Burckhardt Compression Holding Ag · SIX:BCHN
Burckhardt Compression — Investor Day (November 2022)
86 slides from Burckhardt Compression's investor day presentation, Nov 1, 2022
Slide 1: Burckhardt Compression Capital Markets Day
BURCKHARDT COMPRESSION CAPITAL MARKETS DAY 1 NOVEMBER 2022 2022 Capital Markets Day | November 1, 2022 0
Slide 2: Disclaimer
Disclaimer The contents of this document, including all statements made therein, are based on estimates, assumptions and other information currently available to the management of Burckhardt Compression. This document contains certain statements related to the future business and financial performan
Slide 3: Agenda
Agenda Introduction Fabrice Billard 03 Review of past MRP: Stronger platform for success Fabrice Billard 09 Transforming market; New opportunities Fabrice Billard 17 Strategic framework & commitments Fabrice Billard 29 People and culture Vanessa Valentin 37 Systems Division Andreas Brautsch 43 Servi
Slide 4: Introduction
1. INTRODUCTION Fabrice Billard 2022 Capital Markets Day | November 1, 2022 3
Slide 5: Burckhardt Compression solutions make gas usable and transportable
Burckhardt Compression solutions make gas usable and transportable for the industry and energy generation N2 Solar panels Lubricant oil Industrial plastic CO2 CH4 Electrical Cosmetics power C2H4 O2 H2 O2-bottles Automotive Consumer C3H8 C4H10 (pharma, industry) parts gas bottles C2H6 Pharmaceuticals
Slide 6: Embracing the next chapter in the Company's growth agenda
Embracing the next chapter in the Company's growth agenda Platform strengthening 2023 Global -2027 Niche leadership From MBO 2017 to IPO player -2022 2010 2006 -2016 2002 -2006 -2010 Two divisions, Systems and Services Expanding product • One integrated Transforming Strong focus on highly portfolio
Slide 7: Leadership team - committed to advancing Burckhardt Compression
Leadership team - committed to advancing Burckhardt Compression to the next level GROUP CEO PRESIDENT SYSTEMS DIVISION Fabrice Billard Andreas Brautsch Years at BC: 6 Years at BC: Since October 2022 Experience: Experience: President Systems Division, BC Group Vice President, Global Lead Chief Strate
Slide 8: Burckhardt Compression looking forward
Burckhardt Compression looking forward On track to deliver MRP 2022 targets – Raising the bar for 2027, 1. aiming for CHF 1.1 bn sales and 12% - 15% EBIT margin A highly dynamic market where BC is growing fast in applications 2. related to the energy transition A strong commitment to value creation
Slide 9: Raising the bar
Raising the bar Financial targets MRP 2022 MRP 2027 Group Sales (CHF mn) 700 1’100 EBIT margin 10% - 15% 12% - 15% EBIT range (CHF mn)1 70 - 105 132 - 165 RONOA n/a > 25% Dividend payout ratio 50% - 70% 50% - 70% Systems Sales (CHF mn) 340 620 EBIT margin 0% - 5% 5% - 8% EBIT range (CHF mn) 0 - 17 3
Slide 10: Stronger platform for success
2. STRONGER PLATFORM FOR SUCCESS Fabrice Billard 2022 Capital Markets Day | November 1, 2022 9
Slide 11: Demonstrated resilience and delivering on our MRP 2022 targets
Demonstrated resilience and delivering on our MRP 2022 targets ✓ On track to achieve target revenue ORDER INTAKE GROUP SALES & EBIT MARGIN 1. growth (CHF 700 mn) & margin expansion (10% to 15% EBIT) in CHF mn in CHF mn and % 976.6 2. Realized SYST profitability turnaround ✓ 325.5 720 to 760 658.6 ✓
Slide 12: Established a stronger operational platform
Established a stronger operational platform Selected examples GROUP FUNCTIONS ✓ New sustainability function & global data collection ✓ Global Support Center in India SYST SERV Processes ✓ New global processes (“Strong & Sustainable”) ✓ New global processes (“STREAM”) & quality ✓ New test beds in CH,
Slide 13: Reinforced our integrated SYST/SERV business model
Reinforced our integrated SYST/SERV business model Duration Phase Division in charge EXAMPLE: LNGM BUSINESS 2012 - 2022 (OI CUMULATIVE) Evaluation and New business created for SERV 1-3 years – Will increase in the next 25+ start construction years to cover lifetime of ships Systems Division Manufact
