helvea swiss equities conference 2015 - oc oerlikon · 2015. 1. 15. · page 3 20150115_oerlikon...
TRANSCRIPT
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Version September 2012
Helvea – Swiss Equities
Conference 2015
Bad Ragaz, January 15, 2015
Dr. Brice Koch, CEO Oerlikon Group
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Agenda
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 2
1 Current status
2 Roadmap for the Segments
3 Positioning of the Group
4 2014 outlook
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Oerlikon – a global industrial player
Manmade
Fibers
Segment
Advanced
Technologies
Segment2
Drive
Systems
Segment
Surface
Solutions
Segment1
Vacuum
Segment
CHF 1 130m CHF 734m CHF 396m CHF 1 218m CHF 113m
CHF 188m CHF 26m CHF 41m CHF 176m CHF 4m
Oerlikon
Group1
Sales: CHF 3 591m
EBIT: CHF 437m
~15 500 employees
> 170 locations
35 countries
~CHF 146m in R&D
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 3
1 2013 pro-forma figures; Surface Solutions Segment incl. Oerlikon Metco (Metco transaction closed on June 2, 2014) 2 Divestment announced on December 23, 2014
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The Oerlikon Group from various angles*
Adv. Technologies
Surface Solutions
Vacuum
Drive Systems
Manmade Fibers
Rest of World
Europe
Asia / Pacific
North America
Sales: CHF 3 591m Sales: CHF 3 591m
31%
3%
34%
11% 20%
38% 40%
18%
4%
Segment split Regional split
* 2013 pro-forma figures incl. Oerlikon Metco
Corporate
Manmade Fibers
Adv. Technologies
Drive Systems
Surface Solutions
Vacuum
Goods, Equipment
& Components
Service & Spare Parts
Sales: CHF 3 591m ~15 500 employees
38%
1%
34%
10%
1%
16%
74%
26%
Service business Employees
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 4
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The Oerlikon Group has undergone a major
transformation in the past three years
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 5
Manmade
Fibers
Segment
Textile
Segment
Solar
Segment
Drive
Systems
Segment
Vacuum
Segment
Advanced
Technologies
Segment
Coating
Segment
Starting point
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The Oerlikon Group has undergone a major
transformation in the past three years
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 6
Divestment
announced on
Dec. 23, 2014
Surface
Solutions
Segment
Advanced
Technologies
Segment
Manmade
Fibers
Segment
Additional structural measures:
Carding and Melco business sold (former Textile Segment)
Footprint optimization in Drive Systems Segment
Rox acquisition (regrinding business) in Surface Solutions Segment
Drive
Systems
Segment
Vacuum
Segment
Today
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Today’s structure and performance is the
result of...
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 7
Streamlining of portfolio
Divestment of non-operating assets
Reduction of cyclicality, volatility and complexity
Operational & financial restructuring
Reduction of break even costs
Operational excellence initiatives to sustainably increase profitability
Repositioning of balance sheet
Syndicated credit line and three Swiss bonds
Unleveraged balance sheet to maintain financial flexibility
Investment in organic and inorganic growth
Disciplined use of cash and balance sheet capacity as premise for all actions
Metco as first major transaction in the context of strengthening around core competencies
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Agenda
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 8
1 Current status
2 Roadmap for the Segments
3 Positioning of the Group
4 2014 outlook
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Roadmap for Surface Solutions Segment
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 9
Areas of action
Secure Metco integration with dedicated
team with detailed actions plan
Accelerate synergies realization
Challenge
Speed of new/ combined
technologies penetration
Opportunities
Market penetration: New applications/
solutions in growing end markets
Combined R&D strength: Development
of multi-layer surface solutions
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Surface Solutions Segment –
Integration update
Delivering on deal rationale:
Complementarity of technologies, business
model, customer-/market-access and footprint
– Balzers’ PVD applications for Metco customer
=> 8 out of 37 customer roadmap workshops
held in December
– Ramp up of new Thermal Spray Service Centers
on track
– Joint customer approach i.e. at Performance
Racing Industry show in Indiana (US) with
promising customer feedback
– Utilization of Balzers footprint for Thermal Spray
equipment sales & distribution => new setup
established in two Asian countries
Integration process is well on track and
according to plan:
– Joint leadership meeting with 180 leaders
– Thin Film business organizationally integrated
into Oerlikon Balzers as of January 1, 2015
– Optimized Thin Film footprint – closure of one
site in Germany and one in the US announced
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 10
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Financial impact of Metco transaction –
Confirming our cost assessments
H1 14 H2 14 2015 2016 2017ff
>CHF 20 million >CHF 30 million >CHF 30 million >CHF 30 million
Amortization of acquired identified intangibles assets
Inventory step up
>CHF 20 million
as of closing
Integration costs Transaction costs
>CHF 20 million,
thereof CHF 6 million
already booked in 2013
>CHF 10 million >CHF 10 million <CHF 10 million
Cost synergies (cumulative)
<CHF 5 million ~CHF 5 million >CHF 10 million
Top-line synergies
Cash
ite
ms
N
on
-cash
ite
ms
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Surface Solutions Segment expected to
grow ~2x GDP with profitability expansion
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FY 2013 pro-forma
1,218
2017E
around 1,500
Mid-term expectation
Surface Solutions Segment
Based on a current global GDP
growth assumption of ~3 %
2017E
around 22.0%
current trading
14.6%
around 14.5%
2017E current trading
5.7%
CAGR: ~2x global GDP
Incl. full absorption of one-time
transaction/integration costs and
acquisition accounting effects
Incl. full absorption of one-time
transaction/integration costs and
acquisition accounting effects
Sales
EBIT
EBITDA
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Roadmap for Manmade Fibers Segment
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 13
Challenge
Approaching end of the current
5-year plan (FYP) in China
