Huber + Suhner Ag · SIX:HUBN
Huber + Suhner — FY2023 Earnings Presentation
38 slides from Huber + Suhner's earnings presentation, Mar 5, 2024
Slide 1: HUBER+SUHNER
HUBER+SUHNER
Slide 2: Full-year results 2023 Media and analysts' conference
Full-year results 2023 Media and analysts’ conference 5 March 2024 | Full-year results 2023 | Media and analysts' conference 2
Slide 3: Agenda
Agenda Overview of business year 2023 Urs Ryffel (CEO) Financial results 2023 Ivo Wechsler (CFO) Strategic focus, Trends, Outlook 2024 Urs Ryffel (CEO) Questions and answers 5 March 2024 | Full-year results 2023 | Media and analysts' conference 3
Slide 4: Solid EBIT margin despite marked decline in Communication
Solid EBIT margin despite marked decline in Communication MCHF • Order intake negatively impacted by 2023 2022 Δ% overstocked customer inventories across many end markets, and Order intake 821.4 975.4 -15.8 communication market in a downward cycle Net sales 851.1 954.6 -10.8 • Net sales with organic
Slide 5: EBIT
EBIT Long-term comparison (10 years) MCHF 110.0 104.6 15% 103.2 100.0 90.0 82.5 80.5 80.0 77.6 12.1% 69.0 69.7 10.8% 10% 70.0 61.2 9.5% 9.7% 60.0 9.2% 52.3 58.1 9.3% 9.1% 8.3% EBIT 50.0 7.4% 7.5% EBIT margin 40.0 5% 30.0 20.0 10.0 0.0 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 March 2024
Slide 6: Industry segment
Industry segment Reduced momentum and lower but still solid profitability MCHF Key aspects • Continued depletion of inventories at 2023 2022 Δ% customers over the entire reporting year impacted the awarding of new Order intake 258.1 310.5 -16.9 orders Net sales 285.3 298.0 -4.3 • Aerospace and defen
Slide 7: Communication segment
Communication segment Declining volumes and profitability countered by cost measures MCHF Key aspects • Much weaker communications market 2023 2022 Δ% around the world which impacted the entire industry Order intake 283.4 380.6 -25.6 • Declining 5G rollouts in North Net sales 280.3 385.9 -27.4 Ameri
Slide 8: Transportation segment
Transportation segment Net sales growth – four percentage points increase in profitability MCHF Key aspects • Turnaround after a three-year lean 2023 2022 Δ% period following the global pandemic Order intake 279.9 284.4 -1.6 • Railway subsegment with upturn in demand made positive contribution to ne
Slide 9: Net sales by market segment
Net sales by market segment Significant decline in Communication MCHF 400 350 300 -4.3 % -27.4 % +5.5 % 34% 33% 250 200 2023 150 100 33% 50 0 Industry Communication Transportation Industry 2022 Communication 2023 Transportation 5 March 2024 | Full-year results 2023 | Media and analysts' conference 9
Slide 10: Net sales by region
Net sales by region Marginal change in EMEA and Asia-Pacific, major downturn in the Americas MCHF 500 -4.2 % 400 26% 300 +2.3 % 2023 55% 200 -35.8 % 19% 100 0 EMEA Americas Asia-Pacific EMEA 2022 Americas 2023 Asia-Pacific 5 March 2024 | Full-year results 2023 | Media and analysts' conference 10
Slide 11: Reducing our environmental impact: highlights in 2023
Reducing our environmental impact: highlights in 2023 • Lowering our carbon footprint: We continue to be aligned with our 2025 target to reduce our emissions by 50% per added value. • Resource efficiency: We are committed to decrease our resource use which is shown in a reduced amount of waste and w
Slide 12: Agenda
Agenda Overview of business year 2023 Urs Ryffel (CEO) Financial results 2023 Ivo Wechsler (CFO) Strategic focus, Trends, Outlook 2024 Urs Ryffel (CEO) Questions and answers 5 March 2024 | Full-year results 2023 | Media and analysts' conference 12
Slide 13: Factors impacting order intake
Factors impacting order intake Organic growth in Transportation, organic decline in Industry and Communication MCHF 1000 IND COM TRA -154.1 MCHF -15.8 % 800 -43.9 MCHF -79.0 MCHF +10.2 MCHF -14.1 % -20.8 % +3.6 % 600 975.4 Currency, copper Organic and portfolio 821.4 400 -112.7 MCHF -41.4 MCHF -11.6
