Oerlikon concluded a further strategic milestone and delivered strong sales growth and solid profitability

Transcription

1 Oerlikon concluded a further strategic milestone and delivered strong sales growth and solid profitability Dr. Brice Koch, CEO Jürg Fedier, CFO Q2 / H Business Update August 5, 2014

2 Agenda 1 Q Business Update 2 H Financial Result 3 Outlook Appendix Page 2

3 Oerlikon Highlights Q Continuing the Group s value creation path Sales growth of 12.1 % year-over-year (15.8 % at stable FX) Solid profitability with EBITDA margin at 16.1 % and 10th consecutive quarter with double-digit EBIT margin (11.3 %) Successful closing of Metco ahead of schedule; Integration well on track Access to capital markets: Placement of two senior unsecured bonds and prolongation of syncidated credit facility Strong balance sheet Experienced Management Team in place FY 2014 outlook confirmed Page 3

4 Oerlikon delivered strong sales growth and solid profitability in Q Sales Order intake EBITDA (margin) EBIT (margin) in CHF million in CHF million in CHF million; in % of sales in CHF million; in % of sales 12.1% 15.8% % % 16.1% % % 11.3% % 91 Q Q Q at stable FX Q Q Q Q Q Q Successful closing of Metco transaction; Metco consolidated for one month Attractive sales growth of 12.1 % and order intake up 4.5 % in Q % EBITDA margin and 11.3 % EBIT margin impacted by acquisition accounting effects and one-off transaction costs related to Metco transaction Page 4

5 Sales split Q Further balanced Oerlikon portfolio 1 Segment split Regional split Service business 25% 3% 34% 34% 5% 41% 27% 12% 26% 20% 73% Manmade Fibers Drive Systems Vacuum Surface Solutions Adv. Technologies Asia / Pacific North America Europe Rest of World Goods, Equipment & Components Service & Spare Parts 1 Metco consolidated for 1 month Page 5

6 Manmade Fibers Segment Q performance Asia / Pacific BCF carpet yarn/ plastic processing 1 as % of sales RoW 7% 7% 12% Sales Q % Europe North America Staple fiber/nonwoven 3% 18% Sales Q % Filament spinning/texturing Key figures Market development Operational performance in CHF million Q Q Δ Order intake % Sales (to 3 rd parties) % EBITDA % EBITDA margin % 17.4 % +3.6 pp EBIT % EBIT margin % 15.5 % +3.8 pp Filament equipment with high level of deliveries in Q USA carpet yarn (BCF) market shows ongoing strong demand Address opportunities along the value chain (from Melt to Yarn) Declining order intake due to China market normalization Sales in Q2 strong and on high level High profitability due to product mix and variabilization of costs Staple Force S 1000 launched at ITMA trade fair in Asia Page 6

7 Drive Systems Segment Q performance RoW Asia / Pacific 5% 10% North America Performance Automobile Q % 31% Europe Energy/Mining 15% 22% Construction 1 as % of sales Sales 10% Sales Q % 39% Agriculture Transportation Key figures Market development Operational performance in CHF million Q Q Δ Order intake % Sales (to 3 rd parties) % EBITDA % EBITDA margin % 9.4 % +1.8 pp EBIT % EBIT margin % 3.8 % +1.8 pp Construction market continues to strengthen in North America Slowdown in agriculture expected to continue Oil and gas sales strong (primarily Off- Shore) Mining market remains at a low point Sales growth and flat order intake Focus on operational performance and cost resulted in continuous margin improvements Review of Segment strategy under the leadership of new Segment CEO underway Page 7

8 Vacuum Segment Q performance in CHF million Q Q Δ Order intake % Key figures Sales (to 3 rd parties) % EBITDA % EBITDA margin % 14.9 % -3.8 pp EBIT % EBIT margin % 11.7 % -4.1 pp RoW Asia / Pacific 36% 1% Sales Q % 42% Europe Market development Solar industry showing signs of recovery Display coating applications (mobile devices/electronics) in Asia weak due to postponed investments Generally hesitant market dynamics North America Others R&D/ Analytics 22% 12% 19% Energy/Coating 1 as % of sales Sales Q % Process industry Operational performance Declining order intake & sales Profitability impacted by sales volume Continued operational excellence initiatives and structural modifications New TURBOVAC i/ix family being launched worldwide Page 8

