Slide 1: Half-Year 2014 Analyst and Investor Presentation
Half-Year 2014 Analyst and Investor Presentation DKSH Holding Ltd. August 11, 2014 © DKSH
Slide 2: Welcome to the DKSH Half-Year 2014 Analyst and Investor Presentation
Welcome to the DKSH Half-Year 2014 Analyst and Investor Presentation Page 2 © DKSH
Slide 3: H1 2014: Growth in a challenging market environment
H1 2014: Growth in a challenging market environment At constant In CHF millions In CHF In CHF exchange rates¹ H1 2014 ∆ in % H1 2014 ∆ in % H1 2013 Net sales 5,071.8 6.7% 4,618.4 (2.9%) 4,754.5 Operating profit (EBIT) 144.8 1.4% 131.4 (8.0%) 142.8 Profit after tax 99.8 (4.9%) 91.7 (12.6%) 104.9 Free
Slide 4: Update on Thailand
Update on Thailand Thailand Real GDP Growth (year-on-year in %)1 Comments 20 15 • Political unrest more profound and enduring 10 than expected at the beginning of the year in % 5 • Temporarily lower demand for consumer 0 goods and for higher-margin luxury and -5 2011 Q2 Q3 Q4 2012 Q2 Q3 Q4 2013 Q2 Q
Slide 5: Track record: Highlights H1 2014
Track record Highlights H1 2014 Further net sales growth ‒ despite challenging market environment EBIT at constant exchange rates slightly above last year‘s level RONOC of 23.9% and return on equity of 14.0% remain at high level Completed two strategic bolt-on acquisitions Number of specialists rise
Slide 6: Strategy for growth
Strategy for growth Net sales growth driven by organic growth and bolt-on acquisitions • Organic growth − Expanding business with existing clients and customers − Multiplying success stories from country to country − New business development • Bolt-on acquisitions − Glory, Macao (Healthcare) − Zeus
Slide 7: Industry with promising growth potential
Industry with promising growth potential Market Expansion Services (MES) • Still considerable growth potential in DKSH’s addressable markets • Growth drivers: − Rise of the middle class in emerging markets − Stronger inner-Asian trade − Trend towards outsourcing MES growth premium is driven by an in
Slide 8: Rapidly growing middle class in Asia
Rapidly growing middle class in Asia Growing middle class in Asia Pacific1 • By 2030 middle class is expected to grow sixfold1 APAC middle class • Growing middle class driving demand for in % of the global local and international products middle class 54% 66% 28% • DKSH is well positioned to benefit
Slide 9: Strong inner-Asian trade
Strong inner-Asian trade Origin of DKSH’s key clients • Asia Pacific is today already the second largest trading area after Europe, having 1 overtaken North America Asia 25% • Inner-Asian trade is expected to rapidly grow as trade barriers between Asian nations decline (e.g. in ASEAN) and local cons
Slide 10: Trend towards outsourcing
Trend towards outsourcing • Asia as a target region for companies seeking to grow their business • Strong focus on core competencies – R&D, marketing and manufacturing – leads to increasing demand for outsourcing services related to market entry and expansion • Because of increased uncertainty and c
Slide 11: Solid net sales growth, further value creation
Solid net sales growth, further value creation Financials Comments At constant • Net sales growth of 6.7% at constant (In CHF millions) In CHF In CHF exchange rate¹ exchange rates H1 2014 ∆ in % H1 2014 ∆ in % H1 2013 • EBIT increase of 1.4% at constant Net sales 5,071.8 6.7% 4,618.4 (2.9%) 4,754.5
Slide 12: Solid organic growth
Solid organic growth Net sales by region and breakdown Comments Thailand 34.0% • Deeply rooted in one of the world's fastest Rest of World growing markets: 96.1% of net sales generated 3.9% in Asia Pacific Rest of Asia Pacific Greater China • Net sales growth of 6.7% at constant 11.7% 29.6% exchange
Slide 13: Free cash flow
