media & financial analyst conference 2013...2013/03/22 · hub/warehouse in lahr, germany new...
TRANSCRIPT
Media & Financial Analyst Conference 2013
Review 2012
Hans-Peter Zehnder, Chairman & CEOJosef Brügger, CFO22 March 2013
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Agenda
1. Business Review 2012
2. Financial Results 2012
3. Outlook 2013
4. Q&A
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Zehnder Group at a glance
Sales increase of 1.6% to EUR 523.8 Mio. (2011: 515.4)
Organic and adjusted by currency effects -0.4%
EBIT of EUR 38.5 Mio. (2011: 51.5)
EBIT margin 7.3% (2011: 9.9%)
Strategic initiatives do not show substantial benefits yet.
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Cash flows from operating activities EUR 44.0 Mio. (2011: 47.3)
Investments in fixed assets of EUR 37.3 Mio. (2011: 34.9)
Net cash position of EUR 26.3 Mio. (2011: net cash of 31.9)
Equity ratio 61% (2011: 59%)
Net income EUR 26.8 Mio. (2011: 41.1)
Earnings per share EUR 2.31 (2011: 3.41)
Zehnder Group at a glance
Completion of residential new buildings in 2012 increasedin our key markets
5Source: Euroconstruct and BRG Consult
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Europe net sales 2012: ongoing growth in ventilation, small decline in radiators
EUR Mio. 2010 2011 2012 FX-adj/organic
Radiators Europe 295.4 307.7 304.6Change from prior year 4% 4% -1% -2%
Ventilation Europe 132.6 153.4 164.7Change from prior year 17% 16% 7% 6%
Total Europe 428.0 461.1 469.3Change from prior year 8% 8% 2% 1%
Markets: Europe – highlights France
Market
Residential housing grew in new buildings as well as in renovations whereas industrial and commercial buildings fell
“Règlementation Thermique 2012” (regulations on building insulation) now in force since 1 January 2012; supportive for the construction of low-energy houses
Our achievements
Market share increase in ventilation business and towel radiators
Radiators: Enhanced marketing efforts for Do-it-yourself
Ventilation: Enhanced marketing efforts for multi-dwellings
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Markets: Europe – highlights Germany and Austria
Market
German residential market grew, but commercial-industrial stagnated; public building market declined
Despite small growth of new residential buildings, Austrian market slightly below previous year
Our achievements
Overall sales growth, small decline in radiators sales more than compensated by ventilation growth
Market shares grew for towel radiators and ventilation
Price increases implemented
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Markets: Europe – highlights Switzerland
Market
Small growth of new residential buildings
Strong Swiss franc lead to price cuts by €-land competitors
Our achievements
Overall lower sales, mainly due to price cuts for ventilation
Market share of radiators maintained
Market share of ventilation slightly declined
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Zehnder provides solutions for challenging refurbishment projects: Balancing heritage conservation and energy efficiency
10Mellingen (Switzerland)
Markets: Europe – highlights UK and Ireland
Market
Small growth of residential new buildings
Public building sector declined
Our achievements
UK: Moderate growth of the radiator business, slight growth in ventilation
IE: Sales below previous year, mainly due to decline of ventilation business
The Shard, the tallest building in Western Europe, containing a prestigious hotel equipped with Zehnder towel radiators
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Prestigious hotel in The Shard (London) equipped with our design towel radiators
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Markets: Europe – other markets (I/II)
Italy
New building market hit by government austerity measures; renovation stable
Strong growth of ventilation segment and lower sales in the radiator segment
Netherlands
Real estate market back in crisis
Sales in both ventilation and radiator segment fell
Belgium
New building market declined
Sales of radiators slightly increased, ventilation business with double digit growth
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High tech on the farm: the 1st Italian farmhouse fitted with a Zehnder system is awarded an energy efficiency certificate
14Near Bergamo (Italy)
Markets: Europe – other markets (II/II)
Spain
Building market still in sharp decline
Overall sales in decline due to radiators
First successful step into ventilation business
Eastern Europe
Russia: strong sales growth of all product lines
Poland: sharp decline of radiators sales, partially compensated by good sales growth of ventilation
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North America reports slight decrease of net sales 2012 (in local currency)
Organic and adjusted by reclassification growth shows:
Slight increase in radiators sales
Decrease in commercial ventilation sales
