Huber + Suhner Ag · SIX:HUBN
Huber + Suhner — FY2016 Earnings Presentation
49 slides from Huber + Suhner's earnings presentation, Mar 14, 2017
Slide 1: Excellence in Connectivity Solutions
Excellence in Connectivity Solutions
Slide 2: Agenda
Agenda Overview of financial year 2016 Urs Kaufmann (CEO) Financial results Ivo Wechsler (CFO) Outlook Urs Ryffel (designated CEO) Questions and discussion Buffet lunch 14 March 2017 | Media and analysts' conference
Slide 3: Overview of the 2016 financial year
Overview of financial year 2016 Overview of the 2016 financial year Solid growth – improved profitability – new options for the future • Increased order intake and net sales • EBIT margin at upper end of the target range – net income almost doubled • Two of the three divisions with strong developmen
Slide 4: Figures at a glance
Overview of financial year 2016 Figures at a glance CHF million 2016 2015 Δ% Order intake 746.6 702.8 +6.2 Net sales 737.2 706.3 +4.4 Operating profit (EBIT) 65.1 52.3 +24.4 as % of net sales 8.8 7.4 Net income 49.1 24.7 +98.7 as % of net sales 6.7 3.5 Excellence in Connectivity Solutions 14 March 2
Slide 5: Net sales development last 5 years
Overview of financial year 2016 Net sales development last 5 years Return to path of growth CHF million 800 749 737 720 706 698 600 400 200 0 2012 2013 2014 2015 2016 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 5
Slide 6: Net sales development at constant exchange rates since 2003
Overview of financial year 2016 Net sales development at constant exchange rates since 2003 Average growth at constant exchange rates of 5% CHF million 1100 984 1000 900 800 737 700 600 522 500 400 300 200 100 0 * reported 2003 04 05 06 07 08 09 10 11 12 13 14 15 16 16* Excellence in Connectivity So
Slide 7: EBIT development 2012 – 2016
Overview of financial year 2016 EBIT development 2012 – 2016 2015 currency crisis virtually offset – at upper end of target range CHF million 70 21% 65.1 60 50 14% 40 30 9.2% 8.8% 7% 20 7.4% 7.2% EBIT 10 EBIT margin 3.4% 0 0% 2012 2013 2014 2015 2016 Excellence in Connectivity Solutions 14 March 201
Slide 8: Half year dynamics
Overview of financial year 2016 Half year dynamics Strong first, weaker second term – rising demand towards year end CHF million 450 14% 400 388 381 12% 356 356 350 358 356 347 350 10% 300 10.1% 8.3% 250 8% 7.5% 6.5% 200 6% 150 4% 100 2% 50 0 0% H1/15 H2/15 H1/16 H2/16 Order intake Net sales Reporte
Slide 9: The three dimensions of our business
Overview of financial year 2016 The three dimensions of our business Results by technologies, markets and regions APAC Americas EMEA Communi- Transpor- Industrial cation tation RF Technology / Segments Radio Frequency Fiber Optics FO Low Frequency LF Excellence in Connectivity Solutions Markets 14 M
Slide 10: Net sales development in divisions
Overview of financial year 2016 Net sales development in divisions Marked growth in Fiber Optics and Radio Frequency; Low Frequency constant in organic terms CHF million +6.3% +8.9% -3.3% +6.0% +4.8% +0.3% "Organic" (excluding portfolio, copper and currency effects) 350 306 300 281 250 220 219 207 2
Slide 11: Radio Frequency division
Overview of financial year 2016 Radio Frequency division Marked growth – attractive profitability – market share gains CHF million Key aspects • Significant growth in net sales, 2016 2015 Δ% order intake even double-digit • EBIT margin improved by 2 Order intake 226.4 201.2 +12.5 percentage points •
Slide 12: Fiber Optics division
Overview of financial year 2016 Fiber Optics division Best result in corporate history – acquisition of Polatis CHF million Key aspects • New level of order intake 2016 2015 Δ% • Over CHF 300 million net sales for the first time Order intake 322.3 270.8 +19.0 • Further improved operating profit Net
