the way to make it - komaxgroup.com · the way to make it 22 march 2016 / results 2015 and outlook...

THE WAY TO MAKE IT

22 March 2016 / Results 2015 and Outlook 2016 / 1

22 March 2016

Results 2015 and Outlook 2016

THE WAY TO MAKE IT


Agenda

Results 2015

Operational performance

Financial performance

Focus and Outlook 2016

Discussion

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2015 in brief

High order intake and increased Group profitOrder intake +20.4% to CHF 442.8 millionRevenues +1.4% to CHF 368.5 million, internal growth 4.4%EBIT CHF 46.7 million (2014: CHF 48.1 million), EBIT margin 12.7%EAT +5.3% to CHF 29.2 millionStrong balance sheet (equity ratio 71.0%)Distribution to shareholders +20% to CHF 6.00 per share

Komax WireSteady high dynamic of the automotive industryLeading market position further strengthened• Innovation

• Internal and external growth

EBIT margin increased

Komax MedtechExtraordinary high order intakePleasing development has not yet fed through into the income statementSale agreement for Komax Medtech signed with GIMA on 14 March 2016

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internal

growth

acqui-

sitions

currencies Total

Order intake 343'894 367'702 442'836 20.4%

Revenues 323'959 363'338 368'462 4.4% 0.0% -3.0% 1.4%Book-to-Bill 1.06 1.01 1.20

EBIT 43'297 48'102 46'732 -2.8%in % of revenues 13.4% 13.2% 12.7% -1.5pp

Result from discontinued

operations -9'935 -15'917 -2'872 -82.0%

EAT 25'129 27'743 29'215 5.3%in % of revenues 7.8% 7.6% 7.9%

Free cash flow 24'545 14'412 24'519 70.1%

Net cash 22'616 29'211 34'365 17.6%

Distribution per share (in CHF) 4.50 5.00 6.00 20.0%

+/- in TCHF 2014 20152013

Key figures

1 Figures restated in accordance with Note 10 of the consolidated financial statements 2014.2 Proposal of the Board of Directors.

1

2

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by segment

Komax Wire 79% 81% 85%

Komax Medtech 21% 19% 15%k.A. k.A.

by region

Switzerland 2% 3% 3%

Europe 47% 46% 48%

Africa 7% 9% 8%

North/South America 24% 19% 23%

Asia 20% 23% 18%

by industry

Automotive 71% 70% 75%

Medtech 19% 15% 12%Others 10% 15% 13%

2013 2014 2015

Distribution of net sales by segment,

region and industry

11

1 Figures restated in accordance with Note 10 of the consolidated financial statements 2014.

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16.2 15.9 15.4

13.4 13.2 12.7

52.657.7 56.7

43.348.1 46.7

2013 2014 2015

High profitability and rentability

EBITD

EBIT

Margin

in CHF million

EBIT in % of revenues

EBITD in % of revenues

NCE

in CHF million

RONCE in %

16.7

23.4 22.5

1

1 Figures restated in accordance with Note 10 of the consolidated financial statements 2014.

199.2211.4

203.8

2013 2014 2015

EBITD and EBIT in % of revenues RONCE and Net Capital Employed

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-20% 0% 20% 40%

Komax Wire – strong momentum

Continuing trend to further automate manual

processes and enhance processing quality

Increase in order intake of 15.1%

Net sales +6.2%;

internal growth more than 10%

Book-to-bill ratio 1.11

EBIT margin increased to 19.0%

295.0313.3

55.3 59.7

18.7% 19.0%

0

50

10 0

15 0

20 0

25 0

30 0

35 0

40 0

2014 2015

Net sales

EBIT

EBIT margin

in CHF million

2%Switzerland

48%Europe

10%Africa

21%North/South America

19%Asia

Switzerland

Europe

Africa

North/South America

Asia

Net sales by region

Change from previous year

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Automotive is the most important market in

wire-processing – megatrends support the business

of Komax Wire

Beneficial for Komax Wire

SafetyFrom crash survival to crash avoidance

Affordable carCost efficiency through platform strategies

Connected carIntegrated information systems control complex information flows inside and outside the vehicle

«Electrification» leads to strong growth of number of wires per vehicle

Increasing complexity of wiring harnesses which need automated processing

Increasing quality requirements which also need automated processing –

growing importance of quality assurance and «end of the line testing»

