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©Schaffner Group 2013
The Schaffner Group Corporate presentationInvestora Zurich 2013
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©Schaffner Group 2013
The Schaffner Group
Caution regarding forward‐looking statements
This communication contains statements that constitute “forward‐looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives, and other statements relating to our future business development and economic performance.
While these forward‐looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations.
These factors include, but are not limited to, (1) general market, macro‐economic, governmental and regulatory trends, (2) movements in currency exchange rates and interest rates, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness of our customers, and counterparties and developments in the markets in which they operate, (6) legislative developments, (7) management changes and changes to our Business structure and (8) other key factors that we have indicated could adversely affect our business and financial performance which are contained in other parts of this document and in our past and future filings and reports, including those filed with the SIX Swiss Exchange.
More detailed information about those factors is set forth elsewhere in this document and in documents furnished by SchaffnerGroup, including Schaffner Holding's Annual Report for the year ended 30 September 2012, and the Half‐Year Report for the period ended 31 March 2013. Schaffner Group is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward‐looking statements whether as a result of new information, future events, or otherwise.
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©Schaffner Group 2013
The Schaffner Group
Corporate presentation
Agenda
Introduction to Schaffner
Finance – Reaching the targets
Take‐home messages
Q & A
Alexander Hagemann
Kurt Ledermann
Alexander Hagemann
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©Schaffner Group 2013
Alexander Hagemann | Chief Executive Officer
Introduction to Schaffner
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©Schaffner Group 2013
The Schaffner Group
About Schaffner
• Schaffner is the market leader in providing solutions to eliminate electrical distortions, thus improving the reliability of electronics and stabilizing power grids
• Schaffner products are used by the leading manufacturers of power electronic devices worldwide in a large variety of applications
• Schaffner is a global company with 2´200 employees and annual sales approaching CHF 200 million
• Schaffner was founded 1962 with headquarters in Luterbach, Switzerland, is listed at the SIX Swiss Exchange since 1998 (SIX: SAHN), and has a market capitalization of CHF 130 million (as of June 30, 2013)
• Schaffner targets 8% organic annual sales growth and an operating margin (EBIT) of 9% to 12%
• Schaffner intends to payout a dividend in the range of 25% to 35% of net profit
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©Schaffner Group 2013
The Schaffner Group
Schaffner EMC filters and Power Quality filters protect electronic devices and the power grid from electrical distortions
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Escalators Medical Devices
EMC Filter EMC Filter
Power QualityFilter
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©Schaffner Group 2013
The Schaffner Group
Energy efficiency Renewable energy Grid stability
Long‐term structural market growth expected
Schaffner provides users globally with solutions that enable an efficient and reliable operation of electrical and electronic equipment
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©Schaffner Group 2013
The Schaffner Group
Schaffner´s divisions: Global leaders in niche markets
56%27%
17%
Automotive division 17% (13%)• Antennas for keyless entry systems• EMC filters for electric/hybrid cars
EMC division 56% (62%)• Filters to ensure electro‐magnetic compatibility (EMC) for power electronic systems
• Power Quality filters for smart grids
Power Magnetics division 27% (25%)• Mission critical components for high power, high reliability electronics
Divisions
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H1 2012/2013
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©Schaffner Group 2013
The Schaffner Group
Key markets: Energy efficiency and renewable energy
• Motor drive systems require more Schaffner Power Quality solutions• High demand from Asian photovoltaic (PV) inverter manufacturers• Automotive growth from keyless entry/go and EV/HEV• Recession in European capital goods markets weighs on machine tools and electronic device businesses
Strategic markets: 66% (63%)Energy‐efficient motor drive systemsRenewable energyRail technologyAutomotive electronics
Legacy core markets: 32%
Power supplies for electronic devices Machine tools and robotics Electrical infrastructure
Other markets: 2%Other
24%
17%
8%17%
14%
11%
7% 2%
Markets in %
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H1 2012/2013
©Schaffner Group 2013
The Schaffner Group
Focus on Asia‐Pacific
• Schaffner is a strong local player in the Asia‐Pacific region• Market success is achieved with Chinese and Japanese photovoltaic inverter manufacturers• Demand in Europe is on a cyclical low
17% 18%
27%33% 35% 35%
39%
0%
10%
20%
30%
40%
50%
FY06/07
FY07/08
FY08/09
FY09/10
FY10/11
FY11/12
H112/13
45%
39%
16%
Europe
Asia‐Pacific
Americas
