LEM Holding SA · SIX:LEHN
LEM Holding SA — H1 2012/13 Earnings Presentation
39 slides from LEM Holding SA's earnings presentation, Nov 13, 2012
Slide 1: Results First Half Year of 2012/13
Results First Half Year of 2012/13 1 April 2012 to 30 September 2012 13 November 2012
Slide 2: Agenda
Agenda 1. LEM at a Glance 2. Highlights and Business Review 3. Financial Review 4. Strategy and Outlook 2
Slide 3: 1. 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 1’200
Slide 4: LEM Applications: Robot
1. LEM Applications: Robot To control the arm, power inverters drive a motor from one position to the next and stop precisely in position Accurate measurement of the current with transducers needed to control the arm A CASR 1 Control Unit 2 Inverter 3 Motor 4
Slide 5: LEM Applications: Mobile Phone Base Station
1. LEM Applications: Mobile Phone Base Station Transducers ensure stable power supply and control in case of a failure Transducers used to control the charge and discharge of power batteries for backup A HASS B LTS 1 Antenna 2 Battery 3 Controller 4 Power supply 5
Slide 6: LEM Applications: Electric Plug-in Car
1. LEM Applications: Electric Plug-in Car Battery management Electric motor management Charger management 1 High-voltage battery 2 Vehicle control unit 3 Charger 4 Motor controller A HAH1 B DHAB 5 Electric motor and transaxle C HC5F 6 DC/DC converter 6 D CAB 7 Electric power steering
Slide 7: LEM Applications: Plasma Cutting
1. LEM Applications: Plasma Cutting To maintain the arc continuously, current transducer measures the current through the arc Accuracy of measurement is important to guarantee accuracy and shape of cut A LAH 1 Electronic 2 Motor 3 Torch 7 3 XY-table
Slide 8: LEM Production & Logistics World-Wide
1. LEM Production & Logistics World-Wide Production Centers (PDCs) Adaptation Centers Sales Offices Agents / Distributors 8
Slide 9: 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 ■ Start/stop application ■ Miscellaneous Renewable energies & Green cars (HEV, EV) power supplies ■ Battery pack management ■ Solar ■ Electric mot
Slide 10: 2. Highlights and Business Review
2. Highlights and Business Review 10
Slide 11: Highlights H1 2012/13
2. Highlights H1 2012/13 In CHF millions, % H1 2012/13 H1 2012/13 vs. Q2 vs. Q1 2012/13 H1 2011/12 Orders 120.5 49.8% -1.6% Sales 124.2 -1.0% -3.2% Operational EBIT 23.8 24.1% 9.8% Net earnings 20.5 36.6% -8.5% ■ Low visibility with customers requiring increased flexibility in terms of timing and de
Slide 12: Product Launches H1 2012/13
2. Product Launches H1 2012/13 HO New ASIC with twice improved accuracy New functionalities: over-current detection, stand-by mode First programmable transducer DVL New technology to create a digital isolation Improved sensitivity to external magnetic fields Robust design for harsh envir
Slide 13: Net Sales
2. Net Sales In CHF millions In CHF millions, % Sales H1 vs. H1 Q2 vs. as reported at constant Q1 300 currencies 275 Industry 106.0 -6.4% -11.7% -2.0% 250 Automotive 18.2 48.5% 33.0% -10.1% 225 Total sales 124.2 -1.0% -7.3% -3.2% 200 175 ■ Industry businesses affected by European 150 economic slowdo
Slide 14: Quarterly View
2. Quarterly View In CHF millions Book-to-bill ratio 100 1.6 Orders slowing in Q2 of 90 1.4 2012/13 for the first time in four 80 77.0 77.4 quarters 75.0 70 66.8 67.7 1.2 Increasing volatility of the 63.1 61.1 1.0 market characterized by short- 60 57.9 55.0 55.7 term orders from customers 50 0.8
Slide 15: Industry Segment: Regional Markets
2. Industry Segment: Regional Markets Europe In CHF millions, % Sales H1 vs. H1 Q2 vs. Q1 North America Asia Europe 50.3 -14.1% -10.6% Rest of the World N. America 14.9 11.5% -1.8% 2% Asia 38.6 0.0% 12.3% ROW 2.1 -21.5% -32.1% Total 106.0 -6.4% -2.0% 36% Continued weakness in Europe 48% Strong p
