Full Year 2012 Revenue more than EUR 2 billion and 5% higher operating profit (EBITA)
Today s agenda Strategy 2012 Headlines Financial review Operational developments Industrial Services Flow Control Objectives & Outlook Questions & Answers FY2012 2
Strategy
Description of businesses Building Installations Europe Building Installations North America Climate Control Flow Control Industrial Oil & Gas Industrial Services Regulation and distribution of (warm) water and gas in heating, cooling, water and gas systems Regulation and distribution of (warm) water and gas in heating, cooling, water and gas systems Complete systems from source to emission to improve climate control, energy efficiency and comfort for heating & cooling systems Regulation, control and distribution of fluids and gas systems in more severe conditions Supply of highgrade tailor made products, systems and processes for specific market segments FY2012 4
Main markets Building Installations Europe Building Installations North America Climate Control Flow Control Industrial Oil & Gas Industrial Services Commercial/ residential new build Renovation & Repair Sprinkler Utility Commercial/ residential new build Renovation & Repair Fire protection Retail Irrigation / Pool & spa / Golf Commercial and residential buildings New & renovation Shipbuilding Industrial buildings Pulp & paper Food & beverage Power Marine (Petro)chemical Mining Oil & gas production transmission and distribution LNG Shale gas/oil Semiconductor Automotive Oil & gas Turbine & aerospace Machine building Metal & electronics FY2012 5
Market approach of business Building Installations Europe Building Installations North America Climate Control Flow Control Industrial Oil & Gas Industrial Services Market segmentation Installers, contractors & wholesalers Using local sales platforms Market segmentation Installers, contractors & wholesalers Using local sales platform Architects, specifyers & contractors Specification system sales Worldwide project tracking Market segmentation (Global) key accounts Market segmentation Local customers (Global) key accounts FY2012 6
Aalberts Industries - Linked Building Installations Europe Innovation Portfolio Flow Control Industrial Oil & Gas Portfolio (Material) Technology development Industrial Services Key account management Best practices Portfolio Projects Product development Supply Climate Control Projects Portfolio Building Installations North America Cross-selling FY2012 7
Growth drivers
Building Installations Europe Growth drivers 1. Installation efficiency and know-how Metal and plastic piping systems for: a safer, quicker, easier and user friendly installation an optimal connection of all kind of pipe materials Combined with specified control valves 2. Consolidation of contractors and wholesalers Complete offering of connect & control systems % of total revenue Leverage portfolio, using strong local brand name, distribution and service Driving of international product brands, worldwide 31% FY2012 9
Project tracking: Crystal Peaks Shopping Mall & Retail Park Sheffield Fit out of a new Marks & Spencer retail store MARKET SEGMENT Commercial PRODUCT LINES INSTALLED SERVICES Heating Potable water MARKET APPROACH Contractor (Simons Group) Building Installations Europe Installation efficiency FY2012 10
Project tracking: Quarry Gardens Portadown 26 Flats, replacement of Economy 7 heating system MARKET SEGMENT Residential PRODUCT LINES INSTALLED SERVICES Heating MARKET APPROACH Contractor (Fusion Heating) Building Installations Europe Installation efficiency FY2012 11
Building Installations North America % of total revenue Growth drivers 1. Installation efficiency and know-how Metal and plastic piping systems for: A safer, quicker, easier and user friendly installation An optimal connection of all kind of pipe materials Combined with specified control valves 2. Consolidation of contractors and wholesalers Complete offering of connect & control systems Leverage portfolio, using strong local brand name, distribution and service Driving of international product brands, worldwide 14% FY2012 12
