Passion for Light. Zumtobel Group Roadshow Presentation

Transcription

1 Passion for Light Zumtobel Group Roadshow Presentation 1

2 A brief portrait of the Zumtobel Group The Zumtobel Group: a global player in the lighting industry A leading position in the European professional lighting market Brands: Thorn, Zumtobel, Tridonic Sales in over 100 countries, 21 production plants on four continents EUR 1,280.3 million in annual revenues 1) EUR 34.6 million in operating earnings (EBIT) 1) 7,456 employees 1) 1) FY 2011/12 2 2

3 Broad market access through multi-brand strategy The structure of the Zumtobel Group Revenues: EUR 1,280.3 million 1) Lighting Segment Components Segment 18% of revenues with Zumtobel & Thorn Revenues: EUR million 1) Revenues: EUR million 1) 1) FY 2011/12 3 3

4 Major position in European professional lighting market Zumtobel Group Regional revenue distribution Regional revenue distribution in FY 2011/12 Revenues: EUR 1,280.3 million Others 0.8% America 2.8% Australia & New Zealand 9.7% D/A/CH Asia Southern Europe 8.9% 7.3% 26.8% 6.0% 8.5% Europe 77.8% (PY: 77.0%) Eastern Europe 29.3% Northern Europe Western Europe 4 4

5 Our brands are differently positioned in the value chain From light source to lighting solution LED module Control gear Luminaires Lighting management Lighting solution Premium Segment Performance Segment Budget Segment 5 5

6 The value add moves downstream From light source to lighting solution LED module Control gear Luminaires Lighting management Lighting solution Upstream market Value add moves downstream / Expected integration Downstream market Increasing commoditization - LED changes the fundamental industry dynamics - New entrants/higher competition/price pressure - Change in addressable market (control gear AND light source) - Market access into fragmented luminaire market remains a key success factor Customer interface/ application know how is key - Application know-how - Lighting solution/systems competence (controls & systems) - Strong direct sales network - Technology position / innovation power - Brand positioning 6 6

7 Unique sales network as core strength of the company Lighting Segment Wholesalers Including Rexel, Edmundson End Customers E.g. Deutsche Telekom, BMW, municipalities Lighting Segment Architects Including Zaha Hadid, Daniel Libeskind, Matteo Thun & Partners Contractors Including Amec, Crown, House Engineering Lighting Designers Including, Licht Kunst Licht AG, a g Licht, ARUP 7 7

8 A brief portrait of Zumtobel Lighting Segment Zumtobel is an international premium brand for integral lighting solutions One of the largest players in professional lighting in Europe B2B Business model Strong premium brand position Cooperation with prominent architects, designers and artists One of the innovation leaders in the industry with leading edge solutions for conventional and LED lighting Strong emphasis on design and the emotional aspect of lighting Outstanding direct sales network Deep understanding of lighting applications focus on indoor and facade lighting applications 50 sales companies and representatives in over 70 countries 8 8

9 A brief portrait of Thorn Lighting Segment Thorn is an international brand with strong focus on dependable performance and smart solutions Founded in 1928 in the UK Acquired by Zumtobel Group in 2000/01 Comprehensive portfolio for indoor and outdoor lighting solutions in professional lighting Focus on technical customers who focus on quality and reliability Targets wholesalers as well as projects strong sales network Comprehensive application know-how in lighting No. 1 in UK, Hong Kong and New Zealand, No.2 in Scandinavia, France and Australia 9 9

10 A brief portrait of the Components Segment Components Segment Tridonic is a specialist in operating, controlling and managing light Manufacturer of conventional lighting components, lighting management systems, LED modules and LED converters Established strong market access into a highly fragmented customer base strong brand position Leading OEM supplier (over 80% of sales with customer outside the Zumtobel Group) Outstanding market position and major player in the conventional ballast business in Europe 30 sales representations worldwide and partners in more than 70 countries Broad product portfolio / high number of variants catered to the specific needs of luminaire makers (one-stop-shop opportunity for OEM clients) Strong IP position (own patent portfolio and cross-licensing) 10 10

