Schaffner Group Corporate presentation InvestoraZurich2013...6 ©Schaffner Group2013 The Schaffner...

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©Schaffner Group 2013

The Schaffner Group Corporate presentationInvestora Zurich 2013

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The Schaffner Group

Caution regarding forward‐looking statements

This communication contains statements that constitute “forward‐looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives, and other statements relating to our future business development and economic performance.

While these forward‐looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to, (1) general market, macro‐economic, governmental and regulatory trends, (2) movements in currency exchange rates and interest rates, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness of our customers, and counterparties and developments in the markets in which they operate, (6) legislative developments, (7) management changes and changes to our Business structure and (8) other key factors that we have indicated could adversely affect our business and financial performance which are contained in other parts of this document and in our past and future filings and reports, including those filed with the SIX Swiss Exchange.

More detailed information about those factors is set forth elsewhere in this document and in documents furnished by SchaffnerGroup, including Schaffner Holding's Annual Report for the year ended 30 September 2012, and the Half‐Year Report for the period ended 31 March 2013. Schaffner Group is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward‐looking statements whether as a result of new information, future events, or otherwise.

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The Schaffner Group

Corporate presentation

Agenda

Introduction to Schaffner

Finance – Reaching the targets

Take‐home messages

Q & A

Alexander Hagemann

Kurt Ledermann

Alexander Hagemann

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Alexander Hagemann | Chief Executive Officer

Introduction to Schaffner

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The Schaffner Group

About Schaffner

• Schaffner is the market leader in providing solutions to eliminate electrical distortions, thus improving the reliability of electronics and stabilizing power grids

• Schaffner products are used by the leading manufacturers of power electronic devices worldwide in a large variety of applications

• Schaffner is a global company with 2´200 employees and annual sales approaching CHF 200 million

• Schaffner was founded 1962 with headquarters in Luterbach, Switzerland, is listed at the SIX Swiss Exchange since 1998 (SIX: SAHN), and has a market capitalization of CHF 130 million (as of June 30, 2013)

• Schaffner targets 8% organic annual sales growth and an operating margin (EBIT) of 9% to 12%

• Schaffner intends to payout a dividend in the range of 25% to 35% of net profit

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The Schaffner Group

Schaffner EMC filters and Power Quality filters protect electronic devices and the power grid from electrical distortions

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Escalators Medical Devices

EMC Filter EMC Filter

Power QualityFilter

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The Schaffner Group

Energy efficiency Renewable energy Grid stability

Long‐term structural market growth expected

Schaffner provides users globally with solutions that enable an efficient and reliable operation of electrical and electronic equipment

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The Schaffner Group

Schaffner´s divisions: Global leaders in niche markets

56%27%

17%

Automotive division 17% (13%)• Antennas for keyless entry systems• EMC filters for electric/hybrid cars

EMC division 56% (62%)• Filters to ensure electro‐magnetic compatibility (EMC) for power electronic systems

• Power Quality filters for smart grids

Power Magnetics division 27% (25%)• Mission critical components for high power, high reliability electronics

Divisions

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H1 2012/2013

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The Schaffner Group

Key markets: Energy efficiency and renewable energy

• Motor drive systems require more Schaffner Power Quality solutions• High demand from Asian photovoltaic (PV) inverter manufacturers• Automotive growth from keyless entry/go and EV/HEV• Recession in European capital goods markets weighs on machine tools and electronic device businesses

Strategic markets: 66% (63%)Energy‐efficient motor drive systemsRenewable energyRail technologyAutomotive electronics

Legacy core markets: 32%

Power supplies for electronic devices Machine tools and robotics Electrical infrastructure

Other markets: 2%Other

24%

17%

8%17%

14%

11%

7% 2%

Markets in %

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H1 2012/2013


The Schaffner Group

Focus on Asia‐Pacific

• Schaffner is a strong local player in the Asia‐Pacific region• Market success is achieved with Chinese and Japanese photovoltaic inverter manufacturers• Demand in Europe is on a cyclical low

17% 18%

27%33% 35% 35%

39%

0%

10%

20%

30%

40%

50%

FY06/07

FY07/08

FY08/09

FY09/10

FY10/11

FY11/12

H112/13

45%

39%

16%

Europe

Asia‐Pacific

Americas

Sales by regions (in %)Share of Asia‐Pacific on Group net sales (in %)

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H1 2012/2013

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The Schaffner Group

Strategic Initiative: Power Quality filters

• Use of power electronics leads to demand for Harmonic filters: 2012‐2019 market CAGR of 7% (Source: Frost & Sullivan, 2013)

