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NACON Investor Presentation 2011
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VACON
SCREEN SERIES
Vacon Interim Report for Q2/2011
August 3, 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 Q2/2011, Vesa Laisi, President and CEO
- Financial Report, Eriikka Söderström, CFO
- Outlook, Vesa Laisi, President and CEO
- Appendix
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Business environment remained positive
- Positive market environment remained also in the second quarter of 2011.
- Growth was strongest in APAC.
- Demand was evenly divided among all the main industrial sectors, demand for AC drives in marine industry showed clear signs of picking up.
- There are still strong seasonal fluctuations in demand for products for the generation of renewable energy.
- Availability of the components is at the moment reasonably good.
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Q2/2010: Strong growth and improved profitability
- Orders received increased 12.8 % in the second quarter (YoY).
- Revenues grew 33.6 % in Q2 (YoY). Growth was strong especially in EMEA and APAC.
- Profitability continued to develop positively also in the second quarter.
- Operating profit was EUR 11.5 million, or 10.7 % of revenues.
- The turnover of inventories and trade receivables has developed positively and the company's net cash flow from operating activities improved from the first quarter.
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Highlights Q2/2011
| MEUR | Q2/2011 | Q2/2010 | Change |
|---|---|---|---|
| Order intake | 103.8 | 92.1 | +13% |
| Revenues | 107.2 | 80.2 | +34% |
| Operating profit | 11.5 | 6.6 | +75% |
| Operating profit -% | 10.7 | 8.2 | |
| Net cash flow from operating activities | 7.2 | 5.8 | |
| EPS, eur | 0.58 | 0.27 | +111% |
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Highlights H1/2011
| MEUR | H1/2011 | H1/2010 | Change |
|---|---|---|---|
| Order intake | 204.6 | 164.8 | +24% |
| Revenues | 202.2 | 145.5 | +39% |
| Operating profit | 20.4 | 11.2 | +82% |
| Operating profit -% | 10.1 | 7.7 | |
| Net cash flow from operating activities | 0.8 | 7.7 | |
| EPS, eur | 0.93 | 0.44 | +109% |
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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-Q2/2011
| Order intake | Revenues |
|---|---|
| Q1/09 | 70,0 |
| Q2/09 | 75,7 |
| Q3/09 | 62,1 |
| Q4/09 | 64,2 |
| Q1/10 | 65,3 |
| Q2/10 | 80,2 |
| Q3/10 | 89,3 |
| Q4/10 | 103,2 |
| Q1/11 | 95,0 |
| Q2/11 | 107,2 |
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Order intake and order book 2009-Q2/2011
| Order intake | 69,0 | 66,4 | 57,1 | 63,5 | 72,8 | 92,1 | 110,9 | 82,4 | 100,7 | 103,8 |
|---|---|---|---|---|---|---|---|---|---|---|
| Order book | 47,0 | 37,7 | 32,7 | 32,0 | 39,4 | 51,3 | 72,9 | 52,1 | 57,8 | 54,5 |
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Order intake by region 2010-Q2 2011
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Revenues by region 2010-Q2 2011
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Revenues by sales channel 2010-Q2 2011
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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 | 30.6.2011 | 31.12.2010 | 31.12.2009 |
|---|---|---|---|
| Inventories | 33.3 | 31.9 | 19.3 |
| Non-interest bearing receivables | 105.3 | 90.8 | 51.3 |
| Non-interest bearing liabilities | 74.5 | 76.7 | 39.3 |
| Working capital | 64.1 | 45.9 | 31.2 |
| Working capital of rolling revenues, % | 16.3 | 13.6 | 11.5 |
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Working capital development
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Personnel
| Total | 772 | 1 131 | 1 231 | 1 301 | 1 440 |
|---|---|---|---|---|---|
| ■ Factory personnel | 260 | 444 | 468 | 493 | 531 |
| ■ Office personnel | 512 | 687 | 763 | 808 | 909 |
| Total | 869 | 1 197 | 1 228 | 1 339 | 1 577 |
|---|---|---|---|---|---|
| ■ in other countries | 314 | 558 | 601 | 652 | 723 |
| ■ in Finland | 555 | 639 | 627 | 687 | 854 |
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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 estimates that the AC drive market will grow 6-10 % in 2011.
- Investments in improving energy efficiency and in the production of renewable energy will support strong growth in all market areas.
- Demand for Vacon’s products is expected to rise in all key industrial sectors.
- Growth is expected to be greatest in the Asia and Pacific region. The general outlook for economic growth in Europe and North America now includes more uncertainty factors.
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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.
- The shortage of components that slowed down deliveries in 2010 and at the beginning of 2011 has eased and the availability of the components used by Vacon in its products is at the moment reasonably good.
- 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 June 30, 2011
Others 24.4 %
Nominee registered and in foreign ownership 34.8 %
Ahlström Capital Oy Group 20.0 %
Ilmarinen Mutual Pension
Insurance Company 4.7 %
Tapiola Mutual Pension
Insurance Company 3.8 %
Vaasa Engineering 2.5 %
Koskinen Jari 2.4 %
Ehrnrooth Martti 2.1 %
Holma Mauri 1.9 %
OP-Finland Small Firms Fund 1.1 %
Tapiola Group Companies 1.1 %
Handelsbanken Nordic Selective Fund 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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