a comparable basis by 14.5% in the first quarter, reflecting the softening of the investment cycle at Bystronic, continued disruptive changes in the automotive industry, but also first adverse impact from the pandemic, particularly in Asia. In the second quarter, we saw the global spreading out -- spreading of the pandemic with further shutdowns in Europe and America. Our top line dropped by 17.9% on a comparable basis to the previous year, which is a somewhat accelerated decline compared to the first quarter. It is interesting to note the different development of our segments as the accelerated drop in Q2 was driven by chemical specialties with minus 27% and auto with minus 33% on a comparable basis. Bystronic has a similar decline in Q2 as for Q1, both on net revenue in quarter 1, 12% and on order entry of around 20%. For all businesses, we saw a notable recovery of the business activities towards the end of the reporting period, which continued into the beginning of the third quarter. But please note this -- that this recovery was only partial. And as a result, we expect a continuously challenging business environment in the second half of 2020. Now let's move to Slide #21. On this chart, we present the EBIT bridge. And to start with, we back out the one-off divestment gain, as you can see with the light -- is the light-blue shaded area. The large red bar of CHF 86 million reflects the substantial loss coming from the volume and price effect. If you look in the P&L after material expense ratio, then you see that it increased from 46% to 48.8%. On one side, we clearly had lower volumes, but we also experienced changes in the product mix as well as an increasing pressure on our margin, resulting from strong competition. Now this volume mix effect was partly offset by lower personnel and operational expenses. The personnel expenses dropped by CHF 9 million or 14.6%, mainly driven by using the governmental support mechanism, in particular, the subsidies for short-time work in Europe. We have approximately 1,500 employees covered in applicable program. Some of them are already back to normal working hours. Some other continue with short-time work. And again, others might be added to the progress at some later point in Q3. Our use of the support mechanisms varies significantly by business, by location, function and also circumstances. The headcount of the group is down by 98 versus December 2019. This includes the disposal of Schmid Rhyner with 80 headcount, but also the acquisition of Weber Laser in Belgium for Bystronic with about 30 headcount and some additions to the new assembly side of Bystronic in the U.S., the net decline of headcount of personnel segment and demonstrates that we started to initiate structural measures as well. The operational expenses and depreciation dropped by close to CHF 20 million or 80.7%. As we had a slight increase of depreciation, the OpEx decrease was even slightly higher than CHF 20 million, around CHF 21 million. Looking in the P&L at the OpEx ratio, you can see that it increased moderately from 19% to 20%, which I think is a good number given the current circumstances. Part of these savings were, of course, easy to achieve, for example, lower travel expenses due to travel restrictions. However, we also initiated cost-cutting measures, and we re-prioritized our operational plans to ensure focus on the important activities, which, by the way, does not always result in blended cost cutting but also in an accelerated spending, for example, when it comes to digital collaboration and pushing a digital business. We also had some small impact from change in scope and FX. And at the end, an adjusted EBIT of CHF 1.8 billion with an EBIT margin of 0.3% resulted for the first half of 2020. With this release, the EBIT bridge, please turn now to Slide #22. Now here, we show the development of our cash position. Our liquid funds from mid '20 of CHF 238 million compared with CHF 301 million per year-end 2019. The inflows from the sale of Schmid Rhyner were more than offset by the dividend payment, which, as you recall, included a stable dividend for performance in 2019 and the return of excess cash after the disposal. The other significant driver of the development was our cash position -- of our cash position is the operating free cash flow of minus CHF 40 million. This, I would like to elaborate a little bit further. It includes, on the one hand, an operating cash flow of CHF 12 million. Compared to last year, with CHF 56 million, a notably lower member, but consistent based on our business activities and our supply chain challenges in this crisis. It also includes net investment in fixed assets of CHF 30 million. Now if we look at the gross CapEx number, we spent CHF 20 million, which is CHF 1.6 million higher than the first half of 2019. Please keep in mind that we continue with our key investment process, such as the new assembly site for Bystronic in the U.S., the new converting center for FoamPartner or the introduction of further web shops in selected countries for Mammut. Now on the other hand, our operating free cash flow includes an increase of our net working capital by CHF 40 million to a total of CHF 330 million or 26.7% of total revenue. While we had an almost normal collection rate and no big debt losses so far, we experienced an increase in inventory, especially at Mammut and Bystronic, which was mainly driven, of course, by the pandemic as well as some additional safety stock at Bystronic. On the other side, we have some higher levels of [indiscernible] in Q1, which was due to the normal year-end balance sheet day effect end of 2019. We are now in process to work down those inventories with good progress month by month. Notably, in Q2, our operating free cash flow was already slightly positive, and I expect this trend to continue into the second half of 2020 also in connection with our cash cost complexity program. With this, I would like to go over to Slide #23. We announced this cash cost complexity program earlier in March to mitigate the adverse impact from the pandemic. With this top-down flavor, the specific measures are defined, to a large extent, was up by the business units, including the corporate center, [indiscernible] to their characteristics and needs. The measures all together will yield cost savings of approximately CHF 40 million by the end of this year. We expect a muted or somewhat relaxed recovery scenario whereby activities in the second half of this year continue to recover from the low levels in the first half. On the other hand, in our view, it will take multiple years until the world economy will have fully recovered. This is the reason why we initiated complementary to the immediate cash cost complexity measures and rightsizing initiative, which is about both a more structural reduction of the cost base to adjust for lower revenues and a reallocation of resources to reflect new reality. While we face uncertainties and challenging circumstances, we systematically look for opportunities to advance our business models maybe quicker than without the current sales pressure. For example, we push innovation and digitalization in all our segments even harder in this reporting period, and we continue to do so. Or we changed the organization of outdoor with a clear end-to-end view for faster decision-taking and increased accountability. We do all this with the conviction that our businesses will benefit from it and thus create value on any strategic scenario. And of course, all such measures all end with the most important priority of this crisis, which is to safeguard the health of our employees, customers and other stakeholders. With this, I hand back to Michael Willome for his financial -- for his final comment on the ongoing priorities and outlook for 2020.