Orders normalizing after the peak levels
in 2013
* Source: EAC International Consulting: „Early Indications on China‘s 13th Five Year Plan“
Areas of action
Increase service/ after sales business
Leverage regions outside China
Expand value chain around core
competencies
Accelerate innovations
Opportunities
Increased installed base
Preliminary indications on potential
content of 13th Chinese FYP*:
– Chemical fibers (high- and new-tech fibers)
– Develop substitutions for natural fibers
– Industrial textile proportion in textile industry
to exceed 30 % (25 % in 12th FYP)
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Roadmap for Drive Systems Segment
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 14
Areas of action
Streamline organization (integration)
Further reduce cost base
Focus product portfolio
Increase value added
Leverage global footprint
Challenge
End market performance
(agriculture, mining, gas fracking)
Operational performance
Opportunities
Hybridization and E-Drives
Start of production of 3rd plant in India
in 2015 to address local demand
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Roadmap for Vacuum Segment
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 15
Areas of action
Innovation
Operational excellence
Service and distribution network
Opportunities
High-tech applications for vacuum
technologies and solutions
New applications in new industries
Challenge
End market development
(i.e. process industry)
Profitability
Scale/ volume
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Agenda
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 16
1 Current status
2 Roadmap for the Segments
3 Positioning of the Group
4 2014 outlook
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Looking at future development of Oerlikon
from three different perspectives
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 17
Competencies
perspective:
Use existing competencies
to enhance product and
services offering
Megatrends
Resource scarcity
Productivity increase
Global mobility
Environmental
sustainability
Competencies
(Process) Engineering
Materials and surfaces
characteristics
Precision machinery &
equipment
Customers domain
knowledge
Services expertise
Technologies
Deposition technology
Yarn formation technology
incl. polycondensation
Materials technology
High rotation speed,
torque & balancing
technologies
Technology perspective:
Invest into complementary
or adjacent technologies
(organic and inorganic) to
strengthen existing portfolio
(e.g. Metco transaction)
Future
direction of
Oerlikon
Megatrends:
Foster products and services
offerings supporting and
leveraging visible and
sustainable megatrends
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What does this mean for Oerlikon?
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Oerlikon will:
… leverage and strengthen Best-in-Class businesses
… improve businesses which are not yet Best-in-Class
… leverage attractive end-markets
… balance market exposure (regions and end-markets)
… further strengthen its core competencies
… further reduce cyclicality and volatility
… use its cash in a disciplined and value accretive way
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Metco transaction in the context of the
Group strategy
20150115_Oerlikon Presentation_Helvea Conference 2015 Page 19
The Metco acquisition strengthens Oerlikon from a technological,
competencies and megatrends exposure point of view!
Megatrends
Resource scarcity
Productivity increase
Global mobility
Environmental
sustainability
Competencies
(Process) Engineering
Materials and surfaces
characteristics
Precision machinery &
equipment
Customers domain
knowledge
Services expertise
Technologies
Deposition technology
Yarn formation technology
incl. polycondensation
Materials technology
High rotation speed,
torque & balancing
technologies Future
direction of
Oerlikon
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Agenda
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1 Current status
2 Roadmap for the Segments
3 Positioning of the Group
4 2014 outlook
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2014 outlook for the Oerlikon Group
confirmed – Upside on profitability
Sales
EBIT
EBITDA
>15%
2014E 2013 reported
2,883
2014 Group Guidance Consolidating Metco for seven
months and with full absorption of
Metco impacts, Oerlikon expects,
compared to 2013 reported figures
based on stable exchange rates:
Order intake growth
to exceed 10 %
Sales growth to exceed 15 %
EBITDA1 margin to exceed 15 %
EBIT1 margin to exceed 10 %
1 including full absorption of all related transaction/integration costs and acquisition accounting effects
492
2014E 2013 reported
Impacted by Metco
transaction (one-offs)
Gross margin effect
from inventory
step-up
Transaction costs
Integration costs
2014E 2013 reported
366
Impacted by Metco
transaction
One-offs (same as
for EBITDA)
Amortization of
acquired identifiable
intangible assets
Consolidation of Metco
for 7 months
>15% margin
prev.: around 15%
>10% margin
prev.: around 10%
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Thank you.
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Financial Calendar 2015
Page 23
February 24, 2015 Q4 / FY 2014 results and publication of Annual Report 2014
- Annual Press Conference
April 8, 2015 Annual General Meeting of Shareholders
- KKL Lucerne
April 28, 2015
Q1 2015 Results
- Media & Analyst Conference Call
August 4, 2015 Q2 / HY 2015 results and publication of Interim Report 2015
- Media & Analyst Conference Call
October 27, 2015 Q3 / 9M 2015 results
- Media & Analyst Conference Call
20150115_Oerlikon Presentation_Helvea Conference 2015
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Investor Relations Contact
Page 24
OC Oerlikon Management AG, Pfäffikon
Churerstrasse 120
CH – 8808 Pfäffikon SZ
Switzerland
Andreas Schwarzwälder
Head of Investor Relations
Phone: +41-58-360-9622
Mobile: +41-79-810-8211
E-mail: [email protected]
20150115_Oerlikon Presentation_Helvea Conference 2015
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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 or any oral communication in connection therewith and we disclaim any liability whatsoever for the use of it.
This presentation is based on information currently available to management. The forward-looking 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 or to correct any inaccuracies therein.
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.
Disclaimer
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