Slide 1: HUBER+SUHNER
HUBER:+SUHNER
Slide 2: Media and analysts conference 2020
Media and analysts conference 2020 10 March 2020 | Media and analysts conference 2
Slide 3: Agenda
Agenda Overview of business year 2019 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Milestones and outlook 2020 Urs Ryffel (CEO) Questions and discussion Buffet lunch 10 March 2020 | Media and analysts conference 3
Slide 4: HUBER+SUHNER improves profit despite lower net sales
HUBER+SUHNER improves profit despite lower net sales Order intake and net sales behind strong previous year • Large railway market could not sustain strong previous year growth due to weaker demand from Asia • Reduced activity with large-scale 4G mobile infrastructure roll-outs as expected • Radio F
Slide 5: Figures at a glance
Figures at a glance MCHF 2019 2018 Δ% Order intake 800.9 915.2 -12.5 Net sales 830.6 885.0 -6.1 Operating profit (EBIT) 80.5 82.5 -2.4 as % of net sales 9.7 9.3 Net income 62.8 61.4 +2.3 as % of net sales 7.6 6.9 10 March 2020 | Media and analysts conference 5
Slide 6: Net sales
Net sales CAGR of 4.2 % for the period 2015-2019 MCHF 900 885 831 774 737 706 600 300 2015 2016 2017 2018 2019 10 March 2020 | Media and analysts conference 6
Slide 7: EBIT: Profitability at upper end of medium-term target range of 8-10%
EBIT Profitability at upper end of medium-term target range of 8‒10 % MCHF 90 15% 82.5 80.5 80 69.7 70 60 58.1 10% 52.3 9.7% 50 9.5% 9.3% EBIT 40 7.5% EBIT margin 7.4% 30 5% 20 10 2016-2019: Swiss GAAP FER 2015: IFRS 0 0% 2015 2016 2017 2018 2019 10 March 2020 | Media and analysts conference 7
Slide 8: The three dimensions of our business
The three dimensions of our business View on sales by technology segment, market, region 10 March 2020 | Media and analysts conference 8
Slide 9: Radio Frequency technology segment
Radio Frequency technology segment Further growth – increased profitability – round-off acquisitions MCHF Key aspects 2019 2018 Δ% • Broadly based growth • Notably strong development in the Order intake 272.8 269.1 +1.4 Aerospace & Defense growth initiative – satellite components a Net sales 275.2 2
Slide 10: Fiber Optics technology segments
Fiber Optics technology segments Improved EBIT margin – lower volumes with 4G roll-outs – significant acquisition MCHF Key aspects 2019 2018 Δ% • Large-scale 4G project on the Indian subcontinent with much lower Order intake 274.6 347.9 -21.1 volumes • Optical switches business grows Net sales 285.6
Slide 11: Low Frequency technology segment
Low Frequency technology segment Net sales and EBIT margin behind strong previous year MCHF Key aspects 2019 2018 Δ% • Submarkets Railway and conventional automotive less Order intake 253.4 298.2 -15.0 dynamic • Further approvals with high-voltage Net sales 269.8 291.4 -7.4 cables and solutions for
Slide 12: Net sales by market
Net sales by market Double-digit growth in industrial, decline in communication and transportation MCHF 500 400 32% -20.8% 300 +23.1% 38% -7.7% 2019 200 100 30% 0 Communication Transportation Industrial Communication 2018 Transportation 2019 Industrial 10 March 2020 | Media and analysts conference 1
Slide 13: Net sales by region
Net sales by region Higher volumes in Europe partially offset lower business in Asia MCHF 500 +5.8% 400 30% 300 -23.7% 2019 50% 200 +0.1% 20% 100 0 EMEA (incl. CH) Americas Asia-Pacific EMEA (incl. Switzerland) 2018 Americas 2019 Asia-Pacific 10 March 2020 | Media and analysts conference 13
Slide 14: Agenda
Agenda Overview of business year 2019 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Milestones and outlook 2020 Urs Ryffel (CEO) Questions and discussion Buffet lunch 10 March 2020 | Media and analysts conference 14
