Annual Results Analysts' Meeting. Monday, 28 February Agenda

Transcription

1 Annual Results 2010 Analysts' Meeting Monday, 28 February 2011 Agenda 1. Kendrion at a glance highlights 3. Key figures for 2010 and financial objectives 4. Review of the business units 5. Financial position 6. Dividend 7. European Commission fine 8. "100 years of electromagnetism" 9. Priorities and outlook 2 1

2 1. Kendrion at a glance 3 The Kendrion organisation KENDRION N.V. Development, production and marketing of high-quality electromagnetic components 1,400 employees (including 200 temps) in 12 countries Turnover 2010: approximately EUR 220 million Listed company on NYSE Euronext's Amsterdam Market 4 2

3 Organisation Kendrion breakdown of revenue of 2010 Industrial Magnetic Systems Process engineering Medical technology Transportation technology Door lock switches Metering devices and filling stations Recycling Passenger Car Systems Automotive applications Hydraulic applications Industrial Drive Systems Medical technology Packaging machines Servo motors Robotics Elevator drives Crane construction Machine tools Commercial Vehicle Systems Motor cooling systems Air conditioning compressor drives Torsional vibration dampers Magnetic clutches and brakes Controllers Fire protection technology 5 5 Global activities Kendrion 6 3

4 Kendrion committed to being a high-performer in selected business units Mission Strategy Objectives To develop business units that have strong international market positions in selected business-to-business niche markets and are market leader whenever possible To develop leading positions in business-to-business niche markets and to reach geographical spread To create operational and commercial synergy between companies in each business unit To achieve efficiency improvements at the companies Organic growth > 10% ROI > 17.5% 7 Our core competences Experience in electromagnetism Dynamic further growth of specialist knowledge Kendrion Customer Innovation management excellence Cutting-edge green technology solutions Benefit from the cross-divisional know-how Identification with customer demands 8 4

5 Technology and innovation We are passion We develop passionately products for our customers We are driven We identify ourselves with our customers and develop customer-specific and solution-driven products We are ambitious Our drive for fulfilling customer demands and solutions inspires us in developing innovative products We are Kendrion Your dynamic partner with innovation and productivity strength 9 Modular production and processes Low volume production Medium-sized series High volume production Clean room technology End of line testing Environmental testing ISO 9001 ISO TS Innovative solutions from a single source! 10 5

6 Kendrion's strategy - A clearly defined profile of a multinational, fast-growing high-tech company - Building leading positions in business-to-business niche markets - Creating operational and commercial synergy between the business units - Ambitious growth targets (EUR 350 million in revenue within 2 years) - Strategic acquisitions, particularly in industrial operations - Further improvement of geographical distribution across continents - Stronger growth outside Europe (USA, China and India) - Strategy is set out in the "Summertime" Mid-term Plan ( ) highlights 12 6

7 2010 highlights (1) - Excellent year; organic revenue growth of 43% - Very strong fourth quarter (revenue up 46%); our highest net quarterly profit on record - Net profit for full year 2010: EUR 16.6 million (including a non-recurring tax gain of EUR 1.8 million) - Company has fully benefited from improved market conditions and innovative new products - Growth in all business units and all key markets (Germany, the USA and China) - Dependency on China increased in highlights (2) - Significantly improved cost basis thanks to measures implemented in the past ("Springtime") - Acquisition of Magneta (based in Aerzen, Germany) has boosted the company's revenue - Strong free cash flow (EUR 17.4 million) - New financing arrangement has been signed - Significant focus on innovation and flexibility - Great success of Dr. Wilhelm Binder Days - Strong order book 14 7

8 3. Key figures for 2010 and financial objectives 15 Key figures 2010 (x EUR 1 million) Q Q Revenue EBITA from ordinary activities Net profit (x EUR 1 million) Revenue EBITA from ordinary activities Net profit = Including Kendrion Magneta since 1 March 2010 (revenue included in 2010 EUR 8.8 million) 2 = Excluding provision for "Springtime" plan (EUR 8.5 million) 3 = Including book profit on Vink (EUR 10 million) and provision for "Springtime" plan (EUR 8.5 milion) 4 = The quarterly figures are unaudited 16 8

9 Financial objectives Target Realisation 2010 Organic growth >10% per year 43% ROS >10% 10.9% ROI >17.5% 18.7% Solvency 30% 64.7% EBITDA/Interest-bearing debt < Free cash flow Healthy 105% of net profit Dividend 30% of net profit 40% of net profit 17 4a. Review of the business units 18 9

10 General - Operations: electromagnetic components and systems for industrial applications - Focus markets: mechanical engineering, energy sector and medical sector - Highly innovative, customised solutions - Global player with operations in Germany, Switzerland, Austria, China and the US and agencies in Italy, France, etc. - Project business (70%) and standard solutions (30%) - Competitors: a large number of (usually smaller) niche players in Germany, Italy and the US - Fast-growing market in China Strong revenue growth in 2010 (24%), fuelled in part by strong rebound in German industry - Improved efficiency thanks to new production structure - More efficient utilisation of low-cost facility in Romania - Returns improved every quarter - Many new projects due to focus on growth industries (medical sector, energy efficiency) - International footprint (USA and China) is a major advantage - Expansion in China is a key focus 20 10

