Zehnder Group AG Class A · SIX:ZEHN
Zehnder Group AG Class A — Financial Analyst Conference 2011
55 slides from Zehnder Group AG Class A's conference presentation, Mar 29, 2011
Slide 1: Financial Analyst Conference 2011 – Review 2010
Financial Analyst Conference 2011 Review 2010 Hans-Peter Zehnder, Chairman & CEO Dominik Berchtold, CFO March 29, 2011
Slide 2: Agenda
Agenda 1. Business Review 2010 2. Financial Results 2010 3. Mid-term priorities 4. Outlook 2011 5. Q&A 2
Slide 3: Agenda
Agenda 1. Business Review 2010 2. Financial Results 2010 3. Mid-term priorities 4. Outlook 2011 5. Q&A 3
Slide 4: 2010 at a glance
Business Review 2010 2010 at a glance Markets Market environment better than expected Improve- Increasing market share ments Improvement across the whole value chain Financial 9% sales increase performance 17% EBIT increase Share price increased by 63% in 2010 4
Slide 5: Markets: Europe - regulations
Business Review 2010 Markets: Europe - regulations Since 10 years energy efficiency in existing and new buildings is an important topic: • 2002: EU directive on «Energy Performance of Buildings» • Since 2006: incorporation in national legislation (EPBD) • Mai 2010: 2002 directive tightened – all new
Slide 6: Markets: Europe - regulations
Business Review 2010 Markets: Europe - regulations In all European markets are rules for energy efficiency (except CZ), in our core markets FR, DE, CH, UK, NL there are rules concerning ventilation Rules for energy efficiency of residential buildings for new buildings for existing buildings utilisat
Slide 7: Markets: Europe – completions of dwellings
Business Review 2010 Markets: Europe – completions of dwellings New build completions in 2010 15% below 2009 and 32% below 2008 (resp. -10%/-20% excl. Spain/Ireland effect), but renovation remains stable Housing completions total (in tsd. units) 2007 2008 2009 2010 E AU 50 47 45 43 BE 56 53 47 43 FR
Slide 8: Markets: Europe – our performance per segment
Business Review 2010 Markets: Europe – our performance per segment (in TEUR) 2008 2009 2010 FX-adj./organic RAD EUROPE 310'000 284'300 295'375 -8% 4% 3% CSY EUROPE 103'200 113'400 132'616 10% 17% 14% Total EUROPE 413'200 397'700 427'991 -4% 8% 6% 8
Slide 9: Markets: Europe – highlights France
Business Review 2010 Markets: Europe – highlights France Market: • Recovery of the new-build sector in the second semester Our achievements: • Improvement of market share in all segments • New customers gained • Launch of new products (electric and hydronic radiators and towel radiators) • Price inc
Slide 10: Markets: Europe – highlights Germany (and Austria)
Business Review 2010 Markets: Europe – highlights Germany (and Austria) Market: • Stable residential new-build and renovation, commercial and industrial construction declined • Positive effect of state stimulus programs for public healthcare buildings and schools (will fade-out in 2011) Our achievem
Slide 11: Markets: Europe – highlights Switzerland
Business Review 2010 Markets: Europe – highlights Switzerland Market: • Increase of residential and commercial/industrial sector • Share of highly insulated buildings further increasing • Decrease of the radiator market Our achievements: • Slight decrease of radiator sales • Strong growth of Ventila
Slide 12: Markets: Europe – highlights UK (and Ireland)
Business Review 2010 Markets: Europe – highlights UK (and Ireland) Market: • Overall very challenging economy • Further decline of the new build for residential dwellings – stabilization at a all-time low • Difficulties in securing mortgage financing Our achievements: • Only slight decrease of overa
Slide 13: Markets: Europe – other markets (I/II)
Business Review 2010 Markets: Europe – other markets (I/II) Italy: • Market: Decrease of radiator market, increasing importance of energy efficiency • Maintaining Radiator market share. Strong growth of Ventilation Netherlands: • Market: New build declined approx 30%, financing problems • Consolidat
