Title: Disclaimer
1Disclaimer
- Forward-looking statements
- This report contains certain forward-looking
statements within the meaning of Section 27A of
the Securities Act of 1933, as amended referred
to hereafter as the Securities Act, and Section
21E of the Securities Exchange Act of 1934, as
amended referred to hereafter as the Exchange
Act. These forward-looking statements, which may
be expressed in a variety of ways, including the
use of future or present tense language, refer to
future events. Océ has based these
forward-looking statements on its current
expectations and projections about future events.
- Océs expectations and projections may change
and Océs actual results, performance or
achievements could be significantly different
from the results expressed in or implied by these
forward-looking statements based on various
important factors, risks and uncertainties some
of which are beyond Océs control and which are
neither manageable nor foreseeable by Océ. When
considering these forward-looking statements, you
should keep in mind these risks, uncertainties
and other cautionary statements made in this
presentation or Océs annual or periodic reports
filed with the United States Securities and
Exchange Commission. In view of these risks,
uncertainties and assumptions, the
forward-looking events presented today might not
occur. - These factors, risks and uncertainties, which
include, but are not limited to, changes in
economic and business conditions, customer demand
in competitive markets, the successful
introduction of new products and services into
the markets, developments in technology, adequate
pricing of products and services, competitive
pricing pressures within Océs markets, the
financing of Océs activities, efficient and
cost-effective operations, changes in foreign
currency exchange rates, fluctuations in interest
rates, uncertainty of political situations,
changes in governmental regulations and laws, tax
rates, successful acquisitions, joint ventures
and disposals and the effects of recent and
potential future terrorists attacks and the war
on terrorism. - For a more detailed discussion of the risks,
uncertainties and other factors that may affect
Océs actual results, performance or
achievements, you should refer to pages 69 to 73
of the Annual Report for 2004, to pages 6 to 11,
56 and 57 of Océs 2004 Annual Report on Form
20-F and any other filings made by Océ with the
United States Securities and Exchange Commission. - Océs forward-looking statements speak only as
of the date on which the statements are made, and
Océ undertakes no obligation to update or revise
publicly any forward-looking statement, whether
as a result of new information, future events or
otherwise.
2Printing for Professionals
- Results second quarter 2005
- Rokus van Iperen
- CEO
2
3Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
4Summary Q2
- Operational performance second quarter 2005
- 2.5 organic growth in sales of print systems
- Stable development in recurring revenues (-/-
4.8) - First printers from Asia have been shipped to
customers -
- Financials second quarter 2005
- Operating profit Euro 13.6 million
- Operating profit from commercial activities Euro
7.5 million - Net profit Euro 10.6 million
- Free cash flow Euro 34.9 million
5Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
6Profile
Revenues by regions
Europe (58)
ROW (7)
Americas (35)
Revenues by category
80
28
72
20
Recurring revenues
Non-recurring revenues
2005
7Strategic Business Units
- Strategic Business Unit Digital Document Systems
(69) - Corporate Printing 36
- Commercial Printing 18
- Business Services 15
- Strategic Business Unit Wide Format Printing
Systems (31) - Technical Documentation Systems 18
- Display Graphics Systems 3
- Imaging Supplies 10
8DDS Market Position
- Competition
- Corporate Commercial Canon, Ricoh, Xerox,
Konica Minolta, IBM - Business Services Xerox, IKON, Pitney Bowes,
Williams Lea/Bowne - Position
- Number 5 in HV / VHV Document Printing
- Number 2 in HV / VHV Transaction Printing
- Number 4 in Commercial Printing
- Number 5 in Business Services
- Strengths
- Own technology
- Direct sales organisation
- Customer loyalty
- High service level
- Large outsourcing business
9WFPS Market Position
- Competition
- TDS HP, (Fuji)Xerox, Ricoh, KIP
- DGS HP, Epson, Vutek, Kodak, etc.
