Slide 1: Full Year 2014 Analyst and Investor Presentation
Full Year 2014 Analyst and Investor Presentation DKSH Holding Ltd. February 26, 2015 © DKSH
Slide 2: 2014 the most challenging year since 2002
2014 the most challenging year since 2002 Thailand Real GDP Growth (%)1 • Economic implications in Thailand were more profound and enduring than previously expected: 6.5 Lower demand for higher-margin luxury and 4.6 4.4 lifestyle products and FMCG items 2.9 Reduced industrial investments Less
Slide 3: Track record 2014
Track record 2014 Highlights 2014 Net sales growth of 7.1% at constant exchange rates in unfavorable market environment Acceleration of net sales growth in the second half-year of 2014 to 7.6% EBIT at constant exchange rates above last year‘s level Consistently high Free Cash Flow resulting in a CHF
Slide 4: Strategy for growth
Strategy for growth Net sales growth driven by organic growth and solid business model • Organic growth Expanding business with existing clients and customers Multiplying success stories from country to country Gaining new business partners • Bolt-on acquisitions Glory, Macao (Healthcare)
Slide 5: Industry with promising growth potential
Industry with promising growth potential Market Expansion Services (MES) • Still considerable growth potential in DKSH’s addressable markets: 7.4% p.a until 2019¹ • Growth drivers: Rise of the middle class in emerging markets Stronger inner-Asian trade Trend towards outsourcing MES growth prem
Slide 6: Rapidly growing middle class in Asia
Rapidly growing middle class in Asia Growing middle class in Asia Pacific1 • By 2030 middle class is expected to grow sixfold1 APAC middle class • Growing middle class driving demand for in % of the global local and international products middle class 54% 66% 28% • DKSH is well positioned to benefit
Slide 7: Strong inner-Asian trade
Strong inner-Asian trade Origin of DKSH’s key clients • Asia is today already the second largest trading area after Europe, having overtaken America¹ • Inner-Asian trade is expected to rapidly grow Americas Asia as trade barriers between Asian nations 30% 30% decline (e.g. AEC) and local consumer ma
Slide 8: Trend towards outsourcing
Trend towards outsourcing • Asia as a target region for companies seeking to grow their business • Strong focus on core competencies – R&D, global marketing and manufacturing – leads to increasing demand for outsourcing services related to market entry and expansion • Because of increased uncertaint
Slide 9: FY 2014: Growth in a challenging market environment
FY 2014: Growth in a challenging market environment At constant In CHF millions In CHF In CHF exchange rates¹ 2014 in % 2014 in % 2013 Net sales 10,240.7 7.1% 9,818.2 2.7% 9,559.0 Operating profit (EBIT)² 284.1 0.7% 272.7 -3.4% 282.2 Operating profit incl. gain from sale of property 284.1 -8.3%
Slide 10: Expected impact of the Swiss franc appreciation
Expected impact of the Swiss franc appreciation THB / CHF Comments • DKSH generates 96% of its business in Current exchange rate Asia – limited exposure to Swiss franc and Euro. Asian currencies depreciated • Short term no substantial impact on local operations expected • Low single digit impact on
Slide 11: Solid organic growth
Solid organic growth Net sales by region and breakdown Comments Thailand 34.1% • Deeply rooted in one of the world's fastest Rest of World growing markets: 96.2% of net sales generated 3.8% in Asia Pacific Rest of Asia Pacific Greater China • Net sales growth of 7.1% at constant exchange 12.0% 29.6%
Slide 12: New Free Cash Flow definition
New Free Cash Flow definition New and previous definition of Free Cash Flow Comments • As announced with the H1 2014 results, DKSH changed the Free Cash Flow New definition Free Cash Flow definition with full-year 2014 results FCF = Cash Flow from Operations - Capex • Advantages of the new definitio
