LEM Holding SA · SIX:LEHN
LEM Holding SA — FY2008/09 Earnings Presentation
41 slides from LEM Holding SA's earnings presentation, Jun 4, 2009
Slide 1: Results Year 2008/09
Results Year 2008/09 Media & Analyst Conference Zurich, 4 June 2009
Slide 2: Agenda
Agenda 1. Highlights and Business Review Paul Van Iseghem 2. Business Development “ 3. Recession Management “ 4. Financial Review Heinz Stübi 5. Strategy and Outlook Paul Van Iseghem 6. Proposals Shareholders’ Meeting Felix Bagdasarjanz 2
Slide 3: LEM Business Card
LEM Business Card • LEM is the global market leader in providing innovative and high quality solutions for measuring electrical parameters • Its current and voltage transducers are used in a broad range of applications in industry, traction, energy & automation and automotive markets • LEM is a high
Slide 4: LEM Production & Logistics World-Wide
LEM Production & Logistics World-Wide 4 4 June 2009
Slide 5: 1. Highlights and Business Review
1. Highlights and Business Review Paul Van Iseghem President & CEO 5
Slide 6: 1. Highlights
1. Highlights Sales of CHF 196.8 million for the year • Decrease of 3.1% from CHF 203.0 million last year • Operational EBIT decreased by 16.3% to CHF 29.2 million • EBIT (after accounting for the stock option plans) increased by 10.7% to CHF 33.8 million • Net earnings increased by 9.1% to CHF 23.9
Slide 7: 1. Business Review
1. Business Review CHF Millions 250 Sales decreased by 3.1% 5 years CAGR of 12.8% 200 150 100 50 Industrial Segment 0 Automotive Segment 03/04 04/05 05/06 06/07 07/08 08/09 7 4 June 2008 2009
Slide 8: 1. Business Review – Sales by Segment
1. Business Review – Sales by Segment Sales CHF millions Industrial 181.9 Automotive 14.9 Sales growth YoY: Industrial -0.5% Automotive -26.5% Growth at constant exchange rates: Industrial 2.9% Automotive -25.4% Total Sales CHF 196.8 million 8 4 June 2009
Slide 9: 1. Business Review – Industrial Segment Regional Markets
1. Business Review – Industrial Segment Regional Markets Sales growth YoY: Europe 1.5% Asia - 3.3% North America - 0.8% ROW -14.9% Sales 2007/08 9 4 June 2009
Slide 10: 1. Business Review – Industrial Segment
1. Business Review – Industrial Segment CHF millions Op. EBIT in % of sales 200 25% Market and Applications Each market was impacted differently by 160 20% the recession: Industry: declined by 6.5% - specially in the areas of welding, power supplies 120 15% and wind energy. Market share gained in dr
Slide 11: 1. Business Review – Automotive Segment Regional Markets
1. Business Review – Automotive Segment Regional Markets Sales growth YoY: Europe -10.7% North America - 40.9% Asia -2.4 % Sales 2007/08 11 4 June 2009
Slide 12: 1. Business Review – Automotive Segment
1. Business Review – Automotive Segment CHF millions Op. EBIT in % of sales Market 25 20% Sales declined by 26.5% as severely hit by the recession mostly in the American 15% and Japanese markets 20 10% Applications 15 Concentration of efforts in two main 5% areas: Battery management now for sedans 0
Slide 13: 2. Business Development
2. Business Development Paul Van Iseghem President & CEO 13
Slide 14: 2. Business Development – Results for Industry Market
2. Business Development – Results for Industry Market New Business Region SoP SoP > CHF 0.5 million 2009/10 2010/11 Photovoltaic, Wind China Q1 Photovoltaic Japan Q4 Photovoltaic, Drives Germany Q3, Q4 Wind Scandinavia Q3 Drives, Air conditioning Scandinavia Q4 Photovoltaic, Wind Spain Q1 Drives, Ai
Slide 15: 2. Business Development – Results for Automotive Market
2. Business Development – Results for Automotive Market New Business Application in SoP SoP > CHF 0.5 million volume 2009/10 2010/11 China BM, EV, HEV x Q2 Japan EV, HEV Q1 Japan BM Q4 Q2 Japan BM Q2 Japan EPS x Korea EV, HEV Q1 Europe BM x Q3 Europe EV, HEV Q4 Q1, Q2 USA EV, HEV, BM x Q4 Global F1