Thank you, Kaspar. I come to the summary and the outlook. Point #1, we initiated, and Kaspar Kelterborn just mentioned it, is rightsizing program. Rightsizing does not mean downsizing. Rightsizing means: one, reduce the cost structure; and b, allocate or reallocate the resources. We are really -- I think we should all be prepared that the recovery of the economies will take another 1, 2, 3 years. And you can go with a too-high cost structure for 6 months. That is no problem, but you cannot go for 3 or 4 years with a too-high cost structure. So here, we took the necessary measures that will accompany us, as I mentioned, in the next 2 or 3 years. Our cash cost complexity immediate program will deliver the CHF 40 million. I think this we have always announced in March or April, and we are absolutely sure that we will deliver it. Then if you look at the strategic agenda, the progress at FoamPartner and Mammut, that is very high on our agenda. I think I have mentioned where we stand and what are the next steps there. We will execute our portfolio strategy. I think there's no doubt about this. And as I have mentioned in both of the divestment units, the signs we have much further advanced in the process with FoamPartner and less advanced in the process of Mammut are encouraging, and they kind of confirm our current opinion. But again, in this situation, we always have to make the disclaimer that it is subject to the pandemic situation that is developed. I can again confirm that we see a recovery of the business in H2. I can confirm again that our July results, they have been absolutely satisfying concerning the trends we are talking about. And we come, therefore, to the conclusion that we confirm our outlook, which we have made in June, with a positive mid-double-digit million in EBIT, including the divestment gain. And if you look now at the development over the last few weeks and you make your calculations which you do and which we do, I can definitely see that there might be some upside to this, but it is definitely too early to lift potentially a guidance as we consider the situation far too fragile for the next few months. I think you have to lift the business life more or less on a weekly basis. And that is, therefore, we stick to our guidance. But definitely, we do see, over the last 2 weeks, a certain upside to this. I think, with this, I would like to conclude our presentations, Kaspar and I, and I would like to give to the operator for the Q&A.

[Operator Instructions] And the first question received is from [ Charlie Ferenberg of AWP ].

You announced this cost-cutting program for CHF 40 million for 2020. Now you talk about this rightsizing program. So this still be possible without reducing the number of your employees?

I cannot exclude. Kaspar Kelterborn has given you the numbers. Yes, we have reduced about 100 people in the first half, which has also the impact of Schmid Rhyner and has the impact of Weber Laserservices the other way around. I cannot exclude that we will not reduce more positions also after short-time work might be ending in the second half of the year. We do not plan for massive restructuring. I think we are in a position that our businesses are solid and have a reasonable cost structure for now but some selective reductions here and there. If we do reprioritize, as I mentioned, we will reallocate some resources, and that might come hand in hand with certain reductions of personnel. That could be right.

Okay. Did I understand correct that you reduced workforce in the first half for [indiscernible] about around 100?

That's correct.

[Operator Instructions] The next question received is from Tobias Fahrenholz of MainFirst Bank.

Yes. Coming back on your CHF 40 million program, could you quantify what you have effectively saved here so far in the first half? And do you really see the CHF 40 million until year-end? Or will there be maybe some delay? And could you maybe say if these savings are coming to equal sizes from all segments? Would be the first one.

