Year-end Report 2008/09

Transcription

1 Year-end Report 2008/09 13 May 2009 Jörgen Wigh, President & CEO Niklas Enmark, Executive Vice President & CFO

2 Lagercrantz today Value-creating technology companies with market-leading positions in niches Lagercrantz Group Electronics 9 profit centres 9 countries Mechatronics 5 profit centres 5 countries Communications 11 profit centres 4 countries Beijing Technology trading group in elechtronics, electrics, communication and adjacent areas with revenue of approximately SEK 2.1 billion. Hong Kong Listed since 2001 (OMX Nordic SmallCap) Decentralised operations (~25 units) in 3 divisions The Group is active in Sweden, Denmark, Norway, Finland, Poland, Switzerland, United Knigdom, Germany and China 2

3 Divisions and product areas Division Electronics Industrial wireless communication Embedded electronics Division Mechatronics Customized cable harnesses Electrical connection systems Electro mechanics, passive and connectors Division Communications Video conferencing, CCTV, technical security Distribution of software (primarily CAD) Access products for telecom and broadband 3

4 Strategic development From Pan-European component distributor Electronics Large-scale operations To Value-creating technology trading group Electronics, Electric and Communication (High voltage, Technical security) Autonomous units, decentralization and management by objective Increased pace of acquisitions 4

5 Net revenue and operating profit (before items affecting comparability) MSEK 2500 MSEK / / / / / /09 0 Nettomsättning Rörelseresultat 5

6 Niche focus gives diversification of markets, customers and geography Operations by market segment market channel business type Power gen and electric distrib 19% Electronics 16% Construction 11% Telecom 10% Security 9% IT 9% Transportation 8% Övrigt 18% Dirext to end customer 39% Distributors / resellers 29% Contract manufacturers 17% System integrators 12% Other 3% Trade, hardware 45% Proprietory products 17% Trade, software 14% Niche production 14% System integration 5% Service 4% Other 1% Revenue 2008/09 financial year 6

7 2008/09 financial year April March Net revenue amounted to MSEK 2,138 (2,172) Acquired businesses contributed MSEK 53 Operating profit amounted to MSEK 126 (127) not including items affecting comparability: The operating margin was 5.9 percent (5.8) Forceful action to reduce costs and working capital during the latter part of the year. Items affecting comparability for the year of MSEK 21 (MSEK +4) Profit after financial items amounted to MSEK 94 (121). Profit after taxes amounted to MSEK 68 (91) including items affecting comparability. Return on equity was 14 percent (21) Earnings per share SEK 3.05 (3.92) 7

8 2008/09 financial year (cont d) April March Cash flow from operating activities amounted to MSEK 137 (120) corresponding to SEK 6.15 (5.17) per share Net loan liability as of 31 March 2009 amounted to MSEK 78 (93) Net debt equity ratio 0.2 (0.2) Equity ratio was 49 percent (44 percent) Equity increased during the year to MSEK 518 (459 at the beginning of the year) The Board of Directors proposes a dividend of SEK 1.50 (1.50) per share 8

9 Fourth quarter 2008/09 January March 2009 Increased uncertainty, recession and financial crisis marked the second half of the year with lower volumes at many of the Group s units. Net revenue for the fourth quarter amounted to MSEK 528 (562) Operating profit amounted to MSEK 27 (39) before items affecting comparability Forceful action to counteract the market s development Personnel reductions by about 110 persons, 60 of whom were permanent employees during Q4 Cost restraint introduced Focus on reducing capital tied up in trade receivables and inventory result in items affecting comparability of MSEK 17 (+1) The effect of cost-cutting will be seen in coming quarters Operating profit after items affecting comparability was MSEK 10 (40). Cash flow from operating activities was MSEK 56 (82). Capital tied up in trade receivables and inventory shrank by MSEK 73 during the quarter (14). 9