11 Demand in professional lighting is backed by megatrends and technology Professional lighting market opportunities for growth Energy efficiency Lighting consumes 19% of the electricity worldwide Modern lighting solutions enable energy savings of up to 80% Energy efficiency is the central growth driver for Zumtobel Group LED LED is a disruptive technology in lighting with high growth rates Low energy consumption and long lifetime, new design features and opportunities of changing colours make LED highly attractive Controls & Systems The use of intelligent lighting control systems provide huge potential for energy savings Global market growth opportunities Trend to an increasing need for light (e.g. new applications) Growing worldwide awareness for energy savings and sustainability (e.g. global CO2 reduction targets, increasing prices for electricity) Strong structural potential in emerging markets 11 11

12 Up to 80% savings potential with modern professional lighting solutions Growth driver: Energy Efficiency LED module Control gear Luminaire Lighting management Lighting solution LEDs offer energy savings potential of: 30-50% compared to fluorescent 20-40% compared to HID Up to 85% compared to incandescent bulbs Electronic ballast/led converter technology is a prerequisite for intelligent lighting management systems. Strong optimisation potential for greater energy efficiency, for example: Glare-free optics Thermal management Luminaire design Application specific light distribution Savings vs. standard of up to 15% Light management energy savings potential: Daylight linking: 40-60% Presence detection: 15-30% Time management: 5-15% Maintenance control: 10-25% Professionally planned lighting concept combines various luminaires and light sources with an intelligent light management system to achieve an optimised lighting solution

13 LED lighting is gaining traction Growth driver: LED Zumtobel Group estimates that more than one-third of group revenues will be LED-based in 2014/15 Application know-how, electronic know-how and controls technology are the key success factors in LED lighting Zumtobel Group LED share as % of revenues 6.4% 7.2% 8.7% 10.3% 11.2% 13.4% 15.9% 17.0% 18.4% 21.4% 24.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY 2010/11 FY 2011/12 FY 2012/

14 Comparison of conventional versus LED based luminaire Growth driver: LED Project example Offices and Communication MELLOW LIGHT V LED Total Costs (TCO) Framework Old 15 pcs. louvre luminaire 4 x 18W T26 Luminaires luminous flux: 3,472 lm Luminaire efficiency: 39 lm/w Framework New (w/o light management) 10 pcs. MLV LED luminaire 52W 5 pcs. LED Downlight Panos Infinity 23W Luminaires luminous flux: 3,900 lm Luminaire efficiency: 75 lm/w Period for calculation 20 years Basis CO2 Emission in kg Energy costs in EUR Maintenance costs in EUR Amortization: 2,3 years MLV 52W Office concept MLV 52W Office concept + light management Years Basis MLV MLV+LM Basis MLV MLV+LM Basis MLV MLV+LM 14 14

15 Light management systems and services as important growth driver for lighting industry Growth driver: Controls & Systems Strong growing market with low cyclicality (CAGR ~15%) Growth supported by increasing awareness for energy efficiency and regulatory framework regarding building efficiency (green building certifications) Zumtobel Group has an outstanding position as it combines lighting application know-how in lighting segment with controlling expertise in Components Segment Emergency controls market has huge growth potential Controls & Systems are the enabler for Service business Increasing opportunities for strategic after-sales services (maintenance, energy efficiency consulting, etc.) FY 2011/12 Controls & Systems Zumtobel Group revenues: 81m Lighting management systems Somebody there? Day or Night? Help! Value added services - Support & Maintenance Agreements - Light Performance Platform - Light Performance Audits - Light Performance Management Explore new business models - Combine Luminaire, System, Service - Light Performance Guaranties - Light Performance Contracting - Pay-Use-Models (Rental & Leasing) 15 15