Numbers of cars produced and sold grow continuously

Environmental awareness/climate changeEmissions-free vehicle goal

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The number of wires globally processed for cars

is set to grow

2015 2016 2017 2018 2019 2020 2021

Number of wires from vehicle production

CAGR around 2.5%

+ around3% CAGR

Increasing number of vehicules produced –

CAGR 2015 – 2021E: ~2.5%

Trends such as:

• Environmental awareness/climate change

• Connected car

• Safety

• Affordable car

more than double underlying volume growth

Source: IHS 2015 Light Vehicle Production Forecast, Komax estimates.

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-60.0

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

220.0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Above average growth in the past despite headwind

resulting from adverse currency effects

Komax Wire vs. automotive industry 2000 bis 2015

Komax Wire net sales1, CAGR 00–15: 4.7%

Global car production volumes, CAGR 00–15: 3.1%

Basis 2000

1 Reported, excluding FX effects.

EUR/CHF

USD/CHF

Additional growth drivers support the business:

Advance in new markets other than the

automotive industry

New concepts for automation/innovation

Synergies from acquisitions (TSK, MCM, SLE,

Laselec, Thonauer, SLE Electronics and Ondal)

Growing base of installed machines

• Need for renewal

• Spare parts and service business

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Komax Wire covers the most capital intensive parts

of the value chain…

Technological leadership

High level of innovation

Global presence

Comprehensive product range –

complete solution provider

Komax Wire is market leader

Komax Wire

Others

Market share1

1 Relative competitive position: Komax Wire’s market share is almost twice that of its nearest competitor.

Komax Wire systems

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Unique network with partners

…and offers a broad product range from a single hand

Komax Wire – a universal contact partner for

whatever wire-processing challenge

Standard machines and customer-specific

solutions

Accessories including quality monitoring tools

and networking solutions

Test systems

Products of partners

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New processing solutions thanks to

the collaboration with partners

Efficient automation process

• Manufacturing time reduced by up to 50%

• End-to-end data flow from ECAD to the machine

• Efficient just-in-time production

• Wiring simplified by optimum wire deposit

High productivity

• Batch or sequence production without

changeovers

• Automatic wire selector with up to

36 different cables

• Automated marking of cable

Reliable processing of maximum quality

• Large cross section range

• Modules and components of premium quality

• Consistently high quality thanks to fully automatic

production

Efficient automation in control cabinet engineering

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Use of fully automated block loading reduces total time

spent in wire harness manufacturing by around 20%...

Time requirement Zeta vs. manual block loading

Automatic block loading

Manual block loading

Cutting/Stripping/block loading taping/routing/assembly fixtures testing/packaging

Cutting/Stripping/block loading

taping/routing/assembly fixtures

testing/packaging

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… Thus further potential along the value chain emerges

handling/

logisticshandling/

logistics

assembly of

fixtures

routing

taping/

bundling

Required working time in harness manufacturing

taping

routing

Komax Wire systems

assembly of fixtures

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Market position continuously strengthened through

acquisitions

Solutions along the value chain

Increase global reach

Innovative production concepts

Develop non-automotive markets

MCM Cosmic

SLE quality

engineering

TSK Group

Company Products/solutions

Laselec (20%)

SLE Electronics

USA

Ondal Tape

Thonauer

• Market access Mexico

• Solutions provider

• Local skills in customer-specific application development

• Taping/Bundling2015

2016

Strategic priorities of Komax Wire

• Harness test systems

• Module test systems

• Entry-segment machines and coaxial cable processing applications

• Equipment for processing coaxial cables and four-wire lines

• Crimp force monitoring systems

• Micrograph laboratories

• Laser-assisted cable stripping and marking solutions, primarily in the aerospace industry

• Intelligent layout boards

• Market access East-Europe

• Solutions provider

• Local skills in customer-specific application development

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Thonauer Group – an ideal fit for

Komax Wire's service and distribution network

Unique distribution channel in central and eastern

Europe, one of the fastest growing areas globally

Service and distribution network in seven countries

Revenues of ~EUR 20 million, 50 employees

Extensive experience as a solutions provider

Local engineering capacity

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Improving expertise in selected non-automotive

segments supports success in core market

Multimedia

Connected cars

Safety

Light weight

Emission reduction

Small batch sizes

E-mobility

Aerospace Telecom/Datacom Industrial

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A structured innovation process…

