Huber + Suhner Ag · SIX:HUBN
Huber + Suhner — FY2021 Earnings Presentation
50 slides from Huber + Suhner's earnings presentation, Mar 8, 2022
Slide 1: Huber+Suhner
HUBER:+SUHNER
Slide 2: Full-year results 2021 – Media and analysts' conference
Full-year results 2021 Media and analysts’ conference 8 March 2022 | Full-year results 2021 | Media and analysts' conference 2
Slide 3: Agenda
Agenda Overview of business year 2021 Urs Ryffel (CEO) Financial results 2021 Ivo Wechsler (CFO) Sustainability, Strategic focus, Trends, Outlook 2022 Urs Ryffel (CEO) Questions and discussion 8 March 2022 | Full-year results 2021 | Media and analysts' conference 3
Slide 4: Record results in 2021
Record results in 2021 Order intake and net sales significantly above previous year • Double-digit percentage growth in order intake and net sales in all three market segments • Growth initiatives data center, electric vehicle as well as aerospace and defense make an above-average contribution to de
Slide 5: Figures at a glance
Figures at a glance MCHF 2021 2020 Δ% Order intake 995.6 748.2 33.1 Net sales 862.9 737.9 16.9 Operating profit (EBIT) 104.6 61.2 70.9 as % of net sales 12.1 8.3 Net income 87.3 52.3 66.9 as % of net sales 10.1 7.1 8 March 2022 | Full-year results 2021 | Media and analysts' conference 5
Slide 6: EBIT 2021 profitability significantly above medium-term target range
EBIT 2021 profitability significantly above medium-term target range of 8‒10 % MCHF 110 104.6 15% 100 90 82.5 80.5 80 12.1% 10% 70 9.7% 61.2 60 58.1 9.3% 8.3% EBIT 50 EBIT margin 7.5% 40 5% 30 20 10 0 0% 2017 2018 2019 2020 2021 8 March 2022 | Full-year results 2021 | Media and analysts' conference
Slide 7: Industry segment
Industry segment Impressive growth coupled with high level of profitability MCHF Key aspects 2021 2020* Δ% • Test and measurement, aerospace and defense as well as energy and general industrial made equal Order intake 296.6 239.8 23.7 contribution to growth Net sales 275.4 225.9 21.9 • Business with
Slide 8: Communication segment
Communication segment Leap in orders, EBIT margin improvement into double digits MCHF Key aspects • Expansion of 5G mobile network 2021 2020* Δ% (NAM/EMEA) and fixed network infrastructure as growth drivers Order intake 420.0 286.4 46.6 • Data center growth initiative Net sales 341.1 289.1 18.0 cont
Slide 9: Transportation segment
Transportation segment Growth attributable to automotive business, EBIT margin behind expectations MCHF Key aspects • Business developed differently in 2021 2020* Δ% subsegments railway and automotive • Significantly lower volumes with high- Order intake 279.0 222.0 25.7 speed trains in China • Pand
Slide 10: Net sales by market segment
Net sales by market segment Three market segments provide balanced diversification MCHF 350 +18.0 % 300 +21.9 % 29% +10.6 % 32% 250 200 2021 150 100 39% 50 0 Industry Communication Transportation Industry 2020 (adjusted) Communication 2021 Transportation 8 March 2022 | Full-year results 2021 | Media
Slide 11: Net sales by region
Net sales by region Very dynamic development of the business in the Americas MCHF 500 +15.1 % 22% 400 300 2021 53% +61.5 % 200 -8.8 % 25% 100 0 EMEA (incl. CH) Americas Asia-Pacific EMEA (incl. CH) 2020 Americas 2021 Asia-Pacific 8 March 2022 | Full-year results 2021 | Media and analysts' conference
Slide 12: Agenda
Agenda Overview of business year 2021 Urs Ryffel (CEO) Financial results 2021 Ivo Wechsler (CFO) Sustainability, Strategic focus, Trends, Outlook 2022 Urs Ryffel (CEO) Questions and discussion 8 March 2022 | Full-year results 2021 | Media and analysts' conference 12
Slide 13: Half-year development
Half-year development Two excellent semesters in 2021 MCHF 600 14% 12.2% 12.1% 12% 500 10.7% 10.0% 10% 400 8.5% 8% 300 6.7% 6% 200 4% 100 2% 449 447 352 383 397 377 351 361 494 424 501 439 0 0% H1/19 H2/19 H1/20 H2/20 H1/21 H2/21 Order intake Net sales EBIT-margin 8 March 2022 | Full-year results 20