Slide 13: Low Frequency division
Overview of financial year 2016 Low Frequency division Net sales constant in organic terms – noticeably fewer orders – insufficient profitability CHF million Key aspects • Net sales fell slightly overall 2016 2015 Δ% • Weak order intake – rail business declining, in particular the cable Order intake
Slide 14: Net sales by markets
Overview of financial year 2016 Net sales by markets Communication with growth spurt – Transportation and Industrial at previous year's level CHF million 400 +9.4% 300 22% 200 -1.8% 51% +1.5% 2016 100 27% 0 Communication Transportation Industrial Communication Transportation 2015 2016 Industrial Exc
Slide 15: Net sales by regions
Overview of financial year 2016 Net sales by regions Broad-based growth in geographical terms CHF million 400 +5% 300 20% +5% 46% 200 2016 +3% 100 34% 0 EMEA (incl. CH) Asia-Pacific Americas EMEA (incl. Switzerland) Asia-Pacific Americas 2015 2016 Excellence in Connectivity Solutions 14 March 2017 |
Slide 16: Development of average number of employees
Overview of financial year 2016 Development of average number of employees Permanent employees 5000 4000 3808 3739 3789 3866 3584 3000 1870 1891 1954 1994 1870 2000 446 457 463 446 629 1000 1492 1391 1372 1341 1243 Low-cost countries 0 High-cost countries 2012 2013 2014 2015 2016 Switzerland Excelle
Slide 17: Conclusion 2016
Conclusion 2016 Encouraging operative progress and new strategic options • 2015 currency crisis definitely overcome • Order intake, net sales, EBIT and net income increased • Positive development across the board • Low Frequency must do its homework – opportunities exist • New strategic options deve
Slide 18: Dividend: Proposal to the Annual General Meeting
Overview of financial year 2016 Dividend: Proposal to the Annual General Meeting • Dividend policy – Result-oriented: Pay-out of 40-50% of net income – "Floor": At least CHF 1.00 per share • Proposal to the Annual General Meeting 2017 – Increase in dividend per share to CHF 1.25 (PY CHF 1.00) – Pay-
Slide 19: Changes to the Board of Directors
Overview of financial year 2016 Changes to the Board of Directors Proposal to the Annual General Meeting • Urs Kaufmann is proposed as the new Chairman of the Board • Beat Kälin remains on Board of Directors as Vice-Chairman Urs Kaufmann • Swiss citizen, 1962 • Dipl. Ing. ETH Zürich • CEO since 2002
Slide 20: Agenda
Agenda Overview of financial year 2016 Urs Kaufmann (CEO) Financial results Ivo Wechsler (CFO) Outlook Urs Ryffel (designated CEO) Questions and discussion Buffet lunch 14 March 2017 | Media and analysts' conference
Slide 21: Factors impacting the «Top Line»
Financial results Factors impacting the «Top Line» CHF million 800 +26.5m +30.8m +3.8% +0.8% +4.4% +5.3m -0.2% -1.1m 750 700 650 737 600 706 550 500 Net Sales 2015 Organic Currency + Copper Portfolio Net Sales 2016 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 2
Slide 22: Improved gross margin
Financial results Improved gross margin CHF million 400 40% 36.7% 35.8% 34.3% 34.6% 300 35% 30.7% 200 30% 268 270 247 244 100 215 25% Gross profit Gross margin 0 20% 2012 2013 2014 2015 2016 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 22
Slide 23: Increase of operating expenses
Financial results Increase of operating expenses CHF million 300 30% 27.6% 27.6% 26.7% 26.7% 26.2% 200 204 200 192 192 20% 185 100 10% operating expenses as % of net sales 0 0% 2012 2013 2014 2015 2016 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 23
Slide 24: Structure of operating expenses
Financial results Structure of operating expenses in % of net sales 20 16.5 15.9 15.5 15.1 15.1 15 10 7.6 7.8 7.9 6.6 7.0 5 4.0 3.8 3.8 4.2 4.1 0 2012 2013 2014 2015 2016 Marketing & Selling General & Administrative Research & Development Excellence in Connectivity Solutions 14 March 2017 | Media an
