Zehnder Group AG Class A · SIX:ZEHN
Zehnder Group AG Class A — FY2011 Earnings Presentation
52 slides from Zehnder Group AG Class A's earnings presentation, Mar 23, 2012
Slide 1: Financial Analyst Conference 2012
Financial Analyst Conference 2012 Review 2011 Hans-Peter Zehnder, Chairman & CEO Dominik Berchtold, CFO March 23, 2012
Slide 2: Agenda
Agenda 1. Business Review 2011 2. Financial Results 2011 3. Outlook 2012 4. Q&A 2
Slide 3: Agenda: Business Review 2011
Agenda 1. Business Review 2011 2. Financial Results 2011 3. Outlook 2012 4. Q&A 3
Slide 4: 2011 at a glance
2011 at a glance On-going crisis in building industry in various markets Markets Very volatile raw material prices Pressure from high CHF/EUR rate Improve- Increased market share ments High investments in sales & marketing, IT and infrastructure Financial 8% sales increase – first time above 500 MEU
Slide 5: New build completions of dwellings in Europe 2011
New build completions of dwellings in Europe 2011 3% below 2010 and 32% below 2007 (while renovation remains stable) TR ES RU PL AT BE 11 vs. '10 NL 11 vs. '07 IT UK CH DE FR ‐80% ‐70% ‐60% ‐50% ‐40% ‐30% ‐20% ‐10% 0% 10% 20% 5
Slide 6: Europe: Organic growth in both sectors
Europe: Organic growth in both sectors EUR Mio. 2009 2010 2011 FX-adj/organic Radiators Europe 284.3 295.4 307.7 -8% 4% 4% 3% Ventilation Europe 113.4 132.6 153.4 10% 17% 16% 17% Total Europe 397.7 428.0 461.1 -4% 8% 8% 8% 6
Slide 7: Markets: Europe – highlights France
Markets: Europe – highlights France Market: • Positive impact in all segments of the construction market – housing, non- residential buildings and infrastructure • New legislation for electric products – decrease of electric radiator market Our achievements: • Market share increase (warm water rads
Slide 8: Markets: Europe – highlights Germany and Austria
Markets: Europe – highlights Germany and Austria Market: • Lower public-sector construction activity (especially in healthcare and schools) • Growth in the commercial-industrial and residential construction Our achievements: • Growth of market share and volume of radiator business • Strong growth of
Slide 9: Markets: Europe – highlights Switzerland
Markets: Europe – highlights Switzerland Market: • Further increase of residential construction due to strong immigration and low mortgage interest rates • Further increase of price pressure (CHF-EUR) Our achievements: • Substantial increase of radiator sales • Strong growth of ventilation although
Slide 10: Markets: Europe – highlights UK and Ireland
Markets: Europe – highlights UK and Ireland Market: • Very challenging and extremely competitive market • Construction sector in decline Our achievements: • Moderate growth of the radiator business, slight decline in ventilation • Strong sales growth in the commercial radiator sector • Good performa
Slide 11: Markets: Europe – other markets (I/II)
Markets: Europe – other markets (I/II) Italy: • Market: Construction market has tumbled more than 20% over the last five years (new construction down about 40%) • Strong growth of ventilation and lower sales revenue in the radiator segment Netherlands: • Market: Drop in house prices goes on • Sales
Slide 12: Markets: Europe – other markets (II/II)
Markets: Europe – other markets (II/II) Spain (and Portugal): • Market: Further decrease of new build activities (approx. 80% since 2007) • Further decrease of our sales, long-term investments launched (launch of ventilation activities and integration of NEST activities) Eastern Europe: • Ongoing st
Slide 13: Yakutsk: Coldest major city heated by Zehnder ceiling panels
Yakutsk: Coldest major city in the world heated by Zehnder ceiling panels 13
Slide 14: Sound sales performance in US in a challenging environment
Sound sales performance in US in a challenging environment EUR Mio. 2009 2010 2011 FX-adj/organic Radiators US 19.3 21.7 20.8 -9% 13% -4% 0% Ventilation US 4.2 5.3 7.0 5% 25% 34% 40% Total US 23.5 27.0 27.8 • Market: Residential construction in the United States stabilized at higher level, the numbe
Slide 15: Strong sales growth in China
Strong sales growth in China EUR Mio. 2009 2010 2011 FX-adj/organic Radiators CN 14.2 18.0 19.7 -4% 26% 10% 10% Ventilation CN 1.1 3.0 6.7 10% 170% 127% 87% Total CN 15.3 20.9 26.5 -3% 37% 26% 21% • Market: Construction market showed signs of cooling in the second half of the year, as the central ba
