Media- & Financial Analyst-Conference Zehnder Group Review 2013

Transcription

1 Media- & Financial Analyst-Conference 2014 Zehnder Group Review 2013 Hans-Peter Zehnder, Chairman & CEO Josef Brügger, CFO 7 March 2014 We strive to find the right balance between improving results in the short term and optimising earnings in the long term. 2

2 Agenda 1. Business Review Financial Results Outlook Q&A 3 Flat sales and higher costs squeezed our results. Weaker market resulted in unchanged sales and missing our profit targets. Prices were under pressure (mainly RAD). Costs were on level as planned. Sales of EUR million (PY: 523.8) and EBIT of EUR 32.3 million (PY: 38.5) were achieved. 4

3 Financial situation is solid. Investments in fixed assets of EUR 35.1 million (PY: 37.3) Cash flow from operating activities EUR 37.9 million (PY: 44.0) Net cash position of EUR 32.2 million (PY: 26.3) Net income EUR 18.2 million (PY: 26.8) Equity ratio 62% (PY: 61%) 5 New residential buildings in Europe declined in most countries and grew only in RU, DE, CH and BE. Source: Total housing completions, EUROCONSTRUCT, November 2013; BRG Consult, October

4 Refurbishment of residential buildings in Europe overall declined. Source: Total housing completions, EUROCONSTRUCT, November New commercial and industrial buildings in Europe declined in nearly all countries. Source: Total housing completions, EUROCONSTRUCT, November

5 Europe net sales 2013: ongoing growth in ventilation, small decline in radiators. EUR million FX-adj/organic Radiators Europe Change from prior year 4% -1% -3% -2% Ventilation Europe Change from prior year 16% 7% 2% 3% Total Europe Change from prior year 8% 2% -1% 0% 9 Sales of radiators in Europe varied. Growth in France, UK and Russia Decline in Germany, Italy and Switzerland Cold winter affected 1 st quarter sales. Product group ceiling panels for heating and cooling grew again. 10

6 There was no medal ceremony at the Winter Olympic Games in Sochi without Zehnder. Zehnder ZIP radiant ceiling panels are attached to the ceiling of the open ceremonial hall at Medal Plaza to provide warmth to the happy athletes. 11 Despite sales decrease in the key markets NL and CH, ventilation sales in Europe increased by 2%. NL suffered from the continuous drop in residential new built. CH sales were affected by cold winter and delayed product introduction. Growth in IT, FR, UK and DE Strong growth of product group Clean Air Solutions 12

7 Highlights FR: We increased sales in France despite difficult economic situation. Market share radiators kept Significant growth of towel radiators Strong growth in ventilation Merger of 3 companies into 1 sales company New regulations HPE (haute performance énergétique) and THPE (très haute performance énergétique) as of 2014 will favour demand for energy efficient solutions. 13 Highlights FR: Kuehne + Nagel, Paris, goes for our Clean Air Solutions. Massive dust reduction after installation of air cleaning units 14

8 Highlights DE: In the flattish German market our sales slightly decreased. Ventilation sales increased whereas radiator sales decreased Successful new product launch in ventilation business (ComfoAir 180) New partnership with leading supplier of HVAC integration software 15 Highlights CH: The construction market was stable on high level. Cold temperatures in 1 st quarter resulted in temporary stop at many construction sites. Successful, but delayed introduction of a new slim heat recovery ventilation unit. Service offer strengthened Merger of 2 sales companies into 1 company and successful introduction of SAP 16

9 Highlights UK: We achieved over performance in a recovering market. UK residential building market grew in new build as well as in refurbishment. Decorative and towel radiators grew. Very strong growth in radiant heating and cooling. Successful launch of renewed heat recovery ventilation product range. 17 Highlights IT: The construction market declined again. Decline in radiators sales but market share increased. Strong growth of ventilation leads to strengthened leader position. Successful launch of various new radiators and ventilation units. Merger of all 3 sales companies into 1 company and successful introduction of SAP. 18

10 Highlights NL: The market suffered from severe recession in new build residential. Collapse 2012 of residential market continued no recovery in 2013 Radiators sales declined Ventilator sales declined but market leader position was kept. Strong growth of the product group Clean Air Solutions 19 Highlights NL: The ComfoSchool solution provides a perfect indoor climate. Benefits: Ensures healthy air quality Avoids a too high CO₂ concentration Avoids temperature overshoot in the classroom Provides fast response time to changing occupation 20

11 We developed new markets: Example Turkey - Spine Tower, Istanbul developed new markets e developed new markets 21 Highlights North America: We outperformed in the ongoing recovery of the residential construction market. EUR million [1] 2013 FX-adj/organic Radiators North America Change from prior year -4% 31% 13% 16% Ventilation North America Change from prior year 34% -69% -9% -6% Total North America Change from prior year 3% 6% 11% 15% [1] movement between the radiator and ventilation segments mainly due to product reclassification Strong growth in new private residential homes (+18%), whereas private non residential and public construction on previous year s level. (Source: U.S. Census Bureau) Heat recovery ventilation grew significantly, whereas fan coils suffered from a very competitive environment. 22

12 Highlights USA: The Mansions at Aqualina & Oceana in Miami Dual Tunnel Vertical Hi-Stack Fan Coil for high rise luxury condominium buildings Order size: 600 units 23 Highlights USA: Lake Hotel Yellowstone National Park, Wyoming Runtal RF and RV panels 120 pieces for the 1 st phase; total order 450 pieces 24

