[PDF] - THE WAY TO MAKE IT Results 2015 and Outlook 2016 22 March 2016 22 PDF Document

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THE WAY TO MAKE IT

22 March 2016 / Results 2015 and Outlook 2016 / 1

22 March 2016

Results 2015 and Outlook 2016

THE WAY TO MAKE IT

22 March 2016 / Results 2015 and Outlook 2016 / 2

Agenda

Results 2015

Operational performance Financial performance

Focus and Outlook 2016 Discussion

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2015 in brief

High order intake and increased Group profit

Order intake +20.4% to CHF 442.8 million Revenues +1.4% to CHF 368.5 million, internal growth 4.4% EBIT CHF 46.7 million (2014: CHF 48.1 million), EBIT margin 12.7% EAT +5.3% to CHF 29.2 million Strong balance sheet (equity ratio 71.0%) Distribution to shareholders +20% to CHF 6.00 per share

Komax Wire

Steady high dynamic of the automotive industry Leading market position further strengthened

Innovation
Internal and external growth

EBIT margin increased

Komax Medtech

Extraordinary high order intake Pleasing development has not yet fed through into the income statement Sale agreement for Komax Medtech signed with GIMA on 14 March 2016

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internal growth acquisitions currencies Total

Order intake 343'894 367'702 442'836 20.4% Revenues 323'959 363'338 368'462 4.4% 0.0%

3.0%

1.4%

Book-to-Bill 1.06 1.01 1.20

EBIT 43'297 48'102 46'732

2.8%

in % of revenues 13.4% 13.2% 12.7%

1.5pp

Result from discontinued

perations
9'935
15'917
2'872
82.0%

EAT 25'129 27'743 29'215 5.3%

in % of revenues 7.8% 7.6% 7.9%

Free cash flow 24'545 14'412 24'519 70.1% Net cash 22'616 29'211 34'365 17.6% Distribution per share (in CHF) 4.50 5.00 6.00 20.0% +/-

in TCHF

2014 2015 2013

Key figures

1 Figures restated in accordance with Note 10 of the consolidated financial statements 2014. 2 Proposal of the Board of Directors.

1 2

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by segment Komax Wire 79% 81% 85% Komax Medtech 21% 19% 15% k.A. k.A. by region Switzerland 2% 3% 3% Europe 47% 46% 48% Africa 7% 9% 8% North/South America 24% 19% 23% Asia 20% 23% 18% by industry Automotive 71% 70% 75% Medtech 19% 15% 12% Others 10% 15% 13% 2013 2014 2015

Distribution of net sales by segment, region and industry

1 1

1 Figures restated in accordance with Note 10 of the consolidated financial statements 2014.

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16.2 15.9 15.4 13.4 13.2 12.7 52.6 57.7 56.7 43.3 48.1 46.7 2013 2014 2015

High profitability and rentability

EBITD EBIT Margin in CHF million EBIT in % of revenues EBITD in % of revenues NCE in CHF million RONCE in % 16.7 23.4 22.5

1

1 Figures restated in accordance with Note 10 of the consolidated financial statements 2014.

199.2 211.4 203.8 2013 2014 2015

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

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20%

0% 20% 40%

Komax Wire – strong momentum

Continuing trend to further automate manual processes and enhance processing quality Increase in order intake of 15.1% Net sales +6.2%; internal growth more than 10% Book-to-bill ratio 1.11 EBIT margin increased to 19.0%

295.0 313.3 55.3 59.7 18.7% 19.0%

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

2014 2015 Net sales EBIT EBIT margin in CHF million 2% Switzerland 48% Europe 10% Africa 21% North/ South America 19% Asia Switzerland Europe Africa North/ South America Asia

Net sales by region Change from previous year

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

2015 2016 2017 2018 2019 2020 2021

Number of wires from vehicle production CAGR around 2.5%

+ around 3% CAGR

Increasing number of vehicules produced – CAGR 2015 – 2021E: ~2.5% Trends such as:

Environmental awareness/climate change
Connected car
Safety
Affordable car

more than double underlying volume growth

Source: IHS 2015 Light Vehicle Production Forecast, Komax estimates. THE WAY TO MAKE IT

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60.0
40.0
20.0

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0 220.0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

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

Komax Wire vs. automotive industry 2000 bis 2015

Komax Wire net sales1, CAGR 00–15: 4.7% Global car production volumes, CAGR 00–15: 3.1%

Basis 2000

1 Reported, excluding FX effects.

EUR/CHF USD/CHF

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, SLE, Laselec, Thonauer, SLE Electronics and Ondal) Growing base of installed machines

Need for renewal
Spare parts and service business

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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

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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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New processing solutions thanks to the collaboration with partners

Efficient automation process

Manufacturing time reduced by up to 50%
End-to-end data flow from ECAD to the machine
Efficient just-in-time production
Wiring simplified by optimum wire deposit

High productivity

Batch or sequence production without

changeovers

Automatic wire selector with up to

36 different cables

Automated marking of cable

Reliable processing of maximum quality

Large cross section range
Modules and components of premium quality
Consistently high quality thanks to fully automatic

production

Efficient automation in control cabinet engineering

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Use of fully automated block loading reduces total time spent in wire harness manufacturing by around 20%...

