SWISSLOG 2014 FULL-YEAR RESULT

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SWISSLOG 2014

FULL-YEAR RESULT

Ph o to : N o rm a n A. Mü ll e r

P. Hettich, Delegate of the Board of Directors

Ch. Mäder, CFO

5 March 2015

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This document contains certain forward-looking statements,

recognizable by the use of words such as "expects",

"anticipates", "future" or similar expressions or by discussion

of strategies, plans or intentions, etc. Various factors, known

and unknown risks and imponderabilities, many of which are

beyond our control, may cause actual developments and

results to differ substantially in the future from those reflected

in forward-looking statements contained in this document.

Against the background of such uncertainties, readers should

not rely on forward-looking statements. Swisslog assumes no

responsibility to update forward-looking statements or to

adapt them to future events or developments

.

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1. Overview

2. Highlights of Healthcare Solutions

3. Highlights of Warehouse & Distribution Solutions

4. 2014 Financials

5. Conclusion and Outlook

(4)

Overview

Peter Hettich

(5)

Overview

Overview of Swisslog

 Founded in 1900 with

Headquarters in Buchs/Aarau, Switzerland

 2 372 employees, net sales MCHF 670 (2014)

 30 offices in over 20 countries in Europe, North America,

Asia/Pacific and Middle East

 Customers in over 50 countries

 KUKA majority owner with 94.1% shareholding

Healthcare Solutions (HCS)

Warehouse & Distribution Solutions (WDS)

Swisslog

designs, develops and delivers best-in-class automation solutions for forward-thinking hospitals, warehouses and distribution centers

 Transportation of goods & materials throughout healthcare facilities

 Packaging, storage, dispensing and inventory management of medication

 Design: Logistic Consulting / System Design

 Develop: Project Implementation / System Integration

 Deliver: Operation Support /

(6)



Overall unchanged positive drivers towards higher

automation in hospitals, warehouses and distribution

centers



Ongoing sharpening of business strategies in both divisions

with commitment to enlarge the product offering and to

build more USP’s



Demanding business environment in main markets:

- HCS North America due to reluctance to invest in hospital

infrastructure (larger hospitals mainly)

- Europe in general



KUKA owns 94.1% of shares of Swisslog Holding AG

2014 Overview Business Activities

(7)



Strong order intake: +4.9%

(in constant currencies +7.4%)

–

Increased order intake margin



Strong order backlog: +15.9%

–

Growth in New Business and in Customer Service



Increased net sales: +5.8%

–

Strong increase in New Business



Reduced EBIT: -6.8%

(in constant currencies -2.9%)

–

Investments in business structures (higher fix costs)



Lower net result: -63.0%

(in constant currencies -57.1%)

–

Extraordinary expenses related to transaction with KUKA of

MCHF 4.4 on EBIT level

–

Higher currency exchange losses (temporary valuations)

2014 Overview Financial Activities

(8)

Highlights of Healthcare Solutions

Peter Hettich

(9)



Stable development in Europe



North America with stable order intake but further reduction

in net sales



Further growth in Asia



Negative development of AMTS* in Europe and North

America. Further reduced volumes in core business (tube

systems)



Solid development of ADMS**



Strengthening of own offering:

AMTS: New station and new carriers, new AGV

ADMS: Inpatient and outpatient solutions, MedPortal software

2014 Overview

Highlights of Healthcare Solutions

* Automated Materials Transport Systems ** Automated Drug Management Systems

(10)

Segments and Regions Development

2014 / 2013 – Healthcare Solutions

Order

intake

Net

sales

AMTS*

ADMS**

Customer

Service

Order

intake

Net

sales

Europe

North

America

Asia/

Pacific

Segments Regions

* Automated Materials Transport Systems ** Automated Drug Management Systems

 “Obamacare” with negative impact on tube systems in AMTS

 ADMS with return to growth

(11)

High Ratio of Customer Service as

Profitable Recurring Business

 Customer Service business gains on importance due to growing installed base

 Installed base at around

3 000 hospitals with increasing share of ADMS

 Customer Service is of less cyclical nature

32%

Customer

Service*

68%

New

Business

100% = 205

Net sales in 2014 (in MCHF)

* Systems operation, software support, preventive/reactive maintenance and spare parts

(12)

