From the Sector

The coronavirus pandemic and its massive impact on the automotive industry led to an un-precedented market slump in the first half of 2020 and a corresponding revenue decline at Autoneum. Revenue in local currencies fell by –32.7% compared to the prior-year period, and in Swiss francs by –36.8% to CHF 730.6 million. The turnaround program for the North American sites made further progress in the first six months and is showing the targeted results. However, they were clearly overcompensated by the massive impact of the corona-virus crisis, which led to a negative net result of CHF –54.9 million despite comprehensive cost flexibilization measures.

Like the entire automobile industry, Autoneum was massively impacted by the effects of the corona-virus pandemic in the first half of the year. The temporary plant closures at almost all customers in every region, especially in the second quarter of the year, not only led to an unprecedented market collapse, but also to a production stop at all 55 Autoneum sites. Starting in February in China and one month later in all other regions, vehicle manufacturers temporarily shut down production completely. The corresponding massive drop in global vehicle production led to a slump in revenue at Autoneum of –32.7% in local currencies. This reflects the development of the market in the first half of 2020, which contracted by –33.2% year-on-year. Revenue in Swiss francs at Autoneum fell by –36.8% to CHF 730.6 million (prior-year period: CHF 1 156.1 million). Revenue development in all Business Groups outperformed the respective markets, particularly in Asia and the SAMEA (South America, Middle East and Africa) region.

 Like the entire automobile industry, Autoneum was massively impacted by the effects of the corona-virus pandemic in the first half of the year. The temporary plant closures at almost all customers in every region, especially in the second quarter of the year, not only led to an unprecedented market collapse, but also to a production stop at all 55 Autoneum sites. Starting in February in China and one month later in all other regions, vehicle manufacturers temporarily shut down production com-pletely. The corresponding massive drop in global vehicle production led to a slump in revenue at Autoneum of –32.7% in local currencies. This reflects the development of the market in the first half of 2020, which contracted by –33.2% year-on-year. Revenue in Swiss francs at Autoneum fell by –36.8% to CHF 730.6 million (prior-year period: CHF 1 156.1 million). Revenue development in all Business Groups outperformed the respective markets, particularly in Asia and the SAMEA (South America, Middle East and Africa) region.

Autoneum promptly responded to the pandemic-related market slump by adopting extensive cost-cutting measures in all regions. These include the reduction of employee costs by, among other things, adjusting time accounts, introducing short-time work at eligible locations and temporary layoffs as well as headcount reduction, mainly among temporary workers. In addition, operating expenditures were limited to the absolutely necessary. The investment volume for 2020, already reduced from previous years, was downsized even further. Autoneum continues to benefit in this regard from the high level of investments undertaken in recent years.

 Although the coronavirus crisis and the measures taken to contain it dominated Autoneum’s course of business in the first half of 2020, the Company achieved necessary operational and financial im-provements during this period. The comprehensive turnaround program for the North American sites made further progress and is on track. Efficiency improvements already achieved there had a posi-tive effect on the figures of the first half-year, but were significantly overcompensated by the substan-tial impact of the COVID-19 crisis. Savings and cost flexibilization measures taken immediately and implemented worldwide in view of the revenue loss could not offset the ongoing, capacity-related fixed costs. This led at the Group level to a negative EBIT of CHF –31.8 million (prior-year period: CHF 16.4 million), which equates to an EBIT margin of –4.4% (prior-year period: 1.4%). The net result decreased because of the severe revenue shortfall to CHF –54.9 million (prior-year period: CHF –6.0 million).

Outlook
For 2020 Autoneum expects revenue to develop at market level. Although customers’ production volumes should increase again in the second half of 2020 compared with the first semester, latest fore-casts indicate that they will remain clearly below the level of the second half of 2019. Immediately implemented and ongoing cost reduction measures as well as further operational optimizations also within the turnaround program in North America will lead to improvements in the second half of the year. Due to the current uncertainties, a reliable statement on the net result for the full year 2020 thus cannot be made. With regard to the mid-term targets, a recovery of the profitability level is expected, but it will largely depend on the market development.

The two brands have been working together to develop unique concepts for FW2019 and SS2020 collection, starting from premium ISKO™ denim.

Each garment is sartorially and carefully thought out to result in a beautiful product that is respectful of people and the planet.Excellence is in the detail and DW knows it well. The Italian brand always focused on quality standards and craftmanship to develope its collections.
From fabrics to stitching to accessories, every small element is carefully envisioned and developed to create garments are safe for the planet and its people. With cutting-edge technologies and forefront treatments being part of the process, the partnership with ISKO, one of the leading denim ingredient brands, came naturally – the next step forward in a journey toward distinction.

