TKH Group N.V. Cert · EURONEXT:TWEKA
TKH Group N.V. Cert — TKH Group — FY2019 Earnings Presentation
58 slides from TKH Group N.V. Cert's earnings presentation, Mar 5, 2020
Slide 1: Full Year Results and Developments 2019
FULL YEAR RESULTS AND DEVELOPMENTS 2019 5 March 2020
Slide 2: Content
CONTENT 1 Profile 2 Highlights & business update 3 Developments per Solution 4 Financial performance 5 Outlook 6 Annex 2 FY2019 | 03-2020
Slide 3: Profile
PROFILE TKH Group NV (TKH) is focused on high-end innovative technologies in high growth markets within three business segments: Telecom, Building and Industrial Solutions. Through a combination of technologies, TKH offers superior solutions that support to increase the efficiency, safety and securi
Slide 4: Profile
PROFILE 2019 mln € ROS Turnover FTE TELECOM SOLUTIONS Indoor telecom & copper networks 201 15.4% 1.5 5.980 Fibre network systems € billion employees BUILDING SOLUTIONS Net debt Innovations Connectivity systems 745 10.1% Vision & security systems 1.5 20.5% ratio of turnover INDUSTRIAL SOLUTIONS Manuf
Slide 5: Value creation within TKH
VALUE CREATION WITHIN TKH TKH focuses on distinguishing potential for an above-average performance Niche player strategy – focus on high-grade solutions and relatively small markets with high margins High pricing power due to innovative unique solutions Selling high return on investment to customers
Slide 6: Basis for TKH strategy
BASIS FOR TKH STRATEGY Goal: To bring TKH shareholders an above average Return on Investment with a limited risk on their investment, through a significant above average performance of value creation (share value development) and dividend yield Ambition: The ideal investment opportunity Shareholder
Slide 7: Highlights & business update
HIGHLIGHTS & BUSINESS UPDATE 2019 7 FY2019 | 03-2020
Slide 8: Highlights 2019
HIGHLIGHTS 2019 HY2 HY2 Turnover growth of 2.2% (HY2: 0.9%) – Organic -1.9% (HY2: -3.9%) (in million € unless stated otherwise) 2019 2018 Δ in % Turnover 1) 736.4 729.8 +0.9% Decrease EBITA before one-off expenses by 1.5% (HY2: +5.5%) – EBITA before one-off expenses 1, 2) 94.9 89.9 + 5.5% ROS H2 inc
Slide 9: 'Simplify & Accelerate' program
‘SIMPLIFY & ACCELERATE’ PROGRAM Bring TKH to a next stage of performance 1 reduce the number of activities that have low margin and limited value creation opportunities Simplify 2 reduce the number of business sub-segments 3 reduce the number of opco’s through integration 1 accelerating the increase
Slide 10: 'Simplify & Accelerate' program – turnover and ROS improvement
‘SIMPLIFY & ACCELERATE’ PROGRAM – TURNOVER AND ROS IMPROVEMENT BANDWIDTH BANDWIDTH ROS IMPROVEMENT REALIZED STEPS AREA’S TURNOVER DEVELOPMENT TARGET >15% IMPACT ON TURNOVER AND ROS 1) Industrial connectivity (2019) € -175 million DIVESTMENTS - € 300 - 350 million 1.2 % - 1.6 % ZTC (2020) € -70 milli
Slide 11: 'Simplify & Accelerate' program – good progress
‘SIMPLIFY & ACCELERATE’ PROGRAM – GOOD PROGRESS Targets Execution of program led to one-off expenses of € 18.3 million and Key financial targets (mid-term) 2019 2018 impairments of € 5.0 million: ROS > 15% 11.6% 12.0% • Intended decision to relocate cable production in Ittervoort to Haaksbergen and
Slide 12: Vertical markets – better positioned to utilize economies of scale and synergies
VERTICAL MARKETS – BETTER POSITIONED TO UTILIZE ECONOMIES OF SCALE AND SYNERGIES Turnover (in € millions) 2012 2018 2019 Growth scenarios Growth target verticals: € 300 - € 500 million coming 3-5 years Divestment non-vertical markets: minus € 300 - € 350 million – Fibre Optics Network 80 134 137 175
Slide 13: Developments per Solution
DEVELOPMENTS PER SOLUTION Turnover (in %) 2019 2018 2019 Telecom Solutions 13.5% 13.4% Indoor Telecom & copper Solutions 4.7% 4.8% Fibre Network Systems 8.8% 8.6% Building Solutions 50.0% 48.2% Connectivity Systems 22.4% 21.6% Vision & Security Systems 27.6% 26.6% Industrial Solutions 36.5% 38.4% Ma
Slide 14: Telecom Solutions
TELECOM SOLUTIONS (in million €) 2019 2018 Δ in % Fibre network systems – turnover share 8.8% Turnover 200.5 194.5 + 3.0% Organic turnover growth: +4.7% EBITA 30.8 28.1 + 9.5% Slowdown in China was offset by growth in fiber optic network systems within ROS 15.4% 14.5% Europe – mainly achieved in Fra
