TKH Group N.V. Cert · EURONEXT:TWEKA
TKH Group N.V. Cert — TKH Group — H1 2017 Earnings Presentation
53 slides from TKH Group N.V. Cert's earnings presentation, Aug 15, 2017
Slide 1: Half Year Results 2017
HALF YEAR RESULTS 2017 15 August 2017
Slide 2: Inhoud
INHOUD 1 About TKH Group 2 Developments 1st half year 2017 3 Notes to the results 1st half year 2017 4 Strategic developments, business drivers & outlook 5 Annex 2 | Half year results 2017 | 15-08-2017
Slide 3: Profile
PROFILE Turnover € 1.3 billion Geographical Number of employees (FTE) 5,766 distribution of turnover (in %) Technology company Four core technologies Vision & security, communication, connectivity and manufacturing systems The core technologies are combined with software and system H1 2017 integrati
Slide 4: Mission
MISSION TKH aims to be an innovative and leading technology (niche) player that by means of combinations of it’s four core technologies, offers total solutions which lead to greater efficiency, more comfort and improved safety for its customers. By offering ‘best in class’-solutions, TKH wants to co
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 Efficiency – comfort – safety – security Innovations > 15% turnover 5 | Half year results 2017 | 15-08-2017
Slide 6: Developments 2007 - 2016
DEVELOPMENTS 2007 - 2016 Revenue development in mln € 1,600 1,400 1,200 1,000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 EBITA and ROS development in mln € in % 160 16 140 14 120 12 100 10 1) 80 8 60 6 40 4 1) Excluding one-off income and expenses 20 2 0 0 2007 2008 2009 201
Slide 7: Highlights 2nd Quarter 2017
HIGHLIGHTS 2th QUARTER 2017 (in million € unless stated otherwise) Q2 2017 Q2 2016 Δ in % 1) Amortization of intangible fixed assets related to Turnover 365.5 333.3 + 9.7% acquisitions (after tax) 2) One-off net income of € 3.5 million largely as a EBITA 31.6 33.6 - 6.0% result of the release of the
Slide 8: Highlights 1st Half Year 2017
HIGHLIGHTS 1ST HALF YEAR 2017 (in million € unless stated otherwise) H1 2017 H1 2015 H2 2015 2015 Δ in % Turnover 725.2 650.1 690.9 1,341.0 + 11.5% 1) Amortization of intangible fixed assets EBITA 70.9 64.8 81.7 146.5 + 9.5% related to acquisitions (after tax) 2) One-off net income of € 3.5 million
Slide 9: Acquisitions – Strengthening Verticals
ACQUISITIONS – STRENGHTENING VERTICALS Redline CNC, Surrey (Canada) Building Solutions – vision & security systems Consolidation as from 15 April 2017 Manufacturer of camera housing Integration in LMI Technologies – faster and better response to market demand by reducing supply chain and R&D lead ti
Slide 10: Developments Solutions Segments 1st Half Year 2017
DEVELOPMENTS SOLUTIONS SEGMENTS 1ST HALF YEAR 2017 10 | Half year results 2017 | 15-08-2017
Slide 11: Solutions Segmentation
HIGHLIGHTS 1ST HALF YEAR 2017 SOLUTIONS SEGMENTATION Segment | Subsegment Share Business model Markets R&D and System engineering Inhouse Manufacturing Outsourced Manufacturing Assembling Service Telecom Solutions 13% • Telecom operators • Cable operators • Service providers Indoor telecom & Copper
Slide 12: Telecom Solutions
TELECOM SOLUTIONS 4.6% (in million € unless stated otherwise) H1 2017 H1 2016 Δ in % 8.4% Turnover 94.2 84.1 + 12.0% EBITA 11.2 9.2 + 21.1% ROS 11.9% 11.0% Organic turnover growth: +12.3% INDOOR TELECOM & COPPER NETWORKS Increase EBITA +21.1% home networking-systems, broadband ROS improved to 11.9%
Slide 13: Telecom Solutions
TELECOM SOLUTIONS Fibre network systems: turnover +27.9% Organic growth +28.2% Persistent high level of demand for optical fiber in China Higher turnover from fiber optic networks in Germany, Poland, France and the Nordics France: strengthening of sales organization and launch new designed portfolio
