LEM Holding SA · SIX:LEHN
LEM Holding SA — Q3 2012/13 Earnings Presentation
35 slides from LEM Holding SA's earnings presentation, Feb 14, 2013
Slide 1: Results 3rd Quarter of 2012/13
Results 3rd Quarter of 2012/13 1 October 2012 to 31 December 2012 14 February 2013
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Outlook 2
Slide 3: 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 1’200
Slide 4: LEM Applications: Robot
1. LEM Applications: Robot To control the arm, power inverters drive a motor from one position to the next and stop precisely in position Accurate measurement of the current with transducers needed to control the arm A CASR 1 Control Unit 2 Inverter 3 Motor 4
Slide 5: LEM Applications: Mobile Phone Base Station
1. LEM Applications: Mobile Phone Base Station Transducers ensure stable power supply and control in case of a failure Transducers used to control the charge and discharge of power batteries for backup A HASS B LTS 1 Antenna 2 Battery 3 Controller 4 Power supply 5
Slide 6: LEM Applications: Electric Plug-in Car
1. LEM Applications: Electric Plug-in Car Battery management Electric motor management Charger management 1 High-voltage battery 2 Vehicle control unit 3 Charger 4 Motor controller A HAH1 B DHAB 5 Electric motor and transaxle C HC5F 6 DC/DC converter 6 D CAB 7 Electric power steering
Slide 7: LEM Applications: Plasma Cutting
1. LEM Applications: Plasma Cutting To maintain the arc continuously, current transducer measures the current through the arc Accuracy of measurement is important to guarantee accuracy and shape of cut A LAH 1 Electronic 2 Motor 3 Torch 7 3 XY-table
Slide 8: LEM Production & Logistics World-Wide
1. LEM Production & Logistics World-Wide Production Centers Adaptation Centers Sales Offices Agents / Distributors 8
Slide 9: 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 10: Highlights and Business Review
2. Highlights and Business Review 10
Slide 11: Highlights Q3 2012/13
2. Highlights Q3 2012/13 In CHF millions 9M 2012/13 9M 2012/13 vs. Q3 vs. Q2 2012/13 9M 2011/12 Orders 171.8 34.4% -14.0% Sales 179.2 -0.7% -10.0% Operational EBIT 34.4 31.8% -14.9% Net earnings 28.7 38.7% -17.0% ■ Slowing economy results in slowing sales and orders ■ Low visibility in the market re
Slide 12: Net Sales
2. Net Sales In CHF millions In CHF millions, % 9M 9M vs. 9M 9M vs.9M Growth Sales as reported at constant Q3 vs. 300 currencies Q2 275 Industry 152.4 -5.3% -9.2 -11.5% 250 Automotive 26.8 37.3% 26.7 -0.3% 225 Total sales 179.2 -0.7% -5.3% -10.0% 200 175 ■ Industry businesses in all regions affected
Slide 13: Quarterly View
2. Quarterly View In CHF millions Book-to-bill ratio 100 1.6 Orders slowing in Q3 of 2012/13 90 1.4 Short-term placing and calling of 80 75.0 77.0 77.4 volumes by customers 1.2 70 66.8 67.7 63.1 LEM needs to maintain high 61.1 60 57.9 55.0 55.7 1.0 readiness to deliver 50 55.0 0.8 Q3 book-to
Slide 14: New Production Plant in Sofia (Bulgaria)
2. New Production Plant in Sofia (Bulgaria) Goals of the new site Diversify LEM’s low cost production Increase production capacity close to European customers Increase natural hedge of operations Absorb major part of LEM’s future growth Continuation of strategy initiated in 2004 Produc
Slide 15: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets Europe 9M Growth Growth In CHF millions, North America % Sales 9M vs. 9M Q3 vs. Q2 Asia and ROW Europe 71.0 -12.2% -12.8% 47% N. America 22.0 7.1% -4.7% Asia and 59.4 -0.4% -12.5% ROW 39% Total 152.4 -5.3% -11.5% All regions weakening, strongest decreases in C
Slide 16: Industry Segment: Business Development
2. Industry Segment: Business Development Businesses and Applications In CHF millions Op. EBIT in % of sales Drives & welding (growth Q3 vs. Q2: -11.9%) 25 Weak markets 280 LEM’s market share remains stable 240 20 Renewable energies & power supplies (-23.3%) Volatile business 200 Volumes in
Slide 17: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets In CHF millions, % 9M Growth Growth Europe Sales 9M vs. 9M Q3 vs. Q2 North America Asia and Rest of World Europe 2.0 15.3% 15.2% 7% N. America 13.6 32.4% -0.8% Asia and 11.2 49.1% -2.0% ROW 42% Total 26.8 37.3% -0.3% Sales remain stable vs. Q2 of 2012/13 L
Slide 18: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales Businesses and Applications Conventional cars 30 25 (growth Q3 vs. Q2: -3.7%) Stable performance with battery 25 20 management applications for conventional cars mainly driven by US 20 15 and Japan 15 Price erosio
Slide 19: 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 ■ Sales impacted by slowing activity (over 50% of total production) especially in solar, wind and traction ■ “Made by LEM” quality In CHF millions