16 Development of business in new growth markets Growth driver: New markets Market size forecast EUR bn 32 Defined Growth Markets Measures EUROPE NAFTA ASIA LATAM ME+A China incl. Hong Kong Southeast Asia India Middle East Russia + Eastern Europe North America Global matrix organisation Regionalized product portfolio but global pillar products Investment in brand communication Expansion of sales organization and increased local presence Source: McKinsey s 2012 Global Lighting Market Model, Zumtobel Group Market intelligence 16 16

17 The professional lighting market is expected to grow above 3% annually Global professional lighting market EUR bn x% 10% LED Penetration (excl. OLED) LED 28 Traditional technology OLED 32 40% 65% Source: McKinsey s 2012 Global Lighting Market Model, Zumtobel Group Market intelligence CAGR Ʃ 3,2% 3,6% 3,4% >100% 69% >100% 36% 17% 27% -5% -10% -7% Robust growth in total market until 2020 LED revenues expected to grow by around 30% annually OLED is expected to be new growth technology after 2018 Asia by far fastest growing region (CAGR ~5% 50% of global lighting market by 2020) Smaller market growth in Europe (CAGR ~2%) Digital technologies with additional functionality and business opportunities 17 17

18 Zumtobel Continuing the globalization strategy Brand strategy Global roll-out of European success model Key growth markets: USA, China and MENA Global pillar products for each application, including optimized supply chain Customers become more international Efficient global approach as an opportunity for differentiation Successful marketing as premium brand and direct sales channels approach will be further strengthened Selective add-on acquisitions possible to accelerate globalization and/or controls & systems competency Differentiation by package of competent advisory services, the right product, intelligent controls & systems and customer service offerings 18 18

19 Thorn Optimize operational performance Brand strategy Align cost structures with market demand in Europe and Australia Improve operational excellence Reduce complexity Divide product portfolio in global/ regional/ local with modular approach Leverage global matrix organization Expand and strengthen good market position in Asia Reduce SG&A and materials expenditures Alignment of product mix and sales channels 19 19

20 Tridonic Positioning as global supplier of intelligent lighting components Brand strategy Development of exit plan for magnetic ballast production Continuous cost reductions and capacity adjustments for electronic ballast (e.g. optimizing manufacturing footprint) Focus resources on LED components for general lighting Leverage excellent European market access and client relationships with strong growing LED and Controls business to compensate for decline in conventional ballasts Globalize production and sales approach participate in Asian growth Ensure broad product portfolio for LED components by strategic make or buy decisions 20 20

21 Zumtobel Group Focus on growth above the market Group strategy Zumtobel Group still pursues a long-term global growth strategy, but growth assumptions need to be aligned with macro-economic situation Zumtobel Group aims to gain market share in an expected European low growth environment and will establish a stronger presence in global growth markets Each brand follows a dedicated strategy and must contribute to group value Continuous EBIT margin improvement, target EBIT margin is >10% for the Group over the medium term Focus on organic growth funded by internally generated cash flows Dividend policy remains unchanged: distribute 30% to 50% of recurring net profit to shareholders 21 21

22 Zumtobel Group Q1-Q3 2012/13 results March 5,

23 Deteriorating operating environment but improved profitability in the seasonal weak third quarter Financial Highlights Q1-Q3 2012/13 Demand in both segments hit by challenging operating environment Further dynamic growth in revenues with LED-products (plus 55.4%), LED share reaching 21.2% of group revenues (Q1-Q3 PY: 13.4%) - gross margin for LED products continues to improve Group revenues with EUR m slightly below prior year (-1.8%) Cost and capacity adjustments measures launched show first positive results negative special effects of minus EUR 7.1 m Adj. EBIT of EUR 29.5 million below PY (EUR 34.1 million), but improved profitability in both segments in the third quarter Positive development of working capital continued Significantly improved free cashflow vs Q1-Q3 2011/