9 Surface Solutions Segment Q performance in CHF million Q Q Δ Order intake % Key figures Sales (to 3 rd parties) % EBITDA % EBITDA margin % 29.1% pp EBIT % EBIT margin % 20.1 % pp Asia / Pacific 31% RoW 5% Sales Q % 49% Europe Market development Further growth in coating services Global automotive industry, general industries and aviation as drivers Order backlog in aero industry at record levels North America General Industry Power Generation 1% 16% Aviation 4% Automotive 16% Sales Q % Tooling Operational performance Strong underlying sales growth and continued high underlying profitability Segment profitability impacted by acquisition accounting effects and one-off transaction costs 1 as % of sales; 2 Metco consolidated for 1 month Page 9

10 Surface Solutions Segment Financial impact and start of integration Financial impact on Surface Solutions Segment Q2 accounts: Transaction costs of ~CHF 13 million Inventory step up of ~CHF 10 million Amortization of acquired identifiable intangible assets of ~CHF 3 million Integration: Global introduction of Oerlikon Metco brand Formation of joint leadership team Analysis of combined product portfolio and global footprint Definition/start of combined project teams to confirm and execute cost and top-line synergy potentials Page 10

11 Advanced Technologies Segment Q performance Asia / Pacific 54% RoW Europe 4% 11% Sales Q % North America Key figures Market development in CHF million Q Q Δ Order intake % Sales (to 3 rd parties) % EBITDA -1 4 >-100 % EBITDA margin 1 n/a 10.0 % n/a EBIT -2 3 >-100 % EBIT margin 1 n/a 7.3 % n/a Connectivity and Internet of Things drive Semiconductor equipment order intake Increased visibility of order pipeline shows positive trend for H2 Investments in advanced nano markets postponed 1 as % of sales Others Advanced Nano 0% 16% Sales Q % Semiconductor Operational performance Sales and order intake lower due to phasing of projects Profitability mainly affected by ongoing R&D investments Page 11

12 Agenda 1 Q Business Update 2 H Financial Result 3 Outlook Appendix Page 12

13 Key figures Oerlikon Group in CHF million H H Δ Order intake % Order backlog % Sales % EBITDA % of sales % % +4.6 % EBIT % of sales % % +2.3 % Result from continuing operations % of sales % % % Net income % EPS % Cash flow from operating activities % Net operating assets (incl. goodwill and brands) 1 Metco consolidated for one month; 2 Including CHF 37 million from discontinued operations % Page 13

14 Constant level of investments in R&D Investments in R&D (expenditure) at around 4 % of sales in CHF million / as % of sales % 102 4% 106 4% 122 4% H2e 4% R&D essential to secure technological leadership Constant investments of around 4 % of sales R&D expenditures expected to increase in H (H2e) (adjusted) 2011 (restated) 2012 (cont. op.) 2013 (cont. op.) H Page 14

15 FX impact on Sales, EBIT and EBIT margin Oerlikon Group Sales H in CHF million Oerlikon Group EBIT H in CHF million 1, % 47 1, % EBIT margin in % H Transaction effects Translation effects H FX impact adj. H Transaction effects Translation effects H FX impact adj. Devaluation of currencies (INR, USD, CNY) EUR close to prior year level 3 % currency impact on sales Transaction and translation effects on nearly same level Impact on EBIT margin 20 bps Page 15

16 Result from continuing operations increased by 12.8 % in CHF million H H Δ Result before interest and taxes (EBIT) in % of sales % % +2.3 % Financial result % Result before taxes (EBT) in % of sales % % +4.4 % Income taxes in % of EBT % % % Result from continuing operations in % of sales % % % Result from discontinued operations % Net income (reported) % 1 Metco consolidated for one month; 2 Including CHF 37 million from discontinued operations Page 16

17 Strong balance sheet in CHF million Cash and cash equivalents Trade receivables Inventories Property, plant and equipment Goodwill and intangible assets Total other assets Total assets Trade payables Current customer advances Current and non-current loans and borrowings Non-current post-employment benefit provisions Total other liabilities Total liabilities Total equity Total equity ratio Net cash H FY % 51 % Page 17

18 Net working capital expected to decrease in H Net working capital 1 FY 2009 H in % of 12 months rolling sales (incl. Metco pro forma sales); in CHF million 8% 7% 4% 4% 12% Higher asset base (Metco acquisition) and less customer advances led to increase in net working capital Customer advances at CHF 336 million (decrease mainly related to Manmade Fibers) Lower net working capital expected for H due to active net working capital management FY 2010 (reported) FY 2011 (reported) FY 2012 (cont. op.) FY 2013 (cont. op.) H Net working capital is defined as trade receivables + inventories trade payables current customer advances Page 18