Climate Control Growth drivers 1. Energy efficiency, saving & comfort of heating & cooling systems Specification and engineering of complete systems from source to emission using international product brands Making use of local regulation and requirements per country 2. Combining with metal and plastic piping systems to complete the climate control system (one specification/offering) % of total revenue 3. Consolidation of contractors & specifyers Complete solution for climate control Lesser suppliers per project 13% FY2012 13
Project tracking: Naturparkhaus Waltersdorf Renovation of 300 m 2 half-timbered house (1409) MARKET SEGMENT Commercial PRODUCT LINES INSTALLED SERVICES Heat distribution MARKET APPROACH Contractor Climate Control From source to emission FY2012 14
Project tracking: Botanic Garden Aarhus Renovation & new build of greenhouses (5.000 m 2 ) MARKET SEGMENT Residential PRODUCT LINES INSTALLED SERVICES Heat distribution Drinking water MARKET APPROACH Contractor Climate Control From source to emission FY2012 15
Project tracking: Quai Ste Hélène Saint André 160 low-energy consumption apartments MARKET SEGMENT Residential PRODUCT LINES INSTALLED SERVICES Heat distribution Drinking water MARKET APPROACH Contractor Climate Control From source to emission FY2012 16
Flow Control Industrial Oil & Gas % of total revenue Growth drivers 1. More severe conditions in end user markets Higher pressures lower and/or higher temperatures Temperature and pressure control Process system control 2. Consolidation of supply Complete offering of connect & control systems 3. Globalisation of key accounts Supply chain, manufacturing in every part of the world Global standards, local service 4. Development of new resources LNG / Shale gas / Shale oil 13% FY2012 17
Industrial Services Growth drivers 1. Continuous innovation of (local) tailor made solutions Development and engineering of new products Improvement of material usage / technology (Sub)assembly and testing of modules 2. Combined technologies for strategic partners Optimising supply chain, contacts for customers Stable (and strong financial) partnership with same quality Key account management 3. Globalisation of key accounts Supply chain, manufacturing in every part of the world Global standards, local service % of total revenue 29% FY2012 18
2012 Headlines
Headlines 2012 Revenue 5% to EUR 2,025 million Operating profit (EBITA) 5% to EUR 219.1 million Net profit before amortisation 4% to EUR 152.1 million Earnings per share before amortisation 3% to EUR 1.40 Cash flow from operations 9% to EUR 271.4 million Capital expenditure 23% to EUR 103.6 million Industrial Services: revenue 3% and good profitability maintained Flow Control: revenue 5% and operating profit (EBITA) 8% FY2012 20
Financial headlines
Financial headlines Added-value margin maintained at 59.1% Lower net interest expense due to reduced leverage ratio and lower interest rates Higher effective tax rate of 25.2% compared to 2011 (21.6%) Continuous focus on Return on Capital Employed Net working capital slightly to 18.3% of revenue (17.3%) Balance sheet ratios improved further (leverage ratio 2.0 1.8) No refinancing need due to repayments of bank loans from free cash flow: 2013: EUR 124 million 2014: EUR 105 million 2015: EUR 76 million After 2015: EUR 64 million USD currency 8.2% average rate and 1.9% end of December GBP currency 6.9% average rate and 2.4% end of December FY2012 22
Key figures in graphs 1 Revenue (EURm) 5% EBITA 5% 2012 2011 2010 2009 2008 2.025 1.937 1.683 1.405 1.751 2012 2011 2010 2009 2008 99 219 209 180 182 Net profit (EURm) 4% EPS (EUR) 3% 2012 2011 2010 2009 2008 54 105 117 152 146 2012 2011 2010 2009 2008 0,51 1,02 1,10 1,40 1,36 FY2012 23