Slide 14: Strengthened global footprint and market access through acquisitions
Strengthened global footprint and market access through acquisitions T R A C K - R E C O R D O F A C Q U I S I T I O N S ARKOS SYCC JSW Mark van Schaick Date of completion (100%) 25/11/2019 23/02/2021 21/04/2020 21/12/2021 Country USA China Japan/Global Europe Segments/Divisions/ OBC, Midstream, Dom
Slide 15: Increased innovation to enter new markets
Increased innovation to enter new markets REACHED TARGET & SUSTAINABLE NEW PRODUCTS CONTRIBUTING NEW GROWTH PRODUCTS CREATED R&D INVESTMENT LEVEL TO GROWTH Marine applications • New Marine Compressor (NMC) • Marine High-pressure (MHP) 3.0% • Laby®-GI non-lube 10% Hydrogen Mobility & Energy (HME) 2.3
Slide 16: Implementing a structured and impact-oriented sustainability agenda
Implementing a structured and impact-oriented sustainability agenda RECOGNITION Strategic ✓ A sustainable company in sustainable markets supporting vision a sustainable energy future ✓ Expended business activities supporting the energy Environment transition ✓ Certified ISO 14001 environmental manag
Slide 17: Burckhardt Compression today: A future-proof global leader
Burckhardt Compression today: A future-proof global leader KEY SUCCESS FACTORS OUR COMPETITIVE EDGE Capturing rapid market developments Focus on reciprocating compressors – “all eyes on the ball” linked to the energy transition Innovation culture combined with strong customer partnerships Resilience
Slide 18: Transforming market; new opportunities
3. TRANSFORMING MARKET; NEW OPPORTUNITIES Fabrice Billard 2022 Capital Markets Day | November 1, 2022 17
Slide 19: Megatrends reinforced by the energy transition
Megatrends outlined in 2020 reinforced by the energy transition Demographics & Climate & Regulation Technology Regional Dynamics Economic power Hydrogen as a fuel Digitalization, IoT Shift of gas production to countries Stronger than with lower feed stock price Stricter environmental regulations = P
Slide 20: Strong dynamics in market supporting the energy transition
Strong dynamics in market supporting the energy transition BC market expected to grow in any scenario NATURAL GAS DEMAND SOLAR PV & WIND GENERATION HYDROGEN DEMAND BY SCENARIO BY SCENARIO BY SCENARIO bcm TW/h Mt 5’000 14’000 250 4’500 12’000 Potential large 4’000 200 Potential large upside for BC 3’
Slide 21: LNG remaining strong in the next few years
LNG remaining strong in the next few years LNG REMAINS THE MAIN DRIVER OF GLOBAL GAS TRADE Main drivers of global gas trade growth in bcm Additional short-term momentum for LNG driven by Europe’s push for independency from Russian pipelines Opportunities for BC: • LNG import terminals, FSRUs • LNG c
Slide 22: Solar panel-related applications expected to grow strongly
Solar panel-related applications expected to grow strongly ELECTRICITY GENERATION BY SOLAR PV BY SCENARIO IN 2030 (TWH) 8'000 BC providing 6’970 compressor 7'000 systems for the production 6'000 of these materials 5'000 4’190 4'000 3’492 More new solar panel production capacity planned in next 10 ye
Slide 23: The hydrogen value chain requires reciprocating compressors
The hydrogen value chain requires reciprocating compressors at different stages PRODUCTION AND CONVERSION TRANSPORT AND STORAGE USAGES Wind energy Ship Road and Train mobility Solar energy Conversion in Trailer Liquid H2, ammonia, SAF1… Other transport Hydro Power Storage H2 Compression Electrolyzer
Slide 24: Entire hydrogen value chain offers opportunities for growth
Entire hydrogen value chain offers opportunities for growth Est. total market size 2027: CHF 600 to 1’000 mn depending on scenario SIGNIFICANT H2 PRODUCTION INCREASE IN ALL 3 TRANSPORT AND STORAGE INFRASTRUCTURE USAGES WILL DEVELOP AT DIFFERENT SPEED SCENARIOS WILL REQUIRE COMPRESSORS AND OPEN NEW O
Slide 25: Sense of urgency crystalizing into real investments (USA example)
Sense of urgency crystalizing into real investments (USA example) $bn Investment agenda supports BC’s positioning 500 479 237 ✓ Tax credits for investments in solar & storage Funding from IIJA¹ 450 41 Tax credits for producing wind & nuclear energy Carbon-free 110 Funding from IRA 2 energy Tax credi
