TKH Group N.V. Cert · EURONEXT:TWEKA
TKH Group N.V. Cert — TKH Group — H1 2015 Earnings Presentation
51 slides from TKH Group N.V. Cert's earnings presentation, Aug 18, 2015
Slide 1: Half year results 2015
Half year results 2015 TKH Group NV 1 | Half year results 2015 | 18-08-2015
Slide 2: Content
Content 1 About TKH Group 2 Developments 1 half year 2015 st 3 Notes to the results 1 half year 2015 st 4 Strategic developments, business drivers & outlook 5 Four Core technologies & seven vertical growth markets 2 | Half year results 2015 | 18-08-2015
Slide 3: Profile
Profile Turnover 2014 € 1.4 billion Geographical distribution of turnover Number of employees (FTE) 5,337 (in %) Technology company Four core technologies Vision & security, communication, connectivity and manufacturing systems The core technologies are combined with software and system integration
Slide 4: Mission
Mission TKH intends to be an innovative and leading technology (niche) player in creating combinations of technologies to total solutions through which customers are fully relieved and that lead to larger efficiency, more comfort and larger safety. TKH aims to be an attractive employer, to continuou
Slide 5: Strategy TKH
Strategy TKH Value creation Focus on 4 core technologies in 3 business segments Telecom Building Industrial Solutions Solutions Solutions Growth drivers Communication, safety, care and efficiency Innovations > 15% turnover 5 | Half year results 2015 | 18-08-2015
Slide 6: Developments 2005 - 2014
Developments 2005 - 2014 6 | Half year results 2015 | 18-08-2015
Slide 7: Developments 1st half year 2015
DEVELOPMENTS 1st HALF YEAR 2015 7 | Half year results 2015 | 18-08-2015
Slide 8: Highlights 2nd quarter 2015
Highlights 2nd quarter 2015 Turnover 3.2% higher at € 353.7 million - organic decline of 3.1% EBITA increased12.7%, largely from Building Solutions Sequential growth result Q2 compared to Q1 in all segments Continued improvement in ROS, rises to 10.7% Net profit before amortisation and one-off incom
Slide 9: Highlights 1st half year 2015
Highlights 1st half year 2015 Turnover 5.1% higher at € 690.3 million, organic decline of 0.5% Building Solutions books 6.2% organic increase in turnover due to success vertical growth markets Organic decline in turnover Industrial Solutions of 5.4%, due to lower turnover in manufacturing systems se
Slide 10: Highlights 1st half year 2015
Highlights 1st half year 2015 Solutions segmentation based on 4 core technologies 10 | Half year results 2015 | 18-08-2015
Slide 11: Telecom Solutions
Telecom Solutions (in million € unless stated otherwise) 1st half year 1st half year Δ in % 2015 2014 Turnover 81.5 80.5 + 1.2 EBITA 8.0 6.7 + 18.7 ROS 9.8% 8.3% Organic turnover decline: 0.8% Increase turnover indoor telecom & copper network – decrease fibre optic networks Increase ROS due to effic
Slide 12: Telecom Solutions
Telecom Solutions Segment fibre networks systems: turnover -1.9% Optical fibre (cable), connectivity systems and components, active equipment Growth primarily in Poland and Germany – decline demand in the Netherlands Shift in priorities among customers towards investments in upgrading copper network
Slide 13: Telecom Solutions
Telecom Solutions Segment indoor telecom systems and copper network systems: turnover +5.2% Home networking systems, broadband connectivity, IPTV-software solutions, copper cable, connectivity systems and components, active equipment Higher consumer spending in the European market Demand increased,
Slide 14: Building Solutions
Building Solutions (in million € unless stated otherwise) 1st half year 1st half year Δ in % 2015 2014 Turnover 287.8 242.3 + 18.8 EBITA 30.0 18.3 + 64.3 ROS 10.4% 7.5% Organic turnover growth: 6.2% Strong improvement EBITA and ROS as a result of revenue growth in both sub-segments and the acquisiti
Slide 15: Building Solutions
Building Solutions Segment vision & security systems: turnover +27.0% Vision technology, systems for CCTV, video/audio analysis and detection, intercom, access controls and registration, central control room integration, healthcare systems Growth largely due to vision technology companies and Commen
Slide 16: Building Solutions
Building Solutions Segment connectivity systems: turnover +8.6% specialty cable (systems) for shipping, rail, infrastructure, wind energy, as well as installation and energy cable for niche markets, structured cable systems Decline in market volume in building and construction sector Vertical growth
Slide 17: Industrial Solutions
Industrial Solutions (in million € unless stated otherwise) 1st half year 1st half year Δ in % 2014 2014 Turnover 321.0 334.3 - 4.0 EBITA 42.7 41.1 + 4.0 ROS 13.3% 12.3% Organic turnover decline: 5.4% Increase in EBITA and ROS due to effective cost controls, improved efficiency and a higher level of
Slide 18: Industrial Solutions
