Slide 1: Excellence in Connectivity Solutions
Excellence in Connectivity Solutions
Slide 2: Agenda
Agenda Overview of financial year 2017 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Growth initiatives and outlook 2018 Urs Ryffel (CEO) Questions and discussion Buffet lunch 13 March 2018 | Media and analysts conference
Slide 3: Overview of financial year 2017
Overview of financial year 2017 HUBER+SUHNER remains on a path of growth – diminished profitability in Fiber Optics Dynamic growth • All three technology segments recorded an increase in both order intake and net sales • Communications market with large-scale projects in price-sensitive markets • Tr
Slide 4: Figures at a glance
Overview of financial year 2017 Figures at a glance CHF million 2017 2016* Δ% Order intake 826.3 746.6 +10.7 Net sales 774.0 737.2 +5.0 Operating profit (EBIT) 58.1 69.7 -16.6 as % of net sales 7.5 9.5 Net income 42.1 53.2 -20.8 as % of net sales 5.4 7.2 * Swiss GAAP FER restated Excellence in Conne
Slide 5: Net sales development
Overview of financial year 2017 Net sales development Growth path confirmed CHF million 800 774 749 737 720 706 600 400 200 0 2013 2014 2015 2016 2017 Excellence in Connectivity Solutions 13 March 2018 | Media and analysts conference 5
Slide 6: EBIT development
Overview of financial year 2017 EBIT development Broad base limits volatility CHF million 70 21% 60 58.1 50 14% 40 30 9.5% 9.2% 7% 20 7.2% 7.5% 7.4% 10 EBIT 2016/2017: Swiss GAAP FER 0 0% EBIT margin 2013-2015: IFRS 2013 2014 2015 2016 2017 Excellence in Connectivity Solutions 13 March 2018 | Media
Slide 7: Technology segments
Overview of financial year 2017 The three dimensions of our business Results by technology segments, markets and regions APAC Americas EMEA Communi- Transpor- Industrial cation tation RF Technology segments Radio Frequency Fiber Optics FO Low Frequency LF Excellence in Connectivity Solutions Markets
Slide 8: Radio Frequency technology segment
Overview of financial year 2017 Radio Frequency technology segment Strong performance – acquisition for the targeted strengthening of expertise CHF million Key aspects • Order intake, net sales and EBIT 2017 2016* Δ% margin increased • Gains in market share with Order intake 239.9 226.4 +6.0 communi
Slide 9: Fiber Optics technology segment
Overview of financial year 2017 Fiber Optics technology segment Marginal growth at lower profitability CHF million Key aspects • Order intake and net sales above 2017 2016* Δ% previous year • EBIT margin in mid single-digit Order intake 329.2 322.3 +2.1 range • Margin pressure in the upgrading of Ne
Slide 10: Low Frequency technology segment
Overview of financial year 2017 Low Frequency technology segment Successful turnaround CHF million Key aspects • Significant increase in order intake, 2017 2016* Δ% surge in demand from the Asian railway market Order intake 257.2 198.0 +29.9 • Significantly improved EBIT margin • Portfolio streamlin
Slide 11: Net sales by market
Overview of financial year 2017 Net sales by market Communication market at previous year’s level, strong growth in transportation and industrial markets CHF million 400 +0.8% 300 24% +8.9% 200 +9.7% 48% 2017 100 28% 0 Communication Transportation Industrial Communication Transportation 2016 2017 In
Slide 12: Net sales by regions
Overview of financial year 2017 Net sales by regions Strong growth in APAC CHF million 400 +3.2% 300 +12.4% 36% 45% 200 2017 -3.4% 100 19% 0 EMEA (incl. CH) Americas Asia-Pacific EMEA (incl. Switzerland) Americas 2016 2017 Asia-Pacific Excellence in Connectivity Solutions 13 March 2018 | Media and a
Slide 13: Development of average number of employees
Overview of financial year 2017 Development of average number of employees Permanent employees 5000 4198 4000 3739 3789 3866 3584 3000 2221 1891 1954 1994 1700 2000 457 463 544 629 734 1000 1391 1372 1341 1243 1243 Low-cost countries 0 High-cost countries 2013 2014 2015 2016 2017 Switzerland Excelle
Slide 14: Agenda
Agenda Overview of financial year 2017 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Growth initiatives and outlook 2018 Urs Ryffel (CEO) Questions and discussion Buffet lunch 13 March 2018 | Media and analysts conference
Slide 15: Factors influencing order intake
Financial results Factors influencing order intake CHF million +8.2% +1.8% +0.7% +10.7% +61.0 +13.7 +5.0 +79.7 850 800 750 700 821 826 650 808 747 747 600 550 500 Order intake 2016 Organic Currency + Copper Portfolio Order intake 2017 Excellence in Connectivity Solutions 13 March 2018 | Media and an
