Investors' Day 2014 The Schaffner Group · 2015-09-23 · • Economic rebalancing puts pressure on...
Transcript of Investors' Day 2014 The Schaffner Group · 2015-09-23 · • Economic rebalancing puts pressure on...
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©Schaffner Group 20141
Investors' Day 2014 The Schaffner Group
©Schaffner Group 2014
The Schaffner Group
Schaffner Group key facts
• Global leader in solutions for filtering electrical power• Founded 1962, headquarter in Luterbach (Switzerland)• Listed at SIX since 1998 (Ticker: SAHN), market capitalization CHF 190 million (as of May 6, 2014)
• FY 12/13* Net sales CHF 195 m (+10.1%), EBIT margin 4.8%, Net profit CHF 6.3 m (+61%)
• FY 13/14* Guidance: 10‐15% net sales growth, aim for 7% EBIT margin
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*) Financial year per 30 September
Largest shareholders 5 year share price performance (Benchmark: SPIX)
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The Schaffner Group
Energy efficiency Renewable energy Transportation
Long‐term structural growth of end market “Power Electronics”
Variable speed motor drives allow for 30% to 70% energy savings, depending on application
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Wind and photovoltaic power are established in the electricity generation mix
Trend to urbanization and higher population density supports rail transport and electric cars
©Schaffner Group 2014
The Schaffner Group
Unique strategic position in the power electronics market• Deepest technological and application know‐how to eliminate electrical distortions, thus enhancing efficiency and reliability of electrical and electronic equipment
• Schaffner is a preferred partner of the leading power electronics OEM:
The most complete portfolio of filtering solutions
Most global amongst all competitors
• Leading in niche markets: No. 1 in EMC, No. 3 in Power Magnetics, No. 1 or 2 in Automotive
• Automotive: EMC technology for EV/PHEV, plus operational synergies at PRU THA
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EMC POWER QUALITY*
POWER MAGNETICS
Automotive
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©Schaffner Group 2014
The Schaffner Group
The most complete package of filter solutions for power electronics
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EMC‐filter
Active Harmonic filter
Passive Harmonic filter
Line reactor
EMC choke Sinewave filterSwitching frequency filter
Filter inductor
dV/dt filter Load
Grid
3 ~
AHFFilter InductorAHFEMC filter
AHFEMC chokeMultipulse TXMultipulse TX AHFSinewave filter
AHFAHF
Multipulse transformer
Power electronics
Load reactor
Device solutionsLine‐side solutions Load‐side solutions
Load
Test & measurement services
©Schaffner Group 2014
The Schaffner Group
Schaffner has followed the trend of power electronics towards newapplications with higher power levels
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Distribution: Medium voltage
Micro‐Grid: Low voltage
Facility
Grid
Device
High power converter
Medium power converter
Power level
Product introduction1970 1980 1990 2000 2010
Electronic power supply
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While defending leadership in mature markets, new applications provideopportunities for above‐market growth
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Distribution: Medium voltage
Micro‐Grid: Low voltage
Facility
Grid
Device
High power converter
Medium power converter
Power level
Product introduction1970 1980 1990 2000 2010
Electronic power supply
©Schaffner Group 2014
The Schaffner Group
Buy and build: We are a new power magnetics leader
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74 73 64 60
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Comp. A Comp. B Schaffner Comp. C Comp. D Comp. E
Competing sales of market leaders 1
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World market in 2013
Estimated market size: CHF 2 bn
• Power Magnetics FY 2005/06 to FY 2012/13 net sales CAGR of 17.1%
• Power Magnetics division achieved EBITDA margin of 8.5% (FY12/13)
• Clear niche market focus, being truly global and synergies with EMC division are the foundation for further development
CHFm
1 Schaffner analysis of largest competitors, based on published 2012, 2013 financials and market intelligence• Schaffner revenues are pro forma trailing 12 months plus Trenco standalone sales
AB
CDE
Schaffner
Others
• There are another approx. 15 competitors worldwide with annual competing sales of CHF 25m to CHF 40m Sales of competitor E were revised downwards as only one division competes with Schaffner
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The Schaffner Group
After succeeding in APAC, more focus on growth in North America
• APAC expansion strategy has been a success
• 2015 strategy objective (40:40:20) is almost achieved
• Opportunistic approach to BRICS countries except China: «pay‐as‐you‐grow»
45%
35%
20%
Europe
Asia‐Pacific
Americas
H1 2013/14 (pro forma incl. Trenco)
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47%
37%
16%
H1 2013/14 (reported)
75%
18%
7%
FY 2007/08
©Schaffner Group 2014
The Schaffner Group
Rationale of accelerating expansion in North America
• Low cost of energy inside US combined with increasing transportation cost and inflation in China make „reshoring“ commercially attractive
• infrastructure expansion and modernization
• Positive environment for renewable energy: space, climate, demand economics
• Continued investments into oil & gas exploration
• Energy efficiency mandates on state and federal level
• Other NAFTA economies also growing faster than EU
• Opportunities in South America exist but will be addressed step by step
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Quo vadis China?
