LEM Holding SA · SIX:LEHN
LEM Holding SA — H1 2011/12 Earnings Presentation
33 slides from LEM Holding SA's earnings presentation, Nov 8, 2011
Slide 1: Half Year Results 2011/12
Half Year Results 2011/12 8 November 2011 1
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Business Review 3. Financial Review 4. Outlook
Slide 3: About LEM
1. About LEM ■ LEM is the global market leader in providing innovative and high quality solutions for measuring electrical parameters. ■ The current and voltage transducers are used in a broad range of industrial and automotive markets. ■ LEM is a high growth global company with approximately 1’300
Slide 4: LEM Production & Logistics World-Wide
1. LEM Production & Logistics World-Wide Production Centers (PDCs) Adaptation Centers Sales Offices Agents / Distributors 4 8 November 2011
Slide 5: LEM at a Glance - Businesses
1. LEM at a Glance - Businesses Industry segment Automotive segment Drives & welding Conventional cars ■ Motor drives ■ Lead battery management ■ Welding ■ Miscellaneous Green cars (HEV, EV) ■ Battery pack management Renewable energies & ■ Electric motor control power supplies ■ Solar ■ Wind ■ UPS ■
Slide 6: Highlights and Business Review
2. Highlights and Business Review
Slide 7: Highlights H1 2011/12
2. Highlights H1 2011/12 H1 2011/12 H1 2011/12 to Q2 to Q1 2011/12 (in CHF millions) H1 2010/11 Orders received 80.4 -56.4% -37.7% Sales 125.5 -11.5% -14.5% Operational EBIT 19.2 -36.7% -34.5% Net earnings 15.0 -24.1% 8.4% ■ LEM is impacted by the economic weakness starting in Q4 2010/11 ■ Strong st
Slide 8: Net Sales
2. Net Sales Sales (in CHF Growth H1 to H1 Growth Q2 to Q1 million) as at constant In CHF millions reported currencies Total Sales 125.5 -11.5% 2.9% -14.5% 300 275 Industry 113.3 -13.4% -0.1% -17.2% 250 Automotive 12.3 11.8% 38.2% 14.3% 225 200 175 150 ■ General economic situation and strong Swiss f
Slide 9: Quarterly view
2. Quarterly view In CHF millions Book‐to‐bill ratio 100 1.6 ■ Weakening economy 90 1.4 80 75.0 77.0 77.4 ■ Customers continue to reduce 66.8 67.7 1.2 inventory 70 57.9 58.4 1.0 60 ■ Customers order book 50 48.3 0.8 reduction; cancellation of orders 43.2 received of CHF 24.5 million in 40 35.6 0.6 H
Slide 10: Cost and Capacity Management
2. Cost and Capacity Management First signs of market weakness visible in Q4 2010/11 Growing exposure to solar markets increases volatility of LEM’s business Economic weakness impacts mainly industry businesses while automotive businesses continue to grow On 22 September LEM 2011 announced a
Slide 11: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets Sales H1 to H1 Q2 to Q1 (in CHF million) 2011/12 Europe North America Europe 58.5 -16.1% -16.6% Asia Rest of the World N. America 13.4 -5.4% -16.2% 2% Asia 38.6 -13.4% -17.9% ROW 2.7 16.5% -23.0% Total 113.3 -13.4% -17.2% 34% 52% ■ No major change in regional sp
Slide 12: Industry Segment: Business Development
2. Industry Segment: Business Development In CHF millions Op. EBIT in % of sales 300 25 Businesses and Applications 260 Drives & welding 20 Weakened across all regions during 220 summer reflecting uncertainties about the development of the global economy 180 15 Renewable energies & power supplies 14
Slide 13: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets Sales H1 to Q2 to Q1 (in CHF million) H1 2011/12 Europe Europe 1.1 -20.1% -2.2% North America Asia and Rest of World N. America 6.5 14.1% 7.8% 9% Asia and 4.7 20.0% 28.7% ROW Total 12.3 11.8% 14.3% 38% ■ Growth with existing and new customers ■ Improved divers
Slide 14: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales 25 25 Businesses and Applications 20 20 Conventional cars LEM increased market share in Asia and 15 15 North America. 10 10 Green cars (HEV, EV) Positive trend continues. 5 5 Majority of green cars projects launched g
Slide 15: Business Development - China
2. Business Development - China Sales Production • Market share over 50% • LEM China expands its #1 position as • Sales impacted by slowing activity largest manufacturing site of the Group specially in solar and wind (41% of total) • “Made by LEM” quality In CHF millions In CHF millions 120 55 100 4
Slide 16: Financial Review
3. Financial Review At the heart of power electronics
Slide 17: Financial Highlights
3. Financial Highlights Strong balance sheet Dividend payment of CHF 45.5 million to shareholders in July 2011 CHF 21 million loan taken up to finance dividend Equity at CHF 60 million, equity ratio 48% (60% per 31.03.2011) High inventory on 30 September 2011 due to incoming raw material/
Slide 18: Consolidated Balance Sheet
3. Consolidated Balance Sheet In CHF thousands 31.03.2011 30.09.2011 Cash and cash equivalents 27’231 10’615 Accounts receivable 60’026 46’794 Inventories 34’187 39’087 Income tax receivable 1’310 150 Other current assets 1’717 3’000 Total non-current assets 37’508 38’809 Total assets 161’979 138’45
