Results 2014 and Outlook 2015 24 March 2015 24 March 2015 / Results - - PDF document

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Results 2014 and Outlook 2015 24 March 2015 24 March 2015 / Results - - PDF document

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Results 2014 and Outlook 2015 24 March 2015 24 March 2015 / Results 2014 and Outlook 2015 / 1 Agenda Results 2014 Operational performance Financial performance Focus and Outlook 2015 Discussion 24 March 2015 / Results 2014 and Outlook 2015

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24 March 2015 / Results 2014 and Outlook 2015 / 1

Results 2014 and Outlook 2015

24 March 2015

24 March 2015 / Results 2014 and Outlook 2015 / 2

Agenda

Results 2014

Operational performance Financial performance

Focus and Outlook 2015 Discussion

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SLIDE 2

24 March 2015 / Results 2014 and Outlook 2015 / 3

2014 in brief

Profitable growth

Revenues increased by 12.2% to CHF 363.3 million, internal growth of 9.5% Operating profit (EBIT) increased to CHF 48.1 million (+11.1%) Strong balance sheet (equity ratio of 73.2%) Distribution increased to CHF 5.00 per share (2013: CHF 4.50)

Komax Wire

Trend in wire-processing towards automation continues Leading market position further strengthened

  • Innovation
  • Marketing and sales

EBIT margin remained within target area

Komax Medtech

Mixed regional business development – North America and Malaysia enjoyed a good year Measures initiated to stabilize profitability were systematically continued Positive EBIT despite insufficient capacity utilization at the Swiss site

Komax Solar

Management buyout – responsibility was transferred to Xcell Automation Inc. as of 1st October 2014

24 March 2015 / Results 2014 and Outlook 2015 / 4

internal growth acqui- sitions currencies Total

Order intake 287'922 343'894 367'702 6.9% Revenues 288'216 323'959 363'338 9.5% 4.4%

  • 1.7%

12.2%

Book-to-Bill 1.00 1.06 1.01

EBIT 13'617 43'297 48'102 11.1%

in % of revenues 4.7% 13.4% 13.2% –0.8pp Result from discontinued

  • perations

n.s.

  • 9'935
  • 15'917

60.2% EAT 9'426 25'129 27'743 10.4%

in % of revenues 3.3% 7.8% 7.6%

Free cash flow 27'627 24'545 14'412

  • 41.3%

Net cash 938 22'616 29'211 29.2% 2.00 4.50 5.00 11.1% Distribution per share (in CHF) +/-

in TCHF

2013 2014 2012

Key figures

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements. 2 Proposal of the Board of Directors.

1 2

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24 March 2015 / Results 2014 and Outlook 2015 / 5

by sements Komax Wire 79% 79% 81% Komax Medtech 18% 21% 19% Komax Solar 3% n.s. n.s. k.A. by region Switzerland 2% 2% 3% Europe 40% 47% 46% Africa 9% 7% 9% North/South America 29% 24% 19% Asia 20% 20% 23% by industry Automotive 63% 71% 70% Medtech 17% 19% 15% Others 17% 10% 15% Solar 3% n.s. n.s. 2012 2013 2014

Distribution of net sales by segment, region and industry

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.

1 1

24 March 2015 / Results 2014 and Outlook 2015 / 6

22.2 52.6 57.7 13.6 43.3 48.1 2012 2013 2014

High profitability and rentability

EBITD and EBIT in % of revenues RONCE and Net Capital Employed

EBITD EBIT Margin in CHF million EBIT in % of revenues EBITD in % of revenues NCE in CHF million RONCE in % 6.5 16.7 23.4

1

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.

7.7 16.2 15.9 4.7 13.4 13.2 199.1 199.2 211.4 2012 2013 2014

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24 March 2015 / Results 2014 and Outlook 2015 / 7

  • 40%
  • 20%

0% 20% 40% 60%

Komax Wire – strong performance

Supported by the dynamics of the automotive industry Increase of order intake and net sales by 12.5 and 15.1% respectively Internal growth of net sales by around 12% Broad-based business development Net sales by region

256.2 295.0 47.6 55.3 18.6% 18.7%

50 10 0 15 0 20 0 25 0 30 0 35 0 40 0

2013 2014 Net sales EBIT EBIT margin in CHF million

Change from previous year

2% Switzerland 43% Europe 11% Africa 20% North/ South America 24% Asia Switzerland Europe Africa North/ South America Asia

