FULL YEAR RESULTS 2008 Operating profit (EBITDA) in line with 2007
Today s agenda Highlights Profile Objectives Financial review Operational developments The Aalberts Industries share Outlook Questions and answers FY 2008 2
Highlights Increase in revenue 3% to EUR 1.75 billion ( 6% at constant exchange rates) Organic revenue 2% at constant exchange rates Operating profit (EBITDA) EUR 251.6m in line with 2007 Operating profit (EBITA) EUR 181.5m (10.4% of revenue) Earnings per share EUR 1.02 in line with update of December 2008 Continuation of the dividend policy with a pay-out ratio of more than 27% (EUR 0.28 per share) Cash flow from operations 15% Strict control of working capital and maintaining sound balance sheet ratios Strategic expansion of Flow Control (Henco) FY 2008 3
Profile
Profile AALBERTS INDUSTRIES N.V. AALBERTS INDUSTRIES N.V. Decentralised structure with significant operational management responsibilities Small holding; 13 employees Small team of group managers reporting to the holding Small team of group managers reporting to the holding INDUSTRIAL SERVICES 30% of of total revenue Subcontracting of products & processes for high-grade industries FLOW CONTROL 70% of of total revenue Products & systems to connect, distribute and regulate liquid and gas flows FY 2008 5
Markets Industrial Services Subcontracting of products & processes for high-grade industries Precision engineering Precision engineering Medical industry Medical industry Automotive industry Automotive industry Aircraft industry Aircraft industry Electronics industry Electronics industry Semiconductor industry Semiconductor industry Defence industry Defence industry And other And other FY 2008 6
Markets Flow Control Products & systems to connect, distribute and regulate liquid and gas flows Construction District heating District heating Automotive industry Automotive industry Medical industry Medical industry Irrigation industry Irrigation industry And other And other FY 2008 7
Business Sanitary Systems Heating & Cooling Systems Control & Measurement Systems Sewage & Drainage Systems Fitting & Tube Connection Systems Control & Measurement Systems FY 2008 8
Operating companies Worldwide presence More than 150 own production locations including sales offices A few own sales-only offices FY 2008 9
Objectives Focus on growth
Objectives Stable growth in earnings per share Average growth in past 15 years 17% Continuous growth in revenue Organic growth and acquisitions Wide spread of results Lowering risk for shareholders Leading market positions One of the top 3 in all relevant markets Solid balance sheet ratios FY 2008 11
History Revenue Net profit 1800 140 1600 120 EUR million 1400 1200 1000 800 600 400 EUR million 100 80 60 40 200 20 0 93 95 97 99 01 03 05 07 0 93 95 97 99 01 03 05 07 FY 2008 12
Financial Review
Financial highlights Significant impact of Henco acquisition Cash flow from operations 15% Net working capital EUR 123m in H2/08 Capital expenditure to EUR 110.5m Net debt EUR 121m in H2/08 Tax rate from 22% to 17% Exchange rate impact GBP British pound USD US Dollar PLN Polish zloty RUB Russian rouble Average 14% 7% 8% 4% Year-end 24% 4% 13% 12% FY 2008 14
Income statement In EUR x million 2008 2007 Change Revenue 1,750.8 1,702.5 3% Operating profit (EBITDA) 251.6 254.2 (1%) Depreciation (70.1) (60.9) 15% Operating profit (EBITA) 181.5 193.3 (6%) Net interest expense (44.5) (35.8) 24% Other net finance cost (11.7) 5.6 Taxes (19.3) (33.8) Minority interest (1.1) (1.3) Net profit before amortisation 105.0 128.0 (18%) FY 2008 15