19 CapEx allocation in 2014 to emphasize in H2 as planned stabilize around targeted ratio CapEx in CHF million Depreciation & amortization in CHF million CapEx / depreciation & amortization ratio 1-15% +9% Mid-term target corridor H (cont. op.) H H (cont. op.) H FY 2010 (adj.) FY 2011 (adj.) FY 2012 (cont. op.) 2013 (cont. op.) H Excluding impairment Page 19

20 Consolidated cash flow statement Consolidated cash flow statement H in CHF million Receivables -18 Inventories -39 Payables/liabilities 3 Customer advances -78 Hedge accounting -5 Total Dividends paid -91 Interest paid -12 Proceeds from capital increase 30 Proceeds from issue of financial debt 489 Other -5 Total CAPEX PP&E -46 CAPEX intangibles -9 Acquisition of subsidiaries, net of cash acq Interest and Other (net) -2 Total -971 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 Page 20

21 Return On Capital Employed (ROCE) Oerlikon Definition of ROCE H FY 2013 Development of ROCE in % EBIT Total current income tax % 17.4% 17.7% 17.0% - Total deferred tax expense NOPAT (12 months rolling) % Net Operating Assets Current tax receivables Deferred tax assets Current income tax payables Deferred tax liabilities Capital Employed FY 2011 (reported) FY 2012 (adjusted 1 ) FY 2013 Q H First time consolidation of Metco leads to strong increase in net operating assets but contributing only one month to NOPAT Stable EBIT despite significant one-time costs related to Metco acquisition 1 EBIT excl. one-time effect of sale of Arbon property of CHF 39 million Page 21

22 Agenda 1 Q Business Update 2 H Financial Result 3 Outlook Appendix Page 22

23 2014 Outlook confirmed Maintaining a leading position amongst industrial peers >15% Consolidation of Metco for 7 months Sales 2, reported 2014E 2014 Group Guidance ~15% margin Impacted by Metco transaction (one-offs) Consolidating Metco for seven months and with full absorption of Metco impacts, Oerlikon expects compared to 2013 reported figures: EBITDA 492 Gross margin effect from inventory step-up Transaction costs Integration costs Order intake growth of ~ 10 % Sales growth exceeding 15 % EBIT 1 margin of ~ 10 % EBITDA 1 margin of ~ 15 % EBIT 2013 reported 2014E ~10% margin 366 Impacted by Metco transaction One-offs (same as for EBITDA) Amortization of acquired identifiable intangible assets 2013 reported 2014E 1 including full absorption of all related transaction/integration costs and acquisition accounting effects Page 23

24 Summary Q Continued value creation path: Concluded a major strategic milestone Delivered strong sales growth and solid profitability Strong balance sheet / financial position Oerlikon on track Full-year 2104 guidance confirmed Page 24

25 Thank you. Page 25

26 Agenda 1 Q Business Update 2 H Financial Result 3 Outlook Appendix Page 26

27 H key figures by Segment in CHF million Manmade Fibers Drive Systems Vacuum Surface Solutions 2 Adv. Tech. Order intake Δ to H % % % % % Order backlog Δ to H % % % 86 n/a % Sales (to third parties) Δ to H % % % % % EBITDA Δ to H % % % % -6 >-100 % EBITDA margin 1 Δ to H % +4.1 %pts 10.5 % +1.9 %pts 9.7 % -5.2 %pts 18.8 % %pts n/a EBIT Δ to H % % % % -8 >-100 % EBIT margin 1 Δ to H % +4.2 %pts 4.9 % +2.1 %pts 6.2 % -5.3 %pts 10.1 % -9.9 %pts n/a Operating assets Δ to H % % % >100 % % No. of employees Δ to H % % % % % 1 as % of sales; 2 Metco consolidated for one month in H Page 27

28 FX impact on Sales, EBIT and EBIT margin Oerlikon Group Sales Q in CHF million Oerlikon Group EBIT Q in CHF million % % EBIT margin in % Q Transaction effects Translation effects Q FX impact adj. Q Transaction effects Translation effects Q FX impact adj. Devaluation of currencies (INR, USD, CNY) EUR close to prior year level 3.3 % currency impact on sales Impact on EBIT margin negligible Page 28