Slide 26: New applications are driving market growth
New applications are driving market growth Upside potential Market size Opportunity for BC Systems Short-term potential Mid-term potential Long-term potential past 12 months Traditional BC markets (PCI low pressure, REF, IG, …) ▲▲▲▲ ▲▲▲▲ ▲▲▲▲ ▲▲▲▲ Gas Gathering & Processing - High-speed ▲▲▲▲ ▲▲▲▲ ▲▲
Slide 27: SYST market to grow strongly after slow-down in FY 23-24
SYST market to grow strongly after slow-down in FY 23-24 Upside potential SYSTEMS MARKET SIZE - INDICATIVE New markets - Upside End 2030 New markets - BC establishing position New markets - BC strong position Upside outside MRP targets – To be Traditional markets monitored to trigger investments in
Slide 28: Service market growing, with opportunities on BC and OBC compressors
Service market growing, with opportunities on BC and OBC compressors ACCESSIBLE SERVICE MARKET GROWTH OPPORTUNITIES AND DRIVERS in CHF mn 1’600 ~1’600 • Service market is expected to grow at around 2.6% p.a., to CHF 1’600 mn • Current market share: 60-70% for BC compressors and 8%-12% for OBC ~1’400
Slide 29: Wrap-up: A transforming market with new opportunities
Wrap-up: A transforming market with new opportunities and upside potential Market dynamics Climate change 1. Shifting economic power Strong dynamics in SYST markets supporting the energy transition Renewables Investments 2. Energy IoT WIND AND BC presence in key applications ensure growth in any sce
Slide 30: Strategic framework & commitments
4. STRATEGIC FRAMEWORK & COMMITMENTS Fabrice Billard 2022 Capital Markets Day | November 1, 2022 29
Slide 31: Targets 2027: Doubling EBIT while transforming
2022 Capital Markets Day | November 1, 2022 30
Slide 32: Targets 2027: Doubling EBIT while transforming
Targets 2027: Doubling EBIT while transforming Key business Long-term Approx. 40% of Employer of Own GHG One objectives customer business choice emission connected partnerships supports intensity company & energy reduced by customer transition >50% oriented digital services Financial ~1.1 bn 12% - 1
Slide 33: Strong sales growth and doubling of EBIT
Strong sales growth and doubling of EBIT SALES (CHF MN) DEVELOPMENT EBIT (CHF MN) AND EBIT MARGIN DEVELOPMENT 180 160 15% EBIT ~150 margin 13.4%¹ (midpoint) 140 1200 12% EBIT 120 margin 9.1%¹ 1000 100 800 80 600 ~ 1’100 60 400 40 651 70 200 20 0 - FY 21 FY 27 FY 21 FY 27 ¹Implied CAGR 2022 Capital M
Slide 34: Four strategic levers to transform and deliver our new MRP targets
Four strategic levers to transform and deliver our new MRP targets Transform & build Strengthen core business Operational excellence new growth avenues • Consolidate market share in • Improve product competitiveness • Develop best combined SYST & traditional SYST markets → SERV offering for Hydrogen
Slide 35: Two-phased approach to strategy execution
Two-phased approach to strategy execution FY 23 FY 24 FY 25 FY 26 FY 27 Deliver systems backlog, grow Transform business services and further build platform to remain future-proof • Sharpen employer brand • Refresh overall BC brand • Further operationalize Group • Organization & leadership developme
Slide 36: Digitalization vision for customer value and operational excellence
Digitalization vision for customer value, operational excellence and employee engagement Enhancing customer experience and generating new revenues with digital Services: • Up! Remote Support • Up! Monitor • Up! Predict (AI-based) • … Connecting processes and teams to increase delivery speed and real
Slide 37: Impact oriented sustainability strategy with clear commitments
Impact oriented sustainability strategy with clear commitments to the UN Sustainable Development Goals Material topic KPI UN SDG goals Burckhardt Compression targets GHG emissions & GHG emissions Approx. 40% of business supporting GOOD climate change intensity scope 1 + 2 HEALTH AND WELL-BEING energ
Slide 38: People and culture
5. PEOPLE AND CULTURE Vanessa Valentin 2022 Capital Markets Day | November 1, 2022 37
