Kendrion N.V. · EURONEXT:KENDR

Kendrion — Shareholder Meeting (April 2022)

51 slides from Kendrion's shareholder meeting presentation, Apr 11, 2022

  1. Slide 1: General Meeting of Shareholders Kendrion N.V. 11 April 2022

    GENERAL MEETING OF SHAREHOLDERS KENDRION N.V. 11 APRIL 2022

  2. Slide 2: Agenda item 1: Opening and notifications

    GENERAL MEETING OF SHAREHOLDERS Agenda item 1  Opening and notifications

  3. Slide 3: Agenda item 2.a: Report by the Executive Board on 2021

    GENERAL MEETING OF SHAREHOLDERS Agenda item 2.a  Report by the Executive Board on financial year 2021 (for discussion)

  4. Slide 4: Joep van Beurden, CEO; Jeroen Hemmen, CFO

    JOEP VAN BEURDEN, CEO JEROEN HEMMEN, CFO

  5. Slide 5: Agenda

    AGENDA 1. Overview 2. Ukraine, COVID-19 3. Business review 4. Strategic and operational update 5. Q&A 5

  6. Slide 6: 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

  7. Slide 7: Facts and Figures (2021)

    Facts and Figures (2021) Employees over 2,700 Revenue € 463,6 million Industrial Share of 50% revenue Automotive 50% Source: Kendrion Annual Integrated Report 2021 7

  8. Slide 8: Our organization's structure

    OUR ORGANIZATION‘S STRUCTURE INDUSTRIAL AUTOMOTIVE INDUSTRIAL BRAKES INDUSTRIAL ACTUATORS AND Innovative solutions for passenger CONTROLS cars and commercial vehicles focused on advanced valve Full-line provider of Customized solutions for industrial technology, smart actuation and electromagnetic b

  9. Slide 9: Our organization's structure

    OUR ORGANIZATION’S STRUCTURE Executive Board Group HR Group IT General Counsel President Kendrion BG Manager BG Manager COO Automotive CCO Automotive FD Automotive Asia/Strategic Industrial Actuators Industrial Brakes Purchasing and Controls 9

  10. Slide 10: 2. COVID-19, Ukraine

    KENDRION PRECISION. SAFETY. MOTION.

  11. Slide 11: Ukraine

    UKRAINE  Kendrion has limited direct exposure to the Ukraine conflict: no production facilities in the Ukraine and/or Russia, almost no revenue exposure  Adequate screening procedures in place to monitor compliance with EU-sanctions  As a globally active company, we are affected by the indirect e

  12. Slide 12: COVID-19 priorities

    COVID-19 PRIORITIES  Keep our employees and their families healthy and safe: COVID-19 prevention measures continue to be in place  Safeguard the Group’s continuity 12

  13. Slide 13: 1. Business review

    KENDRION PRECISION. SAFETY. MOTION.

  14. Slide 14: Key figures

    KEY FIGURES Normalized (in EUR million) Q4 2021 Q4 2020 delta Revenue 115,8 103,1 12%  Organic revenue growth of 9% in Q4 EBITDA 11,5 11,4 1%  Industrial reported strongest quarter of the year, representing 54% of EBITA 5,8 4,9 19% Group revenue in Q4 Net profit before amortization 4,1 2,9 41%  A

  15. Slide 15: Cash flow and financial position

    CASH FLOW AND FINANCIAL POSITION Free cash flow Financial position  Normalized free cash flow of EUR 3.5 million,  Leverage ratio reduced to 2.3 (Q3 2021: 2.4) affected by high investments, buffer stocks and growth in activity level  Net debt reduced from EUR 10.6 million to EUR 130.6 million in

  16. Slide 16: Industrial

    INDUSTRIAL  Industrial Brakes recorded 21% revenue increase driven by recovery of demand and ongoing trend towards electrification and automation of industrial processes  Industrial Actuators and Controls organic revenue up 16%  3T added EUR 3.4 million revenue and good profitability (19% EBITDA

  17. Slide 17: Automotive

    AUTOMOTIVE  Revenue indirectly affected by semi-conductor shortages in the Automotive industry  Organic revenue growth of 13% in 2021, compared to 2% growth in global car production  EBITDA margin reduction in HY2 driven by higher fixed operating expenses caused by abolishment of temporary pandem

