Komax Holding Ag · SIX:KOMN
Komax — FY2019 Earnings Presentation
46 slides from Komax's earnings presentation, Mar 17, 2020
Slide 1: Results 2019 and Mid-Term Targets
RESULTS 2019 AND MID-TERM TARGETS 17 March 2020 17 March 2020 / results 2019 and mid-term targets / 1
Slide 2: 2019 in brief
2019 in brief Phase of weakness for automotive industry Order intake, revenues, and EBIT all down sharply Investment in R&D maintained at a high level 9.9% of revenues directed toward expansion of technological and market leadership Additional unique selling propositions thanks to the launch o
Slide 3: Sharp decrease in orders
Sharp decrease in orders Phase of weakness for automotive industry Order intake down by 17.7% in CHF million 2nd half slightly weaker than the first six months 600 H1 2019: CHF 206.7 million 496.7 H2 2019: CHF 202.0 million 500 449.7 408.7 General uncertainty due to various geopolitical 40
Slide 4: Revenues well below the record prior-year figure
Revenues well below the record prior-year figure Revenues decrease by 12.9% in CHF million Factors behind development of revenues Organic decline: –13.7% 600 Acquisition-related growth: +2.7% 500 479.7 Foreign currency impact: –1.9% 408.5 417.8 Acquisitions (Artos Engineering and Exmore)
Slide 5: Marked fall in profitability
Marked fall in profitability 5.5 million fewer vehicles produced than in 2018 EBIT down by 64.3% in CHF million EBIT higher in first six months H1 2019: CHF 16.4 million 80 20% H2 2019: CHF 7.6 million 67.3 Reasons for disproportionate decrease in EBIT 60 55.1 14.0% 15% Far smaller numbe
Slide 6: Agenda
AGENDA 1 2019 financial year: financial performance 2 Unchanged strategy – new mid-term targets 3 Priority areas and outlook 2020 4 Questions 17 March 2020 / results 2019 and mid-term targets / 6
Slide 7: Growth in North/South America
Growth in North/South America Revenues by region in 2019 Change from previous year -30% -20% -10% 0% 10% 20% 2% 13% 0.3% Switzerland Schweiz -17.5% Europe Europa -22.5% Asia/Pacific 41% 25% Asien/Pazifik 5.7% North/South America Nord-/Südamerika -13.2% Africa Afrika -12.9% Total 19% Resources situ
Slide 8: Securing the future with innovation
Securing the future with innovation R&D expenditure consist of Internal development services of in CHF million CHF 34.0 million (2018: CHF 32.3 million) 50 9.9% 10% Development services of third parties of 9.0% 8.6% CHF 7.5 million (2018: CHF 8.8 million) 40 41.1 41.5 8% Technological shift
Slide 9: Substantial currency fluctuations
Substantial currency fluctuations Revenues by currency 115 110 105 12% 100 11% EUR 95 USD 46% CNY 90 10% CHF 85 12.16 02.17 04.17 06.17 08.17 10.17 12.17 02.18 04.18 06.18 08.18 10.18 12.18 02.19 04.19 06.19 08.19 10.19 12.19 Others 21% EUR (Basis: 1.09) USD (Basis: 1.03) CNY (Basis: 0.1484) Forei
Slide 10: Group earnings after tax (EAT) fall sharply
Group earnings after tax (EAT) fall sharply Group earnings after tax decreases by 74.5% in CHF million Two factors impacting on Group profit after taxes Negative financial result of CHF –4.9 million 60 (2018: CHF –5.2 million) 51.8 High tax rate of 31.1% (2018: 17.0%) due 50 mainly to non-ca
Slide 11: Free cash flow impacted by high level of investment and acquisition activity
Free cash flow impacted by high level of investment and acquisition activity 15.3 in CHF million Dividends CHF –26.9 million 12.8 Increase in financial liabilities 13.2 CHF 61.9 million 33.4 –53.5 47.5 51.0 Increase in cash flow from operating activities from CHF 29.6 million (2018) to CHF 41.3 mill
Slide 12: Very high investment volume
Very high investment volume Net investment Net investment (excl. acquisition and sale of companies): (excl. acquisition and sale of companies CHF 55.7 million (2018: CHF 31.7 million) Tangible assets (CHF 48.3 million) 13% Intangible assets (CHF 5.2 million) Increase in granted loans (CHF 2.