> 7% of net sales for R&D

Around 145 employees in R&D; additionally

more than 160 people for the engineering of

customer-specific applications

Optimization of the innovation process to better

bridge interfaces

Stringent intellectual property (IP) Management

VALUE ADDING PRODUCT DEVELOPMENT –KOMAX SOLUTIONS

INTERNAL SOURCESKnow how and competencies

EXTERNAL SOURCESCustomer needs and technological trends

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…leads to value-creating solutions

Best in class productivity

• High machine speed for the best unit cost performance

• Fastest conversion for maximum production output

• First-time-right

Powerful and flexible

• Robust and reliable processing of wire cross sections ranging from 0.13 to 6 mm2

• flexible machine configuration to produce special and complex applications

Ready for the future

• Most modern, forward-looking machine technology for highest requirements

• Integrated automatic conductor detection (ACD) for superb quality stripping

• Equipped for future requirements thanks to quality monitoring and gentle wire processing

New Alpha 550 and 530 set the benchmark in wire processing

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68.6

54.7

1.2 -2.6

2014 2015

Komax Medtech – record high order intake

Change from previous year

Net sales

EBIT

in CHF million

11%Switzerland

41%Europe

-60% -40% -20% 0% 20% 40% 60% 80%

Switzerland

Europe

North/South America

Asia

Increase in order intake of 45.2%

Book-to-Bill ratio 1.7

Volatile development of business had the effect

of weighing on capacity utilization

Strong franc is a competitive disadvantage

Sale agreement signed for Komax Medtech on

14 March 2016

36%North/South America

12%Asia

Net sales by region

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Sale Komax Medtech – basic parameters

312.3

54.7

Net sales

46.7

2.6 0.8

EBITreported

EBITMedtech

EBITCorporate

28.0

max. 6.02.0

Signing(14.3.2016)

NWC/ND Adj.(Closing

April 2016)

Earn-Out(31.12.2016)

KSM 24%(31.12.2018)

Transaction value Komax Medtech Pro-Forma P&L w/o Komax Medtech –

EBIT margin ~16% (vs.12.7% reported)

in CHF million

1

1 Komax Systems Malaysia

in CHF million

Komax Medtech

Pro-Forma (w/o Komax Medtech)

367.0

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Agenda

Results 2015




Discussion

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Growth in revenues despite currency influence burden

324.0

363.3 368.5

13.4 13.2 12.7

2013 2014 2015

EBIT margin Net sales by region

Changes from previous year

Revenues

in CHF million

-20% -10% 0% 10% 20%

Growth in revenues of 1.4%, internal growth 4.4%

• Europe CHF 174.9 million (2014: CHF 167.6 million)

• North America CHF 77.0 million (2014: CHF 61.3 million)

EBIT CHF 46.7 million (2014: CHF 48.1 million)

48%Europe

8%Africa

23%North-/South America

18%Asia

3%Switzerland

1

Europe

Africa

Asia

Switzerland

North/South America

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15.9

-12.6

-4.7

EBIT 2014 Material/revenues Personnel Operating expenses EBIT 2015

EBIT virtually unchanged –

significant increase in gross profit margin

48.146.7

in CHF million

Personnel expenses in % of revenues 2015: 35.6%• IAS 19: negative impact

of CHF 2.3 million

Personnel expenses in % of revenues 2014: 32.6%

Higher volume Higher variable costs

Gross profit margin2015: 64.1% • Product mix • Volume effect marginal

Gross profit margin2014: 60.6%

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EBIT development by segment –

EBIT margin further increased at Komax Wire

4.4

-3.8-2.3

0.3

EBIT 2014 Wire Medtech Corporate (IAS 19) Corporate (others) EBIT 2015

in CHF million

EBIT margin 2015: 19.0%

EBIT margin 2014: 18.7%

Massive delayed order intake in 2015 Revenue recognition only in 2016

48.1 46.7

Total Corporate

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Free cash flow increased – despite higher

investments (incl. granted loans)

52.7 50.9

29.2

10.2

10.2

-25.1

-26.3

Cash1 January 2015

Group profitafter taxes

Depreciation Change in NWCand others

Capex Financing Cash31 December 2015

Free cash flow CHF 24.5 million (2014: CHF 14.4 million)

in CHF million

Operating activities

Cash flow from operating activities increased from

CHF 30.3 million in 2014 to CHF 49.6 million in 2015.