Slide 15: Building Solutions
BUILDING SOLUTIONS (in million €) 2019 2018 Δ in % Vision & Security systems - turnover share 27.6% Turnover 745.0 703.7 + 5.9% Turnover increase by 5.8% – organic turnover decrease by -10.2% EBITA before one-off expenses 1) 75.5 69.6 + 8.5% Machine Vision: Reluctance in investments among producers
Slide 16: Building Solutions
BUILDING SOLUTIONS (in million €) 2019 2018 Δ in % Connectivity systems – turnover share 22.4% Turnover 745.0 703.7 + 5.9% Organic turnover growth: +6.6% EBITA before one-off expenses 1) 75.5 69.6 + 8.5% Tunnel & Infra: Good growth with higher market share in Airfield Ground Lighting (AGL) – ROS 2)
Slide 17: Industrial Solutions
INDUSTRIAL SOLUTIONS (in million €) 2019 2018 Δ in % Manufacturing systems – turnover share 36.5% Turnover 544.2 559.5 - 2.7% Organic turnover growth: -2.8% EBITA before one-off 81.4 92.3 - 11.8% expenses 1) Divestment majority of industrial connectivity activities in August – remaining ROS 15.0% 16
Slide 18: Financial Performance 2019
FINANCIAL PERFORMANCE 2019 Presented figures for 2019 are based on ‘continued operations’ (excluding divested majority of industrial connectivity activities) – comparative figures in P&L have been adjusted accordingly 18 FY2019 | 03-2020
Slide 19: Geographical distribution of turnover
GEOGRAPHICAL DISTRIBUTION OF TURNOVER Geographical distribution of turnover (in %) 2019 2018 Netherlands 20 Netherlands 20 Europe (other) 43 Europe (other) 42 Asia 22 Asia 23 North America 13 North America 13 Other 2 Other 3 19 FY2019 | 03-2020
Slide 20: Turnover and added value
TURNOVER AND ADDED VALUE (in € million) 2019 2018 Δ in % Organic turnover growth of -1.9% Turnover 1,489.6 1,457.8 + 2.2% Raw materials and subcontracted work -771.4 -767.9 Turnover from acquisitions of 3.9%: Lakesight Technologies (2018) Added value 718.2 48.2% 689.9 47.3% + 4.1% Ognios (2018) Comm
Slide 21: Operating expenses and EBITA
OPERATING EXPENSES AND EBITA (in € million) 2019 2018 Δ in % Operating expenses increased with 6.0%: Turnover 1,489.6 1,457.8 + 2.2% Consolidation of acquired companies (+5.2%) Raw materials and Currency translation effects (+0.6%) -771.4 -767.9 subcontracted work Expansion production capacity durin
Slide 22: Items below EBITA
ITEMS BELOW EBITA (in € million) 2019 2018 Δ in % One-off expenses and impairments related to 'Simplify & EBITA before one-off income and Accelerate‘ program and acquisitions 172.5 11.6% 175.0 12.0% -1.5% expenses One-off expenses 18.3 4.2 Increase of amortization due acquisitions and higher R&D Amo
Slide 23: Balance sheet December 2019
BALANCE SHEET 31 DECEMBER 2019 (in € million) 31-12-2019 31-12-2018 (in € million) 31-12-2019 31-12-2018 Intangible non-current assets 596.4 544.1 Shareholders' equity 704.5 646.5 Tangible non-current assets 230.9 245.4 Non-controlling interests 0.3 1.2 Right-of-use assets 80.8 Total group equity 70
Slide 24: Working capital
WORKING CAPITAL Changes in working capital (in € million) Working capital as percentage of turnover decreased to 13.0% (2018: 13.9%) Use of non recourse factoring: 31-12-2019 € 38.7 million 30-06-2019 € 50.2 million 31-12-2018 € 52.6 million Use of supply chain finance: 31-12-2019 € 24.8 million 30-
Slide 25: Net debt development
NET DEBT DEVELOPMENT Change in net debt (in € million) High cash flow from operations of € 218.5 million – minimal impact from change in working capital Investment level in tangible assets of € 30.6 million below recent years (2018: € 40.0 million) Investments in intangible assets of € 40.4 million,
Slide 26: Free cash flow
FREE CASH FLOW (in € million) 2019 2018 2017 Substantial growth in FCF compared to previous years Operating result from continued operations 99.1 129.2 104.9 FCF-conversion improved due to stable working capital, Operating result from discontinued operations 8.9 13.5 compared to an increase in 2018,
Slide 27: Outlook
OUTLOOK 27 FY2019 | 03-2020 TKH Group the solution provider <
Slide 28: Outlook
OUTLOOK Macroeconomic uncertainties have increased in recent months. The Marine & Offshore: Growth expected for subsea cable systems based impact of the corona virus seems currently limited for TKH, but is yet on order intake and current tenders. Production will be scaled up, difficult to estimate.