Doubled sales in residential ventilation
EUR Mio. 2010 2011 2012[1] FX-adj/organic
Radiators North America 21.7 20.8 27.1Change from prior year 13% -4% 31% 21%
Ventilation North America 5.3 7.0 2.2Change from prior year 25% 34% -69% -70%
Total North America 27.0 27.8 29.4Change from prior year 15% 3% 6% -2%
[1] movement between the radiator and ventilation segments mainly due to product reclassification
Bainbridge Island near Seattle (USA) equipped with Zehnder ventilation and heat recovery system
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China: Slowdown in construction market results in sales decline
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Construction market cooled off; state regulations slowed down the development of the construction market
Strong price pressure
Positive development of the ventilation business with extended distribution channels and assembly of own ventilation systems in Shanghai
EUR Mio. 2010 2011 2012 FX-adj/organic
Radiators China 18.0 19.7 17.7Change from prior year 26% 10% -10% -19%
Ventilation China 3.0 6.7 7.4Change from prior year 170% 127% 10% -1%
Total China 20.9 26.5 25.1Change from prior year 37% 26% -5% -14%
Market initiatives: Expansion of sales organization in Eastern and Southern Europe
Russia, Czech Republic, Slovakia and Ukraine
Own sales organization strengthened
Turkey
Project launched to establish own sales organization, becoming fully operative as of January 2013
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Product launches: New enthalpy exchanger provides competitive advantage
Enthalpy exchanger recovers heat and moisture
Provides increased comfort
Zehnder first to market new technology based upon washable foil membrane improved hygiene
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Product launches: Zehnder Vitalo, a revolutionary concept, provides nearly unlimited design possibilities
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Product launches: Clean Air Solutions offers smaller unit allowing to enter new market segments
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New products receive various designer awards
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Runtal Folio Corner Nova Neo PremiVent
Won first prize in product competition«Fensterintegriertes Lüftungsgerät mit Wärmerückgewinnung» at theSwissbau Basel 2012.
Sustainability: Switzerland’s 1st solar system directly integrated into production process put into operation
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Equivalent of approx. 20,000 litres heating oil saved for painting line
On the way to process excellence:ERP (SAP) introduction successfully started in 2012
January 2012: Production Switzerland, sales and distribution in Austria
February 2012: Zehnder Beijing (production, logistics, sales, finance & administration)
October 2012: International Sales
January 2013: Sales and distribution Germany
2013: Further rollout
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On the way to operational excellence:Kaizen philosophy implemented in all manufacturing units
Zmile initiative based on Kaizen philosophy
Successful start with strong involvement of employees
All manufacturing sites involved and first savings in production achieved
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Changes in management:Internal successors to ensure continuity of managementHans-Peter Zehnder Will step back as CEO of the Zehnder Group in the
second half of 2014. Plans after 2014 to remain actively involved in the
company on a daily basis as full-time chairman of the Board of Directors.
Dominik Berchtold Was appointed deputy chairman of the Group Executive
Committee as of 1 January 2013 . Will take over as CEO of the Zehnder Group in the
second half of 2014.
Josef Brügger Was appointed New Chief Financial Officer and member
of the Group Executive Committee effective 1 January 2013.
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Agenda
1. Business Review 2012
2. Financial Results 2012
3. Outlook 2013
4. Q&A
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Key figures
EUR Mio. 2011 2012 ∆ in %
Net sales 515.4 523.8 1.6%EBIT 51.1 38.5 -24.7%EBIT margin 9.9% 7.3%
Net income 41.1 26.8 -34.8%Net income margin 8.0% 5.1%
Cash flows from operating activities 47.3 44.0 -7.0%Cash flow margin 9.2% 8.4%
Net cash position 31.9 26.3 -17.6%
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Net sales top 10 countries unchanged
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Net sales per segment: Ventilation Europe drives growth
EUR Mio.
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Net sales: Declining importance of H2 vs H1EUR Mio.
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Investments in fixed assets substantially higher than depreciation
Investments in fixed assets EUR 37.3 Mio. (2011: EUR 34.9 Mio.)
Depreciation in fixed assets EUR 18.1 Mio. (2011: EUR 17.8 Mio.)