1

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements. 24 March 2015 / Results 2014 and Outlook 2015 / 8

Automotive is the most important market in wire-processing – megatrends support the business

  • f Komax Wire

Beneficial for Komax Wire

Safety

From crash survival to crash avoidance

Affordable car

Cost efficiency through platform strategies

Connected car

Integrated information systems control complex information flows inside and

  • utside the vehicle

«Electrification» leads to strong growth of number of wires per vehicle Greater degree of standardization simplifies automation in wire-processing Increasing complexity of wiring harnesses which need automated processing Increasing quality requirements which also need automated processing – growing importance of quality assurance and «end of the line testing» Numbers of cars produced and sold grow continuously

Environmental awareness/ climate change

Emissions-free vehicle goal

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24 March 2015 / Results 2014 and Outlook 2015 / 9

The number of wires globally processed for cars is set to grow

Source: IHS 2014 Light Vehicle Production Forecast, Komax estimates.

2014 2015 2016 2017 2018 2019 2020

Increasing number of vehicules produced – CAGR 2014 – 2020E: ~2.5% Trends such as:

  • Environmental awareness/climate change
  • Connected car
  • Safety
  • Affordable car

more than double underlying volume growth

Number of wires from vehicle production

+ CAGR of around 3% CAGR of around 2.5% 24 March 2015 / Results 2014 and Outlook 2015 / 10

  • 60
  • 40
  • 20

20 40 60 80 100 120 140 160 180 200 220 240 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Above average growth in the past despite headwind resulting from adverse currency effects

Komax Wire vs. automotive industry 1997 to 2014

Komax Wire net sales1, CAGR 97–14: 4.3% Global car production volumes, CAGR 97–14: 2.7% Global car sales volumes, CAGR 97–14: 2.8%

Basis 1997

Additional growth drivers support the business: Advance in new markets other than the automotive industry New concepts for automation/innovation Synergies from acquisitions (TSK, MCM and SLE) Growing base of installed machines

  • Need for renewal
  • Spare parts and service business

1 Reported, excluding FX effects.

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24 March 2015 / Results 2014 and Outlook 2015 / 11

Komax Wire covers the most capital intensive parts

  • f the value chain…

Technological leadership High level of innovation Global presence Comprehensive product range – complete solution provider Komax Wire is market leader

Komax Wire Others

Market share1

1 Relative competitive position: Komax Wire’s market share is almost twice that of its nearest competitor.

Komax Wire systems

24 March 2015 / Results 2014 and Outlook 2015 / 12

Unique network with partners

…and offers a broad product range from a single hand

Komax Wire – a universal contact partner for whatever wire-processing challenge Standard machines and customer-specific solutions Accessories including quality monitoring tools and networking solutions Test systems Products of partners

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24 March 2015 / Results 2014 and Outlook 2015 / 13

Market position continuously strengthened through acquisitions

Growth along the value chain Global presence Innovation Complete solutions/new markets

Strategic priorities of Komax Wire

MCM Cosmic SLE quality engineering TSK Group

Company Products/solutions

  • Harness test systems
  • Module test systems
  • Entry-segment machines

and coaxial cable processing applications

  • Equipment for processing coaxial

cables and four-wire lines

  • Crimp force monitoring systems
  • Micrograph laboratories

Laselec (20%)

  • laser-assisted cable stripping

and marking solutions currently used primarily in the aerospace industry

  • intelligent layout boards for

wire harness production

24 March 2015 / Results 2014 and Outlook 2015 / 14

68.1 68.6 3.1 1.2 2013 2014

Komax Medtech – a challenging year

Change from previous year

Net sales EBIT in CHF million

6% Switzerland 63% Europe

Regional differences in its business – USA and Malaysia enjoyed a good year Positive EBIT despite insufficient capacity utilization at the La Chaux-de-Fonds site Strong Swiss Franc is a competitive disadvantage Net sales by region

17% North/ South America 14% Asia Switzerland Europe North/ South America Asia

  • 40%

0% 40% 80% 120% 160% 200% 240%

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24 March 2015 / Results 2014 and Outlook 2015 / 15

Komax Medtech – a structured approach from the concept to high volume production

Focus on self-medication and on projects providing repeat potential Restructuring of La Chaux-de-Fonds site initiated One of the leading players in its niche markets