Slide 16: Industry Segment: Business Development
2. Industry Segment: Business Development Businesses and Applications In CHF millions Op. EBIT in % of sales 25 Drives & welding (-18%) 280 Weakness in Europe, particularly Germany and Italy 240 20 New projects in the robot and elevator markets 200 Renewable energies & power supplies (+13%) 15
Slide 17: Automotive Segment: Regional Markets
2. Automotive Segment: Regional Markets In CHF millions, % Sales H1 vs. H1 Q2 vs. Q1 Europe Europe 1.4 27.7% -42.5% North America N. America 9.1 40.9% -1.6% Asia and Rest of World Asia and 7.7 63.8% -12.6% 8% ROW Total 18.2 48.5% -10.1% 42% Sales growth despite weak global car industry in H1 of 20
Slide 18: Automotive Segment: Business Development
2. Automotive Segment: Business Development In CHF millions Op. EBIT in % of sales Businesses and Applications 30 30 Conventional cars (+52%) 25 25 Strong performance with battery management applications for 20 20 conventional cars Won market shares and extended 15 15 number of platforms 10 10 G
Slide 19: Business Development China
2. Business Development China Sales Production ■ Market share of over 50% ■ LEM China expands its #1 position as largest manufacturing site of the Group ■ Sales impacted by slowing activity (over 51% of total production) especially in solar, wind and traction ■ “Made by LEM” quality 60 In CHF millio
Slide 20: 3. Financial Review
3. Financial Review At the heart of power electronics
Slide 21: Financial Highlights
3. Financial Highlights Strong balance sheet Dividend payment of CHF 28.4 million to shareholders in July 2012 Equity at CHF 74.3 million, equity ratio 55% (48% per 30.09.2011) Improved profitability Gross margin of 42.9% (40.5%) SG&A down by 2.1 million representing 23.7% of sales Ope
Slide 22: Consolidated Balance Sheet
3. Consolidated Balance Sheet In CHF thousands 30.09.2012 31.03.2012 Cash and cash equivalents 12'421 21'121 Accounts receivable 46'629 42'140 Inventories 30'814 26'605 Income tax receivable 833 2'009 Other current assets 1'610 2'956 Total non-current assets 42'302 37'683 Total assets 134'608 132'51
Slide 23: Income Statement
3. Income Statement In CHF thousands H1 H1 Q1 Q2 Change Change 2011/12 2012/13 2012/13 2012/13 Sales 125'511 124'195 -1.0% 63'118 61'076 -3.2% Gross margin 40.5% 42.9% 2.5pt 42.1% 43.7% 1.6pt Operating Cost -31'582 -29'474 -6.7% -15'224 -14'250 -6.4% Operational 19'194 23'829 24.1% 11'359 12'470 9.8
Slide 24: Change in the Classifications on Income Statement
3. Change in the Classifications on Income Statement Review of definitions linked to systems & process improvements, in order to provide more relevant financial information about LEM’s operations Neutral on overall EBIT Impact on gross margin -2.0%-points Comparable number provided for 2011/
Slide 25: Results by Quarter
3. Results by Quarter In CHF millions In % of sales 100 30% ■ Improved operating EBIT margin, 90 slightly over target range of 15 to 25% 20% 80 75.0 77.0 77.4 66.8 70 67.7 63.1 20% ■ High net profit in % of sales, 61.1 60 57.9 55.0 55.8 resulting from decreased tax 50 15% charge 40 10% 30 20 5% 10 0
Slide 26: Gross Margin
3. Gross Margin H1 H1 Q1 Q2 2011/12 2012/13 2012/13 2012/13 In CHF millions In % of sales 46% Gross margin 135 in CHF millions 50.8 53.3 26.6 26.7 45% 120 44% Gross margin 105 in % of sales 40.5% 42.9% 42.1% 43.7% 90 43% 75 42% Strong positive impacts on gross margin vs. 60 H1 of 2011/12 41% 45
Slide 27: Operating Expenses
