Komax Holding Ag · SIX:KOMN
Komax — FY2012 Earnings Presentation
39 slides from Komax's earnings presentation, Mar 19, 2013
Slide 1: Results 2012 and Outlook 2013
THE WAY TO MAKE IT Results 2012 and Outlook 2013 19 March 2013 19 March 2013 / Results 2012 and Outlook 2013 / 1
Slide 2: Agenda
Agenda THE WAY TO MAKE IT Results 2012 Operational performance Financial performance Focus and outlook 2013 Discussion 19 March 2013 / Results 2012 and Outlook 2013 / 2
Slide 3: 2012 in brief
2012 in brief THE WAY TO MAKE IT A solid performance under difficult conditions Decline in revenues and EBIT Provisions, allowances and restructuring costs have a negative impact on EBIT Foreign currencies negatively impact financial result Substantial increase in free cash flow Still strong balance
Slide 4: Key figures
Key figures THE WAY TO MAKE IT +/- in TCHF 2010 2011 2012 internal acqui- FX Total growth sitions Order intake 357'002 380'432 287'922 -24.3% Revenues 340'172 371'424 288'216 -28.7% 4.5% 1.8% -22.4% Book-to-Bill 1.05 1.02 1.00 EBIT 29'110 47'536 14'352 -69.8% in % of revenues 8.6% 12.8% 5.0% EAT 17'
Slide 5: Distribution of net sales by segment, region and industry
Distribution of net sales by segment, region and industry THE WAY TO MAKE IT 2010 2011 2012 by segment Komax Wire 57% 58% 79% Komax Solar 19% 19% 3% Komax Medtech 24% < 23% 18% by region Switzerland 5% 4% 2% Europe 35% 39% 40% Africa 6% 8% 9% North/South America 21% 20% 29% Asia 33% 29% 20% by indus
Slide 6: Komax Wire – Market position strengthened
Komax Wire – Market position strengthened THE WAY TO MAKE IT 26.2% Margin Net sales by region 23.1% 2% 19% 228.3 217.8 in CHF million Switzerland Net sales Europe EBIT 38% Africa North/South America Asia 30% 11% 57.1 52.7 2011 2012 Change from previous year Solid development of net sales – acquisiti
Slide 7: Komax Wire covers the most capital intensive parts of the value chain
Komax Wire covers the most capital intensive parts of the value chain THE WAY TO MAKE IT Market share Komax Wire ~40% Market shares Technological leadership Comprehensive product range Global presence Komax Wire Competitor 1 High level of innovation Competitor 2 Business development strengthened Com
Slide 8: Acquisition of TSK Group – complementary businesses and high synergy potential
Acquisition of TSK Group – complementary businesses and high synergy potential THE WAY TO MAKE IT Profile of TSK Group Why testing? Leading company in its area of competence Steadily increasing complexity of wire (market share ~40%) harnesses – sources of errors increase Active culture of innovation
Slide 9: TSK provides additional expertise in quality testing
TSK provides additional expertise in quality testing THE WAY TO MAKE IT Komax Wire – quality testing of crimp connections TSK – wire harness test systems Cable testers Test benches Adaption systems Test software Wireless test systems for clips TSK – function test systems Doors Seats Fuse boxes Headr
Slide 10: Strategy Komax Wire – aligned for further growth
Strategy Komax Wire – aligned for further growth THE WAY TO MAKE IT Growth along the value chain Continued innovation Expansion in Asia Complete solutions/new fields of application 19 March 2013 / Results 2012 and Outlook 2013 / 10
Slide 11: Automotive industry is the most important market for wire processing
Automotive industry is the most important market for wire processing THE WAY TO MAKE IT Market segmentation by industry Growth drivers for Komax Wire’s business Innovation cycle of the automotive industry • New car models Automotive • New functionalities High speed data communication Commodities • A
Slide 12: Komax Wire with above average growth
Komax Wire with above average growth THE WAY TO MAKE IT Komax Wire vs. automotive industry 1997 - 2012 Additional growth drivers Basis 1997 Bringing new and existing products in new markets other than the automotive industry 160 New machine concepts/innovations 140 Synergies from acquisitions of TSK
Slide 13: Komax Solar – solar industry in the crisis