24 March 2015 / Results 2014 and Outlook 2015 / 16

Agenda

Results 2014

Operational performance Financial performance

Focus and Outlook 2015 Discussion

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24 March 2015 / Results 2014 and Outlook 2015 / 17

Management buyout Komax Solar – Impact on financial statements according to IFRS 5

Consolidated balance sheet Consolidated income statement Consolidated cash flow statement

No restatement of prior-year figures Restatement of prior-year figures No restatement of prior-year figures Disclosure according IFRS 5 Result from discontinued operations: 2013: CHF –9.9 million 2014: CHF –15.9 million In 2014 impairment losses amounting to CHF –8.7 million are recognized as follows:

  • Goodwill

CHF –2.7 million

  • Technology CHF –2.0 million
  • Others

CHF –4.0 million Disclosure according IFRS 5 Assets classified as held for sale: 2014: CHF 8.9 million Liabilities classified as held for sale: 2014: CHF 0.1 million Disclosure according IFRS 5 No special disclosure

24 March 2015 / Results 2014 and Outlook 2015 / 18

Growth in revenues and virtually unchanged high EBIT margin

288.2 324.0 363.3 4.7 13.4 13.2 2012 2013 2014 EBIT margin

Net sales by region Changes from previous year

Revenues in CHF million

  • 15%

0% 15% 30% 45% 60% 75%

Revenues growth in of 12.2%

  • Europe CHF 167.6 million (2013: CHF 150.6 million)
  • Africa CHF 32.9 million (2013: CHF 22.8 million)
  • Asia CHF 81.8 million (2013: CHF 64.8 million)

Acquisition effects CHF 14.3 million EBIT margin remained virtually unchanged

46% Europe 9% Africa 19% North-/ South America 23% Asia 3% Switzerland

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.

1 1

Europe Africa Asia Switzerland North/ South America

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24 March 2015 / Results 2014 and Outlook 2015 / 19

23.6

  • 14.8
  • 0.2
  • 3.8

EBIT 2013 Material/revenues Personnel R&D third Others EBIT 2014

Volume-related increase in EBIT – gross profit remains high

43.3 48.1 in CHF million Personnel expenses in % of revenues 2014: 32.6% Personnel expenses in % of revenues 2013: 32.0% R&D expenses in % of revenues 2014: 7.1% R&D expenses in % of revenues 2013: 7.7% Higher volume

1

Gross profit margin 2014: 60.6% Gross profit margin 2013: 60.7%

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements. 24 March 2015 / Results 2014 and Outlook 2015 / 20

EBIT development by segment – Komax Wire achieved an EBIT margin of 18.7%

7.7

  • 1.9
  • 1.0

EBIT 2013 Wire Medtech Corporate EBIT 2014 in CHF million

1

All regions contributed to the good result Volume in Europe IAS 19 43.3 48.1

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.

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24 March 2015 / Results 2014 and Outlook 2015 / 21

Free cash flow remains high – despite increased investments

52.2 52.7 27.7 15.8

  • 13.2
  • 15.9
  • 13.9

Cash 1 January 2014 Group profit Depreciation Change in NWC and others Capex Financing Cash 31 December 2014

Free cash flow CHF 14.4 million (2013: CHF 24.5 million)

in CHF million Operating activities Good business in Q4

24 March 2015 / Results 2014 and Outlook 2015 / 22

Investment volume in 2014 more than doubled

Net investments of CHF 15.9 million (2013: CHF 7.2 million) Planned investments in 2015 of around CHF 17 million, thereof around CHF 8 million for participations Average investments of around CHF 15 million per year over the next five years Net investments

26% Land 29% ERP

  • incl. software

37% Property, plant and equipment 8% Others

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24 March 2015 / Results 2014 and Outlook 2015 / 23

Currencies weigh on Net sales, gross profit and EBIT

Currency impact

  • Net sales –1.7%
  • Gross profit –1.1pp
  • EBIT margin –0.8pp

Increasing importance of other currencies (BRL, MAD, MYR, SGD). As in the previous year, the BRL in particular was negative Net sales by currencies

30% CHF 19% USD 33% EUR 6% Others 12% CNY

70 80 90 100 110 Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb EUR (Basis: 1.22) USD (Basis: 0.92) BRL (Basis: .452) CNY (Basis: .1482) 24 March 2015 / Results 2014 and Outlook 2015 / 24

42% Eurozone 58% Others

Net Euro-exposure in a range of 5% of revenues

33%1 Net sales in EUR around 5% Net surplus in EUR around 25% Expenses in EUR

Significantly higher Euro-exposure at Komax Medtech, compared to Komax Wire. Net Sales by region Net Sales in EUR Net surplus in EUR

1 Thereof, 40% generated by Group

companies in the Eurozone.

