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NACON Investor Presentation 2014
1539_rns_2014-04-23_e0868b14-851f-4a0c-aa88-a17c72d828fa.pdf
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VACON
DRIVEN BY DRIVES
Vacon Interim Report Q1/2014
23 April-2014
Vesa Laisi, President and CEO
Ann-Louise Brännback, CFO
Sebastian Linko, Director, Corporate Communications and IR
Vacon
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.
Vacon
VACON
Outline
- Q1/2014 highlights
- Financial Report
- Outlook
- Contacts and calendar
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Q1/2014 highlights
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Q1/2014 highlights
- Vacon's order intake increased. The orders focused on low power drives, since there was no significant recovery in major investments by industry in the first quarter.
- Vacon's revenues declined slightly. Revenues improved during the final month of the review period.
- The Company's profitability improved in January-March 2014 from the corresponding period in the previous year.
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DRIVEN BY DRIVES
Order intake increased
The volume of orders improved particularly in the Asia and Pacific (APAC) region.
The biggest increases in orders were for products for building automation and for renewable energy generation.
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Revenues declined slightly
Revenues, MEUR
Vacon's revenues declined slightly in Q1/2014 vs. Q1/2013.
Factors contributing to the poor figures for revenues in the first quarter were the low order intake in the final quarter of 2013 and the decline in sales of products for the marine industry and for renewable energy generation.
Revenues improved during the final month of the review period.
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Profitability improved
Operating profit, MEUR
The Company's profitability improved in Q1/2014 vs. Q1/2013.
Efficient material sourcing and especially the cost benefits from transferring material sourcing to lower-cost countries are key factors in the improvement in the Company's profitability.
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The Drives Family
- Vacon's strategic priorities in product development this year are expanding the VACON® 100 product range and developing high power products in the low and medium voltage range.
- In March 2014 VACON® 100 X products were chosen as ‘Best in class’ products at the MCE global comfort technology trade fair in Italy. This is a major fair in Southern Europe, where all the most advanced innovations in building automation, energy efficiency and HVAC systems are on display.
- Vacon's new vision, The Drives Family, was created together with personnel in 2013. We have started to introduce the new vision within our own organization and stakeholders. Our unique corporate culture is one of our success factors and nurturing this is one of our most important goals.
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Financial Report
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Results Q1/2014
| MEUR | Q1/2014 | Q1/2013 | Change | 2013 |
|---|---|---|---|---|
| Order intake | 104.8 | 100.2 | 4.6% | 399.8 |
| Order book | 62.4 | 58.9 | 5.9% | 46.8 |
| Revenues | 89.3 | 91.3 | -2.3% | 403.0 |
| Operating profit | 6.7 | 5.8 | 16.0% | 40.6 |
| Operating profit, % of revenues | 7.5% | 6.3% | 10.1% | |
| Profit before taxes | 6.7 | 6.0 | 10.7% | 39.7 |
| Net cash flow from operating activities | -0.6 | 16.6 | 46.7 | |
| EPS, eur | 0.16 | 0.12 | 27.9% | 0.92 |
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Order intake and revenues 2013-Q1/2014
MEUR
| Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 | |
|---|---|---|---|---|---|
| ■ Order intake | 100,2 | 114,0 | 97,9 | 87,7 | 104,8 |
| ■ Revenues | 91,3 | 103,4 | 110,4 | 97,8 | 89,3 |
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Order intake by region 2013-Q1/2014
Given percentage is actual quarter Q1 2014 compared to the corresponding period in the previous year.
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Revenues by sales channel 2013-Q1/2014
Given percentage is actual quarter Q1 2014 compared to the corresponding period in the previous year.
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Revenues and EBIT-%
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Research and development costs
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Earnings per share
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Net cash flow from operating activities
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Working capital development
Inventories
Non-interest bearing liabilities
Non-interest bearing receivables
wc of rolling revenues, %
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Gross capital expenditure
| —— Gross capital expenditure | 4,2 | 6,0 | 3,9 | 5,7 | 4,8 |
|---|---|---|---|---|---|
| % of revenues | 4,6 % | 5,8 % | 3,5 % | 5,8 % | 5,4 % |
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Key balance sheet ratios
MEUR
| Q1/13 | Q2/13 | Q3/13 | Q4/13 | Q1/14 | |
|---|---|---|---|---|---|
| Net Debt | -21,1 | -3,9 | -8,8 | -17,2 | -10,0 |
| Gearing, % | -22,2 % | -3,8 % | -7,8 % | -14,7 % | -10,0 % |
| Equity Ratio, % | 44,2 % | 47,9 % | 52,6 % | 55,0 % | 46,4 % |
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Outlook
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Business environment
- Market research institute IHS estimates that the AC drive market is growing at an average rate of 7% in the period 2012-2017.
- Global megatrends, such as urbanization, increase in industrial automation, energy efficiency, developing markets and renewable energy, all support growth in the AC drive market.
- Growth in the AC drive market varies from year to year, and even from one quarter to another, but as a general rule it is estimated that the AC drive market grows much faster than global average growth in gross national product.
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DRIVEN BY DRIVES
Vacon Strategy
THE DRIVES FAMILY
Vacon sees that true value is created together. That is why we will create The Drives Family where the best people work together to develop the best products, applications and services for our customers. Vacon will be a company that brings together personnel, customers, partners, suppliers, shareholders, scholars and students – all the people who are Driven by Drives.
STRATEGIC CHOICES
- 100% focus on low and medium voltage drives and inverters
- Broad product, application and service portfolio
- Multiple customer industries
- Multi-channel sales
COMPETITIVE ADVANTAGE
- Product leadership
- Profound application know-how
- Extensive services
- Unique organizational culture
FINANCIAL TARGETS
Growth: The target is to achieve an average annual revenue growth of over 10%.
Profitability: The long-term profitability target is to achieve a sustainable EBIT margin level of 14%.
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Prospects for 2014
- There are uncertainties relating to general developments in the market in 2014. Vacon estimates that the AC drive market will grow some 5-10% in 2014, depending on general developments in the market.
- During the past few years the Company has expanded and renewed its product offering, which places the Company in a strong position to grow faster than the AC drive market in 2014. The orders received in the January-March period support growth in the Company's revenues during the remainder of the year.
- Vacon's goal is to improve profitability in 2014. Key factors contributing to an improvement in profitability are the cost benefits from transferring material sourcing to lower cost countries and raising overall efficiency in operations.
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Risks and uncertainties in the near future
- There are still uncertainties relating to developments in the global economy, and these may weaken demand for AC drives globally or in certain regions.
- The geopolitical developments in Ukraine during the first months of 2014 have increased the risks relating to development prospects not only for the Russian economy but also more widely in Europe. Vacon's sales to Russia account for a few per cent of all the Group's sales.
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Market guidelines for 2014
| ACT 2013 | FC 2014 | |
|---|---|---|
| Revenues, MEUR | 403.0 | +5-15% |
| EBIT margin, % (excluding one-time items) | 10.1 | 11-13% |
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Vacon IR contacts and calendar
Contacts:
- Vesa Laisi, President and CEO
+358 40 8371 510,
[email protected] - Ann-Louise Brännback, CFO
+358 40 8371 376
[email protected] - Sebastian Linko, Director, Corporate Communications and IR,
+358 40 8371 634,
[email protected] - Pia Aaltonen-Forsell, CFO
(on maternity leave as of February 2014)
[email protected]
Calendar:
- Interim Report
January-June 2014, on 30 July at 9.30 - Interim Report
January-September 2014, on 22 October at 9.30
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VACON®
DRIVEN BY DRIVES