Komax – technology leader in global niche markets/media/Group/Files/Downloads... · 2015. 4. 9. · Komax Medtech is in systems business, i.e. it mainly manufactures complex, customer

26 March 2015 / Kepler Cheuvreux – 16th Swiss Seminar / 1

Komax – technology leader in global niche markets

Beat Kälin – CEO

Kepler Cheuvreux – 16th Swiss Seminar


Agenda

Results 2014

Komax Wire – highly innovative solutions for the wire-processing industry

Komax Medtech – efficient systems for the automated assembly of medical products

Focus and outlook 2015


Komax Group – in a nutshell

Established 1975

Industrial automation/mechanical engineeringAs a leading manufacturer of innovative and high-quality solutions for the wire-processing industry and for systems for the manufacture of self-medication solutions, Komax supports its customers to implement economical and safe manufacturing processes, especially in the automotive supply and pharmaceutical sectors.

Global presence

High level of innovation– technology and market leader

Highly profitable and sound financing


Two business units, focused on niche markets

in automation

in % of group net salesKomax Wire – solutions for wire processing and

testing of wire harnesses and modules

Standard machines

Customized solutions(Value Added Engineering)

Software

Services

Komax Medtech – solutions for self-medication

Systems

Validation

Services

Komax Wire

81%

Komax Medtech19%


2014 in brief

Profitable growthRevenues increased by 12.2% to CHF 363.3 million, internal growth of 9.5%

Operating profit (EBIT) increased to CHF 48.1 million (+11.1%)

Strong balance sheet (equity ratio of 73.2%)

Distribution increased to CHF 5.00 per share (2013: CHF 4.50)

Komax WireTrend in wire-processing towards automation continues

Leading market position further strengthened• Innovation

• Marketing and sales

EBIT margin remained within target area

Komax MedtechMixed regional business development – North America and Malaysia enjoyed a good year

Measures initiated to stabilize profitability were systematically continued

Positive EBIT despite insufficient capacity utilization at the Swiss site

Komax Solar Management buyout – responsibility was transferred to Xcell Automation Inc. as of 1st October 2014


internal

growth

acqui-

sitions

currencies Total

Order intake 287'922 343'894 367'702 6.9%

Revenues 288'216 323'959 363'338 9.5% 4.4% -1.7% 12.2%Book-to-Bill 1.00 1.06 1.01

EBIT 13'617 43'297 48'102 11.1%in % of revenues 4.7% 13.4% 13.2% –0.8pp

Result from discontinued

operations n.s. -9'935 -15'917 60.2%

EAT 9'426 25'129 27'743 10.4%in % of revenues 3.3% 7.8% 7.6%

Free cash flow 27'627 24'545 14'412 -41.3%

Net cash 938 22'616 29'211 29.2%

2.00 4.50 5.00 11.1%Distribution per share (in CHF)

+/- in TCHF 2013 20142012

Key figures

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.2 Proposal of the Board of Directors.

1

2


22.2

52.657.7

13.6

43.348.1

2012 2013 2014

High profitability and rentability

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

EBITD

EBIT

Margin

in CHF million

EBIT in % of revenues

EBITD in % of revenues

NCE

in CHF million

RONCE in %

6.5

16.723.4

1

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.

7.7

16.2 15.9

4.7

13.4 13.2

199.1 199.2211.4

2012 2013 2014


Agenda

Results 2014





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

Komax Wire – strong performance

Supported by the dynamics of the automotive industry

Increase of order intake and net sales by 12.5

and 15.1% respectively

Internal growth of net sales by around 12%

Broad-based business development

Net sales by region

256.2

295.0

47.6 55.3

18.6% 18.7%

0

50

10 0

15 0

20 0

25 0

30 0

35 0

40 0

2013 2014

Net sales

EBIT

EBIT margin

in CHF million

Change from previous year

2%Switzerland

43%Europe

11%Africa

20%North/South America

24%Asia

Switzerland

Europe

AfricaNorth/South America

Asia

1



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

Greater degree of standardization simplifies automation in wire-processing

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


The number of wires globally processed for cars is set

to grow

Source: IHS 2014 Light Vehicle Production Forecast, Komax estimates.