24 LED share of group revenues increases to 21.2% (Q1-Q3 2011/12: 13.4%) Zumtobel Group LED revenue development Zumtobel Group LED revenue development in EUR million +47.6% Q3 Q4 Q1 Q2 Q3 FY 2011/12 FY 2012/13 LED revenues grow in Q1-Q3 by 55.4% to EUR million on group level Lighting Segment increases sales with LED products by 63.2% to EUR million Zumtobel brand LED penetration: ~30% Thorn brand LED penetration: ~11% Improved profitability with LED products due to optimised product design, partially increased selling prices and better purchasing conditions LED sales in Components Segment rise by 31.0% to EUR 53.5 million 24 24

25 Operating profit above prior year level Lighting Segment Revenue and EBIT development Lighting Segment (rolling five quarters) Revenues in EUR million Adjusted EBIT 1) 223,6-3.9% 254,1 (+0.5%) 236, (+2.9%) 214, % % % 6% 4% 8 2% % % % % Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 FY 2011/12 FY 2012/13 FY 2011/12 FY 2012/13 Adjusted EBIT in EUR million Adjusted EBIT as a % of revenues -2% Revenues Q1-Q3 FY 2011/12 EUR million Revenues Q1-Q3 FY 2012/13 EUR million (minus 0.0%) 1) Reported EBIT adjusted for special effects Adjusted EBIT Q1-Q3 FY 2011/12 EUR 25.9 million (margin of 3.6%) Adjusted EBIT Q1-Q3 FY 2012/13 EUR 30.0 million (margin of 4.2%) 25 25

26 Components segment successfully lowered the break-even level Components Segment Revenue and EBIT development Components Segment (rolling five quarters) Revenues in EUR million Adjusted EBIT 1) -3.3% 20 20% (-11.1%) (-7.0%) % 10 10% % % % % 5% 0% % Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 FY 2011/12 FY 2012/13 FY 2011/12 FY 2012/13 Adjusted EBIT in EUR million Adjusted EBIT as a % of revenues -5% Revenues Q1-Q3 FY 2011/12 EUR million Revenues Q1-Q3 FY 2012/13 EUR million (minus 7.3%) 1) Reported EBIT adjusted for special effects Adjusted EBIT Q1-Q3 FY 2011/12 EUR 16.2 million (margin of 5.2%) Adjusted EBIT Q1-Q3 FY 2012/13 EUR 7.6 million (margin of 2.6%) 26 26

27 Encouraging progress with LED-modules and LED-converters Components Segment LED-modules (~5% of turnover ytd) Revenues in EUR million LED-converters (~5% of turnover ytd) Revenues in EUR million 6,0 5, % +50.4% % 5.1 6,0 5, % % % ,0 3,0 2, ,0 3,0 2, ,0 1,0 0,0 0,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 2011/12 FY 2012/13 FY 2011/12 FY 2012/13 Market share in Europe around 5% in both modules and converters Competitive LED -converters and -modules launched but still gaps in LED product portfolio Profitability for LED-components continuously improved Make-or-buy decision to focus resources 27 27

28 but decline in market size for conventional ballasts due to economic environment and structural changes (technology shift to LED) Components Segment Conventional ballasts Conventional ballast market vs Tridonic market share % 30% % % % % % HY HY HY HY HY HY HY 0% Total Market Size Europe (1000pcs) Market Share Tridonic 28 28

29 Q3 revenues declined by 3.0%, but profitability improved in both segments Zumtobel Group Revenue and EBIT development Zumtobel Group (rolling five quarters) Revenues in EUR million Adjusted EBIT 1) -3.0% 50 10% (-1.7%) (-0.9%) % 8% 6% % 4.0% % % 2% 0% -2% -3.2% -20 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 FY 2011/12 FY 2012/13 FY 2011/12 FY 2012/13 Adjusted EBIT in EUR million Adjusted EBIT as a % of revenues -4% Revenues Q1-Q3 FY 2011/12 EUR million Revenues Q1-Q3 FY 2012/13 EUR million (minus 1.8%) 1) Reported EBIT adjusted for special effects Adjusted EBIT Q1-Q3 FY 2011/12 EUR 34.1 million (margin of 3.5%) Adjusted EBIT Q1-Q3 FY 2012/13 EUR 29.5 million (margin of 3.1%) 29 29