Slide 39: Burckhardt Compression looking forward – HR perspective
Burckhardt Compression looking forward – HR perspective Diverse, highly skilled, and engaged workforce ready to best serve 1. our customers worldwide 2. Targeted and scalable FTE build up to support MRP ambitions HR strategy leverages our strength and supports business 3. transformation 2022 Capital
Slide 40: Diverse, highly skilled, and engaged workforce
Diverse, highly skilled, and engaged workforce ready to best serve our customers worldwide TOP EMPLOYER WITH STRONG HIGHLY DIVERSE TALENT BASE HIGHLY SKILLED WORKFORCE EMPLOYEE ENGAGEMENT • Top 2% in Switzerland (among 3’000 qualified employees worldwide 10% Americas 1’500 employers with 200+ employ
Slide 41: Targeted FTE build up to support MRP ambitions
Targeted FTE build up to support MRP ambitions, with embedded flexibility UNDER PROPORTIONATE GROWTH IN EXPANSION OF OPERATIONAL EMBEDDED FLEXIBILITY FTE’S VS REVENUE GROWTH CAPACITY WITH LIMITED G&A 1’200 6’000 400 ~350 350 1’000 5’000 3’500 3’500 ~300 9%p.a 300 3’000 800 4’000 6%p.a 7%p.a 3’000 25
Slide 42: Targets 2027: Enabling the business transformation
Targets 2027: Enabling the business transformation Key business Long-term Approx. 40% of Employer of Own GHG One objectives customer business choice emission connected partnerships supports intensity company & energy reduced by customer transition >50% oriented digital services Nurture and evolve Fo
Slide 43: Focused organizational development
Focused organizational development ATTRACT • Purpose driven • Employer branding RETAIN • Leadership & culture • Employee experience & engagement • Talent management DEVELOP • Future skills & market practices • Leadership development • Internal successions • Embedded flexibility 2022 Capital Markets
Slide 44: Systems Division
6. SYSTEMS DIVISION Andreas Brautsch 2022 Capital Markets Day | November 1, 2022 43
Slide 45: Systems Division looking forward
Systems Division looking forward 1. Unmatched scale and technological leadership to support customers globally 2. On track to overachieve MRP 2022 targets - Raising the bar for 2027 First mover in fast-growing new market segments: Positioned to enable a 3. sustainable energy future 2022 Capital Mark
Slide 46: Strong global presence, leading positions in all segments
Strong global presence, leading positions in all segments STRONG ORDER INTAKE RECOVERY POST COVID GLOBAL CUSTOMER BASE ACROSS ALL SEGMENTS in CHF mn 800 651 600 428 405 361 400 200 0 FY 18 FY 19 FY 20 FY 21 ...over 100 individual customers in 2021 STRONG GLOBAL FOOTPRINT IN KEY MARKETS COMPETITIVE P
Slide 47: Unmatched scale and technological leadership to support customers globally
Unmatched scale and technological leadership to support customers globally KEY SUCCESS FACTORS OUR COMPETITIVE EDGE Decades of experience in supplying reliable compressor systems: Standard Global references in each applications products as well as engineered-to-order solutions State-of-the-art techn
Slide 48: Targets 2027: Strong sales growth and doubling of EBIT
Targets 2027: Strong sales growth and doubling of EBIT Key business Market leader Balanced segment Safe, lean & smart Resilient and objectives in all regions presence between operations, sized sustainable supply traditional and new to deliver business chain segments volume Financial targets ~620 mn
Slide 49: Strong sales growth and overproportionate EBIT growth
Strong sales growth and overproportionate EBIT growth SALES (CHF MN) DEVELOPMENT EBIT (CHF MN) AND EBIT MARGIN DEVELOPMENT 60 50 8% EBIT margin 700 11.5%¹ ~40 40 9%¹ (midpoint) 600 500 5% EBIT 30 margin 400 ~ 620 20 300 200 373 10 21 100 - - FY 21 FY 27 FY 21 FY 27 ¹Implied CAGR 2022 Capital Markets
Slide 50: Four strategic levers to transform and deliver our new MRP targets
Four strategic levers to transform and deliver our new MRP targets Transform & build new Strengthen core business Operational excellence growth avenues • Increase market share in core • Improve productivity of factories Be the first mover in future segments, building on local with lean & smart proce
