Engelskirchen 30 June Annual accounts press conference / analysts meeting

Transcription

1 Engelskirchen 30 June 2016 Annual accounts press conference / analysts meeting

2 Overview 1. Business model 2. Financial year 2015/ Financial year 2016/ Capital market and M&A 5. Portfolio strategy

3 1. The business model GESCO an association of industrial SMEs including market and technology leaders Currently 17 operating subsidiaries under the roof of GESCO AG. We think and act on a sustainable and entrepreneurial basis. We operate in established sectors with innovative technologies. We offer technology made in Germany for the world s markets. GESCO is comprised of flexible, operationally independent and entrepreneurially-managed entities that benefit from being part of a strong group. GESCO AG long-term investor and safe haven for succession solutions We acquire and develop industrial SMEs on a long-term basis without exit intentions. Majority acquisitions, generally 100 %. Usually as part of a succession arrangement. New management is offered opportunity to acquire stake of up to 20 % of the new company ( entrepreneur company ). 3

4 2. Financial year 2015/2016 Please note: FY subsidiaries = calendar year 1 Jan Dec April March 2016 FY GESCO AG / GESCO Group = 1 April to 31 March 4

5 2. Financial year 2015/2016 Economic environment German GDP % VDMA: stagnant production (original forecast: +2 %) low oil price zero interest rate environment more subdued sentiment from summer onwards, subsiding economic growth in China GESCO Group Expansion of portfolio with Setterstix Inc. in Jan 2015, included in income statement for first-time in reporting year lively demand USA replaces China as main export market incoming orders and sales growing organically and through acquisition results improving disproportionately 5

6 2. Financial year 2015/2016 Sectors that remained difficult: Agricultural machinery (Frank Walz- und Schmiedetechnik GmbH) Oil and chemicals industry (SVT GmbH) Better than expected: Large tools for car body parts (WBL): cyclically-induced weak new business was offset by reworking external tools Robust demand for wire erosion and 3D printing: CFK above budget, exceptionally good year The two restructuring cases: MAE: developing machines processed, 2015 better than planned, restructuring successfully completed; 2016 clearly positive Protomaster: good progress, 2015 better than planned, balanced results targeted for 2016, but ongoing risks, especially in terms of capacity utilisation 6

7 2. Financial year 2015/ / /2016 Change Incoming orders mn % Group sales mn % Group EBITDA mn % Group EBIT mn % Earnings before tax mn % Taxes on income and earnings mn % Earnings after tax mn % Group net income after minority interest mn % Earnings per share pursuant to IFRS % Cash flow mn % Employees No % Organic *) : +5.1% Organic *) : +6.9% Operating improvement, progress with restructuring Organic *) : +1.3% *) organic = excl. addition of Setterstix Inc. 7

8 2. Financial year 2015/2016 budget-actual comparison Group sales ( mn) Group net income after minority interest ( mn) 480 to to Outlook June 2015 Actual Outlook June 2015 Actual 8

9 2. Financial year 2015/ in mn Investments 25 mn Assets Equity ratio 47.7 % Equity and liabilities Fixed assets Equity Inventories Non-current liabilities Receivables and other assets Current liabilities Liquid assets mn paid in dividends Sufficient liquid assets Net bank debt to EBITDA: 1.5 9

10 2. Financial year 2015/2016 Conclusion business was generally lively the reporting year was much better than expected, especially in terms of earnings The main reasons were: restructuring proved more effective than anticipated operating business exceeded the budget at some companies positive one-off effects 10

11 3. Financial year 2016/2017 Starting position and expectations for new financial year Forecast GDP growth: 1.7 % to 1.8 % Forecast VDMA: stagnation at best Agricultural machinery and oil industry: still no growth impetus Industrial customers still generally showing reluctance to invest New growth stimuli still lacking in capital goods industry of relevance to the GESCO Group Our measures: Short term: cost reduction, questioning investments Medium term: optimisation projects on cost and opportunities side 11

12 3. Financial year 2016/2017 Budget figures 2015/2016 Actual 2016/2017 Budget Change Group sales mn to % to -0.8 % Group net income after minority interests mn to % to -9.9 % Earnings per share pursuant to IFRS to % to -9.9 % 12

