| 1 annual press conference 2009 - 31 march 2009 daetwyler group annual press conference analyst...
TRANSCRIPT
| 1Annual Press Conference 2009 - 31 March 2009
Daetwyler GroupAnnual Press ConferenceAnalyst Presentation31 March 2009
| 2Annual Press Conference 2009 - 31 March 2009
Annual Review and Outlook
Dr. Paul J. HaelgCEO
| 3Annual Press Conference 2009 - 31 March 2009
German Ifo Business Climate IndexIfo Business Survey for February 2009
Index, 2000= 100, seasonally adjusted
Economic environment: indicators at an all-time low
Swiss PMI – Swiss Purchasing Managers’ IndexPMI in February: 32.6 points
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Raw materials:Up and down of oil and copper prices
Crude oil price development:
Copper (US… (raw materials indication) 200 days
Copper price development:
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EBIT Margin %Net revenueNet revenue EBITDAEBITDA EBITEBIT
7.4%7.4%3.8%3.8% 5.9%5.9% 9.5%9.5% 10.4%10.4%
+10.3%
+12.9%
+20.7%
Focus on niches pays off sustainably Record earnings from continuing operations
Record earnings driven by profitable growth
CHFm
+27.0%
Profit for the yearProfit for the year
Since 2007, continuing operations excluding the Precision Tubes Division
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2008/2007 balance sheet structure
Cash and cash equivalents
Receivables
Inventories
Non-current assets
2008 2007
1 411.91 331.6
Assets CHFm
Currentliabilities
Non-currentliabilities
Equity
Equity ratio
2008 2007
1 331.61 411.9
Liabilities and equity CHFm
70.0%70.0%58.7%58.7%
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Return on capital employed 2004 - 2008
Equityin CHFm
Net operatingassetsin CHFm
ROE % (net profit / equity)
RONOA %(EBIT / net operating assets)
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Dividend payment
25.3% payout ratio(excl. treasury and unissued shares)
Profit for the year
Proposal to 2008 AGM
Proposed dividend for 2009:CHF 1.80 per bearer share
11
86.3
1122
Profit for the year from continuing operationsProfit distribution in the form of a par value repayment
11
22
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Products
Market
Our four divisions
Cables RubberPharmaceutical
PackagingTechnical
Components
Cabling and systems for datacom, safety and elevators
Precision moulded components, special seals and gaskets, sealing technology
Rubber and aluminium/plastic closures
Engineering and electronic com-ponents, specialist and mail order distribution
Non-residential buildings
Automotive,construction, industrial
Pharmaceutical industry
Industry, small to medium-sized businesses
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Largely stable market environment – copper write-downs
Highlights
Stable performance in the main markets
Operations in China on track
Market positions expanded further
New strategic direction as a system supplier has met customers’ expectations
Focus on productivity enhancements rather than on capacity expansion
Impacts of copper prices and currencies brought the EBIT margin down from 7.8% to 5.0%
Cables in 2008
Net revenue in CHFmEBIT as % of net revenue
+0.8%
(8.9%)(8.9%) 7.6%7.6% 5.0%5.0%(3.2%)(3.2%) 3.0%3.0%
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Cables benchmarking
March 2009 analysis by www.obermatt.com
Revenue growth Slowdown in growth momentum
Peer group: direct peers
Revenue growth
March 2009 analysis by www.obermatt.com
Peer group: direct peers
EBIT marginCopper write-downs narrow the EBIT margin
EBIT margin
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Demand remaining largely stable – decline expected in the second half
Main factors
Performance still stable in the main markets, with a decline in revenue expected in the second half of the year
Decline in elevator business and cable harnessing
Temporary contracts cancelled, about 70 people working short time at the Altdorf plant from April 2009
Engineering capacity expanded with the acquisition of the SymbioTec operations
Copper write-downs again weighing on the margin for 2009
Cables in 2009
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Rubber in 2008
Profitability enhanced – decline in automotive business
Highlights
Growth curbed by decline in automotive business
Consumer goods contract successfully got up and running
Portfolio consistently streamlined
About 170 jobs cut in the Czech Republic and USA
Mexican plant set up and Ukrainian plant expanded
Full project pipeline driven by positioning as a development partner
Focus on core businesses paid off in an EBITmargin of over 10%.
