Kendrion N.v. · EURONEXT:KENDR
Kendrion — FY2019 Earnings Presentation
28 slides from Kendrion's earnings presentation, Feb 18, 2020
Slide 1: Q4 and Full-Year Results 2019
Q4 AND FULL-YEAR RESULTS 2019 18 FEBRUARY 2020 1
Slide 2: Agenda
AGENDA 1. Business review 2. Strategic and operational update 3. Outlook 4. Q&A 2
Slide 3: Cautionary Note Regarding Forward Looking Statements
Cautionary Note Regarding Forward Looking Statements Certain statements contained in this presentation constitute forward-looking statements. These statements may include, without limitation, statements concerning future results of operations, the Company's share of new and existing markets, general
Slide 4: 1. Business review
KENDRION PRECISION. SAFETY. MOTION.
Slide 5: Key figures
Q4 AND FULL-YEAR RESULTS 2019 Key figures Normalised (in EUR million) Q4 2019 Q4 2018 delta Revenue 92.3 101.9 -9% ▪ Revenue down 10% at constant exchange rates EBITDA 7.2 9.9 -28% ▪ Profitability affected by lower revenues and inventory reduction EBITA 1.2 4.2 -72% ▪ Staff costs decreased by 7%, to
Slide 6: Cash flow and financial position
Q4 AND FULL-YEAR RESULTS 2019 Cash flow and financial position Record free cash flow Strong financial position ▪ Record free cash flow of EUR 25.5 million in 2019 ▪ Year-end solvency of 56.8% and leverage ratio of 0.8 (excluding (2018: EUR 10.5 million) IFRS 16) ▪ Normalised working capital as a per
Slide 7: Dividend and cash return
Q4 AND FULL-YEAR RESULTS 2019 Dividend and cash return 2015 2016 2017 2018 2019 Actual Actual Actual Actual Actual Dividend per share 0.78 0.78 0.87 0.87 0.25 ▪ Kendrion strives to distribute annual dividend between 35% and Dividend yield* 3.2% 2.9% 2.2% 4.2% 1.2% 50% of net profit, giving considera
Slide 8: Automotive
AUTOMOTIVE FY 2019 180 20.0% ▪ Global car production down 6% in 2019 160 154 18.0% 16.0% ▪ Revenue decrease of 9% in 2019, 5% in HY2 140 135 130 124 13.5% 14.0% 120 ▪ Decrease of staff costs EUR 5.6 million (8%), EUR 2.8 million in HY2 12.0% 100 10.8% 10.0% 80 ▪ EUR 3.0 million annual cost savings i
Slide 9: Industrial
INDUSTRIAL FY 2019 90 86 20.0% ▪ German industrial production down 7% in 2019 82 79 18.0% 80 16.7% 72 16.0% ▪ Revenue decrease of 7% in 2019, 10% in HY2 70 13.9% 14.0% 60 13.2% ▪ Staff costs decrease of EUR 0.7 million, EUR 1.1 million in HY2 12.0% 50 10.9% 10.0% 40 ▪ EUR 2.0 million saving program
Slide 10: 2. Strategic and operational update
2. Strategic and operational update 10
Slide 11: Kendrion Strategic House
KENDRION STRATEGIC HOUSE STRATEGIC INTENT AUTO BRAKES IAC 'ACES' INTORQ ENERGY ROBOTS CONTROLS TRANSPORT CHINA CHINA CHINA KENDRION GLOBAL ORGANISATION 11
Slide 12: Global Vehicle Production
GLOBAL VEHICLE PRODUCTION Automotive (in million) 96 95.1 94.2 94 93.1 92 90 88.8 88.7 88 86 84 2019 12 2015 2016 2017 2018
Slide 13: Nominations
NOMINATIONS Automotive 2018 2019 100% = EUR 340 million 100% = EUR 320 million 39% 35% 61% 65% Independent ICE technology Independent ICE technology book-to-bill 1.20 book-to-bill 1.25 13
Slide 14: Lighthouse Platforms
LIGHTHOUSE PLATFORMS Automotive Combination of modular valve systems and electronic control units, aligned with future car computer architecture Smart actuation ▪ Development is proceeding as planned ▪ Nomination in OEM platform for battery cooling platform Supporting the legal sound requirements fo
Slide 15: INTORQ at a Glance
INTORQ AT A GLANCE Brakes Key statistics Presence ▪ 2018-2019 revenue: EUR 57 million (April year-end) ▪ Aerzen (HQ, Germany) ▪ Employees: ~300 ▪ Shanghai (China) ▪ Units per year: ~1 million ▪ Atlanta (USA) ▪ Global network: 63 sales partners in 49 countries ▪ Pune (India) Application areas Main pr
Slide 16: Compelling Strategic Rationale
COMPELLING STRATEGIC RATIONALE Brakes ▪ Substantial strengthening of our position in industrial brakes ▪ Further expansion of our footprint in the Chinese growth market ▪ INTORQ's strength in spring-applied brake technology complementary to Kendrion's Strong leading position in permanent magnet brak
Slide 17: Integration Progress
INTEGRATION PROGRESS Brakes ▪ BU Manager, Andreas Laschet, started as of 1 January 2020 Deal closed ▪ Deal completed on 8 January 2020 on 8 January ▪ Integration kick-off on 15 January 2020 ▪ Nine workstreams consisting of combined teams Integration has started ▪ Weekly reporting ▪ Bi-weekly Steerin
Slide 18: Commercial Traction
COMMERCIAL TRACTION Brakes Servo slim line for collaborative robots Spring-applied products ▪ Mass production started in 2019 ▪ Several new products launched late 2019 ▪ Several nominated customers in Japan, China, USA and Europe ▪ Excellent pipeline Markets Leading position across major markets seg
Slide 19: Industrial Actuators and Controls
INDUSTRIAL ACTUATORS AND CONTROLS ICS/IMS ▪ Combination of Industrial Control Systems and Industrial Magnetic Systems ▪ Effective as of 1 January 2020 ▪ Focus on profitability in four distinct verticals Key market segments Machinery Transportation Energy distribution Fluid control 19
Slide 20: COVID-19
COVID - 19 China ▪ At this moment no Kendrion employees diagnosed Sterilised cleaning Separated lunch ▪ Both Kendrion factories are operational ▪ Suzhou per 11 February 2020 ▪ Shanghai per 10 February 2020 ▪ Kendrion traveling to and from China and Hong Kong stopped Body temperature check ▪ Impact o
Slide 21: Commercial Traction China
COMMERCIAL TRACTION China Business review ▪ Year-on-year growth of 29% despite difficult market ▪ Successful ramp of park lock production for local key automotive car player ▪ Lifetime nominations 2019 significantly higher than size of business ▪ Permanent magnet brake project awarded for Germany +
Slide 22: Lean and Agile Organisation
LEAN AND AGILE ORGANISATION Kendrion Management Team as of 1 January 2020 Executive Board Group HR Group IT General Counsel President Kendrion BU Manager BU Manager COO Automotive CCO Automotive FD Automotive Asia/Strategic Industrial Actuators Industrial Brakes Purchasing and Controls 22
Slide 23: Progressing on CSR
PROGRESSING ON CSR Target framework 2019-2023 ▪ Completed the five-year CSR roadmap and started with implementation ▪ 2.5% absolute energy reduction in 2019 ▪ 8.5% decrease in absolute CO₂ emission ▪ Established a health task force to further reduce illness rate from current level of 2.9% 23
Slide 24: 3. Outlook
KENDRION PRECISION. SAFETY. MOTION.
Slide 25: Outlook
OUTLOOK ▪ The overall sentiment regarding the global economic outlook remains uncertain for 2020 ▪ Looking ahead we do see our markets stabilising albeit still at a lower level than in early 2019 ▪ The effects of the COVID-19 corona virus on our business are limited to date. However, its impact on t
Slide 26: Long-Term Targets 2023
LONG-TERM TARGETS 2023 ▪ ROI* 2023: > 20.0% ▪ EBITDA 2023: > 15% ▪ Dividend policy: 35 – 50% of net profit ▪ Strategic and financial update of the enlarged Kendrion, including INTORQ, on 18 August 2020 ▪ Includes updated medium-term financial targets, fully reflecting the INTORQ acquisition * Before
Slide 27: 4. Questions & Answers
KENDRION PRECISION. SAFETY. MOTION.
Slide 28: Kendrion
KENDRION