Agenda in review financial review. - Business strategy and portfolio - Business outlook

Transcription

1 We make high tech possible Media and Analysts Conference Zurich, March 28, 2006 Unaxis / March 28, 2006 Media and Analysts' Conference 1

2 Agenda in review financial review - Business strategy and portfolio - Business outlook 2

3 Progress since August 2005 Operational efficiency Central leadership, local focus Strict budget control introduced COGS and admin costs reduced Non-critical projects on hold Sales efficiency program started Focused R&D activities Costs down in Q3 and Q4 Growth Promising new product portfolio, e.g. ESEC s redesigned wire bonder and new die bonder Two new Balzers in-house coating centers opened (Thailand, Brazil) Technology acquisition to drive Contraves Space Strengthened base for growth EBIT growth since Q

4 2005 in review A year of challenges with a successful turn around Financials All business units delivered positive EBIT in Q4 Strong 2nd half drove net profit to CHF 18 Mio Back on track with total sales of CHF 904 Mio in 2nd half Net liquidity inclusive of marketable securities remains high at CHF 670 Mio Operations 2005 was a turn around year Business impact by successful transformation program Customer focus and new product introduction will sustain business situation 4

5 Unaxis Group turn around in 2005 Strong performance in 2nd half in CHF million Net Profit Net Profit Sales +105% Q1, 2005 Q2, 2005 Q3, 2005 Q4,

6 Transformation Program key driver for Unaxis success 2006 focus on driving business value across all divisions Portfolio 2005 Aug Sep Oct Nov Dec Target portfolio & roadmap M&A/ divestiture - Divestiture Planning (Semicon.) 2006 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Execution of planned exit Business Value Bus. audit Operations efficiency Develop viable business Strategies for core divisions - Margin improvement initiatives - Volume growth push Identify and capture opportunities for growth - Extension of addressed markets - M&A opportunities/necessities Center Role of center Implement Short-term cost improvement - Effective corp. functions - Mgmt. processes Leadership & execution Upgrade leadership - Strong leadership team in core businesses - Common vision for change Decision driven management culture - Set financial targets and milestones - Execution excellence Progress to date 6

7 Unaxis today Business intact for successful, profitable and sustainable growth Business is in healthy condition again Strong market & technology position in core and growing markets Driving customer focus with leading players Strong financial resources for acquisitions available Strong new management team in place 7

8 Agenda in review financial review - Business strategy and portfolio - Business outlook 8

9 Key financials 2005 and 2004 in CHF million H 1 H 2004 Order Intake 1, ,778 Sales 1, ,850 Net Profit Net Profit as % of sales 1% 15% -17% -20% Net liquidity incl. marketable securities Equity ratio 52% 52% 53% 50% 9

10 Coating Services Increased profits in second half 2005 in CHF million EBIT 2005 EBIT ROS Target 2006 ROS 16% 12% % 6 12% 10% 7% 18% Q1 Q2 Q3 Q4 10

11 Coating Services Continued growth in second half 2005 in CHF million Sales and Order Intake 2005 Sales Order- Intake Sales Growth 1H 2H +5.4% Sales Target Q1 Q2 Q3 Q4 Sales Order Intake 11

12 Vacuum Solutions Increased profits in 4Q 2005 in CHF million EBIT 2005 EBIT (+13) ROS 12% 6-5 Target 2006 ROS -1% -1% 8-12% 2 3 Q1 Q2 Q3 Q4 2% -5% -5% 2% -5-5 EBIT incl. provisions 12

13 Vacuum Solutions Continued growth in second half 2005 in CHF million Sales and Order Intake 2005 Sales Order- Intake Sales Growth 1H 2H +6.8% Sales Target Q1 Q2 Q3 Q4 Sales Order Intake 13

14 Data Storage Solutions Strong EBIT improvement trend in CHF million EBIT 2005 EBIT ROS ROS Target % -11% Q1 Q2 Q3 Q % -38% -15% -3% 5%

15 Data Storage Solutions Market downturn with strong impact in CHF million Sales and Order Intake 2005 Sales Order- Intake Sales Growth 1H 2H +2.4% Sales Target Q1 Q2 Q3 Q4 Sales Order Intake 15