Sales by regions (in %)Share of Asia‐Pacific on Group net sales (in %)
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H1 2012/2013
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©Schaffner Group 2013
The Schaffner Group
Strategic Initiative: Power Quality filters
• Use of power electronics leads to demand for Harmonic filters: 2012‐2019 market CAGR of 7% (Source: Frost & Sullivan, 2013)
• Schaffner moves closer to end customers, creating opportunities for establishing a service business
• Objective: No. 1 independent manufacturer of PQ filters
• Establishing ECOsineTM as a leading brand in Power Quality
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Semiconductor plant, South KoreaCoast Guard ship, Germany Office tower, Hong Kong
Active Harmonic filter Passive Harmonic filter
©Schaffner Group 2013
The Schaffner Group
Schaffner targets 8% organic annual sales growth
• Harmonic filters are more widely used to improve Power Quality in buildings, factories, infrastructure
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• Japan and China have become largest markets for photovoltaics; solid growth in USA
• Large multi‐year railway projects in Russia and South Africa
• Higher take rate for keyless entry/go systems in all core markets
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©Schaffner Group 2013
The Schaffner Group
Progress in operational excellence mitigates cost inflation
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• Lean conversion for gains in productivity, quality, lead times
• Centralization of all European EMC manufacturing in Kecskemét, Hungary (new factory opened in 2008)
• State‐of‐the‐art lean factory for all Schaffnerproduct lines in Shanghai, China (new factory opened in 2011)
• Streamlined logistics with decentralized warehousing(new European distribution center opened 2012 in Wittelsheim, France)
©Schaffner Group 2013
The Schaffner Group
Organic growth complemented by selected acquisitions
• Add‐on acquisitions in core business and supporting the communicated strategy
• Disciplined approach to valuation and integration
• Acquired businesses to be EPS accretive in second year after closing
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2009: BETEC Engineering 2011: MTC Transformers
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©Schaffner Group 2013
The Schaffner Group
Sales and profits expected to improve in all divisions: recovery in Europe, railway projects, photovoltaics in Asia, SOP of automotive programs
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71.8
57.250.3 55.5 50.2
0
20
40
60
80
H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13
12.3
7.9
5.57.1
4.5
02468
1012
H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13
18.4 17.7 20.0 26.5 24.10
20
40
60
80
H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13
0.4 ‐0.7 ‐0.6 0.3 0.8
‐2024681012
H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13
8.4 9.2 10.8 14.0 15.3
0
20
40
60
80
H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13
‐0.2 0.2 ‐0.30.9
‐1.0
‐2024681012
H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13
Net sales (in CHF m)
Operating profit (in CHF m)
Net sales (in CHF m)
Operating profit (in CHF m)
Net sales (in CHF m)
Operating profit (in CHF m)
Automotivedivision
BMW i3
Power Magnetics division
Siemens high speed train
EMC division
Aquarium Singapore
• Global No. 1 in EMC filters• Strategic growth: Power Quality Filters• European volumes and profits recovering
• Leading in niche markets• Growth continues in trains, photovoltaics• Operational excellence drives profits
• Top 2 position in antennas for keyless go• Only few electric vehicle programs• Profit focus after SOP of new programs
©Schaffner Group 2013
Kurt Ledermann | Chief Financial Officer
Finance – Reaching the targets
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©Schaffner Group 2013
The Schaffner Group
Financial highlights – Profit & loss statement
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in CHFm H1 2011/12 H2 2011/12 H1 2012/13
Bookings 89.1 m 91.2 m 90.2 m
‐ Book‐to‐bill ratio 1.10 0.95 1.01
Net sales 81.0 m 95.9 m 89.6 m
‐ Growth in CHF ‐17.9% 14.2% 10.7%
‐ Growth in LC ‐13.8% 7.0% 8.4%
EBIT 1.4 m 5.8 m 1.6 m
EBIT in % 1.7% 6.1% 1.8%
Free cash‐flow 2.0 m ‐0.5 m 1.7 m
Net profit 0.3 m 3.6 m 0.3 m
©Schaffner Group 2013
The Schaffner Group
Financial highlights – Balance sheet
in CHFm H1 2011/12 H2 2011/12 H1 2012/13
Total Assets‐ thereof Goodwill
139.39.0
140.89.1
147.49.2
Liabilities‐ thereof Bank Credits
83.935.7
80.133.4
87.638.1
Equity‐ Equity Ratio
55.440%
60.343%
59.841%
Net Working Capital‐ C2C‐Cycle
33.185 days
37.895 days
36.777 days
Net debt 23.8 m 25.9 m 24.8 m
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©Schaffner Group 2013
The Schaffner Group
Schaffner Group mid‐term targets (as disclosed at the annual result presentation on 6 December 2012)
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• Organic growth rate exceeding 8% annually• Focused acquisitions in Divisions EMC and Automotive
Targeted operating margins (EBIT):
EMC division 16% ‐ 20%
Power Magnetics division 8% ‐ 10%
Automotive division 8% ‐ 10%
Schaffner Group 9% ‐ 12% (incl. ‐3% Group service cost)
Dividend pay‐out ratio 25% ‐ 35% of net profits
Equity ratio 40% ‐ 50%
Target for FY 2014/2015:
Net sales CHF 250 – 280 million
Operating margin (EBIT) 9% ‐ 12%
©Schaffner Group 2013
The Schaffner Group
Sales growth
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Avg. growth p.a.
