company presentation half-yearresults2010

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HalfHalfHalfHalf----YearYearYearYear ResultsResultsResultsResults 2010201020102010

Schweiter TechnologiesSchweiter TechnologiesSchweiter TechnologiesSchweiter Technologies

Company Presentation

Half-Year Results 2010

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ContentContentContentContent

� 1. Welcome and Introduction

2. Results Half-Year 2010

3. Division Information

4. Outlook

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Highlights First Half 2010 Highlights First Half 2010 Highlights First Half 2010 Highlights First Half 2010

� (1) Full consolidation of Composites business for 6 months - good results despite increase in raw material prices and currency fluctuations

� (2) Composites: Wind segment strong - mainly China -compensating weaker markets in US/EU

� (3) Composites: Good recovery in Display - mainly re-stocking, Architecture slightly below

� Significant market recovery in TEX and SEM driven by Asian countries, mainly China. Good volume and strong bottom line results also due to tight cost management

� Strong Group EBITDA with CHF 48.5 Mio. and Net Income of CHF 23.6 Mio

� Very solid balance sheet and still approx. CHF 300 Mio. funds available for future investments

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Revenues: 100 MCHF Employees: 200

One Group One Group One Group One Group ---- ThreeThreeThreeThree Leading Leading Leading Leading DivisionsDivisionsDivisionsDivisions

IsmecaSemiconductor

3A Composites

SSM Textile Machinery

Revenues: 100 MCHFEmployees: 300

Revenues: 700-800 MCHFEmployees: 2'900 (of which

1'300 in Ecuador)

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1. Welcome and Introduction

� 2. Results Half-Year 2010


4. Outlook

6


SSM Textile SSM Textile SSM Textile SSM Textile MachineryMachineryMachineryMachinery

in CHF Mio.

H 1

2010

H 1

2009

Total

2009 %

Orders received 47.2 13.5 47.9 250%

Revenues 43.8 13.4 38.6 227%

EBITDA 7.4 -5.5 -6.9 -

%-Revenues 16.9% - -

Employees (end of period) 210 195 192 8%

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SSM Textile SSM Textile SSM Textile SSM Textile MachineryMachineryMachineryMachinery

� 227% increase in sales, however from low base

� Significant market recovery - mostly driven by China

� Increased Gross Margin

� Good EBITDA with CHF 7.4 Mio. Low fix cost structure

� New innovations presented at ITMA Asia well received

� Further asianizing of assembly capacities resulting in optimization of cost structure

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IsmecaIsmecaIsmecaIsmeca SemiconductorSemiconductorSemiconductorSemiconductor

in CHF Mio.

H 1

2010

H 1

2009

Total

2009 %

Orders received 73.1 19.9 54.2 267%

Revenues 50.2 16.5 45.9 204%

EBITDA 6.5 -6.5 -7.2 -

%-Revenues 12.9% - -

Employees (end of period) 349 290 310 20%

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� Sharp increase (from low base) in sales by 204% reflecting upturn in semiconductor industry

� Further improved gross margin despite competitive market environment

� Good EBITDA with CHF 6.5 Mio. Continued tight fixed cost management

� Continued focus on innovation and relation-ships with key accounts

� New products for semiconductor/LED packages well accepted by the market

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3A 3A 3A 3A CompositesCompositesCompositesComposites

in CHF Mio.

H 1

2010

H 1

2009

Total

2009

Orders received 416.3 - -

Revenues 387.3 - -

EBITDA 35.9 - -

%-Revenues 9.3%

Employees (end of period) 3'301 - -

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3A 3A 3A 3A CompositesCompositesCompositesComposites

� Solid volume development in first half of 2010

� Strong core material business especially in China, EU and US rather depressed

� Strong recovery in Display due to re-stocking activities

� Architecture overall slightly down with strong sales in India and Middle East

� Gross margin affected by higher raw material cost not yet fully absorbed

� Stand-alone/separation cost in the amount of CHF 3.0 Mio. expensed, however below budget

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Group Group Group Group

in CHF Mio.

