LEM Holding SA · SIX:LEHN
LEM Holding SA — Q3 2013/14 Earnings Presentation
33 slides from LEM Holding SA's earnings presentation, Feb 18, 2014
Slide 1: Results 3rd Quarter of 2013/14
Results 3rd Quarter of 2013/14 1 October 2013 to 31 December 2013 18 February 2014
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook 2
Slide 3: Global Market Leader in Current and Voltage Transducers
Global Market Leader in Current and Voltage Transducers Market Position Performance Perspectives Global market share Continued sales Reinforced invest- of 50% in Industry growth and margin ment in innovation Benchmark in service improvements Solid growth perspec- and product quality 47.5
Slide 4: LEM Applications: Elevator
1. LEM Applications: Elevator 2 The controller moves the motor in the right 2 direction and lets it stop exactly at the right position to the floor ground, independent of 3 the weight in the elevator car. The current B transducers take care that the motor is A powered with the correct current. A LTS
Slide 5: LEM Applications: Start-Stop System for Cars
1. LEM Applications: Start-Stop System for Cars The current sensors (HAB, CAB) allow the battery management system to decide if enough energy is available in the battery to A CAB C HC5 D HAH3 operate the accessories (such as air- conditioning, headlights, and radio) while the engine is off, and stil
Slide 6: LEM Applications: Container Gantry Crane
1. LEM Applications: Container Gantry Crane A crane can be moved on rails over the ground surface normally driven by four motors. The trolley runs along rails that are located on top A LF 1005 or sides of the boom and girder. The movement is done with two motors located on the trolley. A 4 Once the
Slide 7: LEM Applications: Locomotive
1. LEM Applications: Locomotive Inverters are used to transform the energy into the right voltage and current to drive the motors. Voltage and current transducers are used to measure the current and the voltage on the secondary side of the transformer and A LTC 100 B DVL 1 on the DC-side. Special di
Slide 8: Diverse Target Markets – Diversified Businesses
1. Diverse Target Markets – Diversified Businesses Share of sales Businesses 9M 2013/14 Cyclicality Macro drivers Green Cars Consumer durables Technology adoption 14% Conventional Cars Fuel savings High precision Late cycle Infrastructure investments Traction Renewable energies Mid cycle Energy pric
Slide 9: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook 9
Slide 10: Highlights Q3 2013/14
2. Highlights Q3 2013/14 In CHF million, % 9M 2013/14 9M 2013/14 vs. Q3 vs. Q2 2013/14 9M 2012/13* Orders 183.0 +6.5% -1.0% Sales 184.5 +3.0% -11.5% EBIT 42.1 +22.7% -29.8% Net profit 33.1 +16.0% -41.8% ■ Seasonal sales decrease in Q3 vs. Q2 with stable orders ■ 9M performance improved vs. 2012/13 ■
Slide 11: Net Sales
2. Net Sales In CHF millions In CHF millions, % 300 9M 9M vs. 9M Q3 vs. 275 Sales as at constant Q2 250 reported currencies Industry 158.3 +3.9% +6.0% -13.8% 225 Automotive 26.2 -2.4% +0.7% +3.3% 200 Total sales 184.5 +3.0% +5.2% -11.5% 175 ■ Sales decrease in Q3 in Industry segment 150 due to fewer
Slide 12: Quarterly View
2. Quarterly View In CHF millions Book-to-bill ratio 80 1.2 Stable book-to-bill ratio 70 67.7 Lead times requested 61.8 65.1 1.0 by customers remain 60 57.9 55.7 63.1 61.1 55.0 57.6 short 55.8 55.0 0.8 50 40 0.6 30 0.4 20 0.2 10 0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11/12 11/12 11/12 11/12 12/1
Slide 13: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets In CHF million, % 9M Growth Growth Europe Sales 9M vs. 9M Q3 vs. Q2 North America Asia and ROW Europe 69.1 -2.6% -11.3% N. America 20.2 -8.3% -13.7% Asia and 69.1 +16.2% -16.2% ROW 44% 44% Total 158.3 +3.9% -13.8% China expands its #1 position in Industry Se
Slide 14: Industry Segment: Business Development
2. Industry Segment: Business Development In CHF millions Op. EBIT in % of sales Businesses and Applications 25 280 Drives & welding (growth Q3 vs. Q2: -15%) Weak demand worldwide 240 20 Stable market share 200 Renewable energies & power supplies (-12%) 15 Seasonal weakness Pick up of activi
Slide 15: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets In CHF million, % 9M Growth Growth Europe Sales 9M vs. 9M Q3 vs. Q2 North America Asia and Rest of World Europe 2.3 +13.9% +7.7% 9% N. America 13.8 +1.3% -2.5% Asia and 10.1 -9.7% +10.3% ROW 38% Total 26.2 -2.4% +3.3% Recovery of green cars applications, mai
Slide 16: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales Businesses and Applications 40 20 Conventional cars (growth Q3 vs. Q2: +2%) 35 Performance reflects global car markets: flat 30 15 in Europe, robust performance in Asia and the US 25 10 Green cars (HEV, EV) (+10%) 2
Slide 17: Business Development China
