Von Roll Holding AG Business performance in the first half of 2013 August 21, 2013
Von Roll Group / Overview Positive EBIT despite continuously weak market In CHF million 1H 2013 2H 2012* 1H 2012* Order intake 229 228 277 Sales 246 229 268 Gross profit 39 23 46 EBIT before special items 2-7 5 Special items 0-50 0 EBIT 2-57 5 Net income -4-66 0 CFOA -3 15-13» Sales increase of 7% compared to 2H 2012 to CHF 246 million» Gross profit increase of CHF 15 million compared to 2H 2012 but 15% below previous year» EBIT positive with CHF 2 million» Net income adversely affected by interest expenses of financing and regional distribution of profit taxation» Negative cash flow from operating activities due to low result and sales conditioned buildup of current assets» Moderate increase of employees due to acquisition of Albesiano Sisa Vernici S.r.l. CAPEX -10-15 -8 Equity ratio 44% 45% 60% Number of employees 2'751 2'727 2'855 * restated 2 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group / Overview EBIT affected by sales decline compared to 1H 2012 In CHF million 1H 2013 2H 2012* 1H 2012* Net sales 246 229 268 Cost of goods sold -207-206 -222 Gross profit 39 23 46 Research and development expense -3-3 -5 Sales and distribution expense -15-16 -17 Administrative expense -21-31 -22 Other operating profit 2-30 3» Decline in sales of 2H 2012 could be slowed down and reversed» Gross margin decline based on lower sales in core business in EMEA and lower utilization of sites» EBIT based on decline in sales lower than previous year» Financial result includes CHF 3 million interest expenses from financing the bond EBIT 2-57 5 Thereof special items 0-50 0 Financial result -3-3 -2 Profit before tax -1-60 3 Income tax -3-6 -3 Net income -4-66 0 * restated 3 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group / Balance sheet Assets increase based on acquisition In CHF million 1H 2013 YE 2012* YE 2011 Cash and cash equivalents 69 95 44 Trade accounts receivable 93 75 88 Inventories 126 120 132 Other current assets 20 18 21 Current assets 308 308 285 Property, plant and equipment 109 95 92 Goodwill 18 14 39» Liquid funds decrease of CHF 24 million based on acquisition of Albesiano Sisa Vernici S.r.l. and financing of current assets» Acquisition caused increase of inventories by 5%» Acquisition caused increase of property, plant and equipment» Goodwill increase based on acquisition» Other non-current assets increase mainly due to adaptation in disclosure of pension based assets Other intangible assets 32 33 42 Deferred tax assets 13 12 15 Other non-current assets 41 41 18 Non-current assets 213 195 206 Total assets 521 503 491 * restated 4 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group / Balance sheet Liabilities increase due to acquisition In CHF million 1H 2013 YE 2012* YE 2011 Trade accounts payable 38 32 42 Current financial liabilities 6 1 58 Current provisions 5 6 3 Other current liabilities 40 37 45» Trade accounts payable increase based on the acquisition of Albesiano Sisa Vernici S.r.l.» Equity increases due to - currency effects (CHF 5 million) and - net income (CHF -4 million)» Balance sheet total increase by CHF 17 million due to acquisition Current liabilities 89 76 148 Non-current financial liabilities 151 149 1 Post-employment benefit obligations 29 28 24 Deferred tax liabilities 10 8 6 Non-current provisions 13 14 12 Non-current liabilities 203 199 43 Equity 229 228 300 Total liabilities 521 503 491 * restated 5 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group / Statement of cash flow Impacted Cash Flow due to acquisition and growth In CHF million 1H 2013 2H 2012* 1H 2012* EBITDA 9-13 14 Change in non-current provisions -1-2 -1 Changes in working capital -6 30-23 Other -5 0-3 Cash flow from operating activities -3 15-13 CAPEX -10-15 -8 Acquisitions -13 0 0 Other 1-19 2 Cash flow from investing activities -22-34 -6 Change in financial liabilities 0 73 18 Dividends 0 0 0 Others -1-1 -1» Increase in Working Capital by CHF 6 million due to sales growth» CAPEX includes: - Replacements of CHF 4 million - Expansion/ rationalization investments of CHF 5 million - Investments in environment, health and security of CHF 1 million» Acquisitions include Albesiano Sisa Vernici S.r.l. as well as an additional payment tranche for Von Roll BHU Umwelttechnik GmbH» No Cash Flow impact from changed financial liabilities due to the longterm bond in 2012 Cash flow from financing activities -1 72 17 Change in cash and cash equivalents -26 53-2 * restated 6 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group / Reconciliation statement for sales Sales growth despite overall weak economic environment In CHF million 268-24 28-15 2 2 246-22 229 7 1H12 Growth Copper Effect Currency Translation Effect 2H12 Growth Copper Effect Currency Translation Effect Effect from Acquisition 1H13 7 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group Sales by Region In CHF million Americas EMEA Asia 67-10% 60 +12% 67 143-19% 116 +9% 126 58-9% 53 0% 53 1H 2012 2H 2012 1H 2013 1H 2012 2H 2012 1H 2013 1H 2012 2H 2012 1H 2013» USA with overall positive tendency» Brazil weak in overall difficult market environment» Slight growth within Insulation in the US» Investment climate in Europe still cautious» Integration of offshore windparks (transmission) with new momentum for Insulation» In China increasing local competition» Also in India local players catching up» Competitiveness in India requires locally produced products 8 August 21, 2013 Von Roll: Business performance in the first half of 2013