10 Outcome by division Net Sales Operating profit Q 4 Q 4 12 months 12 months Q 4 Q 4 12 months 12 months MSEK 2008/ / / / / / / /08 Electronics D:o excl. Items affecting comparability Operating margin (excl Items affecting comparability) 5.3% 6.7% 3.9% 4.9% Mechatronics D:o excl. Items affecting comparability Operating margin (excl Items affecting comparability) 5.7% 9.6% 8.4% 8.3% Communications D:o excl. Items affecting comparability Operating margin (excl Items affecting comparability) 6.0% 6.7% 7.3% 6.5% Parent Company/consolidation items D:o excl. Items affecting comparability Group total D:o excl. Items affecting comparability Operating margin (excl Items affecting comparability) 5.1% 6.9% 5.9% 5.8% 10

11 Goals and strategies stand firm Goals Earnings growth of at least 15 percent per year Return on equity of at least 25 percent Strategies Decentralisation and management by objective Strong corporate culture Business acumen Strong positions in niches Increased value added Acquisitions 11

12 Action program Personnel reductions General cost restraint Capital expenditure freeze except for replacement investments Merging subsbidiaries Offices in the UK and Switzerland integrated with other units Capacity reductions in manufacturing businesses Lower inventories New routines for more diligent follow-up of trade receivables, credit checks and collection 12

13 Outlook for 2009/10 Continued recession with pressure on our sales volumes is the most likely scenario. Still no improvement in the state of the market, even though some macro-economic signs point to a stabilisation. The markets developement will be followed closely by each unit. Further action will be taken where necessary. 13

14 Lagercrantz Group s model in times of downturn ~ 25 niched businesses with varying business models in many geographic markets gives good risk diversification Small, focused units, proximity to customers and markets create flexibility and the ability to make prompt decisions High proportion of variable costs and capital primarily in working capital makes for rapid adaptation and positive cash flows Lagercrantz Group s orientation, strategy and organizational model and strong financial position means good opportunities when the market stabilizes and turns up. 14

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16 Division Electronics Value-adding distributor of niche components and systems in electronics. Sales based on customised solutions where components are designed into customers products. Share of 2008/09 34% 20% Revenue Operating profit News for the year: New venture by IWS in Poland with design services and proprietary products in wireless communication Roll-out of ISIC s new product platform Flex ISIC Breakthoughs into new segments, such as the health care sector in Norway through the acquisition of

17 EFC Oy, our company in Finland, increased earnings and profitability during the year and offers cable harness production and trading in electric and electromechanical equipment Division Mechatronics Customised cable harnesses for the electric and electronics industries in the Nordic Region, producer of electric connection systems and valueadding distributor of electromechanical, passive components and connectors. Share of 2008/09 29% 38% Revenue Operating profit News for the year: Success as supplier to the wind power industry, especially in Denmark The acquisition of Elpress in 2006 enjoyed continued success during the year. Now established also in Beijing.

18 Division Share of 2008/09 Communications 37% Video conferencing solutions, infrastructure CCTV and technical security. Value-adding niche distributor of software. Value-adding distributor of access products for telecom and broadband networks. Revenue 42% Operating profit News for the year: Continued success in Access Consulting in CAD that strengthens the market position in software distribution. Included from April 2008 in the division. Reorganisation and improved control in DIT/Technical security introduced during the year.

19 Decentralisation and management by objectives Successful benchmarking between units 6 % 45 % ROS 15 % Margin P/WC Profitability Strategy and action adapted to conditions in each business unit REX Earnings growth Note: ROS Profit margin R/RK Return on working capital REX Earningsgrowth 19

20 Focus on margins Strong gross margins, % Continued focus on gross margins Higher margin business constitutes a growing proportion of consolidated revenue Phase-out of standard components and higher proportion of value-adding products, especially in division Electronics 04/05 05/06 06/07 07/08 08/09 Change in product line in the direction of greater knowledge content and higher proportion of proprietary products Projects aimed at strengthening margins 20

21 Acquisitions important part of the strategy Goal of three to five acquired companies per year Two acquisitions during the year: COBS AB and CAD Kompagniet A/S Strong balance sheet makes for opportunities when the market changes Equity ratio of 49 percent and a generally strong financial position Price expectations are now more reasonable 21