Media- & Financial Analyst-Conference 2015

Transcription

1 Media- & Financial Analyst-Conference 2015 Zehnder Group Review 2014 Dominik Berchtold, CEO Josef Brügger, CFO Zurich/Switzerland, March 6, 2015

2 Structure Business Review 2014 Challenging market conditions Gaining market share and increasing profitability through innovation and operational excellence Financial Results 2014 Flat sales, significantly higher operational profitability, improved cash flow Outlook 2015 Further process- and cost-optimization in a demanding business environment 2

3 Structure Business Review 2014 Challenging market conditions Gaining market share and increasing profitability through innovation and operational excellence Financial Results 2014 Flat sales, significantly higher operational profitability, improved cash flow Outlook 2015 Further process- and cost-optimization in a demanding business environment 3

4 Improvement of efficiency and lower costs generate more than 40% EBIT improvement Business at a glance: Challenging market conditions Net sales flat at EUR million (PY 522.4) Zmile (Kaizen) and additional cost reduction measures EBIT increase of more than 40% to EUR 32.7 million. (PY: 23.1 before sale of office building in China; 32.3 in total) Reduced tax rate 24% (PY: 36) and better financial result 1.9 Mio (PY: -3.6) improved additionally the net income to EUR 26.0 million. (PY: 18.2) 4

5 Net cash position increased by EUR 31.4 million thanks to higher cash flow and lower CAPEX Business at a glance: Cash flow from operating activities increased by 35% to EUR 51.3 million (PY: 37.9) CAPEX reduced by 31% to EUR 24.1 million (PY: 35.1) Net cash position of EUR 63.7 Mio. (PY: 32.3) Equity ratio 66% (PY: 62%) 5

6 Mixed picture for new residential buildings in Europe Business 2014 Source: Total housing completions, EUROCONSTRUCT, Nov 2014; BRG Consult, Sep

7 Renovation of residential buildings in Europe relatively stable Business 2014 Source: Residential renovation, EUROCONSTRUCT, Nov

8 New commercial and industrial buildings in Europe on previous year s level Business 2014 Source: Non-residential new build, EUROCONSTRUCT, Nov

9 Europe net sales 2014: Ventilation growth rate accelerated while radiator decline continued. Business FX-adj/organic Radiators Europe Change from prior year -1% -3% -2% -3% Ventilation Europe Change from prior year 7% 2% 6% 5% Total Europe Change from prior year 2% -1% 1% 0% 9

10 Highlights per market: FR Business 2014 Market: Reduction of new construction by 15-20%, renovation stable Our performance: Radiators stable (renovation driven), ventilation declined (new build driven) Successful SAP go-live as per in sales, administration and logistics New training and sales/administration building (opening in H1 2015) 50 years anniversary of radiator brand ACOVA 10

11 Highlights per market: DE, AT and CH Business 2014 Market: Growth in new build residential, renovation flat, public construction under pressure Our performance: Decline in radiators and ceiling panels, growth in ventilation in DE and AT, decline in CH DE Strong growth of new radiator products (e.g. design radiator Vitalo) and ventilation (e.g. apartment ventilation unit CA 180) Reorganization of sales organization CH Generally high level of competition and price pressure in all areas Positive development with new products: ComfoAir XL and ComfoAir SL 330 Alignment of radiators distribution policy 11

12 Highlights per market: CH ComfoAir XL for multi-flat apartments Business

13 Highlights per market: UK/IE, NL, BE Business 2014 UK/IE Market: good conditions, growth in all areas Our performance: Moderate growth in radiators, strong growth in ventilation Successful SAP go-live as per in sales, administration and logistics NL Market: further strong decline in residential new build Our performance: Decrease in radiators and ventilation Integration of StorkAir brand into Zehnder Successful SAP go-live as per in sales, administration and logistics in radiators BE Market: stable residential business, decline in commercial business Our performance: Decline in radiators, growth in ventilation Integration of Acova brand into Zehnder Successful SAP go-live as per in sales, administration and logistics 13