Slide 15: Factors impacting order intake
Factors impacting order intake MCHF - 101.2 MCHF - 17.7 MCHF + 4.6 MCHF - 114.3 MCHF 1000 - 11.0% - 2.0% + 0.5% - 12.5% 800 600 915 400 801 200 0 Order intake 2018 Organic Currency & copper Portfolio Order intake 2019 10 March 2020 | Media and analysts conference 15
Slide 16: Factors impacting net sales
Factors impacting net sales MCHF 1000 - 40.3 MCHF - 18.2 MCHF + 4.1 MCHF - 54.4 MCHF - 4.6% - 2.0% + 0.5% - 6.1% 900 800 700 600 885 831 500 400 300 Net sales 2018 Organic Currency & copper Portfolio Net sales 2019 10 March 2020 | Media and analysts conference 16
Slide 17: Net sales development by technology segment
Net sales development by technology segment Radio Frequency with plus, Fiber Optics and Low Frequency lower MCHF 400 + 7.7% - 15.5% - 7.4% reported + 8.6% - 15.0% - 4.1% organic 300 200 100 0 Radio Frequency Fiber Optics Low Frequency 2018 2019 10 March 2020 | Media and analysts conference 17
Slide 18: Gross margin
Gross margin Improved business mix leads to higher gross margin MCHF Gross profit Gross margin 400 40% 38% 300 36.7% 36.2% 36% 200 34.6% 34.5% 34.6% 34% 100 32% 244 270 267 306 300 0 30% 2015 2016 2017 2018 2019 10 March 2020 | Media and analysts conference 18
Slide 19: Operating expenses
Operating expenses Lower administration costs and higher R&D expenses MCHF 300 Operating expenses in % of net sales 30% 27.6% 27.6% 28% 26.8% 200 26.2% 25.5% 26% 24% 100 22% 185 203 214 226 223 0 20% 2015 2016 2017 2018 2019 2016-2019: Swiss GAAP FER 2015: IFRS 10 March 2020 | Media and analysts con
Slide 20: EBIT by technology segment
EBIT by technology segment Increase EBIT margin in Radio Frequency and Fiber Optics, reduction in Low Frequency MCHF 2019 in % 2018 in % Radio Frequency 47.1 17.1 40.8 16.0 Fiber Optics 18.8 6.6 20.0 5.9 Low Frequency 21.6 8.0 28.7 9.8 Corporate (7.0) (7.0) Total EBIT 80.5 9.7 82.5 9.3 10 March 2020
Slide 21: Financial result
Financial result Less pronounced currency influences MCHF 3 Net currency effects Other financial result 2 (2.8) (1.7) 1 0 (1.4) -1 (2.8) (0.3) -2 -3 2018 2019 10 March 2020 | Media and analysts conference 21
Slide 22: Currency situation in 2020
Currency situation in 2020 Strong depreciation of H+S relevant currencies vs. CHF so far FX / CHF 31.12.19 vs. "FX early March 2020" 1) 0% Simulation: FX impacts on FY19 result -2.7% “FX early -5% reported March 2020” -4.7% -4.6% -5.3% MCHF calculated Net sales 831 778 (-6.4%) -10% -8.8% EBIT 81 6
Slide 23: Group tax rate
Group tax rate Significant reduction in effective tax rate MCHF 30% expected tax rate effective tax rate 25% 24.0% 23.0% 21.7% 20.4% 20% 15% 10% 5% 0% 2018 2019 10 March 2020 | Media and analysts conference 23
Slide 24: Factors impacting net income
Factors impacting net income Earnings per share (CHF) 3.15 3.22 (+2.1%) MCHF - 2.0 MCHF + 1.1 MCHF + 2.3 MCHF + 1.4 MCHF 70 - 3.2% + 1.8% + 3.7% + 2.3% 60 50 40 30 61.4 62.8* 20 10 0 Net income 2018 EBIT impact Financial result Income tax Net income 2019 (thereof currency & 10 March 2020 | Media a
Slide 25: Investments
Investments Higher volume MCHF 50 Investments in % of net sales 6% 4.9% 4.5% 5% 40 4.4% 4% 3.1% 30 3.3% 3% 20 2% 10 1% 24 32 38 27 38 0 0% 2015 2016 2017 2018 2019 10 March 2020 | Media and analysts conference 25
Slide 26: Impacts of the BKtel acquisition
Impacts of the BKtel acquisition MCHF Acquired net assets 13.5 Less M+A expenses (0.3) Goodwill 39.3 Purchase price 52.4 Net cash outflow 2019 43.1 10 March 2020 | Media and analysts conference 26
Slide 27: Overview Balance sheet
