LEM Holding SA · SIX:LEHN
LEM Holding SA — Q3 2008/09 Earnings Presentation
33 slides from LEM Holding SA's earnings presentation, Feb 10, 2009
Slide 1: Q3 Results April to December 2008/09
Q3 Results April to December 2008/09
Slide 2: Agenda
Agenda 1. Business Review 2. Recession Management 3. Financial Review 4. Outlook 2 February 10, 2009
Slide 3: About LEM
1. About LEM • LEM is the global market leader in providing innovative and high quality solutions for measuring electrical parameters • The current and voltage transducers are used in a broad range of applications in industrial, traction, energy & automation and automotive markets • LEM is listed on
Slide 4: LEM Production & Logistics World-Wide
1. LEM Production & Logistics World-Wide Production Centers: Adaptation Centers: Geneva, Switzerland 290 employees Milwaukee, USA 20 employees Beijing, China 360 employees Tver, Russia 90 employees Tokyo, Japan 90 employees 4 February 10, 2009
Slide 5: Highlights YTD Q3 2008/09
1. Highlights YTD Q3 2008/09 • Sales increased by 5.1% to CHF 156 million – at constant exchange rates +9.0% • Operational EBIT reached CHF 25.4 million (CHF 27.0 million) • EBIT increased by 43.5% to CHF 30.4 million (SOP effect) • Net Earnings increased by 48.4% to CHF 21.6 million • LEM is impact
Slide 6: Net Sales
1. Net Sales CHF millions Sales Growth At constant exch.rate Total Sales 156.1 5.1% +9.0% Industrial 143.8 8.1% +12.0% Automotive 12.4 -20.5% -16.3% Sales in CHF millions Effect of currencies: EUR -2.0% USD -1.7% Others -0.2% 6 February 10, 2009
Slide 7: Industrial Segment: Regional Markets
1. Industrial Segment: Regional Markets Sales growth YTD Q3: • Europe 11.3% • N. America 1.6% • Asia 6.1% • ROW -5.3 % • Total growth 8.1% • Total sales CHF 143.8 million for YTD Q3 2008/09 7 February 10, 2009
Slide 8: Industrial Segment: Business Development
1. Industrial Segment: Business Development Market • The Industry market has grown by only Sales in CHF millions 3.3% due to lower demand in power supplies, medical, windmill and drive applications • The Traction market performed well and increased by 22.1% • The Energy & Automation market continued
Slide 9: Automotive Segment: Regional Markets
1. Automotive Segment: Regional Markets Sales growth YTD Q3: • Europe -11.8% • N. America -39.3% • Asia 21.9% • Total growth - 20.5% • Sales CHF 12.4 million for YTD Q3 2008/09, representing 7.9% of total sales 9 February 10, 2009
Slide 10: Automotive Segment: Business Development
1. Automotive Segment: Business Development Market: US car manufacturers with depressed production Market • Poor sales of our key customers, USA Sales in CHF millions first and now also Japan • Major new design-ins for several battery management and hybrid projects were gained Applications • Battery
Slide 11: China Development YTD Q3 2008/09
1. China Development YTD Q3 2008/09 Sales Production • Sales growth of 17.6% • Production volume increased by 85% • Continued transfer of key products • “Made by LEM” quality, site audited by several key customers Sales in CHF millions Sales in CHF millions 11 February 10, 2009
Slide 12: Recession Management
2. Recession Management At the heart of power electronics
Slide 13: Recession Management
2. Recession Management • Bookings started to decline in September 08 • LEM tends to be in the early part of the business cycle • Order book started to decline in October 08 • On November, 19, 2008 we announced a headcount reduction of 10% to adapt to the ww economic downturn • On Feb 10, 2009 we an
Slide 14: Recession Management: Costs
2. Recession Management Costs: • We continue to improve the cost base, mostly the external and indirect costs, to lower the break-even point. • SG&A to remain in the same % range to sales as before New business opportunities are developed aggressively: • New products for the mainstream Industry mark
Slide 15: Recession Management: multiple markets approach
2. Recession Management Our multiple markets approach is helping us to reduce the impact of the recession Traction Energy & Industry Automotive Automation Q3 to Q3 +5.0% +13.4% -10.2% -37.4% growth* * Comparing Q3 2008/09 to Q3 2007/08 15 February 10, 2009
Slide 16: Recession Management - Automotive
2. Recession Management - Automotive Automotive is impacted most by the recession, primarily in USA and Japan, where LEM has it’s major sales. We are concentrating our focus on 2 main areas: • Battery Management with near standard transducers for most cars – Up to now 1 major customer in NAFTA – 200