29 Return on Net Assets at continued high level EBIT and Net Operating Assets 1 EBIT 12 months rolling; in CHF million in % Return on Net Assets (RONA) 1 2, % % 2,196 2, % 13.3% 1,575 1, % 2010 (reported) 2011 (reported) 2012 (cont. op.) 2013 (cont. op.) H (reported) 2011 (reported) 2012 (cont. op.) 2013 (cont. op.) H Increased asset base (Metco acquisition); continued strong operational performance with only one month contribution of Metco Sustainable double digit RONA performance 1 Net Operating Assets include goodwill and brands; RONA is defined as EBIT (12 months rolling) / Net Operating Assets including goodwill and brands 2 EBIT excl. one-time effect of sale of Arbon property of CHF 39 million Page 29

30 R&D and Capex on Segment level R&D expenses H Adv. Technologies Surface Solutions 31% 15% CHF 65m 22% 20% Manmade Fibers 12% Vacuum Drive Systems Surface Solutions 40% CapEx H Adv. Technologies Manmade Fibers 11% 2% CHF 55m 14% Vacuum 33% Drive Systems Depreciation & Amortization H CapEx / Depreciation & Amortization H Adv. Technologies Manmade Fibers Surface Solutions 42% 3% 13% CHF 71m 32% Drive Systems 0,67 0,82 1,14 0,76 Oerlikon Group 0,50 10% Vacuum Manmade Fibers Drive Systems Vacuum Surface Solutions Adv. Techn. Page 30

31 Asset allocation and employees on Segment level Net operating assets H Adv. Technologies Manmade Fibers Surface Solutions 52% 3% 4% CHF 2 772m 7% 34% Vacuum Drive Systems Employees (FTE) by Segment H Adv. Technologies Corporate Manmade Fibers 1% 1% 16% Surface Solutions 38% % Drive Systems 10% Vacuum Operating Assets H Employees (FTE) by Region H Adv. Technologies Manmade Fibers 3% 17% RoW 2% Surface Solutions 43% CHF 3 943m 7% Vacuum 30% Drive Systems Asia / Pacific 33% 14% North America % Europe Page 31

32 Non-cash items Cash items Financial impact of Metco transaction Top-line synergies Cost synergies (cumulative) <CHF 5 million ~CHF 5 million >CHF 10 million Transaction costs >CHF 20 million, thereof CHF 6 million already booked in 2013 Integration costs >CHF 10 million >CHF 10 million <CHF 10 million Inventory step up >CHF 20 million as of closing Amortization of acquired identified intangibles assets >CHF 20 million >CHF 30 million >CHF 30 million >CHF 30 million H1 14 H ff Page 32 Oerlikon Investor Presentation_August 2014

33 Oerlikon shares Oerlikon shares Oerlikon shareholder structure 1 Listed on Swiss Exchange (SIX) since 1973 Securities symbol: OERL Securities number ISIN: CH No. of shares outstanding: shares (as of June 30, 2014) Re-entry to Swiss SMIM on April 17, 2012 Addition to STOXX Europe 600 as of June 18, 2012 as of June 30, 2014 Free float (incl. 0.2 % treasury shares) 57.3% 42.6% Renova Group Oerlikon share price development as of August 1, 2014, indexed; 100 percent = closing price per December 30, SMI Stoxx Europe 600 Oerlikon SMIM Based on shares outstanding and latest notification by Renova (as of May 8, 2014 of shares) Page 33

34 Coverage 6 Buy/Accumulate & 4 Hold/Neutral Broker Analyst Recommendation Date of last update Target price AlphaValue Pierre-Yves Gauthier Buy Bank am Bellevue Alessandro Foletti Hold Berenberg Bank Benjamin Glaeser Buy Credit Suisse Patrick Laager - restricted - Helvea SA Reto Amstalden Neutral Kepler Cheuvreux Martin Flückiger - suspended - MainFirst Michael Inauen Outperform Mirabaud Securities LLP Thomas Baumann Buy Société Générale Patrick Jousseaume Hold UBS André Rudolf von Rohr Buy Vontobel Michael Foeth Buy Zürcher Kantonalbank Armin Rechberger Marketweight Consensus 6 positive 4 neutral Page 34

35 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 35

36 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 36

37 Investor Relations Contact OC Oerlikon Management AG Churerstrasse 120 CH 8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Investor Relations Phone: Mobile: Page 37

38 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 forwardlooking 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 38