- Position
- Number 1 in Technical Documentation (B/W)
- Number 3 in Display Graphics (MV/HV)
- Strengths
- Own technology
- Direct sales organisation
- Customer loyalty
- High service level
10Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
11Financial Results Q2 2005
Euro million 2005 2004 ? ?
Organic Revenues 640.4 682.2 -/- 6.1
-/- 4.1 Gross Margin 257.5 293.1 -/- 12.1
-/- 10.2 Operating Costs 243.9 258.9 -/- 5.8
-/- 4.3 Operating Income 13.6 34.2 -/- 60.2 -/
- 54.1 Net Income 10.6 21.4 -/- 50.6 -/- 44.8
In euro per share Net Income 0.12 0.25 -/-
52.2 -
12Balance Sheet
-
- Euro million Q2 2005 Q2 2004
- Fixed assets 867 1,004
- Current assets 1,287 1,339
- Total 2,154 2,343
- Group equity 757 750
- Interest bearing debt 454 554
- Non-interest bearing liabilities 943 1,039
- Total 2,154 2,343
- Interest bearing debt
- Long term 414 461
- Short term 40 93
- Total 454 554
- Net debt 229 439
13Non-Recurring Revenues
2005
Q1
Q2
2004
25
Q1
Q2
Q3
Q4
6
10
5
7
2002
2003
2001
2.5
-14
-10
-12
Excl. VLP
14Industry Results
-
- Autonomous Machine Autonomous Machine
- Revenues Sales Revenues Sales
-
- Canon 7 n.a. 7 n.a.
- Hewlett-Packard 2 n.a. 2 5
- Océ 0 7 2 12
- Ricoh 3 n.a. 0 n.a.
- IKON - 3 3 - 7 2
- Xerox - 3 2 - 3 - 2
- Danka - 11 - 8 - 14 - 10
- Sources Company reports
FY 2004
Q1 2005
H1 2005
15Recurring Revenues
2002
2004
2003
2005
2001
Q1
Q2
Q3
Q4
Q1
4
2
Q2
2
-1.7
- 4.3
-2.0
-2.5
-2.1
-1.7
-2.0
- 1
- 1
- 3
- 3
- 3
- 3
- 4.8
- 5.0
Total Population related
- 7.5
16Breakdown Recurring Revenues 2004/2005
- In points of total recurring Q2 Q3 Q4 Q1
05 Q2,05 - sec sec sec sec sec
-
- Population-related revenues
- DDS - 2.6 - 2.2 - 4.3 -1.9 -1.9
- WFPS 0.5 0.2 0.0 0.2 -0.1
- Business Services 2.1 1.5 - 0.2 - 0.8
-0.5 - Imaging Supplies - 0.5 - 0.6 - 1.0 - 0.4
0 - Interest income lease - 0.7 - 1.6 -2.0 -2.1
-2.3 - Total recurring revenues - 1.3 -2.7 - 7.5 -
5.0 -4.8
17Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
18Digital Document Systems Results Q2 2005
- Euro million 2005 2004 ? Organic
- Revenues 432 470 -/- 8.0 -/- 2.7 )
- EBIT 0 18 -/- 99
-
-
-
- Print systems (non-recurring) -/- 7.3 -/-
0.5 ) - Services (recurring) -/- 8.3 -/- 3.4 )
- ) Excluding VLP effect
19Digital Document Systems 2005
- Growth in sales of print systems
- Slowdown in Q2 is not structural, because of
- Strong demand for colour printers and HV/VHV
monochrome printers - Recurring revenues will improve in H2 2005
- Trend is improving quarter by quarter
- Recurring revenues are now growing in some
regions - Positive impact of high demand for new machines
- Profitability will improve in H2 2005
- Higher profitability in Business Services
- Stronger focus on cost control and reduction of
working capital - Lower cost prices by manufacturing in Asia
20Wide Format Printing Systems Results Q2 2005
- Euro million 2005 2004 ? Organic
- Revenues 208 212 -/- 1.8 2.2 )
- EBIT 13 16 -/- 16.8
-
-
- Print systems (non-recurring) 3.5 8.5 )
- Recurring -/- 4.0 -/- 0.5 )
-
- ) excluding VLP effect
21Wide Format Printing Systems 2005
- Continued growth in sales of print systems
- Growth in TDS driven by colour
- Continued strong growth in DGS driven by new
productportfolio - Recurring revenues (excl. lease) will increase in
H2 2005 - Growth in population-related revenues
- Growth in Imaging Supplies
- Profitability will improve in H2 2005
- Growth in machine sales and population-related
revenues - Focus on cost control and reduction of working
capital - Lower cost prices by manufacturing in Asia
22Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
