LEM Holding SA · SIX:LEHN
LEM Holding SA — Q3 2015/16 Earnings Presentation
34 slides from LEM Holding SA's earnings presentation, Feb 16, 2016
Slide 1: Results 3rd quarter and nine months of 2015/16
Results 3rd quarter and nine months of 2015/16 1 April 2015 to 31 December 2015 16 February 2016
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook HO xx-P 2
Slide 3: Global Market Leader in Current and Voltage Transducers
1. Global Market Leader in Current and Voltage Transducers Market Position Performance Perspectives SMI LEHN Source: Swissquote Global market share Continued sales Reinforced invest- of 50% in Industry growth and strong ment in innovation Benchmark in service margins Solid growth perspec-
Slide 4: LEM Applications: Solar plant
1. LEM Applications: Solar plant 1 In solar plants, the generated electricity is fed into the grid. Current transducers (A) in the inverter (3) control the energy flow to the grid. 1 The performance of the overall installation is B 2 monitored in order to maximize its efficiency. 3 The inverters use
Slide 5: LEM Applications: Air Conditioner
1. LEM Applications: Air Conditioner In central air conditioning (1) (and increasingly residential system (2)), the air is cooled by blowing it over an evaporator filled with a refrigerant. Then the refrigerant is pumped B HO xxx-S into a condenser where it releases the heat. A B 1 pump or compresso
Slide 6: LEM Applications: Super Charger Station for Electric Vehicles
1. LEM Applications: Super Charger Station for Electric Vehicles A super charger (1) operates using several 400V DC chargers in parallel. 1MW would be required from the grid (5) if 10 cars were charged simultaneously. Charging stations therefore often include a photovoltaic plant A HO 250-P with sol
Slide 7: LEM Applications: Electric Plug-in Car
1. LEM Applications: Electric Plug-in Car Sensors (DHAB) measure the units of energy available to be consumed. This information helps to calculate the remaining distance that can be driven based on the current battery charge. Other sensors (HAH1) are used to manage the converter and/or inverter. The
Slide 8: Diverse Target Markets – Diversified Businesses
1. Diverse Target Markets – Diversified Businesses Share of sales Businesses 9M of 2015/16 Cyclicality Macro drivers Green Cars Consumer durables Technology adoption 17% Conventional Cars Fuel savings High precision Late cycle Infrastructure investments Traction Renewable energies Mid cycle Energy p
Slide 9: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook DAHBV2 9
Slide 10: Continuous operating margin improvements in 2015/16
2. Continuous operating margin improvements in 2015/16 In CHF millions, % 9M 2015/16 9M 2015/16 vs. Q3 2015/16 vs. 9M 2014/15 Q3 2014/15 Orders 194.2 +2.0% +5.5% Sales 198.7 +1.3% +3.8% EBIT 40.6 -7.4% +10.3% Net profit 31.5 -5.0% +0.1% ■ Strong Swiss franc weighs on sales and margins ■ Continued pr
Slide 11: Net Sales
2. Net Sales In CHF millions In CHF millions, % 300 Sales 9M vs. 9M Q3 vs. as at constant Q3 275 reported currencies 250 Industry 164.5 -3.0% +1.2% -3.2% 225 Automotive 34.3 +28.3% +25.8% +48.4% 200 Total sales 198.7 +1.3% +4.6% +3.8% 175 150 ■ Continued recovery of sales 125 ■ Sales growth in China
Slide 12: Quarterly View
2. Quarterly View In CHF millions Book-to-bill ratio 80 1.2 Market uncertainties and 70.0 shrinking inventories at 67.2 70 65.1 65.0 66.5 64.7 1.0 customers translating 61.8 57.6 61.1 61.5 61.5 into shorter term 60 bookings 50 0.8 Book-to-bill ratio stable at around 1 for the past 40 0.6 quarter
Slide 13: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets In CHF millions, % Sales Growth Growth Europe 9M vs. 9M Q3 vs. Q3 North America Asia & ROW Europe 65.1 -9.0% -9.3% N. America 18.0 +0.3% -10.9% 40% Asia and 81.3 +1.6% +3.8% 49% RoW Total 164.5 -3.0% -3.2% Strong growth in China China the single most importa
Slide 14: Industry Segment: Business Development
2. Industry Segment: Business Development In CHF millions Op. EBIT in % of sales Businesses and Applications 240 25 Drives & welding (growth 9M vs. 9M: -7%) Robust business in China 200 Other regions soft due to weak global capital 20 investments Overcapacities exert pressure on prices 160 15
Slide 15: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets In CHF millions, % Sales Growth Growth 9M vs. 9M Q3 vs. Q3 Europe North America 7% Europe 2.5 +31.4% +39.6% Asia and ROW N. America 15.4 +18.1% +38.0% Asia and 16.3 +39.2% +60.0% RoW Total 34.3 +28.3% +48.4% 48% Focus on Asian and North American markets St
Slide 16: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales 40 25 Businesses and Applications Conventional cars (9M vs. 9M: +18%) 35 Growth in line with market; stable market 20 share 30 High demand due to record US car sales 25 15 Green cars (HEV, EV) (+72%) Benefitted
