Sfs Group Ag · SIX:SFSN
Sfs — FY2017 Earnings Presentation
37 slides from Sfs's earnings presentation, Mar 9, 2018
Slide 1: Presentation FY2017 results
Presentation FY2017 results Zurich, 9 March 2018
Slide 2: Today's speakers
Todays speakers Welcome to the presentation on our FY17 results Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation FY17 results, 9 March 2018 2
Slide 3: Agenda
Agenda 1 Welcome & key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2018 Jens Breu 5 Q&A Jens Breu / Rolf Frei Presentation FY17 results, 9 March 2018 3
Slide 4: Key takeaways FY2017
Key takeaways FY2017 Presentation FY17 results, 9 March 2018 4
Slide 5: Key takeaways FY2017: Dynamic sales growth and high advance outlays
Key takeaways FY2017 Dynamic sales growth and high advance outlays • Sales increased in FY2017 by 13.7% to CHF 1,632.7 million • Driven by strong organic growth of 7.4% • First time consolidation of Tegra Medical • EBITA rose by 10.7% and reached CHF 235.8 million, which corresponds to 14.4% EBITA m
Slide 6: CAPEX vs. organic growth 2013 – 2017
CAPEX vs. organic growth 2013 – 2017 High CAPEX trigger strong organic growth 10% 280 CAPEX in CHF million organic growth at core in % of net sales 7.8% • Realization of new projects 8% 240 requires CAPEX 5.9% 6% 5.1% 200 • High CAPEX levels to be 4% seen as reliable indicators 2% 1.5% 160 1.7% for
Slide 7: Development of key financials
Development of key financials Presentation FY17 results, 9 March 2018 7
Slide 8: Reconciliation balance sheet
Reconciliation balance sheet Offset of intangible assets with CHF 909 million CHF million • Conversion to Equity % 31.12.2017 Swiss GAAP FER IFRS 80.1% • Goodwill and intangibles Offset goodwill -908.6 are offset against equity Pension plans: initially and in future at Liabilities & 30.4 economic be
Slide 9: Reconciliation income statement
Reconciliation income statement EBIT and net income on enhanced level CHF million Net • Amortization 2017 EBIT 2017 income • CHF 70m in IFRS IFRS 168 133 • CHF 42m in SGF • CHF 28m less in SGF Lower amortization 28 28 Pension plans 2 3 • Residual amortization in Income taxes na -5 2017 dissolved in
Slide 10: Sales bridge 2016 – 2017
Sales bridge 2016 2017 Strong organic growth of 7.4% 1,700 1,436 113 -6 83 7 1,633 • Reported growth of 13.7% • Organic +7.4% (PY 2.0%) 1,600 • M&A +5.8% (PY 1.5%) • FX impact +0.5% (PY 0.9%) 1,500 • Like-for-like growth by CHF million segment • 9.6% in EC (PY 0%) 1,400 • 6.5% in FS (PY 7.5%) • 3.
Slide 11: Sales breakdown by end markets and regions
Sales breakdown Medical & America increased share substantially by end markets by regions 20.6% 25.3% 19.8% 27.0% 22.0% 20.9% 22.6% 21.4% 6.4% 1.9% 21.5% 17.2% 39.9% 26.2% 24.1% 14.0% 42.0% 27.2% 2017 data 2017 data 2016 data 2016 data Construction Others Automotive Medical Electronics Switzerland E
Slide 12: Operating profitability
Operating profitability Extraordinary and temporary operating effects 25% 500 • Profitability burdened by in % of net sales 21.3% 20.5% one-off operating effects: in CHF million 19.7% 20% 400 • advance outlays 19.8% • customer-induced project delays 18.5% 14.8% • transition cost in key projects 14.2
Slide 13: Swiss franc exposure
Swiss franc exposure Substantially reduced exposure 60% • Operating expenses in CHF Opex in Swiss francs • 39.8% share of group OPEX 50% 50% 49% • Drivers for strategic driven 46% 40% 44.3% decline 39.8% • international M&A % share • improved productivity in CH 30% 27% • relocation to foreign sites
Slide 14: Net working capital
Net working capital Stable development in past three years 35% 350 • NWC stable at 31% of net sales or at 113 days NWC Days outstanding 30% 300 NWC in % of net sales 31.0% 31.2% 31.1% 30.3% 28.7% • increase by CHF 45m 25% 250 • mainly due to sales growth 20% 200 • Ø Days Sales Outstanding • 67.7 SFS
Slide 15: Capital expenditure
Capital expenditure Record spending to secure future growth 9% 360 8.1% • CAPEX spending 8.1% CAPEX in % of net sales 8% 320 • to increase capacity, efficiency CAPEX in CHF million 7.1% and productivity 7% 280 • to support future growth 6.6% 6% 240 5.9% 5.8% • CAPEX spending by region 5% 200 • 43% S
Slide 16: Free cash flow
Free cash flow CAPEX drive free cash flow & conversion rate 60% 300 • Strong cash flow from 50.9% 51.2% 50% 47.6% 250 operations used for CAPEX CHF million • 227m cash from operations Free cash flow in % of EBITDA • -133m CAPEX 40% 200 • 94m free cash flow 37.4% • Conversion rate with 29% 30% 150 be
Slide 17: Balance sheet ratios
Balance sheet ratios Solid equity and strong financial flexibility 78.4% 80% 500 74.0% 71.6% • Equity ratio remains strong Equity ratio in % 70% 400 and healthy at 71.6% net cash/debt 67.2% • after goodwill offset CHF million 60% 300 50% 200 • Financial flexibility for 48.4% growth secured by 40% 10
Slide 18: Return on capital
Return on capital Economic value added generated 27.8% 28% 24.3% • Capital employed 25.9% • ROCE at 25.9% 24% 23.4% • EBITA measured at Ø CE 20% • excluding intangible assets 20.6% • above target range of >20% Return in % 16% • Return on invested capital • ROIC at 9.8% 12% 9.4% 9.2% • EBITA less tax
