A Global Leader in Color Management Solutions Financials Company Overview Industry Overview
Growth Targets and Strategy Investment Highlights
September 2009
1
September 2009
Safe Harbor Statement This document has been prepared by the Company solely for the use at the Swiss Equity presentation in Zurich on September 16, 2009. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document This document does not constitute an offer or invitation to purchase shares and neither it nor any part of it shall form the basis of, or be relied upon in connection with any contract or commitment whatsoever.
September 2009
2
Financials
Bilanzstruktur
Umstellung von IFRS auf Swiss GAAP FER
Halbjahreszahlen 2008/2009
September 2009
3
Bilanzstruktur In CHF Mio.
31.03.2009 IFRS
Cash
12.6
Umlaufvermögen
17.6
Immaterielle Werte
12.9
Sonstiges Anlagevermögen
11.4
Total Aktiven
54.5
Verbindlichkeiten
20.0
Eigenkapital
34.5
in % der Bilanzsumme
63.3%
Hohe Eigenkapital Quote Netto-Cash Position September 2009
4
31.03.2009 Swiss GAAP FER
Anpassung
Umstellung von IFRS auf Swiss GAAP FER 31.03.2009 IFRS
31.03.2009 Swiss GAAP FER
Cash
12.6
12.6
Umlaufvermögen
17.6
17.6
Immaterielle Werte
12.9
3.8
Sonstiges Anlagevermögen
11.4
11.4
Total Aktiven
54.5
45.4
Verbindlichkeiten
20.0
19.1
(0.9)
Eigenkapital
34.5
26.3
8.2
63.3%
57.9%
In CHF Mio.
in % der Bilanzsumme
Hoher Aufwand der Anwendung von IFRS Vergleichbarkeit der Erfolgsrechnungen September 2009
5
Anpassung
9.1
Halbjahreszahlen 2008/2009 1. Halbjahr 2008/2009 (IFRS)
1. Halbjahr 2007/2008 (IFRS)
Veränderung
Nettoumsatz
26.4
37.7
(29.9%)
Industriegeschäft
20.0
31.0
(35.3%)
Konsumgeschäft
6.4
6.7
(5.3%)
EBITDA (angepasst)
-0.6
2.9
Abschreibungen und Amortisationen
-1.1
-1.0
EBIT (angepasst)
-1.7
1.9
Key Figures (fortgeführtes Geschäft)
Weltweiter Wirtschaftsabschwung Industriegeschäft: Aufschub oder Stornierung von Investitionen bei Kunden September 2009
6
Company Overview
September 2009
7
Color Management – Industrial Products
Managing suppliers, materials and processes across complex supply chains and work flows to consistently and efficiently achieve the intended color
September 2009
8
Color Management - Consumer Products
Un-calibrated monitors - No two monitors are the same
September 2009
9
Color Management - Consumer Products
Calibrated monitors
September 2009
10
Color Management
Color Management Solutions Hardware, software and processes that solve the complex problems in achieving the intended color
Customer Value of Color Management Speed Quality Efficiency
Compress time to market Consistent color Reduce scrap
Color Management Markets: Some industries where color is mission critical: - Fashion and footwear - Automobiles, appliances - Consumer electronics - Home furnishings
September 2009
- Photography - Packaging - Printing - Food and beverage
11
Overview Datacolor
Unchallenged number two in global color management market Market leader in textile industry and monitor calibration
Founded 1970 Headquarters - Lawrenceville NJ, USA Offices - 11 countries Representation - 65 countries
Employees - 250 in 25 countries R&D – U.S., Switzerland, China Manufacturing – U.S., China
Milan Gent
Paris Manchester
Dusseldorf Zurich
Taipei Suzhou Shanghai Hong Kong Mumbai
Lawrenceville
September 2009
12
World class facilities
Headquarters, NJ USA
Technical Center, Suzhou PRC
• R&D • Production • Administrative
• Opened 2008 • Production • Engineering
September 2009
13
Business Model Sustain and expand leading position in developing, manufacturing, and globally distributing precision instruments, software and services for leading edge color management solutions
Primary Industrial customers are: “Specifiers” in the supply chain (e.g. automotive) Textile, leather, paint, plastics, paper producers
Primary Consumer customers are: Serious to professional photographers
September 2009
14
Key Market Characteristics Key market characteristics: Shift to digital workflow creates demand for broader solutions and drives growth Attractive potential in new segments Technology-driven solutions High entry barriers Low capital investment, high cash flows
September 2009
15
Balanced Portfolio Mitigates risk with favorable segment and regional mix % of Tota l Sa les 2 0 1 2
% of Tota l Sa les 2 0 0 8 Consumer
20
Consumer
%
35% Industrial
80%
Industrial
Organic Growth
65%
% of Tota l Sa les 2 0 0 8
Geographical sales are well balanced
American
Asia
29%
26%
Europe
45% September 2009
16
Mix between Industrial and Consumer becomes more balanced due to faster growth of Consumer business
Comprehensive Portfolio – Industrial Hardware Spectrophotometers Color laboratory equipment
Software Spectrophotometers
Matching Quality control Communication
Service and Support Software Product M ix Services Software
30
%
15%
Lab Equipment
Hardware
55% September 2009
17
Strategic Focus Customers
Fashion & Footwear
Automotive Interiors
Paints and Plastics
The names, trademarks, September 2009 service marks, logos and icons of the above companies are properties of the respective companies.