Slide 29: Annex I: Core technologies
ANNEX I: CORE TECHNOLOGIES 29 FY2019 | 03-2020
Slide 30: Bijlage I: TKH technologieën
BIJLAGE I: TKH TECHNOLOGIEËN 30 FY2019 | 03-2020
Slide 31: TKH – Core technologies
TKH – CORE TECHNOLOGIES Vision & Security Mission Critical Smart Connectivity Manufacturing Communication • 2D and 3D camera sensor • Mission critical communication • Subsea & marine cable systems • Medicine distribution technology • Intercom systems • Optical fibre connectivity • Tire assembling •
Slide 32: Annex II: Vertical growth markets
ANNEX II: VERTICAL GROWTH MARKETS 32 FY2019 | 03-2020
Slide 33: Vertical growth markets – Fibre optic networks
TKH – VERTICAL GROWTH MARKETS – FIBRE OPTIC NETWORKS Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Fibre Optics Network 80 127 134 175 200 Growth drivers Data use through the impact of information and communication technology on the way we live our lives continues to grow Interne
Slide 34: Fibre optic networks
Fibre optic networks “Handholes Fibre Optic Cable Modular Cables & Duct “de MS yy WO \ DAA AAAS x i Smart Cabinet Security ! Functi ity Control & Semi-automated Fibre Management ODF ie ==
Slide 35: Vertical growth markets – Care
TKH – VERTICAL GROWTH MARKETS – CARE Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Care 30 52 58 70 100 Growth drivers Life expectancy is continually increasing and healthcare spending will increase sharply due to more and better, but also more expensive care – therefore, the dem
Slide 36: Care
Connectivity Nurse call systems Care Tele care: social alarm Automated dose audio/video & smart dispensing sensors S S S S AS cS Mission critical 2D and 3D Vision etinciogd communication for medical imaging, dental& Alarm pase control Tele c care: personal alarm, systems endoscopy applications manag
Slide 37: Vertical growth market – Parking
TKH – VERTICAL GROWTH MARKET – PARKING Turnover developments and targets Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Parking 20 47 58 150 200 Growth drivers Frictionless parking is a key trend for the future of parking which needs new technology The addressable market for the T
Slide 38: Parking
Predictive Central control Park Mission critical Maintenance tools room systems reserve communication systems Parking ParkSurveillance | ParkSelectRate _ | Camera Alarm _ based systems | guidance | applications ParkFinder tg lira ms Sustainable Access Car & licence systems Connectivity lighting cont
Slide 39: Vertical growth market – Tunnel & Infra
TKH – VERTICAL GROWTH MARKET – TUNNEL & INFRA Turnover developments and targets Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Tunnel & Infra 1) 30 78 98 150 200 1) In 2017, revenue of € 29.9 million related to energy cable has been reclassified from Other vertical markets to Tunn
Slide 40: Tunnel & Infra
Tunnel & Infra " systems Mission critical Central Video : ‘ communication controlroom Management Sustainable Evacuation Emergency i systems systems lighting systems CEDD telephone CO) —- 7 Leakage detection ? 4 yy | ’ & Access control Video Connectivity Traffic control systems surveillance systems
Slide 41: Tunnel & Infra
Vision based Central control _- Facial Tu ri nel & | nfra process control room systems. recognition di fj Airport Airfield Ground Lighting Access ee control systems Security Connectivity Parking Mission critical systems management communication systems
Slide 42: Vertical growth market – Marine & Offshore
TKH – VERTICAL GROWTH MARKET – MARINE & OFFSHORE Turnover developments and targets Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Marine & Offshore 20 58 69 150 200 Growth drivers Large increase global generated power by wind power Demand for larger cargo ships and need for effici
Slide 43: Marine & Offshore
Perimeter Vision based . Leakage intrusion process Central control M arl nN e i Offsh (@) re detection detection control systems room systems Security systems Subsea cable systems Connectivity b, S24 GZ : 3 a Mission critical = communication Alarm Se Evacuation systems systems ~ systems Sustainable