Slide 14: Factors impacting order intake
Factors impacting order intake Organic growth of 30 % supported by all three market segments MCHF + 247.5 MCHF + 33.1% 1000 TRA COM + 33.9 MCHF IND + 15.2 % 800 + 133.5 MCHF + 56.9 MCHF + 46.6 % + 23.7 % 600 995.6 Organic growth Currency & copper 400 748.2 + 224.3 MCHF + 23.2 MCHF + 30.0% + 3.1% 200
Slide 15: Factors impacting net sales
Factors impacting net sales Strong organic contribution from Industry and Communication market segments MCHF 1000 + 125.1 MCHF + 16.9% COM TRA 800 IND + 0.4 MCHF + 51.9 MCHF + 0.2% + 49.6 MCHF + 17.9% + 22.0% 600 862.9 400 Organic growth Currency & copper 737.9 + 101.9 MCHF + 23.2 MCHF + 13.8% + 3.1
Slide 16: Gross margin
Gross margin Margin improvement overall, but rising pressure from material price increases MCHF Gross profit Gross margin 200 45% 150 39.7% 40% 37.2% 36.7% 100 35.9% 34.9% 34.8% 35% 50 167 133 131 130 169 161 0 30% H1/19 H2/19 H1/20 H2/20 H1/21 H2/21 8 March 2022 | Full-year results 2021 | Media and
Slide 17: Operating expenses
Operating expenses Continuously high R+D activity MCHF 300 27.9% 30% 26.8% 26.2% 250 223 206* 226 200 53 49 20% 46 150 42 56 48 100 10% 127 121 50 112 0 0% 2019 2020* 2021 *Adjusted due to new segment structure S+M R+D Admin in % of net sales 8 March 2022 | Full-year results 2021 | Media and analyst
Slide 18: EBIT by market segment
EBIT by market segment Very strong in Industry and Communication, Transportation behind expectations MCHF 2021 2020* Industry 58.4 21.2 % 36.4 16.1 % Communication 41.5 12.2 % 15.4 5.3 % Transportation 12.5 5.1 % 16.2 7.3 % Corporate (7.8) (6.8) Total EBIT 104.6 12.1 % 61.2 8.3 % *Adjusted due to ne
Slide 19: Financial result
Financial result Higher costs due to cash repatriation MCHF 3 Net currency effects Other financial result 2 (0.6) (2.3) 1 0.7 0 -1.3 -1.1 -1 -1.2 -2 -3 2020 2021 8 March 2022 | Full-year results 2021 | Media and analysts' conference 19
Slide 20: Group tax rate
Group tax rate High share of profit in low tax countries and positive impact from R+D and other tax benefits 25% 21.1% 20% 19.2% 14.7% 15% 13.7% 10% 5% 0% 2020 2021 Expected tax rate Effective tax rate 8 March 2022 | Full-year results 2021 | Media and analysts' conference 20
Slide 21: Factors impacting “Bottom Line”
Factors impacting “Bottom Line” Highest net income in HUBER+SUHNER history Earnings per share (CHF) 2.66 4.45 (+67 %) MCHF 110 + 43.4 MCHF - 1.7 MCHF - 6.7 MCHF + 35.0 MCHF 100 + 82.9 % - 3.2 % - 12.8 % + 66.9 % 90 80 70 60 50 87.3 40 30 52.3 20 10 0 Net income 2020 EBIT impact Financial result In
Slide 22: Investments
Investments Increased investment level in Switzerland and Poland MCHF 60 Investments in % of net sales 7% 5.9% 6% 5.1% 45 4.5% 5% 4% 30 3% 2% 15 1% 38 38 51 0 0% 2019 2020 2021 8 March 2022 | Full-year results 2021 | Media and analysts' conference 22
Slide 23: Overview balance sheet
Overview balance sheet Strong cash and equity position MCHF 31.12.2021 31.12.2020 30.06.2021 Cash and cash equivalent 220 204 8% 203 Other current assets 346 288 20 % 343 Non-current assets 268 249 7% 253 Financial liabilities - 1 -100 % 0 Other liabilities 190 148 28 % 184 Equity* 644 592 9% 615 in
Slide 24: Overview cash flow
Overview cash flow Improved cash flow generation from operating activities MCHF 2019 2020 2021 Cash flow from operating activities 129.1 86.5 101.7 Cash flow from investing activities (84.0) (36.3) (45.1) Free operating cash flow 45.1 50.2 56.6 Dividend payment (48.7) (31.2) (25.3) Dividend payment
Slide 25: Share buyback of up to 5% of registered shares
Share buyback of up to 5 % of registered shares Programme started and progressing in % of registered Description Total average share price shares November 2021 61’500 83.26 0.30 % December 2021 80’000 83.89 0.40 % Number of shares bought 141’500 83.62 0.70 % Volume in MCHF 11.8 8 March 2022 | Full-y
