Johnson Electric Holdings Limited · HKEX:179
Johnson Electric — FY2014/15 Earnings Presentation
42 slides from Johnson Electric's earnings presentation, July 2015
Slide 1: Johnson Electric Holdings Limited FY2014/15 Annual Results
JOHNSON ELECTRIC HOLDINGS LIMITED FY2014/15 Annual Results July 2015
Slide 2: Agenda
Group Overview Key Financial Highlights Operational Results Outlook Appendix Page 2
Slide 3: Johnson Electric Group Overview
JOHNSON ELECTRIC GROUP OVERVIEW Johnson Electric is the global leader in custom designed motion subsystems, including motors, solenoids, switches and flexible interconnects. We serve a broad range of industry segments including automotive, building automation and security, business machines, securit
Slide 4: Company Vision and Brand Promise
COMPANY VISION AND BRAND PROMISE Company Vision To be the world's definitive provider of innovative and reliable motion systems Brand Promise “Technology Leadership” “The Safe Choice” Page 4
Slide 5: Key Milestones 1959 – 2015
KEY MILESTONES 1959 – 2015 SALES 2000-2015: US$2.1bn Going Global 1982-1999: US$1.1bn Leveraging China to supply the world US$677m Early Years: Hong Kong family business US$251m US$126m US$54m US$16m Founded by AC Motor Opened Listed on Acquired Acquired Build Wang Seng business USA Sales HK Stock G
Slide 6: APG Applications
APG APPLICATIONS Page 6
Slide 7: IPG Applications
IPG APPLICATIONS Medical Devices Smart Meters Circuit Breakers Lawn & Garden Power Tools Personal Care Power Sports HVAC Building Automation Business Machines Digital Security Home Technologies Food & Beverages Industrial Equipment Special Vehicles Optronics Page 7
Slide 8: Agenda
Group Overview Key Financial Highlights Operational Results Outlook Appendix Page 8
Slide 9: Highlights
HIGHLIGHTS Group sales US$2,136 million – up 4% compared to the prior financial year excluding currency effects Gross profit margin slightly increased to 29.6% Record EBITDA US$336 million – up 4% compared to the prior financial year Operating profits increased by 4% to US$243 million or 11.4% of sa
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS US$ million FY2014/15 FY2013/14 Sales 2,136.1 2,097.6 Gross profit 632.4 618.9 Gross margin 29.6% 29.5% Profit attributable to shareholders 210.9 207.9 Diluted earnings per share 1 (US Cents) 23.60 23.25 EBITDA 2 335.5 321.8 EBITDA margin 15.7% 15.3% Free cash flow from operatio
Slide 11: Agenda
Group Overview Key Financial Highlights Operational Results Outlook Appendix Page 11
Slide 12: Profitability Review FY2014/15 vs. FY2013/14
PROFITABILITY REVIEW FY2014/15 vs. FY2013/14 Increase/ (decrease) US$ million FY2014/15 FY2013/14 in profit Sales 2,136.1 2,097.6 38.5 Gross profit 632.4 618.9 13.5 Gross margin % 29.6% 29.5% Other income and gains, net 17.9 19.8 (1.9) Selling and administrative expenses (“S&A”) (407.5) (405.2) (2.3
Slide 13: Sales Changes FY2014/15 vs. FY2013/14
SALES CHANGES FY2014/15 vs. FY2013/14 US$ million 2% 64 23 49 2,098 2,136 FY2013/14 APG Volume / mix IPG Volume / mix Currency FY2014/15 Sales, and price, net and price, net effects Sales, as reported as reported Note: Numbers do not add across due to the effect of rounding Page 13
Slide 14: Changes in Profit Attributable to Shareholders
CHANGES IN PROFIT ATTRIBUTABLE TO SHAREHOLDERS US$ million 17 8 7 208 211 FY2013/14 Volume / mix, Currency Other income, FY2014/15 Net profit, pricing, and effects, finance costs Net profit, as reported operating costs net and taxes as reported Note: Numbers do not add across due to the effect of ro
Slide 15: Group Sales by Business - APG
GROUP SALES BY BUSINESS - APG APG Sales at Constant Exchange Rates Increase of 4% US$ million 1,501.0 1,436.8 +12% 33% 434.7 30% 488.0 +5% 50% 718.3 50% 751.6 283.8 20% (8%) 261.4 17% FY2013/14 FY2014/15 Asia Europe Americas Page 15
Slide 16: Group Sales by Business - IPG
GROUP SALES BY BUSINESS - IPG IPG Sales at Constant Exchange Rates US$ million Increase of 4% 660.8 684.2 44% 280.6 41% 290.9 (4%) 26% +6% 182.0 27% 172.4 197.5 30% +12% 221.6 32% FY2013/14 FY2014/15 Asia Europe Americas Page 16
Slide 17: Analysis of Cash Flow
ANALYSIS OF CASH FLOW US$ million FY2014/15 FY2013/14 Change Operating profit 243.0 233.7 9.3 Depreciation and amortisation 92.5 88.1 4.4 EBITDA 335.5 321.8 13.7 Other non-cash items in profit before taxes (1.5) 0.9 (2.4) Working capital changes (21.1) 17.8 (38.9) Interest paid (2.6) (1.8) (0.8) Inc
Slide 18: Other Cash Flows
OTHER CASH FLOWS US$ million FY2014/15 FY2013/14 Change Free cash flow from operations 155.8 231.1 (75.3) Acquisition (9.2) - (9.2) Subsequent payments due to divestiture of non-core business - (6.1) 6.1 Dividends paid (54.3) (50.4) (3.9) Purchase of shares held for Long-Term Incentive Share Scheme
Slide 19: Dividends & Shares
DIVIDENDS & SHARES ► Final dividend of 34 HK Cents per share to be paid for FY2014/15. Total dividend of 48 HK Cents for FY2014/2015 compared to 46 HK Cents paid for FY2013/14 ► 14.3 million shares were purchased for cancellation in FY2014/15 at a total cost of US$55.0 million including brokerage an
Slide 20: Working Capital & Capex
WORKING CAPITAL & CAPEX Trade and other receivables Inventories (DSOs calculated on trade receivables only) 450 70 250 60 Days inventory on hand 400 60 50 200 57 Days sales outstanding 350 52 60 63 62 50 40 US$ million 47 US$ million 300 150 250 40 30 200 30 100 150 20 20 100 50 10 10 50 0 0 0 0 31-
Slide 21: Engineering Expenditure
ENGINEERING EXPENDITURE 140 127.8 7.0% 121.1 122.5 120 6.5% US$ million 100 80 6.0% 5.9% 5.8% 6.0% 60 40 5.5% 20 0 5.0% FY2012/13 FY2013/14 FY2014/15 Engineering Expenditure Engineering Expenditure / Sales Page 21
Slide 22: Agenda
Group Overview Key Financial Highlights Operational Results Outlook Appendix Page 22
Slide 23: Trends in Automotive – Emissions
TRENDS IN AUTOMOTIVE – EMISSIONS Source: International Council on Clean Transportation, Nov 2014 - http://www.theicct.org/global-pv-standards-chart-library Page 23
Slide 24: Trends in Automotive – Fuel Economy
TRENDS IN AUTOMOTIVE – FUEL ECONOMY Source: International Council on Clean Transportation, Nov 2014 - http://www.theicct.org/global-pv-standards-chart-library Page 24
Slide 25: Growing Products - APG
Growing Products - APG Fuel Economy • Steering System • Engine Management High Power Brush Motor for Variable Geometry Electric Power Steering Turbocharger Motors Emission Control • Engine Management Valve Actuators for Automotive Coolant Dosing Solutions for & Refrigerant Circuits Diesel Exhaust Fl
Slide 26: Trends in IPG
TRENDS IN IPG ► Key growth areas in IPG include — Solenoid products, including smart meters — Parlex — JE MedTech ► These business units exemplify our strategy of investing in differentiated technology and serving customers whose flagship products require customised motion solutions Page 26
Slide 27: Growing Products - IPG
Growing Products - IPG Smart Meters – MARKETING LEADER – [Gas] Highest intrinsic safety & reliability against gas impurities; Extended battery life; Lowest pressure drop for grid Efficiency. [Electricity] Low power, resistance and self heating design; Fail safe Professional Gardening & Power Tools –
Slide 28: Outlook for Johnson Electric
OUTLOOK FOR JOHNSON ELECTRIC ► No noticeable softening in demand for our products at present time ► APG and IPG continue to win important new programmes — Success due to differentiated technology and global manufacturing capabilities — Impact will not be felt in near term ► Weak Euro vs. US Dollar l
Slide 29: Agenda
Group Overview Key Financial Highlights Operational Results Outlook Appendix Page 29
Slide 30: Global Sales & Support Offices & Engineering Centers
GLOBAL SALES & SUPPORT OFFICES & ENGINEERING CENTERS ► Argentina ► Austria ► Belgium ► Brazil ► China ► France ► Germany ► Hong Kong ► India ► Italy ► Israel ► Japan ► Korea ► Netherlands ► Singapore ► Switzerland ► UK ► USA Page 30
Slide 31: Worldwide Manufacturing
WORLDWIDE MANUFACTURING ► Argentina ► Brazil ► China ► France ► Germany ► Hungary ► India ► Italy ► Israel ► Mexico ► Poland ► Serbia ► Switzerland ► UK ► USA Page 31
Slide 32: Appendix: New Products
APPENDIX: NEW PRODUCTS Page 32
Slide 33: IPG – Impact Driver Power Motors; Electric Motor for Chainsaws
IPG – IMPACT DRIVER POWER IPG – ELECTRIC MOTOR FOR MOTORS BATTERY OPERATED CHAINSAWS Page 33
Slide 34: IPG – Gas Shut-off Valves for Smart Meters; Dishwasher Heater Pumps
IPG – DISHWASHER IPG – GAS SHUT-OFF VALVES HEATER CIRCULATION PUMPS FOR SMART METERS Page 34
Slide 35: IPG – Security Solution for Payment Terminals; Robotic Mower Motors
IPG – SECURITY SOLUTION FOR IPG – TRACTION MOTORS FOR PAYMENT TERMINALS ROBOTIC MOWERS Page 35
Slide 36: IPG – Circulator Pump for Condensing Boilers; APG – All Wheel Drive
IPG – CIRCULATOR PUMP FOR APG – ALL WHEEL DRIVE CONDENSING BOILERS SOLUTIONS Page 36
Slide 37: APG – Turbocharger Motors; Dosing Solutions for Diesel Exhaust Fluid
APG – VARIABLE GEOMETRY APG – DOSING SOLUTIONS FOR TURBOCHARGER MOTORS DIESEL EXHAUST FLUID Page 37
Slide 38: APG – Pneumatic Lumbar Support Pumps; HVAC Actuators
APG – PNEUMATIC LUMBAR SUPPORT PUMPS APG – HVAC ACTUATORS Page 38
Slide 39: Sales Growth by Business
SALES GROWTH BY BUSINESS Sales Growth / (Decline) % Excluding Currency Effect APG IPG Total FY2015/16 Q1 6.8% (3.8%) 3.5% FY2014/15 Q4 2.8% 7.9% 4.4% Q3 6.1% 2.6% 5.0% Q2 3.9% 0.9% 2.9% Q1 5.3% 2.7% 4.5% Page 39
Slide 40: Sales Growth by Region - APG
SALES GROWTH BY REGION - APG Sales Growth/(Decline) % Excluding Currency Effect APG Asia Europe America TOTAL FY2015/16 Q1 13.9% 4.5% 1.6% 6.8% FY2014/15 Q4 11.7% 1.1% (7.4%) 2.8% Q3 11.8% 6.9% (5.3%) 6.1% Q2 13.4% 4.8% (11.6%) 3.9% Q1 12.1% 6.4% (7.0%) 5.3% Page 40
Slide 41: Sales Growth by Region - IPG
SALES GROWTH BY REGION - IPG Sales Growth/(Decline) % Excluding Currency Effect IPG Asia Europe America TOTAL FY2015/16 Q1 (20.9%) 10.7% 7.2% (3.8%) FY2014/15 Q4 4.1% 6.9% 13.7% 7.9% Q3 (10.3%) 5.9% 19.8% 2.6% Q2 (10.2%) 5.3% 16.2% 0.9% Q1 3.5% 4.0% 0.4% 2.7% Page 41
Slide 42: Disclaimer
DISCLAIMER This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Johnson Electric and certain plans and objectives of the management of Johnson Electric. Words such as “outlook”, “expects”, “anticipates”, “intends
Johnson Electric Holdings — FY2014/15 Earnings Presentation on 6ix