Sfs Group Ag · SIX:SFSN
Sfs — FY2016 Earnings Presentation
36 slides from Sfs's earnings presentation, Mar 10, 2017
Slide 1: Welcome to the presentation of the FY2016 results
Welcome to the presentation of the FY2016 results International development, manufacturing and distribution specialist Focused in technology – diversified in end markets 2017-03-10 Presentation FY2016 results I page 1
Slide 2: Today's speakers
Today's speakers Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer 2017-03-10 Presentation FY2016 results I page 2
Slide 3: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-03-10 Presentation FY2016 results I page 3
Slide 4: Key takeaways FY2016
Key takeaways FY2016 Solid sales growth of 5.9% in core business all segments contributed to this growth New sales record in the 2016 financial year with consolidated sales of CHF 1,437 million, representing an increase of 4.4% Position in medical device market significantly strenghtened by
Slide 5: Significant improvement in productivity
Significant improvement in productivity Improvement contribution margin / employee (at SFS intec's production sites in Switzerland) 2016 vs. 2015: +15.9% 2016 vs. 2014: + 5.8% 2017-03-10 Presentation FY2016 results I page 5
Slide 6: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-03-10 Presentation FY2016 results I page 6
Slide 7: Sales bridge
Sales bridge CHF million 1'500 1'376 79 -53 21 13 1'436 Reported growth 4.4% yoy 1'450 organic +2.0% (PY 2.5%) core +5.9% (PY 1.5%) 1'400 M&A +1.5% (PY 2.1%) FX impact +0.9% (PY -5.1%) 1'350 1'300 Like-for-like growth by segment 0.0% in EC (PY 4.3%) 1'250 8.0% in EC core (PY 2.6%) 1'200
Slide 8: Sales breakdown
Sales breakdown 2016 by end markets [%] 2016 by regions [%] CH Europe 2017-03-10 Presentation FY2016 results I page 8
Slide 9: Operating profitability
Operating profitability in % of net sales in CHF million 25% 400 Substantial improvement 20.3% 350 19.6% 19.5% EBITDA margin reported 20.9% 20% 20.9% +33.1m or 12.4% yoy 17.4% 300 EBITA margin adjusted 14.4% 250 15% 13.3% 14.1% 14.4% +35.6m or 20.7% yoy 12.5% 11.5% +29.5m organic 200 207
Slide 10: Swiss franc exposure
Swiss franc exposure % share 60% Operating expenses in CHF 57% Opex in Swiss francs 44.3% share 50% acquisition added 1.3% 50% 49% like-for-like decline 310 bps 46.1% 44.3% 40% Drivers for decline improved productivity in CH 31% relocation to foreign sites 30% 27% higher growth outsi
Slide 11: Capital expenditure
Capital expenditure Capex in % of net sales Capex in CHF million 8% 160 Capex spending 5.9% 7.1% leveraging from Capex 7% 6.6% 140 2014 and 2015 high capacity utilization 5.7% 5.8% 6% 120 slight delay in capex projects 5.9% 2/3 growth capex 5% 97.6 100 Capex spending by region 90.4 4% 80
Slide 12: Net working capital
Net working capital NWC in % of net sales NWC Days outstanding 35% 280 NWC stable at 31% of net sales or at 114 days 30% 31.0% 31.2% 240 30.1% 30.3% 28.7% Ø days outstanding 25% 200 67 SFS Group (PY 69) 80 EC (PY 82) 52 FS (PY 52) 20% 160 47 D&L (PY 46) 15% 120 No major shifts in Ø day
Slide 13: Free cash flow
Free cash flow Free cash flow in % of EBITDA CHF million 60% 300 Strong cash production with 51.7% 52.2% free cash flow of CHF 157m 242m cash from operations 50% 250 - 85m capex 45.2% 40% 200 Conversion rate with 52% above target range 40 – 50% 37.7% 30% 150 Major cash flow items 157 31.0%
Slide 14: ROCE and RONOA
ROCE and RONOA Return in % NOA in CHF million 28% 7'000 Capital employed 24.1% 27.1% average of last 4 quarters 23.0% 24% 6'000 excluding intangible assets 24.0% EBITA measured at Ø CE 22.2% 20% 5'000 ROCE 27.1% above target range of >20% 16% 4'000 Net operating assets 12.1% 11.7% 10.7
Slide 15: Net cash and equity ratio
Net cash and equity ratio Equity in % of assets CHF million Net cash shows a black zero 90% 800 82.6% cash at CHF 164m 80.4% borrowings at CHF 163m 80% 600 slightly higher leverage 76.3% 70% 400 debt ratio 7% (PY 1%) 62.7% leverage ratio of up to 60% 200 1.5x EBITDA 54.7% 127 1 88 Equi
Slide 16: Pay-out ratio
Pay-out ratio Payout ratio in % Payout per share in CHF 60% 3.00 BoD will propose a pay-out from 54% statutory capital reserves of 51% 54% CHF 1.75 per share (PY 1.50) 50% 2.50 increase 16.7% cash out CHF 65.6m 38% 40% 37% 38% 2.00 36% Dividend yield ~ 2% 28% (at share price of CHF 90) 1.75
Slide 17: Summary of important KPIs
Summary of important KPIs CHF million 2016 % 2015 % yoy Sales 1,436.5 1,376.3 4.4% EBITDA margin 300.5 20.9% 267.4 19.5% 12.4% EBITA adjusted margin 207.3 14.4% 171.1 12.5% 20.7% Net income margin 122.2 8.5% 105.0 7.7% 16.4% Equity ratio 1,860.3 76.3% 1,792.6 82.6% 3.8% Net cash 0.5 127.5 Capex % sa
Slide 18: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-03-10 Presentation FY2016 results I page 18
Slide 19: Headlines Engineered Components (EC)
Headlines Engineered Components (EC) Solid sales growth in core business of 8.0% yoy Automotive & Industrial divisions achieved attractive growth rates driven by scale-up of projects Phase-out of non-core trading activities lowered sales by CHF 53 million (-3.9%) Sharp increase in EBITA-marg