Being the first mill in the world to be awarded both Nordic Swan Ecolabel and EU Ecolabel, the company provided responsible solutions to better define DW’s vision. Combined with the brand’s tradition and expertise, the fabrics developed by ISKO the denim pieces are unite responsibility and quality, according to the mill’s Responsible Innovation™ approach.
The result is the five pockets Milano model and the American pocket Enea pant, both available in different washes and colors.

Elevate Textiles, a global provider of advanced, high quality products and mission critical textile solutions is pleased to participate in the recently launched Gerber PPE Task Force. This industry-wide effort combines resources and expertise to support manufacturing operations and brands as they increase their production or transition their operations to produce personal protective equipment in the fight against COVID-19.
Elevate’s Burlington, American & Efird (A&E), and Gütermann brands provide critical barrier fabric and thread components used in the manufacturing of lifesaving PPE products including masks, isolation gowns and other medical garments.

"The only way to be successful during this difficult situation is to join forces and support one another," said Lenny Marano, VP of Product Management & Marketing for Automation Systems at Gerber Technology. "We are proud to have a global network of partners to support PPE production so that it's more widely available."

For over 40 years, Burlington has been in the Medical business manufacturing fabrics for use in operating theaters such as surgeon’s gowns, isolation gowns, sterilization wrapper packs, drapes, scrubs and lab coats. The Maxima® collection of fabrics is useful for reusable isolation and surgical gowns and meets AAMI standards for Levels 1-4 and FDA standards.

HeiQ, winner of the Swiss Technology Award and Swiss Environmental Award, launches HeiQ Viroblock NPJ03, an antiviral and antimicrobial textile treatment that is tested effective against coronavirus.

Since its inception 15 years ago, HeiQ has forged a solid innovation track record helping brands improve textile products. Catalyzed to action by the global fight against Coronavirus, HeiQ launches HeiQ Viroblock NPJ03, an antiviral and antimicrobial textile treatment which is proven effective against human coronavirus (229E) in face mask testing, significantly enhancing the antiviral log reduction from 2.90 of untreated face masks to 4.48, over 99.99% reduction of virus infectivity. (Remarks: a log reduction of 2 is equivalent to 100 times the effectiveness).

Chinese protective masks producer Suzhou Bolisi is the lead adopter of HeiQ Viroblock NPJ03. Treated masks will be available on the market as early as this April. American legwear manufacturer Kayser-Roth is planning to add the technology to their new product, Ghluv hands protector, while Lufeng from China is evaluating the technology on other types of fabric used for garments.

HeiQ Viroblock NPJ03 is a unique combination of vesicle and silver technologies designed to inhibit the growth and persistence of bacteria and viruses. The HeiQ vesicle technology targets lipid- enveloped viruses, such as coronavirus, providing rapid virus deactivation, while the HeiQ silver technology inhibits the replication of both bacteria and viruses. HeiQ Viroblock NPJ03 can be applied to a wide spectrum of textile surfaces including face masks, air filters, medical gowns, curtains, drapes and more. HeiQ also has a range of highly wash-durable antimicrobial and odor control textile technologies, called HeiQ Pure, combining silver-based and bio-based materials for all fabric types.

Net result impacted by operating losses and high impairments in North America

In 2019, Autoneum grew organically by 2.5% and has thereby significantly outperformed the declining market. In Swiss francs, revenue rose slightly to CHF 2 297.4 million. However, as previously communicated, operational inefficiencies in North America and impairments on fixed assets in that region had a particularly strong impact on profitability and led to a net loss of CHF –77.7 million. The Board of Directors therefore proposes that no dividend bedistributed for the 2019 financial year. Based on the new turnaround program launched in North America at the beginning of this year, significant profitability increases are expected for 2020.

2019 was an extremely challenging year for the automobile industry. The continuing weakness of the global economy, ongoing trade disputes and the increasing regulation of mobility impacted vehicle demand negatively. But 2019 was also a year of change for Autoneum internally. An in-depth analysis carried out by the new Group Management in the fall showed a need to reevaluate the Group’s performance over the short- to medium-term. In Business Group North America, the operational and commercial problems have proven more extensive than originally assumed. As a result, the turnaround program launched in spring 2019 was replaced at the beginning of 2020 with a dedicated and far more comprehensive program for the North American sites.