Slide 13: Free Cash Flow
Free Cash Flow Free Cash Flow Comments (Cash Flow from Operations – Capex) • Free Cash Flow achieved CHF 188.4 million 250 and thereby almost reached the high level of last year 200 • Balance sheet further strengthened Low counterparty risk is a competitive advantage for client negotiations and (i
Slide 14: Business Unit Consumer Goods
Business Unit Consumer Goods Financials Comments At constant • Achieving net sales growth1 of 3.7% at (in CHF millions) In CHF In CHF exchange rates¹ constant exchange rates: 2014 in % 2014 in % 2013 Growth derived from all major markets Net sales 4,326.8 3.7% 4,143.2 (0.7%) 4,171.2 Net sale
Slide 15: Business Unit Healthcare
Business Unit Healthcare Financials Comments At constant • Excellent net sales growth of 11.1%1 (in CHF millions) In CHF In CHF exchange rates¹ 2014 in % 2014 in % 2013 • Outstanding EBIT increase of 23.1%1 • Strong organic growth Net sales 4,728.5 11.1% 4,544.0 6.8% 4,254.7 Increased volumes
Slide 16: Business Unit Performance Materials
Business Unit Performance Materials Financials Comments At constant • Solid net sales growth of 6.6% and EBIT (in CHF millions) In CHF In CHF exchange rates¹ growth of 2.8% at constant exchange rates1 2014 in % 2014 in % 2013 • Price adjustments in Japan successfully Net sales 821.3 6.6% 781.9 1
Slide 17: Business Unit Technology
Business Unit Technology Financials Comments At constant • Business Unit Technology with net sales (in CHF millions) In CHF In CHF exchange rates¹ growth of 0.1% at constant exchange 2014 in % 2014 in % 2013 rates in full-year 20141 Net sales 364.4 0.1% 349.5 (4.0%) 363.9 • Lower government-fund
Slide 18: Continued dynamic growth expected
Continued dynamic growth expected • Improvement of economic situation in Thailand expected for 2015 • Enhanced support for Japanese companies aiming to expand into South East Asia • Acquisition of healthcare distributor Glory in Macao allows us to serve both Hong Kong and Macao out of one hand • Acq
Slide 19: Progressive dividend policy
Progressive dividend policy 1.40 1.20 CAGR +26.9% 1.00 (in CHF) 0.80 0.60 1.15 0.95 0.40 0.80 0.65 0.50 0.20 0.35 0.00 2009 2010 2011 2012 2013 2014 Continuation of progressive dividend policy Note: Ordinary dividend per common share. Chart assumes share split of 1:100 effective as of Annual General
Slide 20: Attractive business model with three major growth drivers
Attractive business model with three major growth drivers 1 Growing middle class in Asia Long-term trends support our business model 2 Increasing inner-Asian trade Organic growth coupled with selected bolt-on acquisitions 3 Trend towards outsourcing Double-digit EBIT growth expected in 2015¹ 1 Assum
Slide 21: Confirmation of targets for 2016
Confirmation of targets for 2016¹ Double-digit profitable growth until 2016 at constant exchange rates Net sales EBIT Profit after tax 400 300 14'000 350 12'000 380 250 270 300 (CHF million) (CHF million) (CHF million) 12,000 10'000 200 250 282 214 8'000 9,559 200 150 6'000 150 100 4'000 100 50 2'00
Slide 22: DKSH celebrates 150th anniversary in 2015
DKSH celebrates 150th anniversary in 2015 Page 22 © DKSH
Slide 23: Save the date
Save the date DKSH ‒ Capital Markets Day 2015 • November 27, 2015 • Zurich, Switzerland • More details to follow Page 23 © DKSH
Slide 24: Thank you for your attention.
Thank you for your attention. © DKSH
Slide 25: Disclaimer
Disclaimer Due care has been used in preparation of this presentation and DKSH makes every effort to provide accurate and up-to-date information. Nevertheless, this presentation may be subject to technical inaccuracies, information that is not up-to-date or typographical errors DKSH does not assume