Dividends

CHF -18.3 million

Currency translations

CHF -2.9 million

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High investment volume in 2015

Net investments of CHF 25.1 million

(2014: CHF 15.9 million) in

• Property, plant and equipment (CHF 13.2 million)

• Intangible assets (CHF 5.2 million)

• Investments in associates (CHF 1.8 million)

• Increase in granted loans (CHF 4.9 million)

Average investments of around CHF 17 million per

year over the next five years

Net investments

(without investments in group companies and loans)

28%Building

/ Land

34%IT Software/

Hardware38%Property, plant and equipment

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Currency weigh on net sales, gross profit and EBIT

Currency impact

• Net sales –3.0%

• Gross profit margin –1.7pp

• EBIT margin –1.5pp

Impact from abandonment of the minimum

EUR/CHF exchange rate was compensated by

around 50% with specific measurements:

• Price negotiation with customers

• Increased procurement in EUR

Net sales by currencies

20%CHF

23%USD

43%EUR

5%Others

9%CNY

60

70

80

90

100

110

120

12

.13

02

.14

04

.14

06

.14

08

.14

10

.14

12

.14

02

.15

04

.15

06

.15

08

.15

10

.15

12

.15

02

.16

EUR (Basis: 1.24) USD (Basis: 0.90) BRL (Basis: .3804) CNY (Basis: .1480)

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Net Euro-exposure in the range of 15% of revenues

43%1 (33%)Net sales EUR

around 15% (5%)Net surplus in EUR

around 25% (25%)Expenses in EUR

Net Sales by region Net sales in EUR Net surplus in EUR

1 Thereof, around 50% generated by

Group companies in the Eurozone.

48% (42%)Eurozone

52% (58%)Others

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25.1

27.729.2

2013 2014 2015

13.06.8

17.7

Group profit after taxes (EAT)

EAT increased by 5.3% to CHF 29.2 million

Basic earnings per share CHF 8.00 (2014: CHF 7.64)

Increase in tax rate to 17.7% (2014: 6.8%)

• Low tax rate in the previous year due to sale of Komax Solar

• High negative financial result

• Higher expenses not being tax-deductible

Tax rate broadly in line with expected

long-term average rate

Expected mid-term tax rate +/– 20%

Tax rate in % of EBT

EAT

in CHF million

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EAT reconciliation

27.729.2

-2.3

0.9

-4.3-2.1

13.0

-3.7

EAT 2014 IAS 19 EBIT changes(w/o IAS 19)

Interest, securitiesand exchange rate

result

Contingentconsideration

(SQE)

Result fromdiscontinuedoperations

Taxes EAT 2015

in CHF million

Total changes in EBIT Total changes in financial result

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Komax remains in extremely robust financial health

Equity ratio 71.0%

Further increase in net cash to CHF 34.4 million

(2014: CHF 29.2 million)

Intangible assets of CHF 49.5 million

(2014: CHF 47.4 million), thereof Goodwill

CHF 29.2 million (2014: CHF 29.2 million):

• Wire CHF 17.0 million

• Medtech CHF 12.2 million 357.6

388.1 399.0

264.0284.2 283.1

2013 2014 2015

73.8 73.2

71.0

Equity ratio

Total assets

in CHF million

Shareholders’ equity

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Additional CHF 104 million of unutilized credit lines

135.0 135.0 135.0

42.5

29.1 26.2

2013 2014 2015

0.82 0.82 0.81

Average interest rate in %Syndicated loan of CHF 120 million

Additional credit lines to a maximum of

CHF 15 million (on top of the syndicated loan)