H 1

2010

H 1

2009

Total

2009 %

Orders received 536.6 33.4 175.2 1507%

Revenues 481.5 30.1 132.6 1500%

EBITDA 48.5 -13.0 -16.2 473%

%-Revenues 10.1%

EBIT 33.7 -13.7 -20.4 346%

Net Income/loss 23.6 -10.5 -20.4 325%

Employees (end of period) 3'863 488 3'045 692%

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186186186186 171171171171

66666666

391391391391 41841841841878787878 134134134134

596596596596

302302302302 262262262262

5555

5555

5555

1717171716161616

33333333

28282828

10101010

113113113113115115115115

2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010

644644644644 623623623623653653653653

240240240240203203203203

14141414

10101010

158158158158 182182182182

23.423.423.423.4

84848484

89898989

189.49.49.49.4 0.10.10.10.1

2010201020102010 2009200920092009 2008200820082008 2007200720072007 2006200620062006

Net Net Net Net assetsassetsassetsassets

CashCashCashCash

OtherOtherOtherOther

GoodwillGoodwillGoodwillGoodwill

OtherOtherOtherOther

LoansLoansLoansLoans

EquityEquityEquityEquity

StrongStrongStrongStrong Balance Balance Balance Balance SheetSheetSheetSheet

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Balance Balance Balance Balance SheetSheetSheetSheet Highlights Highlights Highlights Highlights

� Cash position CHF 260 Mio.

� Treasury shares 5.4% of share capital (market price: > CHF 45 Mio.)

� Very low short/long term bank liabilities

� Goodwill CHF 16 Mio.

� Shareholders‘ Equity CHF 644 Mio. = CHF 445 per share

� Equity ratio 72%

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2. Half-Year Results 2010

� 3. Division Information

4. Outlook

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SSM SSM SSM SSM TextileTextileTextileTextile MachineryMachineryMachineryMachinery

DP5

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SSM SSM SSM SSM –––– ExcellenceExcellenceExcellenceExcellence in in in in YarnYarnYarnYarn ProcessingProcessingProcessingProcessing and and and and WindingWindingWindingWinding

Perfection in package quality for best process performance in

yarn treatment and finishing (dyeing/weaving/knitting)

� Precision winding for perfect and even yarn coloring (300 km per package)

� Uniform yarn tension during winding process (up to 2’500 m/min.) resulting in lower process cost (higher speed, less tension peaks)

� Quality and reliability of equipment e.g. rotating parts with up to 30’000 RPM in dusty industrial areas

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StrongStrongStrongStrong NicheNicheNicheNiche PositionsPositionsPositionsPositions in in in in thethethethe ProductionProductionProductionProduction ChainChainChainChain

dye package winding

dyeing

staple yarnsstaple yarnsstaple yarnsstaple yarns filament yarnsfilament yarnsfilament yarnsfilament yarns

knitting / warp knitting:apparel, sport and leisure wear, socks, hosiery, automotive, etc.

weaving:apparel, shirts and blouses, linen, curtains, automotive,

etc.

yarn production

twisting

yarn finishing

fabric production(end-uses)

assembly winding

extrusion

spinningfalse twist texturing

air jet textu-ring

drawing

twisting

conventional covering

air covering

mercerising(singeing)

re-winding

All blue marked areas are supported by SSM equipment

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10 Local service stationsand over 80 agencies worldwide

HorgenHorgenHorgenHorgen BejingBejingBejingBejing

HongHongHongHong KongKongKongKong

SpartanburgSpartanburgSpartanburgSpartanburg

Fort LauderdaleFort LauderdaleFort LauderdaleFort Lauderdale

ZhongshanZhongshanZhongshanZhongshan

StrongStrongStrongStrong Global Global Global Global PresencePresencePresencePresence

Sales & Service

Sales, Manufacturing, Service

IstanbulIstanbulIstanbulIstanbul

CoimbatoreCoimbatoreCoimbatoreCoimbatore

Sao Paulo

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IsmecaIsmecaIsmecaIsmeca SemiconductorSemiconductorSemiconductorSemiconductor Equipment Equipment Equipment Equipment coverscoverscoverscovers thethethetheFinishingFinishingFinishingFinishing ProcessProcessProcessProcess of a Wide of a Wide of a Wide of a Wide PackagePackagePackagePackage VarietyVarietyVarietyVariety