Slide 13: Conclusion of the largest investment program in Komax's history
Conclusion of the largest investment program in Komax’s history Burghaun Kabatec Dierikon Budakeszi Komax Headquarters Thonauer To be commissioned in phases Grafenau (started at the end of 2019) CAPEX 2019: CHF 54 million 2020: CHF 22–28 million Komax SLE from 2021: 2%–3% of revenues annually
Slide 14: Future financing assured by credit limit
Future financing assured by credit limit Loan in the amount of CHF 160 million through a bank syndicate (2018: CHF 160 million) in CHF million Increase of the syndicated loan to CHF 190 200 190 million in the first quarter of 2020 180 160 Term until January 2022 156 150 (plus option for extens
Slide 15: Continued robust financial base
Continued robust financial base Equity ratio over 50% in CHF million Net debt of CHF 106.2 million (2018: CHF 39.4 million) 500 481 75% 463 Retained earnings of CHF 223.8 million 414 62.3% 60.8% (2018: CHF 259.0 million) 400 60% 50.8% 300 282 45% 258 245 200 30% 100 15% Total assets Shareholde
Slide 16: RONCE declining sharply
RONCE declining sharply RONCE: 8.4% (2018: 25.2%) in CHF million Robust management of net working capital (NWC) 350 Ongoing improvement and acceleration of 300 283 295 internal processes 248 Stringent accounts receivable management 250 204 Net working capital: receivables + inventory 200 1
Slide 17: Payout ratio of 52.3%
Payout ratio of 52.3% Payout of CHF 1.80 per share proposed in CHF Of which CHF 1.60 as dividend and CHF 0.20 350 as distribution from capital contribution reserves 300 Payout ratio within strategic bandwidth (50%–60%) 250 200 150 1 2015 2016 2017 2018 2019 100 50 Distribution per share in CHF
Slide 18: Agenda
AGENDA 1 2019 financial year: financial performance 2 Unchanged strategy – new mid-term targets 3 Priority areas and outlook 2020 4 Questions 17 March 2020 / results 2019 and mid-term targets / 18
Slide 19: Focused strategy
Focused strategy 17 March 2020 / results 2019 and mid-term targets / 19
Slide 20: Komax offers solutions for every stage of customers' value chain
Komax offers solutions for every stage of customers’ value chain Proportion of time spent per wire harness Cutting, crimping, 9% block loading, etc. 20% Pre-assembly, taping 9% Routing 9% Attaching clips, etc. 25% Testing 28% Packaging 17 March 2020 / results 2019 and mid-term targets / 20
Slide 21: Focused strategy
Focused strategy 17 March 2020 / results 2019 and mid-term targets / 21
Slide 22: Significant investment in R&D
Significant investment in R&D Prepared to meet changing market needs Strategic target for R&D 8%–9% of revenues 17 March 2020 / results 2019 and mid-term targets / 22
Slide 23: Customer-specific projects
Customer-specific projects Key element in expanding technology leadership Shared projects with customers focused on the automation of wire processing Aim: as many repeat orders as possible and integration of developments into serial production machines In recent years: several pioneering proje
Slide 24: Well positioned in autonomous driving
Well positioned in autonomous driving Acquisition of Exmore Founded in 1993 Own product portfolio and wealth of experience in developing innovative applications related to the processing of sensor cables Headquarters in Beerse, Belgium 60 employees Consolidated as at 1 October 2019 17 Marc
Slide 25: Development of e-mobility
Development of e-mobility Competence center at Komax Thonauer in Budakeszi (Hungary) Number of produced cars in million 120 120000000 100 100000000 80 80000000 60 60000000 Internal combustion engine (ICE) 40 40000000 Full hybrid (HEV) 20000000 Plug-in hybrid (PHEV) 20 Battery electric vehicle (BEV)
Slide 26: SMART FACTORY by KOMAX
SMART FACTORY by KOMAX Simpler, more convenient, and safer Komax Connect Sigma 688 ST Q1250 17 March 2020 / results 2019 and mid-term targets / 26 TSK Connect
Slide 27: Focused strategy
Focused strategy 17 March 2020 / results 2019 and mid-term targets / 27
Slide 28: Global local
Global local Unique sales, engineering, and service network Bangkok Production / Founding of Komax Thailand development site Production / engineering site Sales / service site Sales representative 17 March 2020 / results 2019 and mid-term targets / 28
Slide 29: Strengthening of position in North America
Strengthening of position in North America Acquisition of Artos Engineering Founded in 1911 Own product portfolio and wealth of experience in developing innovative applications Headquarters in Brookfield, Wisconsin, USA 50 employees Consolidated as at 1 April 2019 17 March 2020 / results 2