2. Business Development China Sales Production ■ Market share of over 50% ■ LEM China expands its #1 position as largest manufacturing site of the Group ■ Biggest market with 24% of total (57% of total production, compared to sales 51% in financial year 2012/13) ■ “Made by LEM” quality In CHF millio
Slide 18: New Production Site in Sofia (Bulgaria)
2. New Production Site in Sofia (Bulgaria) Achievements Investment of CHF 2 million into new site Production started 1 October 2013 Delivery approvals from customers received First products delivered to customers Objectives of the new site Diversify LEM’s low cost production Increase
Slide 19: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook 19
Slide 20: Financial Highlights
3. Financial Highlights Seasonal decrease in sales in Q3 of 2013/14 Maintained strong cost discipline Gross margin at record levels and EBIT margin remains above target range (15 to 20%) Slightly higher tax rate due to higher portion of profits in China, but still at low levels 20
Slide 21: Income Statement
3. Income Statement In CHF millions 9M 9M Q2 Q3 Change Change 2012/13* 2013/14 2013/14 2013/14 Sales 179.2 184.5 +3.0% 65.1 57.6 -11.5% Gross margin 43.3% 46.5% +3.2pt 47.5% 46.5% -1.0pt Operating -43.3 -43.6 +0.8% -13.9 -14.9 +6.8% expense EBIT 34.3 42.1 +22.7% 17.0 11.9 -29.8% Financial expense -0
Slide 22: Results by Quarter
3. Results by Quarter In CHF millions In % of sales 80 30% Q3 of 2013/14 includes ramp-up cost for Sofia 70 67.7 63.1 65.1 25% site 61.1 61.8 60 57.9 55.0 55.8 55.0 55.8 57.6 Third consecutive 20% quarter with EBIT 50 margin above target 40 15% range Q4 of 2012/13 includes 30 10% a restructuri
Slide 23: Gross Margin
3. Gross Margin In CHF millions In % of sales 140 47% 9M 9M Q2 Q3 2012/13* 2013/14 2013/14 2013/14 46% 120 Gross margin 77.6 85.8 30.9 26.8 in CHF million 45% 100 Gross margin 43.3% 46.5% 47.5% 46.5% 44% in % of sales 80 43% 42% Positive impacts on gross margin 60 Continued operating savings in
Slide 24: Operating Expense
3. Operating Expense In CHF millions In % of sales 70 30% 9M 9M Q2 Q3 2012/13* 2013/14 2013/14 2013/14 60 25% Operating expense 43.3 43.6 13.9 14.9 in CHF million 50 20% Operating expense 24.2% 23.6% 21.4% 25.8% 40 in % of sales 15% 30 Ongoing strict cost control measures Operating expense as a
Slide 25: R&D Expense
3. R&D Expense In CHF millions In % of sales 9M 9M Q2 Q3 2012/13* 2013/14 2013/14 2013/14 15 10% R&D expense 10.8 10.9 3.4 3.6 in CHF million 12 8% R&D expense 6.0% 5.9% 5.3% 6.2% in % of sales 9 6% Maintained high investment in R&D for 6 4% both segments Ongoing renewal of product range with fo
Slide 26: EBIT
3. EBIT In CHF millions In % of sales 9M 9M Q2 Q3 60 26% 2012/13* 2013/14 2013/14 2013/14 24% 50 EBIT 34.3 42.1 17.0 11.9 22% in CHF million 20% 40 EBIT 19.2% 22.8% 26.1% 20.7% in % of sales 18% 30 16% Continued cost control and high gross 14% margins 20 12% In Q3 EBIT margin impacted by lower v
Slide 27: Financial Expense
3. Financial Expense In CHF millions 9M 9M Q2 Q3 2012/13* 2013/14 2013/14 2013/14 Exchange effect** -0.2 -1.6 0.7 -0.9 Other financial expense & income -0.0 -0.0 -0.0 -0.0 Total -0.2 -1.6 0.6 -0.9 9M 2013/14 exchange effect mainly driven by appreciation of CHF vs. USD and JPY Foreign exchange he
Slide 28: Income Taxes
3. Income Taxes 9M 9M 2012/13* 2013/14 Expected income tax rate 12.6% 16.1% Expected withholding tax rate 2.7% 1.9% Expected tax rate 15.3% 18.0% Other differences 0.9% 0.1% Effective tax rate 16.2% 18.1% Slightly higher tax rate due to higher portion of profits in China Tax rate still at low le
Slide 29: Net Profit
3. Net Profit 9M 9M Q2 Q3 In CHF millions In % of sales 2012/13* 2013/14 2013/14 2013/14 45 20% Net profit 28.6 33.1 14.8 8.6 in CHF million 40 18% Net profit 15.9% 18.0% 22.7% 14.9% in % of sales 35 16% 9M 2012/13 30 -0.2 14% -5.5 34.3 25 28.6 12% 20 EBIT Financial expense Income tax Net profit 10%
Slide 30: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook 30
Slide 31: Market Factors and Strategy
4. Market Factors and Strategy ■ We firmly believe in our strategic direction and the 4 drivers for our business remain unchanged ■ We will continue to capitalize on the drivers of LEM’s markets through pure play components company diversification across geographies and businesses 31
Slide 32: Outlook
4. Outlook ■ Expectations for Q4 of 2013/14 ■ Stable performance in the automotive segment ■ Seasonal recovery in the industry segment ■ Financial year 2013/14 outlook ■ Sales of CHF 240 to 250 million ■ EBIT around CHF 54 million 32
Slide 33: Financial Calendar and Contact Details
Financial Calendar and Contact Details Financial calendar 4 June 2014 Year-end results and media and analyst conference 26 June 2014 Ordinary shareholders’ meeting for the year 2013/14 1 July 2014 Dividend ex-date 4 July 2014 Dividend payment date For further information Julius Renk, CFO Tel: +41 22