Slide 16: Factors influencing net sales
Financial results Factors influencing net sales CHF million +2.2% +1.6% +1.2% +5.0% +16.4 +12.0 +8.5 Mio. +36.9 Mio. 800 750 700 650 765 774 753 737 737 600 550 500 Net sales 2016 Organic Currency + Copper Portfolio Net sales 2017 Excellence in Connectivity Solutions 13 March 2018 | Media and analys
Slide 17: Net sales development technology segments
Financial results Net sales development technology segments +5.2% +3.4% +7.0% reported +5.4% -0.3% +2.6% organic CHF million 350 316 306 300 250 231 220 227 212 200 150 100 50 2016 0 2017 Radio Frequency Fiber Optics Low Frequency Excellence in Connectivity Solutions 13 March 2018 | Media and analys
Slide 18: Development gross margin
Financial results Development gross margin Business mix influences gross margin CHF million 275 40% 35.8% 36.7% 34.3% 34.6% 34.5% 30% 250 20% 268 270 267 225 247 244 10% 200 0% 2013 2014 2015 2016 2017 gross margin in % of net sales Excellence in Connectivity Solutions 13 March 2018 | Media and anal
Slide 19: Development operating expenses
Financial results Development operating expenses Pre-investments result in higher operating expenses CHF million 300 30% 27.6% 27.6% 26.7% 26.7% 26.2% 214 200 203 200 192 185 20% 100 10% 0 0% 2013 2014 2015 2016* 2017 operating expenses in % of net sales * Swiss GAAP FER restated Excellence in Conne
Slide 20: Structure of operating expenses
Financial results Structure of operating expenses Rise in R & D investment in % of net sales 20 16.5 16.3 15.1 15.1 15.5 15 10 7.8 7.9 6.6 7.0 6.9 4.2 4.1 4.4 5 3.8 3.8 0 2013 2014 2015 2016* 2017 Selling Administration Research & Development * Swiss GAAP FER restated Excellence in Connectivity Solu
Slide 21: Factors influencing EBIT
Financial results Factors influencing EBIT CHF million -22.4% +3.4% +2.3% -16.6% -15.6 +2.4 +1.6 -11.6 80 70 60 50 40 70 30 58 54 54 57 20 10 0 EBIT 2016* Organic incl. Portfolio Currency & Copper One-off effects EBIT 2017 * Swiss GAAP FER restated Excellence in Connectivity Solutions 13 March 2018
Slide 22: EBIT technology segments
Financial results EBIT technology segments 2017 in % 2016* in % CHF million Radio Frequency 31.5 13.6 29.5 13.4 Fiber Optics 17.7 5.6 40.9 13.4 Low Frequency 11.6 5.1 3.5 1.6 Corporate (2.7) - (4.1) - Total EBIT 58.1 7.5 69.7 9.5 * Swiss GAAP FER restated Excellence in Connectivity Solutions 13 Marc
Slide 23: Financial result
Financial results Financial result Lower financial result due to currency effects CHF million 3.0 (0.7) 4 0.2 2 2.8 0.1 0 -0.8 -2 -4 2016* 2017 net currency other financial result * Swiss GAAP FER restated Excellence in Connectivity Solutions 13 March 2018 | Media and analysts conference 23
Slide 24: Group tax rate
Financial results Group tax rate Despite US tax reform stable effective tax rate 30% 27.4% 26.8% 26.6% 25% 23.5% 20% 15% 10% 5% 0% 2016* 2017 expected tax rate effective tax rate * Swiss GAAP FER restated Excellence in Connectivity Solutions 13 March 2018 | Media and analysts conference 24
Slide 25: Factors influencing net income
Financial results Factors influencing net income Earnings per share (CHF) CHF million 2.73 ► 2.17 (-21%) -21.8% -6.8% +7.9% -20.8% -11.6 -3.6 +4.2 -11.0 60 50 40 30 53 20 42 42 38 38 10 0 Net income 2016* Impact on EBIT Net financial result Income tax Net income 2017 * Swiss GAAP FER restated Excell
Slide 26: Investments
Financial results Investments Volume above the long-term average CHF million 45 5.7% 6% 40 4.9% 5% 35 4.4% 30 3.6% 4% 3.3% 25 3% 20 15 2% 10 1% 5 26 42 24 32 38 0 0% 2013 2014 2015 2016 2017 Investments in % of net sales Excellence in Connectivity Solutions 13 March 2018 | Media and analysts confere
Slide 27: Balance sheet
Financial results Balance sheet Unchanged strong CHF million 31.12.2017 31.12.2016* 30.06.2017 Liquid assets 153 158 -3% 140 Other current 347 300 16% 343 Non-current assets 252 246 3% 245 Other liabilities 159 130 22% 164 Shareholders’ equity 593 573 4% 565 in % 79% 82% 78% Balance sheet total 752
Slide 28: Free cash flow
Financial results Free cash flow High order backlog ties funds from business activities CHF million 2013 2014 2015 2016* 2017 Net cash from operating activities 115.9 78.0 69.7 79.6 52.9 Net cash from investing activities** (20.0) (89.9) (21.8) (57.5) (33.0) Free operating cash flow 95.9 (11.9) 47.9
Slide 29: Dividend development