30 Weak demand in core regions all above in Europe Zumtobel Group Regional revenue distribution D/A/CH Q3 2012/13 Revenues in EUR million 80.7 Change in % 0.5% Q1-Q3 2012/13 Revenues in EUR million Change in % -0.6% Regional revenue distribution America 3.2% Others 0.9% Eastern Europe Northern Europe Western Europe Southern Europe % -13.0% -1.3% -7.3% % -1.6% 0.9% -6.9% Australia & New Zealand Asia 8.8% 8.6% 27.7% D/A/CH Europe Asia Australia & New Zealand % 1.5% -12.9% % -2.2% -14.4% Southern Europe 7.5% 29.9% 5.1% Eastern Europe 8.4% Northern Europe America Others % 8.3% % 6.3% Western Europe Europe: 78.5% (PY: 77.9%) Total % % 30 30

31 Negative special effects related to cost adjustment measures Zumtobel Group Adjusted EBIT Q1-Q3 2012/13 Adjusted EBIT in EUR million Reported EBIT Thereof special effects Adjusted EBIT Q1-Q3 2012/ Q1-Q3 2011/ Restructuring of Zumtobel sales organization in Germany and in Denmark Restructuring of Tridonic production site in Ennenda / Switzerland Downsizing of magnetic production in Melbourne / Australia to be continued Efficiency programme at the Thorn production plants in Landskrona / Sweden, Sydney / Australia and Auckland / New Zealand Disposal of Ledon Lamp Restructuring of Thorn sales organization 31 31

32 Capacity underutilization in Components Segment and LED technology shift constitute major burden on EBIT Zumtobel Group adj. EBIT-Bridge Q1-Q3 2011/12 vs. Q1-Q3 2012/13 Lighting Segment: Improves gross profit margin by 190bps mainly due to decrease in material expenses (-11,5 m vs Q1- Q3 PY) Components Segment: EUR 22.8 m decrease in revenues and Gross Profit margin 120 bps below Q1-Q3 PY: - Capacity underutilization - Higher share of not yet profitable LED components - High price pressure Efficiency measures in sales activities decrease of selling expenses Increase in innovation costs as a result of parallel activities in the area of LED, light management systems and conventional lighting activities Adj. EBIT Q1-Q3 2011/12 [in EUR m] Lighting Segment Components Gross Profit 1) Segment Gross Profit 1) Development costs Selling expenses Admin expenses Other/ consolidation Adj. EBIT Q1-Q3 2012/13 1) Gross profit on segment level excluding development costs 32 32

33 Financial results improved Zumtobel Group Income Statement Income statement in EUR million Q3 2012/13 Q3 2011/12 Change in % Q1-Q3 2012/13 Q1-Q3 2011/12 Change in % Revenues Cost of goods sold Gross profit as a % of revenues SG&A expenses adjust for special effects Adjusted EBIT as a % of revenues Special effects EBIT as a % of revenues Financial results Profit before tax Financial Results improved mainly due to reduced interest expenses (act. 7.5 million vs 8.7 million in Q1-Q3 PY) Income taxes Net profit/loss from discontinued operations Net profit for the period Depreciation and amortisation Earnings per share ( in EUR)

34 Significant increase of free cash flow vs. Q1-Q3 2011/12 Zumtobel Group Cash Flow Statement Cash Flow statement Free cash flow development in EUR million Cash flow from operating results Q1-Q3 2012/ Q1-Q3 2011/ (cumulative figures in EUR million) Change in working capital Change in other operating items Taxes paid/received Cash flow from operating activities Proceeds from the sale of non-current assets Capital expenditures on non-current assets Capital expenditures on non-current and current financial assets Change in liquid funds from changes in the consolidation range Cash flow from investing activities Free cash flow Cash flow from financing activities Q1 H1 Q1-Q3 FY Effects of exchange rate changes on cash and cash equivalents FY 2011/12 FY 2012/13 Change in cash and cash equivalents