Slide 16: Big investment in new factory for China
Big investment in new factory to underpin our growth ambition for China Description Under construction New factory in Dachang (slightly outside Beijing). Why Key Figures Additional space for growth 2011 50 MCNY (5.5 MEUR) necessary and current area is 2012 55 MCNY (6.3 MEUR) becoming a residential a
Slide 17: Volume growth in both segments
Volume growth in both segments 17
Slide 18: Prestigious design award won for new Comfobox
Prestigious design award won for new Comfobox apart 18
Slide 19: Continuous improvement of system solutions secures competitive advantage
Continuous improvement of system solutions secures competitive advantage 19
Slide 20: Innovation: Solutions for renovation get more important
Innovation: Solutions for renovation get more important 20
Slide 21: New ultra thin and light graphite radiator
New ultra thin and light graphite radiator to underline our design leadership in decorative radiators 21
Slide 22: New Zehnder Fina honored by two design awards
New Zehnder Fina honored by two design awards 22
Slide 23: Installed heat recovery units saved energy equivalent of 55,000 cars
Our installed heat recovery units saved 2011 the energy equivalent of 55’000 cars 2'500'000 Energy gained/saved (MWh/a), cumulative 2'000'000 CO2 avoided (t/a), cumulative 1'500'000 1'000'000 500'000 0 2005 2006 2007 2008 2009 2010 2011 23
Slide 24: Sustainability: investment in our youth
Sustainability: investment in our youth 24
Slide 25: High investments in branding pay off
High investments in branding pay off 25
Slide 26: Minor M&A activities in 2011 to shape our portfolio
Minor M&A activities in 2011 to shape our portfolio • Carve-out of Belgian installation business (move sales organisation from Dendermonde to Mechelen) • Acquisition of Nest Italy • Acquisition of all minority stakes in Sanpan (Turkish radiator manufacturer), i.e. increase our investment from 51 to
Slide 27: We started the journey to process excellence
We started the journey to process excellence Group wide introduction of SAP: • Jan. 2012: Production Switzerland, sales and distribution in Austria • Feb. 2012: Zehnder Beijing (production, logistics, sales, finance&admin) • End 2012: Sales and distribution Germany and International Sales Group wide
Slide 28: Agenda: Financial Results 2011
Agenda 1. Business Review 2011 2. Financial Results 2011 3. Outlook 2012 4. Q&A 28
Slide 29: Group at a glance
Group at a glance Sales increase of 8% to EUR 515.4 Mio. Organic and adjusted by currency effects increase of 8% EBIT of EUR 51.1 Mio (2010: 50.4) Strategic and operative measures show benefits: EBIT margin of 9.9% remains on high level (2010: 10.6%; negative currency impact of about 1%) 29
Slide 30: Group at a glance
Group at a glance Cash flows from operating activities EUR 47.3 Mio. (2010: 56.9) Investments in fixed assets of EUR 34.9 Mio. (2010: 20.0) Net cash position of EUR 31.9 Mio. (2010: net cash of 42.9) Equity ratio 59% (2010: 57%) Net income EUR 41.1 Mio. (2010: 38.2) Earnings per share EUR 3.41 (2010
Slide 31: Top countries (sales)
Top 10 countries (sales) 2006 2007 2008 2009 2010 2011 Ranking 1 FR FR FR FR FR FR 2 DE DE DE DE DE DE 3 IT IT UK CH CH CH 4 NL NL IT UK UK UK 5 CH UK CH NL NL IT 6 SP/PT CH NL IT IT NL 7 UK USA/CA USA/CA USA/CA USA/CA USA/CA 8 CN SP/PT BE BE CN CN 9 USA/CA CN CN CN BE BE 10 BE BE SP/PT SP/PT AT AT
Slide 32: All segments and regions contribute to the growth
All segments and regions contribute to the growth EUR Mio. 2009 2010 2011 FX-adj/organic Radiators Europe 284.3 295.4 307.7 -8% 4% 4% 3% Ventilation Europe 113.4 132.6 153.4 10% 17% 16% 17% Total Europe 397.7 428.0 461.1 -4% 8% 8% 8% Radiators US 19.3 21.7 20.8 -9% 13% -4% 0% Ventilation US 4.2 5.3
Slide 33: Net sales and EBIT
Net sales and EBIT 2010 2011 EUR Mio. H1 H2 Total H1 H2 Total Net sales 217.5 258.4 475.9 242.8 272.6 515.4 Growth H1-H2 in % 19% 12% Growth in % 5% 13% 9% 12% 5% 8% EBIT 19.1 31.1 50.4 22.1 29.0 51.1 Growth H1-H2 in % 64% 31% Growth in % 23% 14% 17% 16% -7% 1% EBIT margin 8.8% 12.0% 10.6% 9.1% 10.6
Slide 34: Investments in fixed assets on a record high
Investments in fixed assets on a record high Investments in fixed assets amounted to EUR 34.9 Mio. (2010 EUR 20.0 Mio) Major projects: • Investments in production in Gränichen • Investments in new building in Beijing • Investments in property adjacent to our facilities in Gränichen and Lahr 34