Slide 44: Vertical growth market – Machine Vision
TKH – VERTICAL GROWTH MARKET – MACHINE VISION Turnover developments and targets Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Machine Vision 95 128 129 250 300 Growth drivers Demand for vision technology is increasing due to trend towards industrial automation and robotics need C
Slide 45: Machine Vision applications
Surgery Medical Medical Machine Vision as 3D imaging Inspection Area & agricultural scanning Additive manufacturing: Tyre high-speed scanning monitoring Automated ~~ Automated Robotic Wood Quality product ~~ Industrial “., Food volume automotive Automotive | processing control validation inspection
Slide 46: Vertical growth markets – Tire building
TKH – VERTICAL GROWTH MARKETS – TIRE BUILDING Bandwidth growth Turnover (in € millions) 2012 2017 2018 scenario Tire Building Industry 175 295 333 450 550 Growth drivers High priority of the tire manufacturing industry to replace existing technology with an emphasis on high productivity, efficiency,
Slide 47: Tire building industry
EXXIUM: Tire building industry - passenger tire building Textile Ply - = om Cutter/Splicer machine eeu MAXX: passenger ; tire building machine Rubber Millroom | VAST: truck tire id é building 280 ind * <j ames) machine MILEXxX: truck tire building machine Tire vision control RETRAX: retreading Tire
Slide 48: Annex III: Innovations
ANNEX III: INNOVATIONS 48 FY2019 | 03-2020
Slide 49: Parking – Camera based guidance applications
PARKING – CAMERA BASED GUIDANCE APPLICATIONS 49 FY2019 | 03-2020
Slide 50: Tunnel & Infra – CEDD / AGL
TUNNEL & INFRA – CEDD / AGL AIRPORT TECHNOLOGIES Increased efficiency Increased sustainability Increased safety Easy installation No ducting with optional direct-buried cable No secondary cabling No transformers or transformer pits Click-on lights; easy replacement and re-configuration Small base st
Slide 51: Marine & Offshore – Subsea cable systems
MARINE & OFFSHORE – SUBSEA CABLE SYSTEMS Excellent mechanical design for high risk environments and operations Double crush load resistance without compromising on bending stiffness Coilable design for optimal mechanical handling 100% watertight full dry design by using a closed aluminium water barr
Slide 52: Machine Vision – 2D scanning & inspection
MACHINE VISION – 2D SCANNING & INSPECTION FOOD INSPECTION 52 FY2019 | 03-2020
Slide 53: Machine Vision – 3D scanning & inspection
MACHINE VISION - 3D scanning & inspection COMPONENT QUALITY CONTROL 53 FY2019 | 03-2020
Slide 54: Machine Vision – 3D scanning & inspection
MACHINE VISION - 3D scanning & inspection CELLPHONE ASSEMBLY AUTOMATION 54 FY2019 | 03-2020
Slide 55: Machine Vision – Mobility
MACHINE VISION – MOBILITY EXTERNAL-SIGHT ON-BOARD SYSTEM Identify obstacles Track Passenger safety checking 55 FY2019 | 03-2020
Slide 56: Tire building industry – MAXX
TIRE BUILDING INDUSTRY - MAXX All new developments to fit on the MAXX tire building platform Benefits for R&D: Develop modules, not complete machines, quicker to market, lower costs Standard software approach, better utilization of resources Benefits for production Increased standardization - fewer
Slide 57: Tire building industry – UNIXX
TIRE BUILDING INDUSTRY - UNIXX The all-in-one solution Flexible and straightforward logistics Lower energy consumption & waste Ability to handle advanced high tech components Extreme level of automation Unprecedented process control Increased tire quality by more accurate components Full track & tra
Slide 58: Disclaimer
Disclaimer Statements included in this press release that are not historical facts (including any statements The forward-looking statements are based upon our current expectations, plans, estimates, concerning investment objectives, other plans and objectives of management for future operations or a