16 Solar / Display Technology Promising start of new Business Solar Technologies in CHF million EBIT 2005 EBIT ROS Q1 Q2 Q3 Q4 Target 2006 ROS -280% -39% 10-15% % -127% 10% 21%

17 Solar / Display Technology Promising start of new Business Solar Technologies in CHF million Sales and Order Intake Sales (+18) Sales Growth 1H 2H Order- Intake (+3) (+3) (+5) Q1 Q2 Q3 Q4-4.7% Sales Target Sales Order Intake excl. order cancellations 17

18 Components and Special Systems Business situation stabilized in CHF million EBIT 2005 EBIT ROS Target ROS 13% 6% 12-16% 0 Q1 Q2 Q3 Q4-8% 14% 16% 1% -4 18

19 Components and Special Systems Business situation stabilized in CHF million Sales and Order Intake 2005 Sales Order- Intake Sales Growth 1H 2H +23.9% Sales Target Q1 Q2 Q3 Q4 Sales Order Intake 19

20 Semiconductor Equipment Strong Recovery of Semiconductor Segment in 2H in CHF million EBIT 2005 EBIT ROS ROS Target % -8% -35% -107% -6% 27% 13-17% 49 Q1 Q2 Q3 Q

21 Semiconductor Equipment Strong Recovery of Semiconductor Segment in 2H in CHF million Sales and Order Intake 2005 Sales Order- Intake Sales Growth 1H 2H +143% Sales Target Q1 Q2 Q3 Q4 Sales Order Intake 21

22 Cost situation of Unaxis 2005 Efficiency focus pays off Sales and COGS in CHF million Sales COGS 29% 18% 33% 40% Gross margin % Q1 Q2 Q3 Q4 22

23 Agenda in review financial review - Business strategy and portfolio - Business outlook 23

24 Unaxis Strategic Targets Unaxis is a premium high tech company Target for Unaxis Profit Leader newunaxis We make high tech possible Leading in Technology & Innovation One company culture Customer Focus Business Units: No. 1 or 2 in profitability in their markets Sales Growth > 15% p.a. Net Profit > 15% p.a. 24

25 Unaxis Strategy A premium high tech company, focusing on core competencies No 1 or 2 Premium high tech corporation Finance growth Divestment Competencies Buy and Build Develop organically Trade Thin film technology Solar Silicium free solar cell technology Coating New applications New center strategy A&P Wafer Vacuum technology Vacuum Expand market share Grow services portfolio Inhouse coating centers Data Storage Blu Ray technology New launch in hard disk Precision engineering Optics New LED and laser applications Space Increase European reach Grow commercial Space technology market share Unaxis is a Leading innovator in technology and services 25

26 Operational excellence Five initiatives to be launched / extended with corporate backing 1. Services initiative 2. Advanced Operations Management initiative Status quo/issues Product related services could be more aggressively charged and priced Advanced Operations Management practices (value stream benchmarking, six sigma, CONWIP) have not been adapted to the extent possible in several businesses Opportunities Set up product related services initiative (Wafer, A&P, Coating Systems, Data Storage) Extend business model for services business (esp. Vacuum) Push Balzers operations excellence initiative towards global roll-out Streamline order-to-delivery flow (esp. Leybold) 3. Sourcing ( Mecanovis ) Cross-divisional coordination of sourcing does not exist Mecanovis at risk due to go-asia strategy of WP and DSS Centralization/ Bundling of global sourcing activities of all Unaxis divisions related to surface finishing within Mecanovis 4. Shared services 5. Working capital management Restructuring measures for Shared Services in Balzers/ Trübbach partly implemented Asia shared services initiative defined (start 2006) Shared Services organization still does not cover all sites Cash management not fully implemented in all divisions No incentive system for sales force on optimized terms and conditions Integration of further sites (e.g. Shared Services at Leybold) Global bundling of functions (e.g. logistics, IT) Initiate group wide cash management policy and incentive system 26

27 Unaxis Group Total cost leadership Product cost reductions (e.g. Clusterline/Wafer, Light engine/optics) Sourcing and supply chain management (e.g. Singapore/A&P, Taiwan/Data Storage, Global sourcing/wafer) Production efficiency (e.g. Utilization/Coating Services, Lead time reduction/wafer, Site strategy/vacuum) Product Line Management (e.g. TMP/Vacuum) COGS reductions (e.g. Wire Bonder/A&P, Die Bonder/A&P) 27

