Andritz Ag · VIE:ANDR
Andritz — Investor Day (2014)
44 slides from Andritz's investor day presentation, 2014
Slide 1: ANDRITZ GROUP Capital Market Day 2014, Austria
ANDRITZ GROUP Capital Market Day 2014, Austria
Slide 2: Update on major topics impacting earnings since last CMD
1. Update on major topics impacting earnings since last CMD 2. Business areas – market update 3. Main topics 2015 4. Capital Market Days – goals and summary
Slide 3: Update on Montes del Plata
Update on Montes del Plata Full production expected for end of 2014 Substantial cost overruns Q1 2014 still impacted, Mill is in ramp-up phase, producing led to sharp decline of however no negative impact round-the-clock and expected to profitability in 2013 on earnings since Q2 2014 reach full prod
Slide 4: Schuler restructuring: major actions taken in 2014
Schuler restructuring Major actions taken in 2014 >> Elimination of complex group structures: merger of several >> Modified production concept: increased concentration on German group companies manufacture of core components, reduction of vertical >> Lean managing structure: number of executive boar
Slide 5: SEPARATION: earnings impacting issues to be resolved by end of 2014
SEPARATION Earnings impacting issues to be resolved by end of 2014 2013 and 2014 earnings impacted by product issues in China Substantial progress achieved on solving low product performance expected to be fully resolved by end of 2014 Implementation of new organizational structure in order to adj
Slide 6: Business areas – market update
1. Update on major topics impacting earnings since last CMD 2. Business areas – market update 3. Main topics 2015 4. Capital Market Days – goals and summary
Slide 7: HYDRO: Sales, order intake, EBITA, and EBITA margin 2009-2013
HYDRO Sales, order intake, EBITA, and EBITA margin 2009-2013 Sales (in MEUR): CAGR +7% EBITA (in MEUR) 1,837 1,805 147.7 153.2 146.9 1,773 Average Average 1,579 118.0 1,378 1,674 100.5 133 MEUR MEUR 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Order intake (in MEUR): CAGR +2% EBITA margin (in %
Slide 8: HYDRO: Major past developments and future focus
HYDRO Major past developments and future focus >> Sales CAGR 2009-2013 (+7%) substantially below Group growth (+16%), but with higher profitability (average EBITA margin: 7.9%) than the Group (5.9%) >> Global market share increased slightly over the last five years despite overall shrinkage of globa
Slide 9: HYDRO: Challenging, but solid market environment
HYDRO Challenging, but solid market environment Large-scale plants Small-scale plants Pumps >> Solid demand for modernizations Good activity to continue, especially in Demand for special pumps emerging markets (high energy demand, to remain high (irrigation, >> Pumped storage projects on hold due to
Slide 10: Favorable modernization potential: more than half of hydropower capacity over 30 years old
Favorable modernization potential: more than half of hydropower capacity installed worldwide over 30 years old Installed hydropower capacity 2013 Units over 30 years old by region in % (in % of installed capacity in operation) Average 55% █ Europe Africa 71 3 █ China 12 26 South America 38 █ North/C
Slide 11: Cumulative installed hydropower capacity in GW (I)
Cumulative installed hydropower capacity in GW (I) Average annual growth of 3.5% expected for 2013-2025 CAGR 2013-2025E ■ China +6% ■ Asia (without China) +3% ■ Africa +5% ■ North/Central America +2% ■ South America +4% ■ Europe +1% 1,630 1,579 1,528 1,479 1,431 1,384 +3.0% 1,335 1,291 1,243 1,196 1
Slide 12: Cumulative installed hydropower capacity in GW (II)
Cumulative installed hydropower capacity in GW (II) Strongest expected growth in China Hydropower capacity increase 2013-2025E: +554 GW, thereof (in %) … 5 █ China 8 █ Asia (without China) 9 █ South America 554 GW 54 12 █ North/Central America █ Europe 12 █ Africa Source: GlobalData 12 Capital Marke
Slide 13: Strong potential in South America: example Brazil
Strong potential in South America Example Brazil >> Very tight energy supply, but no new capacities due to anti-business electricity pricing of current government >> Brazil could/should spend 66 bn. EUR expanding its power generation capacity in 2013-2022; thereof … … hydropower: … solar, biomass, a
Slide 14: PULP & PAPER: Sales, order intake, EBITA, and EBITA margin 2009-2013