13 Highlights China: We progressed in many respects. EUR million FX-adj/organic Radiators CN Change from prior year 10% -10% 10% 12% Ventilation CN Change from prior year 127% 10% -12% -11% Total CN Change from prior year 26% -5% 4% 5% Government took measures to calm down overheated residential building market. Despite this, radiators sales grew significantly. Ventilation sales decreased due to postponed big construction projects. Successful relocation of Beijing factory with minimal impact on operations. Sale of office building results in additional EBIT. 25 Highlights China: Qujiang Wudong Garden in Xian is one of many residential buildings we equipped with our products. Extract ventilation unit G-VENT-3S 26

14 We increased expenses for process improvements. We strongly believe that our investments in the future will pay-off Pro memoria: SAP is a comprehensive process and organisational project to improve Efficiency by a uniform IT platform Transparency of transactions In 2013 introduction of SAP in several sites January: Sales organisation Germany April: Logistics HUB Germany October: Sales organisations Italy and Turkey January 14: Sales organisation Switzerland, Production Lahr (DE) Preparation of further roll-outs 2014 in NL, BE and UK initiated 27 After a difficult start the logistics hub Lahr achieved its performance goals. We strongly believe that our investments in the future will pay-off Difficult start delayed shipments during May and June and impacted 1 st half year sales. Since July the processes in the hub were stable. Further optimisation is in progress. Hub Lahr plays a very important role in our organisation: streamlines entire European logistics chain; reduces logistic costs; shortens delivery time. 28

15 We achieved further process improvements resulting from the Kaizen (Zmile) program. Zmile initiative based on Kaizen philosophy Gain of momentum with strong involvement of employees in all manufacturing sites Considerable savings in production achieved 29 New products were successfully launched. Zehnder Vitalo Runtal Cosmopolitan (if product design award) ComfoAir 180 Comofo Air 330 Slimline ComfoAir XL ComfoSchool ComfoBox A/W Vireo. 30

16 New products were successfully launched: Example ComfoAir 330 Slimline 31 New products were successfully launched: Example ComfoAir

17 New products were successfully launched: Example ComfoBox Air-Water 33 Hand-over of CEO position will take place as of 1 November Hand-over of CEO position will take place as of November 1, 2014 Hans-Peter Zehnder Will step back as CEO of the Zehnder Group as of 31 October Will continue to be involved in the company as full-time chairman of the Board of Directors. Dominik Berchtold Was appointed deputy chairman of the Group Executive Committee as of 1 January Will take over as CEO of the Zehnder Group as of 1 November

18 Agenda 1. Business Review Financial Results Outlook Q&A 35 Key figures 2013: Sales on previous year s level; lower profitability; improved net cash position EUR million in % Net sales EBIT EBIT margin 7.3% 6.2% Net income Net income margin 5.1% 3.5% Cash flow from operating activities Cash flow margin 8.4% 7.3% Net cash position

19 France, Germany and Switzerland remain our most important markets. 1 France 2 Germany 3 Switzerland 4 United Kingdom 5 Italy 6 Netherlands 7 United States 8 China 9 Belgium 10 Austria (88.8%) (6.2%) (5.0%) 37 Net sales increased in 2 nd half of 2013 compared to previous years. EUR million 38

20 Net sales: Reduced ventilation growth rates slight decline of radiators sales EUR million 39 Investments in fixed assets are significantly higher than depreciation. Investments in fixed assets EUR 35.1 million (2012: 37.3) Depreciation in fixed assets EUR 18.0 million (2012: 16.9) Divestment of building in China 40

21 Major investments in fixed assets in 2013 Project Why CAPEX 2013 Picture New production and innovation facility near Beijing, China Additional space for growth necessary; current area is becoming a residential area 8.4 EUR million New logistics hub/warehouse in Lahr, Germany Streamline European value chain, cost reduction, shorter delivery time 4.8 EUR million Further modernization step of multi column production in Lahr, Germany Increase productivity 1.4 EUR million 41 Ongoing investments in research & development in order to remain highly innovative EUR million 42

22 1.9% rise of personnel cost mainly for salary increases. Personnel costs EUR million (2012: EUR million) Headcount 31 December (incl. temporary) Europe 2'128 2'187 Switzerland China / North America Total employees 3'135 3' Major impacts on EBIT 2013 EUR million

23 Net cash position and equity ratio improved. Balance sheet (EUR million) Current assets Fixed assets Total assets Current liabilities Long-term liabilities Equity Total liabilities & equity Net cash position Ratios (in %) Equity ratio Return on capital employed (ROCE) Cash flow: Cash position increased mainly due to divestments. EUR million

24 Solid net cash position provides operational flexibility. EUR million 47 The Zehnder Group share price underperformed 2013 against the Swiss Performance Index. 48

25 The Board of directors proposes a stable payout ratio. CHF 49 Agenda 1. Business Review Financial Results Outlook Q&A 50

26 Long term 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 buildings is a priority in the building industry. High potential for ventilation in renovation. Market penetration of energy recovery ventilation in Europe is still low. 51 Heat recovery ventilation in residential new buildings: Expected stronger market penetration drives growth. % of new builds BE FR DE/AT IT NL CH UK PL Source: Zehnder Group management estimation 52

27 Short term economic outlook is uncertain. European economic development is uncertain, in particular given the Sovereign debt problem; Tapering of expansive monetary policy. New builds slightly declining. Recovery signs for renovation. Stable economy with up-side potential in North America. High volatility in China, but upside potential in residential building market. 53 Short term outlook for 2014 Sales Europe Radiators sales remain flat. Ventilations sales further grow, albeit at a low rate. Sales China and North America Further mid-single-digit sales growth. Profitability Modest improvement in operating profit in 2014 compared with 2013 (not including the one-off effect of the sale of the property in China) 54

28 Thank you! 55 Agenda 1. Business Review Financial Results Outlook Q&A 56

29 Q&A 57 Disclaimer 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. 58