Slide 20: EC: Key messages Automotive division
EC: Key messages Automotive division Sound market environment and stable drivers for innovation (e.g. autonomous driving) Substantial project wins in diverse application areas will Project win to double Successful scale-up of fuel future organic growth volume of parking sensor first ball screw d
Slide 21: EC: Key messages Electronics division
EC: Key messages Electronics division Successfully implemented measures to lower negative impact on profitability (caused by decline in sales) Positive sales development in Successfully entered new Market success of inno- core business starting Q4 (yoy) fields of applications like vative miniatu
Slide 22: EC: Key messages Industrial division
EC: Key messages Industrial division Gained competence in micro injection moulding with acquisition of Stamm Significant growth with solutions for customers from medical device industry; successfully increased share of wallet Successfully managed the accelerated ramp-up of A350 Signing of ne
Slide 23: EC: Rationale for focus medical device market
EC: Rationale for focus medical device market Medical device market Long-term attractive and growing end market driven by Demographic development Improved access to medical Positioning of SFS as services engineering partner Desire for improved quality of life in the attractive growth market fo
Slide 24: Headlines Fastening Systems (FS)
Headlines Fastening Systems (FS) Solid topline growth of 8.8% yoy (comparable basis 7.5% yoy) Increased market share amid positive market environment Significantly improved profitability from 6.8% (2015) to 9.0% (2016) success of innovative products economies of scale far-reaching projec
Slide 25: FS: Key messages Construction division
FS: Key messages Construction division Jirny, Jirny, CZ CZ Production strategy Construction division Schramberg, GER Campia Turzii, RO Valence, FR Izmir, TR Sharpening the production strategy results Dedication and commitment of the in productivity gains management team to achieve substantial im
Slide 26: FS: Key messages Riveting division
FS: Key messages Riveting division Solid sales development Technology leadership underpinned by significantly strengthened innovation pipeline on riveting tools Substantial increase >30 % in threaded fasteners, blind rivet nuts and studs due to customer wins "Break through" innovation Mocksvil
Slide 27: Headlines Distribution & Logistics (D&L)
Headlines Distribution & Logistics (D&L) Slight growth in continued demanding market environment Numerous project wins thanks to comprehensive product range and strong competence in C class logistics Strong profitabilty improvement to EBITA-margin of 8.5% (half of the improvement results from
Slide 28: D&L: Key messages
D&L: Key messages Online product configurator E-commerce First fully electronic configurator for Above-average processed and coated metals growth in Considerable market potential (CH) e-commerce Market introduction: January 2017 Launch of new platform in 2017 Project gains Implementation
Slide 29: Customer proximity supported by local presence
Customer proximity supported by local presence Europe 40% America Switzerland 20% 20% Asia 20% Integration of Tegra Medical and solid growth in North America created a more balanced regional exposure and further improved customer proximity 2017-03-10 Presentation FY2016 results I page 29
Slide 30: SFS Group strategy summary 2020
SFS Group strategy summary 2020 Solid business model based on strong technology base Focus on mission critical components and niche markets Potential to significantly outgrow Strategy the world GDP Measures to lift EBITA on group level and at FS in particular Selective M&A opportunities
Slide 31: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-03-10 Presentation FY2016 results I page 31
Slide 32: Guidance
Guidance Guidance Actual Expectations FY2016 FY2017 Gross sales reported 4.4% 8 – 10% • Organic growth 2.0% 3 – 5% • Change in scope 1.5% ca. 5% • FX impact 0.9% n/a EBITA margin adjusted 14.4% 14.2 – 15.2% FY = Financial Year 2017-03-10 Presentation FY2016 results I page 32
Slide 33: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-03-10 Presentation FY2016 results I page 33
Slide 34: Q&A
Q&A Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer 2017-03-10 Presentation FY2016 results I page 34
Slide 35: 9'000 employees – one target
9'000 employees – one target Creating value with In-depth technological competence International presence Application and industry expertise Long-term relationships 2016-03-04 Presentation FY2015 results I page 35
Slide 36: Disclaimer
Disclaimer This presentation includes forward looking statements. These statements reflect the SFS Group's current assesment of market conditions and future events. The statements are therefore subject to risks, uncertainties and assumptions. Unforseen events may lead to deviations of the actual res