Slide 26: Dividend development
Dividend development Earnings-oriented dividend policy of 40–50 %, high ordinary dividend proposed MCHF Anniversary dividend 79% 60 80% Ordinary dividend 50 Payout ratio ordinary dividend in % 60% 51% 50% Payout ratio incl. anniversary dividend 40 48% 49% 45% in % 30 40% 20 20% 10 21.4 29.2 31.1 25.
Slide 27: Financial assessment 2021
Financial assessment 2021 Double-digit growth in order intake of 33 % and in net sales of 17 % Historic record level of operating profitability (CHF 105 million) and net income (CHF 87 million) Maintained attractive tax rate of 14.7 % Strong cash flow from operating activities reaches CHF 102 millio
Slide 28: Exposure to Russia, Belarus and Ukraine
Exposure to Russia, Belarus and Ukraine • HUBER+SUHNER suspended all business activities that directly or indirectly relate to the concerned regions • Major market served: Railway • Direct sales exposure: 2–3 % of yearly Group turnover (mainly via distributors) • No production facility or strategic
Slide 29: Agenda
Agenda Overview of business year 2021 Urs Ryffel (CEO) Financial results 2021 Ivo Wechsler (CFO) Sustainability, Strategic focus, Trends, Outlook 2022 Urs Ryffel (CEO) Questions and discussion 8 March 2022 | Full-year results 2021 | Media and analysts' conference 29
Slide 30: Sustainability
Sustainability 8 March 2022 | Full-year results 2021 | Media and analysts' conference 30
Slide 31: Sustainable value creation
Sustainable value creation Our aspiration Our aspiration is to create sustainable value by analysing, transforming, and improving our economic performance, existing business / production processes, societal involvement as well as our governance. For more information: www.hubersuhner.com/en/company/s
Slide 32: Materiality matrix
Materiality matrix Material topics according to business and impact relevance 8 March 2022 | Full-year results 2021 | Media and analysts' conference 32
Slide 33: Score card
Score card How we performed in regard to focus topics 8 March 2022 | Full-year results 2021 | Media and analysts' conference 33
Slide 34: Business story: Contributing to a more sustainable future – Energy
Business story Contributing to a more sustainable future – Energy Energy transmission and distribution through reliable fiber optic solutions • High-voltage direct current (HVDC) link of 767 km between Denmark and the United Kingdom • DC power cable passing through the North Sea and two converter st
Slide 35: Business story: Contributing to a more sustainable future – Fixed Access Network
Business story Contributing to a more sustainable future – Fixed Access Network Support to telecom equipment manufacturers and network operators with smart solutions that meet sustainability targets • Internet connections and data are growing exponentially: 127 new devices connect to the Internet ev
Slide 36: Business story: Contributing to a more sustainable future – Rail Communications
Business story Contributing to a more sustainable future – Rail Communications Support rail operators in rejuvenating fleets to deliver 21st century services • Introduction of a National Technical Specification Notice (NTSN) related to rail system accessibility to persons with disability or persons
Slide 37: Sustainability: Reportings, disclosures and ratings
Sustainability Reportings, disclosures and ratings In 2016, HUBER+SUHNER Climate change rating of B (down from A- in 2020) – Management committed to achieving a science- category based GHG reduction target in scope Supplier engagement rating of A- (first time) 1+2 by 2025. Among the top 9 % of some
Slide 38: Strategic focus, Trends, Outlook 2022