2014 2015 2016 2017 2018 2019 2020

Increasing number of vehicules produced –

CAGR 2014 – 2020E: ~2.5%

Trends such as:

• Environmental awareness/climate change

• Connected car

• Safety

• Affordable car

more than double underlying volume growthNumber of wires from vehicle production

+ CAGR of around 3%

CAGR of around 2.5%


-60

-40

-20

0

20

40

60

80

100

120

140

160

180

200

220

240

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Above average growth in the past despite headwind

resulting from adverse currency effects

Komax Wire vs. automotive industry 1997 to 2014

Komax Wire net sales1, CAGR 97–14: 4.3%

Global car production volumes, CAGR 97–14: 2.7%

Global car sales volumes, CAGR 97–14: 2.8%

Basis 1997

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 and SLE)

Growing base of installed machines

• Need for renewal

• Spare parts and service business

1 Reported, excluding FX effects.


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


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


Market position continuously strengthened through

acquisitions

Growth along the value chain

Global presence

Innovation

Complete solutions/new markets

Strategic priorities of Komax Wire

MCM Cosmic

SLE quality

engineering

TSK Group

Company Products/solutions

• 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

Laselec (20%)• laser-assisted cable stripping

and marking solutions currently used primarily in the aerospace industry

• intelligent layout boards for wire harness production


Agenda

Results 2014





68.1 68.6

3.1 1.2

2013 2014

Komax Medtech – a challenging year

Change from previous year

Net sales

EBIT

in CHF million

6%Switzerland

63%Europe

Regional differences in its business – USA and

Malaysia enjoyed a good year

Positive EBIT despite insufficient capacity utilization

at the La Chaux-de-Fonds site

Strong Swiss Franc is a competitive disadvantage

Net sales by region

17%North/South America

14%Asia

Switzerland

Europe

North/South America

Asia

-40% 0% 40% 80% 120% 160% 200% 240%


Komax Medtech – a structured approach from the

concept to high volume production

Focus on self-medication and on projects

providing repeat potential

Restructuring of La Chaux-de-Fonds site initiated

One of the leading players in its niche markets


Agenda

Results 2014





Strategy geared to long-term profitable growth

Business Unit Revenues growth target EBIT margin target

Business Unit Wire 3 to 5% ~20% selective

Business Unit Medtech -- ~5% --

Acquisitions

Targets implemented in March 2011, time horizon 5 years.

Komax Medtech is in systems business, i.e. it mainly manufactures complex, customer specific systems. In this business, targeted selection of the projects to be

acquired is more important than growth per se.

As part of the annual strategy process now getting underway, all possible options are

being examined for the Komax Group strategy.


FX impact and measures

Impact of an increase/decrease in the average exchange rate of the Euro of +/–10% on 2014 results (ceteris paribus):

Increase/decrease in revenues of around +/– 3%

Increase/decrease in EBIT margin of around 0.6pp

Impact of an increase/decrease in the average exchange rate of the USD and the CNY of +/–10% on 2014 results (ceteris paribus):

Increase/decrease in revenues of around +/– 3%

Increase/decrease in EBIT margin around of 1.2pp

MeasuresNegotiations with customers and suppliers

Further increase of natural hedging• Expansion of procurement abroad

• Expansion of foreign locations

Structural adjustments

Cost control and efficiency improvement programs


Focus 2015

Komax Group

Operational Excellence

Pursue opportunities for growth

Komax Wire

Growth along the value chain

Regional market development

Develop markets besides the automotive industry

Innovation

Exploit synergy potentials from acquisitions and partnerships

Komax Medtech

Strengthening of the organization

Stabilize profitability


Outlook 2015

We currently find ourselves in a volatile and uncertain environment that presents both

opportunities and risks. Opportunities will arise above all as a result of the innovative

strength and pronounced customer focus of the Komax Group. A particular challenge

will be the strength of the Swiss franc, which has appreciated once again since the

SNB abandoned its cap on the minimum euro-franc exchange rate. We believe that we

can master this difficult situation with intensified measures aimed at further increasing

productivity and efficiency, so that current currency losses can be largely offset in the

medium term. We will continue to seize any opportunities that arise to further the

company's development. From today's standpoint, we are expecting the Komax Group

to once again post a good result for 2015, although the conversion of the various

currencies into Swiss francs is likely to act as a damper on both growth and

profitability.

