Aalberts N.v. · EURONEXT:AALB
Aalberts — Investor Day (December 2019)
53 slides from Aalberts's investor day presentation, Dec 4, 2019
Slide 1: Update strategy 'focused acceleration' 2018-2022 Capital Markets Day
update strategy ‘focused acceleration’ 2018-2022 Capital Markets Day 4 December 2019 (Utrecht)
Slide 2: Table of contents
table of contents welcome evolving into a stronger Q&A key intro and better Aalberts part I takeaways 0 1 2 3 4 5 6 7 Aalberts financial development Aalberts strategy Q&A 2020-2022 in action part II 4 December 2019 Capital Markets Day Aalberts 2
Slide 3: 1. Aalberts
aalberts 1. Aalberts Wim Pelsma - CEO
Slide 4: You will find Aalberts where technology matters and real progress can be made
“you will find Aalberts where technology matters and real progress can be made” humanly, environmentally and financially
Slide 5: Our essence
our essence we engineer mission-critical technologies for ground-breaking industries and everyday life we are a company of mission-critical people who can’t resist going beyond the line of duty - good is never good enough sharing and discussing ‘bad’ gets us to brilliant – greatness is made of share
Slide 6: Our way of value creation
our way of value creation our essence shareholder value o leading niche technology positions mission-critical ` o high entry barriers, pricing power technologies o high added-value margins, sustainable growth o operational excellence good is never o improve EBITA margins, strong cash conversion good
Slide 7: The Aalberts playbook
the Aalberts playbook compounding returns relentless pursuit of excellence strong free cash flow portfolio optimisation leverage | excellence disciplined → margin expansion capital allocation focus competitive advantage growth drivers relentlessly creating long-term shareholder value 4 December 2019
Slide 8: Our track record - over 40 years of sustainable profitable growth
our track record - over 40 years of sustainable profitable growth multi-industry focus portfolio growth focus niche technology focus 3000 2,759 420 2500 revenue (in EUR million) 366 370 EBITA (in EUR million) 2,025 320 2000 270 1,440 1500 219 220 1000 168 170 474 120 500 130 59 70 0 20 1975-1981 198
Slide 9: Our track record - shareholder value creation
our track record - shareholder value creation share price earnings per share dividend per share long-term shareholders (in EUR) (in EUR) (in EUR) (> 3% holdings) 0.75 2.49 29.05 1.38 0.41 23.18 0.28 1.02 5.06 2008 2013 2018 2008 2013 2018 2008 2013 2018 CAGR 19% CAGR 9% CAGR 10% > 50% our rele
Slide 10: Our key strength - mission-critical people
our key strength - mission-critical people the Aalberts way greatness is made of shared knowledge winning with people our unique advantage be an entrepreneur take ownership go for excellence share and learn act with integrity the Aalberts way – winning with people 4 December 2019 Capital Markets Day
Slide 11: Our strategy & objectives 2018-2022
our strategy & objectives 2018-2022 strategy ‘focused acceleration' non-financial objectives financial objectives remain improve worldwide leading niche average organic focused technology positions revenue growth > 3% technology positions EBITA margin > 14% creating sustainable profitable growth ROC
Slide 12: 2. Evolving into a stronger and better Aalberts
2. evolving into a stronger and better Aalberts Wim Pelsma - CEO
Slide 13: 'Focused acceleration' - evaluation
‘focused acceleration’ - evaluation allocating our capital in the most efficient way to generate highest returns o strong execution existing business plans generates increased CAPEX demand o activities with limited progress require disproportional efforts and cash building an even stronger and bette
Slide 14: Mega trends shaping our future
mega trends shaping our future rapid climate change internet urbanisation resource scarcity of things larger, healthy cities and aging energy efficiency, sustainable acceleration of technological population drive demand for comfort, transportation, lightweight and lifetime breakthroughs for smart ho
Slide 15: Unique market positions with compelling competitive advantage
unique market positions with compelling competitive advantage hydronic flow control eco-friendly 60% buildings piping systems industrial 17% niche selective niches surface technologies technologies end markets sustainable 15% fluid control transportation unique market positions semicon 8% advanced m
Slide 16: Our unique leading market positions
our unique leading market positions installation technology material technology piping systems surface technologies climate technology industrial technology fluid control hydronic flow control advanced mechatronics Aalberts networks stimulate knowledge sharing, fast learning, innovations and entrepr
Slide 17: Aalberts accelerates in 2020-2022
Aalberts accelerates in 2020-2022 accelerate organic » increase innovation rate from 10% to 20% 1 revenue growth » invest EUR 140-160 million CAPEX per year accelerate » focus on unique market positions with compelling competitive advantage 2 portfolio optimisation » expand divestment programme to E