Industrial Solutions Segment connectivity systemen: turnover -0.3% specialty cable systems and modules for the medical, robot, automotive and machine building industries Focus on turnover with a higher margin led to a decline in turnover, but an increase in profit Reluctance for investments in the G
Slide 19: Industrial Solutions
Industrial Solutions Segment manufacturing systems: turnover -6.1% Tyre manufacturing systems, can washers, machine control systems, product handling systems and test equipment Reduced order intake and deliveries due to reluctance to invest among Chinese tyre manufacturers as a result of US import d
Slide 20: Notes to the results 1st half year 2015
NOTES TO THE RESULTS 1st HALF YEAR 2015 20 | Half year results 2015 | 18-08-2015
Slide 21: Change in turnover
Notes to the results 1st half year 2015 Change in turnover (in € million) 21 | Half year results 2015 | 18-08-2015
Slide 22: Geographical distribution of turnover
Notes to the results 1st half year 2015 Geographical distribution of turnover (in %) 22 | Half year results 2015 | 18-08-2015
Slide 23: Development of turnover per solution
Notes to the results 1st half year 2015 Development of turnover per solution (in million € unless stated otherwise) Impact prices raw Turnover 1) Turnover 1) Total materials and Organic H1 2015 H1 2014 growth currencies growth Telecom Solutions 81.5 80.5 + 1.2% + 2.0% - 0.8% Building Solutions 287.8
Slide 24: Notes to the results 1st half year 2015
Notes to the results 1st half year 2015 Gross margin increased to 45.9% (H1 2014: 41.8%) Margin improvement in all Solutions Improved product mix and larger share vision & security systems Positive impact due to the acquisition of Commend Lower outsourcing to third parties, more in-house production
Slide 25: EBITA per Solution
Notes to the results 1st half year 2015 EBITA per Solution (in million € unless stated otherwise) H1 2015 H1 2014 EBITA ROS % EBITA ROS % Telecom Solutions 8.0 9.8 6.7 8.3 Building Solutions 30.0 10.4 18.3 7.5 Industrial Solutions 42.7 13.3 41.1 12.3 Other - 6.9 - 5.9 Total 73.8 10.7 60.2 9.2 25 | H
Slide 26: Notes to the results 1st half year 2015
Notes to the results 1st half year 2015 Increase amortisation charges with € 2.5 million Acquisition of Commend – amortisation of ‘purchase price allocations’ Increased investment level in R&D One-off income and expenses of € 0.5 million Impairment of capitalised R&D expenditure of € 0.7 million (ex
Slide 27: Income statement H1 2015
Notes to the results 1st half year 2015 (in million €) H1 H1 2015 2014 Δ in % Turnover 1) 690.3 657.1 + 5.1 Costs of raw materials / consumables - 373.2 - 382.1 Gross margin 317.1 45.9% 275.0 41.8% + 15.3 Operating costs - 243.3 - 214.8 + 12.8 EBITA 73.8 10.7% 60.2 9.2% + 22.5 Amortisation - 15.5 -
Slide 28: Balance sheet as of June 2015
Balance sheet as of 30 June 2015 (in million €) 30-06-2015 31-12-2014 30-06-2014 Assets Non-current assets 663.7 592.7 580.8 Inventories 221.5 202.3 195.1 Construction contracts 110.2 115.3 81.1 Receivables 217.3 172.5 191.7 Cash 57.1 90.3 65.3 Assets held for sale - 3.1 - Total 1,269.8 1,176,2 1,11
Slide 29: Notes to the balance sheet June 2015
Notes to the balance sheet 30 June 2015 Change in working capital (in € million) Working capital Use of non recourse factoring: 30-06-15 € 40.7 mln 31-12-14 € 41.2 mln 30-06-14 € 33.1 mln Use of supply chain finance: 30-06-15 € 16.7 mln 31-12-14 € 13.6 mln 30-06-14 € 11.0 mln 29 | Half year results
Slide 30: Notes to the balance sheet June 2015
Notes to the balance sheet 30 June 2015 Change in net debt (in € million) Financial covenants Net debt is based on financial covenants as agreed with banks Net debt / EBITDA: 1.6 Interest coverage ratio: 21.7 30 | Half year results 2015 | 18-08-2015
Slide 31: Cash flow statement
Cash flow statement (in million €) H1 H1 H2 2015 2014 2014 Operating result 57.9 47.3 70.5 Depreciation, amortisation and impairment 26.9 23.1 23.6 Share and option schemes 1.6 1.3 0.5 Change in provisions - 3.8 - 2.0 -6.6 Change in working capital - 51.6 - 48.5 7.7 Cash flow from operations 31.0 21
Slide 32: Ratios
Ratios H1 H1 FY 2015 2014 2014 Working capital / Turnover 1) 18.3% 15.8% 13.8% Net debt / EBITDA 2) 1.6 1.6 1.0 Gearing (net debt / equity) 3) 48.5% 49.0% 36.2% ICR (EBITDA / Financial cost) 2) 21.7 14.6 18.9 Solvency 41.3% 40.8% 44.9% Net earnings per ordinary share before amortisation € 1.13 € 0.9
Slide 33: Strategic developments, business drivers & outlook
Strategic developments, business drivers & outlook 33 | Half year results 2015 | 18-08-2015
Slide 34: Business drivers
Business drivers Focus on four core technologies Vision & security, communication, connectivity and manufacturing systems Merge the four core technologies into specific solutions for identified niche vertical markets with special focus on high growth opportunities within the business segments Teleco
Slide 35: TKH – vertical growth markets – growth drivers