  18. Slide 18: Dividend and cash return

    DIVIDEND AND CASH RETURN 2016 2017 2018 2019 2020 2021 Actual Actual Actual Actual actual proposed  Kendrion strives to distribute annual dividend between Dividend per share 0,78 0,87 0,87 - 0,40 0,69 35% and 50% of normalized net profit before Pay-out 53% 50% 52% 50% 50% amortization, giving consi

  19. Slide 19: Financing update

    FINANCING UPDATE Kendrion envisages a refinancing of its existing EUR 162.5 million syndicated loan facility with: 1. Kendrion has succesfully raised EUR 72.5 million in an inaugural transaction in the Schuldschein market with settlement on 13 April 2022  Maturities of 3 years (EUR 20 million) and

  20. Slide 20: Initial EcoVadis rating puts Kendrion in the top 22%

    INITIAL ECOVADIS RATING PUTS KENDRION IN THE TOP 22% OF RATED COMPANIES Ecovadis is used by procurement teams throughout the supply chain to monitor CSR/ESG practices. • Kendrion has acquired an ESG Rating to independently assess the company’s standing on Environmental, Social and Governance aspects

  21. Slide 21: 2. Strategic and operational update

    2. Strategic and operational update

  22. Slide 22: Kendrion strategic house

    KENDRION STRATEGIC HOUSE STRATEGIC INTENT AUTO BRAKES IAC SOUND ROBOTICS ENERGY SENSOR CL LOGISTICS CONTROLS SUSPENSION WIND POWER SAFETY CHINA CHINA CHINA KENDRION GLOBAL ORGANIZATION 22

  23. Slide 23: Kendrion is transforming

    KENDRION IS TRANSFORMING Timing Investment EUR million Q1 2020 Acquisition of INTORQ 77.7 Q3 2021 Acquisition of 3T 23.3 Q4 2021 Started construction of 28,000 m2 manufacturing facility in Suzhou, China 20.0 (estimate) TOTAL 121.0 2019 2019 2021 100% = EUR 412.0 100% = EUR 412.0 million million 100%

  24. Slide 24: Achievements IAC

    ACHIEVEMENTS IAC FY 2021 Actuators Controls  Rotary solenoids production ramp-up for US and EU  Development of 20 kW inductive heating system logistics market started  First samples for standard rotary lock for industrial  Record year for controls for inductive heating washing machines delivered

  25. Slide 25: 3T: integration on track

    3T: INTEGRATION ON TRACK 3T  Organization embedded in IAC  Significant enhancement of IAC’s control technology portfolio  Substantial cross selling opportunities, including 3T insourcing from IAC  First Automotive S&E engineers have been recruited in Enschede  Development office at High Tech Ca

  26. Slide 26: Achievements IB FY 2021

    ACHIEVEMENTS IB FY 2021 Key messages  Substantial volume growth  Smooth transition of UK service business to Villingen  Despite a difficult supply chain, key customers delivered in time Products  Continued success with newly introduced brake portfolio focused on robotics and logistic market segm

  27. Slide 27: Video AGV

    KENDRION PRECISION. SAFETY. MOTION. VIDEO AGV

  28. Slide 28: Global passenger car production

    GLOBAL PASSENGER CAR PRODUCTION Million units 120 99 100 100 94 96 89 91 1 % CAGR 83 80 75 76 60 40 26 22 17 44% CAGR 20 13 10 6 1 2 3 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 Global car production EV production Source: IHS Markit January 2022 28

  29. Slide 29: Entering a new automotive era

    ENTERING A NEW AUTOMOTIVE ERA ACES adoption accelerates further Major OEMs accelerate ACES shift  Mercedes Benz shows Vision EQXX at CES: a concept car with range of 1,000 km (The Verge)  Ford to spend up to $200 million reorganizing for shift to electric cars (Bloomberg)  GM aiming at mass produ

  30. Slide 30: Automotive nominations

    AUTOMOTIVE NOMINATIONS EUR 1.25bn business wins since 2018: average book-to-bill of 1.3* 400 340 350 350 320 305 300 250 202 115 EUR * million 200 265 257 150 100 190 148 50 75 63 0 2018 2019 2020 2021 ACES Legacy Automotive revenue * Adjusted for net effect of cancellations and extensions of legacy

  31. Slide 31: Commercial traction China

    COMMERCIAL TRACTION CHINA New business development  Nominations continue to be higher than size of the business  Significant opportunity driven by China government’s 14th 5-year plan, emphasizing energy transition 31