Slide 18: Innovation drives organic revenue growth
innovation drives organic revenue growth continuous investments in R&D megatrends shaping our future target rates rapid urbanisation % > 120 innovation rate EUR mio climate change resource scarcity > 450 FTE internet % KAM rate of things R&D investments increased globalisation & co-development innov
Slide 19: Disciplined capital allocation
disciplined capital allocation cash dividend policy 30% of net profit before amortisation organic growth CAPEX EUR 140-160 million per year acquisitions | bolt-on 'sweetspot’ deployment EUR 50-100 million per year size EUR 20-100 million annual revenue acquisitions | strategic footprint deployment E
Slide 20: Disciplined capital allocation
disciplined capital allocation CAPEX acquisitions innovation 40% efficiency 30% capacity 30% ‘bolt-on’ installation connection and valve technology technology supply chain efficiency material footprint Eastern Europe, USA technology specialised technologies climate energy efficiency | digital servic
Slide 21: Relentless in our pursuit of operational excellence
relentless in our pursuit of operational excellence 156 locations worldwide manufacturing locations 122 locations worldwide 63 manufacturing locations 9 to be improved 46 upgrade to 2.0 ‘world class’ service locations service locations 7 93 to be improved 76 upgrade to 2.0 ‘world class’ current foot
Slide 22: 3. Financial development 2020-2022
3. financial development 2020-2022 Arno Monincx - CFO
Slide 23: Financial assumptions
financial assumptions o organic revenue growth 3-5% per year » R&D > 4% of total revenue » CAPEX EUR 140-160 million per year o operational leverage | excellence; ‘drop through’ 25% o portfolio optimisations » divestments EUR 300-350 million revenue » reduce inventories with EUR 100-150 million (DIO
Slide 24: EBITA % improvement potential
EBITA % improvement potential organic revenue growth 3% 5% operational leverage | excellence 0.8% 1.4% portfolio optimisation 0.5% 0.5% additional EBITA % 1.3% 1.9% operational leverage | excellence mainly drives EBITA % increase 4 December 2019 Capital Markets Day Aalberts 24
Slide 25: ROCE % improvement potential
ROCE % improvement potential organic revenue growth 3% 5% additional ROCE % (excl. IFRS16) 2.4% 4.2% efficient capital allocation drives ROCE % increase 4 December 2019 Capital Markets Day Aalberts 25
Slide 26: 4. Q&A - part I
A aalberts 4. Q&A - part |
Slide 27: 5. Aalberts strategy in action
5. Aalberts strategy in action
Slide 28: Aalberts hydronic flow control
Aalberts hydronic flow control Maarten van de Veen – Executive Director
Slide 29: Aalberts hydronic flow control
Aalberts hydronic flow control what we do Aalberts hydronic flow control is partnering with its customers to engineer seamless energy efficient hydronic systems for their building requirements. We are involved in every step of the building life cycle. we are at the heart of every great building 4 De
Slide 30: Strategy in action - improving energy efficiency in buildings
strategy in action - improving energy efficiency in buildings hydronic balancing valves » 10-20% reduction energy costs air / dirt separators » 15% reduction energy of energy costs costs insulation » 9% reduction energy costs thermostatic radiator heads » 7-12% reduction energy costs intelligent the
Slide 31: Strategy in action - air separation
strategy in action - air separation a radiator with 5% air loses 8% of its thermal output more energy needed to maintain heat demand 5% air in radiator energy energy consumption consumption with air without air -8% 4 December 2019 Capital Markets Day Aalberts 31
Slide 32: Strategy in action - dirt separation
strategy in action - dirt separation a heating pipe covered with 0,25 mm on the inside magnetite loses 9% of its efficiency 0,5 mm diameter reduction energy costs with dirt without dirt - 9% 4 December 2019 Capital Markets Day Aalberts 32
Slide 33: Strategy in action - smart thermostat and radiator head
strategy in action - smart thermostat and radiator head o 1 driving digitalisation » intelligent thermostat, self-learning and adapts to users’ occupancy and habits » compatible with all heating systems o 2 creating new business models » cloud services and data analysis » direct relationships with e
Slide 34: Aalberts hydronic flow control
Aalberts hydronic flow control our competitive advantage growth drivers 1 integrated offering from 1 sell integrated offering in all source to emitter regions, develop North America 21% 2 engineering partner for 2 develop portfolio through contractors innovations and bolt-ons 3 focused approach with
Slide 35: Aalberts surface technologies
Aalberts surface technologies Oliver Jäger – Executive Director
Slide 36: Aalberts surface technologies
Aalberts surface technologies what we do Aalberts surface technologies improves material characteristics for regional and global key accounts, active in sustainable transportation and industrial niches. We are specialised in surface treatments, heat treatments, brazing, additive manufacturing and po
