Management Roadshow. Frankfurt / London

Transcription

1 Management Roadshow Frankfurt / London 4 / 5 August 2015

2 Highlights H1/2015 Market environment New car registrations in the US and Europe continued to grow by 5.2 per cent to 8.2 million units in Q2/2015 whereas the Chinese automobile market is weakening Operating performance Group sales: per cent to million Adjusted EBITDA: increased by 15.4 per cent from 19.9 million to 23.0 million Net income: per cent to 9.6 million, whereof 1.3 million are derived from the Joint Venture SHW Longji Brake Discs (LongKou) accounted for at equity for the first time Operating free cash flow: improvement of 5.2 million to -3.5 million Financial performance Successful issuance and placement of a capital increase of 24.6 million Shareholders approved to resolve a dividend of 1.00 per share on the Annual General Meeting on 12 May

3 Presence established in strategic relevant markets Tuttlingen Employees: 236 Wasseralfingen incl. HQ Employees: 329 São Paulo, Brazil Employees: 5 Shanghai, China Employees: 6 LongKou, China Employees: 115 Neuhausen Employees: 142 Status: 30 June 2015 Bad Schussenried Employees: 559 Toronto, Canada Employees: 5 Detroit, U.S. Employees: 1 Serial production of oil pumps started in Brazil in June

4 Status internationalisation: Pumps and Engine Components North America: Re-entry into market nomination as a serial supplier of variable engine oil pumps for a global engine platform (North America, Europe and China) China: Successful delivery of prototypes of electric auxiliary pumps for start-stop function as well as transmission oil pumps for dual-clutch; nomination as serial supplier is about to be concluded Active preparation for the start of serial production (SoP) in the second half of 2015 Assembly line shipped to Kunshan; positive results expected promptly Brazil: 2015 seems to be characterised by a challenging market environment with still positive results Europe: Intensified search for best cost country locations in South-Eastern and Eastern Europe for capacity expansion 3

5 Status internationalisation: Brake Discs China: Start of operation of the joint venture SHW Longji Brake Discs (LongKou) in April Currently LongKou produces unprocessed brake discs for the joint venture partner with fixed profit margins Production capacity will be shifted to ready-to-install brake discs for new OEM/OES business over time Management focus lies on improving system and process quality for attaining the certification according to ISO/TS16949 Concrete customer enquiries received shortly after start of operation NAFTA: Further analyses of market potentials for light weight brake discs and evaluation of various market entry strategies 4

6 Status efficiency measures Dr.-Ing. Frank Boshoff, a proven expert in the areas of operational excellence, lean manufacturing and the development of international production sites, appointed as CEO as of 1 July 2015 Implementation of 3-year investment programme in Powder Metallurgy on track sizing and powder press as well as machining cell commissioned Execution of efficiency programmes to overcome operational and logistical pressures in the Powder Metallurgy and in Bad Schussenried are currently lagging selectively behind own expectations Focus on accelerated and enforced execution of identified efficiency measures 5

7 Large investments in Powder Metallurgy ( ) Specification Commissioning date Effect Status Building expansion Q4/2014 Capacity Sizing press Q1/2015 Capacity Powder press Q1/2015 Capacity Machining cell Q2/2015 Capacity / Ratio Double disc grinding machine Q3/2015 Capacity / Ratio Palletizing systems Q3/2015 Ratio High-speed sizing press Q1/2016 Capacity Powder Press Q1/2016 Capacity Execution of investment measures on track 6

8 Investments at a glance 7

9 Investments: building expansion 8

10 Investments: building expansion 9

11 Investments: sizing press 10

12 Investments: powder press 11

13 Investments: machining cell 12

14 Investments: machining cell 13

15 Financials: half-year

16 Results in line with expectations m H1/2015 H1/2014 Change in % Group sales % Incoming orders % Adj. EBITDA % Depreciation (excl. PPA) % Adj. EBIT % Net income for the period % EPS (in ) 1) % Working Capital Ratio (%) Capex 2) % Operating free cash flow 3) % Net Debt % ROCE (%) No. of employees (average) 1,276 1, % 1) H1/2015: based on an average of 6,281,042 shares / H1/2014: based on an average of 5,851,100 shares 2) Additions to tangible and intangible assets 3) Operating free cash flow w/o investments in financial assets 15

