Vacon develops sustainable energy solutions for the future

Transcription

1 Vacon develops sustainable energy solutions for the future Berenberg Energy Efficiency Conference Zürich - May 23 rd Vesa Laisi, President and CEO of Vacon Pia Aaltonen-Forsell, CFO of Vacon 1

2 Disclaimer The content of this presentation contains time-sensitive information that is accurate as of the time hereof. A number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected by Vacon. If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Vacon will not be reviewing or updating the material that is contained herein. 2

3 Outline AC drives clean technology A growing market Vacon 100% focus on AC drives Highlights in Q1/2013 Track record Outlook 3

4 AC drives clean technology 4

5 Vacon products Vacon is one of the world's largest companies focusing solely on the design and manufacture of AC drives and Inverters. What is an AC drive? An AC drive is an electronic device for providing stepless control of the torque and rotation speed of AC motors. What is an Inverter? An inverter is an electric device for feeding electricity back to a power grid in renewable energy applications. Competing or substitute technical solutions do not exist for AC drives and inverters and are not within sight. 5

6 Advantages of AC drives and Inverters 1. Energy savings 2. Improved controllability for processes 3. Reduced mechanical stress 4. A quieter work environment. 5. Feeding electricity back to a power grid (renewable) Vacon PPT 6

7 Clean technology For Vacon Cleantech means that during their lifespan Vacon drives save more energy than it took to manufacture them. Electric motors consume about 30% of the electric energy produced worldwide. Full use of AC drives and energy-efficient motors in industry and civil engineering would provide savings of up to 30% in the energy consumption of electric motors. This saving equals 10% of electricity in the entire world. Renewable energy is an important solution in the battle against climate change. AC drives are a key product in production of clean water. 7

8 AC drives help to save energy In 2012, Vacon's AC drives helped save appox 50 TWh of energy. In 2012, the amount of renewable energy produced with Vacon's products was approximately 20 TWh. Vacon PPT 8

9 A growing market 9

10 Global megatrends support the growth Emerging markets Industrial automation Energy efficiency Renewable energy Urbanization 10

11 The global AC drives market BUSD APAC Americas EMEA Source: IMS Research 2012 (Renewables not included) 11

12 Competition Vacon s main competitors are global conglomerates for which AC drives are just one product among many. Vacon is the world s largest company focusing solely on AC drives. Vacon s extensive experience across a wide range of industries allows us to offer customers solutions that keep the total cost of ownership to a minimum. Based on market surveys, Vacon estimates that it has about 5% of the global market (4.5% + 0.5% brand label sales). No. Manufacturer Market share, % 1. ABB Siemens Mitsubishi Electric Schneider Toshiba Rockwell Automation Danfoss Yaskawa Vacon Emercon CT Fuji Electric Delta 2.5 Source: IMS research

13 Vacon 100% focus on AC drives 13

14 Our footprint is global and growing Americas EMEA Asia Pacific Revenues (MEUR) , , ,2 *) Region split based on customer invoicing address 14

15 One of the strongest product portfolios in the market 15

16 Sales channels optimized by countries Sales channels End users Brand label - customers Distributors Value added resellers OEM s System integrators End customers industries Applications 16

17 Maintenance service products Vacon is a maintenance service provider whom customers can rely on throughout the entire life cycle of their AC drives. Nearly 90 service centers globally in more than 50 countries 24/7 17

18 Our growth model is flexible, resilient and sustainable in profit and cash generation Multiple channels to market six channels to market all major geographical areas Cost competitive 50% LCC sourcing in 2012 and aiming for 60% by 2014 Large product portfolio and multiple segment focus one of the largest portfolio versatile end market coverage Low capital intensity ~4% capex Vacon PPT 18

19 Vacon Q in brief 19

20 Market stayed flat According to the assessment by market research institutions the global AC drive market declined slightly in Vacon estimates that the market did not grow during the first quarter of Taking market developments into account, Vacon s business developed positively during the first quarter of The company s comparable profitability, measured in terms of the operating profit percentage, improved slightly in the January-March period. However, slower growth in revenues than expected and the emphasis in sales on low power drives with a smaller profit margin slowed down the improvement in the company s profitability. 20