Revenue growth despite a shrinking global market
As a result of weak demand, the number of light vehicles produced worldwide fell again sharply in 2019 compared to the previous year; whereby the decline of almost –6% was much steeper than in 2018. Thanks to numerous production ramp-ups and a favorable model portfolio, Autoneum generated organic revenue growth1 of 2.5%, despite the global market cooling. Revenue consolidated in Swiss francs rose by 0.7% from CHF 2 281.5 million to CHF 2 297.4 million.

Profitability2 impacted by operational inefficiencies and impairments
Operational inefficiencies in North America and impairments on fixed assets in this region were the main reason for the – first-ever – negative net result in 2019. In addition, the sharp drop in automobile production in Europe and China as well as associated lower utilization of production capacities in the affected Business Groups also burdened the Group’s profitability. EBITDA excluding IFRS 16 effects decreased to CHF 126.0 million (2018: CHF 197.2 million), which corresponds to an EBITDA margin of 5.5% (2018: 8.6%). One-time charges from impairments in the amount of CHF –68.0 million had a negative impact on EBIT, reducing it to CHF –32.9 million (2018: CHF 114.1 million). Without these one-time charges, EBIT amounted to CHF 35.0 million. The EBIT margin 1 Change in revenue in local currencies, adjusted for hyperinflation. 2 The figures for the 2019 financial year include IFRS 16 effects. Autoneum Management Ltd . Media Release . March 4, 2020 Page 2/5 excluding impairments was at 1.5% in 2019, and taking those into account the margin decreased to –1.4% (2018: 5.0%).

"Fulfillment Hub” presentation will feature collaborations with major brands, thought leadership sessions
Kornit Digital (Nasdaq: KRNT), a worldwide market leader in digital textile printing technology, has announced the details of its presence at PRINTING United 2019, taking place in Dallas, Texas, October 23-25, 2019.

PRINTING United brings the North American public debut of Kornit’s Konnect software, a cloud software analytics platform that provides users a single comprehensive user interface to monitor and manage their productivity. This empowers customers to receive real-time data about their operations, prioritize, assess costs, troubleshoot, and set goals from the convenience of their laptop, tablet, or smartphone.

Archroma, a global leader in color and specialty chemicals towards sustainable solutions, and Carlin, the trend office who pioneered trend forecasting back in 1947, are heading together to Premiere Vision Paris, where they share a booth fully dedicated to color creativity, inspiration and performance.
Carlin is well known in France and abroad for its "trend-oriented" expertise from brand strategy and collection design, to color creation and trend forecasting. Carlin serves famous brands in the fashion, cosmetic or sportswear industry, such as GAP, Empreinte, Byredo, Birchbox, or Samsung.

Carlin x Archroma collaboration
Archroma launched the 'Color Atlas by Archroma®' in 2016, a unique tool dedicated to providing fashion designers and stylists with off-the-shelf color inspiration that can be implemented in production with just a few clicks.
The Color Atlas contains 4,320 colors on cotton poplin, and online, almost double compared to similar tools available to textile and fashion specialists. More brands are turning to the Color Atlas and Archroma for color creation and implementation, such as American Eagle Outfitters, Athleta, Express, and Lands’ End.
Archroma and Carlin started their collaboration in July 2018. Carlin is using the color references of the Color Atlas during its color workshops throughout France, as well as in its 20 yearly publications.
At Premiere Vision, Archroma and Carlin will be together in one exhibition space, allowing visitors to enjoy a full consultation from color trends to color inspiration to color implementation from the first mood board all the way into production.

Universal Linen Service of Louisville, KY, has earned the Hygienically Clean Healthcare certification, reflecting their commitment to best management practices (BMPs) in laundering as verified by on-site inspection and their capability to produce hygienically clean textiles as quantified by ongoing microbial testing. Universal Linen Service is an independently-owned and operated linen service provider that serves all markets.

The Hygienically Clean Healthcare certification confirms the organization’s continuing dedication to infection prevention, compliance with recognized industry standards and processing healthcare textiles using BMPs as described in its quality assurance documentation, a focal point for Hygienically Clean inspectors’ evaluation. The independent, third-party inspection must also confirm essential evidence that:

• Employees are properly trained and protected
• Managers understand regulatory requirements
• OSHA-compliant
• Physical plant operates effectively

To achieve certification initially, laundries pass three rounds of outcome-based microbial testing, indicating that their processes are producing Hygienically Clean Healthcare textiles and diminished presence of yeast, mold and harmful bacteria. They also must pass a facility inspection. To maintain their certification, they must pass quarterly testing to ensure that as laundry conditions change, such as water quality, textile fabric composition and wash chemistry, laundered product quality is consistently maintained. Re-inspection occurs every two to three years.