TKH – vertical growth markets – growth drivers Advantage of focus on defined vertical growth markets Focus leads to maximum traction to realise growth potential Choice for growth verticals is determined on the return potential based on internal and external benchmarking – ROS and ROCE in combination
Slide 36: Financial objectives TKH
Financial objectives TKH Progress realisation targets on track Increase ROS in H1 2015 to 10.7% (full 2014: 10.0%) ROCE in H1 2015: 19.8% (2014: 20.3%) Focus on 7 growth verticals – turnover target for growth in 3 - 5 years of € 300 - € 500 million accelerates realisation of targets Targets ROS targ
Slide 37: Growth scenarios vertical growth markets
Growth scenarios vertical growth markets Growth verticals (in € millions) 2012 2014 Growth scenarios Fibre optics network 80.0 98.0 120.0 150.0 Parking 20.0 34.8 75.0 100.0 Tunnel & infra 30.0 25.5 100.0 150.0 Marine, oil & gass 20.0 50.1 100.0 125.0 Care 30.0 35.1 70.0 100.0 Machine vision 95.0 102
Slide 38: Outlook
Outlook The outlook for the second half of the year is generally positive in the market segments in which TKH is active in Telecom Solutions Investments in optical fibre networks in the Netherlands in H2 expected to remain at low levels Rest of Europe and Asia offer sufficient growth perspective – s
Slide 39: Outlook
Outlook Industrial Solutions Lower order intake manufacturing systems in H1 is having a negative impact on capacity utilisation in H2 Results will, despite improvements in other segments within Industrial Solutions, be in line with H1 Order intake has improved once again since July – expected positi
Slide 40: TKH Technologies
TKH TECHNOLOGIES 40 | Half year results 2015 | 18-08-2015
Slide 41: Core technologies
Core technologies Vision & Security Communication Emergency Personal alarm systems systems Manufacturing systems Connectivity 41 | Half Drag year Chain results 2015 | 18-08-2015 systems MultiMediaConnect
Slide 42: Vertical growth markets
VERTICAL GROWTH MARKETS 42 | Half year results 2015 | 18-08-2015
Slide 43: Business drivers
Business drivers TKH focuses on distinguishing potential for an above- average performance Niche player strategy - focus on high quality solutions with high margins High pricing power by innovative unique solutions Attractive margins because of high yield on investments for customers Commodity produ
Slide 44: TKH – vertical growth markets – Fibre Optic
TKH – vertical growth markets – Fibre Optic Growth drivers High priority from telecom-operators for upgrading networks Successful FttH-projects proof high return on investment Telecom operators are able to gain or defend market share through fibre optic technology More and more parties request of to
Slide 45: TKH – vertical growth markets – Parking
TKH – vertical growth markets – Parking Growth drivers Strong need within parking industry to: decrease OPEX – increase occupancy car parks – increase revenues by differentiated parking rates – increase comfort and ease for parker High returns on technology investments TKH has distinctive advanced t
Slide 46: TKH – vertical growth markets – Tunnel & Infra
TKH – vertical growth markets – Tunnel & Infra Growth drivers New legislation for tunnel technology – caused by fire Mont Blanc-tunnel In Europe, before 2020, thousands of kilometres tunnels will be built and provided with new tunnel technology for replacement Technologies relevant in relation to ne
Slide 47: TKH – vertical growth markets – Marine, Oil&Gas
TKH – vertical growth markets – Marine, Oil&Gas Growth drivers Strong growing market from the perspective of the TKH core technologies that respond to the increasing need to a safer environment by a good detection and analysis of risk with quick and direct communication and guiding of actions in cas
Slide 48: TKH – vertical growth markets – Care
TKH – vertical growth markets – Care Growth drivers Large need for care systems that respond to live longer independently at home: increasing aging – necessary cost reductions – efficiency improvements – need for better care – scarcity of nursing staff TKH core technologies respond well to the trend
Slide 49: TKH – vertical growth markets – Machine vision
TKH – vertical growth markets – Machine vision Growth drivers Extensive industrial automation and robotising responds to high productivity and quality of manufactured products Vision-technology is a superior alternative for steering and control of manufacturing systems and for the human eye in the a
Slide 50: TKH – vertical growth markets – Tyre building
TKH – vertical growth markets – Tyre building Growth drivers High priority in tyre building industry for replacement existing technology with drivers: high productivity – less waste – improved quality – smaller batches – more regional production Advanced TKH-technology responds to these drivers – pe
Slide 51: 51 | Half year results 2015 | 18-08-2015
51 | Half year results 2015 | 18-08-2015