NACON — Investor Presentation 2010

Aug 4, 2010

VACON
BREVEN BY PREVES

Interim Report

January–June 2010

August 4th, 2010
Vesa Laisi, President and CEO
Eriikka Söderström, CFO
Vacon Plc

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VACON DRIVEN BY DRIVES

Disclaimer

• The content of this presentation contains time-sensitive information that is accurate as of the time hereof.
• A number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected by Vacon.
• If any portion of this presentation is rebroadcast, retransmitted or redistributed at a later date, Vacon will not be reviewing or updating the material that is contained herein.

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Outline

• Highlights Q2 and H1/2010, Vesa Laisi, President and CEO
• Financial Report, Eriikka Söderström, CFO
• Outlook, Vesa Laisi, President and CEO
• Appendix

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Q2/2010: Strong order intake

• The AC drives market picked up in 2Q/2010.
• Sharp increase in the order intake in all market areas.
• Revenues also started to pick up in the second quarter.
• The operating profit improved from the beginning of the year
• The growth in market demand has impeded the availability of certain components and materials, and this has affected delivery times to a certain extent.
• The company has passed the levels for the order intake and revenues that it had before the recession.

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Highlights Q2/2010

MEUR	Q2/2010	Q2/2009	Change
Order intake	92.1	66.4	+39 %
Revenues	80.2	75.7	+6%
Operating profit	6.6	7.8	-15 %
Operating profit -%	8.2	10.3
Operating cash flow	5.8	7.9	-27 %
EPS, eur	0.27	0.35	-23 %

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Highlights H1/2010

MEUR	H1/2010	H1/2009	Change
Order intake	164.8	135.4	+22 %
Revenues	145.5	145.7	-0 %
Operating profit	11.2	14.9	-25 %
Operating profit -%	7.7	10.2
Operating cash flow	7.7	14.2	-46 %
EPS, eur	0.44	0.64	-31 %

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Financial Report

Effikka Söderström,
Chief Financial Officer,
Vacon Plc

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Revenues

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Orders and revenues

Order intake	78,2	83,3	77,8	67,2	69,0	66,4	57,1	63,5	72,8	92,1
Revenues	65,9	78,0	74,2	75,2	70,0	75,7	62,1	64,2	65,3	80,2

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Order intake and order book

Order intake	78,2	83,3	77,8	67,2	69,0	66,4	57,1	63,5	72,8	92,1
Order book	47,1	52,4	56,0	48,0	47,0	37,7	32,7	32,0	39,4	51,3

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Order intake by region

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Revenues by region

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Revenues by sales channel

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DRIVEN BY DRIVES

EBIT

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Revenues and EBIT-%

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Research and development costs

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Operating Cash Flow

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Working capital

MEUR	30.6.2010	31.12.2009	30.6.2009
Inventories	24.5	19.3	21.4
Non-interest bearing receivables	69.7	51.3	63.1
Non-interest bearing liabilities	56.9	39.3	41.9
Net working capital	37.4	31.2	42.6
Net working capital of rolling revenues, %	13.8	11.5	14.5

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Key balance sheet ratios

Equity ratio
Net Debt and Gearing,%

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Outlook

Vesa Laisi, President and CEO

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Strategy

The Goal 2014

Profitable Growth	500 MEUR	EBIT > 14 %	ROE > 30 %

Strategic Choices

100 % focus on AC drives	Product leadership	Multi-channel sales	Global presence and transnational operations

Strategic Competences

AC drives know-how	Common product platform design & product portfolio management	Customer relationship management	Mass customization, demand flow technology and global sourcing	Global ICT infrastructure and applications

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Focus on Future Growth

• We are addressing global megatrends
• We are strengthening our global footprint and expanding our market coverage in rapidly-growing emerging markets
• Enhanced low-cost country sourcing brings profitable growth
• Broad use of common-technology platforms accelerates time to market and reduce costs
• Continued investments in competence, product development and extended sales network creates a solid base for future profitable growth

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Prospects 2010 unchanged

	ACT 2009	FC 2010
Revenues, MEUR	272,0	> 272
EBIT margin, %	8,3 %	~ 8,3 %
EPS, EUR	1.01	> 1,01
ROE, %	20,5 %	~ 20,5 %

• During the first half of 2010 the AC drives market picked up.
• Vacon estimates that revenues in 2010 will increase from 2009. It expects relative profitability to be similar to that in 2009 and earnings per share to improve from 2009.

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Risks and factors causing uncertainty

The uncertainty in general demand	The availability and quality of raw materials and components.
Foreign exchange risks	Price competition

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Major shareholders June 30, 2010

Others 26.6 %
Nominee registered 30.7%

Ahlström Capital Group 20.0 %
Ilmarinen Mutual Pension
Insurance Company 4.5 %
Tapiola Mutual Pension
Insurance Company 3.8 %
Vaasa Engineering 2.8 %
Koskinen Jari 2.4 %
Holma Mauri 2.3 %
Ehrnrooth Martti 2.2 %
Tapiola Group Companies 2.1 %
Karppinen Veijo 1.2%
Autio Heikki 1.0 %
Own shares 0.5 %

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Contacts

• Vesa Laisi, CEO
• +358 40 8371 510, e-mail: vesa.laisi@vacon.com
• Eriikka Söderström, CFO
• +358 40 8371 445, e-mail: eriikka.soderstrom@vacon.com
• Johanna Koskinen, IR
• +358 40 8371 528, e-mail: johanna.koskinen@vacon.com

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Every AC motor deserves a Vacon drive

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Calendar

Vacon will publish Q3/2010 interim report on the 27th, October 2010

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