EMC 4%
PM 15%
AM 15%
Organic 9%
Acquisition 4%
Total 12%
106 106 112 119
46 5361
7125
2833
3820
23
0
50
100
150
200
250
300
2011/12 2012/13 2013/14 2014/15
in CHFm
Net sales scenario
EMC PM AM Acquisition
2014/2015
EBIT‐Margin min. max.
EMC 16% 20%
PM 8% 10%
AM 8% 10%
Acquisition 8% 10%
Group service cost ‐3% ‐3%
Total 9% 12%
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©Schaffner Group 2013
The Schaffner Group
Significant shareholders
12.6
10.0
9.1
8.6
3.63.63.2
49.1
0.2%
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12.6% Alpine Select
10.0% Sarasin Investment‐Fonds
9.1% UBS
8.6% Buru Holding AG
3.6% SUVA
3.6% Balfidor Fonds
3.2% Credit Suisse
49.1% Shareholders with a stake of less than 3%
0.2% Treasury shares
©Schaffner Group 2013
The Schaffner Group
21%
15%
23%
0% 0% 0% 0%
35%
24%
0%
24%28%
57%
0%
10%
20%
30%
40%
50%
60%
70%
‐
5.0
10.0
15.0
20.0
25.0
30.0
35.0
98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12
per share in CHF
Pay‐out Net profit Pay‐out ratio
Historical payout
>> Target dividend pay‐out ratio 25% ‐ 35% of net profit
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Sale and leaseback ofproperty in SwitzerlandSale and leaseback ofproperty in Switzerland195%
pay‐outratioin %
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©Schaffner Group 2013
The Schaffner Group
Schaffner share
Valor symbol SAHN
Valor number 906'209
ISIN CH0009062099
Trading currency CHF
Exchange SIX Swiss Exchange
Product type Mid & Small Caps Swiss Shares
Issued by Schaffner
Number in issue 635'940
Nominal value 32.50
Trading 17.06.1998
Security type Registered share
Smallest tradable unit ‐‐
Security segment Swiss shares
Primary listed yes
Dividend entitlement yes
Regulatory standard Main Standard
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©Schaffner Group 2013
The Schaffner Group
Share price development
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Schaffner share price development since June 2008
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©Schaffner Group 2013
Alexander Hagemann | Chief Executive Officer
Take‐home messages
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©Schaffner Group 2013
The Schaffner Group
Take‐home messages
• Schaffner aims to lead niche markets related to energy efficiency, renewable energy, and smart grid applications
• After each Division had suffered setbacks during the past 18 months, sales and profits are now recovering
• Mid‐term sales and profit targets are based on robust business planning and supported by strategic actions
• Due to a still weak demand in H1 and the recovery beginning in H2 of FY2012/2013, Schaffner expects full year sales revenues above and operating margins to be comparable with previous year
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©Schaffner Group 2013
The Schaffner Group
Key figures
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2007/08 2008/09 2009/10 2010/11 2011/12
H1 H2 H1
Net sales 182'445 133'363 188'939 182'603 176'942 80'972 95'970 89'604
EMC 132'818 82'338 111'467 128'932 105'784 50'247 55'537 50'167
PM 39'133 42'690 60'922 36'046 46'495 20'022 26'473 24'132
AM 10'494 8'335 16'550 17'625 24'663 10'703 13'960 15'305
EBIT 13'892 ‐9'193 15'000 12'810 7'243 1'366 5'877 1'612
EMC 48 18'255 20'174 12'552 5'489 7'063 4'453
PM ‐6 3'066 ‐331 ‐284 ‐577 293 824
AM 759 1'548 ‐395 563 ‐345 908 ‐952
Corporate ‐4'674 ‐6'777 ‐6'425 ‐4'733 ‐2'776 ‐1'957 ‐2'283
Net profit 9'355 ‐10'935 11'983 10'150 3'909 256 3'653 299
Operating CF 6'746 15'804 7'314 17'805 4'582 2'186 2'396 4'118
Investiting CF ‐2'095 ‐7'312 ‐5'971 ‐18'736 ‐3'432 ‐318 ‐3'114 ‐1'614
Assets 148'078 126'883 126'643 136'822 140'843 140'843 140'843 147'429
Equity 58'149 47'305 55'985 56'929 60'333 60'333 60'333 59'785
Equity ratio 39% 37% 44% 42% 43% 43% 43% 41%
Number of employees 2'318 1'808 2'393 2'702 2'569 2'482 2'569 2'606
Number of shares 635'940 635'940 635'940 635'940 635'940 635'940 635'940 635'940
2012/13 2011/12
©Schaffner Group 2013
The Schaffner Group Corporate presentationInvestora Zurich 2013
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