LEM Holding SA · SIX:LEHN
LEM Holding SA — H1 2015/16 Earnings Presentation
38 slides from LEM Holding SA's earnings presentation, Nov 11, 2015
Slide 1: Results First half year 2015/16
Results First half year 2015/16 1 April 2015 to 30 September 2015 11 November 2015
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook HO xx-P 2
Slide 3: Global Market Leader in Current and Voltage Transducers
1. Global Market Leader in Current and Voltage Transducers Market Position Performance Perspectives LEHN SMI Source: Swissquote Global market share Continued sales Reinforced invest- of 50% in Industry growth and strong ment in innovation Benchmark in service margins Solid growth perspec-
Slide 4: LEM Applications: Air Conditioner
1. LEM Applications: Air Conditioner In central air conditioning (1) (and increasingly residential system (2)), the air is cooled by blowing it over an evaporator filled with a refrigerant. Then the refrigerant is pumped B HO xxx-S into a condenser where it releases the heat. A B 1 pump or compresso
Slide 5: LEM Applications: Super Charger Station for Electric Vehicles
1. LEM Applications: Super Charger Station for Electric Vehicles A super charger (1) operates using several 400V DC chargers in parallel. 1MW would be required from the grid (5) if 10 cars were charged simultaneously. Charging stations therefore often include a photovoltaic plant A HO 250-P with sol
Slide 6: LEM Applications: Electric Plug-in Car
1. LEM Applications: Electric Plug-in Car Sensors (DHAB) measure the units of energy available to be consumed. This information helps to calculate the remaining distance that can be driven based on the current battery charge. Other sensors (HAH1) are used to manage the converter and/or inverter. The
Slide 7: LEM Applications: Sewing Machine/Embroidery Machine
1. LEM Applications: Sewing Machine/Embroidery Machine 4 Full servo control allows for speed and precision 7 in industrial sewing/embroidery machines. Accuracy and speed of the table movements, as 3 well as the correct, accurate and regulated rotation speed of the main axis for the needles 5 are dir
Slide 8: Diverse Target Markets – Diversified Businesses
1. Diverse Target Markets – Diversified Businesses Share of sales Businesses H1 of 2015/16 Cyclicality Macro drivers Green Cars Consumer durables Technology adoption 16% Conventional Cars Fuel savings High precision Late cycle Infrastructure investments Traction Renewable energies Mid cycle Energy p
Slide 9: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook DAHBV2 9
Slide 10: Business regains momentum in Q2 of 2015/16
2. Business regains momentum in Q2 of 2015/16 In CHF millions, % H1 2015/16 H1 2015/16 vs. Q2 2015/16 vs. H1 2014/15 Q1 2015/16 Orders 126.9 +0.2% +8.5% Sales 131.6 +0.1% +13.8% EBIT 24.9 -16.0% +36.7% Net profit 19.8 -7.8% +23.2% ■ Strong Swiss franc weighs on sales and margins ■ Continued progress
Slide 11: Innovation Road Map
2. Innovation Road Map New product: LF 2010 Proprietary ASIC for closed loop Hall Effect technology High performance, matching fluxgate performance High immunity against surrounding perturbations Industry For drives, renewable energies and traction applications ■ Introduced at least 15 deriv
Slide 12: Net Sales
2. Net Sales In CHF millions In CHF millions, % 300 Sales H1 vs. H1 Q2 vs. as at constant Q1 275 reported currencies 250 Industry 110.3 -2.9% +1.5% +11.7% 225 Automotive 21.3 +18.5% +15.3% +25.6% 200 Total sales 131.6 +0.1% +3.4% +13.8% 175 150 ■ Pick-up of sales in Q2 after slow Q1 125 2015/16 and
Slide 13: Quarterly View
2. Quarterly View In CHF millions Book-to-bill ratio 80 1.2 Sales increased faster 70.0 than bookings in Q2 65.0 70 65.1 66.5 64.7 1.0 Currency impact on 61.8 61.1 60 57.6 61.5 61.5 sales and bookings 0.8 Market uncertainties 50 translated into shorter 40 0.6 term bookings Book-to-bill ratio
