LEM Holding SA · SIX:LEHN
LEM Holding SA — Q3 2011/12 Earnings Presentation
31 slides from LEM Holding SA's earnings presentation, Feb 14, 2012
Slide 1: 3rd Quarter Results 2011/12
3rd Quarter Results 2011/12 14 February 2012 1 14 February 2012
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Business Review 3. Financial Review 4. Outlook 2 14 February 2012
Slide 3: 1. 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 industrial and automotive markets. ■ LEM is a high growth global company with approximately 1’100
Slide 4: LEM Production & Logistics World-Wide
1. LEM Production & Logistics World-Wide Production Centers (PDCs) Adaptation Centers Sales Offices Agents / Distributors 4 14 February 2012
Slide 5: LEM at a Glance - Businesses
1. LEM at a Glance - Businesses Industry segment Automotive segment Drives & welding Conventional cars ■ Motor drives ■ Lead battery management ■ Welding ■ Start/stop application ■ Miscellaneous Renewable energies & Green cars (HEV, EV) power supplies ■ Battery pack management ■ Solar ■ Electric mot
Slide 6: 2. Highlights and Business Review
2. Highlights and Business Review
Slide 7: Highlights Q3 of 2011/12
2. Highlights Q3 of 2011/12 9 months 2011/12 9 months 2011/12 to Q3 to Q2 (in CHF millions) 9 months 2010/11 2011/12 Orders received 127.8 -52.3% +5.6*% Sales 180.5 -17.5% -5.0% Operational EBIT 26.1 -43.2% -8.5% Net earnings 20.7 -24.3% -27.7% * After adjustments for cancellations of CHF 14 million
Slide 8: Net Sales
2. Net Sales In CHF millions Sales Growth Growth (in CHF 9M to 9M Q3 to Q2 300 million) 275 Total Sales 180.5 -17.5% -5.0% 250 Industry 161.0 -20.4% -7.0% 225 Automotive 19.5 16.9% 11.0% 200 175 150 ■ Limited visibility of industry businesses 125 ■ Good performance of automotive 100 businesses 75 ■
Slide 9: Quarterly View
2. Quarterly View In CHF millions Book‐to‐bill ratio 100 1.4 ■ Uncertainty in worldwide 90 economy 1.2 80 77.0 77.4 75.0 ■ Customers’ inventory 70 66.8 1 67.7 corrections ending 58.4 57.9 60 0.8 48.3 55.0 ■ Stabilization of bookings 50 43.2 0.6 40 35.6 ■ Cancellation of orders received 30 of CHF 10.
Slide 10: Cost and Capacity Management Update
2. Cost and Capacity Management Update Economic weakness impacts mainly industry businesses while automotive businesses continue to grow On 22 September LEM 2011 announced a step-up of cost reduction measures Reduction of worldwide headcount to below 1’100 employees Restructuring cost of CHF
Slide 11: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets Europe Sales Growth Growth (in CHF North America million) 9M to 9M Q3 to Q2 Asia 3% Europe 80.8 -25.4% -16.4% Rest of the World N. America 20.5 -3.6% 16.5% 50% Asia 55.6 -19.5% -2.3% 34% ROW 4.1 15.1% 14.5% Total 161.0 -20.4% -7.0% ■ Europe remains the most impo
Slide 12: Industry Segment: Business Development
2. Industry Segment: Business Development In CHF millions Op. EBIT in % of sales 300 25 Businesses and Applications in Q3 260 Drives & welding 20 Weak demand and continued inventory 220 corrections of customers in Europe and Asia 180 15 Renewable energies & power supplies 140 Weak business due to re
Slide 13: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets Europe Sales Growth Growth (in CHF million) 9M to 9M Q3 to Q2 North America 9% Europe 1.8 -14.6% 16.2% Asia and Rest of World N. America 10.3 17.0% 13.3% Asia and 7.5 27.9% 7.0% ROW 38% Total 19.5 16.9% 11.0% ■ Growth with existing and new customers ■ North Am
Slide 14: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales 25 25 Businesses and Applications in Q3 20 20 Conventional cars Won new contracts with new start/stop 15 15 application 10 10 Green cars (HEV, EV) Positive trend due to market growth and a series of new car launches 5
Slide 15: Business Development - China
2. Business Development - China Sales Production • Market share over 50% • LEM China expands its #1 position as • Sales impacted by slowing activity largest manufacturing site of the Group specially in solar, wind and traction • “Made by LEM” quality In CHF millions In CHF millions 120 55 100 45 80
Slide 16: 3. Financial Review
3. Financial Review At the heart of power electronics
Slide 17: Results by Quarter
