Slide 1: Presentation FY2020 results
Presentation FY2020 results Heerbrugg, 5 March 2021
Slide 2: Today's speakers
Today’s speakers Welcome to the presentation on our FY 2020 results Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation FY 2020 results | 5 March 2021 2
Slide 3: Table of contents
Table of contents 1. Key takeaways 2. Development by segment 3. Development of key financials 4. Outlook 2021 5. Q&A Presentation FY 2020 results | 5 March 2021 3
Slide 4: Key takeaways
Key takeaways Presentation FY 2020 results | 5 March 2021 4
Slide 5: Key takeaways: Well positioned in a challenging environment
Key takeaways Well positioned in a challenging environment • FY 2020 strongly impacted by COVID-19 pandemic, turning attention to employee safety, balance supply capacities and cost management at continued innovation activities • Driven by distinct recovery in demand mainly in Engineered Components
Slide 6: Strategic core pillars
Strategic core pillars Effectiveness proven during COVID-19 pandemic • Customer proximity essential for value proposition "Local-for-local" • Reliable delivery performance • End markets and regions Diversification • Sales channels • Continued investments in innovation Solid financial position • Real
Slide 7: Focus on sustainability
Focus on sustainability Key elements to improve sustainable development Mgmt Core CO2 Outlook Reporting attention KPIs Roadmap 2021 • Regular reporting • Economic • UN Global • Defined CO2 • Continued focus on on progress performance Compact (SDGs) emission reduction set goals • Management • Occupat
Slide 8: SFS value engineering – sustainable benefits
Best practice example SFS value engineering – sustainable benefits Increased safety Better performance ~50% reduced ~30% weight Time-to-Lock Integrated braking system reduction (one-box system) Resource optimized Expanded range of energy recuperation modes Presentation FY 2020 results | 5 March 2021
Slide 9: Development by segment
Development by segment Presentation FY 2020 results | 5 March 2021 9
Slide 10: Headlines Engineered Components segment
Headlines Engineered Components segment A challenging year • COVID-19 with significant impact on demand, resulting in 1H 20 reported sales –16.3% yoy • Rebound in 2H (sales +36.3% vs. 1H), driven by recovery in automotive-related areas and organic growth in Electronics and Medical • Improved capacit
Slide 11: Key messages Automotive division
Key messages Automotive division Strong recovery in second half of year • High volatility in demand, characterized by: • Q2 automotive end market sales –58% vs. PY • in 2H organic growth in some months vs. PY • Established deep drawing platform in North America by acquisition of T&M • First project
Slide 12: Key messages Electronics division
Key messages Electronics division Nantong (CN) site fully loaded • Results from lifestyle electronics and smartphones business in 2H 20, confirming strong capabilities in product ramp-ups • Position in accessories strengthened • High capacity utilization at new Nantong (CN) site achieved, infrastruc
Slide 13: Key messages Industrial division
Key messages Industrial division Varying recovery depending on niche market • COVID-19 pandemic impacted individual business units to different degrees: • Industrial Appliances above prior year, impacted by home improvement trends • Hardware Components slightly below PY, im- pacted by construction m
Slide 14: Key messages Medical division
Key messages Medical division Growth track continued • Business impact of COVID-19 pandemic overcompensated by underlying market growth and ramp-up of new projects • Build-up of global manufacturing platform: Pedicle screws and holder Catheterization suturing device • include SFS sites in Europe and
Slide 15: Headlines Fastening Systems segment
