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Power of PartnershipPage 1
KENDRION N.V.
Small & Mid Cap Seminar SNS Securities
13 February 2008
Power of PartnershipPage 2
Agenda 13 February 20081. Kendrion at a glance
2. Most important developments 2007
3. Acquisition Linnig Antriebstechnik
4. Disposal Automotive Metals
5. Key figures 1st nine months 2007
6. Our divisions
7. Financial position
8. Dividend policy
1. Kendrion at a glance
Power of PartnershipPage 4
Kendrion: Niche player in B2B markets
Division Kendrion ElectromagneticTurnover approximately EUR 200 million
Active in 10 countriesAbout 1,300 employees
Division Kendrion Distribution ServicesTurnover approximately EUR 350 million
Active in 13 countriesAbout 1,100 employees
Kendrion N.V.
Power of PartnershipPage 5
Kendrion aims to be high performer in selected business areas
MissionMission StrategyStrategy ObjectivesObjectives
Organic Growth > 5%
ROI > 20%
More and more focused company
Organic Growth > 5%
ROI > 20%
More and more focused company
Build niche market leader positions in business-to-
business markets
Create operational and commercial synergies
between companies in each business area.
Drive efficiency improvement of operations
Build niche market leader positions in business-to-
business markets
Create operational and commercial synergies
between companies in each business area.
Drive efficiency improvement of operations
Developing business areas with strong international
market positions in selected business-to-business niche
markets, whereever possible as market leader
Developing business areas with strong international
market positions in selected business-to-business niche
markets, whereever possible as market leader
2. Most important developments 2007
Power of PartnershipPage 7
Most important developments so far
Improved focus according to strategy “Focused acceleration”
Acquisition of Linnig Antriebstechnik
Disposal of Automotive Metals
New finance arrangement
Publication results 2007 on 26 February 2008
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“Focused Acceleration”
Kendrion in 2008Real niche playerMarket leaderClear focusStrong balanceROI target > 20%
3. Acquisition Linnig Antriebstechnik
Power of PartnershipPage 10
Facts Linnig Antriebstechnik
- Turnover 40 Mill. Euro- 5 Companies- 210 Employees- 5 Countries
Production in:- Germany 160 Employees- USA 15 Employees- China 10 Employees- Mexico 15 Employees- Brasil 10 Employees
Facts and figures:
Power of PartnershipPage 11
Facts Linnig Antriebstechnik
Linnig products
- Angle gear fan drive- Fan bracket- Torsional vibration damper- Deflection pulley- Compressor clutch
4. Disposal Automotive Metals
Power of PartnershipPage 13
Facts
Turnover approximately EUR 110 millionSold to Swedish investors with management participationRevenue EUR 35 millionBook loss EUR 10 million including write off goodwill, deferred tax assets and expenses.Closing end 2007
5. Key figures 1st nine months 2007
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Key figures 1st nine months 2007
Excluding non-recurring writedown of deferred tax assets (non-cash) of EUR 3.1 million reflecting the reduction in the German corporation tax rate as from 1 January 2008. Including this non-recurring writedown, there was a net loss of EUR 1.2 million in the third quarter.
1
Q1-3 2007 Q1-3 2006
Revenu 455.2 418
Operating profit 20.6 18.8
Net profit 1 11.2 10.5
6. Our divisions
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Turnover 2008 > EUR 200 million
Leading position in Europe
Size market EUR 3.0 billion, Europe EUR 1.5 billion
Good geographical spread
Increasing market (applications)
Division Kendrion Electromagnetic
Power of PartnershipPage 18
Plant Villingen, Germany
Division Kendrion Electromagnetic
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Plant Donaueschingen, Germany
Division Kendrion Electromagnetic
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Plant Engelswies, Germany
Division Kendrion Electromagnetic
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Plant Eibiswald, Austria
Division Kendrion Electromagnetic
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Plant Prostejov, Czech republic
Division Kendrion Electromagnetic
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Plant Suzhou, China
Division Kendrion Electromagnetic
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Production Know-how
- Product-specific assembly line
- Highly automated production
Division Kendrion Electromagnetic
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Production Know-how
- State of the art production technology and assembly plants
- Integrated 100% end of line testingfor each product
Division Kendrion Electromagnetic
Power of PartnershipPage 26
small competitors world wide
Lenze
ETO
KECSchulzKuhnke
Warner ElectricBorg Warner
Bosch
Harting NASS EKS Thomas small competitors world wide
Lenze
ETO
KECSchulzKuhnke
Warner ElectricBorg Warner
Bosch
Harting NASS EKS Thomas
Consolidation is a mustin this fragmentedmarket.
