The unaudited condensed consolidated semi-annual financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting”. They are based on the financial statements of the individual Group companies drawn up according to uniform accounting policies as of June 30, 2019. The condensed consolidated semi-annual financial statements are not subject to the same requirements as the consolidated annual financial statements. It is recommended to read the condensed consolidated semi-annual financial statements in conjunction with the consolidated financial statements as of December 31, 2018. The condensed consolidated semi-annual financial statements are published exclusively in English. The financial information disclosed in this report may not add up precisely to the disclosed totals due to rounding. Ratios and variances are calculated using the exact underlying amount and not the disclosed rounded amount. Autoneum’s business activities are not subject to pronounced seasonal fluctuations. The condensed consolidated semi-annual financial statements 2019 were authorized for issue by the Board of Directors on July 24, 2019.

Except as described below, the accounting policies applied in these condensed consolidated semi-annual financial statements are the same as those applied in the consolidated financial statements as of December 31, 2018.

The Group has initially adopted IFRS 16 “Leases” by choosing the modified retrospective approach as of January 1, 2019. As permitted under the specific transitional provisions in the standard, no restatement of the comparatives for the 2018 reporting period was required. The reclassifications and the adjustments arising from the new leasing rules are therefore recognized in the opening balance sheet on January 1, 2019. The switch to IFRS 16 has no impact on equity as of January 1, 2019.

On adoption of IFRS 16, the Group recognized right-of-use assets and lease liabilities in relation to leases which had previously been classified as operating leases under the principles of IAS 17 “Leases”. The lease liabilities were initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if this rate could be readily determined. For all other lease liabilities, the present value was measured of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 4.1%.

For leases previously classified as finance leases the entity recognized the carrying amount of the leased asset and lease liability immediately before transition as the carrying amount of the right-of-use asset and the lease liability at the date of initial application. The measurement principles of IFRS 16 are only applied after that date.

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

The Group has elected not to recognize right-of-use assets and lease liabilities for some leases of low-value assets and short-term leases. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. For all classes of underlying assets, the Group has elected not to separate non-lease components from lease components and instead to account for each lease component and any associated non-lease component as a single lease component.

The adoption of IFRS 16 had the following impact on the consolidated balance sheet as of January 1, 2019:

In the reporting period, other expenses were decreased by CHF 19.9 million while the depreciation and interest expenses were increased by CHF 16.3 million and CHF 6.4 million respectively due to the application of IFRS 16. Furthermore, the consolidated statement of cash flows was impacted by a shift from cash flows used in operating activities to cash flows used in financing act­ivities in the amount of CHF 13.6 million.

As of January 1, 2019 the Group has initially adopted IFRIC 23 “Uncertainty over Income Tax Treatments” and elected to apply this interpretation retrospectively. The cumulative effect recognized at the date of initial application resulted in an adjustment of CHF 1.2 million to the opening balance of retained earnings and a reclassification from non-current provisions to current income tax liabilities of CHF 4.2 million.

There was no change in scope of consolidation in the first half-year 2019.

Segment information is based on Autoneum Group’s internal organization and management structure as well as on the internal financial reporting to the Group Executive Board and the Board of Directors. Chief operating decision-maker is the CEO.

Autoneum is the globally leading automobile supplier in acoustic and thermal management for vehicles. Autoneum develops and produces multifunctional and lightweight components and systems for noise and heat protection and thereby enhances vehicle comfort.

The reporting is based on the following four reportable segments (Business Groups/BG): BG Europe, BG North America, BG Asia and BG SAMEA (South America, Middle East and Africa). “Corporate and elimination” include Autoneum Holding Ltd and the corporate center with its respective legal entities, an operation that produces parts for Autoneum’s manufacturing lines, investments in associated companies and intersegment eliminations. Transactions between the Business Groups are made on the same basis as with independent third parties.

On May 7, 2019 the existing long-term credit agreement with a bank syndicate was increased from CHF 150.0 million to CHF 350.0 million with an unchanged final maturity date on December 31, 2022.

Neither significant changes in the fair value hierarchy nor in the fair value measurement assumptions of financial instruments occurred in the period under review. The Group did neither issue, repurchase nor repay Autoneum Bonds in the reporting period.

There were no events between June 30, 2019 and July 24, 2019 which would necessitate adjustments to the book value of the Group’s assets or liabilities, or which require additional disclosure in the condensed consolidated semi-annual financial statements.