3. Results by Quarter In CHF millions % of sales 100 25% ■ Stabilization of orders and sales on low 90 77.0 level 80 75.0 77.4 20% 70 66.8 67.7 ■ Operational EBIT margin of 12.6% in Q3 58.4 57.9 of 2011/12 maintained despite lower 60 55.0 15% 43.2 48.3 sales 50 35.6 40 10% ■ Cost saving targets achi
Slide 18: Income Statement
3. Income Statement 9 months 9 months Q2 Q3 In CHF thousands Change Change 2010/11 2011/12 2011/12 2011/12 Sales 218’824 180’491 -17.5% 57’852 54’980 -5.0% Gross margin 43.2% 42.0% -1.2%pt 42.6% 41.0% -1.6%pt Operating Cost -48’650 -49’699 2.2% -17’029 -15’569 -8.6% Operational EBIT 45’985 26’140 -4
Slide 19: Gross Margin Development
3. Gross Margin Development In CHF millions GM % of sales 9M 9M Q2 Q3 2010/11 2011/12 2011/12 2011/12 130 50% 120 Gross margin 94.6 75.8 24.6 22.5 in CHF million 110 48% 100 Gross margin 43.2% 42.0% 42.6% 41.0% in % of sales 90 80 46% 70 ■ Q3 of 2011/12 gross margin continues to be 60 adversely impa
Slide 20: Operating Expenses
3. Operating Expenses In CHF millions % of sales 9M 9M Q2 Q3 2010/11 2011/12 2011/12 2011/12 90 50% Operating 80 expenses 48.7 49.7 17.0 15.6 40% in CHF million 70 Operating 60 expenses 22.2% 27.5% 29.4% 28.3% 30% in % of sales 50 40 ■ Q2 of 2011/12 includes restructuring cost of CHF 20% 0.7 million
Slide 21: R&D Expenses
3. R&D Expenses CHF millions % of sales 9M 9M Q2 Q3 15 12% 2010/11 2011/12 2011/12 2011/12 R&D expenses 9.6 10.4 3.2 3.4 12 in CHF million 9% R&D expenses 4.4% 5.7% 5.6% 6.2% 9 in % of sales 6% ■ R&D exempted from restructuring exercise 6 ■ Increased R&D efforts as an investment into the 3% future 3
Slide 22: Operational EBIT
3. Operational EBIT In CHF millions Op EBIT % of sales 9M 9M Q2 Q3 70 24% 2010/11 2011/12 2011/12 2011/12 Operational 60 22% EBIT 46.0 26.1 7.6 6.9 in CHF million 50 20% Operational EBIT 21.0% 14.5% 13.1% 12.6% in % of sales 40 18% 30 16% ■ Excluding additional SOP cost/income 20 14% ■ Exceptionally
Slide 23: Legacy SOP Programs Expire per 31.03.2012
3. Legacy SOP Programs Expire per 31.03.2012 ■ LEM’s legacy stock option plans (SOP) are cash settled; their cost is driven by the share price development (31.3.2011: CHF 570; 30.12.2011: CHF 385) ■ Valuation according to IFRS; time value of option decreases over time ■ Significant reduction of vola
Slide 24: Financial Expense
3. Financial Expense 9M 9M Q2 Q3 2010/11 2011/12 2011/12 2011/12 Exchange effect* -3’910 -676 1’274 359 Other financial expense + -359 -195 -97 -69 income Total -4’268 -872 1’177 290 Q2 of 2011/12 exchange effect mainly driven by EUR and USD appreciation following the SNB intervention Q3 of 2011
Slide 25: Income Taxes
3. Income Taxes 9M 9M Q2 Q3 In CHF thousands 2010/11 2011/12 2011/12 2011/12 EBT 36’759 25’905 9’511 7’254 Income taxes -9’441 -5’226 -1’696 -1’603 Effective tax rate 25.7% 20.2% 17.8% 22.1% 9M 9M Q2 Q3 In % 2010/11 2011/12 2011/12 2011/12 Expected income tax rate 22.8% 20.0% 19.1% 20.4% Expected wi
Slide 26: Net Profit
3. Net Profit 9M 9M Q2 Q3 2010/11 2011/12 2011/12 2011/12 In CHF millions % of sales Net profit 27.3 20.7 7.8 5.7 in CHF million 45 16% Net profit 12.5% 11.5% 13.5% 10.3% in % of sales 40 14% 9M 2010/11 35 12% ‐5.0 ‐4.3 30 46.0 ‐9.4 10% 27.3 25 8% 20 Operational EBIT SOP inc./cost Financial Income t
Slide 27: Financial Highlights in Q3 of 2011/12 - Summary
3. Financial Highlights in Q3 of 2011/12 - Summary Stabilization of bookings and sales Profitability Gross margin of 41.0% Cost reduction plan on track – fully achieved savings targets Operational EBIT margin of 12.6% Tax rate on low 20%-level Net profit of CHF 5.7 million for the quar
Slide 28: 4. Outlook
4. Outlook At the heart of power electronics
Slide 29: 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 markets 29 14 February 20
Slide 30: Outlook
4. Outlook For Q4 of 2011/12 we expect a stabilization, but it is too early to forecast a trend reversal: Slight slow-down of sales in the Industry segment Continue the growth in the Automotive segment For the financial year 2011/12 Sales forecasted to be CHF 225 to 235 million Operational E
Slide 31: Financial Calendar and Contact Details
5. Financial Calendar and Contact Details Financial calendar 6 June 2012 Year-end 2011/12 results and media and analyst conference 28 June 2012 Ordinary shareholder's meeting for the year 2011/12 4 July 2012 Dividend ex-date 9 July 2012 Dividend payment date For further information Julius Renk, CFO