Slide 16: 2. Business Development - China
2. Business Development - China Sales Production • Sales growth 4.3% • Continued transfer of key products • Market share now over 40% • “Made by LEM” quality • Production to start in new leased building in July 2009 CHF Millions CHF Millions 60 20 50 15 40 10 30 20 5 10 0 0 02/03 03/04 04/05 05/06 0
Slide 17: 2. Business Development – Innovation
2. Business Development – Innovation Two major products were launched in 2008/09 • The CAS, CASR and CKSR family of current transducers using a new closed loop Fluxgate technology – For high performance applications in the Industry market • The DV voltage transducer compatible with all standards in
Slide 18: 3. Recession Management
3. Recession Management Paul Van Iseghem President & CEO 18
Slide 19: 3. Recession Management
3. Recession Management Bookings started to decline in September 08 • LEM tends to be in the early part of the business cycle • On November 19, 2008 we announced a headcount reduction of 10% to adapt to the ww economic downturn • On Feb 10, 2009 we announced a further adaptation of capacity by intro
Slide 20: 3. Recession Management
3. Recession Management Costs: • We drastically improved the cost base, mostly the external and internal indirect costs, to lower the break-even point. • SG&A to remain in the same % range to sales as before New business opportunities are developed aggressively: • New products for the mainstream Ind
Slide 21: 3. Recession Management
3. Recession Management • Our multiple markets approach is helping us to reduce the impact of the recession Traction Energy & Industry Automotive Automation FY to FY +20.2% +35.9% -0.5% -26.5% growth* * Comparing FY 2008/09 to FY 2007/08 21 4 June 2009
Slide 22: 3. Recession Management
3. Recession Management Q4 was profitable CHF millions Q1 2008/09 Q2 2008/09 Q3 2008/09 Q4 2008/09 Orders 58.1 53.3 39.2 34.4 received Sales 55.5 55.5 45.1 40.7 Operational 12.0 9.4 4.1 3.7 EBIT 22 4 June 2009
Slide 23: 4. Financial Review
4. Financial Review Heinz Stübi Interim CFO Due to the introduction of the revised IFRS standard IFRIC 14 the results 2007/08 were restated, for details refer to page 27 of the annual report. 23
Slide 24: 4. Income Statement
4. Income Statement TCHF 2007/08 2008/09 % Sales 203’033 196’813 -3.1% Gross margin % 45.1 43.7 Operating costs (56’684) (56’806) Operational EBIT* 34’904 29’219 -16.3% EBIT 30’572 33’841 10.7% Net financial expenses (1’413) (990) Income taxes (7’248) (8’926) Net earnings 21’911 23’925 9.2% Share
Slide 25: 4. Gross Margin Development
4. Gross Margin Development CHF millions EBIT % of sales CHF 2007/08 2008/09 100 50% millions 90 Gr. M 91.6 86.0 45% 80 Gr. M 45.1% 43.7% 70 40% %Sales 60 50 35% 40 30% 30 Lower sales volume led to leveraging 20 effect (unabsorbed capacity costs) 25% Ramp-up costs China 10 0 20% 04/05 05/06 06/0
Slide 26: 4. Operating Expenses
4. Operating Expenses CHF millions % of sales CHF 2007/08 2008/09 70 50% millions 60 Opex 56.7 56.8 45% Opex 50 27.9% 28.9% 40% % Sales 40 35% 30 30% 20 Operating expenses stayed in line with the 10 25% previous year Costs for International transfer pricing projects 0 20% 04/05 05/06 06/07 07/08
Slide 27: 4. R&D Expenses
4. R&D Expenses CHF millions % of sales 15 12% CHF 2007/08 2008/09 millions R&D 11.1 10.8 12 9% R&D 5.5% 5.5% %Sales 9 6% 6 3% 3 R&D expenses were maintained at constant ratio to sales 0 0% 27 04/05 05/06 06/07 07/08 08/09 4 June 2009
Slide 28: 4. Operational EBIT
4. Operational EBIT * CHF millions Op. EBIT % of sales CHF 2007/08 2008/09 40 millions 30% Op. EBIT 34.9 29.2 35 Op. EBIT 17.1% 14.8% 30 25% %Sales 25 20% 20 15% 15 10% 10 5% 5 0 0% * Before SOP revaluation 04/05 05/06 06/07 07/08 08/09 28 4 June 2009
