Half year results TKH Group NV

Transcription

1 Half year results 2014 TKH Group NV 1 Half year results

2 Content 1 About TKH Group 2 Developments 1 st half year Notes to the results 1 st half year Strategic developments, business drivers & outlook 5 4 Core technologies & 7 vertical growth markets 2 Half year results

3 Profile Turnover billion Number of employees (FTE) 4,802 Technology company Geographical distribution of turnover (in %) Four core technologies Vision & security, communication, connectivity and manufacturing systems The core technologies are combined with software and system integration into total solutions in vertical focus and growth markets within three business segments: H Telecom Solutions 12.3% Building Solutions 36.8% Industrial Solutions 50.9% 3 Half year results

4 Mission TKH intends to be an innovative and leading technology (niche) player in creating combinations of technologies to total solutions through which customers are fully relieved and that lead to larger efficiency, more comfort and larger safety. TKH aims to be an attractive employer, to continuously exceed customers expectations by offering best in class -solutions and to be a solid investment for shareholders. 4 Half year results

5 Strategy TKH Value creation Focus on 4 core technologies in 3 business segments Telecom Solutions Building Solutions Growth drivers Industrial Solutions Communication, safety, care and efficiency Innovations > 15% turnover 5 Half year results

6 Developments Half year results

7 DEVELOPMENTS 1 st HALF YEAR Half year results

8 Highlights 2 nd quarter 2014 Turnover rises by 13.5% to million, almost entirely organic primarily driven by Industrial Solutions (+27.8%) Order intake Industrial Solutions stays at high level Efficiency programmes 2013 contribute to results improvement at Building Solutions EBITA up by 42.5% significant improvement of ROS to 9.8% Net profit before amortisation up by 68.4%, partly due to lower tax burden and lower financial expenses Key figures (in million unless stated otherwise) Q Q Δ in % Turnover % EBITA % ROS 9.8% 7.8% Net profit before amortisation attributable to shareholders 1) % 1) Net profit before amortisation of acquisition related intangible non-current assets (after taxes) 8 Half year results

9 Highlights 1 st half year 2014 Turnover rises by 11.9% to million, organic rise 12.8% Gross margin increases to 41.8% from 40.9% thanks to improved product mix EBITA up by 41.0% due to organic turnover growth, strongly improved efficiency and effective cost control Key figures (in million unless stated otherwise) H H H Turnover ,197.8 Turnover change % % + 6.0% + 8.7% of which impact of raw material prices organic - 1.3% % - 0.9% + 1.3% - 1.4% + 6.7% - 1.2% + 4.2% EBITA before one-off expenses 1) ROS 9.2% 7.3% 9.3% 8.3% Net profit before amortisation and one-off income and expenses attributable to shareholders 1, 2) ) One-off expense of 7.2 million in H related to restructuring costs 2) Net profit before amortisation of acquisition related intangible non-current assets (after taxes) 9 Half year results

10 Acquisitions GF Messtechnik GmbH (100%-interest held by Augusta Technologie) Building Solutions vision & security systems. Consolidated as from 30 June 2014 Leading supplier of SD-measurement systems based on optical surface metrology Product portfolio include 3D-measurement equipment, 3D-sensors and related software Turnover of 5.4 million with 30 employees Company is integrated in LMI Technologies (part of Augusta) Increase shareholding in Augusta Technologie from (2012) to 91% (July 2014) Seeks full integration to achieve a further acceleration in cooperation between vision technology companies within TKH Group and Augusta and to define a joint strategy Vision Technologies Other business Acquisition is financed from existing credit facilities 75% in Building Solutions (vision & security systems) 25% in Industrial Solutions (manufacturing systems) Merger squeeze out -procedure has been initiated to acquire remaining shares held by minority shareholders 10 Half year results

11 Highlights 1 st half year 2014 Solutions segmentation based on 4 core technologies 11 Half year results

12 Telecom Solutions (in million unless stated otherwise) 1 st half year st half year 2013 Δ in % Turnover EBITA ROS 8.3% 10.3% Organic turnover growth: + 0.5% Strong decline turnover copper network systems Decrease ROS as a result of margin pressure due to overcapacity and acquisition of strategic projects 12 Half year results

13 Telecom Solutions Segment fibre networks systems: turnover +8.5% Optical fibre (cable), connectivity systems and components, active equipment Growth primarily driven by China, Poland and Germany Acquisition of some strategic optical fibre projects pressure on margin, but perspective of higher growth levels Slight decline in sales prices due to overcapacity at a number of manufacturers expected increase in demand in China will reduce overcapacity Further increase in efficiency of TKH optical fibre production capacity in China completed end of Q Half year results

14 Telecom Solutions Segment indoor telecom systems: turnover +11.5% Home networking systems, broadband connectivity, IPTV-software solutions Expansion of product portfolio Slight increase in consumer spending in European market Segment copper networks systems: turnover -41.9% Copper cable, connectivity systems and components, active equipment Decrease investments due to a shift to optical fibre networks and 4G networks As from 1 January 2015, this sub-segment will be combined with indoor telecom systems segment 14 Half year results

15 Building Solutions (in million unless stated otherwise) 1 st half year st half year 2013 Δ in % Turnover EBITA ROS 7.5% 6.9% Organic turnover growth: + 1.1% EBITA and ROS improved as a result of the in 2013 implemented efficiency programmes and the realised growth 15 Half year results

16 Building Solutions Segment building technologies: turnover +0.8% Energy-saving lighting and light switch systems, energy management systems, care systems, structured cabling systems 2 nd quarter stronger than 1 st quarter Focus on integrated solutions in specific markets is bearing fruit key contracts in vertical growth markets Tunnel & Infra and Parking were acquired Dutch healthcare sector still reluctant to invest due to government changes in healthcare policy Care: Mosadex Parking: Melbourne Airport Tunnel: Avenue2 16 Half year results

17 Building Solutions Segment vision & security systems: turnover +5.9% Vision technology, systems for CCTV, video/audio-analysis and detection, intercom, access controls and registration, central control room integration Growth largely thanks to vision technology companies turnover and order intake improved in China, Germany and France Increasing internationalisation of roll-out of security portfolio Continued reluctance for investments in building and construction sector in the Benelux Organisation strengthened in the fields of R&D, production and commerce perspective for above-average growth in coming years PDVSA Gas Compression Plant - Venezuela Vision techology for wiring robot 17 Half year results

18 Building Solutions Segment connectivity systems: turnover -7.2% Specialty cable, connectivity systems and components for shipping, railways, wind energy as well as installation and energy cable for niche markets Impact raw material prices on turnover: -4.9% Decline in market volume in building and construction sector Lower level of investments from energy and network companies Despite fierce competition, margin improved due to: implemented efficiency programmes focus on growth markets such as Tunnel & Infra and Marine, Oil & Gas 18 Half year results Livian-tunnel Belgium Optara - Belgium Zuid-Willemsvaart

19 Industrial Solutions (in million unless stated otherwise) 1 st half year st half year 2013 Δ in % Turnover EBITA ROS 12.3% 8.9% Organic turnover growth: +27.1% Substantial increase in EBITA due to higher turnover, improved efficiency and better distribution of capacity utilisation across available production locations 19 Half year results

20 Industrial Solutions Segment connectivity systemen: turnover +1.0% Specialty cable systems and modules for the medical, robotic, automotive and machine building industry Impact raw material prices on turnover: -2.8% organic growth 3.8% Improved market conditions had a positive impact on order intake in second quarter Trend of outsourcing more complete modules and systems continued Investment in an integrated solution based on vision and connectivity technology First orders received for newly-developed drag chain portfolio for industrial market 20 Half year results

21 Industrial Solutions Segment manufacturing systemen: turnover +46.5% Tyre manufacturing systems, can washers, machine control systems, product handling systems and test equipment Investments in new technology and production capacity translated into considerable growth in order intake and turnover order intake H > 200 million Increase market share in top 5 tyre manufacturers Order intake outside top 5 tyre manufacturers also increased Improved capacity utilisation at various production locations led to a higher margin 21 Half year results

22 NOTES TO THE RESULTS 1 st HALF YEAR Half year results

23 Notes to the results 1 st half year 2014 Change in turnover (in million) 23 Half year results

24 Notes to the results 1 st half year 2014 Geographical distribution of turnover (in %) 24 Half year results

25 Notes to the results 1 st half year 2014 Development of turnover per solution (in million unless stated otherwise) Turnover 1) H Turnover 1) H Total growth Impact prices raw materials Organic growth Telecom Solutions % - 0.0% + 0.5% Building Solutions % - 1.7% + 1.1% Industrial Solutions % - 1.2% % Total % - 1.3% % 1) Turnover including change of finished goods inventory, work in progress and other operating income. 25 Half year results

26 Notes to the results 1 st half year 2014 Gross margin increased to 41.8% (H1 2013: 40.9%) Improvement in Building and Industrial Solutions Improved productmix Lower gross margin in Telecom Solutions due to overcapacity and acquisition of some strategic optical fibre projects Increase EBITA of 41.0% Operating costs (in % of turnover) fell to 32.7% (H1 2013: 33.6%) due to higher capacity utilisation at TKH s production locations and efficiency programmes implemented in H Increase depreciation charges with 0.4 million as a result of higher investment levels in recent years Increase ROS from 7.3% to 9.2% 26 Half year results

27 Notes to the results 1 st half year 2014 EBITA per Solution (in million unless stated otherwise) H H EBITA ROS % EBITA ROS % Telecom Solutions Building Solutions Industrial Solutions Other Total Half year results

28 Notes to the results 1 st half year 2014 Increase amortisation charges with 1.0 million Higher investments in research & development Result from participations of 0.3 million Mainly 5%-interest in Nedap and12.5%-interest in Chinese preform Joint Venture (ShinEtsu Fasten) Lower result from participations, of which result in 2013 was positively affected by currency effects Decrease tax rate to 21.5% (H1 2013: 23.0%) Renewal of agreement with the Dutch tax authority on innovation box facility, which will now run to year-end Half year results

29 Notes to the results 1 st half year 2014 Change in financial result (in million) Decrease financial expenses with 2.3 million Lower interest expenses following renewal of credit facility as per October 2013 Lower interest rate due to expiration of interest rate swaps Neutral currency effect in H (H negative 0.5 million), delta of 0.5 million 29 Half year results

30 Notes to the results 1 st half year 2014 (in million ) H H Δ in % Turnover 1) Costs of raw materials / consumables Gross margin % % Operating costs EBITA % % Amortisation Operating result Financial expenses Change in provision for earn-out Result participations Result before taxes Taxes Net profit % % Net result before amortisation and one of Income and expenses 2) % % 1) Turnover including change in finished goods, work in progress and other operating income 2) Net profit before amortisation of acquisition-related intangible fixed assets (after taxes) attributable to shareholders 30 Half year results

31 Balance sheet as of 30 June 2014 (in million ) Assets Non-current assets Inventories Construction contracts Receivables Cash Assets held for sale Total 1, , ,055.1 Liabilities Equity Long-term liabilities Long-term provisions Borrowings Construction contracts Short-term liabilities Total 1, , , Half year results

32 Notes to the balance sheet 30 June 2014 Change in working capital (in million) Working capital Use of non-recourse factoring: million million million Use of supply chain finance: million million million 32 Half year results

33 Notes to the balance sheet 30 June 2014 Change in net debt (in million) Financial covenants Net debt is based on financial covenants as agreed with banks Net debt / EBITDA: 1.6 Interest coverage ratio: ) Including non-current liabilities, received from acquisitions 33 Half year results

34 Cash flow statement (in million ) H H H Operating result Depreciation, amortisation and impairment Share and option schemes Result on divestments Change in provisions Change in working capital Cash flow from operations Interest paid Tax paid Cash flow from operational activities Cash flow from investing activities Acquisitions Cash flow from financing activities Exchange differences Change in available funds Half year results

35 Ratios H1 H1 FY Working capital / Turnover 1) 15.8% 15.5% 13.2% Net debt / EBITDA 2) Gearing (net debt / equity) 3) 49.0% 42.7% 45.6% ICR (EBITDA / Financial cost) 2) Solvency 40.8% 40.6% 40.7% Earnings per ordinary share before amortisation and one-off income and expenses Earnings per ordinary share ) On an annual basis 2) Based on the financial covenants as agreed with the banks 3) Based on the average positions during period concerned 35 Half year results

36 Strategic developments, business drivers & outlook 36 Half year results

37 Business drivers TKH focuses on distinguishing potential for an aboveaverage performance Niche player strategy - focus on high quality solutions with high margins High pricing power by innovative unique solutions Attractive margins because of high yield on investments for customers Commodity products are mainly used as part of total solutions Through outsourcing of more than 60% of manufacturing a more flexible capacity is available and cost basis more variable Focus on markets with high growth Spread risk over a large number of product / market combinations 37 Half year results

38 Financial objectives TKH Progress realisation targets on track Increase ROS in H to 9.2% (full 2013: 8.3%) ROCE in H1 2014: 17.5% Focus on 7 growth verticals accelerates realisation of targets Targets ROS target: 9 to 10% ROCE target: 18 to 20% Solvency: > 35% Net debt / EBITDA: < Half year results

39 Business drivers Focus on four core technologies Vision & security, communication, connectivity and manufacturing systems Merge the four core technologies into specific solutions for identified niche vertical markets with special focus on high growth opportunities within the business segments Telecom, Building and Industrial Solutions: Offer high level of service and integrated solutions Offer highly innovative best in class systems Focus on efficiency, security and safety solutions and improvements that offer high return on investment to customers and substitutes labour for technology Focus on seven high growth vertical markets with growth potential in 3-5 years of million Revenue 2012: 450 million Fibre Optic Networks - Care - Tunnel & Infra - Parking - Marine, Oil & Gas - Industrial Machine Vision - Tyre Building Industry 39 Half year results

40 TKH vertical growth markets growth drivers Advantage of focus on defined vertical growth markets Focus leads to maximum traction to realise growth potential Choice for growth verticals is determined on the return potential based on internal and external benchmarking ROS and ROCE in combination with organic growth opportunities Defined turnover and return targets per segment Executive Board directly involved in realisation targets via Solution responsibility One end-responsible per vertical market who reports directly to the Executive Board Optimal use of R&D-resources and investments to markets with largest potential Coordination of technology development priorities to growth verticals Only acquisitions in defined growth verticals 40 Half year results

41 Conclusion strategy and focus vertical growth markets Accelerates the increase of the ROS and ROCE Creates substantial growth for TKH both in result and turnover Creates a better understanding of the TKH strategy at stakeholders Creates much better execution of growth opportunities Brings TKH into a new phase of synergy implementation Combination of the four technologies into high growth verticals Clustering of activities into vertical markets and technologies 41 Half year results

42 Outlook The outlook for the second half of the year in the market segments in which TKH is active is generally positive, despite the continued fragility of general economic conditions and geopolitical situation Telecom Solutions Further increase in investments in optical fibre networks Decline turnover in copper networks as a result of the shift in investments towards optical fibre networks Expected result in H to be in line with H Building Solutions Investment levels in building and construction sector will remain low Vertical growth markets offer sufficient perspective for continued growth and higher margins On balance, expected result in H to be higher than H Half year results

43 Outlook Industrial Solutions High order intake in Industrial Solutions will keep turnover in the second half of the year at the same high level as in the first half Worldwide economic uncertainties make it difficult to forecast the development of order intake in the coming quarters at this time, the outlook for order intake is positive Expected result H to be at least in line with H On balance and barring unforeseen circumstances, for the full year 2014 TKH expects to book a net profit before amortisation and one-off income and expenses attributable to shareholders of between 75 million and 82 million 43 Half year results

44 Appendices: 4 core technologies & 7 vertical growth markets 44 Half year results

45 Connectivity Vision & Security Core technologies Communication Emergency systems Personal alarm systems 45 Drag Half Chain year systems results MultiMediaConnect Manufacturing systems

46 Fibre Optics Networks - growth drivers Fibre optics networks High priority from telecom-operators for upgrading networks Successful FttH-projects proof high return on investment Telecom operators are able to gain or defend market share through fibre optic technology More and more parties request of total systems opportunity for TKH to increase the scope of delivery increase market share Various European countries have announced large investment plans for FttH-projects 46 Half year results

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48 Care growth drivers Care Large need for care systems that respond to live longer independently at home: increasing aging necessary cost reductions efficiency improvements need for better care scarcity of nursing staff TKH core technologies respond well to the trends in the healthcare industry 48 Half year results

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50 Tunnels growth drivers Tunnels New legislation for tunnel technology caused by fire Mont Blanc-tunnel In Europe, before 2020, thousands of kilometres tunnels will be built and provided with new tunnel technology for replacement Technologies relevant in relation to new tunnel legislation: evacuation communication detection identification safety The TKH core technologies fit seamless as proven technology to the demands of the new tunnel technology-specification 50 Half year results

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52 Parking growth drivers Parking Strong need within parking industry to: decrease OPEX increase occupancy car parks increase revenues by differentiated parking rates increase comfort and ease for parker High returns on technology investments TKH has distinctive advanced technology with its core technologies that responds well to the requirements of the parking industry 52 Half year results

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54 Marine, Oil & Gas - growth drivers Marine, oil & gas Strong growing market from the perspective of the TKH core technologies that respond to the increasing need to a safer environment by a good detection and analysis of risk with quick and direct communication and guiding of actions in case of emergency Large potential market share growth due to internationalisation and focussed technical solutions with distinctiveness 54 Half year results

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56 Tyre Building Industry - growth drivers Tyre building industry High priority in tyre building industry for replacement existing technology with drivers: high productivity less waste improved quality smaller batches more regional production Advanced TKH-technology responds to these drivers perspective for market share growth within top five tyre manufacturers More than 70% of equipment older than 15 years Large investment programs announced within industry since 2011 Market share TKH in outsourced market: 60-70% Total market share including top five tyre manufacturers: 18-20% target 30-40% 56 Half year results

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58 Industrial Machine Vision - growth drivers Machine vision Extensive industrial automation and robotising responds to high productivity and quality of manufactured products Vision-technology is a superior alternative for steering and control of manufacturing systems and for the human eye in the area of detection, inspection and identification Based on the advanced TKH-technology markets share growth will be realised Strong increase in the number of applications where vision-technology will be adopted 58 Half year results

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