Oerlikon Investor Presentation

Transcription

1 Oerlikon Investor Presentation Jürg Fedier, CFO Helvea 2014 Swiss Equities Conference, Bad Ragaz January 16, 2014

2 Agenda 1 Overview 2 Business Segments 3 Outlook 4 Appendix Page 2

3 Oerlikon a global industrial player Oerlikon Group Manmade Fibers Segment Drive Systems Segment Vacuum Segment Coating Segment Advanced Technologies Segment Sales: CHF 2 906m EBIT: CHF 421m (1) CHF 1 103m CHF 826m CHF 373m CHF 501m CHF 103m CHF 186m (2) CHF 70m CHF 38m CHF 103m CHF 7m ~ employees ~160 locations 34 countries ~CHF 160m in R&D 1) 2012 Group EBIT contains corporate / elimination items of CHF 16 million 2) Including a one-time effect in the amount of CHF 39 million Page 3

4 Oerlikon Portfolio 9 successful strategic transactions since 2010 Coating Segment: Hartec acquisition Solar Segment: Solar Segment sold Drive Systems Segment: Poretta site sold Coating Segment: Rox acquisition Textile Segment: Carding business sold Textile Segment: Melco business sold Textile Segment: Natural fibers businesses sold Corporate: Pilatus stake sold Drive Systems Segment: Garessio site sold Page 4

5 Result of Oerlikon transformation and underlying performance improvement EBIT margin (in %) Net cash (in CHF Mio.) Q Q Equity ratio (in %) Market cap (in CHF Mio.) H Page 5

6 Agenda 1 Overview 2 Business Segments 3 Outlook 4 Appendix Page 6

7 Manmade Fibers Segment Manmade Fibers Strategic position: High-performing manmade fiber business (high profitable growth potential, less cyclicality) Plant engineering and construction Growing end markets (e.g. apparel, technical applications, home textiles) Market drivers Competitive landscape Customer base Population/GDP growth and increasing spending on textile per capita Replacement of cost intensive equipment by resource saving innovative equipment Growth in technical textiles for new applications Political encouragement in China and India Market growth of 6 % p.a. Concentrated competitor base, only a few big international players in the market for filament spinning (i.e. TMT, CTAMP) Local competitors in texturing, staple fibers and nonwovens market Dedicated customer base with long-term investment horizon (upstream integration) and strong balance sheets, predominantly based in China and India 25 leading companies will produce 60 % of world demand thereof 22 companies are Oerlikon customers Page 7

8 Customer example Spinning plant 3 x 200 t/d Polycondensation 504 WINGS POY 144 WINGS FDY 648 spinning machines Plastic melt Polycondensation Winder Page 8

9 Manmade Fibers Segment 1 Third quarter Q Δ Key figures Order intake % Order backlog % Sales % EBIT % EBIT margin % 14.8 % +1.7 %pts Asia / Pacific RoW Europe 74% 9% 2% 15% Sales North America Market development China remains the Segment s primary market 7th consecutive quarter with high order intake High demand for BCF equipment (carpet yarn) in North America BCF carpet yarn/ plastic processing Staple fiber/nonwoven 23% 4% Sales 9M % Filament spinning/texturing Performance 1 Former Textile Segment; 2 continuing operations; Q restated; 3 sales to third parties; 4 as % of sales Orders increased; sales lower due to phasing of projects/poc Increased EBIT margin due to favorable product mix and operational excellence Strong operational performance to compensate some of the impacts related to the divestment Page 9

10 Drive Systems Segment Drive Systems Strategic position: Niche applications with limited exposure to more commoditized gear component market Focus on difficult-to-produce, high-performance products in high-end applications Expand in high-growth segments such as energy and on-/off-highway market Market drivers Competitive landscape Customer base Population growth, rising middle class and increased mobility Migration towards higher technology/systems in agriculture in emerging markets Construction and infrastructure build-up in developing countries Market growth GDP correlated Many competitors worldwide competing in the niche gear and drives market. Competitors include both global players as well as smaller regional producers Concentrated customer base of global OEMs and producers (CNH, John Deere, Caterpillar, etc.) Develop and expand local Chinese and Indian customers Page 10

11 Drive Systems Segment Third quarter 2013 Q Δ Key figures Order intake % Order backlog % Sales % EBIT % EBIT margin % 9.3 % -5.9 %pts RoW Asia / Pacific 6% 10% North America 34% Sales 50% Europe Market development Resilience of the agricultural market Continued weakness in the heavy construction, rail transportation and infrastructure markets in the US and China Customers with high inventories Energy/Mining/Specialty industry High-end 9% automotive 13% Construction 22% Sales 9M % 45% Off-highway/Transportation 1 sales to third parties; 2 as % of sales Agriculture Performance Sales and profitability continued to be impacted by a challenging market environment EBIT decline due to lower sales and unfavorable product mix Comprehensive mitigation actions have been implemented Page 11