Strategic focus Trends Outlook 2022 8 March 2022 | Full-year results 2021 | Media and analysts' conference 38
Slide 39: Economic environment and strategic focus
Economic environment and strategic focus Economic environment • Basic trends in most markets favourable • Despite (fundamentally) positive market trends, uncertainties and risks are significant: − Geopolitical tensions with the previously unimaginable negative climax of a war on the doorstep of Euro
Slide 40: The dimensions of our strategic focus
The dimensions of our strategic focus Portfolio of attractive markets aligned with mega trends Core markets Focused market Growth initiatives Opportunities with vertical growth potential Energy High Power Charging •… Test & Measurement Aerospace & Defense Medical Device •… Industry Process Industrie
Slide 41: Our solutions for the Industry market
Our solutions for the Industry market Aerospace & Defense Process Industries Energy General Industrial Medical Device Positioning Test & Measurement High Power Charging Connecting challenging and critical applications with reliable solutions, ensuring lifetime data integrity and power transmission –
Slide 42: Market trends in Industry
Market trends in Industry • Need for communication solutions in industrial applications is increasing • Connectivity solutions allowing 24/7 operations without disruption ensure reliability and availability of critical infrastructure for people • Need for high-precision components with maximum signa
Slide 43: Our solutions for the Communication market
Our solutions for the Communication market CEM Components • Components for antennas and radios Data Center • Switches and routers • Telecoms • Optical transport equipment • Broadcasting • Colocation • Enterprise Mobile Network • Edge data center • In-building coverage • Macro cells • Small cells • S
Slide 44: Market trends in Communication
Market trends in Communication • Functioning of communication infrastructure more than ever decisive for functioning of society and efficiency of economies • Communication market ahead of strong period • 5G picks up momentum – evolution of 5G infrastructure towards higher data rates will happen beyo
Slide 45: Our solutions for the Transportation market
Our solutions for the Transportation market Rolling stock • In-carriage wiring solutions Rail Communications • Inter-carriage wiring solutions • Train-to-ground communication • Ground communication • Communication-based train control Positioning Connecting rail and road mobility with sustainable sol
Slide 46: Market trends in Transportation
Market trends in Transportation • Ecological mobility requirements will be an even stronger criterion for the build-up of future transportation • Railway recovery after the pandemic will happen – ecological mobility will not be possible without significant investments in railway infrastructure mediu
Slide 47: Outlook 2022
Outlook 2022 Medium-term EBIT target range • Based on the strong development over the last three semesters, the company expects higher profitability going forward over the cycle and adjusts the medium-term target range for the operating margin to 9–12 % (previously 8–10 %). Net sales guidance for 20
Slide 48: Financial calendar
Financial calendar Annual General Meeting (without presence of shareholders) 06.04.2022 Half-year report 2022 16.08.2022 Media and analysts’ conference (webcast) 16.08.2022 Capital Market Day (Herisau) 23.09.2022 Sales and order intake (9 months) 24.10.2022 Sales and order intake (12 months) 20.01.2
Slide 49: Agenda
Agenda Overview of business year 2021 Urs Ryffel (CEO) Financial results 2021 Ivo Wechsler (CFO) Sustainability, Strategic focus, Trends, Outlook 2022 Urs Ryffel (CEO) Questions and discussion 8 March 2022 | Full-year results 2021 | Media and analysts' conference 49
Slide 50: Connecting – today and beyond
Connecting – today and beyond