28 Developing into a service driven organization Product related services Professional services Operations outtasking Basic product services Installation Technical assistance Maintenance/warranty Parts logistics Product related optimization Project management System integration Technology platform related planning/ optimization (single system layer) Value added services Technical consulting Technology platform related planning/optimization (overarching) Software supported tool services System management (single vendor, single system layer) Integrated Services System integration Operations process optimization Security management Operations outtasking, e.g., Fault management Configuration management Performance management Maintenance Challenge Unlock remaining potential in the core business Build capabilities and fuel growth in new businesses Identify and nurture options Time horizon Now 1-2 years 2-4 years 28

29 First results for pilot center show that lead times are far off the target of 48 hours day 6 day 5 day 4 day 3 day 2 day 1 Analysis of order lead time - Balzers Order Lead Time at 90% delivery (in hours) Center Balzers* Center Brügg* Center Wörnitz* -54% Target** -60% * Data sample comprises 10-month data from Jan to Oct 2005 with batches operated in Balzers, respectively in Brügg and in Wörnitz ** Targeted order lead time is derived from goetzpartners simulation results based on 10-month data sets for pilot centers in Balzers/Wörnitz Advanced Operations Management Initiative Order lead time measures overall time from entry registration in W-easy until exit of coated tools for client delivery Hypothesis: Shorter lead times seem to be key to strengthen competitiveness and acquire additional volume from existing clients Verification of above hypothesis and further evaluation of client preferences by means of customer interviews Detailed lead time analysis in pilot centers based on photograph / time-lapse analysis to identify delays resulting from excessive intermediate storage and bottle necks Value stream-benchmarking as basic concept for acceleration of lead times and derivation of best practice benchmarks Stepwise rollout: Prioritization and global implementation of optimization measures 29

30 Target of Shared Services Unaxis Reduction of 45 FTEs and CHF 12 million, optimization of Shared Services FTEs Budget/ Costs (in m CHF) Others Legal/ Patents Finance HR Logistics Information Management Facility Management (-29%) Apprenticeship Apprenticeship Others Legal/ Patents Finance HR Logistics Information Management Facility Management Apprenticeship program not scope of the project (-24%) 37.3 Budget 2005 Approx 2005* Budget 2006 Flexfit II result** * Approx per September 16, 2005 ** FTE reduction through Logistics outsourcing not considered yet; full outsourcing of Logistics I+II would lead to an additional FTE reduction of 16.5 FTEs Source: Unaxis Flexfit / Phase March II; 28, goetzpartners 2006 analysis Media and Analysts' Conference Budget 2005*** Approx 2005* Budget 2006 (revised)**** Flexfit II result *** Revised figure incl. contribution for special maintenance and potential vacancy **** The shared services budget 2006 as planned per Sept. 1 st 2005 in total amounted to mchf 44.6; in the latest budget cycle some of the reduction potential identified in Flexfit II has been considered, as a result the budget declined to mchf

31 Overview improvement levers in 2006 Transformation Program is spread across all divisions Overhead 16.1 MCHF Volume based 84.3 MCHF Margin based MCHF Wafer A&P Vacuum 230 m CHF Coating Data Optics Space Margin based Improvement levers 1. Product cost reductions (e.g. Clusterline/Wafer, Light engine/optics) 2. Sourcing and Supply Chain Mgmt (e.g., Singapore/A&P, Taiwan/Data Storage, Global sourcing/wafer) 3. Production efficiency (e.g.utilization/coating Services, Lead time reduction/wafer, Site strategy/vacuum) 4. Product Line Management (e.g. TMP/Vacuum) 5. Pricing/Increase Value Proposition (e.g., Vacuum, Coating) Volume based 1. Sales Force Efficiency (e.g. Sales team/wafer, Consolidation of Customer Portfolio/Coating, Use of Reps) 2. New/growth markets (geographic/customer) (e.g. Market penetration/data Storage, Market penetration/wafer, New centers/coating) New/growth products (e.g. market share incr. Adv. Pack./Wafer; PD products/optics) 31