• Continued infrastructure investment driven by central government
• Localization of high‐tech industries
• Automation and rationalization of factories to stave off competition from low‐cost countries
• Growing consumer goods market
Negative forces:
• Overcapacity in many manufacturing sectors
• Economic rebalancing puts pressure on profits: From corporate profits to personal income and social welfare
• Risk of credit crunch for private companies
• Corruption
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©Schaffner Group 2014
The Schaffner Group
Schaffner continues to deliver growth
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50
75
100
125
150
175
200
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FY05/06
FY06/07
FY07/08
FY08/09
FY09/10
FY10/11
FY11/12
FY12/13
FY13/14
FY 2012/13 FX Reported
Group Net SalesCHFm• 8% CAGR of Net Sales at constant exchange rates over two economic cycles (Components FY 2005/06 to FY 2012/13;
reported Net Sales CAGR: 5%)
• Growth driven by regional expansion, innovation, and M&A
• Schaffner´s global structure and lean operations support annual revenues in excess of CHF 300 million
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Investors’ Day 2014EMC – Continue the journey of profitable growth
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©Schaffner Group 2014
The Schaffner Group
Why can EMC realize growth? Because EMC is a way to enable energy efficiency!
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The Schaffner Group
Why can EMC realize growth? Because EMC is a way to enable reliability!
• Electro Magnetic Compatibility (EMC) deals with the unintentional generation, propagation and reception of electromagnetic energy
• EMC filters ensure that equipment items will not interfere each other's correct operation
• EMC filters eliminate electrical noise to ensure safe operation of electronic equipment and to fulfill regulations on EMC
• Without proper EMC filtering electrical devices may malfunction, fail prematurely or not operate at all
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Power gridMachine tool
Powerline with noise
InterferenceEMC filter
Powerline w/o noise
©Schaffner Group 2014
The Schaffner Group
Realising growth in established markets (1/2)
Motor drives
• Electronic motor controls reduce industrial electricity consumption by around 30%
• 70% of all motors worldwide are not equipped with motor controls
• Total market CHFm 105
• Market growth 9%/a
• Schaffner market share 20%
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Machine tool
• Controlling efficient and reliable operations
• Total market CHFm 97
• Market growth 5%/a
• Schaffner market share 26%
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Realising growth in established markets (2/2)
Electronic devices/power supply
• Growth by e.g. mobile and medical & health applications
• Total market CHFm 104
• Market growth 5%/a
• Schaffner market share 25%
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Photovoltaik
• Growth drivers new installations & technical developments
• Market shift from Europe to Asia (esp. China, Japan) and USA
• Total market CHFm 40
• Market growth 15%/a
• Schaffner market share 35%
©Schaffner Group 2014
The Schaffner Group
Realizing growth in developing markets (1/2)
EV quick charger
• EMI filters protect neighboring electronic devices and car electronics from interferences
• Total market CHFm 3
• Market growth >20%/a
• Schaffner market share 15%
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Smart grid
• Consists of power generation, transfer, distribution, storage & consumption
• Each smart grid needs different types of power electronics
• EMC filters reduce unintended impact on grid
• Market growth e.g. smart metering 15%/a
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The Schaffner Group
Realizing growth in developing markets (2/2)
LED lighting
• Energy efficient LED lighting technology requires EMC and harmonics filtering
• EMC filtering by chokes, inlet and 1phase filters
• Market growth >20%/a
• New lighting dedicated products under evaluation
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Smart home
• Market growing strongly with easy‐to‐use products
• Chokes and 1‐phase filters required
• First key customers won in the USA
• Developing new customized products
©Schaffner Group 2014
The Schaffner Group
Realizing growth with new products: Switching frequency filters
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Harmonic filters Switching frequency filters EMC filters
Regulations existing Regulations under preparation Regulations existing
Schaffner portfolio existing Schaffner portfolio in development Schaffer portfolio existing
50 Hz 2.0 KHz 150 KHz 30 MHz
Technologies Markets
Segment Motor Drives Photovoltaic Wind
Market Potential
30.000 k€ 120.000 k€ 112.000 k€