As part of the annual strategy process now getting underway, all possible options are

being examined for the Komax Group strategy.


Contact/Financial calendar

Financial calendarContact

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

www.komaxgroup.com

Annual General Meeting 8 May 2015

Dividend payment 15 May 2015

Half-year results 2015 18 August 2015

First Informationon the year 2015 19 January 2016

Annual media conference/analysts’ presentation2015 results 22 March 2016

Annual General Meeting 12 May 2016


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.


Komax – technology leader in global niche markets

Beat Kälin – CEO

Kepler Cheuvreux – 16th Swiss Seminar


Appendix – 2014 results


Management buyout Komax Solar –

Impact on financial statements according to IFRS 5

Consolidated balance sheet

Consolidated income statement

Consolidated cash flow statement

No restatement of

prior-year figures

Restatement of

prior-year figures

No restatement of

prior-year figures

Disclosure according IFRS 5

Result from

discontinued operations:

2013: CHF –9.9 million

2014: CHF –15.9 million

In 2014 impairment losses

amounting to CHF –8.7 million

are recognized as follows:

- Goodwill CHF –2.7 million

- Technology CHF –2.0 million

- Others CHF –4.0 million


Assets classified as

held for sale:

2014: CHF 8.9 million

Liabilities classified as

held for sale:

2014: CHF 0.1 million


No special disclosure


Growth in revenues and virtually unchanged

high EBIT margin

288.2324.0

363.3

4.713.4 13.2

2012 2013 2014

EBIT margin Net sales by region

Changes from previous year

Revenues

in CHF million

-15% 0% 15% 30% 45% 60% 75%Revenues growth in of 12.2%

• Europe CHF 167.6 million (2013: CHF 150.6 million)

• Africa CHF 32.9 million (2013: CHF 22.8 million)

• Asia CHF 81.8 million (2013: CHF 64.8 million)

Acquisition effects CHF 14.3 million

EBIT margin remained virtually unchanged

46%Europe

9%Africa

19%North-/South America

23%Asia

3%Switzerland


1

1

Europe

Africa

Asia

Switzerland

North/South America


23.6

-14.8 -0.2

-3.8

EBIT 2013 Material/revenues Personnel R&D third Others EBIT 2014

Volume-related increase in EBIT –

gross profit remains high

43.3

48.1

in CHF million

Personnel expenses in % of revenues 2014: 32.6%

Personnel expenses in % of revenues 2013: 32.0%

R&D expenses in % of revenues 2014: 7.1%

R&D expenses in % of revenues 2013: 7.7% Higher volume

1

Gross profit margin2014: 60.6%

Gross profit margin2013: 60.7%



EBIT development by segment –

Komax Wire achieved an EBIT margin of 18.7%

7.7

-1.9 -1.0

EBIT 2013 Wire Medtech Corporate EBIT 2014

in CHF million

1

All regions contributed to the good result Volume in Europe IAS 19

43.3

48.1



Free cash flow remains high – despite increased

investments

52.2 52.7

27.7

15.8

-13.2

-15.9

-13.9

Cash1 January 2014

Group profit Depreciation Change in NWCand others

Capex Financing Cash31 December 2014

Free cash flow CHF 14.4 million (2013: CHF 24.5 million)

in CHF million

Operating activities

Good business in Q4


Investment volume in 2014 more than doubled

Net investments of CHF 15.9 million

(2013: CHF 7.2 million)