13 3. Financial year 2016/2017 Why is the outlook subdued? still no growth impetus for capital goods industry, steel industry under consolidation pressure widespread low capacity utilisation, prices under strong pressure positive one-off effects of the prior year won t occur in the new financial year 13

14 3. Financial year 2016/2017 What are the opportunities? Tool manufacture: additional orders for reworking external tools (not plannable) Significant recovery of steel market (currently no sign) Increase in general willingness to invest What are the risks? Economic setbacks for Protomaster, especially in terms of capacity utilisation General economic downswing 14

15 3. Financial year 2016/2017 Brexit: another cause of uncertainty direct sales of GESCO Group with UK in financial year 2015/2016: around 4.9 mn = 1% of Group sales direct implications are therefore limited indirect implications cannot be reliably estimated at the moment general uncertainty is growing, which could further undermine the general investment climate 15

16 3. Financial year 2016/2017 Q1 (operating period Jan. to March 2016) Start to new financial year (preliminary figures for the first quarter) Q1 prev. year incl. large order Incoming orders Q1 approx mn Sales Q1 approx mn Q1 Q2 Q3 Q4 Q Incoming orders below prev. year s Q1, but above previous quarter; book-to-bill > 1 Q1 sales still weak due to low incoming orders in previous quarters Incoming orders Sales 16

17 4. Capital market and M&A GESCO share underperformed the SDAX benchmark in reporting year delisted from SDAX in December 2015 two largest shareholders increased shareholding Mr Heimöller acquired roughly 30,000 shares, currently holds around 14.6 % Investmentaktiengesellschaft für langfristige Investoren TGV exceeded the 10 % threshold in Dec 2015, currently holds around 13.0 % the two biggest shareholders now hold almost 30 % of the shares Proposed dividend ( per share) / /2016 Dividend policy: payout ratio approx. 40 % of Group net income after minority interest 17

18 4. The GESCO share Free float: 85.4 % Stefan Heimöller, entrepreneur, member of supervisory board: 14.6 % Investmentaktiengesellschaft für langfristige Investoren TGV: 13 % 18

19 4. Share price development (in %) Financial year 2015/2016 GESCO vs. Indices, Financial year 2015/2016 GESCO DAX SDAX 19

20 4. Share price development (in %) 1 and 10 years GESCO vs. Indices, 1 year GESCO vs. Indices, 10 years GESCO DAX SDAX 20

21 4. Capital market and M&A Proposal to Annual General Meeting on 25 August 2016: capital increase from company funds and share split Objective: to make the share lighter through higher number of shares in order to enhance the share s attractiveness for private investors and to improve liquidity Implementation: Increase in share capital by 1,330,000 through capital increase from company funds Redistribution of share capital through share split 1:3 All shares are fully entitled to dividends for financial year 2016/2017 New share capital of 9,975,000 divided into 9,975,000 shares with a calculated nominal value of 1.00 each 21

22 4. Capital market and M&A M&A remains a seller s market High demand, limited number of candidates rising multiples Last acquisition was Setterstix Inc. in early 2015 Numerous offers have since been analysed, evaluations have been carried out GESCO AG has intensified its activities, is increasingly approaching companies directly Focus on 4 end customer market segments 22

23 5. Portfolio strategy 2022 GESCO s portfolio strategy Spring 2016: development of a portfolio strategy of profitable growth based on tried-and-tested GESCO business model Criteria: long-term positive megatrends, comparable end customer markets, similar economic fluctuation and growth rates Definition of 4 relevant end customer market segments Grouping of existing GESCO Group companies into the new segments, new segment reporting as of Q1 2016/2017 Production process technology Resource technology Health and infrastructure technology Mobility technology 23

24 5. Portfolio strategy 2022 Production process technology Features: Products / services: End customers: Dynamically growing markets, high degree of innovation, automation, trend towards batch size 1 Robotics and automation solutions in machine and plant construction, technology-intensive manufacturing services Serial producers, e.g. in automotive, steel and consumer goods industries Sales *) : 76.7 mn EBIT *) : 4.5 mn *) unaudited pro-forma figures, financial year 2015/