Financial results Dividend development Earnings-orientated distribution policy CHF million payout ratio in % 30 100% 25 79% 75% 20 51% 15 46% 46% 50% 48% 10 25% 5 15.6 27.2 19.5 24.3 21.4 0 0% 2013 2014 2015 2016* 2017 per share 0.80 1.40 1.00 1.25 1.10** ** proposed dividend * Swiss GAAP FER restat
Slide 30: Financial assessment 2017
Financial results Financial assessment 2017 Double-digit growth in order intake Broad-based growth in sales Significantly reduced profitability in the FO technology segment Successful turnaround in the LF technology segment Successful change of accounting standard to Swiss GAAP FER Excelle
Slide 31: Agenda
Agenda Overview of financial year 2017 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Growth initiatives and outlook 2018 Urs Ryffel (CEO) Questions and discussion Buffet lunch 13 March 2018 | Media and analysts conference
Slide 32: Our growth drivers
Growth initiatives and outlook 2018 Our growth drivers Appetite for bandwidth Broadband communication Growing demand for mobility Electric mobility Constant change of technology High-tech niches Excellence in Connectivity Solutions 13 March 2018 | Media and analysts conference 32
Slide 33: Focused strategy derived from megatrends and growth drivers
Growth initiatives and outlook 2018 Focused strategy derived from megatrends and growth drivers Growth Opportunities with Cornerstones initiatives growth potential Bandwidth Frequency Radio Digitalization CEM1 and Test & Aerospace & Sustainability Measurement Defense Big Data Communication Fiber Opt
Slide 34: Growth initiative: Aerospace & Defense
Growth initiatives and outlook 2018 Growth initiative: Aerospace & Defense Market trends HUBER+SUHNER differentiation HUBER+SUHNER solutions Defense spending 2016 (US$ bn) USA China Russia S. Arab. India France UK 0 200 400 600 800 Source: SIPRI • High, increasing defense budgets • Highest reliabili
Slide 35: Growth initiative: Small Cells
Growth initiatives and outlook 2018 Growth initative: Small Cells Market trends HUBER+SUHNER differentiation HUBER+SUHNER solutions Non-residential Small Cell shipments (in million) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Mobile Experts • Network
Slide 36: Growth initiative: Data Center
Growth initiatives and outlook 2018 Growth initiative: Data Center Market trends HUBER+SUHNER differentiation HUBER+SUHNER solutions Data created (in Zettabytes) 150 100 50 0 Source: IDC Data Age Study 2025 (2017) • Doubling of data traffic / 3 years • Packing density + ease of installation • Fiber
Slide 37: Growth initiative: Electric Vehicles (EV)
Growth initiatives and outlook 2018 Growth initiative: Electric Vehicles (EV) Market trends HUBER+SUHNER differentiation HUBER+SUHNER solutions Sales of electric vehicles (in million) Durchdringung 20 bis 2040 35- 47% der neuen Europe USA Fahrzeuge 10 China Japan RoW 0 Source: based on Bloomberg New
Slide 38: Outlook 2018 technology segments
Growth initiatives and outlook 2018 Outlook 2018 technology segments Radio Frequency • Goal 2018: repeat previous year’s strong performance • Strategic thrust: defend good margin and remain on growth path through RF solutions for aerospace and defense technology Fiber Optics • Goal 2018: reverse neg
Slide 39: Outlook 2018 markets
Growth initiatives and outlook 2018 Outlook 2018 markets Solid starting position in key markets and with key customers – growth drivers remain intact Communication • LTE rollouts in price-sensitive emerging economies last – 5G mobile network large-scale starting 2020 • Continuous increase in global
Slide 40: Outlook 2018
Growth initiatives and outlook 2018 Outlook 2018 Net sales guidance for 2018 • From today's perspective, due to the currently good order situation and provided that exchange rates remain comparable to 2017, we expect to remain on a growth path. Medium-term target range over the business cycle and EB
Slide 41: Agenda
Agenda Overview of financial year 2017 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Growth initiatives and outlook 2018 Urs Ryffel (CEO) Questions and discussion Buffet lunch 13 March 2018 | Media and analysts conference
Slide 42: Agenda
Agenda Overview of financial year 2017 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Growth initiatives and outlook 2018 Urs Ryffel (CEO) Questions and discussion Buffet lunch 13 March 2018 | Media and analysts conference
Slide 43: Excellence in Connectivity Solutions
Excellence in Connectivity Solutions