Key figures in graphs 2 Cash flow (EURm) 6% Working capital (EURm) 7% 2012 2011 2010 2009 2008 124 186 175 216 229 2012 2011 2010 2009 2008 244 370 345 304 316 Capex (EURm) 23% Leverage ratio 0.2 2012 2011 2010 2009 2008 45 63 84 104 111 2012 2011 2010 2009 2008 1,8 2,0 2,3 2,9 3,4 FY2012 24
Income statement in EUR million FY 2012 FY 2011 Δ Revenue 2,024.5 1,937.4 5% Added-value 1,197.1 1,145.9 4% Operating profit (EBITDA) 296.1 279.4 6% Depreciation (77.0) (70.5) 9% Operating profit (EBITA) 219.1 208.9 5% Net interest expense (20.5) (23.0) (11%) Other net finance cost 0.3 (3.6) - Taxes (45.9) (36.3) 26% Non-controlling interest (0.9) (0.2) - Net profit before amortisation 152.1 145.8 4% FY2012 25
Balance sheet ASSETS in EUR million 31-12-2012 31-12-2011 Goodwill 504.2 504.3 Other intangible assets 181.9 196.7 Property, plant and equipment 592.4 565.3 Deferred income tax assets 14.4 17.4 Non-current assets 1,292.9 1,283.7 Inventories 428.2 421.1 Trade receivables 204.7 199.2 Other current assets 29.6 27.9 Cash and cash equivalents 0.1 0.1 Current assets 662.6 648.3 TOTAL ASSETS 1,955.5 1,932.0 FY2012 26
Balance sheet EQUITY AND LIABILITIES in EUR million 31-12-2012 31-12-2011 Total equity 980.0 858.5 Non-current borrowings 264.9 384.4 Employee benefit plans 26.6 26.7 Deferred income tax liabilities 70.5 71.4 Other provisions and long term liabilities 8.5 27.3 Non-current liabilities 370.5 509.8 Current borrowings 150.3 84.7 Current portion of non-current borrowings 126.4 136.6 Trade and other payables 218.1 225.0 Other current liabilities 110.2 117.4 Current liabilities 605.0 563.7 TOTAL EQUITY AND LIABILITIES 1,955.5 1,932.0 FY2012 27
Cash flow statement in EUR million FY 2012 FY 2011 Operating profit (EBITDA) 296.1 279.4 Provisions & other movements (1.4) (1.5) Changes in inventories (5.4) (20.1) Changes in trade & other receivables (6.6) 20.3 Changes in trade & other payables (11.3) (28.1) Changes in working capital (23.3) (27.9) Cash flow from operations 271.4 250.0 FY2012 28
Cash flow statement in EUR million FY 2012 FY 2011 Net finance cost paid (23.1) (25.3) Income taxes paid (45.9) (26.8) Acquisitions (incl. earn-outs) (18.3) (110.4) Capital expenditure (100.4) (77.9) Proceeds from borrowings 20.1 102.3 Repayments of borrowings (148.6) (133.8) Dividend paid (19.9) (8.5) Other movements (3.0) (3.5) Net cash flow (67.7) (33.9) FY2012 29
Key figures in EUR million FY 2011 FY 2010 Δ EBITA as a % of revenue 10.8 10.8 Effective tax rate in % 25.2 21.6 Earnings per share (EUR x 1) 1.40 1.36 3% Average number of shares issued 108.9 107.5 1% Number of employees (x 1) 12,048 12,282 Capital expenditure 103.6 84.3 23% Interest cover (12 months-rolling) 14.4 12.9 Total equity 980.0 858.5 14% Total equity as a % of total assets 50.1 44.4 Leverage ratio (12 months-rolling) 1.8 2.0 Net debt 541.6 605.6 (11%) Net debt / Total equity (Gearing) 0.6 0.7 FY2012 30
Spread of revenue United States 389 Germany 358 Benelux 282 Eastern Europe France United Kingdom Scandinavia Spain & Portugal 46 92 188 220 212 EURm 2012 2011 2010 Middle East 40 Other European countries 101 Other countries outside Europe 98 0 100 200 300 400 500 FY2012 31
Spread of revenue per activity in 2012 United States Germany Benelux countries France Eastern Europe United Kingdom Scandinavia Spain & Portugal Middle East Other European countries Other countries outside Europe Flow Control Industrial Services 0 100 200 300 400 FY2012 32
Operational developments Industrial Services
Industrial Services market developments Market Developments Semiconductor LED Semiconductor good 1H2012 Weakening 2H2012 Flattening partly offset by new technologies, new customers and engineering Activities for LED production lines remained at a low level Automotive Turbine & aerospace Oil & gas Machine building Metal & electronics Stable, high level in Germany France on lower level Investing in new product/process developments and sales Strong growth, particularly in US, France and UK Investments made/planned in these countries Sharp increase in orders and project requests Significant expansion of sales and engineering capacity Continued improvement of key account management Stable, good level Strong market position in Germany Declined of demand in France, partly offset by product developments Good developments in China and Poland FY2012 34