- Technology driven, over engineered
Historical sales trends
> 3 Billion € world wide (1.5 Billion € in Europe)
Size
- Technology driven, over engineered
Historical sales trends
> 3 Billion € world wide (1.5 Billion € in Europe)
Size
- Outsourcing by big OEM‘s(active partners)
- Looking for problem solver(global competitiveness)
- Cost pressure- Global presence
Factors impacting trends
- Outsourcing by big OEM‘s(active partners)
- Looking for problem solver(global competitiveness)
- Cost pressure- Global presence
Factors impacting trends
Market characteristics
Main competitors
Market and competitive
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Customers
Type of contracts
- 60 % long term > 5 years- 25 % applications- 15 % standard
Company dependency on customers: low
Customer sales drivers
2% 2% 2% 3% 3%4%
4%
10%
8%
12%
50%
Bosch Rexroth Schindler Stoll Automotive LigthingBosch Hydraulikring Hella KG ZF LemföferSiemens AG Daimler Others
- Technology- Problem solver- Global positioned (NA, Asia)- Price
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Division Kendrion Electromagnetic
Excellent development, good market circumstances
Organic growth in turnover 10-15%
Growth in both industrial activities as well as in automotiveactivities
Many new orders
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Division Kendrion Electromagnetic
Limited niches innovation leadership by R + D synergies
Clear structure efficiency decentralized, unbureaucratic
Kendrion Electromagnetic
Automotive Industrial
Cars
Busses
Magnetic Systems
Power Transmission
Focused
Power of PartnershipPage 30
Division Kendrion Electromagnetic
Worldwide increasing importance for:
- Safety
- Environment target markets for KE
- Comfort
New acquisition Linnig is exactly in line:Focused on fuel – consumption and comfort.
Focused acceleration
Power of PartnershipPage 31
Division Kendrion ElectromagneticAutomotive Systems
Possible applications in the automotive sector Safety Environment ComfortSafety Environment Comfort
Oil control
Headlights:• Adjustment
Air conditioning technology:• Thermal management
Top operation:• 3/2 solenoid valve
Switch mechanisms:• Shift lock-solenoids• Key lock-solenoids• Interlock-solenoids
Transmissions:• Automatic control gear• All-wheel hook up / cut off• Interlock• Power allocation
Doors/deck lids:• Doors/deck lid
actuation• Closing systems
Chassis:• Active buffer
Motor management:• Camshaft displacement• 3/2 pneumatic solenoid• Common rail injection
Power of PartnershipPage 32
Division Kendrion ElectromagneticAutomotive Systems
Automotive Systems in 1st nine months 2007
Organic growth 16%
Remains turbulent market with a lot of price pressure
Good expectations for common rail technology(>EUR 30 mln turnover in 2009/2010)High investments
Strong growth in Czech Republic (this year expansion of the production)Also growth in USA in the coming years (new projects)
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Business model
Increased customised solenoids
Service model for catalogue products
Many customers a.o. world players
Engineering, logistics and delivery time most important drivers
Division Kendrion ElectromagneticIndustrial Systems
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Division Kendrion ElectromagneticIndustrial Systems
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Division Kendrion ElectromagneticIndustrial Systems
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Division Kendrion ElectromagneticIndustrial Systems
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Division Kendrion ElectromagneticIndustrial Systems
Industrial Systems in 1st nine months 2007
Organic growth 15%
Benefits from good market situation in machine building
Strengthened international sales organisation
First large order in USA (Siemens, post ordering system)
China develops step by step
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Competitive advantagesKnow how of decadesReliable partner, solid and edifying know howFast delivery time
RisksRaw material market, especially copper
Division Kendrion Electromagnetic
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Division Kendrion Electromagnetic
Conclusion
Excellent development with strong organic growth
Acquisition opportunities get a lot of attention
A lot of perspective
Power of PartnershipPage 40
Preferred plastics supplier in Europe
Market leader active in 14 countries
More and more focus on added value (machining, industry)
Central marketing and logistics improvement
Increasing market share in key countries
Division Kendrion Distribution ServicesVink
Power of PartnershipPage 41
Division Kendrion Distribution ServicesVink and Servico (1)
Organic growth in turnover 1st nine months 2007 approximately 4% (Q3 5.5%) Growth in turnover and growth operating result depressed by implementation Vink broad applied ICT system in NLExcellent performance in Scandinavia and BelgiumImprovements visible in France, strong revenue growthAlso strong revenue growth in Germany, margin still too low
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Division Kendrion Distribution ServicesVink and Servico (2)
In Germany new warehouse brought into use in accordance with strategy (extra costs)Central management Vink Group more and more in place (purchase, marketing, logistics)Small acquisition France
Unexpected sharp decline Q3 revenue / results Servico due to model changes
Page 43
Vink Group
In most European countriesVink is is synonymouswith Plastics
– Distribution
– Knowledge
– Application
Page 44
Vink is focused on serving in the following market segments
• Signs & Graphics• Industry• Building & Construction
What does Vink do?