Slide 37: Strategy in action - increased voltage (48V)
strategy in action - increased voltage (48V) o 1 increase of electric power demand in vehicles 3 main components 48V system » extensive usage electrical powered applications » autonomous driving » hybrid technology and fully electric vehicles DC/DC- convertor 48V-Lithium- 2 o demand becomes more com
Slide 38: Strategy in action – additive manufacturing and post processing
strategy in action – additive manufacturing and post processing pre process in process post process » define CAD/CAM » define 3D printer heat treatment » optimisation for serial production » printing hot isostatic pressing (HIP) » define production documents surface treatment CNC machining finishing
Slide 39: Strategy in action – business development North America
strategy in action – business development North America o 1 5Y business plan execution North America » footprint strengthened with 20 locations, including 3 greenfields » enhanced technology portfolio due to multiple acquisitions o 2 activating key accounts North America » new business via European
Slide 40: Aalberts surface technologies
Aalberts surface technologies our competitive advantage growth drivers 1 worldwide service network 1 expand technologies to all of more than 90 locations regions; develop Eastern Europe, North America, Asia 2 ability to offer combination 12% of specialised technologies 2 further market consolidation
Slide 41: Aalberts integrated piping systems
Aalberts integrated piping systems André in het Veld – Executive Director
Slide 42: Aalberts integrated piping systems
Aalberts integrated piping systems what we do Aalberts integrated piping systems engineers the optimum piping system to distribute and control liquids and gas for different vertical end markets. Our piping systems (fittings, valves, pipes and fasteners) are easy to specify and install, saving import
Slide 43: Strategy in action - the 'veins' in each vertical
strategy in action - the ‘veins’ in each vertical vertical end markets digital design services integrated piping systems 1o tackling labour shortage and complexity in projects » delivering integrated, plug and play piping solutions 2o converting market to high-end press technology » reliability and
Slide 44: Strategy in action - press and valve technology
strategy in action - press and valve technology o 1 sell press portfolio in all regions » Europe, USA and Asia » local sales and distribution organisations o 2 delivering continuous innovations » adding different materials: copper, carbon and stainless steel » adding press connections to valve progr
Slide 45: Aalberts integrated piping systems
Aalberts integrated piping systems our competitive advantage growth drivers 1 manufacturer of integrated 1 sell product lines in all regions piping systems in every type (Europe, North America, Asia); of material and connection utilise local organisation 8% 2 global footprint with local 2 develop ve
Slide 46: Aalberts advanced mechatronics
Aalberts advanced mechatronics Thomas Breser - Managing Director
Slide 47: Aalberts advanced mechatronics
Aalberts advanced mechatronics what we do Aalberts advanced mechatronics delivers leading-edge innovative, tailor-made and future-proof technologies, enabling the roadmaps and manufacturing challenges of high-tech customers. We are specialised in vibration isolation, ultra precision frames and high
Slide 48: Strategy in action - integrated qualified sub-system
strategy in action - integrated qualified sub-system o 1 supply base consolidation global OEMs external interface module (EIM) » high-tech customers outsource non-core to local co-development partners » need for investment power and climate control by fluid management mission-critical competences ga
Slide 49: Strategy in action - vertical integration ultra-clean large frame
strategy in action - vertical integration ultra-clean large frame o 1 high-accuracy & ultra-clean vacuum frames » reliable and controllable production flow with state-of-art machining equipment » cleaning (sub-micron level), high-throughput e-beam welding and testing (highest standards) o 2 co-devel
Slide 50: Aalberts advanced mechatronics
Aalberts advanced mechatronics our competitive advantage growth drivers 1 specialised in 3 core technologies: 1 scale up existing key accounts, vibration isolation, ultra following global manufacturing precision frames and footprint, increase market share high purity fluid systems 8% 2 open new OEMs
Slide 51: 6. Key takeaways
A aalberts 6. key takeaways
Slide 52: Aalberts accelerates - key takeaways
Aalberts accelerates - key takeaways 1 allocating our capital in the most efficient way - further narrow the focus 2 achieving unique leading market positions with sustainable impact 3 building an even stronger and better Aalberts » accelerate organic revenue growth » realise operational leverage |
Slide 53: 7. Q&A - part II
A aalberts 7. Q&A = part II