Investor Presentation 3 March 2016
DISCLAIMER This presentation is not an offer for subscription for any type of securities in Scanfil Oyj (the “Company”). Information in this presentation shall not constitute an offer to sell or a solicitation of an offer to purchase the securities, and there will not be any sale of the securities in any jurisdiction. This presentation has not been approved by any regulatory authority. This presentation does not contain any legal, financial or investment advice. This presentation does not contain any legal, financial or investment advice and is provided merely for informational purposes and for purposes of a general knowledge of the field the Company operates in. The information contained in this presentation has not been independently verified and no representation or warranty is given as to the achievement or reasonableness of any projections, estimates, targets, prospects and/or opinions contained in this presentation. None of the Company nor any of the Company's advisors, or any of their respective members, directors, officers or employees or any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. Any projections, estimates, forecasts, targets, prospects, returns and/or opinions (including, without limitation, projections of revenue, expense, net income and stock performance) contained in this presentation involve elements of subjective judgment and analysis, and are based upon the best judgment of the Company as of the date of this presentation. This presentation may contain forward-looking statements. The Company does not give any undertaking, or is not under any obligation obligated to update these forward-looking statements for events or circumstances that occur subsequent to the date of this presentation, or to update or keep current any of the information contained herein. 1
Content 1. Business overview 2. Investment highlights 3. Key financials 2
1. Business overview 3
SCANFIL - AN INTERNATIONAL CONTRACT MANUFACTURER AND SYSTEMS SUPPLIER Description • Founded in 1976 and headquartered in Sievi, Finland • Operations include 16 production facilities in 10 countries • Employs around 3,900 people currently • Listed at Nasdaq Helsinki with a market cap of EUR 191m and approximately 4,700 shareholders Customer segments Urban Applications Energy & Automation Networks MedTech, Life Science & Defence, Oil & Gas and Environmental Measurement Maritime 4 Source: Scanfil
SCANFIL - AN INTERNATIONAL CONTRACT MANUFACTURER AND SYSTEMS SUPPLIER Turnover (EURm) Employees by country China 79 54 517 Poland 86 73% 452 57 Estonia 1,226 461 Hungary 325 Finland Sweden 377 213 Norway 27% USA 613 774 Germany UK 215 Production footprint 189 181 # of facilities 2 3 1 1 1 Aerodyn AB sold To be closed down 2012 2013 2014 2015 # of facilities 2 1 1 1 3 Reported turnover Pro forma turnover incl. PartnerTech Negotiations started to 5 restructure operations Source: Scanfil
KEY MILESTONES Jorma J. Takanen 10 years rapid growth Acquisition of founded Scanfil Oy period PartnerTech in Professional electronics Merger with Wecan • Sales 1991 EUR 5m July 2015 represented 75% of the • Electronics (sales of EUR Sales 2001 EUR 220m (sales of EUR sales • 46m) Position of a system 246m) supplier Demerger of Sievi Capital Listed on Helsinki Stock (investment company) and Exchange Scanfil (contract manufacturing) 1976 1991 2001 2002 2010 2012 2014 2015 Rapid internationalisation Professional electronics Acquisition of Schaltex to low cost countries: represented about 50% of Systems GmbH (sales of • Hungary 2001 the sales for the first time EUR 21m) • China Suzhou 2002 • Estonia 2002 • China Hangzhou 2003 6 Source: Scanfil
CUSTOMER NEEDS Original Equipment Manufacturers (OEM) Product Inbound Outbound Sales and Customer development / Sourcing Manufacturing logistics logistics marketing service design Electronics Manufacturing Services (EMS) 7 Source: Scanfil
EXAMPLE CUSTOMER CASE STUDIES Customer Provider of vertical integration service in production Provider of vertical integration service in production Scanfil’s role of various complete products, for example laundry of the reverse vending solutions machines and photo booths Illustrations “We have made good progress on costs in past “ Scanfil is a key partner to Tomra and an important years, but this will be overshadowed by the leap part of Tomra operations since 2005. They are forward we will take in 2014 in reducing the providing capacity and flexibility enabling Tomra to manufacturing costs of both our photo booths and handle the big variations in demand. They are Customer laundry units, by outsourcing to China and Hungary situated close to our main market in Germany feedback respectively. Not only does this open up the enabling acceptable cost level and short delivery times.” emerging markets for us, it enables us to increase manufacturing capacity with potential decrease in capital expenditure.” SCANFIL Vertical Integration 2016 - YouTube 8 Source: Scanfil
2. Investment highlights 9
SOLID FOUNDATION TO BUILD ON 1 Growing customer segments and well-diversified customer base 5 2 Vertically integrated Several further business model value creation and a globally opportunities optimised factory network 4 3 Strong Continuous focus performance on operational culture excellence 10
MEGATRENDS DRIVE DEMAND IN ALL 1 SCANFIL’S CUSTOMER SEGMENTS • Urbanisation in developing countries Urban 35.5% • Increase in people’s wealth Applications of sales • Population ageing • Energy efficiency & renewable energy production Energy & 18.9% • Urbanisation in emerging markets Automation of sales • Industrial automation • Digitalisation • 20.9% Increasing significance of telecommunications and Networks of sales wireless solutions • Industrial internet MedTech, Life • Population ageing and healthcare needs in emerging Science & 11.5% markets Environmental • of sales Need to predict weather phenomena Measurement • Monitoring of food, water and air quality • Geopolitical instability drives investments in security Defence, Oil & 3.0% and defence material Gas and • of sales Low oil price drives need for cost efficient solutions in Maritime Oil&Gas industry 11
VERTICALLY INTEGRATED BUSINESS 2 MODEL Supply network Scanfil services Complete product • • • Scanfil controls and manages a Services cover the whole product After sales services include supplier network whose structure project and manufacturing phase product repair services, product is optimised for efficiency and enabling the company to assume data management services and cost-effectiveness a greater responsibility in spare parts and logistics services customer’s value chain than mere ensuring high customer manufacturing of products satisfaction Complete service offering with focus on high mix / low volume production 12 Source: Scanfil
GLOBALLY OPTIMISED FACTORY 2 NETWORK Sievi, Finland Åtvidaberg, Sweden Karlskoga, Sweden Vantaa, Finland Moss, Norway Pärnu, Estonia Malmö, Sweden Cambridge, UK Sieradz, Poland Myslowice Hamburg, Germany Myslowice, Poland Budapest, Hungary Suzhou, China Hangzhou, China Dongguan, China Atlanta, USA Negotiations started to restructure operations To be closed down 13 Source: Scanfil
CONTINUOUS FOCUS ON OPERATIONAL 3 EXCELLENCE Overview Decreased customer PPM (1) Improved schedule management Continuous improvement of operations by using • Six Sigma principles for quality • Lean principles for customer value creation • Visual factory for effective management of lean operations Common KPI:s (Key Performance Indicators) • Annual targets by function • For example quality, on time delivery, lead time and productivity Global development organization • More than 100 Lean Six Sigma professionals deployed worldwide 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 • Standardized global processes and shared best practices Lead time On time delivery Note: (1) PPM = Parts Per Million 14 Source: Scanfil
HIGH PERFORMANCE CULTURE 4 EURm % 450 12 9.7% 360 9 8.5% 8.3% 7.9% 7.6% 270 6.3% 6 5.0% 4.7% 377.3 4.5% 180 4.3% 321.6 3.7% 241.4 224.6 219.3 3 218.9 214.5 210.8 197.3 188.5 180.9 90 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Turnover Operating profit % 15 Source: Scanfil
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