Slide 25: Factors impacting EBIT
Financial results Factors impacting EBIT CHF million 80 +10.3% +24.4% +12.8m +5.4m +4.1% +9.9% +2.2m +5.2m 60 40 65 52 20 0 EBIT 2015 Organic Currency + copper One-off effects EBIT 2016 (incl. Portfolio) Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 25
Slide 26: Overview Divisions
Financial results Overview Divisions CHF million 2016 in % 2015 in % Radio Frequency 27.5 12.5 21.7 10.5 Fiber Optics 38.4 12.6 34.4 12.3 Low Frequency 3.8 1.8 2.4 1.1 Corporate (4.6) (6.2) Total EBIT 65.1 8.8 52.3 7.4 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conferen
Slide 27: Positive financial result
Financial results Positive financial result CHF million 8 4 2.7 (15.4) 2.8 0 (0.1) -4 -8 (15.1) other financial result net currency effects -12 -16 (0.3) 2015 2016 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 27
Slide 28: Improved Group tax rate
Financial results Improved Group tax rate 35% 33.0% expected tax rate effective tax rate 30% 28.5% 26.9% 27.5% 25% 20% 15% 10% 5% 0% 2015 2016 Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 28
Slide 29: Factors impacting net income
Financial results Factors impacting net income +24.4m +12.8m +18.1m -26.5% CHF million -6.5m +99% +52% +73% 60 Earnings per share 1.27 2.52 (+99%) 50 40 30 49 20 25 10 0 Net income 2015 Impact EBIT Net financial result Income tax Net income 2016 Excellence in Connectivity Solutions 14 March 2017 |
Slide 30: Normalised investment volume
Financial results Normalised investment volume CHF million 80 10% 9.3% 8% 60 5.7% 6% 40 3.6% 4.4% 3.3% 4% 20 2% 65 26 42 24 32 0 0% 2012 2013 2014 2015 2016 Amortisation: 27 30 30 30 31 (without M+A amortisation) Investments in % of net sales Excellence in Connectivity Solutions 14 March 2017 | Medi
Slide 31: Strong balance sheet
Financial results Strong balance sheet CHF million 31.12.2016 31.12.2015 30.06.2016 Liquid assets 158 160 -2% 133 Current assets (other) 300 281 7% 316 Non-current assets 337 337 0% 326 Liabilities 137 129 6% 160 Shareholders' equity 658 650 1% 615 in % 83% 83% 79% Balance sheet total 795 778 2% 775
Slide 32: Pleasing free operating cash flow
Financial results Pleasing free operating cash flow CHF million 2012 2013 2014 2015 2016 Net cash from operating activities 39.2 115.9 78.0 69.7 76.9 Net cash from investing activities* (114.3) (20.0) (89.9) (21.8) (57.5) Free operating cash flow (75.1) 95.9 (11.9) 56.7 19.5 Dividend payment (18.5)
Slide 33: Attractive dividend policy
Financial results Attractive dividend policy CHF million Payout ratio 30 100% 79% 25 75% 20 48% 50% 45% 46% 15 50% 10 25% 5 9.7 15.6 27.2 19.5 24.3 0 0% 2012 2013 2014 2015 2016 per share 0.50 0.80 1.40 1.00 *1.25 *proposed dividend Excellence in Connectivity Solutions 14 March 2017 | Media and anal
Slide 34: Financial assessment 2016
Financial results Financial assessment 2016 Significant organic growth in order intake and net sales Improved operational profitability Insufficient profitability in the Low Frequency division Prominent increase in net income also thanks to a positive financial result Continued high cash f
Slide 35: Change from IFRS to Swiss GAAP FER
Financial results Change from IFRS to Swiss GAAP FER Reasons • IFRS is becoming increasingly formal and more complex • Swiss GAAP FER is more pragmatic and nevertheless allows transparent reporting that is geared to the needs of medium-sized international companies • Reduction of volatility in the s
Slide 36: Agenda
Agenda Overview of financial year 2016 Urs Kaufmann (CEO) Financial results Ivo Wechsler (CFO) Outlook Urs Ryffel (designated CEO) Questions and discussion Buffet lunch 14 March 2017 | Media and analysts' conference