17 Group Sales ( m) Sales by quarter ( m) % % +11.7% H1/2014 H1/2015 Q1 Q2 Q3 Q4 Adj. EBITDA ( m) Adj. EBITDA by quarter ( m) % % 9.6% 8.4% 9.4% 10.3% 9.7% 10.3% 8.7% H1/2014 H1/2015 Q1 Q2 Q3 Q4 1 Readjustment of Q2 / Q figures due to non-recurring serial start-up costs Strong growth driven by ongoing customer call orders and new product ramp-ups 16

18 Increased sales with leading key accounts VW Sales by customer ( m) Daimler AUDI BMW Volvo Cars Porsche H1/2014 H1/2015 ThyssenKrupp Ford Hilite PSA Other SHW well positioned with German OEMs 17

19 Pumps and Engine Components Sales ( m) Sales by quarter ( m) % % % H1/2014 H1/2015 Q1 Q2 Q3 Q4 Adj. EBITDA ( m) Adj. EBITDA by quarter ( m) % % 9.6% % 10.0% 10.9% 9.1% 10.8% 8.7% H1/2014 H1/2015 Q1 Q2 Q3 Q4 1 Readjustment of Q2 / Q figures due to non-recurring serial start-up costs Execution of efficiency measures currently lagging selectively behind own expectations 18

20 Brake Discs Sales ( m) Sales by quarter ( m) +0.8% +1.0% +0.7% H1/2014 H1/2015 Adj. EBITDA ( m) Q1 Q2 Q3 Q4 Adj. EBITDA by quarter ( m) +19.8% % % 7.2% 8.7% 10.1% 11.9% 9.1% 11.2% H1/2014 H1/2015 Q1 Q2 Q3 Q4 EBITDA-margin will exceed the 10 per cent hurdle in

21 Joint Venture LongKou : Key financial figures k Q2/2015 Sales 5,054 EBITDA 555 Depreciation (excl. PPA) 288 EBIT 267 EBT 457 Tax 114 EAT 343 Attributable earnings after tax (51 per cent) 175 Additionally, 1.1 million one-off net income effect due to release of badwill and hidden reserves 20

22 Net Working Capital Ratio 15.6% 16.1% 11.3% 9.7% 11.7% 10.5% Medium-term target: 11% 10.4% 8.7% 7.2% Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Sales increased by 13.2 per cent - Working Capital Ratio reduced to 10.4 per cent 21

23 Capex Depreciation Capex ( m) Capex by quarter ( m) % -20.4% % % % 8.8% 6.2% 8.2% 6.6% 6.2% 9.3% H1/2014 H1/2015 Depreciation ( m) Q1 Q2 Q3 Q4 Depreciation by quarter ( m) % +24.5% % +24.9% % % 4.3% 4.1% 4.5% 4.4% 4.5% H1/2014 H1/2015 Q1 Q2 Q3 Q4 Capex ratio of around 7 per cent in 2015 within reach 22

24 Cash Flow ( m) 5. Q2/2015 Q2/2014 H1/2015 H1/2014 Cash flow from operating activities Cash flow from investing activities - tangible and intangible assets Operating free cash flow Cash flow from investing activities - financial assets ) 0.0 Total free cash flow Other (esp. dividend / proceeds from capital increase) Change in net cash ) Payment into the Joint Venture s share capital (SHW Longji Brake Discs (LongKou)) Free cash flow driven by capital increase and internationalisation 23

25 Sound financial profile Balance sheet as of 30 June, 2015 ( m) 243.4m Balance sheet as of 31 December, 2014 ( m) 209.5m 37.9 Current assets (42.5%) Equity (45.8%) Current assets (43.0%) Equity (40.3%) Non-current assets (57.0%) Cash (0.5%) Assets Equity & Liabilites 1) Net financial debt declined by 8.5 million to 8.9 million Pensions (11.4%) Other long term liabilities (5.8%) Bank debt (4.1%) 1) Other short term liabilities (33.0%) Non-current assets (56.9%) Cash (0.1%) Assets Sound balance sheet safeguards organic and inorganic growth Equity & Liabilites 1) Increased pension provision due to interest rate decline (IAS 19) 2) Net financial debt amounts to 14.4m in 2014 Pensions 1) (13.4%) Other long term liabilitie (3.5%) Bank debt (7.0%) 2) Other short term liabilities (35.8%) 24

