Andritz AG · VIE:ANDR
Andritz — Investor Day (October 2007)
47 slides from Andritz's investor day presentation, Oct 25, 2007
Slide 1: Capital Market Days 2007
Capital Market Days 2007 23-25 October 2007 China
Slide 2: Disclaimer
Disclaimer Certain statements contained in this presentation constitute “forward- looking statements.” These statements, which contain the words “believe”, “intend”, “expect” and words of similar meaning, reflect Management’s beliefs and expectations and are subject to risks and uncertainties that m
Slide 3: Agenda
Agenda Update on recent developments - Review on targets of past Andritz Investor Days - Important achievements and developments during the last 12 months Growth and the supply chain Outlook 2008 by Business Area Summary Slide No. 3
Slide 4: Agenda
Agenda Update on recent developments - Review on targets of past Andritz Investor Days - Important achievements and developments during the last 12 months Growth and the supply chain Outlook 2008 by Business Area Summary Slide No. 4
Slide 5: Review on targets of past Investor Days
Review on targets of past Investor Days Event Targets Achievements Increase profitability (EBITDA) of Investor Days Feed Technology Business Area Target reached 2003: (FT) from 4.4% in 2001 to 10% in 2004 Investor Days Become a 2 billion Euro company Target reached 2004: by 2007 Reach Group EBIT(A
Slide 6: Update on EBITA margin target of 7%
Update on EBITA margin target of 7% Achievements Margin development in recent years mainly influenced by acquisition of 7 6.3 6.1 VA TECH HYDRO and fast growth 5.9 6 of the capital business 5.2 5.3 5.1 5 Excluding VA TECH HYDRO, 4 EBITA margin in 2006 would have been approx. 6.3% 3 2 Due to th
Slide 7: Planned measures to reach EBITA Group goal of 7%
Planned measures and expected developments to reach EBITA Group goal of 7% Target to increase profitability of VA TECH HYDRO by 1 percentage point per year: from ~3.5% in H2 2006 to 6.5% in 2009: - Full integration of VA TECH HYDRO’s existing production facilities into Andritz Group - Optimization
Slide 8: Update on dividend payout ratio
Update on dividend payout ratio EUR 1.00 1,00 0.75 0.50 0.50 0,50 New target is to increase the 0.35 dividend payout ratio to 40% 0.23 0.25 for the financial year 2007 0.00 0,00 2002 2003 2004 2005 2006 Dividend per share (adjusted for share split of 1:4) Dividend per share and payout ratio: 2002: 0
Slide 9: Agenda
Agenda Update on recent developments - Review on targets of past Andritz Investor Days - Important achievements and developments during the last 12 months Growth and the supply chain Outlook 2008 by Business Area Summary Slide No. 9
Slide 10: Important achievements and developments during the last months
Important achievements and developments during the last 12 months Continuation of Group growth in 2007 and 2008 Successful integration and development of VA TECH HYDRO Complementary acquisitions further extend product range and strengthen market position Successful start-ups and major orders
Slide 11: Continuation of Group growth in 2007 and 2008
Continuation of Group growth in 2007 and 2008 Andritz Group Sales in MEUR CAGR 1998-2007: For 2007, Group Sales are 3500 expected to increase by +19% 3200 20% compared to 2006; most of the Sales increase 2710 comes from first-time consolidation of VA TECH HYDRO 1744 1319 1481 Based on the curren
Slide 12: Strong organic growth
Strong organic growth Andritz Group Sales in MEUR 3500 3200 Organic growth 2710% Since 1998, the +8 Andritz Group has +12% p.a. shown a strong organic growth of 12% p.a. .6% +29 1744 1481 5% 1319 6. +1 -1 1225.0% 5. 8% 1110 +1 3 % +7.1 9378.4% +1 666 656+7.4% 1998 1999 2000 2001 2002 2003 2004 2005
Slide 13: Growth by Business Area
Growth by Business Area Sales 1998-2006 MEUR CAGR by Business Area: 3000 2,710 MEUR Feed and Biofuel +7% 2500 Environment and Process +23% 17 75% Rolling Mills and 2000 Strip Processing +16% + % Lines +4 Hydro Power +40% 1500 % 34 +2 % 343 , 1000 +1 Pulp and 666 MEUR Paper +18% % 64 +2 500 0 1998 20
Slide 14: Growth by region
Growth by region Sales 1998-2006 CAGR by region: MEUR 3000 2,710 MEUR ROW +44% 2500 Asia +21% 2000 % 80 +2 % South America +59% 70 1500 +3 % 900 , +3 North America +11% 1000 % 120 666 MEUR + 500 % +18% 60 +2 Europe 0 1998 2006 Slide No. 14
Slide 15: Important achievements during the last months
Important achievements during the last 12 months Further continuation of Group growth in 2007 and 2008 Successful integration and development of VA TECH HYDRO Complementary acquisitions further extend product range and strengthen market position Successful start-ups and major orders in pulp
Slide 16: Review on CMD 2006 regarding integration measures of VA TECH HYDRO
Review on CMD 2006 regarding integration measures of VA TECH HYDRO Integration: Markets Existing overlaps: Service business for Austria and Germany Large Hydro core component business in China Status of integration: 9 Service business for Austria directed from Graz location (former HM Business