Time requirement Zeta vs. manual block loading

Automatic block loading Manual block loading

Cutting/Stripping/block loading taping/routing/assembly fixtures testing/ packaging Cutting/Stripping/ block loading taping/routing/ assembly fixtures testing/ packaging

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… Thus further potential along the value chain emerges

handling/ logistics handling/ logistics assembly of fixtures routing taping/ bundling Required working time in harness manufacturing

taping routing Komax Wire systems assembly of fixtures

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Market position continuously strengthened through acquisitions

Solutions along the value chain Increase global reach Innovative production concepts Develop non-automotive markets MCM Cosmic SLE quality engineering TSK Group

Company Products/solutions

Laselec (20%) SLE Electronics USA Ondal Tape Thonauer

Market access Mexico
Solutions provider
Local skills in customer-specific application development
Taping/Bundling

2015 2016

Strategic priorities of Komax Wire

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
Laser-assisted cable stripping and marking solutions,

primarily in the aerospace industry

Intelligent layout boards
Market access East-Europe
Solutions provider
Local skills in customer-specific application

development

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Thonauer Group – an ideal fit for Komax Wire's service and distribution network

Unique distribution channel in central and eastern Europe, one of the fastest growing areas globally Service and distribution network in seven countries Revenues of ~EUR 20 million, 50 employees Extensive experience as a solutions provider Local engineering capacity

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Improving expertise in selected non-automotive segments supports success in core market

Multimedia Connected cars Safety Light weight Emission reduction Small batch sizes E-mobility Aerospace Telecom/Datacom Industrial

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A structured innovation process…

> 7% of net sales for R&D Around 145 employees in R&D; additionally more than 160 people for the engineering of customer-specific applications Optimization of the innovation process to better bridge interfaces Stringent intellectual property (IP) Management

VALUE ADDING PRODUCT DEVELOPMENT – KOMAX SOLUTIONS INTERNAL SOURCES Know how and competencies EXTERNAL SOURCES Customer needs and technological trends

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…leads to value-creating solutions

Best in class productivity

High machine speed for the best unit cost performance
Fastest conversion for maximum production output
First-time-right

Powerful and flexible

Robust and reliable processing of wire cross sections

ranging from 0.13 to 6 mm2

flexible machine configuration to produce special

and complex applications Ready for the future

Most modern, forward-looking machine technology

for highest requirements

Integrated automatic conductor detection (ACD)

for superb quality stripping

Equipped for future requirements thanks to quality

monitoring and gentle wire processing

New Alpha 550 and 530 set the benchmark in wire processing

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68.6 54.7 1.2

2.6

2014 2015

Komax Medtech – record high order intake

Change from previous year

Net sales EBIT in CHF million

11% Switzerland 41% Europe

60%
40%
20%

0% 20% 40% 60% 80% Switzerland Europe North/ South America Asia

Increase in order intake of 45.2% Book-to-Bill ratio 1.7 Volatile development of business had the effect

f weighing on capacity utilization

Strong franc is a competitive disadvantage Sale agreement signed for Komax Medtech on 14 March 2016

36% North/ South America 12% Asia

Net sales by region

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Sale Komax Medtech – basic parameters

312.3 54.7 Net sales 46.7 2.6 0.8 EBIT reported EBIT Medtech EBIT Corporate 28.0

max. 6.0

2.0 Signing (14.3.2016) NWC/ND Adj. (Closing April 2016) Earn-Out (31.12.2016) KSM 24% (31.12.2018)

Transaction value Komax Medtech Pro-Forma P&L w/o Komax Medtech – EBIT margin ~16% (vs.12.7% reported)

in CHF million

1 1 Komax Systems Malaysia

in CHF million Komax Medtech Pro-Forma (w/o Komax Medtech) 367.0

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Agenda

Results 2015

Operational performance Financial performance

Focus and Outlook 2016 Discussion

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Growth in revenues despite currency influence burden

