Press release dated 17 August 2020

V-ZUG Group: Successful spin-off; improved operating result; strategic projects on track

Zug, 17 August 2020 - Despite impacts because of COVID-19 and extensive transformation projects, V-ZUG was able to maintain its leading position in Switzerland. Net sales increased marginally to CHF 258.6 million (previous year: CHF 257.7 million). At CHF 12.9 million, the operating result (EBIT) was significantly higher than in the previous year (CHF 3.7 million, or CHF 7.4 million when adjusted for the provisions for ground remediation work).

In the first half of 2020, the V-ZUG Group's cash flow from operating activities amounted to CHF 25.4 million (previous year: CHF -5.5 million), and free cash flow (after investment activities) totalled CHF -0.6 million (previous year: CHF -34.6 million). The equity ratio stood at 70.3% as at 30 June 2020.

The spin-off and listing of V-ZUG Holding AG on SIX Swiss Exchange on 25 June 2020 took place in challenging times. Not only is V-ZUG in the midst of a far-reaching transformation, but the first half of the year was also greatly impacted by COVID-19.

The transformation process is progressing. Key strategic projects such as the new refrigerator factory in Sulgen are on track, and the transition to V-ZUG AG's new ERP system is essentially complete.

Successful spin-off
The shares of V-ZUG Holding AG were traded on SIX Swiss Exchange for the first time on 25 June 2020. Under the spin-off and listing, Metall Zug AG shareholders were allocated one registered V-ZUG Holding AG share per type A registered share and ten registered V-ZUG Holding AG shares per type B registered share. Metall Zug AG retains around 30% of V-ZUG Holding AG shares as a strategic shareholding. The share price opened at CHF 72.00.

Improved operating result
The V-ZUG Group is reporting in two segments: "Household Appliances" and "Real Estate". Despite extensive transformation projects, V-ZUG was able to maintain its leading position in Switzerland. Net sales increased marginally to CHF 258.6 million (previous year: CHF 257.7 million). At CHF 12.9 million, the operating result (EBIT) was significantly higher than in the year-back period (CHF 3.7 million, or CHF 7.4 million when adjusted for the provisions for ground remediation work).

In the first half of 2020, the V-ZUG Group's cash flow from operating activities amounted to CHF 25.4 million (previous year: CHF -5.5 million), and free cash flow (after investment activities) totalled CHF -0.6 million (previous year: CHF -34.6 million). The equity ratio stood at 70.3% as at 30 June 2020.

Less affected by COVID-19 than anticipated
In the first half of 2020, the Household Appliances segment posted net sales of CHF 258.6 million (previous year: CHF 257.7 million). At CHF 11.5 million, the operating result (EBIT) was significantly higher than in the prior-year period.

The return to extremely reliable deliveries had a positive effect on business, particularly in Switzerland. V-ZUG was able to maintain its delivery capability at all times, even during the most stringent COVID-19 restrictions.

So far, the V-ZUG Group has not been as badly affected by the consequences of the COVID-19 pandemic as initially expected. Nevertheless, the impact on the company overall has still been serious. Many supply-related challenges have been successfully overcome, albeit with a huge amount of effort. The cancellation of trade fairs and the impossibility of carrying out sales support measures, such as consultancy in the ZUGORAMA showrooms and in customers' homes, reduced costs in the first half-year, but may also depress sales over the coming months. Short-time working had to be introduced for 60 to 80 employees in Switzerland for a two-month period. Most office staff worked from home for several weeks.

The COVID-19 safety measures that were introduced also had some impact on manufacturing productivity. Service & Support were able to fulfil their repair and servicing commitments at all times, while adhering to precautionary measures.

Progress with the V-ZUG brand in the international business
In the international business, the V-ZUG Group increased net sales in local currency in all markets with its own branch operations, generating net sales of CHF 24.3 million in the first half year of 2020.

Sales of the V-ZUG brand rose by 38.7% in the international business. However, OEM business in the United States was greatly reduced in the first half year due to COVID-19. Overall, this led to a decline in net sales of 3.5% in the international business. Significant progress in target markets indicates that V-ZUG is on the right track internationally.

With the opening of additional ZUGORAMAs in Beijing and Munich, V-ZUG is strengthening its position as a premium brand. The brand experience offered to customers in the showroom in Munich has been recognized with the "German Brand Award".