Slide 14: Building Solutions
BUILDING SOLUTIONS 18.3% (in million € unless stated otherwise) H1 2017 H1 2016 Δ in % Turnover 312.0 274.0 + 13.9% 24.7%. EBITA 26.7 28.9 - 7.5% ROS 8.6% 10.6% Organic turnover growth: +10.1% CONNECTIVITY SYSTEMS Decline EBITA: -7.5% specialty cable (systems) for shipping, Start-up costs for subsea
Slide 15: Building Solutions
BUILDING SOLUTIONS Vision & Security systems: turnover +7.9% Organic turnover growth: +6.7% Mainly growth in vertical growth markets Machine Vision and Tunnel & Infra Machine Vision Increase market share at manufacturers of consumer electronics Positive feedback on newly developed innovative camera
Slide 16: Building Solutions
BUILDING SOLUTIONS Connectivity systems: turnover +23.0% Organic turnover growth: +15.5% Increased market volume in construction and infra sector Turnover growth in marine & offshore and data cable systems Solid progress with CEDD technology for airfield ground lighting (Tunnel & Infra) Integration
Slide 17: Industrial Solutions
INDUSTRIAL SOLUTIONS 18.3% (in million € unless stated otherwise) H1 2017 H1 2016 Δ in % Turnover 319.1 292.1 + 9.2% 25.7% EBITA 40.9 32.8 + 24.6% ROS 12.8% 11.2% Organic growth: +7.3% CONNECTIVITY SYSTEMS Mainly manufacturing systems and related to higher order intake in specialty cable systems and
Slide 18: Industrial Solutions
INDUSTRIAL SOLUTIONS Connectivity systems: turnover +5.6% Organic turnover growth: +1.2% Growth realized in medical and robot industries Continued investments in R&D respond to trend towards miniaturization and extension of lifespan of cable systems for advanced manufacturing systems Growing demand
Slide 19: Industrial Solutions
INDUSTRIAL SOLUTIONS Manufacturing systems: turnover +11.9% Organic turnover growth +11.9% Higher order intake over past quarters – engineering and production on higher level Order intake Q2: € 114 million (H1 2017: € 228 million) Continued recovery Chinese market – further growth market share top-5
Slide 20: Notes to the Results and Balance Sheet
NOTES TO THE RESULTS AND BALANCE SHEET 1ST HALF YEAR 2017
Slide 21: Change in turnover
NOTES TO THE RESULTS 1ST HALF YEAR 2017 Change in turnover (in € million) 750 59.4 725.2 700 12.0 0.7 650.1 3.0 650 600 550 500 21 | Half year results 2017 | 15-08-2017
Slide 22: Geographical distribution of turnover
NOTES TO THE RESULTS 1ST HALF YEAR 2017 Geographical distribution of turnover (in %) H1 2017 H1 2016 Netherlands 18 Netherlands 20 Europe other 48 Europe other 47 Asia 20 Asia 20 North America 11 North America 10 Other 3 Other 3 22 | Half year results 2017 | 15-08-2017
Slide 23: Development of turnover per solution
NOTES TO THE RESULTS 1ST HALF YEAR 2017 Development of turnover per solution (in € million unless stated otherwise) Raw material prices and Turnover Turnover Total foreign Organic H1 2017 H1 2016 Growth currencies Acquisitions growth Telecom Solutions 94.2 84.1 +12.0% -0.3% +12.3% Building Solutions
Slide 24: EBITA per Solution
NOTES TO THE RESULTS 1ST HALF YEAR 2017 EBITA per Solution Increase EBITA 9.5% (in € million unless stated otherwise) H1 2017 H1 2016 EBITA ROS EBITA ROS Operating expenses (in % turnover) decreased to 35.8% (H1 2016: 36.5%). Increase operating Telecom Solutions 11.2 11.9% 9.2 11.0% expenses due to:
Slide 25: Notes to the Results 1st Half Year 2017
NOTES TO THE RESULTS 1ST HALF YEAR 2017 Increase amortization with € 2.3 million to € 18.2 million Higher investment levels in R&D in recent years Increase financial expenses to € -3.9 million (H1 2016: € -3.2 million) Interest expenses increased € 0.3 million due to an on average higher outstanding
Slide 26: Profit and Loss account