25 5. Portfolio strategy 2022 Features: Consolidating markets, focus on niches and customer service Resource technology Sales *) : mn EBIT *) : 18.8 mn Products / services: End customers: Customised preparation of primary materials, e.g. materials supply, transport and loading technology Material-intensive industrial companies, globally distributed production structures, broadly diversified *) unaudited pro-forma figures, financial year 2015/

26 5. Portfolio strategy 2022 Health and infrastructure technology Features: Products / services: End customers: Close to end consumers, not very cyclical, relatively resilient to economic fluctuation Components, modules and primary products Providers for mass markets close to end consumers (construction, sanitary equipment, food, hygiene, medicine) Sales *) : mn EBIT *) : 9.5 mn *) unaudited pro-forma figures, financial year 2015/

27 5. Portfolio strategy 2022 Mobility technology Features: Products / services: End customers: Cyclical automotive market, positive outlook driven by technological leaps, e.g. electromobility Tools and moulds, components, parts Vehicle industry, e.g. car, commercial vehicle and rail Sales *) : 85.5 mn EBIT *) : 8.2 mn *) unaudited pro-forma figures, financial year 2015/

28 5. Portfolio strategy 2022 Objective of the GESCO portfolio strategy: enhance value of investment portfolio organically and through acquisitions Respective managing directors continue to have exclusive operating responsibility for GESCO Group companies As the majority shareholder GESCO AG has 3 levers 1. Appointment of best possible management 2. Prioritisation of investment projects within the individual companies which promise the highest return on capital employed in the long term 3. Active consulting and support role of shareholder: Monthly discussions, regular exchange, sparring, best practice Setting focal themes on strategy days: digitalisation and Industry 4.0 Support for technical optimisation projects for profitable growth and cost efficiency, from the beginning of a project to its implementation 28

29 Appendix GESCO Group overview Company Sales Staff as at 31/12/2015 GESCO AG shareholding AstroPlast Kunststofftechnik GmbH & Co. KG 16, % Paul Beier GmbH Werkzeug- und Maschinenbau & Co. KG 12, % C.F.K. CNC-Fertigungstechnik Kriftel GmbH 9, % Dömer GmbH & Co. KG Stanz- und Umformtechnologie 15, % Dörrenberg Edelstahl GmbH 179, % Frank Group 27, % Franz Funke Zerspanungstechnik GmbH & Co. KG 15, % Haseke GmbH & Co. KG 12, % Hubl GmbH 12, % Georg Kesel GmbH und Co. KG 11, % MAE Group 44, % Modell Technik Formenbau GmbH 13, % Protomaster GmbH 17, % Setter Group 26, % SVT GmbH 33, % VWH Vorrichtungs- und Werkzeugbau Herschbach GmbH 11, % Werkzeugbau Laichingen Group 26, % 29

30 Appendix Facts and figures for GESCO AG Founded: 1989 Share capital: 8,645,000 Shares: Free float: 85.4% Stock markets: Sec. identification number: ISIN: 3,325,000 registered shares Xetra; Frankfurt (regulated market); Berlin, Düsseldorf, Hamburg, Hanover, Munich, Stuttgart (open market) A1K020 DE000A1K0201 IPO: 24/03/1998 End of financial year: Designated sponsors: 31 March equinet Bank AG Oddo Seydler Bank AG 30

31 Appendix Financial calender Financial calendar 30 June 2016 Annual Accounts Press Conference / Analysts Meeting 15 Aug Figures for the first quarter (1 April to 30 June 2016) 25 Aug Annual General Meeting, Wuppertal 15 Nov Figures for the second quarter (1 April to 30 September 2016) Feb Figures for the third quarter (1 April to 31 December 2016) 29 June 2017 Annual Accounts Press Conference / Analysts Meeting Aug Figures for the first quarter (1 April to 30 June 2017) 31 Aug Annual General Meeting, Wuppertal Nov Figures for the second quarter (1 April to 30 September 2017) 31

32 Appendix Investor Relations contact Investor Relations GESCO AG Telephone: Investor Relations Fax: Oliver Vollbrecht Johannisberg 7 Internet: Wuppertal Germany 32