Slide 51: Ramping up: Leverage current footprint and add limited capacity
Ramping up: Leverage current footprint and add limited capacity FACTORY CAPACITY RESOURCE RAMP UP SUPPLY CHAIN Increasing capacity of existing Planning to grow execution teams in Focus on resilient and scalable infrastructure with operational CN, IN, CH, IT and US supply chain setup excellence (lean
Slide 52: Expand export from China, while maintaining domestic lead
Expand export from China, while maintaining domestic lead STATE-OF-ART FACTORY TANGIBLE PROGRESS ON EXPORT CAPABILITIES • Dedicated process and teams for export projects implemented, Global • New Testing Center in operation Design • 25 projects delivered, 27 in execution • 30 compressors already del
Slide 53: Operational excellence: Seamless continuation of key initiatives
Operational excellence: Seamless continuation of key initiatives KEY INITIATIVES STATUS UPDATE ACHIEVEMENTS AND NEXT STEPS Ongoing Expected Progress level completion Debottlenecking activities/Capacity management Continuous “Low-CAPEX” – measures running, in-/outsourcing Readiness Growth Make-in-Ind
Slide 54: Shaping the hydrogen ecosystem with customers and partners
Shaping the hydrogen ecosystem with customers and partners Current project examples H2 PRODUCTION H2 TRANSPORT AND STORAGE H2 USAGE • Large LH2-projects in execution • First reference orders for heavy- • First deliveries in target markets for USA and South Korea duty applications with scaling potent
Slide 55: Maintaining leadership for LNG carriers and LNG-fueled ships
Maintaining leadership for LNG carriers and developing applications for LNG-fueled ships LNG CARRIERS LNG-FUELED SHIPS: MERCHANT & CRUISE SHIPS Low Pressure System High Pressure System The market The market • Small number of large compressors • Large number of small compressors • Current focus on hi
Slide 56: Systems Division: Summary
Systems Division: Summary We are your partner for high-performance compression solutions. Globally. Unmatched scale & technological 1. leadership to support customers globally On track to overachieve MRP 2022 2. targets - Raising the bar for 2027 First mover in fast-growing new market 3. segments: P
Slide 57: Services Division
7. SERVICES DIVISION Rainer Duebi 2022 Capital Markets Day | November 1, 2022 56
Slide 58: Services Division looking forward
Services Division looking forward Market leader in attractive and growing end markets with 1. unmatched footprint and unique technological expertise 2. Raising the bar to grow sales by 70% until 2027 Leading digital solutions and services to support customer’s 3. sustainability journey 2022 Capital
Slide 59: Transitioning from an OEM aftersales to a full-service provider
Transitioning from an OEM aftersales to a full-service provider for our customers SERVICE OFFERING GROWING IN ALL AREAS FURTHER INCREASE IN OBC SALES (2017-2021) in CHF mn 300 278 150% CHF 278 mn 210 CHF 210 mn ~30% 200 100% ~20% 100 50% ~70% ~80% 0 0% FY 17 FY 21 FY 17 FY 21 Spare Parts Revamp and
Slide 60: Market leader in attractive and growing end markets
Market leader in attractive and growing end markets with unmatched footprint and unique technological expertise KEY SUCCESS FACTORS OUR COMPETITIVE EDGE Fast reaction time and local availability Global positioning and expertise with close proximity to customers In-depth understanding of customers’ S
Slide 61: Targets 2027: Strong sales growth and doubling of EBIT
Targets 2027: Strong sales growth and doubling of EBIT Key business objectives Leading full- Increase installed Grow LTSA, Global supply service provider base coverage with solutions for network based on globally, enhanced local energy transition & state-of-the-art IT with strong safety presence dig
Slide 62: Strong sales growth and overproportionate EBIT growth
Strong sales growth and overproportionate EBIT growth SALES (CHF MN) DEVELOPMENT EBIT (CHF MN) AND EBIT MARGIN DEVELOPMENT 150 130 600 25% EBIT margin ~113 110 11.7%2 (midpoint) 500 22% EBIT margin 9.5%¹ 90 400 70 300 ~ 480 50 200 278 30 58 100 10 - FY 21 FY 27 FY 21 FY 27 -10 ¹Implied CAGR 2022 Cap
