INTERIM REPORT September 2004

Transcription

1 INTERIM REPORT September 2004

2 Interim Report 2004 Alexander van der Lof (CEO) Jan Vaandrager (CFO) 1

3 Contents presentation 1. Developments 1 st half year 2004 Alexander van der Lof 2. Results 1 st half year 2004 Jan Vaandrager 3. Developments, strategy and prospects Alexander van der Lof 2

4 Developments 1 st half year 2004 Alexander van der Lof (CEO) 3

5 Developments 1 st half year 2004 Financial (in million ) H1 H Difference Turnover % Operating result % Net profit % 4

6 Developments 1 st half year 2004 Market conditions: (Outdoor) telecom, construction and installation sector continuing difficult circumstances above all impact on turnover and growth of Cable group, but also impact on Technical Trading group Growth sectors communication, safety, care and comfort compensate for difficult market conditions Solutions strategy has positive impact on the margin 5

7 Developments 1 st half year 2004 Telecom Solutions Outdoor Telecom Market Growing need for broadband solutions Copper networks Pressure on prices and fall in investment volume compared to last year Expectation increasing need to update networks - VDSL Optical fibre networks market conditions unchanged: still difficult Volume global market optical fibre fell slightly - Further fall in price single mode (15%) Production volume single mode TKH increased by 30% Still limited increase in volume TKH multi-mode Interest in FTTH increasing amongst others Citynet Amsterdam Joint venture agreement PacketFront Expansion of portfolio Advanced software and hardware for broadband networks Reacts to simplification and cost savings client connections Turnover share 27.7% (H1 2003: 30.8%) 6

8 Developments 1 st half year 2004 Telecom Solutions Outdoor Telecom Market Activities in Asia Base stations mobile networks - Indonesia Sharply growing market market penetration of mobile phones still limited - 6% Position of TKH growing Fibre optic networks China Anti-dumping measures limited positive effect on price level 7

9 Developments 1 st half year 2004 Telecom Solutions US$/km Nov '00 Mar '00 Development of optical fibre price single mode Jul '00 Nov '01 Mar '02 Jul '02 Nov '02 Mar '03 Jul '03 Nov '03 Mar '04 Jul '04 Souce: CRU 8

10 Developments 1 st half year 2004 Telecom Solutions US$/km Nov '00 Mar '01 Development of optical fibre price multi-mode Jul '01 Nov '01 Mar '02 Jul '02 Nov '02 May '03 Jul '03 Nov '03 Mar '04 Jul '04 Source: CRU 50/ /125 9

11 Developments 1 st half year 2004 Telecom Solutions Indoor Telecom Market Dect telephony limited growth of market Position TKH strengthened by innovative solutions - market share increased TKH partner in Green Wire campaign KPN with Boston 530 (daily promotion on TV) Broadband connections market continuing to grow at high level Home Networking-portfolio Eminent : - increasing interest in supply chain solutions strong position NL Penetration TKH outside NL Small Office Home Office market sharp increase in volume Lower sales prices (dollar effect) leads to fall in turnover margin remains the same 10

12 Developments 1 st half year 2004 Telecom Solutions Indoor Telecom Market expansion of portfolio TKH has acquired the exclusive rights to a total solution for timeshifted TV Reacts to great needs of network operators, hospitals, hotels, etc. to offer triple play - services (telephony, Internet and TV) Unique solution suitable for copper and fibre optic infrastructure 3 Mb connection Relatively low connection costs per client digital quality TV Launch on market September

13 Developments 1 st half year 2004 Building Solutions Reluctant investments in construction and installation sector Negative effect on turnover and margin in Cable group Negative effect on turnover and margin in NL Technical Trading g roup Project flight information system Changi Airport Singapore partly compensates difficult market conditions Investments in efficiency solutions partly compensates difficult market conditions Central control room concepts multi-storey car parks, bridges, tunnels, locks Care sector communication solutions care for the elderly Expansion of portfolio care wrist band Turnover share 28.0% (H1 2003: 25.1%) 12

14 Developments 1 st half year 2004 Building Solutions Interesting projects NL: Cell communication for the Eikenstein borstal in Zeist Communication system for the Veldhuizen health centre in De Meern Domotics and audio surveillance system in Veldhuizen assisted living centre in Middelharnis Parking communication concept Q Park Maastricht 13

15 Developments 1 st half year 2004 Industrial Solutions Turnover share 44.3% (H1 2003: 44.1%) Increase in investment level for industry Control technology High degree of innovation leads to increase in turnover Specialty cable Increase in turnover in all segments: medical, automotive, machinery and robot industry 14

16 Developments 1 st half year 2004 Industrial Solutions Tyre-building systems Positive development Improved profitability tyre-building industry higher investment level Shortage of means of production for tyres with larger rim diameters High investment level Asia Innovative solutions Expansion of product portfolio Product handling systems Willingness to invest increasing 15

17 Notes to the results 1 st half year 2004 Jan Vaandrager (CFO) 16

18 Notes to the results 1 st half year 2004 in million H1 H1 H Turnover Costs of raw materials and consumables Gross margin % % % Operating expenses Operating result % % % Financial result Result before taxes Taxes Net profit

19 Turnover share TKH groups Machinery group 21% Techn. Trading group 34% Machinery groep 19% Techn. Trading group 36% Cable group 45% Cable group 45% H Whole year