Slide 17: Financial Review
3. Financial Review At the heart of power electronics
Slide 18: Profit and Loss
3. Profit and Loss CHF millions YTD Q3 YTD Q3 Change 2007/08 2008/09 Sales 148.5 156.1 +5.1% Gross margin 67.4 69.9 Gross margin in % 45.4% 44.8% Operating costs (40.4) (44.5) Operational EBIT (pro forma) * 27.0 25.4 -5.7% SOP revaluation (5.8) 5.0 EBIT 21.2 30.4 +43.5% Net financial expense 0 (1.3)
Slide 19: Sales by Quarter
3. Sales by Quarter CHF Q1 Q2 Q3 YTD millions Q3 2007/08 49.9 48.6 50.0 148.5 CHF millions 2008/09 55.5 55.5 45.1 156.2 • Slowdown of growth in Q3 2008/09 19 February 10, 2009
Slide 20: Gross Margin Development
3. Gross Margin Development CHF millions YTD Q3 YTD Q3 in CHF millions 2007/08 2008/09 Gr.M. 67.4 69.9 Gr.M. % 45.4% 44.8% • Gross margin % below PY due to lower capacity utilization 20 February 10, 2009
Slide 21: Operating Expense
3. Operating Expense (before SOP revaluation) CHF millions YTD Q3 YTD Q3 2007/08 2008/09 in CHF millions Opex 40.4 44.5 Opex % sales 27.2% 28.5% Operating expenses increased due to: • Build up of sales structure: – India and Energy & Automation • Tax optimization project 21 February 10, 2009
Slide 22: Operational EBIT
3. Operational EBIT CHF Q1 Q2 Q3 YTD millions Q3 2007/08 9.6 8.4 9.0 27.0 in CHF millions 2008/09 12.0 9.4 4.1 25.4 • Significant drop in operational EBIT in Q3 as a result of lower sales, reduced capacity utilization and higher operating expenses 22 February 10, 2009
Slide 23: EBIT Development
3. EBIT Development CHF millions YTD Q3 YTD Q3 in CHF millions 2007/08 2008/09 EBIT 21.2 30.4 EBIT % sales 14.3% 19.5% • Effect of the reversal of SOP provisions 23 February 10, 2009
Slide 24: Financial Expense
3. Financial Expense TCHF YTD Q3 YTD Q3 2007/08 2008/09 Financial expense (708) (401) Financial income 217 199 Exchange effect 484 (1’120) Net financial expense (7) (1’322) • Unfavorable exchange effects from the translation of the balance sheet positions in foreign currency (EUR). 24 February 10, 2
Slide 25: Net Earnings
CHF millions 3. Net Earnings CHF millions YTD Q3 YTD Q3 2007/08 2008/09 Net earnings 14.5 21.6 Net earnings 9.8% 13.8% % sales • Improved Net earnings due to SOP revaluation 25 February 10, 2009
Slide 26: Consolidated Balance Sheet HY 2008/09
3. Consolidated Balance Sheet HY 2008/09 TCHF 31.09.2007 31.03.2008 31.09.2008 Cash and cash equivalents 13’227 25’787 19’172 Trade debtors 37’588 41’169 49’442 Other current assets 1’724 2’051 2’786 Inventories 26’269 22’411 32’847 Total non-current assets 23’402 24’541 26’960 Total assets 102’210
Slide 27: Summary
3. Summary • Sales increased by 5.1% to CHF 156 million – at constant exchange rates +9.0% • Operational EBIT reached CHF 25.4 million (CHF 27.0 million) • EBIT increased by 43.5% to CHF 30.4 million (SOP effect) • Net Earnings increased by 48.4% to CHF 21.6 million • High priority on working capita
Slide 28: Outlook
4. Outlook At the heart of power electronics
Slide 29: Market Factors and Strategy
4. Market Factors and Strategy The present recession challenges our growth strategy: – Weakness in important Industry market – Very weak market situation in Automotive – Weakness in energy savings and renewable energy We firmly believe in our Strategic Direction • Our fast and firm reaction will mak
Slide 30: Innovation: New Major Product Launches
4. Innovation: 2 New Major Product Launches New products are our investment for the future • DV is the first DC class 1 accurate voltage transducer for the Traction market – Applications: energy metering in trains • The CAS, CASR and CKSR families are a new generation of our mainstream products for
Slide 31: Outlook
4. Outlook • We are able to increase our outlook statement after Q2, of November • In terms of Sales and EBIT we will remain below last years results (2007/08: sales CHF 203 million, EBIT CHF 30.3 million) • We expect a positive EBIT for the fourth quarter 31 February 10, 2009
Slide 32: Share Price Development
4. Share Price Development P/E ratio was: 5.2 end Q3 08/09 19.0 end Q3 07/08 19.8 end Q3 06/07 32 February 10, 2009
Slide 33: Financial Calendar and Contact Details
4. Financial Calendar and Contact Details Financial calendar 4 June 2009 Full year 2008/09 results 26 June 2009 Annual Shareholder’s Meeting For further information Paul Van Iseghem Ageeth Walti President and CEO CFO Tel.: +41 22 706 14 09 Tel: +41 22 706 12 30 E-mail: pvi@lem.com Email: awa@lem.com