New technologies in
‐ Product design
‐ Production processes
‐Materials
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©Schaffner Group 2014
The Schaffner Group
The most complete package of filter solutions for power electronics
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EMC‐filter
Active Harmonic filter
Passive Harmonic filter
Line reactor
EMC choke Sinewave filterSwitching frequency filter
Filter inductor
dV/dt filter Load
Grid
3 ~
AHFFilter InductorAHFEMC filter
AHFEMC chokeMultipulse TXMultipulse TX AHFSinewave filter
AHFAHF
Multipulse transformer
Power electronics
Load reactor
Device solutionsLine‐side solutions Load‐side solutions
Load
Test & measurement services
©Schaffner Group 2014
The Schaffner Group
Improving profitability with R&D excellence
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• R&D 8% of turnover
• 3 development center in Switzerland, Thailand and China with individual skill portfolios but global alignment of development processes and structures
• 3 standard product innovations per year plus multiple customized projects with improved margins of 5%‐20%
• Production cost reductions in certain cases up to 20%‐30% by design optimization (platform approach, modularity, standardization)
• Focus on design‐to‐cost/value add/breakthrough designs
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Improving profitability with Operational excellence
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• 3 highly competitive production sites with different skill portfolios in Hungary, Thailand and China
• Production transfers use global production network
• Production costs reduction by CHFm 2.5 in 2012/13, target CHFm 2.0 for 2013/14
• Continuous reduction of average unit costs
• Expansion of lean manufacturing and automation
• New quality initiatives to reduce costs‐of‐non‐quality and to increase customer satisfaction
• Dual source strategy for key materials is paying off in terms of supply reliability and purchasing power
©Schaffner Group 2014
The Schaffner Group
Improving profitability with Sales excellence
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• Price increases 2014 implemented
• Market introduction of standard products with better margin ongoing
• In Europe new customers and projects won with high margin customized products
• In USA #1 position at key US distributors extended
• In Asia market specific products (e.g. China, Japan) under development
• Stronger focus of sales activities on higher margin customers
• New growth markets defined
• Sales excellence initiative started
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The Schaffner Group
Conclusions
Schaffner EMC is pursuing profitable growth by…
• …gaining market share in existing markets
• …participating in the growth of new markets
• …exploiting an innovative and growing product portfolio
• …continuously improving cost structures and organization processes
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©Schaffner Group 201426
Investors' Day 2014 Power Quality – Opportunities wherever power electronics are involved
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The Schaffner Group
Active Power Quality filter – Noise cancelling for the grid
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Grid = “Silence“
Compensation currentcreated by the filter
Harmonics created by load
CT
Exemplification: Noise cancelling headphones Schaffner solution:Noise cancelling for the grid
©Schaffner Group 2014
The Schaffner Group
The most complete package of filter solutions for power electronics
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EMC‐filter
Active Harmonic filter
Passive Harmonic filter
Line reactor
EMC choke Sinewave filterSwitching frequency filter
Filter inductor
dV/dt filter Load
Grid
3 ~
AHFFilter InductorAHFEMC filter
AHFEMC chokeMultipulse TXMultipulse TX AHFSinewave filter
AHFAHF
Multipulse transformer
Power electronics
Load reactor
Device solutionsLine‐side solutions Load‐side solutions
Load
Test & measurement services
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©Schaffner Group 2014
The Schaffner Group
New products (1/2) Launch: November 2013
Simplicity
• New open panel filter concept for high power motor drives
• Minimized and cost effective filter design with few essential building blocks
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Flexibility
• Free choice of cabinet type, size and style
• Customer supplied cooling
• Allows optimized harmonization and integration with other system components
©Schaffner Group 2014
The Schaffner Group
New products (2/2) Launch: June 2014
• 100/120A active harmonic filter for marine applications
• First product in the portfolio with German Lloyd certificate
• Ongoing project for major tugboat manufacturer in Japan
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The Schaffner Group
Core markets