Operating Segments Von Roll Insulation In CHF million Order Intake Sales EBIT (excl. special items) -19% +9% -20% +7% 160 130 142 166 133 142 10 5 1H 2012 2H 2012 1H 2013 1H 2012 2H 2012 1H 2013 1H 2012* 2H 2012* 1H 2013» Positive development in solvent-free resins (green resins); market introduction/penetration successful» Large orders for Wires within the Wind business in EMEA» Investment climate in Europe still weak due to financial constraints especially for high voltage products and systems» USA with positive trend; Brazil weak -3 * restated 9 August 21, 2013 Von Roll: Business performance in the first half of 2013
Operating Segments Von Roll Composites In CHF million Order Intake Sales EBIT (excl. special items) -12% +9% -8% +3% 3 74 65 71 72 66 68-5 0 1H 2012 2H 2012 1H 2013 1H 2012 2H 2012 1H 2013 1H 2012* 2H 2012* 1H 2013» Positive trend within the Wind business; growing demand for Insulation products especially in the energy transmission (i.e. long distances from offshore wind-parks/high Voltage Direct Current (HVDC))» Relatively stable market for industrial applications» Positive development of Ballistic business; further growth potentials in new application areas (first discussions) * restated 10 August 21, 2013 Von Roll: Business performance in the first half of 2013
Operating Segments Von Roll Technologies In CHF million Order Intake Sales EBIT (excl. special items) -23% -52% 0% +20% 0% -80% -1 43 33 30 30 36-5 -5 16 1H 2012 2H 2012 1H 2013 1H 2012 2H 2012 1H 2013 1H 2012* 2H 2012* 1H 2013 Von Roll Transformers» First half with weaker order intake but with promising market demand since July» Cyclicity of project business significant in first half 2013 Von Roll Water» Positive development with attractive new projects in Germany, Eastern Europe and Asia * restated 11 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ Market Von Roll is in an attractive growth market Capacities Development Energy Generation (in GW) and Investment Requirements (approx. in US$) North America Investments 1.308 1.461 1.660 GW 2010 $ 120bn p.a. GW 2020 GW 2035 Latin America Investments $ 30bn p.a. 1,0% 2,7% 1.762 GW 2010 189 EMEA Investments $ 220bn p.a. 2.212 GW 2020 India Investments $ 70bn p.a. 422 2.730 GW 2035 808 1,8% 6,0% 1.412 GW 2010 China & RoA (excl. JPN) Investments $ 240bn p.a. 2.409 GW 2020 3.324 GW 2035 3,5% 237 337 465 2010 2020 2035 2010 2020 2035 Note: %-Values are CAGR of capacity development (GW) Source: iea: World Energy Outlook 2012; Bloomberg New Energy Finance 2012; Von Roll Research 12 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ Market Sustainable market growth based on strong mega trends Growing Energy Demand» Globally growing energy consumption/need» Emerging markets key driver for increasing energy demand Investment Requirements» Net capacity increase driven by demand side requirements» Energy mix targets require significant investments» Energy efficiency of existing infrastructure requires modernization Renewables» Renewables as a significant growth driver» Distance between energy generation and consumption requires significant investments into transmission infrastructure High Voltage Direct Current (HVDC) Political Need for Action» Political energy mix and sustainability behind schedule» CO 2 reduction targets with high transparency and part of political discussions 13 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ Core Capabilities Von Roll has to focus on its core capabilities Technical Capabilities» Leading know-how and capabilities in MICA, LIQUIDS and WIRE» Transfer/leverage of Insulation capabilities in Industrial Composites» Experience and highly motivated staff Best Practices in Production & R&D» High degree of production capabilities in many of the sites» Innovative development teams» Ability to develop cross-technology and cross-product systems Attractive Product- Portfolio in Core Businesses» Attractive product-portfolio within High Voltage (HV) and Low Voltage (LV) as well as systems» Environmental friendly products (e.g. solvent-free Insulation resins)» Portfolio within Industrial Composites to be evaluated/ assessed Global Presence» Strong presence on EU home markets; strong brands» Established presence in the US with strong key account relations» China and India in build-up with attractive growth perspectives 14 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ Transformation Von Roll needs a Transformation Program Strategic Focus & Growth» Von Roll needs to focus its activities in order to leverage its key capabilities globally Cornerstones defined; detailing