Our main investments in fixed assets in 2012
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Project Why CAPEX 2012 Picture
New production and innovation facility near Beijing, China
New logistic hub/warehouse in Lahr, Germany
New sheet metal center in Châlons, France
Additional space for growth necessary; current area is becoming a residential area
6.3 MEUR
Cost-reductions compared to external warehousing
6.5 MEUR
Insourcing sheet metal work
3.2 MEUR
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Increased investments in innovation, research & development
Research & Development costs of EUR 13.2 Mio. (2011: EUR 11.6 Mio.)
Major projects:
Flat panel radiator
Comfobox: Portfolio expansion
ComfoAir180
Clean air solutions: New models and redesigns
Standardization of controls
Strategic initiatives have a substantial impact on EBIT
51.1
4 2 -6-3
-2 -4 -4
38.5
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EUR Mio.
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Key figures: Balance sheet, ratiosEUR Mio. 2008 2009 2010 2011 2012
Current assets 228.9 224.0 237.0 245.9 229.6Fixed assets 125.1 128.5 141.4 160.1 177.7Total assets 354.0 352.5 378.4 406.0 407.3Current liabilities 104.3 98.6 89.1 101.2 115.9Long-term liabilities 97.1 71.9 71.9 65.1 43.8Equity 152.6 182.0 217.4 239.7 247.6Total liabilities & equity 354.0 352.5 378.4 406.0 407.3
Equity ratio 43% 52% 57% 59% 61%Net debt (-) / net cash position (+) -5.0 20.2 42.9 31.9 26.3Fixed assets / total assets 35% 36% 37% 39% 44%Equity / fixed assets 122% 142% 154% 150% 139%Cash ratio 63% 67% 85% 65% 46%Quick ratio 131% 138% 173% 142% 114%Current ratio 219% 227% 266% 243% 198%Return on capital employed (ROCE) 21% 27% 29% 25% 17%
Cash flow: Decrease of cash position mainly due to capex
26.8
18.2 -1.18.4 -37.3
-1.6 -2.1 -4.7-13.6
-6.51.4 -12.0
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EUR Mio.
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Solid net cash position
EUR Mio.
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Stable payout ratio
• 2012: The Board of Directors proposes to the Annual General Meeting a dividend of CHF 0.90 per bearer share.
•••
2008 2009 2010 2011 2012
Dividend per bearer share CHF 0.11 1.30 0.63 0.20 0.90
Nominal value repayment per bearer share CHF - - 1.25 1.20 -Payout ratio (at annual average exchange rate) 31% 31% 43% 33% 32%
Agenda
1. Business Review 2012
2. Financial Results 2012
3. Outlook 2013
4. Q&A
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The most important growth drivers remain valid
Trend towards energy efficiency remains unchanged (EPBD/2020 targets)
Building regulations in Europe continue to move towards this target
Comfort and health in indoor buildings continues to be a priority in the building industry
Market penetration of energy recovery ventilation in Europe still very low
Unchanged expected market penetration of high-end heat recovery ventilation in residential new build
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
FR
DE
CH
UK
IT
NL
BE
AT
PL
ES
US
CN
43Source: Zehnder Group Management
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Outlook 2013: Critical factor is the economic development
Macroeconomic environment in Europe remains very uncertain
Residential new builds expected to decline
Renovation overall should remain stable
Mixed picture for North America: difficult market conditions in the commercial/public sector – upside potential in the residential sector
China remains very volatile – but with some upside potential for H2
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Zehnder is making investments now to harvest the benefits in the medium term
Long-term potential of a radiator rebound remains valid
We continue to invest into innovation, market development, operational excellence and processes
We continue to invest substantially into our infrastructure
Our focus is on the long-term, sustainable growth of our business
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Outlook 2013: Solid grounds for cautious optimism
Stable sales for radiator sales in Europe
Opportunities in Eastern Europe and Turkey
Higher market penetration in the ventilation business
Mid-single-digit growth of ventilation sales in Europe
Mid-single-digit sales growth in North America and China
EBIT margin at least at same level as in 2012
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Thank you!
Agenda
1. Business Review 2012
2. Financial Results 2012
3. Outlook 2013
4. Q&A
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Q&A
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While Zehnder Group is making great efforts to include accurate and up-to-date information, we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this handout and disclaim any liability for the use of it.
The statements in this presentation relating to matters that are not historical facts are forward-looking statements that are not guarantees of future performance and involve risks and uncertainties, including but not limited to: future global economic conditions, foreign exchange rates, regulatory rules, market conditions, the actions of competitors and other factors beyond the control of the company.
Disclaimer