New pressing hall commences operation
Even after the spin-off, Metall Zug is continuing to oversee construction projects in Zug and Sulgen in its capacity as V-ZUG's representative. At the end of 2019, it handed over the new pressing hall to V-ZUG operations on schedule. In the period under review, V-ZUG has started to phase in production operations using the new press as planned.

The site allocation carried out in conjunction with the spin-off of the V-ZUG Group from Metall Zug Group has been completed. This has laid excellent foundations for productive collaboration within the Technologycluster Zug.

In the first half of 2020, the Real Estate segment posted an operating result (EBIT) of CHF 1.9 million, CHF 3.2 million more than in the same period of pervious year. It should be noted that provisions of CHF 3.7 million had to be posted in the previous year for ground remediation work.

Strategic projects on track
The construction of the new refrigerator factory in Sulgen is proceeding according to plan. In Zug, the new state-of-the-art pressing hall has commenced operations.

Further milestones have been achieved in the implementation of the digitalization strategy. The transition to the new ERP system has been completed. On this basis, ongoing optimizations will be incorporated into the processes.

Innovation: the new Adora dishwasher range receives the Plus X Award
An expert panel of representatives from 25 different sectors awarded the new Adora dishwasher range the Plus X Award in the categories of high quality, design, ease of use, functionality, ergonomics and ecology. This prize is presented to brands that focus on developing new, innovative technology, exceptional designs and smart yet straightforward operating concepts. (You can find out more about V-ZUG's innovations at https://www.vzug.com/ch/en/vzug-novelties-2020)

Sustainability as an integral part of the brand promise
Sustainability is an integral part of the V-ZUG brand and the corporate culture of the V-ZUG Group, and has been for many years already.

The Head of Sustainability is now leading a new interdisciplinary project team that is overseeing the implementation of defined measures. These measures are aligned with the Sustainable Development Goals (SDG) and follow the "triple bottom line" approach - people, planet, profit.

To help customers to save energy, V-ZUG has for a long time committed itself to developing energy-saving appliances. For example, the energy consumption of the new Adora dishwasher range is 40% lower than that required for an A+++ energy rating.

One specific example of how V-ZUG is encouraging sustainable mobility is the mobility concept that was introduced in summer 2020 at the Zug site, which has over 1,000 employees. The mobility concept is intended to incentivize employees to make greater use of public transport when they travel to work. A car park management system has been introduced in parallel to this initiative.

The V-ZUG Group is committed to sustainable technology and production methods in all areas and is aiming to achieve CO₂ neutrality at production facilities in Zug by 2021.

Board of Directors constituted
For its new phase as an autonomous company, V-ZUG Holding AG has re-formed its Board of Directors. Alongside Oliver Riemenschneider (Chair), Prof. Annelies Häcki Buhofer and Jürg Werner, the new members as of May 2020 are Prisca Hafner, Tobias Knechtle and Petra Rumpf. The Board of Directors is therefore composed of three women and three men, covering a wide range of expertise and displaying diversity.

New CEO as of 1 September 2020
Peter Spirig was appointed as CEO of the V-ZUG Group in March 2020. He will take over the role of CEO from Heinz M. Buhofer, who has held this post on an interim basis since 1 September 2019.

Key figures

1) Combined historical financial statements.

2) Contains a provision of CHF 3.7 million for soil remediation.

About the V-ZUG Group
V-ZUG is the leading Swiss brand for household appliances. Located in the heart of Switzerland, V-ZUG has been developing and producing kitchen and laundry appliances for over 100 years and offers a comprehensive service as well. In Switzerland alone, there are over 300 technicians working in the service business. As market leader in Switzerland, V-ZUG Group also markets its products in selected premium markets abroad. V-ZUG Group currently employs around 2,000 people.

V-ZUG Holding AG is listed on the Swiss Reporting Standard of SIX Swiss Exchange, Zurich (securities number 54 248 374, ISIN CH0542483745, ticker symbol VZUG).

Key dates

Further information

The press release is available at https://www.vzug.com/ch/en/investor-relations-news, the Half Year report at https://www.vzug.com/ch/en/financial-reports.

Legal Notes
This press release is published in German and English. The German version is binding. V-ZUG Holding AG processes personal data in accordance with its privacy statement available at https://www.vzug.com/ch/en/privacystatement.