PULP & PAPER Sales, order intake, EBITA, and EBITA margin 2009-2013 Sales (in MEUR): CAGR +21% EBITA (in MEUR) 2,282 134.6 1,885 2,005 120.4 Average 1,130 1,646 82.2 Average 926 MEUR 64 17.2 MEUR 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 -35.7 Order intake (in MEUR): CAGR +19% EBITA margin (
Slide 15: PULP & PAPER: Major past developments and future focus
PULP & PAPER Major past developments and future focus Sales CAGR 2009-2013 (+21%) substantially above Group growth (+16%), mainly driven by large greenfield orders and, to a lesser extent, acquisitions, however … >> EBITA margin declined due to increasing price competition >> Poor performance in exe
Slide 16: PULP & PAPER: Good project activity, but fierce competition
PULP & PAPER Good project activity, but fierce competition Pulp Paper/packaging Nonwoven/plastic film Service >> Investments in greenfield pulp mills to >> Stable demand for tissue and >> Stable and good Good potential continue containerboard machines, project activity to grow organi- predominantly
Slide 17: PULP & PAPER: 12 major greenfield pulp mills expected during next five years
PULP & PAPER 12 major greenfield pulps mills expected during next five years Chile: Mozambique: Owner – project Capacity/a.* Planned start-up Owner Capacity/a.* Planned start-up Arauco – Bio-Bio 1.6 2018 et seq. Portucel 1.5 2020 et seq. Brazil: Finland: Owner – project Capacity/a.* Planned start-up
Slide 18: METALS: Sales, order intake, EBITA, and EBITA margin 2009-2013
METALS Sales, order intake, EBITA, and EBITA margin 2009-2013 Sales (in MEUR): CAGR +29%* EBITA (in MEUR) 1,311 53.5 Schuler: 40.0 Schuler: 967 Average 25.1 Average 473 20.5 18.4 19.4 ex Schuler: 340 373 405 ex Schuler: 387 19.4 MEUR MEUR 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 * -8% ex Sc
Slide 19: METALS: Major past developments and future focus
METALS Major past developments and future focus >> Sales CAGR 2009-2013 (+29%) substantially above Group growth (+16%) mainly due to Schuler acquisition (CAGR ex Schuler: -8%) >> Average EBITA margin below Group margin due to low sales volume and challenging competitive environment Schulerʼs main st
Slide 20: METALS: good project activity in metalforming, aluminum, and furnaces
METALS: good project activity in metalforming, aluminum, and furnaces – unchanged low activity in carbon/stainless steel Metalforming Stainless steel Furnaces >> Good demand from automobile manufacturers Investment activity to remain at low Good demand Market continuing, especially in Asia and Ameri
Slide 21: Long-term growth of automobile production to support growth of Schuler
Long-term growth of automobile production to support growth of Schuler Global production volume in million car units (CAGR global 2013-2018E: +4%) 100 103 92 97 83 87 77 82 2011 2012 2013 2014E 2015E 2016E 2017E 2018E Share in production CAGR volume 2013 2013-2018E █ Europe 22% +4% █ Greater China 2
Slide 22: SEPARATION: Sales, order intake, EBITA, and EBITA margin 2009-2013
SEPARATION Sales, order intake, EBITA, and EBITA margin 2009-2013 Sales (in MEUR): CAGR +9% EBITA (in MEUR) 653 44.0 44.9 566 590 Average 505 39.0 421 547 Average MEUR 25.9 31 MEUR 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 -0.6 Order intake (in MEUR): CAGR +10% EBITA margin (in %) 598 629 60
Slide 23: SEPARATION: Major past developments and future focus
SEPARATION Major past developments and future focus >> Sales CAGR 2009-2013 (+9%) substantially below Group growth (+16%) due to weak mining/minerals and chemicals segments >> Average business area margin usually higher than Group level (except for last year) because of high service portion (40%) >>
Slide 24: SEPARATION: Varied project activity in different markets
SEPARATION Varied project activity in different markets Municipal Industrial Feed Biomass pelleting Investment activity at reasonable >> Reasonable demand in Continuing at solid level Stable demand to levels, mainly in developed markets food processing continue Market update >> Low project activity
Slide 25: Main topics 2015
1. Update on major topics impacting earnings since last CMD 2. Business areas – market update 3. Main topics 2015 4. Capital Market Days – goals and summary
Slide 26: Roadmap 2015: Main topics
Roadmap 2015 Main topics Restructure product segments with limited long-term market growth or earnings potential Further improve cost position Continue long- term profitable growth of Schuler Optimize ANDRITZ SEPARATIONʼS current organization/ set-up Usage of cash 1 2 3 4 5 Photo: Shutterstock 26 Ca