Komax Solar – solar industry in the crisis THE WAY TO MAKE IT Global equipment market – demand collapsed by 90% in USD million 70.8 2’500 in CHF million Net sales 2’000 EBIT 1’500 -3.4 9.9 1’000 -21.2 2011 2012 500 0 2010 2011 2012 Source: SEMI, VDMA and VLSIresearch Massive reduction in net sales –
Slide 14: Komax Solar – restructuring measures implemented
Komax Solar – restructuring measures implemented THE WAY TO MAKE IT Product range reduced Locations closed Organization further adjusted Headcount globally reduced by more than 50% 19 March 2013 / Results 2012 and Outlook 2013 / 14
Slide 15: Strategy Komax Solar – management of the crisis
Strategy Komax Solar – management of the crisis THE WAY TO MAKE IT Structural adjustments Reduction of product and process costs Secure market position in core markets 19 March 2013 / Results 2012 and Outlook 2013 / 15
Slide 16: Komax Medtech – break in the upward trend
Komax Medtech – break in the upward trend THE WAY TO MAKE IT Net sales by region 83.8 5% 25% in CHF million Switzerland Net sales Europe 49.8 EBIT 48% North/South America Asia 22% 3.8 -8.6 2011 2012 Change from previous year Drop in net sales -80% -60% -40% -20% 0% • Project delays – reticent invest
Slide 17: Komax Medtech – focus on self-medication maintained
Komax Medtech – focus on self-medication maintained THE WAY TO MAKE IT Measures to improve profitability initiated in Market shares the previous year were vigorously pursued and expanded Accelerating order intake in the first quarter 2013 observed Komax Medtech Competitor 1 Cooperation with Doerfer
Slide 18: Strategy Komax Medtech – profitability is the top priority
Strategy Komax Medtech – profitability is the top priority THE WAY TO MAKE IT Profitability Focus on self-medication Development of additional niche markets 19 March 2013 / Results 2012 and Outlook 2013 / 18
Slide 19: Cooperation with Doerfer Companies
Cooperation with Doerfer Companies – impulse to further strengthen Komax Medtech’s market position THE WAY TO MAKE IT Profile of Doerfer Companies Characteristics of the cooperation Leading provider of engineering and manufacturing Joint marketing approach as partner for global solutions for custome
Slide 20: Agenda
Agenda THE WAY TO MAKE IT Results 2012 Operational performance Financial performance Focus and outlook 2013 Discussion 19 March 2013 / Results 2012 and Outlook 2013 / 20
Slide 21: Summary
Summary THE WAY TO MAKE IT Marked decline in revenues EBIT margin in % of revenues to CHF 288.2 million (–22.4%) 12.8 9.1 8.6 • Business Unit Wire remains very successful 5.0 • Revenues of Komax Solar collapsed • Sharp fall in revenues at Komax Medtech • Acquisitions contribute CHF 16.7 million in C
Slide 22: Increase in revenues in North/South America
Increase in revenues in North/South America THE WAY TO MAKE IT EBIT margin in % of revenues Net sales by region 12.8 2% 8.6 5.0 20% 371.4 in CHF million Switzerland 340.2 Revenues 40% Europe 288.2 Africa North/South America Asia 29% 9% 2010 2011 2012 Change from previous year Share of net sales in S
Slide 23: Volume-driven decline in EBIT – gross profit margin up
Volume-driven decline in EBIT – gross profit margin up by 4.9 percentage points THE WAY TO MAKE IT in CHF million Gross profit margin 2012: 59.0% 47.5 Gross profit margin 2011: 54.1% 0.7 -30.6 -0.7 -1.7 -0.8 14.4 2011 Material/revenues Personnel R&D third Restructuring Others 2012 19 March 2013 / Re
Slide 24: EBIT development by segment – disappointing results for Solar and Medtech
EBIT development by segment – disappointing results for Komax Solar and Komax Medtech THE WAY TO MAKE IT in CHF million -4.3 47.5 -17.7 1.3 -12.4 14.4 2011 Wire Solar Medtech Corporate 2012 19 March 2013 / Results 2012 and Outlook 2013 / 24
Slide 25: Free cash flow rises sharply
Free cash flow rises sharply THE WAY TO MAKE IT in CHF million 25.2 1.4 -17.6 8.6 10.0 -22.1 Free cash flow of CHF 27.6 million (2011: CHF –0.1 million) 57.7 57.7 52.1 Cash Group profit Depreciation Change in Change in Investing activities Financing Cash 1.1.2012 provisions and NWC acitvities 31.12.