324.0 363.3 368.5 13.4 13.2 12.7 2013 2014 2015 EBIT margin

Net sales by region Changes from previous year

Revenues in CHF million

20%
10%

0% 10% 20%

Growth in revenues of 1.4%, internal growth 4.4%

Europe CHF 174.9 million (2014: CHF 167.6 million)
North America CHF 77.0 million (2014: CHF 61.3 million)

EBIT CHF 46.7 million (2014: CHF 48.1 million)

48% Europe 8% Africa 23% North-/ South America 18% Asia 3% Switzerland

1

Europe Africa Asia Switzerland North/ South America

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15.9

12.6
4.7

EBIT 2014 Material/revenues Personnel Operating expenses EBIT 2015

EBIT virtually unchanged – significant increase in gross profit margin

48.1 46.7 in CHF million Personnel expenses in % of revenues 2015: 35.6%

IAS 19: negative impact
f CHF 2.3 million

Personnel expenses in % of revenues 2014: 32.6% Higher volume Higher variable costs Gross profit margin 2015: 64.1%

Product mix
Volume effect marginal

Gross profit margin 2014: 60.6%

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EBIT development by segment – EBIT margin further increased at Komax Wire

4.4

3.8
2.3

0.3 EBIT 2014 Wire Medtech Corporate (IAS 19) Corporate (others) EBIT 2015 in CHF million EBIT margin 2015: 19.0% EBIT margin 2014: 18.7% Massive delayed

rder intake in 2015

Revenue recognition

nly in 2016

48.1 46.7 Total Corporate

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Free cash flow increased – despite higher investments (incl. granted loans)

52.7 50.9 29.2 10.2 10.2

25.1
26.3

Cash 1 January 2015 Group profit after taxes Depreciation Change in NWC and others Capex Financing Cash 31 December 2015

Free cash flow CHF 24.5 million (2014: CHF 14.4 million)

in CHF million Operating activities Cash flow from operating activities increased from CHF 30.3 million in 2014 to CHF 49.6 million in 2015. Dividends CHF -18.3 million Currency translations CHF -2.9 million

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High investment volume in 2015

Net investments of CHF 25.1 million (2014: CHF 15.9 million) in

Property, plant and equipment (CHF 13.2 million)
Intangible assets (CHF 5.2 million)
Investments in associates (CHF 1.8 million)
Increase in granted loans (CHF 4.9 million)

Average investments of around CHF 17 million per year over the next five years Net investments (without investments in group companies and loans)

28% Building / Land 34% IT Software/ Hardware 38% Property, plant and equipment

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Currency weigh on net sales, gross profit and EBIT

Currency impact

Net sales –3.0%
Gross profit margin –1.7pp
EBIT margin –1.5pp

Impact from abandonment of the minimum EUR/CHF exchange rate was compensated by around 50% with specific measurements:

Price negotiation with customers
Increased procurement in EUR

Net sales by currencies

20% CHF 23% USD 43% EUR 5% Others 9% CNY

60 70 80 90 100 110 120 12.13 02.14 04.14 06.14 08.14 10.14 12.14 02.15 04.15 06.15 08.15 10.15 12.15 02.16 EUR (Basis: 1.24) USD (Basis: 0.90) BRL (Basis: .3804) CNY (Basis: .1480)

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Net Euro-exposure in the range of 15% of revenues

43%1 (33%) Net sales EUR around 15% (5%) Net surplus in EUR around 25% (25%) Expenses in EUR

Net Sales by region Net sales in EUR Net surplus in EUR

1 Thereof, around 50% generated by

Group companies in the Eurozone.

48% (42%) Eurozone 52% (58%) Others

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25.1 27.7 29.2 2013 2014 2015 13.0 6.8 17.7

Group profit after taxes (EAT)

EAT increased by 5.3% to CHF 29.2 million Basic earnings per share CHF 8.00 (2014: CHF 7.64) Increase in tax rate to 17.7% (2014: 6.8%)

Low tax rate in the previous year due to sale of Komax Solar
High negative financial result
Higher expenses not being tax-deductible

Tax rate broadly in line with expected long-term average rate Expected mid-term tax rate +/– 20%

Tax rate in % of EBT EAT in CHF million

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EAT reconciliation

27.7 29.2

2.3

0.9

4.3
2.1

13.0

3.7

EAT 2014 IAS 19 EBIT changes (w/o IAS 19) Interest, securities and exchange rate result Contingent consideration (SQE) Result from discontinued

perations

Taxes EAT 2015 in CHF million Total changes in EBIT Total changes in financial result

