Starragtornos Group Ag · SIX:STGN
Starragtornos — Starrag Group — FY2019 Earnings Presentation
43 slides from Starragtornos's earnings presentation, Mar 6, 2020
Slide 1: Financial Year 2019: Media and Analyst Conference
Financial Year 2019: Media and Analyst Conference Zürich, 6 March 2020
Slide 2: Agenda
Agenda Highlights and business review Dr. Christian Walti, CEO Financial review Gerold Brütsch, CFO Strategy and outlook Dr. Christian Walti, CEO Q&A 1
Slide 3: Disclaimer
Disclaimer This presentation contains forward looking statements which reflect Starrag Group’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statemen
Slide 4: Agenda
Agenda Highlights and business review Dr. Christian Walti, CEO Financial review Gerold Brütsch, CFO Strategy and outlook Dr. Christian Walti, CEO Q&A 3
Slide 5: FY 2019: lower order intake and higher sales, EBIT margin lower
FY 2019: As expected, lower order intake and higher sales, while EBIT margin lower – order backlog still solid Order intake down 26% to CHF 343 million (down 24% at constant exchange rates) Sales up 8% to CHF 418 million (up 9% at constant exchange rates) Solid order backlog of CHF 284 million Opera
Slide 6: First steps of "Starrag 2021" program implemented
First steps of "Starrag 2021" program implemented Since 1 July 2019 new Group structure: Increased focus on target markets/application expertise Four operational business units organized by product ranges Sales and Operations new under central management New central HR manager All functions staffed
Slide 7: Lower order intake after second-highest value in 2018
Lower order intake after second-highest value in 2018 CHF m 600 500 400 300 200 100 0 2015 2016 2017 2018 2019 6
Slide 8: Order intake: Decline mainly due to large orders
Order intake: Decline mainly due to large orders CHF m 600 500 400 143 239 41 Large orders 300 79 67 (> 5 Mio.) 20% 200 237 239 199 Small/medium 199 178 orders 58% 100 Recurring 63 68 69 80 77 Service 22% 0 2015 2016 2017 2018 2019 Large oders (Ø 2015-2019: 114 CHF m) and small/medium orders down
Slide 9: Order intake: Decline in all customer industries
Order intake: Decline in all customer industries CHF m 600 500 400 200 171 300 110 116 122 Aerospace 36% 38 50 38 25 Energy 7% 200 29 176 194 157 132 100 143 Industrial 38% 76 63 45 36 44 Transport 19% 0 2015 2016 2017 2018 2019 Aerospace and Industrial in previous year positively influenced by se
Slide 10: Market trends by industry
Market trends by industry Key markets Aerospace and Industrial with long-term positive perspective Aerospace Energy Transportation Industrial 35% 9% 16% 40% Production interruption Power plant investments Agriculture with positive Stationary machines with Boeing 737 MAX affects concentrated
Slide 11: Order intake Asia more stable, significant declines in America and Europe
Order intake Asia more stable, significant declines in America and Europe CHF m 600 500 101 69 400 24 120 32 45 America 13% 300 174 94 105 112 Asia 33% 200 272 100 196 205 231 Europe 54% 186 0 2015 2016 2017 2018 2019 All regions positively influenced by several large order in the previous year
Slide 12: More productivity for Aerospace and Energy
More productivity for Aerospace and Energy New 5-axis-machining-centre NB 151 Completion of the NB series Machining of blisks and impellers in one set-up 20% higher productivity Short cycle times Reduced tool costs Less waste 11
Slide 13: New dimension for high-precision cylindrical grinding
New dimension for high-precision cylindrical grinding New grinding centre RVU 4700/450 from Berthiez Machining of workpieces weighing up to 12 tons and a diameter of up to 4.5 meters Concentricity and axial run-out accuracy of 4 to 5 micrometers Development in cooperation with Chinese customer (larg
Slide 14: More efficiency for the oil and gas industry
More efficiency for the oil and gas industry New horizontal machining centre Heckert DBF 1000 DBF = Drehen, Bohren, Fräsen (turning, drilling, milling) Increasing efficiency in machining of fluid ends All-in-one: complete machining in one set-up Most productive solution on the market 13
Slide 15: Successful trade fair year 2019