Important Orders in 2014 –

Healthcare Solutions

AMTS

ADMS



Leading Hospital Group, Germany



Universitätsklinikum Jena, Germany



Barnes Jewish Hospital South, USA



Cook Children’s Health Care System, USA



Parkland Memorial Hospital, USA

1



Bendigo Hospital, Australia



New Children Hospital, Australia



Jiangsu Province Hospital, China



Zhenjgjia Shengzhou Hospital, China



Lozenetz Hospital, Bulgaria



Liège Hospital, France



Humber River, Canada



Leading Hospital Group, USA



Southeast Louisiana Veterans Health Care

System, USA



New Children Hospital, Australia



The First Affiliated Hospital, Sun Yat-sen

University, China



Leading Hospital Group, Qatar

Order value > MCHF 1.0

(13)

Strategic Thrusts

STRATEGIC THRUSTS Strengthen position in material handling solutions Develop medication management solutions inpatient Develop medication management solutions outpatient Strengthen position in customer service  Investment in solution and product management  Software platform  Positioning of product lines by market  Differentiation through product featuring (Global PTS)  Capitalize on TransCar3 (AGV) KEY INITIATIVES  Investment in solution and product management  Software platform  Adaptation of pharmacy automation to market requirements (PillPick)  Supply chain management in hospitals  Vision dockside to bedside  Investment in solution and product management  Software integration

 Extend local China organization to support business growth

 Leverage outpatient solution to other markets

 Differentiate through additional features  Investment in solution and product management  Software platform  Automation Academy  Network Operating Center (NOC)  Infrastructure modernization (new station / new Xpress)

(14)

Highlights of

Warehouse & Distribution Solutions

Peter Hettich

(15)



Very strong order intake and order backlog



Significant increase of Customer Service order intake



Fix cost increase due to additional sales resources (North

America and APAC) and investment in global SAP solution



Increase of standardization through further strengthening of

specific end customer market segments (focus) and

implementation of solution management



Continued focus and investments in software and controls



Good progress in SAP rollout

2014 Overview

Highlights of Warehouse & Distribution Solutions

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Segments and Regions Development

2014 / 2013 – Warehouse & Distribution Solutions

Order

intake

Net

sales

New

Business

Customer

Service

Order

intake

Net

sales

Europe

North

America

Asia/

Pacific

Segments Regions _ _{Customer Service with very strong}

order intake but not (yet) increased net sales

 Further increase of order intake in North America despite an already high level in previous year

 Further growth in APAC

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High Ratio of Customer Service as

Profitable Recurring Business

 Customer Service business with over-proportional share on total profitability

 Customer Service is of less-cyclical nature

 Installed base around

2 000 distribution centers and warehouses

 Global network for Customer Service established

37%

Customer

Service*

63%

New

Business

100% = 465

Net sales in 2014 (in MCHF)

* Retrofit projects, systems operation, software support, preventive/reactive maintenance and spare parts

(18)

Important Orders in 2014 –

Warehouse & Distribution Solutions

Highlights of Warehouse & Distribution Solutions

Order value in MCHF

Order value Food & Beverage Retail Pharma Other

> 20  Varner, Sweden  SCA, Netherlands1

 Banking industry, South

East Asia

< 20  Norbert Dentressangle,

Netherlands

 Unil, Norway

 Food Manufacturer, UK

 Coffee Producer, USA

 Inghams Chicken, Australia  CP Food, China  Food Manufacturer, Singapore  Rusta, Sweden  Schenker Logistics, Sweden  Competec Brack, Switzerland  Cosmetic products distributor, USA

 Catch of the day,

Australia

 IKEA Distributor China, China

 Shilla Duty Free

Shop, Korea  B. Braun Melsungen, Germany  Janssen, Italy  Baxter, USA  Medline, USA  SBE, Italy

 Tire Manufacturer, Sweden

 Riwisa, Switzerland

 Trisa, Switzerland

 Winterhalter+Fenner,

Switzerland

 Automotive Company, UK

 Federal Mogul, USA

 CT Department of Transportation, USA  PT Djarum Tobacco, Indonesia  Shanghai Cigarette Factory, China

(19)

Strategic Thrusts

STRATEGIC THRUSTS Product innovations Customer Service growth Geographic expansion Business optimization  Extended WM6 functionalities  Controls harmoni-zation  Light goods innovations  Crane innovations (Vectura/Tornado)  Value added partner-ships KEY INITIATIVES  Further leverage installed base and conversion via enhanced account management

 System operations blueprint

 Spare parts sales portal and better geographic coverage  Product lifecycle Management  NA light goods market expansion  EMEA expansion: Middle East  APAC expansion: Korea, Hong Kong and others

 APAC local value add expansion  SAP Roll-Out  Procurement  Software governance  Closed loop learning in projects  CoPQ reduction program  Organizational excellence programs Industry segment growth  E-Commerce Focus (CarryPick, AutoStore, Tornado etc.)  3PL/4PL solution cooperation  Industry segment strategies, Marketing and Solution Management