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Water Treatment
Oil & Gas
HVAC
Factory Automation Building Technology
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The Schaffner Group
Opportunities wherever power electronics are involved
Bordeaux Metro power substations (17x 200A/690V)
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The Schaffner Group
A global market set for long term growth
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Source: Frost & Sullivan, W
orld Harmonic Filter M
arket (2013)
Low voltage segment stage Growth
Segment revenue (2012) USDm 410
Segment forecast (2019) USDm 659
CAGR 2012 to 2019 7.0%
Degree of competition (1 to 10, low to high) 7
Degree of technical change (1 to 10, low to high) 4
Key market drivers ‐ Increased use of power electronics‐ Greater Power Quality awareness‐ International standards‐ Enforcement of grid codes
Key market restraints ‐ Price sensitivity (buy price vs. total cost of ownership dilemma)
‐ Lack of understanding
©Schaffner Group 2014
The Schaffner Group
New Power Quality business unit
“Supporting customers with state‐of‐the art products and services for harmonics mitigation and related Power Quality challenges.”
• Established 1 April 2014
• Dedicated group within the EMC division
• Focused organization with experienced specialists in engineering, service, product management
• Accelerated progress in after‐sales service
• Close cooperation with engineering partners from industry and universities
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The Schaffner Group
Organization of Power Quality business unit
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Head of business unit Power Quality
Global sales/FAE
Pre‐salesProj. engineeringChannelsDirect sales
Product management
Active filtersPassive filters
Services
After‐salesService centersService mgmt.
Project manager supply chain
Coordination ManufacturingSourcingOutsourcing
R&D
Active filtersPassive filtersPartnerships
©Schaffner Group 2014
The Schaffner Group
Partner network
• Schaffner believes in the value of partnering
• The Power Quality business unit closely collaborates with a growing network of qualified and authorized sales and service partners, offering:
Pre‐sales and application engineeringProduct salesProduct commissioning and training
Trouble shooting Inspection and preventive maintenance
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The Schaffner Group
Tools for professionals: The new Power Quality Simulator (PQS)
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©Schaffner Group 2014
The Schaffner Group
Summary
• Leading product portfolio serving a growing number of markets and applications
• Dedicated business unit organization support growth ambitions
• Pre‐ and after‐sales service allow for differentiation and customer intimacy
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©Schaffner Group 2014
Investors’ Day 2014Power Magnetics ‐ Strife towards market leadership
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©Schaffner Group 2014
The Schaffner Group
Transformers with harmonics mitigation
• Motor drive applications
Schaffner´s offering of Power Magnetic components
MV/LV transformers for mission critical applications
• Rail: trackside power
• Datacenters
• Oil , gas, mining
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Filter inductors for power electronic applications
• Photovoltaic inverters
• Wind turbine converters
• Train propulsion systems
• Motor drives
Internal supply to the EMC division (not reported as sales)
• Passive harmonic filters
• Sinewave filters
• Line/load reactors
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©Schaffner Group 2014
The Schaffner Group
Application synergies especially for motor drives and photovoltaic inverters
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EMC‐filter
Active Harmonic filter
Passive Harmonic filter
Line reactor
EMC choke Sinewave filterSwitching frequency filter
Filter inductor
dV/dt filter Load
Grid
3 ~
AHFEMC filterAHFEMC filter
AHFEMC chokeMultipulse TXMultipulse TX AHFSinewave filter
AHFAHF
Multipulse transformer
Power electronics
Load reactor
Device solutionsLine‐side solutions Load‐side solutions
Load
Test and Measurement Services
©Schaffner Group 2014
The Schaffner Group
The pillars of the Power Magnetics strategy
• Apply a “build‐and‐buy” strategy for accelerated growth to market leadership
• Focus on selected niche markets
• Design and operational excellence as strategic targets
• Global in reach (sales, application engineering, production)
• Innovation (products, materials, processes), best quality, design‐to cost when required as drivers for growth and market leadership
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Realizing further growth in established niche markets
Traction (rolling stock & infrastructure)