12 Vacuum Segment Market drivers Aging population with growing demand for health care and pharma Demographics and middle class development driving process industry growth Construction and infrastructure with coating of glass and solar panels Market growth GDP correlated Vacuum Strategic position: Vacuum solutions for process industry, solar/coating and R&D/analytics with limited exposure to semiconductor market Modularization of product offering and streamlining of production process Competitive landscape Customer base Big global competitors (Edwards, Pfeiffer, Busch) as well as regional competitors Reliable partner for more than customers Page 12

13 Vacuum Segment Third quarter 2013 Q Δ Order intake % Key figures Order backlog % Sales % EBIT % EBIT margin % 8.3 % +0.7 %pts RoW Asia / Pacific 43% 1% Sales 15% 41% Europe Market development Challenging environment in process industry R&D/analytics and glass coating market with solid demand Continued weakness in solar market North America Others R&D/ Analytics 21% 17% Sales 9M % 41% Solar/Coating Process industry Performance Increased order intake due to penetration in energy sector Increased sales activities led to higher sales and market share Sequentially lower profitability impacted by utilization and product mix 1 sales to third parties; 2 as % of sales Page 13

14 Coating Segment Market drivers Automotive sales in emerging markets Usage of adv. surface solutions in various sub-segments for functional and decorative enhancements (watches, medical, aerospace) Substitution of chrome-plating technology on automotive CAGR >7 % Coating Strategic position: Undisputed technology and market leader in PVD Expansion of components business Automotive industry represents around 40 % (direct and indirect) Extension of product offer to new coatings and services Competitive landscape Customer base Undisputed market and technology leader in PVD (physical vapor deposition) coating Broad customer base worldwide Page 14

15 Coating Segment Third quarter 2013 Q Δ Key figures Order intake % Order backlog Sales % EBIT % EBIT margin % 20.0 % +0.4 %pts RoW Asia / Pacific 29% 8% Sales 14% 49% Europe Market development Rising demand in the automotive industry in the US and China High demand in components business, i.e. decorative coatings in the watch industry North America Automotive Comp. Precision Comp. Forming tools 5% 12% 10% Equipment 22% Sales 9M sales to third parties; 2 as % of sales 51% Cutting tools Performance Growth in Coating Services in local currencies (Q3: +5 %) Stable performance on high level Innovation milestone with BAL.IQ New coating center in Oklahoma, US Launch of regrinding service Page 15

16 Advanced Technologies Segment Advanced Technologies Strategic position: High growth and highvalue added applications in clean technology, semiconductors and mobile device markets Incubator for new technologies and applications predominantly in deposition technology Market drivers Competitive landscape Customer base Population growth Rising middle class (India, China and Brazil) Accelerated demand for mobile devices / touch panels Demand for new, more efficient and clean energy infrastructure 4 % market growth in semiconductor Big global as well as regional producers with focus on different core markets Concentrated customer base with strong focus in Asia Page 16

17 Advanced Technologies Segment Third quarter 2013 Q Δ Asia / Pacific 59% RoW 0% Sales 36% 5% Europe North America Key figures Market development Order intake % Order backlog % Sales % EBIT % EBIT margin 2 n/a n/a n/a Strong demand for power devices and touch panels Continued softness in semi market Strong demand in Asia Photovoltaic Others 39% 0% Sales 9M % Semiconductor Performance Significant orders for CLUSTERLINE 300 High order backlog and book-to-bill ratio above 1 indicate future sales growth Profitability close to break-even 1 sales to third parties; 2 as % of sales Page 17

18 Agenda 1 Overview 2 Business Segments 3 Outlook 4 Appendix Page 18

19 Oerlikon Group 2013 Outlook confirmed and specified Outlook as of March 2013 Assessment after 9M 2013 Global environment Environment uncertain and challenging H1 is likely to be weak with upside potential in H2 Global economic environment remains uncertain and difficult to assess Visibility of industries and regions is still limited Top line Order intake to be around the previous year s level with performance in H1 offset at least by better performance in H Sales at around the previous year s level Order intake and sales at around the previous year s level Profitability Operational profitability around the previous year s level Temporarily impacted by the announced Textile Segment divestments EBIT margin is expected at around 12 % Page 19