(20)

2014 Financials

Christian Mäder

(21)

Key Financials –

Swisslog Group

 Increased order intake in New Business and Customer Service

 Increased and very strong order backlog

 Improved net sales

 Slightly reduced operating results due to lower margins (mix) and increased fix costs

 Reduced net result due to one-time expenses related to KUKA transaction

 Increased FTEs in line with

business growth (mainly Customer Service) in MCHF 31.12.14 31.12.13 Change in % CHF LOC Order intake 735.4 701.3 4.9% 7.4% Order backlog 628.2 542.2 15.9% 12.7% Net sales 669.6 632.6 5.8% 7.5% EBITDA 30.01 _30.1 _0.0% _-2.9% EBIT 19.11 _20.5 _-6.8% _-2.9% EBIT margin 2.9%1 _3.2% Net result 4.4 11.9 -63.0% -57.1% Employees (FTE) 2 372 2 225 6.6%

1_{Before transaction expenses KUKA}

(22)

Key Figures Development –

Swisslog Group

229 220 244 217 216 383 477 389 485 520 2010 2011 2012 2013 2014 HCS WDS 218 206 219 211 205 397 369 433 421 465 2010 2011 2012 2013 2014 HCS WDS

EBIT (in MCHF) EBIT margin (%)

735 611

670 615

697 ₅₇₅

Net sales (in MCHF) Order intake (in MCHF)

632 652

3.3

2.9

2

3.2

3.8

1 2010 2011 2012 2013 2014

20.1 _18.9

20.5

19.1

2

24.9

1 2010 2011 2012 2013 2014 2014 Financials 701 ₆₃₃

1_{Before restructuring expenses from Score!} 2_{Before transaction expenses KUKA}

(23)

Geographical Net Sales Distribution

Regional split in 2013: Asia/Pacific 17%; North America 32% and Europe 51%

49

23

61

29

54

18

22

23

21

Swisslog Group Healthcare Solutions Warehouse & Distribution Solutions

Asia/Pacific

North America

Europe

Share in %

Net sales in 2014 (in MCHF) and regional split

670

205

465

 HCS with strongest pillar in North America

 WDS main pillar in Europe

 Growth in Asia due to expansion of footprint

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Key Financials –

Healthcare Solutions

 Stable order intake but positive book to bill ratio development

 Significantly increased order backlog

 Reduced operating results due to lower net sales in North America

2014 Financials in MCHF 31.12.14 31.12.13 Change in % CHF LOC Order intake 215.8 216.8 -0.5% 1.1% Order backlog 187.4 163.9 14.3% 7.6% Net sales 204.5 211.3 -3.2% -1.7% EBITDA 16.31 18.1 -9.9% -8.3% EBIT 13.21 15.7 -15.9% -14.6% EBIT margin 6.5%1 7.4% Employees (FTE) 848 832 1.9%

(25)

Key Figures Development –

Healthcare Solutions

2014 Financials

4.4

6.1

7.4 _6.5

2

8.4

1 2010 2011 2012 2013 2014

218

206

219

211

205

2010 2011 2012 2013 2014

229

220

244

217

216

2010 2011 2012 2013 2014

Order intake (in MCHF) Net sales (in MCHF)

9.5

12.6

15.7

13.2

2

18.4

1 2010 2011 2012 2013 2014

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Key Financials –

Warehouse & Distribution Solutions

 Increased order intake in Customer Service

 Strong order backlog

 Improved net sales due to strong order backlog beginning of the year

 Improved operating results due to increased net sales

 Increase of FTEs in line with

business growth (mainly Customer Service) 2014 Financials in MCHF 31.12.14 31.12.13 Change in % CHF LOC Order intake 519.6 484.5 7.2% 10.2% Order backlog 440.8 378.1 16.6% 15.0% Net sales 465.1 421.3 10.4% 12.1% EBITDA 20.81 18.0 15.6% 19.4% EBIT 14.01 11.3 23.9% 29.2% EBIT margin 3.0%1 2.7% Employees (FTE) 1 505 1 376 9.4%

(27)

Key Figures Development –

Warehouse & Distribution Solutions

4.8

4.1

2.7

3.0

2

3.5

1 2010 2011 2012 2013 2014

397

369

433

421

465

2010 2011 2012 2013 2014

383

477

389

485

520

2010 2011 2012 2013 2014

Order intake (in MCHF) Net sales (in MCHF)

2014 Financials

18.9

15.3

11.3

14.0

2

15.1

1 2010 2011 2012 2013 2014

(28)