• Schaffner is the leader in the rolling stock market in Europe, China, USA and in the track side‐power market in North America
• Further substantial opportunities in Europe, USA, Japan and emerging markets
• High performance & quality requirements as entry barrier
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Renewable energy (PV & wind)
• Manifold product offering such as MV step‐down/up trans‐formers, LV transformers, inductors, LCL solutions, dv/dt filters
• Cross selling opportunities with EMC Division
• Current main markets in China, Japan, USA, RSA
©Schaffner Group 2014
The Schaffner Group
Growth in new markets ‐ cross selling opportunities with the EMC division
Motor drives
• Product designs from Schaffner Trenco facilitate market entry
• High power/high motor frequencies as a specialty
• Focus on specialized, e.g. oil & gas
• Patented 18‐pulse transformers for harmonic mitigation
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Smart grid
• Consists of power generation, transfer, distribution, storage and consumption
• Each smart grid needs different types of power electronics
• Step‐up/down transformers, inductors & LCL solutions to eliminate unintended impact on grid and power devices
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The Schaffner Group
Realizing growth & increased profitability with new products
• Direct & indirect water‐cooled and encapsulated transformers and inductors
• New innovative insulation materials allow new design concepts
• Middle‐frequency transformers & inductors for emerging power electronics concepts
• 12/18/24‐pulse transformers for harmonics mitigation
• Combined/integrated CM/DM inductors reduces size and cost of products by half
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©Schaffner Group 2014
The Schaffner Group
Power Magnetics’ “Buy‐and‐Build” strategy
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2006 2007 2008 2009 2010 2011 2012
2006: Acquisition ofJackeTransformatoren
2006: Acquisition ofJackeTransformatoren
2006: Acquisition ofJackeTransformatoren
2008: Production start Hungary2008: Production start Hungary2008: Production start Hungary
2007: Production start China2007: Production start China2007: Production start China
2011: Lean factoryChina2011: Lean factoryChina2011: Lean factoryChina
2013 2014
2011: Acquisition ofMTC Transformers2011: Acquisition ofMTC Transformers2011: Acquisition ofMTC Transformers
2014: Acquisition of Trenco2014: Acquisition of Trenco2014: Acquisition of Trenco
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Acquisition of US‐based Transformer Engineering LLC (Trenco)
• Purchased on 31 March 2014
• Trenco was a manufacturer of custom designed power magnetics
• Operations are located in Cleveland, Ohio, employing 70
• Trenco serves the applications of energy‐efficient drive systems, renewable energy and rail technology
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©Schaffner Group 2014
The Schaffner Group
Benefits of the Schaffner Trenco
• Schaffner Trenco strengthens the Power Magnetics’ position in the strategic growth markets rail technology, energy‐efficient drive systems and renewable energy (wind, photovoltaics)
• Expands customer base for power magnetics in North America
• Broad engineering capabilities, product portfolio and cost leadership
• Operational benefits from increased scale
• Additional product series (e.g. patented 18‐pulse transformers for harmonic mitigation)
• Schaffner now offers the largest portfolio of power quality solutions
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The Schaffner Group
Acquisition of Trenco: Establishing Schaffner as a new power magnetics leader
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74 73 64 60
300
50
100
150
200
Comp. A Comp. B Schaffner Comp. C Comp. D Comp. E
Competing sales of market leaders 1
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World market in 2013
Estimated market size: CHF 2 bn
• Power Magnetics FY 2005/06 to FY 2012/13 net sales CAGR of 17.1%
• Power Magnetics division achieved EBITDA margin of 8.5% (FY 2012/13)
• Clear niche market focus, being truly global and synergies with EMC division are the foundation for further development
CHFm
1 Schaffner analysis of largest competitors, based on published 2012, 2013 financials and market intelligence• Schaffner revenues are pro forma trailing 12 months plus Trenco standalone sales• There are another approx. 15 competitors worldwide with annual competing sales of CHF 25m to CHF 40m• Sales of competitor E were revised downwards as only one division competes with Schaffner
AB
CDE
Schaffner
Others
©Schaffner Group 2014
The Schaffner Group
Excellence in sales/global reach
• Continuous strengthening of our key account sales and application engineering structure world‐wide
• “Value” selling by offering high‐performance & innovative products to increase profit margins