11 4b. Review of the business units 21 General - Operations: electromagnetic brake and clutch systems for industrial drive technology - Production site in Germany; international sales are coordinated through UK sales office - Acquisition of Magneta in Aerzen, Germany, effective 1 March Global market leader in permanent magnetic brake systems - Substantial project business (80% of revenue), in addition to services business (20% of revenue) - Innovative business unit with many new products - Competitors: limited number of players with revenues between EUR 10 million and EUR 50 million 22 11

12 Strong organic revenue growth in 2010 (43%) - Improved efficiency thanks to "Springtime"; sharp increase in flexibility - Accelerated growth during the year - Growth driven mainly by revival in German machine-building industry (exports to China) - Other growth driver: innovative new products (ski lift, wind energy) - Acquisition of Magenta off to excellent start - Significant focus on expansion in China and USA (initial new contracts) 23 4c. Review of the business units 24 12

13 General - Operations: electromagnetic components and systems for the automotive industry - Production sites in Germany, Austria, the Czech Republic, Romania and China - Primarily serves European Original Equipment Manufacturers (Daimler, Volkswagen (incl. Audi]) PSA) - Focus on energy efficiency, emission reduction, safety and comfort - Established strong position with high-quality electromagnetic valves for common-rail technology - Existing expertise can be extended to other markets (e.g. gasoline, off-road, trucks) Strong organic revenue growth in 2010 (+62%), on the back of a revival in the German automotive industry - Growth across the entire product range and in all locations; large number of projects - Leading position in electromagnetic valves for diesel engines is increasingly starting to pay off - New projects in USA in diesel engines; strong revenue growth expected in USA in 2-3 years - Priority given to innovations (technology radar) - Company follows trends in engine management (increasingly smaller engines, switchable units, fuel efficiency and carbon reduction) 26 13

14 4d. Review of the business units 27 General - Operations: components and total cooling systems for buses and coaches, trucks, special vehicles and generators - Global market leader in electromagnetic cooling systems for luxury coaches - Sites in Germany, US, Mexico, Brazil and China - USPs are energy-efficiency and convenience - Increasingly a systems provider - Service business (approximately 50% of revenue) forms an important basis 28 14

15 Strong revenue growth in 2010 (+37%) - German bus market not yet back to pre-crisis levels - Growth driven primarily by Far East (China and Korea) - Continued focus on truck market in coming years - New product for truck market ("Terminator") successful in US market - New-market penetration for generators in 2010 (innovation) has been successful, generating substantial revenue - Start-up in India is proceeding according to plan; 100% delivery from new plant in Pune by mid Financial position 30 15

16 Financial position - Free cash flow for Q4 2010: EUR 7.5 million - Excellent free cash flow for full year 2010: EUR 17.4 million - Working capital is under control - Strong balance sheet (net debt at year-end 2010: EUR 5.2 million; solvency: 65%) - New five-year financing arrangement (EUR million) - Funds available for acquisitions > EUR 40 million Dividend 32 16

17 Dividend - Dividend policy: 30% of net profit - Optional dividend proposed for 2010: 40% (on account of the results, low debt and the lack of a dividend for 2009) - Dividend: EUR 0.59 per share European Commission fine 34 17

18 European Commission fine - Fine imposed in 2005 (EUR 34 million) - Reason: alleged involvement of former subsidiary Fardem Packaging in cartel during period According to three respected law firms, Kendrion stands a good chance of successfully defending itself before the General Court in Luxembourg - Kendrion made a provision of EUR 2.2 million - Company has been invited to attend public hearing to be held on 9 March Court will likely render judgement 8-12 months after this hearing (or later) Celebration 100 years of electromagnetism 36 18

19 100 years of electromagnetism : Kendrion Binder established in Villingen, Germany - Celebration of 100 years of electromagnetism in Various events to be organised for key stakeholders - This includes a special meeting to be held on 15 September 2011; attendees will include major shareholders and analysts Priorities and outlook 38 19

20 Priorities for Four key themes (Flexibility, Innovation, Sustainability and Globalisation) - Further market segmentation by industry - Achieving our financial objectives (in relation to costs and cash) - Expanding our business in Romania and India - Further expanding our European operations, even in a tight job market - Focus on green (energy efficiency, comfort and sustainability) - ERP project HORIZON (on schedule) - Review of strategic acquisitions (in Germany, China and the USA) 39 Outlook for Global uncertainty (in North Africa, southern Europe and China) - Year is off to a good start - Very strong order book - Operations remain strong; no sign of a decline - Investment significantly above depreciation level (ERP project) - Strong financial position - Revenue and results expected to increase 40 20

21 We magnetise the world! 21