DiscretesDiscretesDiscretesDiscretesPower Power Power Power discretesdiscretesdiscretesdiscretes

Small Small Small Small outletoutletoutletoutletICsICsICsICs ICsICsICsICs DiesDiesDiesDies LEDLEDLEDLED

ElectricalElectricalElectricalElectrical TestTestTestTest

component contacting and (testing)

Direct docking

MarkingMarkingMarkingMarking

Laser marking/ inspection

LeadLeadLeadLead/surface /surface /surface /surface inspectioninspectioninspectioninspection

2D, 3D, 5S co-planarity, surface

Full 3D component inspection

TapingTapingTapingTaping

Tape, Tube, Tray

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IsmecaIsmecaIsmecaIsmeca Malaysia Malaysia Malaysia Malaysia –––– TrulyTrulyTrulyTruly AsianAsianAsianAsian

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IsmecaIsmecaIsmecaIsmeca Malaysia Malaysia Malaysia Malaysia ---- ProductsProductsProductsProducts

NX16 and NX32NX16 and NX32NX16 and NX32NX16 and NX32

For standard processes and components

Modules, Kits, and Modules, Kits, and Modules, Kits, and Modules, Kits, and SpareSpareSpareSpare PartsPartsPartsParts

Modules for production enhancements, retrofit and upgrade kits, as well as spareparts

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Global Global Global Global PresencePresencePresencePresence in All Key in All Key in All Key in All Key SemiconductorSemiconductorSemiconductorSemiconductor Markets Markets Markets Markets

CarlsbadCarlsbadCarlsbadCarlsbad

La La La La ChauxChauxChauxChaux----dededede----FondsFondsFondsFonds

MelakaMelakaMelakaMelaka

SuzhouSuzhouSuzhouSuzhou

Sales & Service

Manufacturing

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CompositesCompositesCompositesCompositesA Division of Schweiter Technologies

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Rationale for Schweiter to invest in Composites Rationale for Schweiter to invest in Composites Rationale for Schweiter to invest in Composites Rationale for Schweiter to invest in Composites

PerspectivePerspectivePerspectivePerspective of Schweiter Portfolioof Schweiter Portfolioof Schweiter Portfolioof Schweiter Portfolio::::

"Composites" fulfills criteria of

1. World market leadership/growth potential (organic/acquisitions)

2. Autonomy (full set of management skills in company)

3. Ability to stabilize machinery business portfolio of Schweiter

4. Proven history of strong free cash flow generation

5. Purchase price that leaves sufficient cash for

- further acquisitions in Composites

- complementary acquisitions in Textile Machinery and

Ismeca Semiconductor and/or

- substantial acquisition of fourth division

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An Intelligent and Efficient Material ApproachAn Intelligent and Efficient Material ApproachAn Intelligent and Efficient Material ApproachAn Intelligent and Efficient Material Approach

Solid MaterialSolid MaterialSolid MaterialSolid Material

> Uniform mechanical properties

AdvantagesAdvantagesAdvantagesAdvantages

> Low weight - high stiffness

> Excellent surface quality and thermal insulation

> Efficient use of raw materials

> Enables modular design concepts

AdvantagesAdvantagesAdvantagesAdvantages

> Low weight - high stiffness

> Excellent surface quality and thermal insulation

> Efficient use of raw materials

> Enables modular design concepts

Composites MaterialComposites MaterialComposites MaterialComposites Material

> Thin, high performance skin material

> Low weight core material

> Adhesion between layers of highest importance

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Select attractive market segmentswith unmet or latent need for raw material efficient, low weight, high performance multi-material solutions