• Schaffner moves closer to end customers, creating opportunities for establishing a service business

• Objective: No. 1 independent manufacturer of PQ filters

• Establishing ECOsineTM as a leading brand in Power Quality

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Semiconductor plant, South KoreaCoast Guard ship, Germany Office tower, Hong Kong

Active Harmonic filter Passive Harmonic filter


The Schaffner Group

Schaffner targets 8% organic annual sales growth

• Harmonic filters are more widely used to improve Power Quality in buildings, factories, infrastructure

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• Japan and China have become largest markets for photovoltaics; solid growth in USA

• Large multi‐year railway projects in Russia and South Africa

• Higher take rate for keyless entry/go systems in all core markets

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The Schaffner Group

Progress in operational excellence mitigates cost inflation

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• Lean conversion for gains in productivity, quality, lead times

• Centralization of all European EMC manufacturing in Kecskemét, Hungary (new factory opened in 2008)

• State‐of‐the‐art lean factory for all Schaffnerproduct lines in Shanghai, China (new factory opened in 2011)

• Streamlined logistics with decentralized warehousing(new European distribution center opened 2012 in Wittelsheim, France)


The Schaffner Group

Organic growth complemented by selected acquisitions

• Add‐on acquisitions in core business and supporting the communicated strategy

• Disciplined approach to valuation and integration

• Acquired businesses to be EPS accretive in second year after closing

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2009: BETEC Engineering 2011: MTC Transformers

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The Schaffner Group

Sales and profits expected to improve in all divisions: recovery in Europe, railway projects, photovoltaics in Asia, SOP of automotive programs

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71.8

57.250.3 55.5 50.2

0

20

40

60

80

H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13

12.3

7.9

5.57.1

4.5

02468

1012

H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13

18.4 17.7 20.0 26.5 24.10

20

40

60

80

H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13

0.4 ‐0.7 ‐0.6 0.3 0.8

‐2024681012

H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13

8.4 9.2 10.8 14.0 15.3

0

20

40

60

80

H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13

‐0.2 0.2 ‐0.30.9

‐1.0

‐2024681012

H1 10/11 H2 10/11 H1 11/12 H2 11/12 H1 12/13

Net sales (in CHF m)

Operating profit (in CHF m)





Automotivedivision

BMW i3

Power Magnetics division

Siemens high speed train

EMC division

Aquarium Singapore

• Global No. 1 in EMC filters• Strategic growth: Power Quality Filters• European volumes and profits recovering

• Leading in niche markets• Growth continues in trains, photovoltaics• Operational excellence drives profits

• Top 2 position in antennas for keyless go• Only few electric vehicle programs• Profit focus after SOP of new programs


Kurt Ledermann | Chief Financial Officer

Finance – Reaching the targets

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The Schaffner Group

Financial highlights – Profit & loss statement

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in CHFm H1 2011/12 H2 2011/12 H1 2012/13

Bookings 89.1 m 91.2 m 90.2 m

‐ Book‐to‐bill ratio 1.10 0.95 1.01

Net sales 81.0 m 95.9 m 89.6 m

‐ Growth in CHF ‐17.9% 14.2% 10.7%

‐ Growth in LC ‐13.8% 7.0% 8.4%

EBIT 1.4 m 5.8 m 1.6 m

EBIT in % 1.7% 6.1% 1.8%

Free cash‐flow 2.0 m ‐0.5 m 1.7 m

Net profit 0.3 m 3.6 m 0.3 m


The Schaffner Group

Financial highlights – Balance sheet

in CHFm H1 2011/12 H2 2011/12 H1 2012/13

Total Assets‐ thereof Goodwill

139.39.0

140.89.1

147.49.2

Liabilities‐ thereof Bank Credits

83.935.7

80.133.4

87.638.1

Equity‐ Equity Ratio

55.440%

60.343%

59.841%

Net Working Capital‐ C2C‐Cycle

33.185 days

37.895 days

36.777 days

Net debt 23.8 m 25.9 m 24.8 m

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The Schaffner Group

Schaffner Group mid‐term targets (as disclosed at the annual result presentation on 6 December 2012)

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• Organic growth rate exceeding 8% annually• Focused acquisitions in Divisions EMC and Automotive

Targeted operating margins (EBIT):

EMC division 16% ‐ 20%

Power Magnetics division 8% ‐ 10%

Automotive division 8% ‐ 10%

Schaffner Group 9% ‐ 12% (incl. ‐3% Group service cost)

Dividend pay‐out ratio 25% ‐ 35% of net profits

Equity ratio 40% ‐ 50%

Target for FY 2014/2015:

Net sales CHF 250 – 280 million

Operating margin (EBIT) 9% ‐ 12%


The Schaffner Group

Sales growth

20

Avg. growth p.a.