in preparation + Efficiency Improvement» Von Roll needs to adapt its cost structure; growth to be realized on an overall lower cost base Targets defined; detailing in preparation + Re-Organization» Current organizational set-up does not allow to globally focus and to leverage core capabilities Developed; detailing with leadership team + Staff Motivation» Staff aiming for a clear perspective and a transparent communication Continuous process; started 15 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ Goals of the Transformation The goals of the transformation have been defined Adequate profitability in fiscal year 2014 Sustainable profitable growth within the core businesses -> 5% in Insulation/gain market shares -> double digit in Industrial Composites/significantly grow business Grow business in Americas; significant growth in China (Asia) and India Realize a sustainable profitability on group level of EBIT >6% 16 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ (1) Strategic Focus & Growth Core businesses: «Insulation» and «Industrial Composites» Core Businesses Insulation Industrial Composites Transformers Water» Profitable growth above market growth» Positioning and competitive differentiation as one-stop-shop offering complete systems» Goal: Strengthen and increase global market leadership» Strategic focus concerning markets/ segments and applications to be reviewed» Focus on selected attractive areas with right to win» Significant growth» Goal: Develop a strong second business next to Insulation» Evaluation of strategic options» Goal: Realization/assurance of profitability 17 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ (1) Strategic Focus & Growth Acquisition of Albesiano strengthens «Liquids business» Strategic Fit» Logical step after Dolph (USA) acquisition in 2007» Clear sign for growth strategy within Liquids and accordingly within Insulation» Strengthening position within Low Voltage (LV) Liquids; broad product portfolio clear competitive differentiator» Strong development team in Italy» Very good fit into Von Roll production network for Liquids» Position as strong global #2» Very positive customer feedback Status of the Integration» Dedicated integration manager nominated and already active» Detailed integration plan finalized (topics, teams, activities, timelines)» Official integration launch on September 9 th 2013 ( launch day )» Integration of administrative functions already ongoing (e.g. IT, Finance)» First joint successes realized; joint production/fulfillment of orders 18 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ (2) Efficiency Improvement Cost optimization have been defined/ are already initiated 2014 CHF -10 million» Measures mostly defined; further detailing started» Full EBIT effect in 2014» Restructuring expenditures of CHF 5 million in 2013 2016/17 additional CHF -10 million» Measures partly already defined/initiated» Longer-term effects as often structural topics» Full EBIT effect until 2017 (partly effects already before) 19 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group/ (3) Re-Organization Strong divisions with global scope and global responsibility CEO Executive Board CFO Division Insulation Division Industrial Composites Division Technology Insulation Products & Systems Global Global Product Global Product Lines Product Lines Lines Ind. Composites Products & Systems Global Global Product Global Product Lines Product Lines Lines BU Transformers BU Water Commercials/ Controlling Global Markets Commercials/ Controlling Regional Sales Global Global Lead Lead Plants Plants SCM/ Procurement Global Production Global Production SCM/ Procurement 20 August 21, 2013 Von Roll: Business performance in the first half of 2013
Von Roll Group Key topics have already been tackled first success realized» All measures for the short-term cost-optimization with effect in 2014 are defined and partly already in implementation» Cost reduction especially within administrative functions initiated» Investments into new machines to increase efficiency and to allow staff reduction already realized» Internal communication improved, e.g. regular CEO Newsletter launched, site visits» Albesiano integration started; first joint successes realized» SAP implementation in largest plant Breitenbach finalized in August 2013» Masterplan Breitenbach in implementation» Key leadership team already involved in the Transformation Program Knowing is not enough, we must apply. Willing is not enough, we must do! Johann Wolfgang von Goethe 21 August 21, 2013 Von Roll: Business performance in the first half of 2013
Contact Claudia Güntert Corporate Communications & Investor Relations T +41 44 204 35 29 F +41 44 204 30 39 press@vonroll.com investor@vonroll.com www.vonroll.com 22 August 21, 2013 Von Roll: Business performance in the first half of 2013
Disclaimer This presentation is based on information currently available to the management. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected. 23 August 21, 2013 Von Roll: Business performance in the first half of 2013