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NACON Investor Presentation 2011
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VACON
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Vacon Interim Report for Q3/2011
October 25, 2011
Vesa Laisi, President and CEO
Eriikka Söderström, CFO
Vacon Plc
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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
- Business environment and highlights in Q3/2011, Vesa Laisi, President and CEO
- Financial Report, Eriikka Söderström, CFO
- Outlook, Vesa Laisi, President and CEO
- Appendix
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The growth levelled off
- The growth in the global AC drive market levelled off in the third quarter of 2011 in all market areas compared to the extremely strong first half of the year.
- Demand for AC drives was evenly divided among all industrial sectors, except for renewable energy and in particular wind power.
- The slow down in the growth in order intake in the third quarter was due to poor demand for products for renewable energy generation.
- Demand for Vacon's products for controlling electric motors in the third quarter has been similar to what it was in the first half of the year.
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Q3/2011: Profitability on 2010 level
- Q3 revenues totalled EUR 91.1 (89.3) million. Revenues in the January-September period increased 24.9 % to EUR 293.2 (234.8) million.
- Profitability in the Q3 was similar to that in the previous year, but weakened a little compared to the first half of the year.
- The operating profit in Q3 was EUR 8.2 million, or 9.1 % of revenues (EUR 8.3 million and 9.3 %). The January-September operating profit was MEUR 28.6 or 9.8 % of revenues, an increase of 46.6 % (MEUR 19.5 and 8.3 %).
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Highlights Q3/2011
| MEUR | Q3/2011 | Q3/2010 | Change |
|---|---|---|---|
| Order intake | 83.9 | 110.9 | -24% |
| Revenues | 91.1 | 89.3 | +2% |
| Operating profit | 8.2 | 8.3 | -1% |
| Operating profit -% | 9.1 | 9.3 | |
| Net cash flow from operating activities | 19.8 | 6.6 | |
| EPS, eur | 0.36 | 0.31 | +14% |
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Highlights 1-9/2011
| MEUR | 1-9/2011 | 1-9/2010 | Change |
|---|---|---|---|
| Order intake | 288.4 | 275.7 | +5% |
| Revenues | 293.2 | 234.8 | +25% |
| Operating profit | 28.6 | 19.5 | +47% |
| Operating profit -% | 9.8 | 8.3 | |
| Net cash flow from operating activities | 20.6 | 14.3 | |
| EPS, eur | 1.29 | 0.76 | +70% |
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Financial Report
Eriikka Söderström,
Chief Financial Officer,
Vacon Plc
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Revenues
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Order intake and revenues 2009-Q3/2011
| Order intake | 69,0 | 66,4 | 57,1 | 63,5 | 72,8 | 92,1 | 110,9 | 82,4 | 100,7 | 103,8 | 83,9 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 70,0 | 75,7 | 62,1 | 64,2 | 65,3 | 80,2 | 89,3 | 103,2 | 95,0 | 107,2 | 91,1 |
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Order intake and order book 2009-Q3/2011
| Order intake | 69,0 | 66,4 | 57,1 | 63,5 | 72,8 | 92,1 | 110,9 | 82,4 | 100,7 | 103,8 | 83,9 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Order book | 47,0 | 37,7 | 32,7 | 32,0 | 39,4 | 51,3 | 72,9 | 52,1 | 57,8 | 54,5 | 47,3 |
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Order intake by region 2010-Q3 2011
*) Given percentage is actual quarter compared to the corresponding period in previous year
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Revenues by region 2010-Q3 2011
*) Given percentage is actual quarter compared to the corresponding period in previous year
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Revenues by sales channel 2010-Q3 2011
*) Given percentage is actual quarter compared to the corresponding period in previous year
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EBIT
2010: Excl. China customs case
) 12,6 MEUR
*) 32,4 MEUR
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Revenues and EBIT-%
*) Q4/2010: Excl. China customs case 12,2%
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Research and development costs
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Net Cash Flow from operating activities
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Net Cash Flow from operating activities
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Working capital
| MEUR | 30.9.2011 | 31.12.2010 | 31.12.2009 |
|---|---|---|---|
| Inventories | 30.8 | 31.9 | 19.3 |
| Non-interest bearing receivables | 91.6 | 90.8 | 51.3 |
| Non-interest bearing liabilities | 71.0 | 76.7 | 39.3 |
| Working capital | 51.4 | 45.9 | 31.2 |
| Working capital of rolling revenues, % | 13.0 | 13.6 | 11.5 |
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Working capital development
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Personnel
| Total | 772 | 1 131 | 1 231 | 1 301 | 1 471 |
|---|---|---|---|---|---|
| ■ Factory personnel | 260 | 444 | 468 | 493 | 544 |
| ■ Office personnel | 512 | 687 | 763 | 808 | 927 |
Personnel at end of period
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Key balance sheet ratios
- Equity ratio
- Net Debt and Gearing,%
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Earnings per share
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Outlook
Vesa Laisi,
President and CEO,
Vacon Plc
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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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Market outlook
- Vacon still estimates that the AC drive market will grow 6-10 % in 2011.