3. Operating Expenses In CHF millions In % of sales H1 H1 Q1 Q2 2011/12 2012/13 2012/13 2012/13 90 40% Operating 80 expenses 31.6 29.5 15.2 14.2 in CHF millions 70 30% Operating 60 expenses 25.2% 23.7% 24.1% 23.3% in % of sales 50 20% 40 ■ Ongoing strict cost control measures ■ Operating expenses as
Slide 28: R&D Expenses
3. R&D Expenses H1 H1 Q1 Q2 2011/12 2012/13 2012/13 2012/13 In CHF millions In % of sales 15 10% R&D expenses 7.5 6.9 3.5 3.4 12 8% in CHF millions R&D expenses 6.0% 5.6% 5.5% 5.6% 9 6% in % of sales Continued investment in R&D for both 6 4% segments R&D expense around the long-term 3 2% average
Slide 29: Operational EBIT
3. Operational EBIT In CHF millions In % of sales H1 H1 Q1 Q2 2011/12 2012/13 2012/13 2012/13 70 22% Operational EBIT 19.2 23.8 11.4 12.5 60 in CHF millions 20% Operational 50 EBIT 15.3% 19.2% 18.0% 20.4% 18% in % of sales 40 16% Q2 of 2012/13 operational EBIT 30 increased vs. Q1 H1 of 2012/13 o
Slide 30: Legacy SOP Programs Expired per 31.03.2012
3. Legacy SOP Programs Expired per 31.03.212 ■ With the closing of fiscal year 2011/12, all legacy stock option plans are closed ■ LEM will not record any additional stock option plan cost/income going forward ■ LEM has no further option based compensation programs 31.03.2008 31.03.2009 31.03.2010 3
Slide 31: Financial Expense
3. Financial Expense H1 H1 2011/12 2012/13 Exchange effect* -1'035 722 Other financial expense + income -127 -7 Total -1'162 716 H1 of 2012/13 exchange effect mainly driven by USD & CNY appreciation vs. EUR & CHF Foreign exchange hedging policy In general: 50% of net exposure on a rolling 3-9
Slide 32: Income Taxes
3. Income Taxes In CHF thousands H1 2011/12 H1 2012/13 EBT 18’651 24’544 Income taxes -3’624 -4’015 Effective tax rate 19.4% 16.4% In % H1 2011/12 H1 2012/13 Expected income tax rate 19.8% 12.7% Expected withholding tax rate 2.6% 2.6% Expected tax rate 22.4% 15.3% Adjustments in respect of previous
Slide 33: Net Profit
3. Net Profit H1 H1 Q1 Q2 In CHF millions % of sales 2011/12 2012/13 2012/13 2012/13 45 20% Net profit 15.0 20.5 10.7 9.8 in CHF millions 40 18% Net profit 12.0% 16.5% 17.0% 16.1% in % of sales 35 16% H1 2011/12 0.6 -1.2 -3.6 30 14% 19.2 25 15.0 12% 20 Operational SOP inc. / cost Financial Income ta
Slide 34: Cash Flow Statement
3. Cash Flow Statement In CHF thousands H1 2011/12 H1 2012/13 Profit before taxes 18’651 24’544 Non-cash items 90 125 Cash flow from changes in net working capital -4’112 -1’630 Cash flow from operating activities 14’629 23’039 Cash flow from investing activities -5’498 -7’445 Free cash flow 9’131 1
Slide 35: 4. Strategy and Outlook
4. Strategy and Outlook At the heart of power electronics
Slide 36: 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 36
Slide 37: Strategic Priorities to Extend Leadership Position
4. Strategic Priorities to Extend Leadership Position Strategic priorities Achievements in H1 of 2012/13 Increase technology leadership ■ Reinforce multidisciplinary innovation team ■ Launched 3 new ■ Increase number of product launches products ■ Constantly improve performance of products ■ Establi
Slide 38: Outlook
4. Outlook ■ Uncertainty due to the economic slowdown – global political and economic implications of crisis remain unclear and make long-term planning difficult ■ Expectations for H2 of 2012/13 ■ decrease of sales in the Industry segment ■ strengthen market share thanks to introduction of new produ
Slide 39: Financial Calendar and Contact Details
Financial Calendar and Contact Details Financial calendar 14 February 2013 Third quarter results of 2012/13 5 June 2013 Year-end results and media and analyst conference 27 June 2013 Annual shareholders’ meeting for the year 2012/13 (Fribourg) 2 July 2013 Dividend ex-date 5 July 2013 Dividend paymen