Slide 14: Factors impacting net sales
Factors impacting net sales Decline in Communication, adverse FX, Transportation with double digit organic growth MCHF 1000 IND COM TRA -103.5 MCHF -10.8 % 800 -1.7 MCHF -88.7 MCHF +30.3 MCHF -0.6 % -23.0 % +11.2 % 600 954.6 Currency, copper Organic and portfolio 851.1 400 -60.2 MCHF -43.3 MCHF -6.3
Slide 15: Gross margin
Gross margin Stabilisation despite higher costs related to capacity reduction / inventory write-downs MCHF Gross profit Gross margin 39.7% 200 40% 36.7% 36.5% 35.8% 34.8% 34.9% 150 30% 100 20% 50 10% 169 161 174 166 167 134 0 0% H1/21 H2/21 H1/22 H2/22 H1/23 H2/23 5 March 2024 | Full-year results 20
Slide 16: Operating expenses
Operating expenses Reduced due to lower business activity and proactive cost management MCHF 300 30% 26.2% 26.6% 25.1% 250 Σ 240 Σ 226 48 Σ 227 200 49 50 20% 59 150 56 57 100 10% 121 132 119 50 0 0% 2021 2022 2023 S&M R&D Admin in % of net sales 5 March 2024 | Full-year results 2023 | Media and anal
Slide 17: EBIT by market segment
EBIT by market segment Industry lower, Communication not satisfactory, Transportation with turnaround MCHF 2023 2022 Industry 46.8 16.4 % 63.4 21.3 % Communication 13.7 4.9 % 34.2 8.9 % Transportation 25.9 9.1 % 13.7 5.1 % Corporate (8.9) (8.0) Total EBIT 77.6 9.1 % 103.2 10.8 % 5 March 2024 | Full-
Slide 18: Currency situation 2023
Currency situation 2023 CHF appreciated strongly against all relevant currencies 31.12.2023 vs. 31.12.2022 Ø 2023 vs. Ø 2022 5% 3.9% FX / CHF 0.5% 0% -3.0% -3.0% -5% -4.3% -4.7% -6.0% -7.3% -8.0% -10% -8.9% -10.2% -10.4% -9.8% -9.9% -15% EUR USD RMB GBP AUD INR PLN Ø 2023 0.97 0.90 0.126 1.12 0.60 0
Slide 19: Financial result
Financial result Strong Swiss franc and higher hedging costs resulted in negative FX impact MCHF 1 Net currency effects Other financial result 0.1 0 -1.6 -1 -3.0 -2 -0.2 -3 -1.8 -2.9 -4 2022 2023 5 March 2024 | Full-year results 2023 | Media and analysts' conference 19
Slide 20: Group tax rate
Group tax rate Positive impact from Swiss footprint and significant R&D tax benefits 25% 19.9% 20% 17.4% 16.0% 15% 13.1% 10% 5% 0% 2022 2023 Expected tax rate Effective tax rate 5 March 2024 | Full-year results 2023 | Media and analysts' conference 20
Slide 21: Investments
Investments Continuous high investment in IT, automation and production equipment MCHF 60 Investments in % of net sales 7% 5.9% 6.0% 6% 4.7% 5% 4% 45 3% 2% 1% 51 45 51 30 0% 2021 2022 2023 5 March 2024 | Full-year results 2023 | Media and analysts' conference 21
Slide 22: Overview balance sheet
Overview balance sheet Very solid structure MCHF 31.12.2023 31.12.2022 30.06.2023 Cash and cash equivalent / marketable securities 163 151 8% 112 Other current assets 321 389 (18 %) 384 Non-current assets 293 275 7% 287 Financial liabilities - - - Other liabilities 167 208 (20 %) 190 Equity* 610 607
Slide 23: Cash flow development
Cash flow development Significantly improved despite high investments and cash returns to shareholders MCHF 2021 2022 2023 Cash flow from operating activities 101.7 87.3 115.7 Cash flow from investing activities (excl. marketable securities) (45.1) (49.7) (52.0) Free operating cash flow 56.6 37.7 63
Slide 24: Return on invested capital
Return on invested capital Clearly double digit MCHF P+L 2023 MCHF Balance Sheet (31.12.2023) 90 700 80 600 70 -10.2 500 -166 60 50 400 40 77.6 300 588 67.4 30 200 421 20 100 10 0 0 EBIT - Effective NOPAT “Operating “Operating Invested income tax rate assets” liabilities” capital (13.1%) 67 ø426** R
Slide 25: Dividend proposal
Dividend proposal Continuous earnings-oriented dividend policy of 40‒50 % Dividend Pay-out ratio dividend in % 45 80% 60% 30 50% 49% 49% 47% 45% 40% 15 20% 31 25 39 39 31 0 0% 2019 2020 2021 2022 2023 Dividend per share 1.60 1.30 2.00 2.10 1.70* *proposed dividend 5 March 2024 | Full-year results 20
Slide 26: Financial assessment 2023
Financial assessment 2023 Overall solid operational performance – despite challenging environment EBIT margin within medium-term target range Book to Bill ratio < 1 Low tax rate Organic net sales decline High cash flow from operating activities FX development 5 March 2024 | Full-year results 2023 |
Slide 27: Agenda
Agenda Overview of business year 2023 Urs Ryffel (CEO) Financial results 2023 Ivo Wechsler (CFO) Strategic focus, Trends, Outlook 2024 Urs Ryffel (CEO) Questions and answers 5 March 2024 | Full-year results 2023 | Media and analysts' conference 27
Slide 28: We connect people with people
We onnect peo} , wit people by —
Slide 29: Economic environment and strategic focus
Economic environment and strategic focus Economic environment • Market trends for connectivity business remains fundamentally positive. However, uncertainties and risks dominate the operational agenda: − Regional wars and conflicts show impact far beyond embattled territories; mounting geopolitical
Slide 30: Customer markets verticals
Customer markets verticals 2023 Sales by segment Sales by customer market growth Long term growth drivers • Test & Measurement • Medical Device Industry Industrials • Energy • Process 21 % Increasing demand for power and data connectivity (IoT, Industry 4.0,…) • High Power Charging Industries 33 % C
Slide 31: Industry segment
Industry segment High tech applications allow for high differentiation/high margin Core market Growth initiative Other markets Test & Measurement Aerospace & Defense High Power Charging General Industrial Energy Medical Device Process Ind. T&M business suffers from Rising defense budgets Electrifica
Slide 32: Communication segment
Communication segment Technologies to cope with the increasing data traffic and AI Core markets Growth initiative CEM Components Fixed Access Network Mobile Network Data Center Trend to faster network Data traffic doubling every Evolution of 5G Investments in data centers components from three years
Slide 33: Transportation segment
Transportation segment Environmentally friendly mobility offers high growth potential Core market Growth initiatives Advanced Driver Rolling Stock Electric Vehicle Rail Communications Assistance System Ecological mobility in urban Level 3 automated driving Electrification adopted by On-board and tra
Slide 34: Outlook 2024
Outlook 2024 Medium-term EBIT target range The medium-term target range of 9–12 % for the EBIT margin remains unchanged. Net sales guidance for 2024 In terms of net sales, HUBER+SUHNER has set itself the goal of returning organically to a growth path in 2024. EBIT guidance for 2024 For the current f
Slide 35: Financial calendar
Financial calendar Annual General Meeting (Rapperswil SG) 27.03.2024 Half-year report 2024 20.08.2024 Media and analysts’ conference (webcast) 20.08.2024 Sales and order intake (9 months) 2024 22.10.2024 Sales and order intake (12 months) 2024 23.01.2025 Annual Report 2024 11.03.2025 Figures are ava
Slide 36: Agenda
Agenda Overview of business year 2023 Urs Ryffel (CEO) Financial results 2023 Ivo Wechsler (CFO) Strategic focus, Trends, Outlook 2024 Urs Ryffel (CEO) Questions and answers 5 March 2024 | Full-year results 2023 | Media and analysts' conference 36
Slide 37: Connecting – today and beyond
Connecting – today and beyond
Slide 38: Disclaimer
Disclaimer This document is for presentation purposes only. It contains certain forward-looking statements including, but not limited to, those using the words “believes”, “assumes”, “expects” or formulations of a similar kind. Such forward-looking statements are made on the basis of assumptions and