14 Highlights per market: IT, SP Business 2014 Market: Ongoing overall decline Our performance: Decline in radiators, growth in ventilation - gain of market share in all areas IT: good start with three merged companies and SAP SP: decline in radiators, strong growth with ventilation business (start-up) 14

15 Highlights per market: IT: renovation of historic 5-star hotel in Bergamo Business

16 Highlights per market: PL, RU, CZ, UA, TR Business 2014 Growth in Poland in all areas in a positive market Start-up activities in TR and CZ Difficult environment in RU and UA lead to reorganization actions 16

17 Overview: Increase in ventilation compensated decrease in radiators Business 2014 Sales trend in 2014 vs. PY in LC France Germany Switzerland UK Netherlands Italy Belgium Austria Poland Russia RADIATORS VENTILATION 17

18 Mixed picture in the US: Radiators flat, strong growth in ventilation Business 2014 Market: Residential construction recovered public investments remain low Our performance: Strong growth in the ventilation business (residential driven), decline in radiators (public construction driven) (EUR million) FX-adj/organic Radiators North America Change from prior year 31% 13% -3% -3% Ventilation North America Change from prior year -69% -9% 81% 81% Total North America Change from prior year 6% 11% 2% 2% 18

19 Highlights per market: US: Jim Cooper, Habitat for Humanity Business

20 Mixed picture in China: Strong growth in ventilation, radiators declined Business 2014 Market: Decrease in construction activities and of real estate prices due to cool-down measures by the government. Environmental issues (e.g. air quality) Our performance: Strong growth in ventilation partially compensated the decrease in radiators. Successful transfer of production location in Beijing (EUR million) FX-adj/organic Radiators CN Change from prior year -10% 10% -23% -24% Ventilation CN Change from prior year 10% -12% 53% 51% Total CN Change from prior year -5% 4% -4% -5% 20

21 Fresh air and moisture recovery for residents in apartments at Sea View City in Penglai/China Business 2014 Energy recovery ventilation (ERV) unit CA-D-H

22 Highlights per market: Strong growth of Clean Air Solution Business Business _saufqpk 22

23 Zehnder has changed the radiator industry in 1930 for the first time... Business

24 ... and we do it again: Introducing the revolutionary Zehnder Zmart Business will be introduced at ISH 2015 in Frankfurt/DE, March

25 The next generation of comfortable, healthy and energy efficient ventilation: The Zehnder ComfoAir Q Business will be introduced at ISH 2015 in Frankfurt/DE, March

26 Strategic positioning and operational excellence are the two pillars of our competitive advantage. Business

27 Our priorities in the area of strategic positioning Business 2014 Radiators: Market introduction of new generation of radiators - the Zehnder Zmart (2015) Build up of a market position in the Closed Ceiling market (2015/2016) To grow in the towel radiator business (ongoing) Ventilation: Market introduction of new generation of HRV/ERV units ComfoAir Q (2015) Enhance our position in domestic air distribution (ongoing) Improve service organization in Clean Air Solutions (2015/2016) 27

28 Our priorities in the area of operational excellence Business 2014 Optimize the group organization (mainly in the area of innovation; H2 2015) Continuation of SAP roll-out (2015/2016) Zmile (ongoing) 28

29 Group Executive Committee since November 1, 2014 Dominik Berchtold CEO, Sales Nordic Josef Brügger CFO Tomasz Juda Competence Center Radiators/RHC Cyril Peysson Sales EMEA Olaf Schulte Competence Center Comfosystems Business

30 Structure Business Review 2014 Challenging market conditions Gaining market share and increasing profitability through innovation and operational excellence Financial Results 2014 Flat sales, significantly higher operational profitability, improved cash flow Outlook 2015 Further process- and cost-optimization in a demanding business environment 30

31 Zmile (Kaizen) works! Enthusiastic teams continuously make good to better. Financials

32 A bundle of actions and initiatives contributed to a significant higher operating profitability. Financials 2014 Process optimizations, Zmile Change of product mix Cost reduction measures Significant increase of operating profitability 2014 Value Pricing 32