Headlines Fastening Systems segment Improved performance in difficult environment • Less pronounced impact of COVID-19 on construction market and scope effects limited decline of segment sales to –1.7% yoy • Recovery at Riveting division in the fourth quarter, driven by demand from automotive custom
Slide 16: Key messages Construction division
Key messages Construction division Benefited from stable demand • After decline in demand in Q2, business picked up in 2H and showed usual positive seasonality • Business with system manufacturers and distributors affected most, while demand with installers and builders increased • Underlying innova
Slide 17: Key messages Riveting division
Key messages Riveting division Improved performance • After significant decline in demand during first half year, recovery driven by automotive related areas as of Q4 • Temporary adjustments in production capa- city, together with structural measures taken during previous year, supported profitabili
Slide 18: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Stable development thanks to balanced activities • Stable development throughout the year, with limited impact of COVID-19 on sales: • strong demand in the areas of building materials and personal protective equipment • weaker demand from industrial custome
Slide 19: Development of key financials
Development of key financials Presentation FY 2020 results | 5 March 2021 19
Slide 20: Sales bridge: Like-for-like growth including M&A –0.2%
Sales bridge Like-for-like growth including M&A –0.2% CHF million • Reported growth of – 4.3% (PY 2.5%) 1,900 • organic – 3.2% (PY –0.6%) 1,781 –57 54 –73 1,705 • scope 3.0% (PY 4.4%) 1,800 • FX impact – 4.1% (PY –1.3%) 1,700 • Sales growth to PY 1,600 • 1H 20 organic –10.4% + M&A 3.4% –7.0% • 2H 2
Slide 21: Sales breakdown
Sales breakdown Strong Electronics / Asia | Weak Automotive / Europe 2020 data 2020 data 2019 data 2019 data by end markets by regions 20.9% 19.5% 22.4% 18.8% 20.0% 19.4% 31.1% 29.6% 7.7% 7.5% 22.7% 21.6% 35.4% 21.6% 18.7% 39.0% 24.4% 19.7% Construction Others Automotive Medical Electronics Switzerl
Slide 22: Sales growth quarter by quarter
Sales growth quarter by quarter Steep decline back in 2Q 20 | V-curve recovery 2H 20 in % yoy 15% Weakening global economy COVID-19 12.8% 10% 7.4% 6.3% 6.1% 6.0% 5.8% 5.0% 4.7% 9.9% 5% 7.5% 6.7% 0.9% 4.1% -0.7% 0.1% 0% 1.4% 0.7% 0.9% -1.0% -1.7% -2.4% -5% -3.1% -10% Organic growth only -19.0% -15% L
Slide 23: Operating profitability: EBIT in 2H 20 driven by strong sales
Operating profitability EBIT in 2H 20 driven by strong sales EBIT adjusted in CHF million EBIT adjusted margin in % • EBIT exceeded expectations in 2H 20 200 20% • record EBIT margin at 16.8% 16.8% • w/o personnel cost measures at 14.9% 14.2% • driven by strong growth Sept–Dec 160 16% 154.3 • Worldw
Slide 24: Operating profitability: Strong track record throughout the cycle
Operating profitability Strong and robust track record throughout the cycle Sales in CHF million EBITDA margin adjusted 20.7% 19.1% 19.7% 2'000 18.9% 18.5% 19.5% 19.2% 18.6% 19.1% 20% 17.3% 17.1% 1,781 15.5% 1,739 1,705 1'600 16% 1,633 1,437 11.7% 1,383 1,376 1,331 1,327 1'200 12% 1,193 1,122 1,093
Slide 25: Net working capital
Net working capital Stable development in past five years in % of net sales in days • NWC stable at around 30% net sales 35% 175 31.2% 31.1% 30.3% 30.3% • equals 111 working days 29.8% 30% 150 • measured at year end 25% 125 • Ø Days Sales Outstanding (DSO) 114 113 111 111 • 65.6 SFS Group (PY 65.0)
Slide 26: Capital expenditure
Capital expenditure 25% of CAPEX invested to expand Medical business in % of net sales in CHF million • CAPEX spending 6.1% 10% 250 • to increase capacity, efficiency, productivity 8.6% 8.1% • to support future growth 8% 200 • to expand Medical business in USA & CH • CAPEX spending by region 6% 6.6%
Slide 27: Free cash flow
Free cash flow Very strong cash generation and conversion rate in % of EBITDA CHF million • Strong cash flow from operations 70% 300 • CHF 296m (+19m to PY) 58.7% 60% 250 • Lower CAPEX 50% • CHF 104m (–13m to PY) 51.2% 48.5% 200 192 40% • Strong operating free cash flow 150 161 157 29.0% • CHF 192m