Slide 37: Our growth drivers
Outlook Our growth drivers Communication Appetite for bandwidth Connected mobility Broadband communication Transportation Increasing mobility and environmental awareness Electromobility Industrial Continuous technology change and innovation High-tech niches Excellence in Connectivity Solutions 14 Ma
Slide 38: Broadband communication: Our solutions for the Communication market
Outlook Broadband communication Our solutions for the Communication market Mobile communication Central office, Fiber to the Home Data Centers In-building communication Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 38
Slide 39: Data Centers: Solutions for today
Outlook Data Centers Solutions for today Product range Added value Customers • Most advanced fiber optic • Future-proof design, modularity and • Operators of data centers and components and cable systems optimised packing density for data system integrators portfolio centers • Fiber management, new
Slide 40: Data Centers: Solutions for tomorrow
Outlook Data Centers Solutions for tomorrow Industry leading all-optical switches Active and passive transport solutions Series 7000 384x384 Wavelength Division Multiplexers Active Fiber-optical Components S1000 all-optical switch Transceivers Excellence in Connectivity Solutions 14 March 2017 | Med
Slide 41: Electromobility: Our solutions for the Transportation market
Outlook Electromobility Our solutions for the Transportation market Rolling stock, Railway stations Automotive, electric and hybrid vehicles Fast charging Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 41
Slide 42: Automotive: Solutions for today
Outlook Automotive Solutions for today Product range Added value Customers • Battery cables • Technology leader in solutions • Sub-system suppliers (tier 2/3) • Screened power cables for harsh environmental • System suppliers (tier 1) conditions • Vehicle manufacturers (OEM) • Connection systems • C
Slide 43: Automotive: RADOX High Power Charging System
Outlook Automotive Solutions for tomorrow: RADOX High Power Charging System Connector (CCS) & Connection inserts Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 43
Slide 44: High-tech niches: Our solutions for Industrial market
Outlook High-tech niches Our solutions for Industrial market Test+Measurement Aerospace+Defense Energy Other high-tech niches Excellence in Connectivity Solutions 14 March 2017 | Media and analysts' conference 44
Slide 45: Starting position for 2017
Outlook Starting position for 2017 • Solid position overall in key markets and with key customers • Growth drivers remain intact • Pre-investments in solutions for tomorrow • All acquisitions assert their technological leadership and are well integrated • Radio Frequency and Fiber Optics with positi
Slide 46: Midterm EBIT margin target range and Outlook 2017
Outlook Midterm EBIT margin target range and Outlook 2017 Midterm EBIT margin target range raised • New 8 - 10%* (old: 6 - 9%) Outlook 2017 • In 2017, we expect – assuming that exchange rates remain similar to those in 2016 – to be able to stay on the growth path and to reach an EBIT margin within t
Slide 47: Agenda
Agenda Overview of financial year 2016 Urs Kaufmann (CEO) Financial results Ivo Wechsler (CFO) Outlook Urs Ryffel (designated CEO) Questions and discussion Buffet lunch 14 March 2017 | Media and analysts' conference
Slide 48: Agenda
Agenda Overview of financial year 2016 Urs Kaufmann (CEO) Financial results Ivo Wechsler (CFO) Outlook Urs Ryffel (designated CEO) Questions and discussion Buffet lunch 14 March 2017 | Media and analysts' conference
Slide 49: Excellence in Connectivity Solutions
Excellence in Connectivity Solutions