EBIT Change Effects –

Swisslog Group

EBIT 31.12.2013 Volume _EBIT 31.12.2014 Volume Margin Margin 19.11 -3.0 +1.7 -1.2 +6.8 +1.1 -5.2 -1.6 20.5

Fix costs Fix costs HQ

in MCHF

HCS WDS

3.2% 2.9%

1_{Before transaction expenses KUKA}

(29)

Below EBIT Line –

Swisslog Group

 Transaction expenses KUKA contain mainly:

- M&A expenses

- Early termination of share plan

 Negative net financial result due to (temporary) currency exchange losses

 Stable tax expenses due to unchanged operational results (before transaction expenses)

 Reduced net result

in MCHF 31.12.14 31.12.13 Change in %

CHF LOC

EBIT 19.1 20.5 -6.8% -2.9%

Transaction expenses -4.4 0.0

EBIT after transaction

expenses 14.7 20.5 -28.3% -23.9%

Financial income 0.7 1.8

Financial expenses -3.3 -1.9

Net financial result -2.6 -0.1

Share of loss of an

associate -0.5 -1.5

Income taxes -7.2 -7.0

Net result 4.4 11.9 -63.0% -57.1%

(30)

Consolidated Balance Sheet –

Swisslog Group

 Higher non-current assets due to increase of own offering

 Increased current assets due to higher net sales

 Reduced equity due to higher pension liabilities

 Stable and solid net working capital and net cash

in MCHF 31.12.14 31.12.13 2014 in %

Non-current assets excluding goodwill 61.8 54.8 13.2%

Goodwill 82.0 78.0 17.5%

Non-current assets 143.8 132.8 30.7%

Inventories, receivables and other current assets 264.1 227.3 56.3%

Cash 61.1 50.8 13.0% Current assets 325.2 278.1 69.3% TOTAL assets 469.0 410.9 100.0% Equity 134.9 139.6 28.8% Non-current liabilities 40.0 20.3 8.5% Provisions 11.4 8.3 2.4% Financial liabilities 20.0 10.2 4.3% Other current liabilities 262.7 232.5 56.0% Current liabilities 294.1 251.0 62.7%

TOTAL equity and liabilities 469.0 410.9 100%

Net working capital -14.8 -12.7

Net cash 41.1 40.6

(31)

Consolidated Cash Flow Statement –

Swisslog Group

 Stable operating cash flow before and after working capital changes

 Increased investing activities

 Increased cash flow from financing activities due to higher debt

in MCHF 31.12.14 31.12.13

Cash flow before working capital changes 13.9 14.0

Cash flow from working capital changes 1.1 1.8

Net cash flow from operating activities 15.0 15.8

Net cash flow from investing activities -14.7 -13.1

Net cash flow from financing activities 8.8 -16.4

Currency translation differences 1.2 -0.6

Net change in cash 10.3 -14.3

Cash at beginning of period 50.8 65.1

Cash at end of period 61.1 50.8

(32)

Operating Cash Flow and Margin

Development – Swisslog Group

 Reduced operating cash flow (before working capital changes) due to lower operational results

 Significant volatility in working capital due to changes in advance payments

 Different working capital models in HCS and WDS

2014

2010

in MCHF

14.0

13.9 2011

21.0

+3.1% +2.1% 2.2% +3.4%

2012

21.8 2013

Working capital changes: -39.5 +10.7 -18.6 +1.8 +1.1 Net change: -18.5 32.5 1.7 15.8 15.0

20.3

+3.8% 2014 Financials

(33)

CAPEX and CAPEX in % of Net Sales

Major CAPEX 2014

 Global SAP

 Software and controls WDS

 Software HCS

 ADMS product portfolio HCS

 Replacements 14.3 17.0 9.8 1.6% 2.5% 2.3% (in MCHF)

Higher CAPEX to support innovation and to increase

own value add as well as to improve and standardize

processes

2.3%

2014

2010

2011

2012

14.9 2.1% 12.3

2013

2014 Financials

(34)

Conclusion and Outlook

Peter Hettich

(35)

Conclusion and Outlook –

Swisslog Group

Conclusion



Positive development of order intake, order backlog and

net sales



Operational results (EBITDA, EBIT) as expected



Reduced net result due to transaction expenses

Outlook 2015

(based on current currency levels and barring unforeseen events)



Continuation of focused strategy



Leverage on joint opportunities with KUKA



Negative translation effects on results, due to devaluation

of currencies against CHF

Mid-term target



Best-in-class products and services



EBIT margin target of around 5% in stable business

environment

(36)

Calendar



26 March 2015:

Annual General Meeting



5 May 2015:

First quarter result



5 August 2015:

Half-year result



11 November 2015:

Third quarter result

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