Overview Balance sheet Unchanged strong MCHF 31.12.19 31.12.18 30.06.2019 Cash and cash equivalent 192 199 -4% 167 Other current assets 314 332 -5% 373 Non-current assets 244 239 2% 237 Financial liabilities 1 - n/a - Liabilities 161 149 8% 172 Equity* 588 621 -5% 605 in % 78% 81% 78% Balance sheet
Slide 28: Overview cash flow
Overview cash flow Record high cash flow from operating activities MCHF 2015 2016 2017 2018 2019 Cash flow from operating activities 69.7 79.6 52.9 99.6 129.1 Cash flow from investing activities (21.8) (57.5) (33.0) (27.8) (84.0) Free operating cash flow 47.9 22.1 20.0 71.7 45.1 Dividend payment (27
Slide 29: Dividend development
Dividend development Increase of the ordinary dividend MCHF 79% Anniversary dividend 79% 60 80% Ordinary dividend 50 Payout ratio ordinary dividend in % 60% 51% 50% 40 46% 48% Payout ratio incl. anniversary dividend in % 19.5 30 40% 20 20% 10 19.5 24.3 21.4 29.2 31.1 0 0% 2015 2016 2017 2018 2019 Or
Slide 30: Financial assessment 2019
Financial assessment 2019 Decline in order intake (-12.5 %) and net sales (-6.1 %) Operating profitability (9.7 %) at the upper end of the medium-term target range Improved corporate tax rate (20.4 %) Higher net income (MCHF 63) despite lower sales Very high cash flow from operating activities (MCHF
Slide 31: Agenda
Agenda Overview of business year 2019 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Milestones and outlook 2020 Urs Ryffel (CEO) Questions and discussion Buffet lunch 10 March 2020 | Media and analysts conference 31
Slide 32: Milestones 2019
Milestones 2019 50 years HUBER+SUHNER Communication Connecting with you Acquisition of BKtel This was the motto under which the The acquisition strengthens the company was getting in touch with position in broadband customers, employees, shareholders communication and optical and other stakeholders
Slide 33: Trends in main markets
Trends in main markets Basic trends and prospects remain intact Communication: “Connectivity” • Densification of mobile networks for higher capacity, better coverage, and lower latency remains a focal area • Expansion of the 5G mobile communications infrastructure expected to gain momentum • Further
Slide 34: Coronavirus outbreak
Coronavirus outbreak China impact certain – unclear impact of geographical spreading HUBER+SUHNER in China • The business of HUBER+SUHNER in North Asia accounts for approximately 15 % of Group sales. • +/- 1000 employees, production plant in Changzhou (Jiangsu province); sales organisation across Ch
Slide 35: Outlook 2020
Outlook 2020 Net sales guidance for 2020 • Following the lower order intake during the second half of the reporting year, a rather restrained start to the current year is to be expected. • Measures against the spread of the coronavirus in the Chinese market will have negative effects directly on loc
Slide 36: Agenda
Agenda Overview of business year 2019 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Milestones and outlook 2020 Urs Ryffel (CEO) Questions and discussion Buffet lunch 10 March 2020 | Media and analysts conference 36
Slide 37: Agenda
Agenda Overview of business year 2019 Urs Ryffel (CEO) Financial results Ivo Wechsler (CFO) Milestones and outlook 2020 Urs Ryffel (CEO) Questions and discussion Buffet lunch 10 March 2020 | Media and analysts conference 37
Slide 38: Connecting – today and beyond
Connecting – today and beyond
Slide 39: Disclaimer
Disclaimer This document is for presentation purposes only. It contains certain forward-looking statements including, but not limited to, those using the words “believes”, “assumes”, “expects” or formulations of a similar kind. Such forward-looking statements are made on the basis of assumptions and