21 Strongest growth in Asia Pacific Europe developed encouragingly Geographically the area with strongest growth was Asia Pacific, where revenues increased 16.4 % in January-March. Revenues in the APAC region increased especially in building automation. Business in the Europe, Middle East and Africa region developed encouragingly and sales in the region increased 13.5 % in the January-March period. The marine industry recorded the biggest growth among customer sectors in Europe. Revenues in North and South America declined 12.9 % in January- March from the period for comparison. Weaker sales than expected to distributors and brand label customers were a particular factor in the decline in revenues. Sales for building automation increased to some extent. Sales in other sectors were at the same level as in the period for comparison. 21

22 Results Q1/2013 MEUR Q1/2013 restated * Q1/2012 Change Order intake % Revenues % Operating profit ** Operating profit, % of revenues ** 6.3 % 7.7 % Net cash flow from operating activities % EPS, eur *) Figures adjusted in accordance with IAS 19. More details of changes in IFRS standards are given in the interim report. **) Operating profit excluding one-time items in Q1/2012 was EUR 5.0 million, or 5.9 % of revenues. 22

23 Track record

24 Vacon key figures Revenues Operating profitc Return on equity Net cash flow from operating activities Equity ratio Earnings per share 24

25 Share price development Vacon OMX Mid Cap Helsinki 2/2011 8/2011 2/2012 8/2012 2/

26 Market capitalization 26

27 Shares traded 27

28 Dividends Year EPS, EUR Dividend / share, EUR ,51 0, ,01 0, ,22 1, ,10 0, ,70 1,10 28

29 Excellent total shareholder return ( ) 30% Huhtamäki Kone 20% 10% 0% -10% Metso YIT Elisa Cargotec Upm-Kymmene Kesko Stora Enso Uponor Ramirent Sanoma Fortum Stockmann Vacon Kemira Wärtsilä Tieto Fiskars Amer Sports Outotec Konecranes Nokian Renkaat Orion -20% Rautaruukki -30% Nokia Outokumpu -40% (TSR)= (dividends reinvested) Source: Thomson Reuters Datastream; BCG analysis 29

30 Outlook 30

31 Vacon strategy The goal 2014 Profitable growth 500 MEUR EBIT > 14 % ROE > 30 % Strategic choices 100% focus on AC drives Product leadership Multi-channel sales Strategic competences Global presence and transnational operations AC drives know-how Common product platform design & product portfolio management Customer relationship management Mass customization, demand flow technology and global sourcing Global ICT infrastructure and applications 31

32 Prospects for 2013 There were no signs of growth in the AC drive market in January-March, but Vacon expects the market to pick up towards the end of the year. The company still estimates that the global AC drive market will grow much faster than average growth in industrial production, at an estimated rate of 5-10 % in Vacon s strong order intake in January-March supports growth in the company s revenues and improving profitability towards the end of the year. Other key factors contributing to an improvement in profitability, in addition to the growth in revenues, are the cost benefits from transferring material sourcing to low cost countries and raising overall efficiency in operations. Improving the company s profitability does not require a change in the sales product breakdown, the profitability targets set can also be achieved with the existing product breakdown. 32

33 Market guidelines for 2013 ACT 2012 FC 2013 Revenues, MEUR % EBIT margin, % (excluding one-time items) 9.4% 10-12% 33

34 Risks and uncertainties in the near future There are still uncertainties relating to developments in the global economy, and these may weaken demand for AC drives globally or in certain regions. The court proceedings relating to the customs procedures followed by Vacon s subsidiary in China continue in the higher court, since two of the parties appealed against the ruling given by the lower court in December It is possible that the sentence imposed on Vacon may also change in the higher court, so some uncertainty still remains in this matter. Vacon made provisions in 2010 and 2011 relating to the court proceedings. 34

35 Major shareholders AC Invest Three B.V % Others 27.5 % Ilmarinen Mutual Pension Insurance Company 5.6% Tapiola Mutual Pension Insurance Company 3.8 % Koskinen Jari 2.4 % Ehrnrooth Martti 2.1 % Vaasa Engineering Ltd 2.0 % Holma Mauri 1.5 % Special Fund Handelsbanken Nordic Selective 1.2 % Nominee registered and in foreign ownership 37.9 % (incl. AC Invest Three B.V %) Fondita Nordic Micro Cap 1.1 % OP-Finland Small Firms Fund 1.1 % Own shares 0.3 % 35

36 IR contacts Vesa Laisi, President and CEO , Pia Aaltonen-Forsell, CFO, Sebastian Linko, Director, Corporate Communications and IR , 36

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