Slide 63: Four strategic levers to transform and deliver our new MRP targets
Four strategic levers to transform and deliver our new MRP targets Transform & build new Strengthen core business Operational excellence growth avenues • Full-Service provider for gas • Improve process efficiency and • Develop network & organization compression solutions realize digitalization poten
Slide 64: Improve coverage of installed base and grow in selected white spots
Improve coverage of installed base and grow in selected white spots Global Functions1 Priorities: Americas Priorities: APAC Priorities: Europe Priorities: MEA&EE Priorities: Legend: Develop revamp, Field Service & Service Component HME Service Update & new service center Manufacturing model Global o
Slide 65: Combining forces to leverage downstream and HME opportunities in the US
Combining forces to leverage downstream and HME opportunities in the US COMBINING THE 2 BUSINESSES STRATEGIC PRIORITIES FOR BCUS SERV UNDER ONE ORGANIZATION AND BRAND 1 . Continued midstream growth & financial improvement in US • Enhance profitable offerings such as spare parts (HS parts replacement
Slide 66: Expand Marine offering: Dry-dock overhaul of Creole Spirit
Expand Marine offering Case study: Time-critical dry-dock overhaul of Creole Spirit Business challenge • Major compressor service within tight timeframe (13-day dry-dock maintenance period) • Coordination of sub contractors within the confines of the compressor machinery room • Pandemic situation So
Slide 67: Grow Service offerings addressing customer's operational excellence
Grow Service offerings addressing customer’s operational excellence and sustainability agenda STRONG EXPECTED BENEFIT OF DIGITALIZATION EXAMPLES OF OUR SOLUTIONS FOR OUR CUSTOMERS IN PCI Operations & 5% - 10% EBIT increase Maintenance solutions beyond preventive concepts production through throughpu
Slide 68: Develop new business models & offering: UP! Predict case study
Develop new business models & offering, incl. digital solutions Case study: UP! Predict for a LNG carrier fleet Business challenge • Unexpected compressor incidents can create interruption of gas system and lead to additional costs for the ship owner • Planned proactive inspections lead to unnecessa
Slide 69: Services Division: Summary
Services Division: Summary We love to provide services that matter. Hands-on. Market leader in attractive and growing 1. end markets with unmatched footprint and unique technological expertise Raising the bar to grow sales by 70% 2. until 2027 Leading digital solution and service to 3. support custo
Slide 70: Financial plan
8. FINANCIAL PLAN Rolf Braendli 2022 Capital Markets Day | November 1, 2022 69
Slide 71: Burckhardt Compression looking forward – Financial perspective
Burckhardt Compression looking forward – Financial perspective 1. Raising the bar for 2027 in both divisions and at group level Resilient balance sheet and financial headroom to execute our 2. strategy Disciplined capital allocation and strong commitment to value 3. creation 2022 Capital Markets Day
Slide 72: Raising the bar
Raising the bar Financial targets MRP 2022 MRP 2027 Group Sales (CHF mn) 700 1’100 EBIT margin 10% - 15% 12% - 15% EBIT range (CHF mn)1 70 - 105 132 - 165 RONOA n/a > 25% Dividend payout ratio 50% - 70% 50% - 70% Systems Sales (CHF mn) 340 620 EBIT margin 0% - 5% 5% - 8% EBIT range (CHF mn) 0 - 17 3
Slide 73: MRP 2023 – 2027 macro considerations
MRP 2023 – 2027 macro considerations Challenges Considerations in MRP 2023 – 2027 Mitigation measures Uncertain No inflation considered on cost or sales¹ • Cost-saving measures development of • Continue passing on higher cost to the market Inflation Exchange Rate No exchange rate fluctuations consid
Slide 74: GROUP – Strong growth momentum in early MRP phase
GROUP – Strong growth momentum in early MRP phase Increasing EBIT margin in following years in CHF mn +69% ~1’100 EXPECTED DEVELOPMENTS 976.6 Order Intake 706.7 • Exceptionally high order intake in SYST business in last 658.7 650.7 599.3 18 months leading to a ramp-up in order backlog 335.8 Sales •