33 The top four markets remained unchanged from last year. Financials 2014 Country ranking Sales by region 1. France Germany 3. Switzerland United Kingdom United States 6. Netherlands 7. Italy China North America Europe 8. China 9. Belgium Austria 0 EUR million EUR million 33

34 Ventilation with a CAGR of 8% over the last 4 years was the main sales growth driver. Financials 2014 EUR million Ventilation Radiators CAGR: Compound Annual Growth Rate 34

35 Investments are significantly lower than last year. Depreciation is up due to prior years investments. Financials 2014 EUR million 35

36 Important investments in fixed assets Financials 2014 Project Why Invest Picture New training- and office-building south of Paris, France Optimal infrastructure to present our products and train our customers and employees 6.3 EUR million New office floor in Beijing, China Showroom and offices in Beijing 2.7 EUR million New generation of radiators: Zehnder Zmart Additional production equipment 0.6 EUR million 36

37 R&D costs up 1.5 EUR million. Main driver was the new generation of comfort ventilation units. Financials 2014 EUR million 37

38 3% headcount reduction with 1.3% rise of personnel cost mainly driven by salary increases. Financials 2014 Year end headcount (including temporary) down 3% to Personnel costs up 1.3% to EUR million (2013: EUR million) Europe 2'187 2'176 Switzerland China / North America Total employees 3'283 3'185 38

39 75% of sales are now invoiced via SAP. Financials 2014 SAP software implementation is progressing according to plan Since January 2014 seven successful go-lives Jan 2014 Sales organization Switzerland, production Lahr/Germany July 2014 Sales organizations Belgium, United Kingdom, Netherlands Jan 2015 Sales organization France, logistic center St. Quentin/France Next go-lives planned for production in Poland and France Benefits start to materialize 39

40 Flat sales, significantly higher operating profitability, improved cash flow Financials 2014 EUR million in % Net sales EBIT before sale of real estate in China EBIT margin 4.4% 6.2% EBIT after sale of real estate in China EBIT margin 6.2% 6.2% Net income Net income margin 3.5% 5.0% Cash flow from operating activities Cash flow margin 7.3% 9.8% 40

41 Further improvement of net cash and equity ratio Financials 2014 EUR million Current assets Fixed assets Total assets Current liabilities Long-term liabilities Equity Total liabilities & equity Net cash position Equity ratio in %

42 Cash flow from operating activities increased from EUR 37.9 million to EUR 51.3 million. Financials 2014 EUR million Operating cash flow

43 Solid net cash position provides operational flexibility. Financials 2014 EUR million 43

44 The Board of Directors proposes a 82% higher dividend and a payout ratio of 38%. Financials 2014 CHF 44

45 Structure Business Review 2014 Challenging market conditions Gaining market share and increasing profitability through innovation and operational excellence Financial Results 2014 Flat sales, significantly higher operational profitability, improved cash flow Outlook 2015 Further process- and cost-optimization in a demanding business environment 45

46 The long-term growth drivers remain valid to further develop the business. Outlook 2015 Growth for advanced indoor climate solutions Potential in renovation for radiators and ventilation Market penetration of energyrecovering ventilation is still low Comfortable and healthy indoor climate is a priority of building industry Building regulations in Europe for energy efficiency General trend towards energy efficiency 46

47 Business environment for the construction industry remains demanding. Outlook 2015 Europe Residential new buildings Mixed picture Residential renovation Stable Commercial new buildings Slight growth except in Southern Europe North America Residential new buildings Positive trend Commercial new buildings Remains depressed China Residential new buildings Stable 47

48 Strong Swiss franc impacts result negatively Outlook 2015 Positive effects Conversion of CHF sales into EUR Negative effects Sales price discounts (so called Euro currency discounts) in Swiss market Overproportional CHF cost base Swiss headquarters Swiss production plant The magnitude of the impact depends on the EUR/CHF exchange rate. 48

49 Outlook 2015 but strong market position and continuous improvement in operational excellence enable Zehnder Group to be successful in a demanding environment. 49

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51 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. 51