Financial liabilities reduced by CHF 7.2 million

Average interest rates on financial loans

remained at 0.8%in CHF million

Credit lines

thereof utilized

Financial result

Interests –1.1 –1.1

Contingent considerations 0.0 –2.1

Other financial income/expenses –0.2 –4.5

Total –1.3 –7.7

2014 2015

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128.5136.0

127.2

2013 2014 2015

39.2 36.4 35.7

Steady reduction of average net working capital

in % of revenues

Further decrease of days sales outstanding (DSO)

on trade receivables

Expansion contract controlling

Extension worldwide inventory controlling

Target for average net working capital in % of

revenues ~30%

Average NWC in % of revenues

in CHF million

NWC

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Attractive profitability of capital employed

RONCE reached 22.5%

• Profitability Komax Wire

• Efficient use of capital

Payout of CHF 6.00 per share proposed

• Thereof CHF 4.50 as dividend and CHF 1.50 as

distribution from capital contribution reserves

• Payout ratio 75%

• Dividend yield on date of Board resolution 2.8%

Share price development since 1 January 2011

1

1 On date of Board resolution.

2011 2012 2013 2014 2015

Dividend/share in CHF 4.00 2.00 4.50 5.00 6.00

Dividend yield in % 5.8 2.8 3.3 3.5 2.8

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Agenda

Results 2015




Discussion

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Focus 2016

Capture synergies from acquisitions and partnerships

Growth along the value chain

Regional market development

Develop non-automotive markets

Innovation and digital transformation

Operational Excellence

Komax Medtech

Closing of sales transaction

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Outlook Komax Group

The current macroeconomic environment remains characterized by wide-ranging

uncertainty. Against this backdrop, Komax is focusing on the factors that it can directly

influence itself, and is therefore looking to its clear strengths such as its innovative

drive and customer orientation. Based on these foundations, Komax will further

enhance its profile and continue to seize – after careful scrutiny – opportunities to

further advance the company. From today's standpoint, another good result is

envisaged for 2016.

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Outlook Komax Wire

Supported by the dynamic momentum of the automotive industry, as well as the

ongoing global trend towards the further automation of manual processes in wire

processing and increased processing quality, we expect demand to remain strong from

today’s perspective. Komax Wire has started the year with a strong order book. Given

this backdrop, the business unit can be expected to post another good result for the

first half of 2016.

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Outlook Komax Medtech

The commercial environment facing Komax Medtech remains challenging. However,

given its strong order book at the start of the year, with its numerous repeat projects

and highly promising orders from new customers, Komax Medtech is confident that net

sales will increase in 2016 on the back of better balanced capacity utilization and that

profitability will increase beyond the target range.

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Strategy Komax Group –

focus on wire processing

03/11 03/13 08/13

Announcement

mid-term targetsAnnouncement

evaluation

strategic options for

Solar and Medtech

Decision sale of

Komax Solar

08/14

Sale of

Komax Solar

03/15

Announcement evaluation

strategic options Komax Group

01/16

Announcement

priority is on sale

of Komax Medtech

03/16

Signing

sale agreement

Komax Medtech

Focusing of Komax Group according to mid-term targets• Systematic divestment of unprofitable businesses• Expansion of attractive Komax Wire

No short-term need for a significantly larger Board of Directors • Complexity of business reduced after divestments• Efficient Board• Decisive expertise and experience (industry/technology/finance) necessary to successfully lead the company

already covered by existing Board members

focusing

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Agenda

Results 2015




Discussion

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Contact/Financial calendar

Financial calendarContact

Marco KnuchelIndustriestrasse 66036 DierikonSwitzerlandPhone +41 41 455 06 [email protected]

www.komaxgroup.com

Annual General Meeting 12 May 2016

Dividend payment 19 May 2016

Half-year results 2016 23 August 2016First Informationon the year 2016 17 January 2017

Annual media conference/analysts’ presentation2016 results 21 March 2017

Annual General Meeting 12 May 2017

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Disclaimer

This presentation contains forward-looking statements in relation to Komax which are

based on current assumptions and expectations. Unforeseeable events and

developments could cause actual results to differ materially from those anticipated.

Examples include: changes in the economic and legal environment, the outcome of

legal disputes, exchange rate fluctuations, unexpected market behaviour on the part of

our competitors, negative publicity and the departure of members of management. The

forward-looking statements are pure assumptions, made on the basis of information

that is currently available.

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22 March 2016

Results 2015 and Outlook 2016

the way to make it - komaxgroup.com · the way to make it 22 march 2016 / results 2015 and outlook...

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