32 ONE Company approach From a Holding to a Corporation Structure newunaxis We make high tech possible Profit Leader Leading in Technology & Innovation Customer Imperative One company culture Individual Business Approach Several Sub-Cultures Individual Technology and Market Strategies No centralized services Individual Market appearance, several market brands introduced Company strategy imperative One company culture Centralized services shared services, global sourcing, IT Centralized leadership Global finance and HR organizations Centralized and customized R&D One face and name to the external world Re-focus on a strong Swiss technology tradition 32

33 Unaxis Branding Changing from a House of Brands to a Branded House Strategy Today s structure with five separate brands is confusing, and costly Unaxis needs a brand strategy with a strong umbrella brand ( branded house ) Strategy now being defined will be phased-in during 2006 The new Brand will represent the heritage and future of a Premium High Tech Company Brand Synergies Optimize total company Brand & MarCom spending 33

34 Company Culture - Company Values Our people knowledge, enthusiasm, creativity and passion are our biggest asset Integrity Excellence Innovation The process to define our new values involved ALL employees Introduction of EMS system for all employees Several career programs in place and being adjusted Team Work International Trainee program starting in October Key talent programs set up Collaboration programs with several Universities set up People development will secure our capabilities 34

35 Technology Focus R&D focus on all levels to provide customer and market required products and services % R&D of turn over 12.3 Corporate R&D Business R&D Customer Solutions Future technologies Market driven Technology R&D Products & Services Unaxis Siemens ABB Applied Materials BMW Customer needs driven R&D % Engineers of total employees Focus on core technologies Aligning R&D activities 25.3 Using technology synergies and opportunities cross markets and customers Unaxis Siemens 5.7 ABB Applied Materials BMW

36 Next steps to strengthen the Unaxis strategy Operational excellence Key initiatives Product related service Advanced operations management Sourcing, Mecanovis Shared services Working capital mgmt. Build and buy Next steps Push and review service options on divisional level Review opportunities on divisional level Review Mecanovis option and initiate global sourcing Initiate global shared services organization Implement group wide cash management monitoring and incentive system Develop strategy for divisions (New market, acquisition candidates, etc.) Achieving market leadership Develop organically Enable relevant divisions to strong organic growth (capex, leadership talent) Create financing power Push divestment actions; utilize debt capacity 36

37 Key priorities for 2006 Sales and Marketing will be driving EBIT Key tasks Customer focus Voice of the customer understanding real customer needs Transition from a technology driven to a customer driven company Aligning the marketing value chain accordingly Product Line Mgmt. Developing product and technology roadmaps Aligning the product portfolio accordingly Managing portfolio according to customer needs and profitability requirements Services strategy Pricing Understand the market requirements and our existing pricing strategies as well as current execution Develop price/condition systems that optimize EBIT Align incentive systems accordingly 37

38 Unaxis 2006 targets Positioned for sustainable and profitable growth Thin Film & Vacuum Technology Precision Technology Semiconductor Technology Coating Services Vacuum Solutions Data Storage Solutions Solar / Display Technology Components and Special Systems Semiconductor Equipment Market leader for coating of tools and components Market 2005: CHF 1.1bn Goal: CHF 17-21% ROS Leading supplier for vacuum solutions Market 2005: CHF 2.8bn Market leader for metallizers and RW Market leading Supplier for thin film solar cells machines Market 2005: CHF 200m Market leading supplier for projection displays Market 2005: CHF 1.0bn Goal: Goal: Goal: Goal: Goal: CHF 8-12% ROS Market 2005: CHF 900m CHF 6-10% ROS CHF 10-15% ROS CHF 12-16% ROS Market leading supplier for payload fairings Market 2005: CHF 1.0bn Market leader In photomask etching, adv. packaging Market 2005: CHF 600m CHF 13-17% ROS Market leading Supplier in die bonding Market 2005: >CHF 2bn 38

39 Thank you for your attention. We look forward to making your future possible. 39

40 Questions and answers 40

41 Calendar and contact details Agenda For further information: April 25 1st quarter report 2005 May 23 Annual Shareholders Meeting, Lucerne August 22 Semi-annual report 2005 October 24 3rd quarter report 2005 Carsten Barth Head Corporate Communications Tel.:

42 Disclaimer This presentation is based on information currently available to management. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected. 42