Slide 14: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets In CHF millions, % Sales Growth Growth H1 vs. H1 Q2 vs. Q1 Europe North America Europe 44.3 -8.8% +26.4% Asia and RoW N. America 12.6 +6.1% +9.0% Asia and 53.4 +0.6% +1.4% RoW 40% Total 110.3 -2.9% +11.7% 48% Strong growth in China Recovery in Europe and US
Slide 15: Industry Segment: Business Development
2. Industry Segment: Business Development In CHF millions Op. EBIT in % of sales Businesses and Applications 240 25 Drives & welding (growth H1 vs. H1: -9%) Lower industrial investments 200 Won projects with new products 20 Maintained market share 160 Renewable energies & power supplies (+8%)
Slide 16: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets In CHF millions, % Sales Growth Growth H1 vs. H1 Q2 vs. Q1 Europe North America Europe 1.5 +26.6% -11.8% 7% Asia and Row N. America 9.9 +9.4% +15.7% Asia and 9.8 +28.2% +44.5% RoW Total 21.3 +18.5% +25.6% 46% Focus on Asian and North American markets Benef
Slide 17: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales 40 20 Businesses and Applications 18 Conventional cars (H1 vs. H1: +14%) 35 Development in line with the market; stable 16 market share 30 Support from growing US vehicle production 14 25 12 Green cars (HEV, EV) (
Slide 18: Business Development Beijing (China)
2. Business Development Beijing (China) Sales Production ■ Market share of over 50% ■ LEM China increased its #1 position as largest manufacturing site of the Group ■ Most important country with 32% of (63% of total production, compared to total sales 58% in financial year 2014/15) ■ “Made by LEM” q
Slide 19: Business Development in Sofia (Bulgaria)
2. Business Development in Sofia (Bulgaria) Objectives of the site Diversify LEM’s cost-competitive production Increase production capacity close to European customers Increase natural hedge of operations Absorb major part of LEM’s future growth Achievements 11 Production lines relocat
Slide 20: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook LA 130/150-P 20
Slide 21: Financial Highlights
3. Financial Highlights Robust profitability despite impact of strong Swiss franc Gross margin 45.5% (46.3% in H1 of 2014/15) EBIT margin 18.9% (22.5% in H1 of 2014/15) Net profit CHF 19.8 million (CHF 21.5 million in H1 of 2014/15) Improved key figures in Q2 vs. Q1 One-time operating ex
Slide 22: Income Statement
3. Income Statement In CHF millions H1 H1 Q1 Q2 Change Change 2014/15 2015/16 2015/16 2015/16 Sales 131.5 131.6 +0.1% 61.5 70.0 +13.8% Gross margin 46.3% 45.5% -0.8pt 45.0% 46.0% +1.0pt Operating expense -31.3 -35.0 +11.8% -17.2 -17.8 +3.9% EBIT 29.6 24.9 -16.0% 10.5 14.4 +36.7% Net financial exp. -
Slide 23: Results by Quarter
3. Results by Quarter In CHF millions In % of sales Q2 of 2015/16 margin 80 30% improvement due to 65.1 70.0 70 61.8 65.0 66.5 volume leverage and 61.1 64.7 25% 57.6 61.5 61.5 easing currency 60 pressure 50 20% CHF 3.6 million foreign exchange impact on 40 15% EBIT margin in H1 of 30 2015/16 10%
Slide 24: Gross Margin
3. Gross Margin In CHF millions In % of sales 140 48% H1 H1 Q1 Q2 2014/15 2015/16 2015/16 2015/16 47% 120 Gross margin 60.9 59.9 27.7 32.2 in CHF millions 46% 100 45% Gross margin 46.3% 45.5% 45.0% 46.0% in % of sales 44% 80 43% Decrease of gross margin due to adverse 60 foreign exchange impact 42
Slide 25: SG&A
3. SG&A In CHF millions In % of sales H1 H1 Q1 Q2 60 25% 2014/15 2015/16 2015/16 2015/16 SG&A 23.9 27.8 13.5 14.3 in CHF millions 50 20% SG&A 18.2% 21.1% 21.9% 20.5% in % of sales 40 15% Higher sales and administration expense 30 due to 10% Organizational changes 20 Introduction of new ERP 5%