This process eliminates subjectivity by focusing on outcomes and results that verify textiles cleaned in these facilities meet appropriate hygienically clean standards and BMPs for hospitals, surgery centers, medical offices, nursing homes and other medical facilities.

Hygienically Clean Healthcare certification acknowledges laundries’ effectiveness in protecting healthcare operations by verifying quality control procedures in linen, uniform and facility services operations related to the handling of textiles containing blood and other potentially infectious materials.

Certified laundries use processes, chemicals and BMPs acknowledged by the federal Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services, Association for the Advancement of Medical Instrumentation, American National Standards Institute and others. Introduced in 2012, Hygienically Clean Healthcare brought to North America the international cleanliness standards for healthcare linens and garments used worldwide by the Certification Association for Professional Textile Services and the European Committee for Standardization.

Objective experts in epidemiology, infection control, nursing and other healthcare professions work with Hygienically Clean launderers to ensure the certification continues to enforce the highest standards for producing clean healthcare textiles.

“Congratulations to Universal Linen Service on their certification,” said Joseph Ricci, TRSA president and CEO. “This achievement proves their commitment to infection prevention and that their laundry takes every step possible to prevent human illness.”

Archroma, a global leader in color and specialty chemicals towards sustainable solutions, will be presenting its innovative denim solutions for manufacturers and brands at DenimsandJeans India 2018, on August 1 & 2, in Bangalore, India.

Just two months after the DenimsandJeans Vietnam show, Archroma will again showcase its unique combination of technologies for denim effects and colors, from fiber to finish, from the authentic roots of indigo to the most innovative and eco-advanced solutions.

At the India show, Archroma’s expert team will also present its coatings and washing solutions aiming at bringing denim creativity to a whole new dimension.
Visitors at the booth will be able to see an “illustration collection” of exciting indigo casts.

DENISOL®, BRINGING INDIGO BACK TO ITS ROOTS - NOW ANILINE-FREE*
Archroma’s Denisol® range is a newly developed pre-reduced liquid indigo solution that is manufactured in Archroma’s award winning ‘zero liquid discharge’ manufacturing plant in Pakistan. Denisol® Indigo 30 liq is compliant with major official eco-standards and requirements from retailers, brands and fashion leading companies and helps to produce fabrics suitable for current eco-labeling such as bluesign® and GOTS.

Responding to demands for a non-toxic alternative to the dyes that are used for the iconic and traditional indigo blue that consumers associate with denim and jeans, Archroma just announced the upcoming new Denisol® Pure Indigo 30.

ADVANCED DENIM, TOWARDS WATERLESS DENIM DYEING
Consider this: The water needed to produce one pair of jeans is said to be ~ 11'000 liters(1). With approximately 167 million pairs of jeans produced monthly(2), that is 1,837,000,000,000 liters of water consumed every month in the process!
Based on the Denim-Ox and Pad/Sizing-Ox dyeing processes, Archroma’s multi-awarded ADVANCED DENIM, dyeing technology allows savings of up to 92% in water, 87% in cotton waste and 30% in energy, compared to a conventional denim dyeing process.

The technology has been adopted by brands like Patagonia and received the prestigious 2012 ICIS Innovation Award and Innovation with Best Environmental Benefit Award.

• Optisul® C, “soft colors” made easy
  With Optisul® C dyes, denim manufacturers can produce soft denim colors in continuous dyeing processes, as well as on coating and printing. Optisul® C affinity-free, sulfide-free dyes can easily be combined with each other to create garments suitable for wash-down treatments in a wide array of easily achievable and reproducible soft colors.
  They are suitable for GOTS and bluesign® approval.
• Diresul® RDT Ocean Blues, ocean-themed bright sulfur blue dyes
  Archroma’s Diresul® RDT Ocean Blues are a collection of vibrant, ocean-themed bright sulfur blue dyes. These best-in-class dyes and their auxiliaries bring out the best of indigo, improve workability, dyeing consistency and process safety.
  They can be combined with Denisol® Indigo 30 liq in bottoming/topping manufacturing routes for avant-garde blue styles.
• Diresul® blacks & greys, a cosmos of greys and deep black and navies
  Archroma’s dye portfolio of conventional and black Diresul® specialties allow to create a universe of greys and deep black and navies. From superficial to solid blacks for both extreme wash-down and stay black effects.