Successful trade fair year 2019 China International Machine Tool Show CIMT Beijing (April) Leading trade fair for mechanical engineering in the important sales market China Many interesting contacts as a start for future orders EMO Hannover (September) World’s most important leading trade fair for m
Slide 16: Technology Days: The Hotspot for experts
Technology Days: The Hotspot for experts Turbine Technology Days (June) More than 200 visitors from 20 countries in Rorschacherberg Stimulus for an even more productive and reliable turbine production Focus on the interaction of machines and cooling lubricants International premiere of the 5-axis ma
Slide 17: Opening TechCenter Shanghai
Opening TechCenter Shanghai Five machining centres for live-demonstrations New machining solutions for a wide variety of applications Impeller Watchmaking Med Tech Industrial and Transportation 17
Slide 18: Agenda
Agenda Highlights and business review Dr. Christian Walti, CEO Financial review Gerold Brütsch, CFO Strategy and outlook Dr. Christian Walti, CEO Q&A 17
Slide 19: Solid order backlog, order intake below record high previous year
Solid order backlog, order intake below record high previous year CHF m 480 500 461 400 349 333 343 249 245 300 172 192 208 200 348 366 302 284 238 231 216 100 171 141 142 0 2015 2016 2017 2018 2019 Order intake H1 Order intake H2 Order backlog Order intake 2019: -26% (fx adjusted -24%) Order ba
Slide 20: Increase in sales
Increase in sales Sales +7.6%, fx adjusted +9.2% CHF m 500 -7 400 36 300 Organic growth driven by 200 418 High order intake in 2018 389 Measures to improve project management 100 Negative FX currency influence Weaker EUR/CHF translation rate (2019: 1.1247; 2018: 1.1677) 0 2018 Organic FX 2019 Trans-
Slide 21: Income statement: burden of restructuring and salary increases
Income statement: burden of restructuring and salary increases CHF m Revenue Expenses 450 400 350 Sales revenue 194 45.7% 300 42.8% 166 Material/inventory change 250 Personnel 200 418 389 Other operating expenses/income 150 155 37.6% 146 34.3% 100 Depreciation 50 13.9% 54 13.5% EBIT 53 2.8% 2.7% 0 2
Slide 22: EBIT burdened by salary increases and restructuring cost
EBIT burdened by salary increases and restructuring cost Contribution Measures to improve project CHF m management effective Partly compensated by negative Base Value Change1 20 translation rates due to weaker euro Change2 Change3 Salary increases Change4 15 1.3 -2.6 Higher unit labor costs in Germa
Slide 23: One-off positive tax effect relieves net profit
One-off positive tax effect relieves net profit CHF m 2019 2018 Change Operating result EBIT 4.8 11.1 -57% Interest expenses, net -0.4 -0.4 FX result, net 0.7 -0.3 Other financial result -1.2 -1.5 Total financial result, net -1.0 -2.2 Income before taxes 3.8 8.9 -57% Income tax expenses 3.0 -0.5 Net
Slide 24: Balance sheet: Strong financial base
Balance sheet: Strong financial base CHF m Assets Liabilities 400 350 32 37 Cash 15 14 300 Receivables 128 250 118 143 156 Inventories 200 Fixed assets 150 105 108 Financial liabilities 100 178 177 Operating liabilities 50 105 93 Shareholders' equity 0 31.12.2018 31.12.2019 31.12.2018 2 Net assets 3
Slide 25: Intact free cash flow
Intact free cash flow CHF m Base Value 25 Change1 Change2 20 12.0 -2.1 -6.5 Change3 Change4 15 Change5 Change6 Change7 0.1 10.5 -5.1 Change8 10 Change9 3.0 8.3 Change10 6.9 Change11 Change12 Change13 5 Change14 Change15 Change16 Change17 0 Change18 Change19 Change20 Net Depreication Change in Long-t
Slide 26: Agenda
Agenda Highlights and business review Dr. Christian Walti, CEO Financial review Gerold Brütsch, CFO Strategy and outlook Dr. Christian Walti, CEO Q&A 25
Slide 27: Continuing implementation of the strategy
Continuing implementation of the strategy Focus on the most attractive market/product segments and regions in order to better exploit the group-wide growth and profit potential Differentiation through application competence, technology, service competence and premium market presence Better scaling o
Slide 28: Program "Starrag 2021" with medium-term horizon
Program "Starrag 2021" with medium-term horizon 2021 2020 Readiness for growth Reduced break-even New orders with Value added co-operation benchmark profitability 2019 in Group Renewed product port- folio Review and con- solidation Gain profitability Accelerate change Stable profitability Evaluate s
Slide 29: Mid-term financial targets unchanged