Slide 19: Income Statement
3. Income Statement H1 H1 Q1 Q2 In CHF thousands Change Change 2010/11 2011/12 2011/12 2011/12 Sales 141’780 125’511 -11.5% 67’659 57’852 -14.5% Gross margin 43.7% 42.5% -1.2%pt 42.4% 42.6% 0.1%pt Operating Cost -31’666 -34’130 7.8% -17’101 -17’029 -0.4% Operational EBIT 30’327 19’194 -36.7% 11’600
Slide 20: Results by Quarter
3. Results by Quarter In CHF millions % of sales 100 30% ■ Operational EBIT of 13.1% in Q2 2011/12 90 maintained despite lower sales 25% 80 ■ Q2 2011/12 positive impact on net profit 77.4 20% 70 75.0 67.7 due to foreign exchange impact and 77.0 60 66.8 57.9 additional SOP income 15% 50 58.4 48.3 10%
Slide 21: Gross Margin Development
3. Gross Margin Development In CHF millions GM % of sales H1 H1 Q1 Q2 48% 2010/11 2011/12 2011/12 2011/12 135 Gross margin 62.0 53.3 28.7 24.6 47% in CHF million 120 105 46% Gross margin 43.7% 42.5% 42.4% 42.6% in % of sales 90 45% 75 44% ■ H1 2011/12 gross margin heavily impacted by 60 foreign exch
Slide 22: Operating Expenses
3. Operating Expenses In CHF millions % of sales H1 H1 Q1 Q2 90 50% 2010/11 2011/12 2011/12 2011/12 80 Operating expenses 31.7 34.1 17.1 17.0 40% in CHF million 70 Operating 60 expenses 22.3% 27.2% 25.3% 29.4% 30% in % of sales 50 ■ Q2 2011/12 includes restructuring cost of CHF 0.7 million 40 20% ■
Slide 23: R&D Expenses
3. R&D Expenses CHF millions % of sales H1 H1 Q1 Q2 15 10% 2010/11 2011/12 2011/12 2011/12 R&D 12 8% expenses 6.1 7.0 3.7 3.2 in CHF million R&D expenses 4.3% 5.5% 5.5% 5.6% 9 6% in % of sales ■ R&D exempted from restructuring exercise 6 4% ■ High R&D efforts as an investment into the future maintai
Slide 24: Operational EBIT
3. Operational EBIT In CHF millions Op EBIT % of sales H1 H1 Q1 Q2 70 24% 2010/11 2011/12 2011/12 2011/12 Operational 60 22% EBIT 30.3 19.2 11.6 7.6 in CHF million 50 20% Operational EBIT 21.4% 15.3% 17.1% 13.1% in % of sales 40 18% 30 16% ■ Excluding additional SOP cost/income ■ Exceptionally good
Slide 25: Legacy SOP Programs Expire per 31.03.2012
3. Legacy SOP Programs Expire per 31.03.2012 ■ LEM’s legacy stock option plans (SOP) are cash settled; their cost is driven by the share price development (31.3.2011: CHF 570; 30.9.2011: CHF 389) ■ Valuation according to IFRS; time value of option decreases over time ■ Significant reduction of volat
Slide 26: Financial Expense
3. Financial Expense H1 H1 Q1 Q2 2010/11 2011/12 2011/12 2011/12 Exchange effect* -2’406 -1’035 -2’309 1’274 Other financial expense + -244 -127 -30 -97 income Total -2’650 -1’162 -2’339 1’177 Q2 2011/12 exchange effect mainly driven by EUR and USD appreciation following the SNB intervention For
Slide 27: Income Taxes
3. Income Taxes H1 H1 Q1 Q2 In CHF thousands 2010/11 2011/12 2011/12 2011/12 EBT 27’249 18’651 9’140 9’511 Income taxes -7’439 -3’624 -1’928 -1’696 Effective tax rate 27.3% 19.4% 21.1% 17.8% H1 H1 Q1 Q2 In % 2010/11 2011/12 2011/12 2011/12 Expected income tax rate 24.2% 19.8% 20.6% 19.1% Expected wi
Slide 28: Net Profit
3. Net Profit H1 H1 Q1 Q2 2010/11 2011/12 2011/12 2011/12 In CHF millions % of sales Net profit 19.8 15.0 7.2 7.8 in CHF million 45 16% Net profit 14.0% 12.0% 10.7% 13.5% in % of sales 40 14% -0.4 H1 2010/11 35 -2.7 12% 30.3 -7.4 30 10% 19.8 25 8% Operational SOP inc./cost Financial Income tax Net p
Slide 29: Cash Flow Statement
3. Cash Flow Statement In CHF thousands H1 H1 Q1 Q2 2010/11 2011/12 2011/12 2011/12 Net profit 19’810 15’028 7’212 7’816 Non-cash items 5’676 3’454 1’172 2’282 Cash flow from changes in net working capital -15’044 -4’112 -3’867 -246 Cash flow from operating activities 10’442 14’369 4’517 9’852 Cash
Slide 30: Outlook
4. Outlook At the heart of power electronics
Slide 31: Market Factors and Strategy
4. Market Factors and Strategy ■ We firmly believe in our strategic direction and the 4 drivers for our business remain unchanged ■ We will continue to capitalize on the drivers of LEM’s markets through pure play components company diversification across geographies and markets 31 8 November 201
Slide 32: Outlook
5. Outlook For the financial year 2011/12, we are cautious regarding our markets, in the second half of 2011/12 we expect: Orders in the Industry segment to stabilize on a low level and sales to further decrease compared to the first half of 2011/12. The Automotive segment to benefit from the cu
Slide 33: Financial Calendar and Contact Details
5. Financial Calendar and Contact Details Financial calendar 14 February 2012 Q3 2011/12 results 6 June 2012 2011/12 year-end results media and analyst conference 28 June 2012 Ordinary shareholders’ meeting for the year 2011/12 For further information Julius Renk, CFO Tel.: +41 22 706 12 50 E-mail: