Zumtobel Group AG Q1 2018/19 & Strategic Outlook. September 2018

Transcription

1 Zumtobel Group AG Q1 2018/19 & Strategic Outlook September 2018

2 AGENDA Q1 2018/19 financial results Corporate Strategy Outlook ) Q1 2018/19 results & strategic outlook

3 Stabilisation measures show first successes Financials Q1 2018/19 at a glance Group revenues 7.6% below prior year, UK (minus 22%) and negative FX effects remain the biggest drag Components Segment shows moderate growth (fx-adjusted plus 3.2%) after 10 consecutive quarters of decline Group adj. EBIT decreases from EUR 18.2 million to EUR 10.0 million driven by: missing contribution from revenues growth ongoing intense price competition Corrective actions initiated and already clearly visible in P&L selling, administrative & development expenses favourable influenced by saving measures Net profit at EUR 2.8 million (PY: EUR 9.7 million) European Investment Bank (EIB) financing package amounting to EUR 40 million with a 6 years term bullet repayment signed on Sept 3, 2018 Guidance confirmed - slight year-on-year improvement in adjusted Group EBIT Q1 2018/19 results & strategic outlook

4 Further decline in revenues as well as in adjusted EBIT Lighting Segment Revenue and EBIT development Lighting Segment Revenues Adjusted EBIT 1) -10.3% (fx-adj. -8.7%) % 3.7% % 0.5% -2.1% Q1 Q2 Q3 Q4 Revenues 2017/18 In EUR million Revenues 2018/19 In EUR million Q1 Q2 Q3 Q4 Adjusted EBIT 2017/18 Adjusted EBIT 2018/19 in EUR million Adjusted EBIT 2017/18 Adjusted EBIT 2018/19 as a % of revenues Revenues FY 2017/18 EUR million (minus 9.2%) Adjusted EBIT FY 2017/18 EUR 9.4 million (margin of 1.0%) 1) Reported EBIT adjusted for special effects Q1 2018/19 results & strategic outlook

5 Stabilisation of both top line and adjusted EBIT development Components Segment Revenue and EBIT development Components Segment Revenues Adjusted EBIT 1) +0.6% -8.7% (fx-adj. +3.2%) -6.6%) % 9.0% % % 8.1% 7.2 Q1 Q2 Q3 Q4 Revenues 2017/18 In EUR million Revenues 2018/19 In EUR million Q1 Q2 Q3 Q4 Adjusted EBIT 2017/18 Adjusted EBIT 2018/19 in EUR million Adjusted EBIT 2017/18 Adjusted EBIT 2018/19 as a % of revenues Revenues FY 2017/18 EUR million (minus 6.5%) Adjusted EBIT FY 2017/18 EUR 31.4 million (margin of 8.9%) 1) Reported EBIT adjusted for special effects Q1 2018/19 results & strategic outlook

6 Decline stopped after 10 quarters Components Segment Revenue development by quarter (in % vs prior year) 15% 13,3% 10% 5% 6,4% 4,0% 0% 0,6% -5% -10% -15% Q1 2015/16 Q2 2015/16 Q3 2015/16-6,0% Q4 2015/16-11,1% Q1 2016/17-12,0% Q2 2016/17-5,4% Q3 2016/17-3,1% Q4 2016/17-8,7% Q1 2017/18-3,4% Q2 2017/18-7,0% -6,9% Q3 2017/18 Q4 2017/18 Q1 2018/19 Q1 2018/19 results & strategic outlook

7 Profitability hit by lower volume and pricing pressure but fixed costs favourable impacted by saving measures Zumtobel Group Revenue and EBIT development Zumtobel Group Revenues Adjusted EBIT 1) -7.6% (fx-adj. -5.6%) 5.7% 3.4% % 0.1% -0.3% 10.0 Q1 Q2 Q3 Q4 Revenues 2017/18 In EUR million Revenues 2018/19 In EUR million Revenues FY 2017/18 EUR 1,196.5 million (minus 8.2%) Q1 Q2 Q3 Q4 Adjusted EBIT 2017/18 Adjusted EBIT 2018/19 in EUR million 0.2 Adjusted EBIT 2017/18 Adjusted EBIT 2018/19 as a % of revenues Adjusted EBIT FY 2017/18 EUR 19.7 million (margin of 1.6%) 1) Reported EBIT adjusted for special effects Q1 2018/19 results & strategic outlook

8 Simplified illustration to highlight main building blocks of the adj. EBIT development Zumtobel Group adj. EBIT Q1 2017/18 vs. Q1 2018/19 Lower revenues as well as price presure lead to lower absolute Gross profit. Selling and Administration expenses favourable influenced by saving measures Adj. EBIT Q1 2017/18 Gross profit (before R&D) R&D Selling & Administration Others Adj. EBIT Q1 2018/19 [in EUR million] Q1 2018/19 results & strategic outlook

9 Free cash flow at minus EUR 6.2 million (Q1 PY minus EUR 26.4 million) Zumtobel Group Cash flow statement in EUR million Q1 2018/19 Q1 2017/18 Cash flow from operating results Change in working capital Free cash flow development (cumulative figures in EUR million) 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 Change in current and non-current financial assets Cash flow from investing activities Free cash flow Cash flow from financing activities Q1 H1 Q1-Q3 FY FY 2017/18 FY 2018/19 Q1 2018/19 results & strategic outlook

10 Balance sheet structure unchanged Zumtobel Group Key balance sheet data in EUR million 31 July April 2018 Total assets Net debt Equity Equity ratio in % Gearing in % Investments Working capital As a % of rolling 12 months revenues Net debt totalled EUR million as of 31 July 2018 (30 April 2018: EUR million) Secure liquidity position backed by: Consortium credit agreement with a term ending November 2022 and a current max. volume of EUR 250 million (EUR 120 million drawn by 31 July 2018) Two bilateral bank credit agreements of EUR 40 million each with a term extending to September 2018 respectively January 2020 (fully drawn by 31 July 2018) EIB financing package amounting to EUR 40 million with a 6 years term bullet repayment signed on Sept 3, 2018 (not drawn yet) Uncommitted lines of credit totalling EUR 75.5 million as of 31 July 2018 Financial covenants attached to financing: Debt coverage ratio (=net debt/ebitda) < 3.5 Equity ratio > 25% Testing on 31 Oct as well 30 April Q1 2018/19 results & strategic outlook

11 Expected EBITDA development indicates full compliance with covenants as per Zumtobel Group EBITDA development by quarter (in Mio EUR) EBITDA GJ 2016/17: Mio EUR EBITDA GJ 2017/18: 54.2 Mio EUR Forecast EBITDA LTM as per Oct. 31, 2018: ca. 57 Mio EUR 20.9 FC Q1 Q2 Q3 Q4 FY 2016/17 FY 2017/18 FY 2018/19 A forecasted LTM EBITDA of 57 Mio EUR as per 31 October implies a net debt headroom of up to 200 Mio EUR Q1 2018/19 results & strategic outlook

12 Substantial decline in Great Britain and USA Zumtobel Group Regional revenue distribution Q1 2018/19 Revenues in EUR million Change in % nominal FX adjusted D/A/CH Northern Europe Benelux & Eastern Europe Southern Europe Asia & Pacific Middle East & Africa America Total Q1 2018/19 results & strategic outlook

13 Zumtobel Group Outlook Guidance confirmed Cautious optimism for the 2018/19 financial year We see 2018/19 as a year of transition in which we must do everything to stabilise the operating business and, at the same time, re-establish a stable foundation for profitable growth in the future. The forecast for revenues and earnings in the 2018/19 financial year is connected with substantial uncertainty due to the upcoming changes in the company, the generally aggressive price competition in the lighting industry and the ongoing weak operating environment in Great Britain, the Zumtobel Group s most important market. We expect a decline in revenues in the first half-year. For the full 2018/19 financial year, the Management Board has set a goal to generate a slight year-on-year improvement in adjusted Group EBIT (FY 2017/18: EUR 19.7 million). Q1 2018/19 results & strategic outlook

14 AGENDA Q1 2018/19 financial results Corporate Strategy Outlook ) Q1 2018/19 results & strategic outlook

15 The various businesses of the ZG follow a different logic, requiring quite different plays and actions to develop each business Zumtobel Group businesses with key requirements Component Luminaire Service Indoor applications Outdoor applications Retail Office Industry Amenity Urban Road TRIDONIC Global scale play, market share in US is mandatory Innovation challenge Module integration Functional differentiation IoT Size matters to earn back high R&D costs and gain share in IoT Indoor Scale across Europe possible. Focus segments allow for a long term leading market share with Innovative product portfolio Intensive sales with focus on Key Account Management Integrated service (Turnkey, Aftermarket, IoT) Require competitive setup Dual brand strategy to cover sufficient part of core markets / segments and get penetration Outdoor Major segments in public tender business, require local adapted products and long term influence Control/ networking play will lead to strong competition Solutions & IoT Q1 2018/19 results & strategic outlook

16 Vison for Zumtobel Group: Lighting Solutions provider with the clear ambition to be the undisputed market leader in focus markets and applications Repositioning based on 5 strategic cornerstones F O C U S Focus Markets & Applications Lighting: European market Components: Global market Sustainable and profitable applications Operational & Process Excellence Lean organisation for competitive cost base in operations, administration & sales Digitalization of business processes Components Integral part of Zumtobel Group IOT as driver for business Innovation driver for components & sensors Unique Brands 3 strong brands: ZUMTOBEL, THORN, TRIDONIC Lighting: dual brand strategy with differentiated portfolio Special focus on specification business Services & Turnkey Solutions Differentiator & enabler for future growth Services as integral part of lighting solutions Innovative turnkey solutions for products, systems & services

17 Current Market Positioning Europe Pacific North America Middle East & Africa Asia Indoor Outdoor Components Market Leader Source: Zumtobel Group AG Among Top 3 Fair Share Relevant Share Weak

18 Desired Market Positioning Indoor Outdoor Components Europe F O C Pacific North America Middle East & Africa Asia S Market Leader Among Top 3 Source: Zumtobel Group AG

19 Components: Tridonic will succeed in the future by executing on four key priorities Reduce costs (Operations and Indirect Selling Expenses) Streamline operations; cost-competitive production in Serbia Modernize our IT systems to reduce back-office efforts Develop Software Competence Setup effective R&D in Porto (Portugal) Drive Sales with new and existing customers, incl. solution sales Market entry & grow in the US market Increase share in existing accounts in Europe Develop solution sales invest in people Continue to drive Hardware innovations (LED Drivers, Sensors, LED Modules) Miniaturization of Drivers, ease of use (NFC), electrical interface (p-dali), design for cost Smart and connectable sensors, design for cost Performance & Cost competitive LED Modules, integrate electronics

20 Vision = sustainable value for customers, shareholders, employees (FY 2020/2021: ~6% EBIT-Margin) # market leader in focus markets & applications

21 Back-up

22 Net profit for the period at EUR 2.8 million Zumtobel Group Income statement in EUR million Q1 2018/19 Q1 2017/18 Change in % Revenues Cost of goods sold ,3 Gross profit (w/o development) 110, as a % of revenues R&D SG&A expenses Adjusted EBIT as a % of revenues Special effects <-100 EBIT 7, as a % of revenues Financial results Profit before tax Income taxes Net profit for the period Earnings per share ( in EUR) Q1 2018/19 results & strategic outlook

23 Working capital below prior year level Zumtobel Group Working capital Working capital in % of rolling 12-month revenues 18.7% 18.0% 16.7% 19.2% 18.2% 17.3% 17.9% 16.9% 15:7% Working capital at EUR million as of 31 July 2018 (31 July 2017: EUR million) In % of rolling 12-month revenues, working capital down to 16.7% (PY: 18.0%) Q1 Q2 Q3 Q4 FY 2016/17 FY 2017/18 FY 2018/19 Q1 2018/19 results & strategic outlook

24 Supplement data regarding Segment Reporting Zumtobel Group Segment Reporting Q1 Lighting Segment Components Segment Reconciliation Group in TEUR Q1 2018/19 Q1 2017/18 Q1 2018/19 Q1 2017/18 Q1 2018/19 Q1 2017/18 Q1 2018/19 Q1 2017/18 Net revenues External revenues Internal revenues Adjusted EBIT Special Effects Operating profit Investments Depreciation Q1 2018/19 results & strategic outlook

25 Five-Year Overview in EUR million 2017/ / / / /14 Revenues 1, , , , ,246.8 Adjusted EBIT as a % of revenues Net profit/loss for the period as a % of revenues Total assets , , , ,006.6 Equity Equity ratio in % Net debt Cash flow from operating results Investments as a % of revenues R&D total as a % of revenues Headcount incl. contract worker (full-time equivalent) 6,224 6,562 6,761 7,234 7,291 Q1 2018/19 results & strategic outlook

26 Financial Calendar September 4, 2018 Report on the First Quarter 2018/19 (1 May July 2018) December 4, 2018 Report on the First Half-year 2018/19 (1 May October 2018) March 5, 2019 Report on the First Three Quarters 2018/19 (1 May January 2019) Q1 2018/19 results & strategic outlook

27 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 Group 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 Group 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 Group 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 Group AG as being accurate. Contacts: Investor Relations Tel.: +43 (5572) Q1 2018/19 results & strategic outlook