Slide 19: Payout ratio
Payout ratio Stable dividend at ~37% of cash net income 50% 4.00 • BoD will propose a payout Payout per share in CHF 41% per share of CHF 1.90 • PY CHF 1.75; increase by 8.6% Payout ratio in % 40% 3.20 38% • cash out CHF 71.25m 37% 37% • from statutory capital reserve 30% 2.40 • Dividend yield ~ 1.7
Slide 20: Summary KPI's
Summary KPI's Strong growth, healthy profitability and funding In CHF million 2017 % 2016 % yoy Sales 1,632.7 1,436.5 13.7% EBITDA margin 323.5 19.8% 306.2 21.3% 5.7% EBITA adjusted margin 235.8 14.4% 213.0 14.8% 10.7% Net income margin 159.1 9.7% 124.8 8.7% 27.5% Equity ratio 1,087.0 71.6% 933.0 67
Slide 21: Development by segment
Development by segment Presentation FY17 results, 9 March 2018 21
Slide 22: Headlines Engineered Components segment
Headlines Engineered Components segment Strong sales growth achieved • Sales growth of 20.5% to CHF 926m driven by: • Dynamic growth of Automotive and Electronics • fueled by project ramp-ups • first-time consolidation of Tegra Medical • Project wins drive CAPEX and advance outlays that impact profi
Slide 23: Key messages Automotive division
Key messages Automotive division Electrification of cars confirmed as a growth driver • High growth momentum sustained thanks to the ramp-up of new projects • Vehicle electrification and autonomous driving support innovation and growth • Significant project wins fuel future growth and require substa
Slide 24: Key messages Electronics division
Key messages Electronics division Back on the growth track • Strong growth in both semesters vs. prior year • Positive demand development in HDD • Underpinned position as reliable partner in major product launches • Strong project pipeline triggers new plant in CN- Nantong • Expect positive developm
Slide 25: Key messages Industrial division
Key messages Industrial division Stable sales trend achieved • Overall stable sales level • Good momentum in electrical engineering, control engineering and sensorics application • Temporary inventory effects in customer supply chain for A350 caused flat sales in aircraft activities • Attractive pro
Slide 26: Key messages Medical division
Key messages Medical division Smooth integration process • First time fully consolidated • Integration viewed positively by customers and employees • Project characteristics and inventory effects led to flat sales development • Production capacity at site in Costa Rica expanded • Healthy project pip
Slide 27: Headlines Fastening Systems segment
Headlines Fastening Systems segment Strengthened market position • Attractive sales growth of 8.0% to CHF 384.0 Mio. • good market environment • gained market share thanks to new product introductions • Projects to improve productivity • additional costs in the short- term impact profitability • exp
Slide 28: Key messages Construction division
Key messages Construction division Market share gains thanks to innovative products • Key markets showed strong momentum • Market share gains fueled by innovative solutions • Positive momentum from improved product offering (Ncase & HECO products) • Production optimization projects will be concluded
Slide 29: Key messages Riveting division
Key messages Riveting division Demand from automotive sector increased • Positive sales development driven by good demand from automotive customers • Benefit from trends like electrification of assembly lines & 100% quality control • Numerous projects to sharpen production profiles initiated; challe
Slide 30: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Broadened customer base • Solid sales growth with 3.2% yoy above Swiss GDP • realization of new projects • Neue • good momentum of Tabelle business units tools and fastening systems • EBITA on like for like level at 6.9% (PY 7.2%) • book gains from disposal
Slide 31: Key messages Distribution & Logistics segment
Key messages Distribution & Logistic segment Product portfolio & online sales channel improved • Extensive measures to improve product range & operating performance • Personal protective equip- ment enhanced offering • Offering of multiple sales channels as differentiator • Launch of new online shop
Slide 32: Guidance FY 2018
Guidance FY 2018 Presentation FY17 results, 9 March 2018 32
Slide 33: Guidance FY2018
Guidance FY2018 Expect solid growth & margin improvement yoy Actual Guidance FY2017 FY2018 Gross sales reported 13.7% 5 – 7% EBIT margin comparable 14.3%* >14.3% FY: Financial Year *: EBIT margin reported FY2017: 12.1% Presentation FY17 results, 9 March 2018 33
Slide 34: Q&A
Q&A Presentation FY17 results, 9 March 2018 34
Slide 35: Q&A
Q&A Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation FY17 results, 9 March 2018 35
Slide 36: Thank you
Thank you More than 9,000 employees – one target Inventing success together Presentation FY17 results, 9 March 2018 36
Slide 37: 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