Identify and evaluateopportunities for

segment specific sandwich offering

Identify and evaluateopportunities for

segment specific sandwich offering

Designthe most effective sandwich configuration

Designthe most effective sandwich configuration

Specifythe most cost efficient raw materials

Specifythe most cost efficient raw materials

Source commodity raw materials

Own efficientand reliablemanufacturing technologies

Offer broad range of segment specific specialities

The Business IdeaThe Business IdeaThe Business IdeaThe Business Idea

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Products

Brands

Applications

Core Materials

Structural Core Materials

Engineering Foams and Balsa

Display

Sandwich Panels

Metal, paper and plastic skins and foamed core materials

Architecture

Sandwich Panels

Aluminum skins and various core materials

Broad Product Range and MarketBroad Product Range and MarketBroad Product Range and MarketBroad Product Range and Market----leading Brandsleading Brandsleading Brandsleading Brands

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America

26%

RoW

24%

Europe

50%

Display

33%

Architecture

26%

Core

Materials

28%

Transport &

Industry

7%

Other

6%

by Market Segmentby Market Segmentby Market Segmentby Market Segmentby Geographyby Geographyby Geographyby Geography

Revenue Breakdown 2009 Revenue Breakdown 2009 Revenue Breakdown 2009 Revenue Breakdown 2009 ---- 3A Composites 3A Composites 3A Composites 3A Composites

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Market environment Business strategy

Wind growth

61 63

25

12

2431

Germany China US

Insta

lled w

ind c

apacity (

GW

)

2008 2012

Source: GWEC 2009, BTM Consult 2009, EER 2009

• Driven by increasing demand for renewable energy

• Wind energy takes a large share within the segment of renewable energy

• Originated in Europe; both China and the US have also made significant commitments

• Offering a full range of universal and specialty core materials to serve wind energy OEMs

• Composites responsible for 70% of world balsa production

• Focusing on sandwich design being the most economical solution

• Follow leading global customers and manage capacity increases are key success factors going forward

6-7% 38-50% 25-26%

Snapshot Wind Market Dynamics and StrategySnapshot Wind Market Dynamics and StrategySnapshot Wind Market Dynamics and StrategySnapshot Wind Market Dynamics and Strategy

CAGR

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BestBestBestBest----inininin----class Development and Innovation Capabilitiesclass Development and Innovation Capabilitiesclass Development and Innovation Capabilitiesclass Development and Innovation Capabilities

• Composites focuses on product and process development

• The key elements are:

– Innovation Management at Composites im@c

– Central R&D in Neuhausen

– Local R&D in key European and US sites

• R&D spend in 2008: US$12m (1.5% of net sales)

New product launches

4

8

6

3

16

2005 2006 2007 2008 2009

Core Materials Display Architecture

•Innovation emphasis:

– market, customer and technology scouting

– strategic product development roadmaps

– competencies identification and development

Innovation Field 'Media Facades'

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Global Footprint Global Footprint Global Footprint Global Footprint ---- Bridgeheads in HighBridgeheads in HighBridgeheads in HighBridgeheads in High----growth Economiesgrowth Economiesgrowth Economiesgrowth Economies

Germany

Switzerland

Assets

• Headquarters in Sins and Singen

• 5 Sites

• 790 Employees (26% of Total)

Osnabrück

AltenrheinSingenSins

Neuhausen

USA

Northvale, NJ

Benton, KY Glasgow, KY

Statesville, NCMooresville, NC

Assets

• PMU DAA Headquarters in Mooresville

• 4 sites


Ecuador

Brazil

Manta

Guayaquil

Quevedo

Sao Paulo Assets

• 3 sites

• Sales office

• 8'500 ha plantations in Ecuador

• 1'330 Employees (44% of Total)

China

India

Changzhou

ShanghaiMumbai

Khopoli

Singapore

Assets

• 5 Sites

• Headquarters in Singapore


Xiamen

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Investment HighlightsInvestment HighlightsInvestment HighlightsInvestment Highlights