Net revenue in CHFmEBIT as % of net revenue
+0.7%
2007 EBIT margin before impairment charges
2.5%2.5% 4.7%4.7% 8.0%8.0% 10.2%10.2%5.9%5.9%
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Rubber benchmarking
Revenue growth Growth curbed by slump in automotive business
Analysis March 2009 by www.obermatt.com
Peer group: European Peers
Revenue growth
EBIT margin Portfolio focusing has paid off in a higher EBIT margin
EBIT margin
Peer group: European Peers Analysis March 2009 by www.obermatt.com
2007 EBIT Marge vor Sonderabschreibungen
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Rubber in 2009
No recovery expected for 2009 – cost-cutting measures kick in
Main factors
No significant recovery expected for 2009
Programmes to boost economic activity may stimulate demand later in the year
New projects starting in 2009 mean growth for 2010 onwards
Working short time since January and another 30 jobs cut to date
Transfer of production from the USA to Mexicoand shutdown of the plant in Marion (USA) at the end of 2009
Consumer goods contract continuing to grow
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Growth ahead of market – raw material costs reduce margin
Highlights
Growth well ahead of the average market growth of 6%
Market development activities and GMP (Good Manufacturing Practice) stepped up further
New Omniflex generation launched
New “FirstLine” clean room production unit commissioned
Margins under pressure due to increasing raw material prices
Slight decline in the EBIT margin to 11.1%
Pharmaceutical Packaging in 2008
Net revenue in CHFmEBIT as % of net revenue
+8.6%
13.3%13.3% 11.1%11.1% 11.3%11.3% 11.1%11.1%12.1%12.1%
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Pharmaceutical Packagingbenchmarking
March 2009 analysis by www.obermatt.com
March 2009 analysis by www.obermatt.com
Peer group: direct peers
Revenue growth Encouraging growth momentum
Revenue growth
Peer group: direct peers
EBIT margin EBIT margin in the median range
EBIT margin
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Non-cyclical pharmaceutical market - growth expected to slightly outpace the market
Main factors
No significant cost-cutting measures
Focus on certification of “FirstLine” production
Improved margin driven by price increases and falling raw material prices
Automation projects being implemented to increase productivity and quality
Evaluation of “low-cost” locations for less sophisticated products
Pharmaceutical Packaging in 2009
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Strategic expansion with ELFA – operational problems at Maagtechnic
Highlights
Growth driven by the consolidation of the ELFA Group
Market slowdown late in the year, more pronounced in Eastern and Northern Europe
Distrelec/ELFA integration projects proceeding to plan
Swiss distribution of Shell lubricants taken over in August
Maagtechnic’s strategic projects now completed
EBIT margin falling to 9.1% due to the lower profit contribution from Maagtechnic
TechnicalComponents in 2008
+19.2%
Net revenue in CHFmEBIT as % of net revenue
5.3%5.3% 8.6%8.6% 9.9%9.9% 9.1%9.1%4.3%4.3%
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Technical Componentsbenchmarking
Revenue growth High growth momentum driven by acquisitions
March 2009 analysis by www.obermatt.com
Peer group: direct peers
EBIT margin Above-average EBIT margin supported by niche positions
Peer group: direct peers March 2009 analysis by www.obermatt.com
Revenuegrowth
EBIT margin
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Marked drops in sales revenue – opportunities for acquisitions
Main factors
Marked drops in sales revenue from industrial customers since the beginning of the year
About 40 job cuts at Maagtechnic and about 30 at Distrelec/ELFA planned or already carried out
Working short time in Germany and France, with further restructuring on the cards
Focus on joint catalogue for Distrelec and ELFA
Capitalising on acquisition opportunities
TechnicalComponents in 2009
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PY
PY
PY
PY
Cables RubberPharmaceutical
PackagingTechnical
Components
273.3271.2
154.9153.9
283.2260.8
585.3491.1
5.0 %7.6 %
10.2 %8.0 %
11.1 %11.3 %
9.1 %9.9 %
2.251.99
1.211.60
0.880.75
0.811.33
774781
7121 038
1 3531 317
1 5761 112
Division summary for 2008
Net revenue in CHFm
Capital turnover
EBIT as% of NR
Full-timeequiv.
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Market environment in 2009
Q1 run rate
Initiatives in 2009
Cables RubberPharmaceutical
PackagingTechnical
Components
Demand expected to decline in the second half of the year
Low demand without significant improve-ment
Stable market performance
Declines in business with industrial customers
Cost-cutting measures
Expansion of engineering
Cost-cutting measures
Start of new projects
Transfer of US plant to Mexico
Market activities to be stepped up further
Certification of “FirstLine”
Cost-cutting measures
Joint Distrelec/ELFA catalogue
Acquisitions
Revenue down 20% (excluding acquisition) – a profit and positive free cash flow
Summary outlook for 2009
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Cables RubberPharmaceutical
PackagingTechnical
Components
Strong regionalniche positions
Strong global niche positions
Strong global niche position
Strong regional niche positions
Implementing a systems approach in the regions
Focusing on sealing technology for global markets (automotive, civil engineering, industrial)
Driving organic growth through geographical expansion, innovation and increased value added
Realising synergy and growth potential from the ELFA acquisition, expansion in Eastern Europe
6 – 9% 7 – 9% 11 – 14% 9 – 12%
Strategic priorities and medium-term EBIT targets remain unchanged
Strategicobjectives
Strategicpriorities
EBIT range(medium-term)
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Intact business opportunity
Cyclicality reduced by the portfolio realignment during the boom phase Precision Tubes Division sold Mail order distribution expanded with the ELFA acquisition
Pharmaceutical Packaging Division having a stabilising effect as a non-cyclical business generating about 25% of Group revenue
Strong market positions supported by consistent focus on niches
Robust balance sheet and high liquidity
Capitalising on acquisition opportunities: Strategically expanding the Technical Components and Pharmaceutical
Packaging Divisions Consolidating the Cables and Rubber Divisions Extending portfolios
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Disclaimer
This presentation contains forward-looking state-ments that reflect the Group’s current expectations regarding market conditions and future events and are therefore subject to a number of risks, uncertain-ties and assumptions. Unanticipated events could cause actual results to differ from those predicted and from the information contained in this presen-tation. All forward-looking statements in this presen-tation are qualified in their entirety by the foregoing.