Slide 14: Markets: Europe – other markets (II/II)
Business Review 2010 Markets: Europe – other markets (II/II) Spain (and Portugal): • Market: Further decrease of new build activities (approx 75% since 2007) • Further decrease of our sales, long-term investments launched (e.g. preparation for launch of Ventilation activities) Eastern Europe: • Stro
Slide 15: Markets: US – our performance per segment
Business Review 2010 Markets: US – our performance per segment (in TEUR) 2008 2009 2010 FX-adj./organic RAD US 21'100 19'300 21'733 -9% 13% 7% CSY US 4'000 4'200 5'255 5% 25% 19% Total US 25'100 23'500 26'988 -6% 15% 9% • Market: Challenging environment, 18% decline of housing completions; energy ef
Slide 16: Markets: CN – our performance per segment (I/II)
Business Review 2010 Markets: CN – our performance per segment (I/II) (in TEUR) 2008 2009 2010 FX-adj./organic RAD CN 14'800 14'200 17'956 -4% 26% 19% CSY CN 1'000 1'100 2'973 10% 170% 25% Total CN 15'800 15'300 20'929 -3% 37% 20% • Market: Construction market is booming – but not overheated: • Urba
Slide 17: Markets: CN – investment in relationships, infrastructure and distribution network
Business Review 2010 Markets: CN – investment in relationships, infrastructure and distribution network
Slide 18: Highlight product lines Europe (in units)
Business Review 2010 Highlight product lines Europe (in units) • Radiators: strong increase (mainly driven by towel radiators, but also positive developments for electric radiators, multi column and made to measure radiators) • Radiant heat and cooling panels: moderate increase • Heat recovery venti
Slide 19: Innovation: Successful recent market introductions
Business Review 2010 Innovation: Successful recent market introductions Metropolitan: design radiator, exceeding ComfoBox 5: All-in one energy center our expectations in various markets (heating, cooling, ventilation, hot water); successful concept copied by various competitors 19
Slide 20: Innovation: Major market launches for 2011 (I/II)
Business Review 2010 Innovation: Major market launches for 2011 (I/II) ComfoBox apart: “small” brother of New flat panel (“Avento Neo”): low ComfoBox 5 for apartments; temperature radiator. Including forced introduction at ISH March 2011 convection and new approach ref. ease of installation 20
Slide 21: Innovation: Major market launches for 2011 (II/II)
Business Review 2010 Innovation: Major market launches for 2011 (II/II) Continuous improvement of air New supply air valve for refurbishment distribution systems for renovation 21
Slide 22: Innovation: Harmonization of R&D activities – stage gate process
Business Review 2010 Innovation: Harmonization of R&D activities – introduction of a stage gate process Stage Gate Stage Gate Stage Gate 0 1 1 2 2 3 Idea Description Rough Concept Business Case Stage Gate Stage Gate Stage 4 5 PLR 3 4 5 Development Testing, Launch Post Launch Production Transfer Revi
Slide 23: Operative measures – project energiZe (I/III)
Business Review 2010 Operative measures – project energiZe (I/III) • Main goals: to become a system provider and to improve our profitability • Launched in November 2008 – completed in October 2010 Ongoing activities handed-over to daily business 23
Slide 24: Operative measures – project energiZe (II/III)
Business Review 2010 Operative measures – project energiZe (II/III) Key projects: • Increase share of system offer • Increase technical knowledge • One company approach (1 sales entity per country) • Introduction of a new ERP (SAP) and a new MIS (Hyperion/Oracle) • Optimization of logistics and oper
Slide 25: Operative measures – project energiZe (III/III)
Business Review 2010 Operative measures – project energiZe (III/III) New group brand policy: Focus on Zehnder and Runtal as core brands (beside some local tactical brands) 25
Slide 26: Agenda
Agenda 1. Business Review 2010 2. Financial Results 2010 3. Mid-term priorities 4. Outlook 2011 5. Q&A 26
Slide 27: Group at a glance
Financial Results 2010 Group at a glance Sales increase of 9% to EUR 475.9 Mio. Organic and adjusted by currency effects increase of 6% EBIT of EUR 50.4 Mio (2009: 44.0; excl. extraordinary 43.0) Strategic and operative measures show benefits. EBIT margin increased from 9.9% to 10.6% 27
Slide 28: Group at a glance
Financial Results 2010 Group at a glance Cash flows from operating activities EUR 56.9 Mio. (2009: 50.7) Investments in fixed assets of EUR 20.0 Mio. (2009: 24.5) Repayment of loans of EUR 17.3 Mio. (2009: repayment of 24.7) Net cash position of EUR 42.9 Mio. (2009: net cash of 20.2) Equity ratio 57
Slide 29: Net sales per segment 2010
Financial Results 2010 Net sales per segment 2010 476 445 454 437 27 480 427 23 25 24 450 405 16 21 420 7 16 16 17 15 390 15 360 52 58 70 103 113 133 330 300 270 240 210 180 332 337 336 310 284 295 150 USA 120 90 China 60 Ventilation Europe 30 Radiator Europe 0 2005 2006 2007 2008 2009 2010 29
Slide 30: Top countries (sales)
Financial Results 2010 Top 10 countries (sales) 2006 2007 2008 2009 2010 Ranking 1 FR FR FR FR FR 2 DE DE DE DE DE 3 IT IT UK CH CH 4 NL NL IT UK UK 5 CH UK CH NL NL 6 SP/PT CH NL IT IT 7 UK USA/CA USA/CA USA/CA USA/CA 8 CN SP/PT BE BE CN 9 USA/CA CN CN CN BE 10 BE BE SP/PT SP/PT AT 30
Slide 31: Organic and FX-adjusted sales
Financial Results 2010 Organic and FX-adjusted sales Net sales EUR 476 Mio. (PY EUR 437 Mio., +9%; H1: +5%) Organically (net of FX and acquisitions): +6% (H1: +3%) Organic growth 6% H1 H2 Year Radiator Europe 0% 4% 3% Ventilation Europe 10% 18% 14% China 18% 21% 20% USA 3% 16% -9% Currency effects 3
Slide 32: Sales per segment and region
Financial Results 2010 Sales per segment and region (in TEUR) 2008 2009 2010 FX-adj./organic Radiators EUROPE 310'000 284'300 295'375 -8% 4% 3% Ventilation EUROPE 103'200 113'400 132'616 10% 17% 14% Total EUROPE 413'200 397'700 427'991 -4% 8% 6% Radiators US 21'100 19'300 21'733 -9% 13% 7% Ventilati
Slide 33: Net sales and EBIT
Financial Results 2010 Net sales and EBIT EUR Mio. 2009 2010 H1 H2 Total 1 H1 H2 Total Net sales 207.0 229.5 436.5 217.5 258.4 475.9 Growth H1-H2 in % 11% 19% Growth 09-10 in % 5% 13% 9% EBIT 15.5 27.5 43.0 19.1 31.1 50.4 Growth H1-H2 in % 77% 64% Growth 09-10 in % 23% 14% 17% EBIT margin 7.5% 12.0%
Slide 34: Sales & EBIT
Financial Results 2010 Sales & EBIT 34
Slide 35: Investments in fixed assets
Financial Results 2010 Investments in fixed assets Investments in fixed assets amounted to EUR 20.0 Mio. (PY EUR 24.5 Mio). Major projects: • Investments in production in Lahr (move from Riegel) • Investments in Machinery in Täby • Investments in new building in Beijing 35
Slide 36: Innovation – Research & Development
Financial Results 2010 Innovation – Research & Development Research & Development costs of EUR 10.3 Mio. (Budget EUR 7.5 Mio). Major projects: • Comfobox in Gränichen • Flat Panel in Gränichen • High-efficiency HRV in Zwolle 36
Slide 37: Key figures
Financial Results 2010 Key figures EUR Mio. 2009 2010 in % Sales 436.5 475.9 9.0% EBIT before extraordinary income 43.0 50.4 17.3% EBIT margin 9.9% 10.6% Extraordinary income 1.0 0.0 EBIT after extraordinary income 44.0 50.4 14.7% EBIT margin 10.1% 10.6% Net income 33.4 38.2 14.5% Net income margin
Slide 38: Key figures
Financial Results 2010 Key figures EUR Mio. 2008 2009 2010 Current Assets 228.9 224.0 237.0 Fixed Assets 125.1 128.5 141.4 Total Assets 354.0 352.5 378.4 Current liabilities 104.3 98.6 89.1 Long-term liabilities 97.1 71.9 71.9 Equity 152.6 182.0 217.4 Total Liabilities&equity 354.0 352.5 378.4 Equit
Slide 39: Cash Flow
Financial Results 2010 Cash Flow 60.0 1.1 50.0 17.6 -20.9 40.0 -0.2 0.8 -1.8 30.0 -10.6 -26.6 38.2 20.0 -17.4 2.2 10.0 9.1 0.0 39
Slide 40: Proposals to the AGM
Financial Results 2010 Proposals to the AGM Dividend payment, nominal value repayment and share split Due to the 25th anniversary of Zehnder being listed at the SIX Swiss Exchange the board proposes to the AGM an extraordinary payout structure. Per bearer share this structure consists of: dividend o
Slide 41: Dividend and nominal value repayment
Financial Results 2010 Dividend and nominal value repayment 2007 2008 2009 2010 Net income without minority interest (EUR Mio.) 26.0 2.6 32.8 37.4 Earnings per share (at CHF 100.-) in EUR 89 9 112 128 Variance in % -13% -90% 1144% 14% Number of shares (entitled to dividend) bearer share (CHF 100 par
Slide 42: Agenda
Agenda 1. Business Review 2010 2. Financial Results 2010 3. Mid-term priorities 4. Outlook 2011 5. Q&A 42
Slide 43: The key trends are still dominant – and ask for integrated solutions
Mid-term priorities The key trends are still dominant – and ask for integrated solutions Comfort, Health, Energy efficiency Radiators Air vents Air intake Air distribution casing Sound-insulated ducts Underfloor convectors Compact energy unit with control Brine pipe 43
Slide 44: Mission statement confirmed
Mid-term priorities Mission statement confirmed We want to be the most attractive provider of energy-efficient, healthy and comfortable indoor climate solutions. Comfort Indoor Climate Solutions Health Energy efficiency 44
Slide 45: Our Strategy Geographical priorities
Mid-term priorities Our Strategy Geographical priorities EUROPE: OVERSEAS: - France - North America - Germany - China - Switzerland - UK - Italy - Eastern Europe Regions where we see the biggest growth potential for us Other markets are monitored (Brasil and India) 45
Slide 46: Organic growth and acquisitions
Mid-term priorities Organic growth and acquisitions Focus is on organic growth. Acquisitions shall be complementary to support our growth ambitions (“pearl chain strategy”) The main acquisition criteria are: • Enhancing the offer of Indoor Climate Solutions • Adding system-management know-how, inclu
Slide 47: Operational excellence throughout the whole value chain
Mid-term priorities Operational excellence throughout the whole value chain Continuous optimization of our sales organizations Improvement of marketing and communication Group-wide introduction of SAP Optimized logistics Continuous improvement of our production facilities Innovation will get more an
Slide 48: Agenda
Agenda 1. Business Review 2010 2. Financial Results 2010 3. Mid-term priorities 4. Outlook 2011 5. Q&A 48
Slide 49: Market forecasts
Outlook Market forecasts European and global construction Construction and economic growth EC-19 2007 2008 2009 2010 E 2011 F 2012 F 2013 F Construction output 2.3 -3.4 -8.8 -3.3 -0.1 2.0 2.5 GDP 2.9 3.5 -4.0 1.9 1.6 1.7 1.8 EC-19 2004 2009 2013 Residential - new build 50% 40% 40% - renovation 50% 6
Slide 50: Market forecasts
Outlook Market forecasts European housing market (completions residential new build) Housing completions total (in(intsd. tsd)units) 2010 E 2011 F 2012 F 2013 F AU 43 42 42 43 BE 43 44 43 43 FR 320 330 325 340 DE 157 166 183 204 IT 190 159 149 148 SP 250 98 90 100 CH 42 44 45 45 NL 56 64 65 68 UK 13
Slide 51: Positive prospects …
Outlook Positive prospects … Overall macro economic market environment remains very challenging, but: • Positive trend of residential new build in key markets France and Germany, stable situation in Switzerland and UK expected • Opportunities in Eastern Europe and North America • Continuous growth i
Slide 52: … and conclusions
Outlook … and conclusions Thanks to our strong position we will continue to expand our market share We expect again a slight growth of the Radiator business and a two digit growth of the Ventilation business Rising energy and raw material prices will lead to price adjustments – operative margin of s
Slide 53: Agenda
Agenda 1. Business Review 2010 2. Financial Results 2010 3. Mid-term priorities 4. Outlook 2011 5. Q&A 53
Slide 54: Q&A
Q&A? 54 zeh* Yor
Slide 55: Disclaimer
Disclaimer While Zehnder Group is making great efforts to include accurate and up-to- date information, we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this handout and disclaim any liability for the use of it. The sta