Slide 17: Hydro Power: Strong development of VA TECH HYDRO
Hydro Power: Strong development of VA TECH HYDRO Order Intake of VA TECH HYDRO developed substantially above expectations Given the high Order Backog of over 1.7 bn. EUR of VA TECH HYDRO, Sales of the Hydro Power Business Area could approach 1 bn. EUR in 2008 already Simon Bolivar hydropower sta
Slide 18: Planned measures and targets for 2008
Planned measures and targets for 2008 Further enhancement of supply chain and business process management Combine organizations in China; VA TECH HYDRO to benefit from strong local presence of the Andritz Group in China Further exploitation of cross-functional synergies with the Andritz Group
Slide 19: Important achievements during the last months
Important achievements during the last 12 months Further continuation of Group growth in 2007 and 2008 Successful integration and development of VA TECH HYDRO Complementary acquisitions further extend product range and strengthen market position Successful start-ups and major orders in pulp
Slide 20: Sindus Human Technology
Sindus Human Technology BRAZIL - North and Northeast Sindus is the leading provider Regions VERACEL – Bahia of outsourced automation, KLABIN – Bahia instrumentation, and electrical JARI – Pará SUZANO - Bahia maintenance services for the Pulp & Paper sector in Brazil. BRAZIL – Southeast Region ARAC
Slide 21: Bachofen + Meier (Andritz BMB)
Bachofen + Meier (Andritz BMB) Supplier of coating equipment, size and film presses, air turns, and related equipment since the 1960’s. Complements existing product range for paper and board production. Board Coating Line PrimeCoat™ Super Roll Off Machine Coating Station Slide No. 21
Slide 22: Cooperation with UPM for biomass gasification
Cooperation with UPM for biomass gasification Joint development project of Andritz Carbona and UPM for biomass gasification and synthetic gas production Utilizing technology of Andritz Carbona, a specialist in advanced biomass gasification processes Joint development of technology and processes
Slide 23: Supplier of renewable energy products
Supplier of renewable energy products Andritz Group Order Intake H1 2007: 2,037 MEUR Feed and Biofuel Environment Feed and Biofuel and Process Systems for production of biofuel pellets Components for bio-ethanol Approximately 35-40% of Andritz‘s Rolling Mills and Strip Sales are derived from Process
Slide 24: Important achievements during the last months
Important achievements during the last 12 months Further continuation of Group growth in 2007 and 2008 Successful integration and development of VA TECH HYDRO Complementary acquisitions further extend product range and strengthen market position Successful start-ups and major orders in pulp
Slide 25: Single-line successes
Single-line successes t/d ,7 96 of3 or d re c d o rl W s o nth n 6 m inal ithi nom p – w ing r t-u eed ity s ta exc ac ord dy cap c a Re alre Slide No. 25
Slide 26: Andritz: Preferred technology for eucalyptus
Andritz: Preferred technology for eucalyptus Customer Location Andritz Scope Size Start-up VCP Três Lagoas, Fiberline, Pulp Drying, 3,924 t/d April Brazil White Liquor Plant 2009 Bahia Sul Mucuri, Woodyard, Washing, 3,160 t/d Oct 2007 Brazil and Bleaching Botnia Fray Bentos, Complete Mill 3,000 t/d
Slide 27: Successful start-ups of stainless steel plants
Rolling Mills and Strip Processing Lines: Successful start-ups of stainless steel plants Lianzhong Stainless Steel Corp: Annealing and pickling line supplied by Andritz to Lianzhong Complete stainless steel annealing and pickling line; with 550 meters length, this line has an annual production cap
Slide 28: Agenda
Agenda Update on recent developments - Review on targets of past Andritz Investor Days - Important achievements and developments during the last 12 months Growth and the supply chain Outlook 2008 by Business Area Summary Slide No. 28
Slide 29: Andritz purchasing
Andritz purchasing Purchasing volume of local Andritz Group subsidiaries in MEUR: Europe as most important region (~75% of total purchasing volume), followed by North 1750 America, China, and India 1200 1250 Main components purchased: 1100 Special components 950 Raw materials (sheet metal, c
Slide 30: Andritz purchasing strategy and trends
Andritz purchasing strategy and trends Increase volume of purchased components in East Asia (particularly China), in South America, and in India Tendency towards more complex purchased components/systems Increase inter- and intra-continental cooperation by Andritz subsidiaries in South America
Slide 31: Buy-ratio continues to increase
Buy-ratio continues to increase Sales of the Andritz Group Direct labour hours of the Andritz Group 1997-2006; in MEUR 1997-2006; in million 3000 2,710 2500 6 4.9 2000 5 % 4 0 +32 1500 % +227 3 1000 646 2 1.5 500 1 0 0 1997 2006 1997 2006 Outsourcing > 50% Slide No. 31