Vink is a plastics supplier offering competency in the following main areas:
• Distribution of semi-finished plastic materials• Engineering and production of customer specific, manufactured
plastic products and components• Systems solutions
Page 45
Brief description of the market segments
• Signs & Graphics:From signs, selfadhesive lettering and banners to shop interiors and displays.
• Industry:From transport guides in conveyor systems, glazing forforrestry machines to parts of water treatmentinstallations and windwills.
• Building & Construction:From facades, stadion roof, green houses to shop securityand sound walls.
Page 46
Vink Group in 2008
• 33 locations in 13 European countries
• 50,000 active customers
• 1,100 dedicated employees
• Over 400 persons in commercial functions
• 30,000 different products on stockin 26 warehouses
• 5 modern machine shops in NL, B, DK, S and Fi
Page 47
Locations in Europa2008
• “Act Local - Support Global”• 13 countries / 4 regions• Headquarters in Zeist• Group Functions
– Marketing / business development
– Production development– “Supply Chain”– Purchasing– IT / Systemen– Controlling & Analysis
Page 48
Plaatjeolie
plaatjeraffinage
Now and in the future
Find and deliver the best plastic solution, starting from the application atthe customer
Oil
Extrusion
Machining
Refinery
End customerApplication
Page 49
Market situation and competition Vink
DK
Nor
Swe
Fin
Bel
NL
Ger
Fra
UK
Ire CH
Cze
Hun
VinkAmari
0
5
10
15
20
25
30
35
Vink Thyssen Amari Sunclear
Market share %
Page 50
What are Vink’s markets and who areour customers?
Signs & Graphics
Page 52
Industry
from machine part to wind mill
Industry: machined product
Industry: installation
Corrosion free constructions for theChemical- and water treatment industry
Building & Construction
Page 56
Billboards in stadiumsCustomers: advertisingagencies
Page 57
Shop interiors
Customers: interior decorators and shop fitters
Page 58
Cinema lobby
Page 59
Printed foil for a restaurant interior
Page 60
The perception of plasticshas changed
• Perception then:– “plastic” and “nylon”– cheap, fake – bad for the environment
• Perception now:– plastics have countless applications– high tech– durable and responsible
Total plastics market in Europe; more than Euro 200 billionof which 6 billion in semi finished products
Page 61
Vink combines competencies in 3 areas
Distribution:High serviceleveland cost efficiency
DistributionProduction
Plastics
Information Technology
Clearprocesses
People
VINKAdded value:KnowledgeDrivensolutions
Page 62
Main points Vink strategy
• Focus on the customer
• Market segment focus
• Supply Chain Excellence
• Services (added value) aimed at solutions
• Targeted acquisitions:– Critical mass in existing countries (France and Germany)– New growth markets– Machining facilities
Power of PartnershipPage 63
Organic growth
9 months 2007 2006 2005 2004 Target
Electromagnetic 15.0% 12.6% 8.0% 7.8% > 10%
Distribution Services 4.0% 5.3% 7.8% 4.6% > 5%
Power of PartnershipPage 64
ROS (12 months rolling)
HY1 2007 2006 2005 2004 2003 Target
Electromagnetic 9.2% 9.0% 9.0% 9.2% 7.2% > 10%
Distribution Services 4.3% 4.2% 4.2% 3.5% 1.9% > 5%
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ROI (12 months rolling)
HY1 2007 2006 2005 2004 2003 Target
Electromagnetic 24.7% 24.3% 22.4% 20.0% 14.9% > 25%
Distribution Services 23.0% 23.4% 22.3% 15.5% 10.6% > 20%
7. Financial position
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Financial position
Solvency approximately 28 - 30%
Renewed financial arrangements with our bank consortium
High capital expenditure 2007 (as planned)
Available for acquisitions approximately EUR 40 million
8. Dividend policy
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Dividend policy
With continuation current state of affairs paying dividend over 2007 is considered
Decision will be taken beginning 2008
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. .www.kendrion.com