Thank you for this question. Now if you look at the EBIT bridge, you see in the first half, the CHF 9 million of tax reduction. That was mainly driven by the governmental support mechanisms such as short-time work, et cetera. There's one part. Now on the OpEx reduction, as I explained, there are a variety of initiatives in there, but also, of course, some volume-driven items and some cost savings, which you can easier realize such as travel cost savings. But of course, there are also some cost-savings measure like postponing of projects like refocusing on key initiatives. So as you can see from that number, compared to the CHF 40 million, we are on a good way to achieve that CHF 40 million -- that approximately CHF 40 million by the end of the year.

Okay. And what would be your CapEx guidance for the current next year, assuming you still have portfolio dispositions?

Good question. Now if you look at the gross CapEx, the CHF 20 million which we have spent, and as Michael explained, we do not -- we have not stopped, and we also will not stop in the second half our key investment topics. And that CapEx number is around a reinvestment rate of 1. And I would expect a very similar number and a very similar situation for the second half so that, at the year-end, we will also have a reinvestment rate of 1 or slightly below.

Okay. And maybe one last here. You've spoken a lot about disposals. What about own acquisitions? So if you look at Bystronic, you were always indicating that you were always trying to expand. Are there any targets coming now on the horizon? Or would this be a no-go for the next 2, 3 quarters as you are just too busy with disposing the other 2 units?

Yes. I can get you here just -- I mean, we will not make any type of acquisitions or, let's say, sizable acquisitions from Mammut and FoamPartner, obviously. For Bystronic, the situation is different. But also right now, our focus is to finish the strategy and to come up with this strategy. If we have targets and maybe even triggered by some cash issues at some prospects, we definitely are in the position to look at it. But I can tell you we right now do not have advanced-stage larger acquisition project. I mentioned Weber Laserservices, I mean, it was a CHF 7 million business which we acquired but something more substantial we don't have right now. But again, if opportunity and that's also thanks to our cash position and our balance sheet position, if something maybe a little bit under distress in this situation would come up, we will certainly look at it. But again, no advanced-level projects right now of a certain part.

[Operator Instructions] And the next question received is from Daniel Koenig.

This is Daniel Koenig from Mirabaud Securities. I have a couple of questions. First, this plant in the U.S., what can we expect on an annual basis of -- in terms of revenue? And I was wondering if this U.S. plant and this thing if it's not loss-making in the beginning. And then I have some housekeeping questions: a, the financial result in the first half is minus 2.1%. What are the reasons? And then the minorities are 1.2%, down quite considerably. I was wondering -- of course, you increased the stake at the ANA, but I saw the [ Han's ] laser result, and that was up in the first half. I was wondering how the ANA was performing in the first half and what can we expect for the full year, of course.

Okay, first question, Chicago, we plan with probably some 20% additional sales. If you look at the mix, we had some CHF 100 million in the U.S. And we plan for some 20% addition sales coming because of this new assembly center. What definitely I can tell you is that we'll not make losses. We plan to make money, and this will be the case there from the beginning because you have a very flexible cost structure. We have had before something -- you have an increased depreciation, but we have a very modular way how to run the operation. So we will only have the costs basically in a variable way. So this will be profitable from Day #1 in Chicago. And your last question about the minorities, that is true, the minorities, they're coming from Antil and from DNE. Antil is the Bystronic automation company in Italy, and the performance. And if you compare that to [ Han's ] laser, but the performance of DNE was clearly lower than last year. From January actually onwards until about May, we had a much lower performance of DNE because also there we have lots of shutdowns, and we have lots of problems. It was picking up in the last 2 or 3 months at DNE. But in fact, yes, higher, we have increased our stake to 70%, as you mentioned. That is one reason why the minorities are lower, but the other reason is a clearly lower business performance of DNE, I would say, January until May.

And to answer the second question, the financial result, it is true. You see quite a bit of a swing. If you look at the P&L compared to June 2019, the main reason for that swing is the employer contribution. Last year, of course, we had a positive contribution. And this year, of course, given the situation, we had a slightly negative contribution. With the other costs in there are the hedging costs and the swap costs for rolling over the hedges, which are a normal level.

Okay. So what does this mean for the full year? Something similar like in H1? Or...

For the financial result?

Yes, that's right.

Yes. It's difficult to estimate, but I think the employer contribution reserve there might be a recovery on that. And on the other level, the hedging cost and the swap costs, they might be a bit reduced. So it will be some sort on a similar level.

[Operator Instructions] As we received no further questions, I hand back to the speakers for closing remarks.

Thank you very much, everybody, for your interest. I think we closed the discussion for today. We'll hear from us again latest on October 16, when we produce the trading update for the Q3. Thank you very much. And have, everybody, a good day.

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.