Mid-term financial targets unchanged Growth rate 5% p.a. Profitability 8% EBIT margin Dividend ratio 35-50% of net profit In local currencies and as average over the business cycle. 28
Slide 30: Economic outlook 2020
Economic outlook 2020 Continued optimism target markets in the longer term But: numerous political and economic uncertainties (including corona virus) VDW forecast 2020: Unchanged to slightly declining production output Expectations for customer industries Aerospace Problems at OEM with effects on i
Slide 31: Priorities 2020
Priorities 2020 Strategic Focusing on defined market segments and regions (US, China) Further expansion of service capabilities as additional enabler of new machinery business Innovation: Consistent development of state-of-the art products for target applications Operational Rigorous implementation
Slide 32: Guidance 2020
Guidance 2020 Order intake Within 2019, in the best case certain increase Sales revenue Significantly below previous year due to weaker order intake in 2019 EBIT EBIT before restructuring costs slightly lower, at best unchanged Negative: Lower order backlog at the beginning of 2020 and thus declinin
Slide 33: Summary
Summary Highlights 2019 Increased sales thanks to higher order intake 2018 improved project management and thus faster order processing First steps “Starrag 2021” program implemented New and further developed products Opening Starrag TechCenter Shanghai Setbacks 2019 Lower order intake (after se
Slide 34: Starrag Group – Attractively positioned
Starrag Group – Attractively positioned Benefiting from sustainable megatrends Mobility, global infrastructure capex, agricultural productivity, energy efficiency, miniaturization Innovation leadership and technological expertise Leading innovation capability focused on customers’ needs using Indust
Slide 35: Corporate calendar and Contact details
Corporate calendar and Contact details 25.04.2020 Annual General Meeting in Rorschach 23.07.2020 Half-year report 2020 29.01.2021 Sales and orders 2020 05.03.2021 Presentation of 2020 results for analysts and media in Zurich 23.04.2021 Annual General Meeting in Rorschach Gerold Brütsch, CFO Phone +4
Slide 36: Agenda
Agenda Highlights and business review Dr. Christian Walti, CEO Financial review Gerold Brütsch, CFO Strategy and outlook Dr. Christian Walti, CEO Q&A 35
Slide 37: Backup information
starrag Backup information Engineering precisely what you value Solutions for Aerospace Energy Transportation Industrial
Slide 38: Share details (as of 31 December 2019)
Share details (as of 31 December 2019) Market capitalization CHF 155 million Listed at SIX Swiss Exchange Main Standard Ticker: STGN, Valor number 236‘106, ISIN CH00023610608 3‘360‘000 registered shares, nominal value of CHF 8.50 each Free float 28% Stable shareholder structure Andere 27.5% Walter F
Slide 39: 150 years tradition in innovation
150 years tradition in innovation Key milestones for Starrag Group to become and remain a reliable long-term partner Scientific Machine Machine Machine Machine Textile Machine Machine Machine Software/ instruments tools tools tools tools machinery tools tools tools Technology company 38
Slide 40: At your service
At your service Production site Logistic center Service center 39
Slide 41: Group Management
Group Management Dr. Christian Walti, CEO Gerold Brütsch, CFO (1967, Swiss) (1966, Swiss) Since 01.06.2018: CEO and Head of Regional Sales Since 2000 CFO, since 2005 Deputy CEO and Head of 2012 – 2018 Head of Bosch Packaging Systems, Beringen, Corporate Center Switzerland 1997 – 1999 CFO of
Slide 42: World production machine tools 1989 - 2018
World production machine tools 1989 - 2018 EUR b 75 +6% +3% +10% +8% -2% +29% +4% -12% 60 +29% 45 -30% 74 70 69 67 72 30 63 61 64 52 55 49 46 40 37 41 39 42 36 38 34 34 34 33 32 36 15 27 24 27 29 23 0 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Note: Wit
Slide 43: World production machine tools 2016 - 2018: Top 20 countries
World production machine tools 2016 - 2018: Top 20 countries EUR b CN US DE JP IT KR MX IN TW RU FR TR CA VN CH TH ES AT PL 2016 2017 2018 GB 0 5 10 15 20 25 Top 20 consume 91% of the total EUR 74 billion machine tool market. Note: Without Parts/accessories: Source: VDW World Machine Tool Statisti