Slide 26: Balanced foreign currency mix has stabilizing influence on results
Balanced foreign currency mix has stabilizing influence on results THE WAY TO MAKE IT FX impact Net sales by currency • Net sales 1.8% • EBIT margin 0.6%-points 15% FX exposure 33% CHF • USD 11% of net sales USD EUR • EUR 5% of net sales 24% Others Increased importance of other currencies (BRL, MAD,
Slide 27: Group profit after taxes (EAT)
Group profit after taxes (EAT) THE WAY TO MAKE IT EAT declined by 74.4% to CHF 10.0 million Tax rate in % of EBT Tax rate stood at low 8.3% 27.7 • Capitalized tax-loss carryforwards 14.8 in countries with high tax rates 8.3 • Reduced tax rates in certain countries Expected mid-term tax rate: +/- 20%
Slide 28: Balance sheet – equity ratio still high
Balance sheet – equity ratio still high THE WAY TO MAKE IT Equity impacted by FX by CHF –2.5 million Equity in % of total assets (2011: CHF –0.3 million) Net cash of CHF 0.9 million 68.3 67.9 (2011: CHF 5.6 million) 66.7 Intangible assets of CHF 51.0 million (2011: CHF 34.3 million), thereof goodwil
Slide 29: Low reference exchange rates weigh on financial results
Low reference exchange rates weigh on financial results THE WAY TO MAKE IT Syndicated loan of CHF 120 million Average interest rates in % Additional credit lines of CHF 15 million 3.19 (on top to the syndicated loan) 2.08 1.29 Decrease in average interest rates on financial loans from 2.1% to 1.3% i
Slide 30: Decrease in net working capital due to volume declines
Decrease in net working capital due to volume declines at Komax Solar and Komax Medtech THE WAY TO MAKE IT Expanded inventory at Komax Wire in order to Average net working capital in % of revenues ensure supply capabilities Value adjustments mainly at Komax Solar and 48.1 Komax Medtech 35.8 Balance
Slide 31: Attractive return on capital employed
Attractive return on capital employed THE WAY TO MAKE IT Dividend of CHF 2.00 per share proposed RONCE in % of average NCE • Pay out ratio: 68% 23.4 • Dividend yield on the date of Board resolution: 2.5% 16.2 Capital contribution reserves as at 31.12.2012: 7.6 CHF 20.4 million in CHF million EBIT 22
Slide 32: Agenda
Agenda THE WAY TO MAKE IT Results 2012 Operational performance Financial performance Focus and outlook 2013 Discussion 19 March 2013 / Results 2012 and Outlook 2013 / 32
Slide 33: Strategy geared to long-term profitable growth
Strategy geared to long-term profitable growth THE WAY TO MAKE IT Business unit Revenues growth target EBIT margin target Acquisitions Wire business unit 3 to 5% around 20% selectively Solar business unit 20% around 8% -- Medtech business unit -- around 5% -- As part of the annual strategy process n
Slide 34: Focus 2013
Focus 2013 THE WAY TO MAKE IT Komax Group Operational excellence Evaluate strategic options of Komax Solar and Komax Medtech Komax Wire Strategy implementation Opening up new markets Integration of TSK Group Komax Solar and Komax Medtech Strategies to further reduce the exposure Highest priority on
Slide 35: Outlook Komax Group
Outlook Komax Group THE WAY TO MAKE IT The macroeconomic outlook remains uncertain, and visibility is still poor. Making predictions for the future is therefore anything but easy. That notwithstanding, Komax has laid the foundations for the continued growth of profitability at Komax Wire and a susta
Slide 36: Outlook Komax Wire
Outlook Komax Wire THE WAY TO MAKE IT The dynamic growth of the automotive industry, further increases in production volumes, and the growing trend towards further automation of production processes and higher quality requirements are all contributing to industrial investment in the solutions manufa
Slide 37: Outlook Komax Solar
Outlook Komax Solar THE WAY TO MAKE IT Solar will remain an attractive market in the longer term. However, the major supply overhang in capacity for solar module manufacturing is preventing a short-term improvement in the competitive environment, which means that the investment activity of solar mod
Slide 38: Outlook Komax Medtech
Outlook Komax Medtech THE WAY TO MAKE IT Thanks to the pleasing order intake in the fourth quarter of 2012 and the first few months of 2013, the foundation has been laid for a good start to the current year. The key factor for success going forward is whether and when customers place further orders
Slide 39: Results 2012 and Outlook 2013
THE WAY TO MAKE IT Results 2012 and Outlook 2013 19 March 2013 19 March 2013 / Results 2012 and Outlook 2013 / 41