Free cash flow Free cash flow Comments (EBITDA - Capex - SWC1) • Although net sales grew in the first six months 180 of 2014, free cash flow achieved, at constant exchange rates, CHF 166.7 million thanks to 160 sound working capital management and thereby 140 almost reached the high level of last y
Slide 14: Business Unit Consumer Goods
Business Unit Consumer Goods Financials Comments At constant • Achieving net sales growth despite (in CHF millions) In CHF In CHF exchange rates¹ challenging market environment H1 2014 ∆ in % H1 2014 ∆ in % H1 2013 − Fast moving consumer goods for daily Net sales 2,134.5 1.9% 1,932.3 (7.7%) 2,094.3
Slide 15: Business Unit Healthcare
Business Unit Healthcare Financials Comments At constant • Excellent net sales growth of 11.9% and (in CHF millions) In CHF In CHF exchange rates¹ outstanding EBIT increase of 29.9% both H1 2014 ∆ in % H1 2014 ∆ in % H1 2013 at constant exchange rates Net sales 2,348.8 11.9% 2,143.8 2.2% 2,098.4 • S
Slide 16: Business Unit Performance Materials
Business Unit Performance Materials Financials Comments At constant • Solid net sales growth of 4.9% at constant (in CHF millions) In CHF In CHF exchange rates¹ exchange rates H1 2014 ∆ in % H1 2014 ∆ in % H1 2013 • Substantial decline of Thai industrial Net sales 413.4 4.9% 381.7 (3.1%) 394.1 produ
Slide 17: Business Unit Technology
Business Unit Technology Financials Comments At constant • Business Unit Technology with net sales (in CHF millions) In CHF In CHF exchange rates¹ growth of 3.2% at constant exchange H1 2014 ∆ in % H1 2014 ∆ in % H1 2013 rates Net sales 175.4 3.2% 160.8 (5.4%) 169.9 • Substantially lower government-
Slide 18: Changing Free Cash Flow definition with full-year 2014 results
Changing Free Cash Flow definition with full-year 2014 results Existing and new definition of Free Cash Flow Comments • Changing Free Cash Flow definition with full-year 2014 results Existing definition Free Cash Flow FCF = EBITDA • Advantages of the new definition: +/- Change in Specific Working Ca
Slide 19: Remain cautiously optimistic
Remain cautiously optimistic • Situation in Thailand has stabilized in recent weeks – potential trend reversal • Further enhanced the targeted service offering and support for Japanese companies aiming to enter South East Asia • Acquisition of healthcare distributor Glory in Macao allows us to serve
Slide 20: Attractive business model with three major growth drivers
Attractive business model with three major growth drivers 1 Growing middle class in Asia Long-term trends support our business model 2 Increasing inner-Asian trade Organic growth coupled with selected bolt-on acquisitions 3 Trend towards outsourcing Expect to achieve a 2014 result above the record y
Slide 21: Three-year targets up to 2016
Three-year targets up to 2016¹ Double-digit profitable growth until 2016 at constant exchange rates Net sales EBIT Profit after tax 400 300 14'000 350 12'000 380 250 270 (CHF million) (CHF million) (CHF million) 12,000 300 10'000 200 250 282 214 8'000 9,559 200 150 6'000 150 100 4'000 100 50 2'000 5
Slide 22: Thank you for your attention.
Thank you for your attention. © DKSH
Slide 23: Appendix
Appendix
Slide 24: Development of selected exchange rates in H1 2014
Development of selected exchange rates in H1 2014 Unit H1 2014 H1 2013 ∆ in % Comments 1 AUD 0.81 0.95 -14.2% • Weakness in Asian currencies reduced net sales for the first half-year of 2014 in total by 100 CNY 14.32 15.19 -5.7% 9.6% 100 HKD 11.49 12.07 -4.8% • Constant exchange rates ensure compara
Slide 25: Disclaimer
Disclaimer • Due care has been used in preparation of this presentation and DKSH makes every effort to provide accurate and up-to-date information. Nevertheless, this presentation may be subject to technical inaccuracies, information that is not up-to-date or typographical errors • DKSH does not ass