• Sales excellence initiative started, trainings on cross selling opportunities
Europe Focus on existing & new key customers in traction, renewable energy & motor drives (newly addressed market)
APAC Maintain current customer base and add selectively new
key customers (risk mitigation). Enlarge our base in traction
and renewable energy in Japan
USA Leverage the Schaffner MTC, Schaffner Trenco & global product
portfolio and market coverage
50
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Excellence in product designs
• R&D spending 4.3% of net sales
• 4 design centers in Germany, USA (2) and China with individual skill portfolios, global alignment of development processes and structures
• Application services in all major markets
• Design‐to‐cost capabilities
• Excellent test laboratories to test and validate innovations & new designs
• Evaluation of new core and insulation materials as an integrated part of our design process
51
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Excellence in operations/global production network
• Highly competitive production sites with partially different skill portfolios in Germany, Hungary, USA and China; production subcontracting options in Russia & Republic of South Africa (RSA)
• Expansion of lean manufacturing
• Apply a “zero defect” attitude with ROFO spirit (Responsibility, Ownership, Focus, On‐time corrective actions)
• Standardize processes and materials used globally
• Material purchase pooling
• Enhance cooperation between production, engineering & design
• Continuous improvement & cost reduction programs actively pursued
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Conclusion
Schaffner Power Magnetics is pursuing profitable growth by:
• Enhancing global penetration of our current key markets (traction, renewable energy)
• Enlarge our exposure in the huge motor drive markets world‐wide with product designs and solutions from Schaffner Trenco
• Taking advantage of new market trends & requirements with high rate of product, material & process innovations
• Continuous improvement of cost structure and processes
53
©Schaffner Group 2014
Investors’ Day 2014Automotive – Building a profitable business
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FY 2012/13: High project costs lead to loss in Automotive division
55
• High capex for product development and improvement of engineering in conjunction with underutilized capacities contributed to a loss of CHFm 2
• The plants in Thailand and the setup in China were undergoing improvement processes to reach automotive standards
8.4 9.210.8
14.015.3 16.0
18.1
0.0
5.0
10.0
15.0
20.0
H110/11
H210/11
H111/12
H211/12
H112/13
H212/13
H113/14
‐1.8% ‐2.7% ‐3.2%
6.5%
‐6.4% ‐6.4%
3.3%
‐10.0%
‐5.0%
0.0%
5.0%
10.0%
H110/11
H210/11
H111/12
H211/12
H112/13
H212/13
H113/14
Net sales (CHFm) Profit margin (%)
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H1 2013/14: Back to black after three years of growth investments
8.4 9.210.8
14.015.3 16.0
18.1
0.0
5.0
10.0
15.0
20.0
H110/11
H210/11
H111/12
H211/12
H112/13
H212/13
H113/14
‐1.8% ‐2.7% ‐3.2%
6.5%
‐6.4% ‐6.4%
3.3%
‐10.0%
‐5.0%
0.0%
5.0%
10.0%
H110/11
H210/11
H111/12
H211/12
H112/13
H212/13
H113/14
Net sales (CHFm) Profit margin (%)
56
• Continuous black monthly results in business year since November
• Reduced OH, strict cost control and sourcing cost reduction• Plant improved to best in class standards
• Price increases successfully established
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Building a profitable business 1/2
• New customer programs are now in volume production
• PPAP of prestigious filter program with leading German OEM executed
• Customers rated plant as exceptional within the field of Asian operations
• Highly motivated teams in design and manufacturing committed to reach their targets
• Sales targets in line with Business Plan
• Automotive operating margins expected to increase further
57
LV filter module
Filter assembly
©Schaffner Group 2014
The Schaffner Group
Building a profitable business 2/2
• Standardized product lines to improve economics of scale
• Next generation products design freeze at set cost down targets
• Investment in automated ferrite winding and gluing process to further reduce cost and improve quality
• Sales presence in key markets for automotive added
• Profitability to reach best in class level for comparative automotive business in the medium term
58
Antennas & Sensors(keyless entry/go)
DC storage chokes
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Market offering and product strategy
• Continued double‐digit growth with keyless entry/go solution expected due to high end customer acceptance
• Standardized range of antenna products at significantly lower cost
• Offer filter solutions for propulsion power electronics as well as for HV and LV battery packs.