Slide 17: Business Development Beijing (China)
2. Business Development Beijing (China) Sales Production ■ Market share of over 50% ■ LEM China increased its #1 position as largest manufacturing site of the Group ■ Most important country with 33% of (64% of total production, compared to total sales 58% in financial year 2014/15) ■ “Made by LEM” q
Slide 18: Business Development Sofia (Bulgaria)
2. Business Development Sofia (Bulgaria) Production 14 production lines relocated from Japan and Switzerland to Bulgaria (+3 in Q3 of 2015/16) Headcount at 144 FTE Introduced a local development team to support production In CHF millions 20 18 16 Objectives of the site 14 Diversify LEM’s cos
Slide 19: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook LA 130/150-P 19
Slide 20: Financial Highlights Q3 of 2015/16
3. Financial Highlights Q3 of 2015/16 EBIT margin in the quarter improved to 23.5% easing currency situation increased share of low-cost production tight cost control favorable product mix Operating expenses at long term average Free cash flow for the quarter of CHF 22.8 million prof
Slide 21: Income Statement
3. Income Statement In CHF millions 9M 9M Change Q3 Q3 Change 2014/15 2015/16 2014/15 2015/16 Sales 196.2 198.7 +1.3% 64.7 67.2 +3.8% Gross margin 46.3% 46.2% -0.1pt 46.2% 47.6% +1.3pt Operating expense -47.0 -51.2 +9.0% -15.6 -16.2 +3.5% EBIT 43.9 40.6 -7.4% 14.3 15.8 +10.3% Net financial exp. -3.2
Slide 22: Results by Quarter
3. Results by Quarter In CHF millions In % of sales Continuous margin 80 30% 65.1 improvements in 70.0 70 61.8 66.5 67.2 2015/16 61.1 65.0 64.7 61.5 25% 57.6 61.5 CHF 4.9 million negative 60 foreign exchange impact 20% 50 on EBIT for first 9 months of 2015/16 40 15% 30 10% 20 5% 10 0 0% Q1 Q2 Q3
Slide 23: Gross Margin
3. Gross Margin In CHF millions In % of sales 9M 9M Q3 Q3 140 48% 2014/15 2015/16 2014/15 2015/16 47% Gross margin 90.8 91.8 29.9 31.9 120 in CHF millions 46% 100 Gross margin 46.3% 46.2% 46.2% 47.6% 45% in % of sales 44% 80 43% Negative impact on gross margin due to 60 adverse foreign exchange de
Slide 24: SG&A
3. SG&A In CHF millions In % of sales 9M 9M Q3 Q3 60 25% 2014/15 2015/16 2014/15 2015/16 SG&A 35.9 40.3 12.0 12.5 50 in CHF millions 20% SG&A 18.3% 20.3% 18.5% 18.7% 40 in % of sales 15% 30 Higher sales and administration expense in H1 of 2015/16 due to 10% 20 Organizational changes Introducti
Slide 25: R&D Expense
3. R&D Expense In CHF millions In % of sales 9M 9M Q3 Q3 8% 2014/15 2015/16 2014/15 2015/16 15 R&D expense 11.1 10.9 3.7 3.7 in CHF millions 12 6% R&D expense 5.6% 5.5% 5.7% 5.5% in % of sales 9 4% Maintained high investment in R&D for both segments 6 Ongoing renewal of product range with 2% foc
Slide 26: EBIT
3. EBIT In CHF millions In % of sales 9M 9M Q3 Q3 60 26% 2014/15 2015/16 2014/15 2015/16 24% EBIT 43.9 40.6 14.3 15.8 50 in CHF millions 22% 20% EBIT 22.4% 20.4% 22.1% 23.5% 40 in % of sales 18% 30 16% Adverse foreign exchange impact; easing in the course of 2015/16 14% One-time operating expens
Slide 27: Financial Expense
3. Financial Expense In CHF millions 9M 9M Q3 Q3 2014/15 2015/16 2014/15 2015/16 Exchange effect* -3.2 -0.6 -1.3 -1.1 Other financial expense & -0.0 -0.2 -0.1 -0.2 income Total -3.2 -0.8 -1.4 -1.3 Exchange effect impacted by negative valuation of USD and EUR currency hedges Foreign exchange hedg
Slide 28: Income Taxes
3. Income Taxes 9M 9M 2014/15 2015/16 Expected income tax rate 20.0% 19.6% Expected withholding tax rate 1.4% 2.0% Expected tax rate 21.3% 21.6% Withholding tax for results from prior years -3.3% 0.0% Other differences 0.4% -0.7% Effective tax rate 18.5% 20.9% Expected withholding tax rate increas
Slide 29: Net Profit
3. Net Profit 9M 9M Q3 Q3 In CHF millions In % of sales 2014/15 2015/16 2014/15 2015/16 50 20% Net profit 33.1 31.5 11.7 11.7 in CHF millions 45 18% Net profit 16.9% 15.8% 18.0% 17.4% 40 in % of sales 16% 35 9M 2014/15 14% -3.2 30 -7.5 43.9 25 12% 33.1 20 10% EBIT Financial expense Tax Net profit 15
Slide 30: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook HLSR 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 ■ For Q4 of 2015/16 we expect ■ No major short-term impact from current global economic uncertainties ■ Normal seasonal decline because of Chinese New Year and lower solar infrastructure investments during winter quarter (January to March) ■ Financial year 2015/16 outlook ■ Volume growth
Slide 33: At the heart of power electronics
O&A At the heart of power electronics
Slide 34: Financial Calendar and Contact Details
Financial Calendar and Contact Details Financial calendar 9 June 2016 Year-end 2015/16 results 30 June 2016 Ordinary General Meeting of the Shareholders for the year 2015/16 5 July 2016 Dividend ex-date 7 July 2016 Dividend payment date For further information Andrea Borla, CFO Phone: +41 22 706 12