Slide 28: Balance sheet ratios
Balance sheet ratios Solid equity and strong financial flexibility Equity ratio in % CHF million net cash • Equity ratio remains strong and healthy 90% 180 • ratio at 75.9% 80% 74.4% 75.5% 75.9% 160 • target range >60% 70% 140 144 71.6% • Net cash CHF 144m up CHF 75m 60% 67.2% 120 • higher free cash
Slide 29: Return on capital
Return on capital EBIT is driver for improvement in return on capital Return in % • Return on capital employed at 19.9% 30% • 1H 20 EBIT 9.2% ROCE 12.6% 24.6% 24.8% • 2H 20 EBIT 16.8% ROCE 27.2% 25% 22.7% 21.1% 19.9% • Return on invested capital at 8.6% 20% • –7.8% ROIC impact from CHF 1bn goodw
Slide 30: Effective tax rate
Effective tax rate ETR expected to fluctuate around 17.5% Effective tax rate in % • ETR expected in a lower bandwidth 25% • new target range since 2019 16% to 19% • new tax regime in Switzerland (STAF) 20.1% 20.0% 20% 17.6% adj. 17.5% • adjusted ETR in 2019 was 17.6% 15% 16.1% • exceptional one-off
Slide 31: Payout ratio
Payout ratio Stable dividend payout at low end of target range Payout ratio in % Payout per share in CHF • BoD reduced its dividend proposal 2019 from 60% 4.20 CHF 2.10 to CHF 1.80 at reported net income • as an act of solidarity in the pandemic 50% 3.60 • to protect operating cash of the company 38
Slide 32: KPI summary
KPI summary Robust profitability and strong funding maintained In CHF million 2020 % 2019 % yoy Sales 1,704.9 1,781.4 -4.3% EBITDA margin 327.6 19.2% 331.7 18.6% -1.2% EBIT margin 227.4 13.3% 236.3 13.3% -3.8% Net income margin 184.8 10.8% 206.5 11.6% -10.5% Equity ratio 1,278.2 75.9% 1,237.2 75.5%
Slide 33: Outlook 2021
Outlook 2021 Presentation FY 2020 results | 5 March 2021 33
Slide 34: Guidance FY2021
Guidance FY2021 Organic growth and profitability on prior-year level 2020A 2021G Mid-TermG Gross sales development –0.2% Positive 3–6% (in local currencies incl. M&A) EBIT margin 13.3% PY level 13–16% A = Actual G = Guidance Assumption: No further global waves of COVID-19 infections leading to a det
Slide 35: SFS Group priorities
SFS Group priorities Focus on specific priorities Sustain- Megatrends Growth Employees Profitability ability Strengthen Investments in Continue with Balance produc- Integrate sustain- innovation, future growth pro- preventive meas- tion capacity with able acting and especially in the jects in partic
Slide 36: Handover of CFO position
Handover of CFO position 40 years of successful service and strong loyalty to SFS Rolf Frei Volker Dostmann Rolf Frei joined SFS in 1981, long-standing 20 years of experience in the industrial sector CFO and Head of Corporate Services in finance and IT of international organizations Presentation FY
Slide 37: Q&A
Q&A Presentation FY 2020 results | 5 March 2021 37
Slide 38: Q&A: Any questions?
Q&A Any questions? Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation FY 2020 results | 5 March 2021 38
Slide 39: Coming up: Our IR agenda for FY2021
Coming up Our IR agenda for FY2021 • Annual General Meeting: IR Contact: 22 April 2021 (no physical presence) investor.relations@sfs.biz • Publication Sustainability Report 2020 https://sustainability.sfs.biz/en End of May • Detailed information on 1H 2021: 20 July 2021 Presentation FY 2020 results
Slide 40: Thank you for your attention
Thank you for your attention Presentation FY 2020 results | 5 March 2021 40
Slide 41: Presentation FY 2020 results | 5 March 2021
Presentation FY 2020 results | 5 March 2021 41
Slide 42: Disclaimer
Disclaimer This presentation includes forward looking statements. These statements reflect the SFS Group's current assessment of market conditions and future events. The statements are therefore subject to risks, uncertainties and assumptions. Unforeseen events may lead to deviations of the actual r