Industrial Services key figures in EUR million FY 2011 FY 2010 Δ Revenue 595.2 579.2 3% Operating profit (EBITDA) 110.5 107.8 3% EBITDA as a % of revenue 18.6 18.6 Operating profit (EBITA) 79.6 79.8 - EBITA as a % of revenue 13.4 13.8 Capital expenditure 56.5 41.2 37% Depreciation 30.9 28.0 10% Average number of employees (x1) 4,756 4,463 7% Employees at year-end (x1) 4,585 4,701 (2%) FY2012 35
Industrial Services key figures Revenue (EURm) 3% EBITA (EURm) = 3.7% organic 2012 2011 2010 2009 2008 361 595 579 465 515 2012 2011 2010 2009 2008-6 42 58 80 80 Capex (EURm) 37% EBITA margin 0.4 2012 2011 2010 2009 2008 10 22 41 51 57 2012 2011 2010 2009 2008-1,8 8,2 12,5 13,4 13,8 FY2012 36
Industrial Services Oil & Gas Parts for drilling equipment Stator tubes Stator middle @ Instrumentation bodies Knee joint (part of steering unit) @ Thermal spraying @ FY2012 37
Operational developments Flow Control
Flow Control market developments Market Building Installations Europe Building Installations North America Climate Control Industry Oil & Gas Developments New build continued to be difficult Renovation, repair and maintenance reasonably stable Focus on fast growing product lines Benefit from joint marketing and sales approach Increase in sales of new houses, building applications and renovations Projects in commercial building declined somewhat Growth in retail activities (plastic and metal regulator valves) Efforts concentrated on complete energy-efficient systems for heating & cooling (residential/commercial) = optimum building comfort Marketing & sales, training & education were strengthened Position strengthened in Europe, North America and Asia Upward trend in power stations, pulp & paper, (petro)chemical and food industry Substantial growth as a result of expansion of portfolio BSM Valves to contribute in strengthening market position FY2012 39
Flow Control key figures in EUR million FY 2012 FY 2011 Δ Revenue 1,429.3 1,358.2 5% Operating profit (EBITDA) 185.6 171.6 8% EBITDA as a % of revenue 13.0 12.6 Operating profit (EBITA) 139.5 129.1 8% EBITA as a % of revenue 9.8 9.5 Capital expenditure 47.1 43.1 9% Depreciation 46.1 42.5 8% Average number of employees (x1) 7,625 7,767 (2%) Employees at year-end (x1) 7,445 7,563 (2%) FY2012 40
Flow Control key figures Revenue (EURm) 5% EBITA (EURm) 8% 2.1% organic 2012 2011 2010 2009 2008 1.429 1.358 1.218 1.044 1.236 2012 2011 2010 2009 2008 105 140 129 122 139 Capex (EUR) 9% EBITA margin 0.4 0.3 2012 2011 2010 2009 2008 47 43 42 35 60 2012 2011 2010 2009 2008 9,8 9,5 10,0 10,1 11,3 FY2012 41
Flow Control Climate Control From generator to emission FY2012 42
Flow Control Industrial Oil & Gas Valves, actuation, control systems FY2012 43
Objectives & Outlook
Objectives unchanged Organic Acquisitions CONTINUOUS GROWTH IN REVENUE WIDE SPREAD OF RESULTS Lowering risks for shareholders STABLE GROWTH OF EARNINGS PER SHARE In specific market segments LEADING MARKET POSITIONS SOLID BALANCE SHEET RATIOS Equity 30% of total assets Interest cover 4 Leverage ratio 2.5 Gearing 1.5 FY2012 45
Outlook In 2013 Aalberts Industries will continue strengthening the technology and product portfolio and the marketing and sales force; expand the engineering capacity, increase the production efficiency; and widen the position in specific market segments. The management is sharply focused on achieving the many plans for profitable growth and higher operational margins; complemented by acquisitions that add value and strengthen the market positions; while making the best possible use of the solid balance sheet ratios. Barring unforeseen circumstances The expectation is that this will enable revenue, profit and capital expenditure to further increase in 2013 FY2012 46
Questions & Answers