Balance sheet ASSETS In EUR x million 31-12- 2008 30-06- 2008 31-12- 2007 Goodwill 445.6 445.1 308.8 Other intangible assets 149.1 151.4 101.4 Property, plant and equipment 516.3 494.6 444.9 Deferred tax assets 25.4 16.7 16.3 Non-current assets 1,136.4 1,107.8 871.4 Inventories 360.2 403.8 328.2 Trade receivables 178.7 314.4 205.4 Other current assets 28.0 35.8 29.4 Cash and cash equivalents 0.1 0.1 0.1 Current assets 567.0 754.1 563.1 TOTAL ASSETS 1,703.4 1,861.9 1,434.5 FY 2008 16
Balance sheet EQUITY AND LIABILITIES In EUR x million 31-12- 2008 30-06- 2008 31-12- 2007 Total equity 587.0 581.3 538.2 Non-current borrowings 572.8 614.1 350.8 Cumulative preference shares - 10.2 10.2 Employee benefit plans 27.7 31.6 32.3 Deferred tax liabilities 37.6 37.4 23.5 Other provisions 5.9 5.6 7.1 Non-current liabilities 644.0 698.9 423.9 Current borrowings 192.6 261.9 164.0 Trade and other payables 181.4 190.0 190.3 Other current liabilities 98.4 129.8 118.1 Current liabilities 472.4 581.7 472.4 EQUITY AND LIABILITIES 1,703.4 1,861.9 1,434.5 FY 2008 17
Cash flow statement In EUR x million FY 2008 H1 2008 FY 2007 Operating profit (EBIT) 169.3 100.1 184.0 Depreciation 70.1 34.1 60.9 Amortisation 12.2 5.6 9.3 EBITDA 251.6 139.8 254.2 Result on sale of equipment 0.8 (0.1) (0.6) Provisions & direct equity movements (3.0) (9.2) (16.5) Changes in working capital 15.1 (107.7) (7.0) Cash flow from operations 264.5 22.8 230.1 FY 2008 18
Cash flow statement In EUR x million FY 2008 H1 2008 FY 2007 Net finance cost (54.8) (25.0) (27.1) Taxes (45.0) (21.2) (31.7) Acquisitions (277.9) (266.9) (107.1) Capital expenditure (106.1) (54.6) (100.5) Issue of share capital - - 54.6 Long-term debt contracted 315.8 306.9 97.4 Repayments on long-term debt (86.0) (35.3) (76.1) Dividend paid (15.3) (15.7) (12.6) Other movements (3.4) (1.9) (2.0) Net cash flow (8.2) (90.9) 25.0 FY 2008 19
Key figures In EUR x million 2008 2007 Change EBITA as a % of revenue 10.4 11.4 Tax rate in % 17.0 22.0 Earnings per share (EUR x 1) 1.02 1.26 (19%) Average number of shares issued 103.3 101.7 2% Number of employees (x 1) 10,880 10,918 Capital expenditure 110.5 108.8 2% Interest cover (EBITA / net interest) 4.1 5.4 Total equity 587.0 538.2 9% Total equity as a % of total assets 34.5 37.5 Net debt / EBITDA (12 month rolling) 2.9 2.1 Net debt 765.3 525.0 46% Net debt / Total equity (Gearing) 1.3 1.0 FY 2008 20
EBITA and EBITA margin 250 14 200 12 10 150 8 100 6 4 50 2 0 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 0 EBITA EBITA-margin FY 2008 21
Net profit and EPS 140 1,4 120 1,2 100 1 in EUR million 80 60 0,8 0,6 in EUR 40 0,4 20 0,2 0 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 0 Net profit EPS FY 2008 22
Operational Developments Overall market slowdown
Spread of revenue 2008 in EUR million 2008 as a % of revenue 2007 in EUR million 2007 as a % of revenue Germany 310.3 17 293.7 17 Benelux 256.2 15 237.7 14 United Kingdom FY08* EURm: 256.2 228.3 13 270.2 16 Eastern Europe 214.1 12 153.3 9 France 203.2 12 200.1 12 United States FY08* EURm: 186.9 177.2 10 194.5 12 Scandinavia 90.0 5 89.1 5 Spain & Portugal 80.2 5 92.4 5 Other European countries 100.2 6 90.7 5 Other countries outside Europe 91.2 5 80.8 5 TOTAL 1,750.8 100 1,702.5 100 *at constant exchange rates FY 2008 24
Spread of revenue 350 300 250 EUR million 200 150 100 50 0 Germany Benelux United Kingdom Eastern Europe France United States Scandinavia Spain & P ortugal Other European countries 2005 2006 2007 2008 Other countries outside Europe FY 2008 25