Slide 35: CAPEX Key Projects: Extension of production in Gränichen
CAPEX Key Projects: Extension of production in Gränichen Description New covered area New production facility in Gränichen for New Flat Panel mass production. Why Key Figures Necessary space for New Flat Panel 2011 6.0 MCHF mass production. 2012 5.9 MCHF Total CAPEX 12 MCHF 35
Slide 36: CAPEX Key Projects: new logistics HUB Lahr
CAPEX Key Projects: new logistics HUB Lahr Description HUB and new land New warehouse in Lahr with 14’500m2 to insource from Schenker. Why Key Figures Additional space for growth 2011 2.0 MEUR necessary and cost-reductions 2012 7.5 MEUR compared to external warehousing. Total CAPEX 10.4 MEUR 36
Slide 37: Innovation: Research & Development
Innovation: Research & Development Research & Development costs of EUR 11.6 Mio. (2010: 10.3) Major projects: • Comfobox product family in Switzerland • Flat Panel in Switzerland • Vertical and Horizontal Stack Heat Pump in US • Heat recovery product family (incl. enthalpy heat exchanger) in Germany
Slide 38: Net income on an all time high
Net income on a all time high EUR Mio. 2010 2011 ∆ in % Net sales 475.9 515.4 8.3% EBIT 50.4 51.1 1.3% EBIT margin 10.6% 9.9% Net income 38.2 41.1 7.4% Net income margin 8.0% 8.0% Cash flows from operating activities 56.9 47.3 -16.9% Cash flow margin 12.0% 9.2% Net cash position 42.9 31.9 -25.6% 38
Slide 39: Key figures
Key figures EUR Mio. 2008 2009 2010 2011 Current Assets 228.9 224.0 237.0 245.9 Fixed Assets 125.1 128.5 141.4 160.1 Total Assets 354.0 352.5 378.4 406.0 Current liabilities 104.3 98.6 89.1 101.2 Long-term liabilities 97.1 71.9 71.9 65.1 Equity 152.6 182.0 217.4 239.7 Total Liabilities&equity 354.0
Slide 40: High capex and nominal value repayment financed by cash flow
High cap ex and nominal value repayment financed by cash flow 40
Slide 41: Net cash position maintained
Net cash position maintained 41
Slide 42: Attractive dividend payment in combination with nominal value repayment
Attractive dividend payment in combination with nominal value repayment The board proposes to the AGM a tax-free nominal value repayment of CHF 1.20 and a dividend of CHF 0.20 per bearer share. The capital structure of Zehnder post nominal value repayment will be: • bearer shares: 9,756,000 with a n
Slide 43: Pay out ratio in the range of the last years
Pay out ratio in the range of the last years 2007 2008 2009 2010 2011 Net income without minority interest (EUR Mio.) 26.0 2.6 32.8 37.4 40.0 Earnings per share (at CHF 1.25) in EUR 2.23 0.23 2.80 3.19 3.41 Variance in % -13% -90% 1144% 14% 7% Number of shares (entitled to dividend) bearer share (CH
Slide 44: Agenda: Outlook 2012
Agenda 1. Business Review 2011 2. Financial Results 2011 3. Outlook 2012 4. Q&A 44
Slide 45: Market forecasts
Market forecasts European housing market (completions residential new build) 11 vs. '10 12 vs. '11 13 vs. '12 14 vs. '13 14 vs. 11 (in tsd) FR 6% 7% 0% 1% 9% DE 14% 16% 11% 5% 34% CH 7% 6% 2% 1% 9% UK 1% 0% 0% 6% 6% IT -24% -10% -5% -4% -17% NL 14% 5% 4% 6% 16% BE 10% -8% 9% 1% 1% AT 1% 2% 0% 0% 2%
Slide 46: Current and expected market penetration of high-end heat recovery ventilation
Current and expected market penetration of high-end heat recovery ventilation in residential new build 100.0% FR 90.0% DE 80.0% CH 70.0% UK 60.0% IT 50.0% NL BE 40.0% AT 30.0% PL 20.0% ES 10.0% US 0.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CN 46 Source: Zehnder Group Management
Slide 47: Mixed macroeconomic indicators …
Mixed macroeconomic indicators … Overall macro economic market environment remains very challenging, but: • Positive trend of residential new build in Germany • Stable situation in France, Switzerland, UK and the Netherlands expected • Italy and mainly Spain remain very difficult • Opportunities in
Slide 48: … and our conclusions
… and our conclusions We remain very prudent – consider the macroeconomic situation as even more challenging than in 2008/2009 Forecast for sales and raw material prices even more difficult than 12 months ago Thanks to our strong position we will continue to expand our market share We expect
Slide 49: Thank you!
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Slide 50: Agenda: Q&A
Agenda 1. Business Review 2011 2. Financial Results 2011 3. Outlook 2012 4. Q&A 50
Slide 51: Q&A
Q&A 51 BSS
Slide 52: 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