Tornos : Half-year report 2022

Half-year report

Tornos Group

incl. Interim Consolidated Financial Statements

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Content

Letter to Shareholders	4
Management Report	7
Interim Consolidated Financial Statements	10

Forward-looking statements	Responsible for the contents
The present half-year report contains	Tornos Holding Ltd, Moutier, Switzerland
forward-looking statements in relation to the
Tornos Group which are based on current	Concept
assumption and expectations. Unforeseeable	Zoebeli Communications Ltd, Bern, Switzerland
events and developments could cause actual
results to differ materially from those anticipated.	Design
	Luidspreker-Creative Studio, Venlo, Netherlands
This half-year report is available in English,
German and French. The original English-language	Printing
version is binding. Tornos half-year report can be	Pressor Ltd, Delémont, Switzerland
downloaded from the Tornos website:
https://investors.tornos.com

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Key Figures

Tornos Group

	1st HY 2022	1st HY 2021	Difference	Difference
Unaudited, in CHF 1 000 1)	1.1.-30.6.2022	1.1.-30.6.2021		in %
Order intake	98 297	104 640	-6 343	-6.1%
Net sales	93 677	84 389	9 288	11.0%
EBITDA 2)	10 651	13 182	-2 531	-19.2%
in % of net sales	11.4%	15.6%
EBIT 2)	8 796	11 109	-2 313	-20.8%
in % of net sales	9.4%	13.2%
Net result	8 782	11 644	-2 862	-24.6%
in % of net sales	9.4%	13.8%
Cash flow from operating activities	5 931	18 581	-12 650	-68.1%
Cash flow from investing activities	-1 721	877	-2 598	-296.2%
Free cash flow 2)	4 210	19 458	-15 248	-78.4%
	30.6.2022	31.12.2021
Net cash 2)	30 699	26 631	4 068	15.3%
Total equity	107 717	98 768	8 949	9.1%
in % of total balance sheet	70.2%	68.2%
Total balance sheet	153 514	144 914	8 600	5.9%
Employees (full-time equivalents) 3)	662	640	22	3.4%

1. Unless otherwise stated
2. Non-GAAPfinancial measure, see https://investors.tornos.com/en/content/publications
3. Without apprentices

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Letter to shareholders

Tornos confirms the good results for the 2021 financial year

Dear Shareholders,

The Tornos Group has carried the momentum of the previous year into 2022, and confirmed its good results for the first half of the year.

Compared to the first half of 2021, net sales rose by another 11%. Tornos saw a significant increase in Europe and the United States in particular, while the operating conditions remained very challenging with frequent disruptions in the global supply chain for raw materials and supplier products. The restrictions imposed by the local authorities to combat the coronavirus pandemic were felt most keenly in Asia, above all in China.

Although the Group's order intake for the first half of 2022 did not quite reach the high figure for the same period of 2021, it still clearly exceeded the net sales (book-to-bill ratio: 1.05). In terms of expenses, Tornos faced various cost increases for materials, energy and transportation in the first six months of 2022.

Overall, our Group posted order intake of CHF 98.3 million in the first half of 2022 (first half of 2021: CHF 104.6 million, -6.1%) and net sales of CHF 93.7 million (first half of 2021: CHF 84.4 million, +11.0%). EBIT* fell from CHF 11.1 million to CHF 8.8 million.

Without the writeback of value adjustment provisions in the amount of CHF 4.6 million, EBIT* for the first six months of 2022 would come to CHF 4.2 million (first half of 2021:

CHF 3.9 million, excluding a book gain from a property sale of CHF 0.7 million). As a result of the changed market conditions and the usability of its inventory, the Tornos Group has introduced a refined method for value adjustment provisions that takes even better account of the specific circumstances at Tornos.

Significant rise in orders in medical and dental technology

In the first half of 2022, the Tornos Group was particularly successful in its biggest sales market, medical and dental technology, increasing order intake from CHF 11.0 million to CHF 18.2 million (+65%). As was the case at the end of 2021, it thus remains Tornos' biggest market segment in terms of sales, followed by the automotive industry. Tornos also received more orders from the electronics and watchmaking industries in the first half of 2022 compared with the same period of 2021.

* Non-GAAP financial measure, see https://investors.tornos.com/en/content/publications

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Significant rise in sales of SwissNano

The SwissNano Swiss-type automatic lathe, produced in Switzerland, again had considerably more customers in all sales markets in the first six months of 2022 than in the same period of the previous year. Demand for machines produced by Tornos in Taiwan also rose sharply. Due to the much stricter local coronavirus restrictions, the production of Tornos machines in China was severely limited in the first half of 2022.

Service and spare parts business expanded further

Tornos' service and spare parts business continued to perform well, with sales in this area rising by 9.7% compared with the first half of 2021. The DECO 10 Plus offer, whereby Tornos customers could have their older DECO 10 machines upgraded to the latest technology, made a major contribution to this pleasing development. Tornos also buys older systems back and - after fully reconditioning them - puts them back on the market in the spirit of a circular economy.

Infrastructure projects

The Tornos Group completed or pressed ahead with a number of infrastructure projects in the first half of 2022, including in São Paolo (Brazil), where Tornos opened a

300 square-meter Customer Center, and in Kąty Wrocławskie (Poland), where the Group brought a new production plant into operation. Here, it will primarily overhaul and modernize older DECO 10 systems. There are currently around 40 qualified employees working for Tornos in Poland. Some of them are active worldwide in order to ensure an efficient, high-quality global customer service.

In Taiwan, construction work has commenced on a new production building. This should be operational by the end of 2023 and create the ideal conditions for continuing the successful production of mid-priced and lower-priced Tornos machines in Taiwan.

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