Slide 30: Largest installed base in the world
Largest installed base in the world Komax machines on all continents Diversified customer portfolio (including key accounts, small regional companies, all OEMs) ~ 20 Crimp to crimp machines ~ 20 Other machines 17 March 2020 / results 2019 and mid-term targets / 30
Slide 31: Focused strategy
Focused strategy 17 March 2020 / results 2019 and mid-term targets / 31
Slide 32: Rigorous development of non-automotive markets
Rigorous development of non-automotive markets Aerospace Data/Telecom Industrial Non-automotive markets make a substantial contribution to revenues, accounting for less than 20% Selective and complementary build-up of competencies in non-automotive areas supports success of core business 17 Marc
Slide 33: Mid-term targets
MID-TERM TARGETS 17 March 2020 / results 2019 and mid-term targets / 33
Slide 34: Global megatrends in the automotive industry
Global megatrends in the automotive industry 17 March 2020 / results 2019 and mid-term targets / 34
Slide 35: Vehicle production set to increase again from 2021 (CAGR: 1%–2%)
Vehicle production set to increase again from 2021 (CAGR: 1%–2%) Production of passenger cars and light commercial vehicles in million vehicles 99 102 95 94 94 97 93 92 89 89 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: IHS Markit, November 2019 17 March 2020 / results 2019 and mid-term
Slide 36: Increasing in electrical functions
Increasing in electrical functions 17 March 2020 / results 2019 and mid-term targets / 36
Slide 37: Steady rise in level of automation (CAGR: 2%–3%)
Steady rise in level of automation (CAGR: 2%–3%) Numerous reasons rising number of wires rising wage costs autonomous driving e-mobility traceability miniaturization staff availability 17 March 2020 / results 2019 and mid-term targets / 37
Slide 38: Mid-term targets up to 2023
Mid-term targets up to 2023 CHF • Primarily organic growth REVENUES 450–550 • Increase in number of vehicles produced from 2021 (CAGR: 1%–2%) • Increase in level of automation (CAGR: 2%–3%) million CHF • EBIT dependent on product mix EBIT 50–80 • EBIT strongly influenced by volume business (crimp-to
Slide 39: Agenda
AGENDA 1 2019 financial year: financial performance 2 Unchanged strategy – new mid-term targets 3 Priority areas and outlook 2020 4 Questions 17 March 2020 / results 2019 and mid-term targets / 39
Slide 40: Current situation: Coronavirus
Current situation Coronavirus Coronavirus – too early to predict impact January/February 2020: revenues in China around 40% lower than in 2019 Travel reduced to a minimum Customers cannot perform factory acceptance testing (FAT) at Komax’ sites Service technicians cannot provide support in c
Slide 41: Current situation: Review of structures / reducing costs
Current situation Review of the structures / reducing costs Review of the structures of the entire Komax Group Review within the first six months of 2020 First staffing and organizational measures already implemented Measures for reducing costs Short-time working at several locations Individ
Slide 42: Priority areas 2020
Priority areas 2020 Successfully navigating the challenges presented by the coronavirus Review of the structures of the Komax Group implementation of organizational and staffing measures Completion of customer-specific pioneer projects Integration of Artos Engineering and Exmore Bringing
Slide 43: Outlook
Outlook The Komax Group’s medium- and long-term growth outlook remains positive as customers continue to target a significant increase in the level of automation in wire processing going forward. What is more, trends such as autonomous driving and e-mobility will power growth at Komax. That said
Slide 44: Contact / Financial calendar
Contact / Financial calendar Contact Financial calendar Roger Müller Annual General Meeting 21 April 2020 Industriestrasse 6 6036 Dierikon Dividend payment 27 April 2020 Switzerland Phone +41 41 455 06 16 Half-year results 2020 18 August 2020 roger.mueller@komaxgroup.com Investor Day 23 October 2020
Slide 45: Disclaimer
Disclaimer This presentation contains forward-looking statements in relation to Komax which are based on current assumptions and expectations. Unforeseeable events and developments could cause actual results to differ materially from those anticipated. Examples include: changes in the economic and l
Slide 46: Questions?
QUESTIONS? 17 March 2020 / results 2019 and mid-term targets / 46