Spread of revenue per activity in 2008 200 180 160 140 EUR million 120 100 80 60 40 20 0 Germany B enelux United Kingdom Eastern Europe France United States Scandinavia Spain & P ortugal Other Euro pean countries Other countries outside Europe Industrial Services Flow Control FY 2008 26
Industrial Services
Industrial Services highlights Revenue 2% Organic revenue 6%: H1 2%, H2 13% EBITA margin to 8.2% Capital expenditure 4% to EUR 50.5m Changeable market conditions Automotive: 1st half year, 2nd half Precision engineering: in the latter months Semi-conductor industry: Difficult all year Aircraft, medical and energy sectors: FY 2008 28
Acquisitions Industrial Services Revenue: EUR 32 million DEU/USA/JAP Consolidation JAN 2008 Revenue: EUR 7 million CHE/DEU Consolidation JAN 2008 Revenue: EUR 16 million FRA/CHN/SLV Consolidation JAN 2008 FY 2008 29
Industrial Services In EUR x million 2008 2007 Change Revenue 515.2 506.0 2% Operating profit (EBITDA) 74.1 87.9 (16%) EBITDA as a % of revenue 14.4 17.4 Operating profit (EBITA) 42.4 58.3 (27%) EBITA as a % of revenue 8.2 11.5 Capital expenditure 50.5 52.5 (4%) Depreciation 31.7 29.6 7% Average number of employees (x1) 4,640 4,368 6% Employees at year-end (x1) 4,253 4,356 (2%) FY 2008 30
Flow Control
Flow Control highlights Revenue 3% Organic revenue 1%: H1 3%, H2 5% EBITDA margin to 14.4% EBITA margin = 11.3% Capital expenditure 7% to EUR 60.0m Changeable market conditions: Benelux: Scandinavia: 1st half year, 2nd half France: reasonably good Spain and Italy: unfavourable market conditions Germany: by focused market approach UK: 1st half year, 2nd half East Europe: Full year, slow down in 2nd half North America: commercial/industrial building, housing construction sector FY 2008 32
Flow Control acquisitions Belgium Consolidation: APR08 Annual revenue EUR 105 million Poland Consolidation: MAY08 Annual revenue EUR 7 million Alphacan s French heating & sanitary activities Consolidation: JAN09 Annual revenue EUR 25 million FY 2008 33
Flow Control In EUR x million 2008 2007 Change Revenue 1,235.6 1,196.5 3% Operating profit (EBITDA) 177.5 166.3 7% EBITDA as a % of revenue 14.4 13.9 Operating profit (EBITA) 139.1 135.0 3% EBITA as a % of revenue 11.3 11.3 = Capital expenditure 60.0 56.3 7% Depreciation 38.4 31.3 23% Average number of employees (x1) 6,872 6,303 9% Employees at year-end (x1) 6,608 6,544 1% FY 2008 34
The Aalberts Industries share
The Aalberts Industries share FY FY FY FY FY 2008 2007 2006 2005 2004 Average trading volume (in EUR million) Closing share price (in EUR) Earnings per share (in EUR) Share price / Earnings per share Shares in issue (in million) Dividend (in EUR) Market capitalisation (in EUR million) 7.035 8.324 4.908 2.384 1.743 5.06 13.60 16.38 11.21 8.93 1.02 1.26 1.09 0.85 0.73 5.0 10.8 14.9 13.2 12.2 103.3 102.0 98.2 97.6 96.9 0.28 0.32 0.28 0.21 0.18 523 1,387 1,609 1,095 865 FY 2008 36
Share price development FY 2008 37
Outlook
Outlook Given the current economic circumstances and the associated uncertainties, it is not possible to give an outlook for 2009. However: The solid financial position, the many years investments, the established market positions, R&D (both production automation and new products) and the measures taken, will enable Aalberts Industries to emerge strengthened from the current market situation when the economy improves. FY 2008 39
Questions and Answers