Planned investments in 2015 of

around CHF 17 million, thereof

around CHF 8 million for participations

Average investments of around CHF 15 million

per year over the next five years

Net investments

26%Land

29%ERP

incl. software

37%Property, plant and equipment

8%Others


Currencies weigh on Net sales, gross profit and EBIT

Currency impact

• Net sales –1.7%

• Gross profit –1.1pp

• EBIT margin –0.8pp

Increasing importance of other currencies (BRL,

MAD, MYR, SGD). As in the previous year, the

BRL in particular was negative

Net sales by currencies

30%CHF

19%USD

33%EUR

6%Others

12%CNY

70

80

90

100

110

Dec

Fe

b

Ap

r

Ju

n

Au

g

Oct

Dec

Fe

b

Ap

r

Ju

n

Au

g

Oct

Dec

Fe

b

EUR (Basis: 1.22) USD (Basis: 0.92) BRL (Basis: .452) CNY (Basis: .1482)


42%Eurozone

58%Others

Net Euro-exposure in a range of 5% of revenues

33%1

Net sales in EUR

around 5%Net surplus in EUR

around 25%Expenses in EUR

Significantly higher Euro-exposure at Komax Medtech, compared to Komax Wire.

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

1 Thereof, 40% generated by Group

companies in the Eurozone.


9.4

25.127.7

2012 2013 2014

7.713.0

6.8

Group profit after taxes (EAT)

EAT increased by 10.4% to CHF 27.7 million

Basic earnings per share CHF 7.64 (2013: CHF 7.33)

Tax rate decreased to 6.8%

• Healthy business development in Switzerland

• A number of capitalized tax-loss carryforwards in countries

with significantly higher tax rates

Average tax rate over the last seven years 16.5%

Expected mid-term tax rate +/– 18%

Tax rate in % of EBT

EAT

in CHF million

1



Komax remains in extremely robust financial health

Equity ratio 73.2%

Further increase in net cash to CHF 29.2 million

(2013: CHF 22.6 million)

Intangible assets of CHF 47.4 million (2013: CHF

49.5 million), thereof Goodwill of CHF 29.2 million

(2013: CHF 30.4 million):

• Wire CHF 17.0 million

• Medtech CHF 12.2 million 359.5 357.6

388.1

236.1264.0

284.2

2012 2013 2014

65.7

73.8 73.2

Equity ratio

Total assets

in CHF million

Shareholders’ equity


Financial result

Interests –1.0 –1.1

Other financial income/expenses –2.0 –0.2

Total –3.0 –1.3

2013 2014

Additional CHF 99.9 million of unutilized credit lines

135.0 135.0 135.0

65.9

42.5

29.1

2012 2013 2014

1.290.82 0.82

Average interest rate in %Syndicated loan CHF 120 million

Additional credit lines to a maximum

of CHF 15 million (on top of the syndicated loan)

Financial liabilities reduced by CHF 4.0 million and

financial loans by CHF 1.9 million

Average interest rates on financial loans

remained at 0.8%

1

in CHF million

Credit lines

Thereof utilized



125.3 128.5136.0

2012 2013 2014

48.1

39.236.4

Further reduction of average net working capital

in % of revenues

Further decrease of days sales outstanding (DSO)

on outstanding trade receivables

Substantial reduction of risks in NWC after

Management buyout of Komax Solar

Target for average net working capital

in % of revenues ~30%

Average NWC in % of revenues

1

in CHF million

NWC



2010 2011 2012 2013 2014

Dividend/share in CHF 2.00 4.00 2.00 4.50 5.00

Dividend yield in % 2.0 5.8 2.8 3.3 3.5

Attractive profitability of capital employed

RONCE reached 23.4%

• Healthy margin at Komax Wire

• Efficient use of capital

Payout of CHF 5.00 per share proposed

• Thereof CHF 2.50 as dividend and CHF 2.50 as

distribution from capital contribution reserves

• Payout ratio 65%

• Dividend yield on the date of Board resolution 3.2%

Share price development from 2010 to 12 January 2015

KomaxVontobel Small Cap Index

1

1 As at 31 December.

Documents

Komax – technology leader in global niche markets/media/Group/Files/Downloads... · 2015. 4. 9. · Komax Medtech is in systems business, i.e. it mainly manufactures complex, customer