Slide 1: Q2 and Half Year Results 2023
Q2 AND HALF YEAR RESULTS 2023 Amsterdam, 23 August 2023
Slide 2: Agenda
AGENDA 1. Business review 2. Strategic and operational update 3. Outlook 4. Q&A 2
Slide 3: Cautionary Note Regarding Forward Looking Statements
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS Certain statements contained in this presentation constitute forward-looking statements. These statements may include, without limitation, statements concerning future results of operations, the Company's share of new and existing markets, general
Slide 4: 1. Business review
KENDRION 1. Business review PRECISION. SAFETY. MOTION.
Slide 5: Key Figures Q2 and HY1 2023
KEY FIGURES Q2 and HY1 2023 Q2 2023 Q2 2022 delta Q2 revenue increased 9% at constant rates of exchange Revenue 136.9 126.9 8% Normalized EBITDA ¹ 14.0 13.7 2% Sales price increases contributed with 6% to Q2 revenue Normalized EBITA ¹ 8.2 7.9 4% Inflationary margin dilution and sales mix effec
Slide 6: Industrial Activities
INDUSTRIAL ACTIVITIES IAC IB Industrial Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 6% revenue growth in Q2 at constant rates of exchange Revenue 33.2 30.2 36.0 36.0 69.2 66.1 Price increases contributed 4% to Q2 revenue Continued strong momentum in IAC driven by medical, Revenue growth 10% 17% 0% 15%
Slide 7: Automotive Activities
AUTOMOTIVE ACTIVITIES Core¹ ² E¹ ² Automotive Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 12% organic revenue increase in Q2 driven by increased Revenue 49.2 46.6 18.5 14.2 67.7 60.8 global car production Price increases contributed with 6% to Q2 revenues Revenue growth 6% 30% 11% -3% Currency translati
Slide 8: Cash Flow and Net Debt
CASH FLOW AND NET DEBT EUR 5.4 million normalized net cash from operating activities in the first six months (HY1 2022: EUR 8.9 million) EUR 2.5 million cash payments in HY1 relate to settlement of long standing tax audit dispute and restructuring payments Investments of EUR 15.4 million in HY
Slide 9: 2. Strategic and operational update
2. Strategic and operational update 9
Slide 10: Global Purchasing Managers' Index
GLOBAL PURCHASING MANAGERS‘ INDEX 10
Slide 11: Current Economic Climate
CURRENT ECONOMIC CLIMATE Eurozone economy is slow Expected to grow by 0.5% in 2023, with the risk of a recession still present Business activity in Germany fell to its lowest level this year, with a score of 48.3 (above 50 represents growth) in the S&P Global flash composite purchasing manager
Slide 12: Kendrion Strategic House
KENDRION STRATEGIC HOUSE More focus on clean energy STRATEGIC INTENT AUTO BRAKES IAC ‘E’ ‘Core’ Growth Cash engine Growth Cash cow ROBOTS CONTROLS 'ACES' WINDPOWER ENERGY LOGISTICS TRANSPORT CHINA CHINA Growth CHINA KENDRION GLOBAL ORGANIZATION 12
Slide 13: Industrial Brakes
INDUSTRIAL BRAKES HY1 revenue has increased by 3% as the market slowed during HY1 Demand from key customers is weak – IB market position is intact Several cost cutting measures have been implemented to protect profitability and cash generation Sustained success with current and new clients,
Slide 14: Industrial Actuators and Controls
INDUSTRIAL ACTUATORS AND CONTROLS HY1 revenues in line with expectations, with volumes slightly up, despite weakness in textile machinery Markets trending up: aircraft products, electrical distribution, beverage dispensing valves, laser shutters, inductive heating systems Stable gross margins;
Slide 15: IAC Opportunities
IAC OPPORTUNITIES Motorized lock Focus on industrial washing machines, refrigerators, household appliances Significant high volume opportunity Revenue ramping up now Inductive heating First type of machine (5kW solution), demand is increasing Currently developing a 20kW solution for bakery
Slide 16: Global Engine Production: Electric cars growth continues
GLOBAL ENGINE PRODUCTION Electric cars growth continues Total overall automotive market is still growing: CAGR 2023-2028: +2,3% Growth is mainly in BEV and PHEV BEV: +25,2% PHEV: +10,5 ICE: -11,3% In 2028, there will be more BEV than ICE vehicles 16
Slide 17: Global Active Suspension Production
GLOBAL ACTIVE SUSPENSION PRODUCTION Market development Semi active damper market: Million systems 30 CAGR 2022-2028: +13% 25 20 Air suspension market: CAGR 2022-2028: +15% 15 10 5 0 2022 2023 2024 2025 2026 2027 2028 Cars with Semi Active Dampers Cars with Airsuspension Source: IHS market 04 202
Slide 18: Automotive E
AUTOMOTIVE E Pro-forma ‘E’ revenue growth of 17% to EUR 34.4 million Significant interest in the market for our Active Suspension, Sound and Smart Actuation New nomination received for our Air Suspension Valve platform in China Preparations for 7 new production introductions (SOP) in China a
Slide 19: China, the Largest EV Market
CHINA, THE LARGEST EV MARKET China is the #1 large global market China is the #1 fast growing region 3 2022 2022 major EV EV penetration rate EV global BEV+PHEV SALES AND % GROWTH FOR EVs Total Growth Rate Market market regions per sales market share 2022 vs 2021 (‘000s) 2022 2021 China 27% 59% 6,18
Slide 20: Local Brands Dominate the China Market
LOCAL BRANDS DOMINATE THE CHINA MARKET Top 20 BEV+PHEV Models−sales volume of 2022 Wuling Hongguang MINI 554,067 BYD Song Plus 458,047 • 82% of sales Telsa Model Y BYD Qin Plus 349,074 455,091 volume of top 20 BYD Han 274,016 models comes Telsa Model 3 255,774 BYD Dolphin 205,417 from China brands B
Slide 21: Grand Opening on 24 May
KENDRION PRECISION. SAFETY. MOTION.
Slide 22: Operational Status Factory S.I.P.
OPERATIONAL STATUS FACTORY S.I.P. IAC IB Automotive Production transfer 100% 100% 100% R&D Localization 95% 70% 60% IE IE IE Testing Testing Testing Design Design Application support 2222
Slide 23: China-Based Automotive E Projects
CHINA-BASED AUTOMOTIVE E PROJECTS Business potential in 2024 EUR million ASV iCDV eCDV AVAS eCDV ASV eCDV SOP schedule Q3 2023 Q4 2023 Q1 2024 23
Slide 24: 3. Outlook
KENDRION PRECISION. SAFETY. MOTION. -» = 3. Outlook
Slide 25: Outlook
OUTLOOK We are experiencing a reduction in economic activity especially in Germany and in China We are taking short term cost-reduction measures to protect our profitability and cashflow Implementing short-time work in one of our German-based facilities Reducing discretionary expenses and in
Slide 26: Long-Term Targets
LONG-TERM TARGETS Revenue EBITDA margin Average organic growth at least 5% per At least15% in 2025 year * ROIC Dividend At least 25% in 2025 Between 35% - 50% of normalized net profit * Invested capital excluding goodwill and intangibles arising from acquisitions 26
Slide 27: 4. Questions & Answers
KENDRION PRECISION. SAFETY. MOTION.
Slide 28: Kendrion
KENDRION