20 Geographic turnover distribution USA 3% Europe (other) 1% Asia 13% other 2% Netherlands 49% Europe (other) 5% USA 5% Asia 9% other 2% Netherlands 48% E.U. 32% E.U. 31% H Whole year

21 Notes to the results 1 st half year 2004 Gross margin remained practically the same (44.1%) Increase in total operating expenses by 3.9 million due to increased activity of Machinery group and Cable group Fall in financial expenses to 1.1 million Tax burden: 32.7% Net profit more than doubled to 9.9 million (H1 2003: 4.3 million) 20

22 Notes to the results 1 st half year 2004 Operating results per group (sum in millions of ) 2004 H1 ROS % H1 ROS % 2003 H2 ROS % Technical Trading group Cable group Machinery group Other Total

23 Balance sheet in million Assets Fixed assets Inventories Receivables Cash Total Liabilities Shareholders equity Provisions Long-term debts Short-term debts Total

24 Notes to the balance sheet H1 H1 H2 Net debt / EBITDA¹ Gearing (net debt / equity)¹ 30.4% 50.6% 38.8% Solvability 53.5% 47.9% 55.6% ICR ¹ On the basis of average positions during the period under review 23

25 Cash flow statement in million H1 whole Operating result Depreciation Changes in provisions Changes in working capital Cash flow from operations Interest paid / received Income tax on profit Other Cash flow from operating activities Cash flow from investments Cash flow from financing activities Changes in available funds Cash Funds owed to credit institutions Balance at end of period

26 Developments, strategy and outlook Alexander van der Lof (CEO) 25

27 Developments General focus: Creation of value 26

28 Developments Focus core activities on: Telecom Solutions Building Solutions Industrial Solutions Communication, safety, care and comfort 27

29 Developments 2004 Market Raw material production Development Production and Assembly Value added reselling Solutions & Value added Services Outdoor Telecom Indoor Telecom (ICT) - TFO - TFO Electrical engineering Preform & fibre production Preform & fibre production -TKF TFO -TFO TKF - TKF - ZTC - TKF - Eldra Optical fibre cable & copper cable Optical fibre cable & copper cable Installation cable / Power cable - VMC - Elspec - TKF - TFO Telecom VAR - Isolectra - C&C - VMC - Elspec - Isolectra -C&C -Intronics - VMC - Elspec - Isolectra - C&C Telecom VAR Electrical Engineering VAR - TKF - Isolectra - Elspec - VMC - C&C - Isolectra - EKB - VMC - Elspec - C&C - Intronics Telecom Solutions 27,7% Building Solutions 28,0% Specialty Industry - VMI - EBM - EKB - -E&E TKF - Eldra - TKF - VMI - EBM - EKB Specialty cable Tyre-building Producthandling systems - TKD -Jobarco -Capable - EKB Specialty cable Steering systems -EKB -VMI -E&E -TKF -EBM -TKD Industrial Solutions 44,3% 28

30 Developments 2004 TKH Acquisitions: Machinery group - strengthened portfolio Industrial Solutions take-over of AZ on Turnover: 8 million Number of employees: 30 Locations: Cham (Nürnberg) production Munich and Akron (USA) sales offices The take-over will positively contribute to TKH s profit as of

31 Developments TKH 2004 Acquisitions: TKH s objective Emphasis on strengthening Technical Trading activities portfolio Telecom and Building Solutions Aim: 1-3 acquisitions per annum Profile : Size million turnover Good management No turn-around situations North-west and Eastern Europe 30

32 Progress in TKH Strategy First half year 2004 confirms good progress in the execution of the TKH strategy Development ROS from 6.2 to 7.4% Progress of strategy s implementation still behind target and market opportunities Further investment in TKH organisation talent acquisition Difficult market conditions require a lot of additional attention from the current organisation Emphasis on copying success formulas and successful solutions within the group Expansion of portfolio with successful solutions 31

33 Strategy TKH Technical Trading group Autonomous growth and growth through acquisitions Overlap in portfolio 60% Focus on value-added reselling Introduction of products in early stage of the life cycle Innovations > 20% of portfolio introduced during the past two years Geographic focus on North-West and Eastern Europe and Asia 32

34 Strategy TKH Cable group Autonomous growth Increase in use of capacity Focus on niche markets (> 80%) Positioning of group for future growth of FTTH Increase in share of system sales Innovation >20% of portfolio introduced during the past two years Geographic focus North-West and Easter Europe and Asia 33

35 Strategy TKH Machinery group Autonomous growth on the basis of innovations launched and new innovations Acquisitions aimed at complementary range and strengthening leading position Innovations with the emphasis on exceptional costs effective technology high return on investment for clients Focus on leading position in a select number of industries 34

36 Strategy TKH Financial objectives To be achieved within 3 years (in 2006) H1 whole ROS > 7% 7.4% 6.2% ROCE > 15% 14.1% 10.4% 35

37 Outlook The market conditions in the outdoor telecom, construction and installation sector are expected to remain difficult during the second half year and above all have a negative effect on the Cable group and to a limited degree also on the Technical Trading group. As a result of the strong euro, the margin of the Machinery group will fall in the second half of However, the Machinery group does have a well-filled order portfolio. 36

38 Outlook The developments in the field of speciality cable and total solutions in the growth sectors of communication, safety, comfort and care are positive. Partly on the basis of the result achieved during the first half year of 2004, the net profit for the whole year is expected to be substantially higher than for the whole of

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