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24 March 2015 / Results 2014 and Outlook 2015 / 25

9.4 25.1 27.7 2012 2013 2014 7.7 13.0 6.8

Group profit after taxes (EAT)

EAT increased by 10.4% to CHF 27.7 million Basic earnings per share CHF 7.64 (2013: CHF 7.33) Tax rate decreased to 6.8%

  • Healthy business development in Switzerland
  • A number of capitalized tax-loss carryforwards in countries

with significantly higher tax rates

Average tax rate over the last seven years 16.5% Expected mid-term tax rate +/– 18%

Tax rate in % of EBT EAT in CHF million

1

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements. 24 March 2015 / Results 2014 and Outlook 2015 / 26

Komax remains in extremely robust financial health

Equity ratio 73.2% Further increase in net cash to CHF 29.2 million (2013: CHF 22.6 million) Intangible assets of CHF 47.4 million (2013: CHF 49.5 million), thereof Goodwill of CHF 29.2 million (2013: CHF 30.4 million):

  • Wire CHF 17.0 million
  • Medtech CHF 12.2 million

359.5 357.6 388.1 236.1 264.0 284.2 2012 2013 2014 65.7 73.8 73.2 Equity ratio Total assets in CHF million Shareholders’ equity

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24 March 2015 / Results 2014 and Outlook 2015 / 27

Financial result Interests –1.0 –1.1 Other financial income/expenses –2.0 –0.2 Total –3.0 –1.3 2013 2014

Additional CHF 99.9 million of unutilized credit lines

135.0 135.0 135.0 65.9 42.5 29.1 2012 2013 2014 1.29 0.82 0.82

  • Syndicated loan CHF 120 million

Additional credit lines to a maximum

  • f CHF 15 million (on top of the syndicated loan)

Financial liabilities reduced by CHF 4.0 million and financial loans by CHF 1.9 million Average interest rates on financial loans remained at 0.8%

1

in CHF million Credit lines Thereof utilized

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements. 24 March 2015 / Results 2014 and Outlook 2015 / 28

125.3 128.5 136.0 2012 2013 2014 48.1 39.2 36.4

Further reduction of average net working capital in % of revenues

Further decrease of days sales outstanding (DSO)

  • n outstanding trade receivables

Substantial reduction of risks in NWC after Management buyout of Komax Solar Target for average net working capital in % of revenues ~30%

Average NWC in % of revenues

1

in CHF million NWC

1 Prior-year figures restated in accordance with Note 10 of the consolidated financial statements.

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24 March 2015 / Results 2014 and Outlook 2015 / 29

2010 2011 2012 2013 2014 Dividend/share in CHF 2.00 4.00 2.00 4.50 5.00 Dividend yield in % 2.0 5.8 2.8 3.3 3.5

Attractive profitability of capital employed

RONCE reached 23.4%

  • Healthy margin at Komax Wire
  • Efficient use of capital

Payout of CHF 5.00 per share proposed

  • Thereof CHF 2.50 as dividend and CHF 2.50 as

distribution from capital contribution reserves

  • Payout ratio 65%
  • Dividend yield on the date of Board resolution 3.2%

Share price development from 2010 to 12 January 2015

Komax Vontobel Small Cap Index 1

1 As at 31 December. 24 March 2015 / Results 2014 and Outlook 2015 / 30

Agenda

Results 2014

Operational performance Financial performance

Focus and Outlook 2015 Discussion

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24 March 2015 / Results 2014 and Outlook 2015 / 31

Strategy geared to long-term profitable growth

Business Unit Revenues growth target EBIT margin target

Business Unit Wire 3 to 5% ~20% selective Business Unit Medtech

  • ~5%
  • Acquisitions

Targets implemented in March 2011, time horizon 5 years. Komax Medtech is in systems business, i.e. it mainly manufactures complex, customer specific systems. In this business, targeted selection of the projects to be acquired is more important than growth per se.

As part of the annual strategy process now getting underway, all possible options are being examined for the Komax Group strategy.