Slide 32: Manufacturing sites worldwide
Manufacturing sites worldwide Vallentuna/S Växjö/S Jevnaker/N Esbjerg/DK Päiverinne/FIN Geldrop/NL Varkaus/FIN Savonlinna/FIN Brantford/CAN Cologne/D Ravensburg/D Spisska/SK Muncy/USA Bülach/CH Regensburg/D Kriens/CH Humenne/SK Krefeld/D Sibiu/RO Châteauroux/F Hemer/D Weiz/A Bretten/D Foshan ATC/RC
Slide 33: Sales/Direct labour hours 2006 by Business Area
Sales/Direct labour hours 2006 by Business Area Breakdown of Sales 2006 Breakdown of direct labour hours 2006 by Business Area by Business Area 4%* Feed and Biofuel 6% 12%* Environment and Process 20% 15%* Rolling Mills and Strip Processing Lines 6% 24%* Hydro Power 37% 45%* Pulp and Paper 31% * Sha
Slide 34: Andritz manufacturing strategy
Andritz manufacturing strategy Manufacturing strategy: Focus manufacturing on key components (A parts) Maintain outsourcing (C parts permanently, B parts partly) Increase production capacities in emerging markets to serve both local and global markets Further enhance lead times Focus on pr
Slide 35: Development of employees by region
Development of employees by region 2000 India As ia 0.8% 0.3% H1 2007 China 1.1% China RoW S-Am erica RoW 0.4% India 7.2% 1.3% 0.3% 4.7% H1 2007: 2000: A sia 1.7% ~ 22% of employees N-Am erica ~ 3% of employees S-America in Emerging Markets 26.9% in Emerging 7.0% Markets N-America 12.4% Europe Europ
Slide 36: Agenda
Agenda Update on recent developments - Review on targets of past Andritz Investor Days - Important achievements and developments during the last 12 months Growth and the supply chain Outlook 2008 by Business Area Summary Slide No. 36
Slide 37: Many pulp mill projects …
Many pulp mill projects … High project activity for new pulp mills/expansion of existing lines to continue during the next few years Æ In total, approximately 15 million tons of new pulp mill capacity are expected to be decided until 2012 Major new pulp mill/expansion projects planned or announced u
Slide 38: … based on fast growing plantations and …
… based on fast growing plantations and … Approx. 150,000 - 200,000 hectars of plantations needed for a pulp mill with 1 million tons capacity Source: J. Pöyry Slide No. 38
Slide 39: … natural wood resources
… natural wood resources Russia holds the largest resource of unutilized softwood and hardwood Source: J. Pöyry Slide No. 39
Slide 40: Hydro Power: High project activity worldwide
Hydro Power: High project activity worldwide Andritz VA TECH HYDRO is a global leading supplier of turnkey electromechanical equipment and services for hydropower plants with a leading position in the growing market Simon Bolivar rehabilitation project, Venezuela of plant refurbishment Integrati
Slide 41: Installed Capacity: Big replacement cycle underway
Big replacement cycle underway The predominant markets for rehabilitation and upgrades are Europe and North America. World Average Asia 25% 50% 192,000 MW Installed Capacity North America 65% 159,000 MW Western Europe 70% 154,000 MW Central/South America 15% 125,000 MW Eastern Europe 87,000 MW 55% M
Slide 42: Good project activity for Rolling Mills and Strip Processing Lines
Good project activity for Rolling Mills and Strip Processing Lines Overall continued good project activity with focus on: China: - Long-term modernization of domestic steel industry targeted - Continued expansion of stainless steel capacities due to fast growing demand: market share of Andritz ove
Slide 43: Environment and Process – excellent growth prospects
Environment and Process – excellent growth prospects Andritz offers complete systems for solid/liquid separation (centrifuges, thermal driers) for various types of sludges from municipalities and industries Directives and stringent environmental regulations as long- term major growth drivers, es
Slide 44: Feed & Biofuel – continued strong organic growth
Feed & Biofuel – continued strong organic growth Andritz is a world market leader for plants to produce animal feed and biofuel pellets out of materials, such as wood, peat, and agricultural by-products. Continued strong organic growth of Order Intake (+25.6% in 2006; Andritz wood pelleting plan
Slide 45: Agenda
Agenda Update on recent developments - Review on targets of past Andritz Investor Days - Important achievements and developments during the last 12 months Growth and the supply chain Outlook 2008 by Business Area Summary Slide No. 45
Slide 46: Summary and goals
Summary and goals Assuming an overall solid development of the global economy, Andritz expects good project activity in all Business Areas to continue Continuation of strategy to acquire complementary businesses/companies in all Business Areas Focus on improving the Group EBITA towards 7% Ba
Slide 47: A Global Market Leader
A Global Market Leader in High-Tech Production Systems for Pulp & Paper, Steel and other Specialized Industries