26 Value drivers 25

27 General positive market development despite China s loosing momentum Light vehicle production (< 6 t) Europe (m units) Light vehicle production (< 6 t) North America (m units) CAGR 3.3% CAGR 3.2% Light vehicle production (< 6 t) China (m units) Light vehicle production (< 6 t) South America (m units) CAGR 23.9 CAGR 6.8% % Source: PwC Autofacts (July 2015) Source: PwC Autofacts January 2015 SHW benefits from dynamic market development and challenging CO 2 regulations in all regions 26

28 Trendsetter for CO 2 -relevant pumps and engine components SHW innovations in the past Variable engine oil pump 2002 Transmission oil pump for dual clutch 2005 Variable external gear pump 2006 Electric auxiliary pump for start-stop 2010 Variable oil-/ vacuum pump 2012 Variable oil-/ vacuum pump with balancer shaft 2014 Fixed displacement engine oil pump Aluminium camshaft phaser Oil-/vacuum pump Map controlled engine oil pump Camshaft phaser for diesel engines Scissor gears First to market through excellence in the field of innovation 27

29 Characteristics Application Product picture SHW products contribute to fuel saving two examples Variable oil-/vacuum pump with balancer shaft Variable oil-/vacuum pump (tandem pump) VW Polo BlueMotion Technology 66kW (90 HP) TDI Mileage: 3.5 l / 100km CO 2 emissions: 90.5 g / km BMW 1 series 118d (4-cylinder) Mileage: 4.15l / 100km CO 2 emissions: 109 g / km 2-3 per cent less fuel consumption SHW product solutions help automobile manufacturers to thrive 28

30 Ongoing trendsetter for CO 2 -relevant automobile components SHW innovations in the future Camshaft phaser without pressure vessel Variable oil pump reduced friction and weight Electric auxiliary pump for startstop-sailing Camshaft phaser reduced mass inertia Electrical transmission oil pump for hybrid vehicles for electric motor support 2015 CO 2 reduction by lower weight, friction and input power as well as fully variable settings and hybrid concepts Valve integration Fully variable vane pump module 2 nd generation Electrical prefeed-pump for commercial vehicles Fully variable cooling-fluid pump Gerotor for plastic pump Gaining market share with innovative capacity and product optimisation 29

31 Price per unit Value contribution per vehicle consistently increasing Illustration of value per pump 1) Sales split Pumps Passenger Cars* Transmission oil pumps Oil-/vacuum pumps Variable oil pumps Fixed displacement pumps Camshaft phaser Other / per component Fixed displacement engine oil pump c. 12 Variable oil-/ vacuum pump c. 33 Electric auxiliary oil pump for start-stop c % 13.9% 38.1% 34.0% Complexity Variable engine oil pump c % 34.4% 18.8% 11.5% 31.5% 25.7% 20.1% 17.5% 21.6% 22.4% 10.7% 4.0% 24.6% 19.5% 6.4% 11.8% 12.0% 1) Increase of value per pump for illustrative purposes only and not representative for other components developed over the past years *Column height represents sales development Oil-/vacuum pumps and camshaft phasers are major growth drivers in

32 Trendsetter for CO 2 -relevant composite brake discs SHW innovations Riveted discs 2005 Weight-optimized disc 2007 Friction-welded disc 2008 Hybrid-disc 2011 Hybrid-forged disc 2011 Wave disc 2013 SHW composite disc Ex-centrical Bell-joint 2006 Tube-disc 2008 Metal-spinning disc 2009 Air-flow optimized disc 2010 Sheet-disc 2012 Ford Mustang lightweight brake disc 2014 Future focus lies on cost reduction by further automation of the production process 31