20 Redeployment of cash Strong financial basis for future growth Net debt / net cash position in CHF million 1'500 1' Dec 2010 Dec 2011 June 2012 Dec 2012 June 2013 Sep 2013 Regional expansion (organic growth): New sites (e.g. new coating centers) Strengthening market presence in emerging markets Expansion of value chain: Upstream expansion of value chain (e.g. Coating Segment with regrinding technology) Complementary technology: Add complementary technology to address new applications with existent technology framework Adjacent technology: Farming out in adjacent technologies to broaden technology offering to the benefit of customers Page 20

21 Questions & Answers Session Page 21

22 Agenda 1 Overview 2 Business Segments 3 Outlook 4 Appendix Page 22

23 Strong order intake and sequential margin improvement in Sales in CHF million Order intake in CHF million Order backlog EBIT EBIT margin 1 in CHF million in CHF million in % % % % % %pts Q (restated) (cont. Op.) Q (restated) (cont. Op.) Q (restated) (cont. Op.) Q (restated) (cont. Op.) Q (restated) (cont. Op.) Strong order intake growth of 6.7 % to CHF 712 million Sequential improvement of EBIT margin to 12.6 % (Q2 2013: 12.4 %) Sales of CHF 697 million close to prior year s level Strong financial position with net liquidity of CHF 963 million 1 as % of sales Page 23

24 Sales split Q3 / 9M 2013 Segment split 1 Regional split 1 Split service vs. goods business 1 3% 4% 18% 24% 14% Q % 31% Q % 9M % 19% 76% Manmade Fibers (-1 %pts) Drive Systems (-2 %pts) Vacuum (+1 %pts) Coating (+1 %pts) Adv. Techn. (+0 %pts) 1 Q3/9M 2013 continuing operations, compared to prior year Asia (+1 %pts) North America (+6 %pts) Europe (-5 %pts) Rest of World (-2 %pts) Goods, Equipment, Components (-2 %pts) Service & Spare Parts (+2 %pts) Page 24

25 FX impact on Sales, EBIT and EBIT margin Oerlikon Group Sales* in CHF million Oerlikon Group EBIT in CHF million +1% +2% EBIT margin in % ** reported Transaction effects Translation effects FX impact adj. ** reported Transaction effects Translation effects FX impact adj. Devaluation of currencies (INR, BRL, JPY) compensated by slightly stronger EUR Overall minor currency impact on sales Only minor impact on EBIT and EBIT margin * Sales to third parties * * continuing operations Page 25

26 Key figures Oerlikon Group H in CHF million H H Δ Order intake % Order backlog % Sales % EBITDA 1 % of sales % % -20 % EBIT 1 % of sales % % 2 Result from continuing operations 1 % of sales % % -32 % Net income % EPS % Cash flow from operating activities % Net operating assets (incl. goodwill and brands) % 1 H continuing operations; H restated, 2 excl. one-time effect of sale of Arbon property EBIT of CHF 194 million, EBIT margin of 13.1 %, Δ 10 % Page 26

27 Constant range of investments in R&D Investments in R&D (expenditure) in the range of 4-5 % of sales in CHF million / as % of sales R&D essential to secure technological leadership Constant range of 4 5 % of sales following the divestments 0 FY 2009 (adjusted) FY 2010 (adjusted) FY 2011 (restated) FY 2012 (cont. op.) 9M 2013 (cont. op.) 0 Page 27

28 Return On Capital Employed (ROCE) Development of ROCE in % 19.7% 14.9% 17.3% 17.0% 16.5% 17.3% FY 2011 (reported) 9M 2012 FY 2012 (reported) Q H M M 2013 ROCE: Improved 12-month rolling NOPAT over slight increased Capital Employed The Oerlikon Group continues to earn in excess of its cost of capital Page 28

29 Key figures by Segment H in CHF million Order intake Δ to H Order backlog Δ to H Manmade Drive Vacuum Fibers 1 Coating Adv. Tech. Systems % % % % % % % % % Sales 2 Δ to H % % % % % EBITDA Δ to H EBITDA margin 3 Δ to H EBIT Δ to H EBIT margin 3 Δ to H % % +3.2 %pts 29-6 % 14.8 % -1.4 %pts % 4-72 % -4 % -4 % 15.7 % +3.3 %pts % 8.7 % -5.1 %pts 2.8 % -6.0 %pts 11.5 % -1.2 %pts Operating assets % +4 % +15 % 73-1 % 29.1 % -0.2 %pts 20.0 % -1.0 %pts % -1 0 % n/a n/a -3 0 % n/a n/a % No. of employees % +2 % +1 % % 1 H continuing operations; H restated; 2 sales to third parties; 3 as % of sales 4 on a like-for-like basis excl. one-time effect of sale of Arbon property % Page 29