Slide 29: 4. EBIT
4. EBIT CHF millions % of sales 40 CHF 2007/08 2008/09 millions 30% 35 EBIT 30.6 33.8 30 25% EBIT 15.1% 17.2% 25 20% %Sales 20 15% 15 10% 10 Constant EBIT growth continues 5% 5 0 0% 04/05 05/06 06/07 07/08 08/09 29 4 June 2009
Slide 30: 4. Taxes
4. Taxes 2007/08 2008/09 Expected tax rate 28.2% 25.0% One-time effects (3.3%) 2.2% Effective tax rate 24.9% 27.1% Expected tax rate reduced as a consequence of optimization of international trading flows One-time effects due to withholding tax on repatriation of profits from previous periods 30
Slide 31: 4. Net Profit
4. Net Profit CHF millions % of sales CHF millions 2007/08 2008/09 25 14% Net profit 21.9 23.9 12% Net profit 10.8% 12.1% 20 % sales 10% 15 8% 6% 10 4% Net earnings increase 9.2% 5 compared to previous year 2% EPS increases from CHF 18.6 0 0% to CHF 20.9 04/05 05/06 06/07 07/08 08/09 31 4 June 2
Slide 32: 4. Consolidated Balance Sheet
4. Consolidated Balance Sheet TCHF 31.03.2008 31.03.2009 Cash and cash equivalents 25’787 27’951 Accounts receivable 41’169 31’920 Other current assets 2’051 2’834 Inventories 22’411 23’728 Total non-current assets 24’540 29’778 Total assets 115’958 116’211 Accounts payables 17’034 12’614 Other shor
Slide 33: 4. Cash Flow Statement
4. Cash Flow Statement TCHF 2007/08 2008/09 Net profit 21’911 23’925 Cash flow before changes in NWC 26’401 27’286 Changes in net working capital (NWC) (2’279) 3’651 Cash flow from investing activities (6’507) (9’052) Free cash flow 17’615 21’855 33 4 June 2009
Slide 34: 4. Summary Financial Results
4. Summary Financial Results • Continuous EBIT growth despite impact of economic downturn in the second half of 2008/09 • Recession Management programs show effect as of Q4 • Positive impact of outstanding SOP programs • Strong net profit of CHF 23.9 million (+9.2%) • Solid balance sheet – Net finan
Slide 35: 5. Strategy and Outlook
5. Strategy and Outlook Paul Van Iseghem President & CEO 35
Slide 36: 5. Market Factors and Strategy
5. Market Factors and Strategy The present recession challenges our growth strategy: – Weakness in important Industry market – Very weak market situation in Automotive – Weakness in energy savings and renewable energy We firmly believe in our Strategic Direction • The underlying market trends contin
Slide 37: 5. Outlook
5. Outlook Our fast and firm reaction to the recession will enable us to be stronger coming out of the downturn. • We will maintain our focus on cost control and operational priorities • We will continue our investments in the new businesses • We believe that the market downturn has bottomed out How
Slide 38: 6. Proposals for the Shareholders’ Meeting
6. Proposals for the Shareholders’ Meeting Felix Bagdasarjanz Chairman of the Board of Directors 38
Slide 39: 6. Proposals for the Shareholders’ Meeting
6. Proposals for the Shareholders’ Meeting In view of the strong performance and solid balance sheet the Board of Directors has decided to propose: • Ordinary dividend payment of CHF 10.00 per share, which represents a payout ratio of 48 %. 39 4 June 2009
Slide 40: 6. Summary
6. Summary • Recession Management is effective • Strong balance sheet • Outlook is difficult but we are confident to have the right strategy in place 40 4 June 2009
Slide 41: 6. Financial Calendar and Contact Details
6. Financial Calendar and Contact Details Financial calendar 26 June 2009 Ordinary Shareholders’ Meeting 6 August 2009 Q1 2009/10 results 5 November 2009 Q2 2009/10 results 9 February 2010 Q3 2009/10 results 3 June 2010 Full year 2009/10 results For further information Paul Van Iseghem Heinz Stübi P