23Strategic Objectives
- Océ strives for a Top 3 position in the selected
strategic market segments - Technical Documents
- Display Graphics
- Productive Printing in Corporate and Commercial
segments - Océ aims for a leading position in
document-related Business Services - Financial objectives RoA 12 RoE 18
24Strategic Segment Developments 2003-2008
- Strategic Segment Size 2003 CAGR
- Technical Documentation 3.5 billion -/- 1
- Colour 1.4 billion 2
- Display Graphics 2.6 billion 6
- Corporate Printing 8 billion 5
- Commercial Printing 9.2 billion 11
- Document Management 10.4 billion 9Services and
Software
25DDS Strategic Actions
- Investments in distribution
- Expansion of direct sales force
- Possible acquisitions / Partnerships in
distribution - Investments in competitive product portfolio
- RD activities in colour, software and HV-B/W
- Outsourcing of manufacturing to Asia
- Higher added value solutions in Business Services
- Operational Excellence
- Cost reduction in IT, Logistics and Purchasing
- Reduction of working capital
26WFPS Strategic Actions
- Investments in distribution
- Expansion of sales channels in USA, Germany and
Asia - Possible acquisitions
- Investments in competitive product portfolio
- RD activities focus on colour and software
- Outsourcing of manufacturing to Asia
- Focus on DG-media in Imaging Supplies
- Operational excellence
- Cost reduction in IT, Logistics, Purchasing
- Reduction of working capital
27Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
28Outsourcing of Manufacturing
- First phase of outsourcing manufacturing
according to plan - Cost price targets achieved
- High quality standards maintained
- 20 of original Venlo volume will be delivered
from low cost countries in 2005 - New Océ TDS100 fully assembled in Asia
- Next phases of outsourcing announced
- 50 of original Venlo volume will be delivered
from low cost countries by end of 2006 - Improved natural hedge
- Shift of costs from euros to dollars
- Level playing field with competition
29Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
30Leasing
- Main part of portfolio has been outsourced
- 60 of total lease outsourced
- Euro 349 million of lease on Q2 2005 balance
sheet - Temporarily high cash balances
- Proceeds of the sale will be used for
- Repayment of debt and deferred taxes
- Investments and acquisitions
- Buy back of shares
- Outsourcing outside Europe is temporizedexpected
year end lease debtors on balance sheet Euro
300 million
31Commercial vs Financial Results
- Euro million Q2 2005 Q2 2004
- Commercial activities
- Revenues 631.3 661.7
- Operating Income 8.8 19.5
- Profit on sale of lease contracts 1.3 10.5
- Operating Income excl. sale of
- lease contracts 7.5 9.0
- Financial activities
- Revenues 9.1 20.5
- Operating Income 4.8 14.7
32Agenda
Summary Q2 2005
Profile
Financial Results Q2 2005
Strategic Business Units
Strategy
Outsourcing Manufacturing
Leasing
Outlook
33Outlook 2005
- Expected growth in sales of print systems through
- Momentum of new products especially colour
- Investments in distribution power
- Will lead to
- Increase of installed base of digital machines
- Growth of print volume
- This will lead to a reversal of the declining
trend in recurring revenues, which we expect to
take placein the second half of 2005 - Growth of operational result of commercial
activities excluding lease effects - Net profit for 2005 will be below 2004 because of
the reduced revenues from leases - Based on the developments of the business as
presented today
34Questions Answers
35Printing for Professionals
35