EARTHCOLORS, TRACEABLE FROM NATURE TO FASHION
The EarthColors patented range of “biosynthetic” dyes for cotton and cellulose-based fabrics, which are made from waste left over by the agricultural and herbal industry after extraction, such as almond shells, saw palmetto, or rosemary leaves. The latest NFC technology used on the end-product hangtags enables transparency and traceability through the supply chain to consumers.
The EarthColors allow to produce the earth tones that are coming strong: red, brown and green colors. They have been adopted by brands such as Patagonia, Kathmandu and G-Star, and won an OutDoor Industry Award 2017.

COATING, A WHOLE UNIVERSE OF COLORS AND EFFECTS
Archroma’s dye and chemical specialties portfolio allows to create exciting colors and effects using coating applications, from exclusive sulfur dyes and pigment specialties that help highlighting the indigo look, to functional finishes that give performance to denim garments - using water-based, formaldehyde-free or ultra-low formaldehyde polymers.

SOLUTION PACKAGES FOR SUSTAINABILITY
Archroma recently introduced the ONE WAY Process Simulator, the last update of a calculation tool that supports its ONE WAY Sustainability Service introduced back in 2012. The new, online software can be used to mimic and compare products and processes, and thus calculate the ecological and economical profile of the final end-product.
Archroma’s portfolio of ZDHC MRSL-compliant chemicals and dyes is integrated into the ONE WAY calculation tool since 2013.
“It is time to make denim in a whole different way; denim that brings together innovation, sustainability and creativity,” says Anjani Prasad, Head of Sales India, Archroma. “Brands around the globe are exploring how to make fashion in a cleaner and safer way, and Archroma has the solutions to do just that, to create denim with a soul.”
Visit Archroma at DenimsandJeans India 2018 at t at Hotel Lalit, Bangalore, India, on August 1 & 2, 2018.
* Below limits of detection

(1) Arjen Y. Hoekstra, The Water Footprint of Modern Consumer Society
(2) American Chemical Society, www.sciencedaily.com/releases/2012/06/120619123753.htm.
Denisol®, Optisul®, Diresul® are trademarks of Archroma registered in many countries.
© 2018 Archroma

Emphasis on Process, Third-party Validation and Outcome-based Testing
HandCraft Linen Services’ Richmond, Virginia laundry has had their certification renewed for Hygienically Clean Healthcare, reflecting their commitment to best management practices (BMPs) in laundering as verified by on-site inspection and their capability to produce hygienically clean textiles as quantified by ongoing microbial testing.

The laundry was first certified in 2014. Recertification confirms the organization’s continuing dedication to infection prevention, compliance with recognized industry standards and processing healthcare textiles using BMPs as described in its quality assurance documentation, a focal point for Hygienically Clean inspectors’ evaluation. The independent, third-party inspection must also confirm essential evidence that:

•             Employees are properly trained and protected
•             Managers understand regulatory requirements
•             OSHA-compliant
•             Physical plant operates effectively

To achieve certification initially, laundries pass three rounds of outcome-based microbial testing, indicating that their processes are producing Hygienically Clean Healthcare textiles and diminished presence of yeast, mold and harmful bacteria. They also must pass a facility inspection. To maintain their certification, they must pass quarterly testing to ensure that as laundry conditions change, such as water quality, textile fabric composition and wash chemistry, laundered product quality is consistently maintained. Re-inspection occurs every two to three years.

This process eliminates subjectivity by focusing on outcomes and results that verify textiles cleaned in these facilities meet appropriate hygienically clean standards and BMPs for hospitals, surgery centers, medical offices, nursing homes and other medical facilities.

Hygienically Clean Healthcare certification acknowledges laundries’ effectiveness in protecting healthcare operations by verifying quality control procedures in linen, uniform and facility services operations related to the handling of textiles containing blood and other potentially infectious materials.

Certified laundries use processes, chemicals and BMPs acknowledged by the federal Centers for Disease Control and Prevention (CDC), Centers for Medicare and Medicaid Services, Association for the Advancement of Medical Instrumentation, American National Standards Institute and others. Introduced in 2012, Hygienically Clean Healthcare brought to North America the international cleanliness standards for healthcare linens and garments used worldwide by the Certification Association for Professional Textile Services and the European Committee for Standardization.

Objective experts in epidemiology, infection control, nursing and other healthcare professions work with Hygienically Clean launderers to ensure the certification continues to enforce the highest standards for producing clean healthcare textiles.