Slide 20: Financial Review
3. Financial Review At the heart of power electronics
Slide 21: Results by Quarter
3. Results by Quarter In CHF millions In % of sales ■ Maintained operating EBIT 100 30% margin, within target range of 15 77.0 90 75.0 77.4 to 20% 25% 80 67.7 66.8 70 ■ Solid margins thanks to cost 63.1 57.9 61.1 20% control measures 60 55.0 55.8 55.0 50 15% 40 10% 30 20 5% 10 0 0% Q1 Q2 Q3 Q4 Q1 Q2
Slide 22: Income Statement
3. Income Statement In CHF thousands 9M 9M Q2 Q3 Change Change 2011/12 2012/13 2012/13 2012/13 Sales 180‘491 179'183 -0.7% 61‘076 54‘989 -10.0% Gross margin % 40.6% 43.3% 2.7pt 43.7% 44.3% 0.6pt Operating cost -47‘183 -43‘216 -8.4% -14'250 -13‘742 -3.6% Operational 26'140 34‘447 31.8% 12‘470 10‘618
Slide 23: Gross Margin Development
3. Gross Margin Development 9M 9M Q2 Q3 2011/12 2012/13 2012/13 2012/13 In CHF millions In % of sales 46% Gross margin 135 in CHF millions 73.3 77.7 26.7 24.4 45% 120 44% Gross margin 105 in % of sales 40.6% 43.3% 43.7% 44.3% 90 43% 75 42% Positive impacts on gross margin vs. Q2 of 2011/12 60 41%
Slide 24: Operating Expenses
3. Operating Expenses In CHF millions In % of sales 9M 9M Q2 Q3 2011/12 2012/13 2012/13 2012/13 80 35% Operating 70 30% expenses 47.2 43.2 14.2 13.7 in CHF millions 60 25% Operating expenses 26.1% 24.1% 23.3% 25.0% 50 in % of sales 20% 40 ■ Ongoing strict cost control measures 15% 30 ■ Operating exp
Slide 25: R&D Expenses
3. R&D Expenses 9M 9M Q2 Q3 2011/12 2012/13 2012/13 2012/13 In CHF millions In % of sales 15 10% R&D expenses 10.7 10.7 3.4 3.8 in CHF millions 12 8% R&D expenses 5.9% 6.0% 5.6% 6.9% in % of sales 9 6% Continued investment in R&D for both 6 4% segments R&D expense (6.9%) in Q3 of 2012/13 above t
Slide 26: Operational EBIT
3. Operational EBIT In CHF millions In % of sales 9M 9M Q2 Q3 2011/12 2012/13 2012/13 2012/13 70 22% Operational EBIT 26.1 34.4 12.5 10.6 60 in CHF millions 20% Operational 50 EBIT 14.5% 19.2% 20.4% 19.3% 18% in % of sales 40 16% Q3 of 2012/13 operational EBIT 30 decreased vs. Q2 of 2012/13 due to
Slide 27: Legacy SOP Programs Expired per 31.03.2012
3. Legacy SOP Programs Expired per 31.03.2012 ■ With the closing of fiscal year 2011/12, all legacy stock option plans are closed ■ LEM will not record any additional stock option plan cost/income going forward ■ LEM has no further option based compensation programs 31.03.2008 31.03.2009 31.03.2010
Slide 28: Financial Expense
3. Financial Expense In CHF thousands 9M 9M Q2 Q3 2011/12 2012/13 2012/13 2012/13 Other financial expense + -195 -1 14 6 income Exchange effect* -676 -231 -800 -954 Total -872 -232 -786 -948 Q3 of 2012/13 exchange effect mainly driven by JPY depreciation Foreign exchange hedging policy EUR: 10
Slide 29: Income Taxes
3. Income Taxes 9M 9M Q2 Q3 In CHF thousands 2011/12 2012/13 2012/13 2012/13 EBT 25’905 34’215 11’684 9’670 Income taxes -5’226 -5’542 -1’875 -1’526 Effective tax rate 20.2% 16.2% 16.0% 15.8% 9M 9M Q2 Q3 In % 2011/12 2012/13 2012/13 2012/13 Expected income tax rate 20.0% 12.6% 12.6% 12.4% Expected w
Slide 30: Net Profit
3. Net Profit 9M 9M Q2 Q3 In CHF millions % of sales 2011/12 2012/13 2012/13 2012/13 Net profit 20.7 28.7 9.8 8.1 in CHF millions 45 20% Net profit 11.5% 16.0% 16.1% 14.8% 40 18% in % of sales 35 9M 2011/12 16% 0.6 30 -0.9 14% 26.1 -5.2 20.7 25 12% Operational SOP inc./cost Financial Income tax Net
Slide 31: Financial Highlights in Q3 of 2012/13 - Summary
3. Financial Highlights in Q3 of 2012/13 - Summary Sales continued to decrease in Q3 of 2012/13 Cost savings both in COGS and in Operating Expenses LEM keeps high level of R&D investments LEM maintains a strong gross and operating margin Tax rate remains at a low 16% 31
Slide 32: Strategy and Outlook
4. Strategy and Outlook At the heart of power electronics
Slide 33: 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 33
Slide 34: Outlook
4. Outlook ■ Uncertainty due to the economic slowdown – global political and economic implications of crisis remain unclear and make long-term planning difficult ■ Expectations for Q4 of 2012/13 ■ stable sales development in the Industry segment ■ resuming growth in the Automotive segment ■ Full yea
Slide 35: Financial Calendar and Contact Details
Financial Calendar and Contact Details Financial calendar 5 June 2013 Year-end results and media and analyst conference 27 June 2013 Annual shareholders’ meeting for the year 2012/13 (Fribourg) 2 July 2013 Dividend ex-date 5 July 2013 Dividend payment date For further information Julius Renk, CFO Te