• Market growth for EV`s at a CAGR of 35 % between 2012 to 2016 (PWC) to an estimated 3.2 million vehicles WW (PHEV/HEV/BEV)
• Be supplier of choice for Tier 1 EV systems providers with a target market share of 20%
• Exploit higher margin opportunity in EV filter business
59
©Schaffner Group 201460
Investors’ Day 2014Finance – Adding value
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Schaffner’s definition of ROCE (Return on Capital Employed)
Balance sheet
61
Recievables
Inventory
Tangible assets
Intangible assets
Def. taxes and other assets
Cash
Interest free liabilities
Provisions
Loans
Def. taxes
EquityGoodwill
ROCE 1 ∗EBIT
CapitalEmployed
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Schaffner’s definition of WACC (Weighted Average Cost of Capital)
62
Market riskpremium
6 %
Market riskpremium
6 %
Beta0.8Beta0.8
Equity riskpremium
4 %
Equity riskpremium
4 %
Riskfree rate1 %
Riskfree rate1 %
Size premium4%
Size premium4%
Cost of equity9 %
Cost of equity9 %
Equity ratio50%
Equity ratio50%
WACC7 %
WACC7 %Riskfree rate
1 %Riskfree rate
1 %
Credit spread4 %
Credit spread4 %
Cost of debt(pre‐tax)
5 %
Cost of debt(pre‐tax)
5 %
1‐Tax rate0.8
1‐Tax rate0.8
Cost of debt4 %
Cost of debt4 %
Debt ratio50%
Debt ratio50%
x
+
x
x
+
+
x
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HY 2013/142012/132011/122010/112009/102008/092007/082006/072005/062004/052003/04
ROCE WACC
ROCE‐WACC‐spread | Schaffner Group
63
Target: ROCE > WACC25%
15%
5%
‐5%
‐15%
H1 2013/14
©Schaffner Group 2014
The Schaffner Group
65%4%
31%
EMC PM AM
Capital employed by division in %
6464
14%
86%
Intangible assetsNWC
CHFm 31 CHFm 9
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Capital employed in CHFm
65
‐
10'000
20'000
30'000
40'000
50'000
60'000
70'000
80'000
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 HY 2013/14
IA
TA
NWC
80
70
60
50
40
30
20
10
0H1 2013/14
©Schaffner Group 2014
The Schaffner Group
EBIT improvements in H2 over H1 2013/14 in CHFm
66
12
8
6
4
2
0
Volume
Margin
Administration Other
10
9 ‐11~
4.9
H2 2013/14H1 2013/14
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Investors’ Day 2014Wrap‐up
67
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Summary
• Schaffner has a unique strategic position as being the premier supplier of filtering solutions for power electronics
• The power electronics market in itself offers growth perspectives driven by megatrends to energy efficiency, renewable energy, urbanization
• Schaffner has proven the ability to „buy and build“ strong businesses
• Schaffner creates value by regularly delivering ROCE above WACC
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Strategic priorities
• Increase market share by cross‐selling and sales excellence
• Accelerate growth in North America
• Establish No. 1 or 2 market position for Power Magnetics division
• Create lasting differentiation through innovation
• Achieve target margins and create value by operational excellence
69
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With strategy execution, Schaffner shall continue to grow
70
50
100
150
200
250
300
FY 2012/13 FX Reported
Group Net SalesCHFmMid‐term target
FY 13/14 Guidance