Slide 26: R&D Expense
3. R&D Expense In CHF millions In % of sales H1 H1 Q1 Q2 16 8% 2014/15 2015/16 2015/16 2015/16 14 R&D expense 7.4 7.2 3.7 3.5 in CHF millions 12 6% R&D expense 5.6% 5.5% 6.0% 5.0% 10 in % of sales 8 4% Maintained high investment in R&D for both segments 6 Ongoing renewal of product range with 4
Slide 27: EBIT
3. EBIT In CHF millions In % of sales H1 H1 Q1 Q2 60 26% 2014/15 2015/16 2015/16 2015/16 24% EBIT 29.6 24.9 10.5 14.4 50 in CHF millions 22% 20% EBIT 22.5% 18.9% 17.1% 20.5% 40 in % of sales 18% 30 16% Adverse foreign exchange impact; easing 14% in Q2 of 2015/16 20 One-time operating expenses 12
Slide 28: Financial Expense
3. Financial Expense In CHF millions H1 H1 Q1 Q2 2014/15 2015/16 2015/16 2015/16 Exchange effect* -1.9 +0.5 +0.5 +0.1 Other financial expense & +0.1 -0.1 +0.0 -0.1 income Total -1.8 +0.5 +0.5 -0.0 Exchange effect in Q2 positive (revaluation of EUR and devaluation of CNY) Foreign exchange hedging
Slide 29: Income Taxes
3. Income Taxes H1 H1 2014/15 2015/16 Expected income tax rate 19.7% 19.2% Expected withholding tax rate 2.6% 2.1% Expected tax rate 22.3% 21.2% Other differences 0.3% 0.6% Effective tax rate 22.6% 21.8% Tax rates showing positive impact of transfer to Bulgaria Reduction of withholding taxes on
Slide 30: Net Profit
3. Net Profit H1 H1 Q1 Q2 In CHF millions In % of sales 2014/15 2015/16 2015/16 2015/16 50 20% Net profit 21.5 19.8 8.9 10.9 in CHF millions 45 18% Net profit in % of sales 16.3% 15.1% 14.4% 15.6% 40 16% 35 H1 2014/15 -1.8 14% 30 -6.3 29.6 21.5 25 12% EBIT Financial expense Income tax Net profit 20
Slide 31: Balance Sheet Analysis
3. Balance Sheet Analysis In CHF millions 31.3.2015 30.9.2015 Net working capital 37.9 58.4 Fixed assets 39.9 39.5 Noncurrent liabilities -6.8 -8.4 Net operating assets 71.0 89.5 Net cash / (debt) 20.9 -26.8 Equity 91.9 62.6 Equity ratio 65.1% 40.0% Days of sales outstanding 66 84 Days of inventory
Slide 32: Cash Flow Statement
3. Cash Flow Statement In CHF millions H1 H1 2014/15 2015/16 Profit before taxes 27.8 25.3 Adjustment for noncash items and taxes paid 4.0 -4.8 Cash flow from changes in net working capital -6.6 -20.0 Cash flow from operating activities 25.2 0.6 Cash flow from investing activities -3.6 -2.0 Free cas
Slide 33: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook HLSR 33
Slide 34: Market Factors and Strategy
4. Market Factors and Strategy ■ We firmly believe in our strategic direction and the 4 drivers for our business remain unchanged ■ We will continue to capitalize on the drivers of LEM’s markets through pure play components company diversification across geographies and businesses 34
Slide 35: Executing Strategy
4. Executing Strategy Strategic priorities Achievements in H1 2015/16 Increase technology leadership ■ Reinforce multidisciplinary innovation ■ Launched 1 new product and a team series of custom built derivatives ■ Increase number of product launches ■ Started development team in Sofia ■ Constantly
Slide 36: Outlook
4. Outlook ■ For H2 of 2015/16 we expect ■ No major change in the global economic environment ■ Normal seasonal decline because of holiday seasons and lower solar infrastructure investments during winter months ■ Financial year 2015/16 outlook ■ Volume growth (in number of transducers) in both segme
Slide 37: At the heart of power electronics
O&A At the heart of power electronics
Slide 38: Financial Calendar and Contact Details
Financial Calendar and Contact Details Financial calendar 16 February 2016 Third quarter 2015/16 results 9 June 2016 Year-end 2015/16 results 30 June 2016 Ordinary General Meeting of the Shareholders for the year 2015/16 5 July 2016 Dividend ex-date 7 July 2016 Dividend payment date For further info