EMC 4%

PM 15%

AM 15%

Organic 9%

Acquisition 4%

Total 12%

106 106 112 119

46 5361

7125

2833

3820

23

0

50

100

150

200

250

300

2011/12 2012/13 2013/14 2014/15

in CHFm

Net sales scenario

EMC PM AM Acquisition

2014/2015

EBIT‐Margin min. max.

EMC 16% 20%

PM 8% 10%

AM 8% 10%

Acquisition 8% 10%

Group service cost ‐3% ‐3%

Total 9% 12%

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The Schaffner Group

Significant shareholders

12.6

10.0

9.1

8.6

3.63.63.2

49.1

0.2%

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12.6% Alpine Select

10.0% Sarasin Investment‐Fonds

9.1% UBS

8.6% Buru Holding AG

3.6% SUVA

3.6% Balfidor Fonds

3.2% Credit Suisse

49.1% Shareholders with a stake of less than 3%

0.2% Treasury shares


The Schaffner Group

21%

15%

23%

0% 0% 0% 0%

35%

24%

0%

24%28%

57%

0%

10%

20%

30%

40%

50%

60%

70%

‐

5.0

10.0

15.0

20.0

25.0

30.0

35.0

98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

per share in CHF

Pay‐out Net profit Pay‐out ratio

Historical payout

>> Target dividend pay‐out ratio 25% ‐ 35% of net profit

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Sale and leaseback ofproperty in SwitzerlandSale and leaseback ofproperty in Switzerland195%

pay‐outratioin %

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The Schaffner Group

Schaffner share

Valor symbol SAHN

Valor number 906'209

ISIN CH0009062099

Trading currency CHF

Exchange SIX Swiss Exchange

Product type Mid & Small Caps Swiss Shares

Issued by Schaffner

Number in issue 635'940

Nominal value 32.50

Trading 17.06.1998

Security type Registered share

Smallest tradable unit ‐‐

Security segment Swiss shares

Primary listed yes

Dividend entitlement yes

Regulatory standard Main Standard

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The Schaffner Group

Share price development

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Schaffner share price development since June 2008

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Alexander Hagemann | Chief Executive Officer


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The Schaffner Group


• Schaffner aims to lead niche markets related to energy efficiency, renewable energy, and smart grid applications

• After each Division had suffered setbacks during the past 18 months, sales and profits are now recovering

• Mid‐term sales and profit targets are based on robust business planning and supported by strategic actions

• Due to a still weak demand in H1 and the recovery beginning in H2 of FY2012/2013, Schaffner expects full year sales revenues above and operating margins to be comparable with previous year

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The Schaffner Group

Key figures

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2007/08 2008/09 2009/10 2010/11 2011/12

H1 H2 H1

Net sales 182'445 133'363 188'939 182'603 176'942 80'972 95'970 89'604

EMC 132'818 82'338 111'467 128'932 105'784 50'247 55'537 50'167

PM 39'133 42'690 60'922 36'046 46'495 20'022 26'473 24'132

AM 10'494 8'335 16'550 17'625 24'663 10'703 13'960 15'305

EBIT 13'892 ‐9'193 15'000 12'810 7'243 1'366 5'877 1'612

EMC 48 18'255 20'174 12'552 5'489 7'063 4'453

PM ‐6 3'066 ‐331 ‐284 ‐577 293 824

AM 759 1'548 ‐395 563 ‐345 908 ‐952

Corporate ‐4'674 ‐6'777 ‐6'425 ‐4'733 ‐2'776 ‐1'957 ‐2'283

Net profit 9'355 ‐10'935 11'983 10'150 3'909 256 3'653 299

Operating CF 6'746 15'804 7'314 17'805 4'582 2'186 2'396 4'118

Investiting CF ‐2'095 ‐7'312 ‐5'971 ‐18'736 ‐3'432 ‐318 ‐3'114 ‐1'614

Assets 148'078 126'883 126'643 136'822 140'843 140'843 140'843 147'429

Equity 58'149 47'305 55'985 56'929 60'333 60'333 60'333 59'785

Equity ratio 39% 37% 44% 42% 43% 43% 43% 41%

Number of employees 2'318 1'808 2'393 2'702 2'569 2'482 2'569 2'606

Number of shares 635'940 635'940 635'940 635'940 635'940 635'940 635'940 635'940

2012/13 2011/12


The Schaffner Group Corporate presentationInvestora Zurich 2013

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