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Komax remains in extremely robust financial health

Equity ratio 71.0% Further increase in net cash to CHF 34.4 million (2014: CHF 29.2 million) Intangible assets of CHF 49.5 million (2014: CHF 47.4 million), thereof Goodwill CHF 29.2 million (2014: CHF 29.2 million):

Wire CHF 17.0 million
Medtech CHF 12.2 million

357.6 388.1 399.0 264.0 284.2 283.1 2013 2014 2015 73.8 73.2 71.0 Equity ratio Total assets in CHF million Shareholders’ equity

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Additional CHF 104 million of unutilized credit lines

135.0 135.0 135.0 42.5 29.1 26.2 2013 2014 2015 0.82 0.82 0.81

Syndicated loan of CHF 120 million

Additional credit lines to a maximum of CHF 15 million (on top of the syndicated loan) Financial liabilities reduced by CHF 7.2 million Average interest rates on financial loans remained at 0.8%

in CHF million Credit lines thereof utilized

Financial result Interests –1.1 –1.1 Contingent considerations 0.0 –2.1 Other financial income/expenses –0.2 –4.5 Total –1.3 –7.7 2014 2015

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128.5 136.0 127.2 2013 2014 2015 39.2 36.4 35.7

Steady reduction of average net working capital in % of revenues

Further decrease of days sales outstanding (DSO)

n trade receivables

Expansion contract controlling Extension worldwide inventory controlling Target for average net working capital in % of revenues ~30%

Average NWC in % of revenues in CHF million NWC

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Attractive profitability of capital employed

RONCE reached 22.5%

Profitability Komax Wire
Efficient use of capital

Payout of CHF 6.00 per share proposed

Thereof CHF 4.50 as dividend and CHF 1.50 as

distribution from capital contribution reserves

Payout ratio 75%
Dividend yield on date of Board resolution 2.8%

Share price development since 1 January 2011

1

1 On date of Board resolution.

2011 2012 2013 2014 2015 Dividend/share in CHF 4.00 2.00 4.50 5.00 6.00 Dividend yield in % 5.8 2.8 3.3 3.5 2.8

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Agenda

Results 2015

Operational performance Financial performance

Focus and Outlook 2016 Discussion

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Focus 2016

Capture synergies from acquisitions and partnerships Growth along the value chain Regional market development Develop non-automotive markets Innovation and digital transformation Operational Excellence Komax Medtech Closing of sales transaction

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Outlook Komax Group

The current macroeconomic environment remains characterized by wide-ranging

uncertainty. Against this backdrop, Komax is focusing on the factors that it can directly

influence itself, and is therefore looking to its clear strengths such as its innovative drive and customer orientation. Based on these foundations, Komax will further enhance its profile and continue to seize – after careful scrutiny – opportunities to further advance the company. From today's standpoint, another good result is envisaged for 2016.

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Outlook Komax Wire

Supported by the dynamic momentum of the automotive industry, as well as the

ngoing global trend towards the further automation of manual processes in wire

processing and increased processing quality, we expect demand to remain strong from today’s perspective. Komax Wire has started the year with a strong order book. Given this backdrop, the business unit can be expected to post another good result for the first half of 2016.

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Outlook Komax Medtech

The commercial environment facing Komax Medtech remains challenging. However, given its strong order book at the start of the year, with its numerous repeat projects and highly promising orders from new customers, Komax Medtech is confident that net sales will increase in 2016 on the back of better balanced capacity utilization and that profitability will increase beyond the target range.

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Strategy Komax Group – focus on wire processing

03/11 03/13 08/13

Announcement mid-term targets Announcement evaluation strategic options for Solar and Medtech Decision sale of Komax Solar

08/14

Sale of Komax Solar

03/15

Announcement evaluation strategic options Komax Group

01/16

Announcement priority is on sale

f Komax Medtech

03/16

Signing sale agreement Komax Medtech Focusing of Komax Group according to mid-term targets

Systematic divestment of unprofitable businesses
Expansion of attractive Komax Wire

No short-term need for a significantly larger Board of Directors

Complexity of business reduced after divestments
Efficient Board
Decisive expertise and experience (industry/technology/finance) necessary to successfully lead the company

already covered by existing Board members focusing

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Agenda

Results 2015

Operational performance Financial performance

Focus and Outlook 2016 Discussion

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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 12 May 2016 Dividend payment 19 May 2016 Half-year results 2016 23 August 2016 First Information

n the year 2016

17 January 2017 Annual media conference/ analysts’ presentation 2016 results 21 March 2017 Annual General Meeting 12 May 2017

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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.

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