NOTES TO THE RESULTS 1ST HALF YEAR 2017 Profit and Loss account (in € million) H1 2017 H1 2016 Delta % Turnover 725.2 650.1 + 11.5 Raw materials and consumables -394.4 -348.2 Gross margin 330.8 45.6% 301.9 46.4% +9.6 Operating costs -259.9 -237.1 + 9.6 EBITA 70.9 9.8% 64.8 10.0% +9.5 Amortization -1
Slide 27: Balance Sheet as of 30 June 2017
BALANCE SHEET AS OF 30 JUNE 2017 30 June 31 Dec 30 June 30 June 31 Dec 30 June (in € million ) 2017 2016 2016 2017 2016 2016 Assets Equity and liabilities Non-current assets Group equity Intangible non-current Shareholders’ equity 554.5 574.0 518.3 assets 391.5 395.5 393.1 Non-Controlling interests
Slide 28: Changes in working capital
NOTES TO THE BALANCE SHEET 30 JUNE 2017 Changes in working capital (in € million) 250 2.8 1.3 2.8 2.8 204.8 17.5 192.0 200 -2.9 -8.7 -2.8 Use of non recourse factoring: 150 30-06-17 € 52.8 mln 31-12-16 € 45.1 mln 30-06-16 € 44.7 mln 100 50 Use of supply chain finance: 30-06-17 € 36.6 mln 0 31-12-16
Slide 29: Change in net debt
NOTES TO THE BALANCE SHEET 30 JUNE 2017 Change in net debt (in € million) 250 223.0 11.4 3.9 Financial convenants 47.6 Net debt is based on financial 200 covenants as agreed with banks 166.1 15.8 3.3 20.8 Net debt / EBITDA: 1.2 150 - 1.2 10.8 3.6 100 - 59.1 50 0 29 | Half year results 2017 | 15-08-2
Slide 30: Cash Flow Statement
CASH FLOW STATEMENT (in € million) H1 2017 H1 2016 H2 2016 Operating result 52.5 48.5 64.6 Badwill -0.6 Depreciation, amortization and impairments 30.0 26.4 30.3 Result on divestments -0.7 Share and option schemes 1.4 2.0 Change in provisions and financial liabilities 0.3 -1.2 -0.9 Change in working
Slide 31: Ratios
RATIOS H1 2017 H1 2016 FY 2016 Working capital / Turnover1) 14.5% 14.4% 13.4% Net debt / EBITDA 2) 1.2 1.3 1.0 Solvency 43.7% 44.2% 46.7% Earnings per ordinary share before amortization and one-off € 1.07 € 0.98 € 2.25 income and expenses 3) Earnings per ordinary share 3) € 1.02 € 0.83 € 2.04 1) On
Slide 32: Strategic Developments & Outlook
STRATEGIC DEVELOPMENTS & OUTLOOK
Slide 33: 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 produc
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 high growth vertical markets with special focus on growth opportunities within the business segments
Slide 35: 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 realize 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: Solid Base Growth in Vertical Growth Markets
SOLID BASE GROWTH IN VERTICAL GROWTH MARKETS WITH FOCUS OP 25 BUILDING BLOCKS Fibre Optic Marine & Care Parking Tunnel & Infra Machine Vision Tire Building Networks Offshore Differentiation via Airfield Ground High market Market share Internationalization Market share smart-sensor / Lighting- Connec
Slide 37: Growth Scenarios Vertical Growth Markets
GROWTH SCENARIO’S VERTICAL GROWTH MARKETS Turnover (in € million) 2012 2014 2015 2016 Growth scenarios Fibre Optics Network 80 99 101 109 120 150 Parking 20 35 50 55 75 100 Tunnel & Infra 30 25 42 43 100 150 Marine & Offshore 20 50 58 53 100 125 Care 30 34 39 43 70 100 Machine Vision 95 103 114 111
Slide 38: Higher Margins Due to Focus on Technologies
HIGHER MARGINS DUE TO FOCUS ON TECHNOLOGIES Turnover from innovations R&D expenditure in mln € in % in mln € in % 350 35 60,0 4,0 300 30 50,0 3,5 250 25 40,0 3,0 200 20 30,0 2,5 150 15 100 10 20,0 2,0 50 5 10,0 1,5 0 0 0,0 1,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 201
Slide 39: Financial Objectives TKH
FINANCIAL OBJECTIVES TKH Progress realization targets on track ROS H1 2017: 9.8% (2016: 10.9%) ROCE H1 2017: 19.8% (2016: 20.1%) Targets (mid term) ROS 11 - 12% ROCE 20 – 22% NET debt / EBITA <2.0 39 | Half year results 2017 | 15-08-2017
Slide 40: Outlook