• Business idea applicable to attractive markets

• Strong customer focus and deep understanding of end markets

• Leading position and winning brands in all current strategic

segments

• Access to leading distributors and OEMs

• Synergistic assets and technologies

• Proven history of strong free cash flow generation

• Market-leading innovation management

• Set-up to capture further growth

• Effective management and business model to serve multiple

markets and geographies

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2. Half-Year Results 2010


� 4. Outlook

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0

100

200

300

400

500

600

2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009

-20

-10

0

10

20

30

40

50

60

2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009

RevenuesRevenuesRevenuesRevenues OperatingOperatingOperatingOperating EarningsEarningsEarningsEarnings

in Mio. CHF in Mio. CHF

Group Performance Group Performance Group Performance Group Performance

0

100

200

300

400

500

600

700

2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009

Net CashNet CashNet CashNet Cash

in Mio. CHF

*

* excl. PPA adj. of CHF 5.5 Mio.pro forma Composites für 12 Monate kons.

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Group Portfolio Strategy (1) Group Portfolio Strategy (1) Group Portfolio Strategy (1) Group Portfolio Strategy (1)

� The individual business units (divisions) are global market leaders in their segments - or at least have the potential to become global market leaders. Each is autonomous - including financially.

� The core of each strategy consists of innovation (starting pointfor all success to date), proximity to customers via an in-house sales and service system and concentration on critical value creation. Structures are lean and communication direct.

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Group Portfolio Strategy (2)Group Portfolio Strategy (2)Group Portfolio Strategy (2)Group Portfolio Strategy (2)

� The same care is applied to management development as to business development. A management culture is promoted which goes beyond product or even company cycles. In this way, limits are determined not by market segments, technologies or locations, but by these very management assets.

� The holding company is not interested in buying and selling businesses, but aims to develop them beyond the timespan of those currently in executive spots. Acquisitions are primarily intended to strengthen current positions; divestments only take place if there are better owners than Schweiter, or if there is no prospect of market leadership.

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SSM Textile MachinerySSM Textile MachinerySSM Textile MachinerySSM Textile Machinery

� Expansion project Asia

� Strengthening supply chain

� Complementary acquisition - if possible


� Execution of LED strategy

� Market introduction of new products

� Cost reductions on new module

3A Composites3A Composites3A Composites3A Composites

� Focus on customers and business opportunities

� Project stand alone

� Strategy assessment 2010-

Key Priorities H2/2010Key Priorities H2/2010Key Priorities H2/2010Key Priorities H2/2010

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Outlook H2/2010Outlook H2/2010Outlook H2/2010Outlook H2/2010

SSM Textile MachinerySSM Textile MachinerySSM Textile MachinerySSM Textile Machinery

� Solid order intake expected to be continued in 2nd sem

� Volume orders are back - China remains strong, India picking up

� Local assembly (CN) with positive impact on results


� Strong order intake to be continued in 2nd sem

� High sales expected in 2nd sem. Ramp-up as a challenge

� New products with positive effect on results

3A Composites3A Composites3A Composites3A Composites

� Solid course of business to be continued, wind energy (China) remains strong

� Focus on customers and business opportunities with positive impact on results

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This document is for presentation purposes only and should not bThis document is for presentation purposes only and should not be construed as an offer, invitation or solicitatione construed as an offer, invitation or solicitation

to subscribe for purchase or sell any investment and neither it to subscribe for purchase or sell any investment and neither it nor anything it contains shall form the basis of anynor anything it contains shall form the basis of any

contact whatsoever.contact whatsoever.

Opinions expressed herein reflect the current judgment of the maOpinions expressed herein reflect the current judgment of the management of Schweiter Technologies. The nagement of Schweiter Technologies. The

presentation contains forwardpresentation contains forward--looking statements that involve risks and uncertainties. The actlooking statements that involve risks and uncertainties. The actual result ofual result of

Schweiter Technologies may differ materially from those anticipaSchweiter Technologies may differ materially from those anticipated in these forwardted in these forward--looking statements andlooking statements and

forecasts as a result of a number of factors.forecasts as a result of a number of factors.

The management of Schweiter Technologies does not accept any liaThe management of Schweiter Technologies does not accept any liability whatsoever with respect to the usebility whatsoever with respect to the use

of this presentation.of this presentation.

DisclaimerDisclaimerDisclaimerDisclaimer

company presentation half-yearresults2010

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