Slide 75: SYSTEMS – Significant sales growth in early MRP phase
SYSTEMS – Significant sales growth in early MRP phase; further increasing profitability in CHF mn SALES DRIVERS +66% ~620 651.1 • Exceptionally strong order intake FY 21 & FY 22 531.5 • New opportunities linked to the energy transition 428.0 375.4 372.7 • Penetration of less covered areas (USA/East
Slide 76: SERVICES – Steady sales growth and profitability increase
SERVICES – Steady sales growth and profitability increase in CHF mn SALES DRIVERS +73% ~480 • Growth of installed base/OBC market share gains • Expand marine offering and increase presence in USA, 325.5 APAC and other selected markets 278.0 230.7 223.9 • Hydrogen Mobility and Energy (full-service so
Slide 77: Driving Free Cash Flow throughout the MRP
Driving Free Cash Flow throughout the MRP • EBIT as per MRP objectives EBITDA • Slightly higher depreciation and amortization in the second half of the MRP due to investments in growth initiatives • Further reduction of overdue A/R, mainly in China NWC • Overall improvement of DSO (days of sales out
Slide 78: Focus on RONOA for substantial value creation
Focus on RONOA for substantial value creation RONOA1 DEVELOPMENT KEY VALUE CREATION DRIVERS ✓ EBIT performance as per MRP objectives 35% > 25%2 30% 25% 20% ✓ Focus on NOA/NWC management (DSO/DPO) 20% 15% 10% 12% 14% ✓ Continue to balance advance payments from customers to finance work in progress 10
Slide 79: Stringent and selective approach to acquisition
Stringent and selective approach to acquisition • Focus on reciprocating compressors • Organic growth remains core priority • Strengthening local/regional presence but continual assessment of unique • Adding on capabilities/product range value-adding opportunities Strategic Systems Rationale • Adequ
Slide 80: Strong balance sheet and sufficient financing headroom
Strong balance sheet and sufficient financing headroom STRONG BALANCE SHEET & ADEQUATE LEVERAGE 1. Net Cash turned into net debt in FY 16 with cash used for strategic acquisitions (SYCC/Arkos); staggered in CHF mn Net Debt/EBITDA payments until FY 21 150 2.5 2. 2. Very strong FCF generation in FY 20
Slide 81: Dividend remains an important part of the capital allocation strategy
Dividend remains an important part of the capital allocation strategy DIVIDEND & RESILIENCE THROUGH THE CYCLE • 22.1% annual EPS growth since FY 18 90% 19.00 • Dividend paid every year since the IPO in FY 2006, 17.00 without exception 80% 74% 14.82 70% 15.00 • 7.7% annual dividend growth since FY 18
Slide 82: Disciplined and balanced approach to capital allocation
Disciplined and balanced approach to capital allocation with focus on RONOA Organic growth CAPEX M&A • Maintenance CAPEX similar to • Bolt-on acquisitions with level of depreciation & selective and disciplined amortization approach • Dedicated investments to • Strategic fit, management support MRP i
Slide 83: Conclusion and Q&As
9. CONCLUSION AND Q&As 2022 Capital Markets Day | November 1, 2022 82
Slide 84: Embracing the next chapter in the Company's growth agenda
Embracing the next chapter in the Company's growth agenda Platform strengthening 2023 Global -2027 Niche leadership From MBO 2017 to IPO player -2022 2010 2006 -2016 2002 -2006 -2010 Two divisions, Systems and Services Expanding product • One integrated Transforming Strong focus on highly portfolio
Slide 85: Burckhardt Compression looking forward
Burckhardt Compression looking forward On track to deliver MRP 2022 targets – Raising the bar for 2027, 1. aiming for CHF 1.1 bn sales and 12% - 15% EBIT margin A highly dynamic market where BC is growing fast in applications 2. related to the energy transition A strong commitment to value creation
Slide 86: Glossary
Glossary A/R Accounts Receivable KR South Korea APS Announced Pledges Scenario LNG Liquefied Natural Gas BC Burckhardt Compression LTSAs Long-Term Service Agreements CAGR Compound Annual Growth Rate M&A Mergers and Acquisitions CAPEX Capital Expenditure MHP Marine High-Pressure CCUS Carbon Capture &
Burckhardt Compression — Investor Day (November 2022) on 6ix