24 March 2015 / Results 2014 and Outlook 2015 / 32

Focus 2015

Komax Group

Operational Excellence Pursue opportunities for growth

Komax Wire

Growth along the value chain Regional market development Develop markets besides the automotive industry Innovation Exploit synergy potentials from acquisitions and partnerships

Komax Medtech

Strengthening of the organization Stabilize profitability

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24 March 2015 / Results 2014 and Outlook 2015 / 33

FX impact and measures

Impact of an increase/decrease in the average exchange rate of the Euro of +/–10%

  • n 2014 results (ceteris paribus):

Increase/decrease in revenues of around +/– 3% Increase/decrease in EBIT margin of around 0.6pp

Impact of an increase/decrease in the average exchange rate of the USD and the CNY of +/–10% on 2014 results (ceteris paribus):

Increase/decrease in revenues of around +/– 3% Increase/decrease in EBIT margin around of 1.2pp

Measures

Negotiations with customers and suppliers Further increase of natural hedging

  • Expansion of procurement abroad
  • Expansion of foreign locations

Structural adjustments Cost control and efficiency improvement programs

24 March 2015 / Results 2014 and Outlook 2015 / 34

Outlook Komax Group

We currently find ourselves in a volatile and uncertain environment that presents both

  • pportunities and risks. Opportunities will arise above all as a result of the innovative

strength and pronounced customer focus of the Komax Group. A particular challenge will be the strength of the Swiss franc, which has appreciated once again since the SNB abandoned its cap on the minimum euro-franc exchange rate. We believe that we can master this difficult situation with intensified measures aimed at further increasing productivity and efficiency, so that current currency losses can be largely offset in the medium term. We will continue to seize any opportunities that arise to further the company's development. From today's standpoint, we are expecting the Komax Group to once again post a good result for 2015, although the conversion of the various currencies into Swiss francs is likely to act as a damper on both growth and profitability. As part of the annual strategy process now getting underway, all possible options are being examined for the Komax Group strategy.

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24 March 2015 / Results 2014 and Outlook 2015 / 35

Outlook Komax Wire

Supported by the momentum of the automotive industry, the ongoing global trend towards automation of production processes, and the increased quality demands that

  • riginal equipment manufacturers are making of their suppliers, end demand should

continue to be strong from today's perspective. However, the conversion of the various currencies into Swiss francs will impair the business unit's growth and profitability. From today's standpoint, therefore, last year's results are unlikely to be matched in 2015.

24 March 2015 / Results 2014 and Outlook 2015 / 36

Outlook Komax Medtech

The commercial environment remains challenging for Komax Medtech. Another surge in the value of the Swiss franc is confronting this business unit with severe challenges at its Swiss location. By contrast, we regard the environment in the United States and Malaysia as favourable. Here we are expecting a good business performance and good results. Komax Medtech will systematically pursue the measures it has ushered in to increase efficiency and stabilize profitability. Under current conditions, an improvement in profitability in the short term poses a very great challenge.

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24 March 2015 / Results 2014 and Outlook 2015 / 37

Agenda

Results 2014

Operational performance Financial performance

Focus and Outlook 2015 Discussion

24 March 2015 / Results 2014 and Outlook 2015 / 38

Contact/Financial calendar

Financial calendar Contact Marco Knuchel Industriestrasse 6 6036 Dierikon Switzerland Phone +41 41 455 06 16 marco.knuchel@komaxgroup.com www.komaxgroup.com Annual General Meeting 8 May 2015 Dividend payment 15 May 2015 Half-year results 2015 18 August 2015 First Information

  • n the year 2015

19 January 2016 Annual media conference/ analysts’ presentation 2015 results 22 March 2016 Annual General Meeting 12 May 2016

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24 March 2015 / Results 2014 and Outlook 2015 / 39

Disclaimer

This presentation contains forward-looking statements in relation to Komax which are based on current assumptions and expectations. Unforeseeable events and developments could cause actual results to differ materially from those anticipated. Examples include: changes in the economic and legal environment, the outcome of legal disputes, exchange rate fluctuations, unexpected market behaviour on the part of

  • ur competitors, negative publicity and the departure of members of management. The

forward-looking statements are pure assumptions, made on the basis of information that is currently available.

24 March 2015 / Results 2014 and Outlook 2015 / 40

Results 2014 and Outlook 2015

24 March 2015