30 FX impact on Sales, EBIT and EBIT margin Oerlikon Group Sales* H in CHF million Oerlikon Group EBIT H in CHF million % % EBIT margin in % H1 2013** reported Transaction effects Translation effects H FX impact adj. H1 2013** reported Transaction effects Translation effects H FX impact adj. Only minor currency impact on sales (-1 %) in H Only minor currency impact on EBIT (-4 %) and EBIT margin (-40 basis points) in H * Sales to third parties * *H continuing operations Page 30

31 Oerlikon increased net income by 30 % in CHF million H H Δ Result before interest and taxes (EBIT) 1 in % of sales % % -25 % Financial result % Result before taxes (EBT) 1 in % of sales % % -28 % Income taxes 1 in % of EBT % % +17 % Result from continuing operations 1 in % of sales % % -32 % Result from discontinued operations >100 % Net income % 1 H continuing operations; H restated; 2 H including Solar Segment transaction closed on Nov. 26, 2012 Page 31

32 Strong balance sheet in CHF million Cash and cash equivalents H FY Trade receivables Inventories Assets classified as held for sale Property, plant and equipment Intangible assets Total other assets Total assets Trade payables Current customer advances Liabilities classified as held for sale Current and non-current loans and borrowings Non-current post-employment benefit provisions Total other liabilities Total liabilities Total equity Total equity ratio Net liquidity % % 339 Page 32

33 Net working capital Net working capital * FY 2009 H in % of 12 months rolling sales; in CHF million 17% 8% 7% 4% 3% Further reduction in net working capital Customer advances at CHF 515 million com-pared to CHF 450 million at year-end FY 2009 (reported) FY 2010 (reported) FY 2011 (reported) FY 2012 (adjusted) H (cont. op.) * Net working capital is defined as trade receivables + inventories trade payables current customer advances Page 33

34 CAPEX exceeding depreciation level CAPEX in CHF million Depreciation & amortization* in CHF million CAPEX / depreciation & amortization ratio* +2% +2% Mid-term target corridor H (adjusted) H (cont. op.) H (restated) H (cont. op.) FY 2009 (adj.) FY 2010 (adj.) FY 2011 (adj.) FY 2012 (adj.) H (cont. op.) * Excluding impairment Page 34

35 R&D, CapEx and depreciation & amortization on Segment level R&D expenses H CapEx H Adv. Technologies 16% 27% Manmade Fibers Adv. Technologies Manmade Fibers 2% 15% Coating 35% CHF 56m CHF 65m Coating 29% 11% 18% Vacuum Drive Systems Vacuum 9% 38% Drive Systems Depreciation & Amortization H CapEx / Depreciation & Amortization H Adv. Technologies Manmade Fibers 1,11 3% 1,09 1,00 Oerlikon Group 14% 0,86 Coating 36% CHF 64m 0,50 36% Drive Systems Vacuum 11% Manmade Fibers Drive Systems Vacuum Coating Adv. Technologies Page 35

36 Consolidated cash flow statement Consolidated cash flow statement H in CHF million * 247 Receivables -110 Inventories -77 Payables/liabilities 45 Customer advances 64 Hedge accounting -1 Total * CAPEX PP&E -61 CAPEX intangibles -13 Proceeds, interest and Other +38 Total -36 Dividend paid -84 Interest paid -13 Proceeds from issue of share capital 35 Other -18 Total -80 Cash and cash equivalents at the beginning of the period Operating activities before changes in net current assets Changes in net current assets Investing activities Financing activities Translation adjustments on cash and cash equivalents Cash and cash equivalents at the end of the period* * Includes cash and cash equivalents that are included in «Assets classified as held for sale» Page 36

37 Return on Net Assets at continued high level (RONA*) EBIT (12 months rolling) and Net Operating Assets* in CHF million RONA* in % 2,821 2,196 2, % 26.7% 22.9% 1,575 1, % % FY 2009 (reported) FY 2010 (reported) FY 2011 (reported) FY 2012 (restated) H (cont. op.) FY 2009 (reported) FY 2010 (reported) FY 2011 (reported) FY 2012 (restated) H (cont. op.) Divestments and Discontinued Operations reduced asset base Slight decline in RONA attributable to lower EBIT in H over stable net operating assets * Net Operating Assets include goodwill and brands; RONA is defined as EBIT / Net Operating Assets including goodwill and brands Page 37