35 Successful working capital management Zumtobel Group Key data Balance Sheet Working capital in % of rolling 12-month revenues 22.4% 21.9% 19.8% 20.2% 20.7% 19.9% 19.0% 19.0% 17.0% 18.6% 17.8% Target range: 18% - 20% Working Capital remains a priority for management As % of 12-month revenues, working capital improved to 17.0% as of 21 January 2013 (31 January 2012: 20.7% ) Inventory reduction (by EUR 25.6 m) was main driver for positive development (in Components and Lighting Segment) Q1 Q2 Q3 Q4 FY 2010/11 FY 2011/12 FY 2012/13 Trade receivables decrease by 9.6% to million (PY million), while 12- month rolling revenues decreased by 1.6% Level of factoring reduced to ~ EUR 34 million (PY 41 million) 35 35

36 Solid financial foundation Zumtobel Group Key data Balance Sheet Balance sheet data in EUR million Total assets 31 January April Liquidity position supported by Net debt Net debt/ebitda Equity Syndicated loan with max. line of EUR 400 million, ending Oct (31 January 2013 EUR 195 million drawn) Equity ratio in % Gearing in % Unsecured line of credit totaling EUR 79.3 million as of 31 January 2013 Investments Working capital Net debt significantly reduced vs Q1-Q3 2011/12 (EUR million) As a % of rolling 12 months revenues

37 Zumtobel Group guidance adjusted Zumtobel Group Outlook Deteriorating operating environment in some of the European core markets, low visibility and high uncertainty regarding economic outlook result Ongoing focus on adjusting total cost structure to market demand and continuing investments into innovative product portfolio (LED products, Control & Systems) Group guidance needs to be adjusted to reflect expected negative revenue growth dynamics For FY 2012/13 Zumtobel Group does not expect that total revenues as well adjusted EBIT will reach the prior year level (FY 2011/12 revenues: EUR 1,280.3 million; FY 2011/12 adjusted EBIT: EUR 34.6 million) 37 37

38 Financial Calendar Tues, Mar. 5, 2013 Report on the 3 rd Quarter 2012/13 (May 2012 Jan. 2013) Wed, Jun. 26, 2013 Annual Financial Results Fri, July 26, th Annual General Meeting Tues, July 30, 2013 Ex-Dividend Day Fri, Aug. 2, 2013 Dividend Payout Day Wed, Sep. 3, 2013 Report on the 1 st Quarter 2013/14 (May 2013 Jul. 2014) Tues, Dec. 10, 2012 Interim Financial Report 2013/14 (May 2013 Oct. 2014) Tues, Mar. 4, 2013 Report on the 3 rd Quarter 2013/14 (May 2013 Jan. 2014) 38 38

39 Passion for Light Thank you for your attention! 39 39

40 Five-Year Overview in EUR million 2011/ / / / /08 Revenues 1, , , , ,282.3 Adjusted EBIT as a% of revenues Net profit/loss for the period as a % of revenues Total assets 1, , , ,082.4 Equity Equity ratio in % Net debt Cash flow from operating results Investments as a % of revenues Headcount incl. contract worker (full-time equivalent) 7,456 7,814 7,329 7,165 7,

41 Disclaimer The facts and information contained herein constitute forward-looking statements as of the date they were made and based upon assumptions as to future events or circumstances that may not prove to be complete or accurate. By their nature, these statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and are difficult to predict. Therefore, actual outcomes or results may differ materially from what is expressed, implied or forecasted in these statements. Neither Zumtobel AG nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, expressed or implied, as to the accuracy or completeness of the facts and information contained in this document or the related oral presentation thereof, including responses to questions following the presentation. Neither Zumtobel AG nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this document, the facts and/or information. Whilst all reasonable care has been taken to ensure the facts stated herein are accurate and that the assumptions and opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Zumtobel AG as of the date this document was made. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Zumtobel AG as being accurate. Contacts: Investor Relations Tel.: +43 (5572)