- Vacon does not expect demand to grow significantly in the final quarter of 2011 compared to the strong first half of the year.
- The risks to overall economic growth prospects in Europe and North America came to a head in the third quarter of 2011. Vacon considers that overall economic growth prospects are exposed to risks.
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Vacon launches new products
- Vacon is launching several new products towards the end of 2011 and in the first half of 2012, which creates good potential for the company to increase its business even in a challenging market environment.
- During the third quarter 2011 Vacon’s solar energy inverter, the Vacon 8000 Solar, obtained extensive grid code approvals that comply with the requirements of national grid operators. This places the product in a strong position for competing in this rapidly growing market.
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Market guidance 2011
| ACT 2010 | FC 2011 | |
|---|---|---|
| Revenues, MEUR | 338.0 | +10–20 % |
| EBIT margin, % | 8.5 % | > 8.5 % |
| EPS, EUR | 1.22 | >> 1.22 |
- Vacon estimates that revenues in 2011 will increase 10 % – 20 % and the operating profit percentage will rise from the 2010 figures. Earnings per share are expected to improve considerably from 2010.
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Risks and uncertainties in the near future
- Typical risks to which Vacon's business operations are exposed relate to uncertainty in demand and intensifying competition on price, and to losing customers, to goodwill, the availability of raw material and components, and fluctuations in the values of foreign currencies.
- Business related to renewable power generation can cause greater seasonal fluctuations in business volumes than what the company is used to. It has long delivery and payment schedules, which increases the risks relating to customer credit rating and of orders being cancelled.
- The deadline for the sales of The Switch Engineering Oy shares have been agreed to be extended.
- The Chinese prosecuting authority is demanding EUR 3.2 million from Vacon as a compensation for unpaid customs duties, and a provision for this was recorded in the result for the final quarter of 2010. The court case began in March 2011.
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Major shareholders September 30, 2011
Others 25.0 %
Nominee registered and in foreign ownership 32.9 %
Ahlström Capital Oy Group 20.0 %
Ilmarinen Mutual Pension Insurance Company 5.7 %
Tapiola Mutual Pension Insurance Company 3.8 %
Vaasa Engineering 2.5 %
Koskinen Jari 2.4 %
Ehrnrooth Martti 2.1 %
Holma Mauri 1.9 %
OP-Suomi Pienyhtiöt Investment Fund 1.4 %
Tapiola Group Companies 1.1 %
Autio Heikki 0.9 %
Own shares 0.2 %
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Contacts
- Vesa Laisi, CEO
- +358 40 8371 510, e-mail: [email protected]
- Eriikka Söderström, CFO
- +358 40 8371 445, e-mail: [email protected]
- Sebastian Linko, Director, Corporate Communications and IR
- +358 40 8371 634, e-mail: [email protected]
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