OUTLOOK Outlook H2 in market segments in which TKH is active shows generally a positive picture Telecom Solutions Demand for optical fiber in China and fiber optics networks in Europe in line with H1 Result H2 also in line with H1 Building Solutions Positive development turnover H2 Order book and or
Slide 41: Outlook
OUTLOOK Industrial Solutions Increase turnover H2 compared to H1 Customer-specific developments and new technologies within manufacturing systems will require relatively high levels of engineering activities in coming quarters – increase order book and order intake will primarily only just be visibl
Slide 42: Annex I: Core Technologies
ANNEX I: CORE TECHNOLOGIES 42 | Half year results 2017 | 15-08-2017
Slide 43: Bijlage I: TKH Technologieën
BIJLAGE I: TKH TECHNOLOGIEËN
Slide 44: Core Technologies
CORE TECHNOLOGIES VISION & SECURITY: COMMUNICATION CONNECTIVITY MANUFACTURING SYSTEMS • Video surveillance • Optical fibre systems • Sub-sea cable systems • Medicine distribution • safety cameras (explosion proof) • Mission critical communication • Marine cable systems • Tire assembling • Video mana
Slide 45: Annex II: Vertical Growth Markets
ANNEX II: VERTICAL GROWTH MARKETS
Slide 46: Vertical Growth Markets – Fibre Optic
TKH – VERTICAL GROWTH MARKETS – FIBRE OPTIC Growth drivers Data use through the impact of information and communication technology on the way we live our lives continues to grow Internet has become a basic service, like gas, water and electricity Developments such as the 'Internet of Things', 'Indus
Slide 47: Vertical Growth Markets – Care
TKH – VERTICAL GROWTH MARKETS – CARE Growth drivers Life expectancy is continually increasing and healthcare spending will increase sharply due to more and better, but also more expensive care – therefore, the demand for technologies for care solutions is increasing Changing healthcare funding: shif
Slide 48: Vertical Growth Markets – Parking
TKH – VERTICAL GROWTH MARKETS – PARKING Growth drivers Revenue from car parks is under pressure due to low supply and mobility - need to reduce OPEX Demand for providing a visual dashboard with parking information - managers and car park operators can react faster and more efficient to current situa
Slide 49: Vertical Growth Markets – Tunnel & Infra
TKH – VERTICAL GROWTH MARKETS – TUNNEL & INFRA Growth drivers In Europe, investment in tunnel technology for new and existing tunnel are planned for the next few years Due to strict legislation and regulations in the field of security, ever increasing demands are made on the technical equipment Incr
Slide 50: Vertical Growth Markets – Marine & Offshore
TKH – VERTICAL GROWTH MARKETS – MARINE & OFFSHORE Growth drivers Large increase global generated power by wind power Marine & Offshore Demand for larger cargo ships and need for efficient external site management Increase in the building of quality ships, cruise liners and luxury yachts Increase of
Slide 51: Vertical Growth Markets – Machine Vision
TKH – VERTICAL GROWTH MARKETS – MACHINE VISION Growth drivers Demand for vision technology is increasing due to trend towards industrial automation and robotics need Continue demand for more productivity and improvement of high quality of produced products Vision technology is a superior alternative
Slide 52: Vertical Growth Markets – Tire Building
TKH – VERTICAL GROWTH MARKETS – TIRE BUILDING Growth drivers High priority of the tire manufacturing industry to replace existing technology with an emphasis on high productivity, efficiency, waste reduction, quality improvement and smaller batches The number of types of tire for passenger cars has
Slide 53: TKH Group the solution provider
TKH Group the solution provider <