  32. Slide 32: Planned new factory in SIP, Suzhou

    PLANNED NEW FACTORY IN SIP, SUZHOU CHINA Phase I Automatic Warehouse Phase I 4-floor Phase I  30 years land-use-right acquired at Suzhou Warehouse Production Building Industrial Park Phase I: 27,248 m² Phase I Phase II: 16,105 m² Office Building  Automatic warehouse designed will enhance overall e

  33. Slide 33: Video new factory in China

    PRECISION. SAFETY. MOTION. <q Zz = (Ss) z > a fe) E {S) 4 Le = iu z fe) Ww Q > KENDRION

  34. Slide 34: Sustainable product contributions

    SUSTAINABLE PRODUCT CONTRIBUTIONS 34

  35. Slide 35: Progressing on sustainability

    PROGRESSING ON SUSTAINABILITY Target framework 2019-2023 35

  36. Slide 36: Long-term targets

    LONG-TERM TARGETS Revenue EBITDA margin Average organic growth at least 5% At least15% in 2025 per year * ROIC Dividend At least 25% in 2025 Between 35% - 50% of normalized net profit * Invested capital excluding goodwill and intangibles arising from acquisitions 36

  37. Slide 37: Thank you

    THANK YOU 37

  38. Slide 38: Agenda item 2.b: Report by the Supervisory Board

    GENERAL MEETING OF SHAREHOLDERS Agenda item 2.b  Report by the Supervisory Board on financial year 2021 (for discussion) 38

  39. Slide 39: Agenda item 3.a: Adoption of 2021 financial statements

    GENERAL MEETING OF SHAREHOLDERS Agenda item 3.a  Adoption of the 2021 financial statements (for resolution) 39

  40. Slide 40: Summary independent auditors report - Deloitte

    Summary independent auditors report -- Deloitte CSR REPORT  Presented on pages 200-202 in the annual REPORT ON THE AUDIT OF THE report FINANCIAL STATEMENTS 2021  Integrated report with limited assurance report on defined KPI’s  Auditor’s report presented on pages 187-199 in the annual report  Si

  41. Slide 41: Agenda item 3.b: Dividend over 2021

    GENERAL MEETING OF SHAREHOLDERS Agenda item 3.b  Dividend over financial year 2021 (for resolution) 41

  42. Slide 42: Agenda item 4.a: Discharge of Executive Board

    GENERAL MEETING OF SHAREHOLDERS Agenda item 4.a  Discharge of the members of the Executive Board (for resolution) 42

  43. Slide 43: Agenda item 4.b: Discharge of Supervisory Board

    GENERAL MEETING OF SHAREHOLDERS Agenda item 4.b  Discharge of the members of the Supervisory Board (for resolution) 43

  44. Slide 44: Agenda item 5: Remuneration report 2021

    GENERAL MEETING OF SHAREHOLDERS Agenda item 5  Remuneration report 2021 (for advice) 44

  45. Slide 45: Agenda item 6: Supervisory Board remuneration policy

    GENERAL MEETING OF SHAREHOLDERS Agenda item 6  Revisions to remuneration policy for Supervisory Board (for resolution) 45

  46. Slide 46: Revisions to remuneration policy for Supervisory Board

    GENERAL MEETING OF SHAREHOLDERS Revisions to remuneration policy for Supervisory Board (for resolution) Annual base fee Current Proposed Delta Chairman Supervisory Board EUR 45,000 EUR 59,000 31% Member Supervisory Board EUR 35,000 EUR 41,800 19% Annual committee fee Current Proposed Delta Chair Aud

  47. Slide 47: Agenda item 7.a and 7.b: Share issuance authorisation

    GENERAL MEETING OF SHAREHOLDERS Agenda item 7.a and 7.b  7.a Authorisation to issue shares (for resolution)  7.b Authorisation to restrict or exclude pre-emptive rights (for resolution) 47

  48. Slide 48: Agenda item 8: Authorisation to repurchase shares

    GENERAL MEETING OF SHAREHOLDERS Agenda item 8  Authorisation to repurchase Kendrion N.V. shares (for resolution) 48

  49. Slide 49: Agenda item 9: Any other business

    GENERAL MEETING OF SHAREHOLDERS Agenda item 9  Any other business 49

  50. Slide 50: Agenda item 10: Closing

    GENERAL MEETING OF SHAREHOLDERS Agenda item 10  Closing 50

  51. Slide 51: Precision. Safety. Motion.

    Se PRECISION. SAFETY. MOTION.

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