38 Impact from closing of Textile transaction Expected net cash proceeds of some CHF 500 million Impact of reclassification of cumulative exchange differences negative CHF 114 million (non-cash item) Expected loss on the disposal of CHF 97 million Result from discontinued operations in H CHF 37 million Divestment of Business Units Natural Fibers and Textile Components closed on July 3, 2013 Full-year 2013 result from discontinued operations expected in the amount of negative CHF million Page 38

39 Currency mix with strong natural hedge Limited Swiss franc exposure Currency exposure 2012 in % in % Currency exposure 2013 (e) CHF USD EUR RMB 12% 4% 7% 17% 2012 Other 60% CHF USD EUR RMB 3% 12% 13% 2013 (e) 17% Other 55% No major currency mismatch between sales, COGS and overhead costs natural hedge Solar divestment reduced Swiss franc exposure in 2012 Limited transaction risk Translation effects from reporting currency Swiss francs Growth in China will increase RMB proportion Page 39

40 Dividend increase of 25 % Dividend yield of 2.4 % based on year-end share price Dividend proposal for FY 2012 in CHF per share +25% % Payout ratio: 29 % Payout ratio: 29 % EPS 2011 EPS 2012 Normalized EPS 2012 Dividend FY 2011 Dividend FY 2012 AGM approved a pay out CHF 0.25 per share for FY 2012 in line with dividend policy Stable pay-out ratio of 29 % based on normalized EPS Dividend distributed from the reserve from capital contribution Page 40

41 Infrastructure Energy Electronics Food Clothing Transportation Presence and opportunities in global growth markets Manmade Fibers Manmade Fibers Manmade Fibers Drive Systems Drive Systems Drive Systems Vacuum Vacuum Vacuum Coating Coating Coating Adv. Techn. Adv. Techn. +5 %* +4 %* +5 %* Adv. Techn Manmade Fibers Manmade Fibers Manmade Fibers Drive Systems Drive Systems Drive Systems Vacuum Vacuum Vacuum Coating Coating Coating Adv. Techn. Adv. Techn. +4 %* +2.5 %* +5 %* Adv. Techn. Page 41

42 Oerlikon shares Oerlikon shares as of September 30, 2013 Oerlikon shareholder structure as of September 30, 2013 Listed on Swiss Exchange (SIX) since 1973 Securities symbol: OERL Securities number ISIN: CH No. of shares outstanding: shares Re-entry to Swiss SMIM on April 17, 2012 Addition to STOXX Europe 600 as of June 18, 2012 Free float 55.0% Renova Group* 44.8% 0.3% Treasury shares Oerlikon share price development as of December 21, 2013, indexed; 100 percent = closing price per December 31, 2012 SMI Stoxx 600 Oerlikon SMIM * Based on latest notification as of August 2, 2013 of shares and shares outstanding of Page 42

43 Coverage 8 Buy/Accumulate & 4 Hold/Neutral Broker (as of December 31, 2013) Analyst Recommendation Date of last update Target price AlphaValue Pierre-Yves Gauthier Add Bank am Bellevue Alessandro Foletti Hold Berenberg Bank Benjamin Glaeser Buy Credit Suisse Patrick Laager Outperform Helvea SA Reto Amstalden Neutral Kepler Cheuvreux Christoph Ladner Buy MainFirst Michael Inauen Outperform Mirabaud Securities LLP Thomas Baumann Neutral Société Générale Jean Baptiste Roussille Hold UBS André Rudolf von Rohr Buy Vontobel Michael Foeth Buy Zürcher Kantonalbank Armin Rechberger Overweight Consensus 8 positive 4 neutral Page 43

44 Oerlikon Customer Base (Selection) Preferred technology supplier to technology leaders in their respective industries Global customer base and world-leading brand names Strong long-term customer relationships Page 44

45 Financial Calendar 2014 February 25, 2014 Q4 / FY 2013 results and publication of Annual Report Annual Press Conference April 15, 2014 April 29, 2014 Annual General Meeting of Shareholders - KKL Lucerne Q Results - Media & Analyst Conference Call August 5, 2014 Q2 / HY 2014 results and publication of Interim Report Media & Analyst Conference Call October 28, 2014 Q3 / 9M 2014 results - Media & Analyst Conference Call Page 45

46 Investor Relations Contact OC Oerlikon Management AG Churerstrasse 120 CH 8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Investor Relations Phone: Mobile: Page 46

47 Disclaimer Oerlikon has made great efforts to include accurate and up-to-date information in this document. However, we make no representation or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoever for the use of it. 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. Oerlikon is under no obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. All information provided in this document is not intended as, and may not be construed as, an offer or solicitation for the purchase or disposal, trading or any transaction in any Oerlikon securities. Investors must not rely on this information for investment decisions. Page 47