33 Technology and market leader for composite brake discs Peugeot RCZ - R Maserati Quattroporte Porsche 911 GT3 Cup Bentley Mulsanne Porsche Cayenne Turbo S Audi RS6 Porsche Panamera Turbo Audi R8 Lamborghini Gallardo Mercedes S-Class AMG Ford Mustang Access to new vehicle classes through process optimisation 32

34 Ramp-up of lightweight brake discs Composite brake discs sales (as % of business segment sales) 46.4% 40.8% 33.7% 26.1% 17.8% 18.4% 13.9% Improved profitability and product mix 33

35 Price per unit Value contribution per vehicle consistently increasing Illustration of value per disc 1) Sales split Brake Discs* Composite brake discs Ready-to-install brake discs Unprocessed brake discs Other / per component 100 Composite brake discs c % 17.8% 18.4% 26.1% 80 Unprocessed brake discs c Ready-toinstall brake discs 52.2% 51.3% 50.3% 45.0% 40 c % 24.9% 26.1% 24.5% 0 Complexity 1) Increase of value per brake disc for illustrative purposes only and not representative for other components developed over the past years *Column height represents sales development Composite brake discs are major profitability driver in

36 Key focus points of management Pumps & Engine Components: Further market penetration with new technical solutions for transmission oil pumps (e.g. two stroke vane pump) Start of operation in China in the course of H2/2015 Evaluation of Best Cost Country locations in Eastern and South Eastern Europe for capacity expansion Actively monitoring and evaluating potential M&A opportunities Brake Discs: Further automation of aluminium casting assembly process and capacity expansion for composite brake discs Evaluation of market entry strategies into the NAFTA region 35

37 Key focus points of management "Overall, we can be pleased with the earnings development in the first half of At all of our sites, I found highly motivated and qualified management and staff who are strongly committed to implementing the optimisation measures for our internal procedures and production processes. We are working on the right issues; nevertheless, we must acknowledge that the degree of implementation in the Powder Metallurgy division at our Aalen-Wasseralfingen site and in the pump production operations in Bad Schussenried currently lag selectively behind our own expectations. It is time to roll up our sleeves and catch up the backlog in a decisive and timely manner. (Dr. Frank Boshoff, Chief Executive Officer of SHW AG: Press release 29 July 2015) 36

38 Accelerated execution of efficiency measures crucial for achieving targets Guidance 2015 (new) 2015 (old) Sales approx. 470 million approx. 460 million Adjusted EBITDA 46 to 50 million 46 to 50 million Capex 30 to 33 million 30 to 33 million Working Capital Ratio sustainable 11 % of sales sustainable 11 % of sales Joint venture Brake Discs China will be accounted for at equity and disclosed in the net income 37

39 Financial Calendar 2015 Dates Events 10 September 16 September 28 October Sector Conference Week Commerzbank Frankfurt IAA Cars 2015 Conference Deutsche Bank Frankfurt Interim Report: January September 2015 Conference Call 38

40 Contact Investor Relations Michael Schickling Head of Investor Relations & Corporate Communications Telephone: +49 (0) Anja K. Siehler Senior Manager Investor Relations & Corporate Communications Telephone: +49 (0)

41 Disclaimer No offer or investment recommendation This document, which has been issued by SHW AG (the Company or SHW ), does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, any shares in the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. The contents of this presentation are may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. Neither the Company nor any other party is under any duty to update or inform you of any changes to such information. In particular, it should be noted that financial information relating to the Company contained in this document has not been audited and in some cases is based on management information and estimates. This material is given in conjunction with an oral presentation and should not be taken out of context. Certain market data and financial and other figures (including percentages) in this document were rounded in accordance with commercial principles. Figures rounded may not in all cases add up to the stated totals or the statements made in the underlying sources. For the calculation of percentages used in the text, the actual figures, rather than the commercially rounded figures, were used. Accordingly, in some cases, the percentages provided in the text may deviate from percentages based on rounded figures. Future Oriented Statements Certain statements in this presentation are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. No obligation to update the information The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by applicable laws and regulations. You should not place undue reliance on forward-looking statements, which speak as only of the date of this presentation. Statements contained in this presentation regarding past trends or events should not be taken as a representation that such trends or events will continue in the future. 40