18
Preferred Supplier to Retail/Apparel Industry 80 of the top 100 Retailers have selected Datacolor. Over 3,500 Apparel Suppliers rely on Datacolor equipment.
BHS
Over 1,000 Apparel Suppliers are Accredited by Datacolor.
The names, trademarks, September 2009 service marks, logos and icons of the above companies are properties of the respective companies.
19
Unmatched Portfolio – Consumer Products Award-winning monitor and printer calibration solutions for digital photography workflows Unique TV calibration solutions for home theater providers and enthusiasts
Target Customers
Spyder3 Print
Serious to professional photographers
Distribution Photo and electronics retailers – e.g. Media Markt e-Tailers – e.g. Amazon Electronics distributors – e.g. Globell Datacolor web store % Sales by Region - Current
Asia
American
35
% Sa les by Region - Future
15%
%
American
Asia
Spyder3 Europe
50% September 2009
Europe
20
Current Market Shares HunterLab 4%
All others 6%
Konica Minolta 7%
Datacolor share in major market segments Fashion and footwear Photography X-Rite Pulp and Paper 59% Paint/plastics producers Retail paint Printing
Byk-Gardner 9%
Datacolor 15%
USD 650 million Served Market Chart data based on Datacolor estimates
September 2009
21
65% 55% 65% 35% 20% 5%
Opportunities for Growth
September 2009
22
Business Opportunity Will Grow Clearly defined growth drivers - Importance of color as quality indicator - Decentralized and fragmented production - Fast transition to digital workflows
Consumer segment (professionals and enthusiasts) expected growth 15-20% driven by: - Growing adoption of digital SLR cameras - Lower priced, better displays Growth Rates – Served Market - Recognition of need to calibrate 25% 15-20% 20%
Industrial segment expected growth 4-6% driven by: 15% - Replacement of analog color tools 10% - Need for broader solutions 5% - New business areas
4-6%
0% Consumer Segment
September 2009
23
Industrial Segment
Focused Growth Strategy
Datacolor: - Strong No 2 in the industry
- Leadership in its focused market segments
September 2009
Accelerated product development and new services Entry into adjacent market segments seeking leadership position Selected acquisitions to expand technology base and market position New organization structure, gains in efficiency
24
Accelerated Product Development New miniaturized sensor Will reduce size and cost of consumer products Enables embedded solutions
September 2009
25
Accelerated Product Development
September 2009
Measurement of multicolor patterns is very restricted today
New imaging technology combined with current instruments will solve this problem
Instrument market will expand by at least 25%
26
Strategic Entry into Adjacent Segments Furniture and Home Furnishings
Packaging Materials
September 2009
27
Well-Defined Acquisition Strategy
Strong balance sheet will support acquisitions Proven track record - acquisition and integration of Consumer business
September 2009
28
Executive Team
Albert Bush
Brian Levey
Christoph Gamper
Doris Brown
Stefan Dobler
Rico Sauerborn
President & CEO
Industrial BU
Consumer BU
Marketing
CFO
Operations
V. President
V. President
V. President
U of Leuven, Belgium
U of CT, Connecticut
MCI Innsbruck Austria
R.I.T Rochester, NY
Swiss CPA Zurich, CH
Bekaert
Dow Chemical Beckman Inst.
kdg mediatech ag Koch Media AG
X-Rite PANTONE Indocs Online, Inc. Agfa/Bayer Corp. Anitec /Kodak
Eichhof Holding Pricewaterhouse
V. President
strong domestic and international business development and marketing experience September 2009
29
Sustainable Efficiency Improvements Consistently lower cost instrument designs
New scalable manufacturing site in China Manufacturing now concentrated in Suzhou Cost-efficient production for export and local market Capacity to produce at mid-term volumes
Tightened industrial sales organizations Strengthened web marketing Efficient worldwide ERP platform supports lean processes
September 2009
30
Investment Highlights
Clearly focused “pure play” in the global market for color management solutions with above-average growth potential
Dynamic, exciting market space driven by technology innovations with high barriers to entry
Well balanced revenues from industrial and consumer markets, as well as from a geographic point of view
EBITDA Margin of 18% to 20% in the mid-term
Sustained organic growth driven by cutting-edge technology in hardware & software products, effective service packages and acceleration of development of adjacent markets
Well-positioned to benefit from economies of scale in distribution, production and information systems
Strong balance sheet allows to profit from industry consolidation and fast growing demand for color management solutions in the supply chains
September 2009
31
A Global Leader Set for Growth