Slide 27: Topic 1: Restructure product segments with limited growth or earnings potential
Topic 1: Restructure product segments with limited long-term market growth or earnings potential Main selection criteria: >> Limited long-term market growth potential >> Overcapacity situation in end markets >> Weak competitive position >> Not part of ANDRITZʼs core business >> Low level of synergie
Slide 28: Topic 2: Improve cost position
Topic 2: Improve cost position Further shift of manufacturing capacities to emerging markets Continue to shift production from developed world to emerging markets goal of 50% by 2017 vs. 44% in 2013 Split of ANDRITZ production capacities by region (in %) 89 ANDRITZ ex Schuler: 80 51 49 73 73 64 57
Slide 29: Manufacturing: High flexibility due to global outsourcing
Manufacturing High flexibility due to global outsourcing Focus on manufacturing of key components (A parts) ANDRITZ GROUP procurement volume 2013 Maintain outsourcing of C parts; outsourcing by region in % of B parts depending on own workload █ Europe Further reduce costs 42 9 █ North America Consis
Slide 30: Focus on service
Focus on service EBITA margin substantially above Group average Increased importance of life cycle support (day-to-day business) Good potential to grow organically and by acquisitions Strong contribution towards customer satisfaction 30 Capital Market Day 2014, Austria – ANDRITZ GROUP – Wolfgang Lei
Slide 31: Development of service sales
Development of service sales Strong contribution towards overall sales growth since 2009 CAGR sales 2009-2013: ■ Capital sales: +15% +17% ■ SEPARATION service sales: +10% 5,711 ■ METALS service sales: +98%* 5,177 ■ PULP & PAPER 4,596 service sales: +18% ■ HYDRO 3,554 service sales: +8% 3,198 * +6% e
Slide 32: Topic 3: Schuler: Continue long-term profitable growth
Topic 3: Schuler Continue long-term profitable growth Long-term EBITA margin goal: 8.5% Annual cost savings 2015E et seq.: 15-20 MEUR out of restructuring Schulerʼs strategy program: >> Reduce complexity >> Develop products for B-segment markets >> Create new production concept >> Expand production
Slide 33: Topic 4: SEPARATION: Optimization of current organization/set-up in 2015
Topic 4: SEPARATION Optimization of current organization/set-up in 2015 ANDRITZ decanter centrifuges for Sungai Semenyith, Malaysia, one of the largest drinking water treatment plants in South East Asia Main focus of reorganization: Profitability actions: >> Straight-line organization >> Competitive
Slide 34: Topic 5: Usage of cash with balance between acquisitions, dividends, balance sheet
Topic 5: Usage of cash with good balance between acquisitions, attractive dividends, and strong balance sheet Continue to look out for complementary acquisitions in existing business areas Maintain payout ratio at 50% and potentially move it up to 60% Share buy-back mainly for stock option program S
Slide 35: Capital Market Days – goals and summary
1. Update on major topics impacting earnings since last CMD 2. Business areas – market update 3. Main topics 2015 4. Capital Market Days – goals and summary
Slide 36: Review of Capital Market Day goals
Review of Capital Market Day goals: Dividend goals achieved, EBITA margin goal pending Goal Goal Goal not achieved pending achieved 2007 2008 2009 2010 2011 2012 2013 Share of renewable Sales: 3.0 bn. energy 4.0/4.5 bn. 5.0 bn. EUR sales EUR EUR >50% 7.0% over the cycle Regain EBITA 7.0% 7.0% >> Goa
Slide 37: Target to continue long-term profitable growth
Target to continue long-term profitable growth Goal: maintain 7% and improve to 8% with top-line sales growth Long term: maintain 7% and improve to Average 8% with top-line 2005-2009: sales growth % Average 6.0% 8.0 2000-2004: 7.2 MEUR 5.3% 7.2 6,000 6.9 7.0 6.5 5,711** 6.3 6.4 6.1 6.1 5,177 6.0 5,0
Slide 38: EBITA margin goal HYDRO
EBITA margin goal HYDRO 7.0-8.0% Factors influencing margin: >> Execution of some large orders >> Competition from Asia? >> Impact from new JV GE/Alstom remains to be seen 2010 et seq.: Average 2006-2009: 7.0-8.0% 6.6% 8.3 8.3 8.1 7.3 7.3 7.5 7.1 5.9 5.7 2006 2007 2008 2009 2010 2011 2012 2013 H1 20
Slide 39: EBITA margin goal PULP & PAPER
EBITA margin goal PULP & PAPER 6.0-7.0% Factors influencing margin: >> Large order execution >> Share of service business/wear parts lower than competitorsʼ >> Pricing environment on large projects 2010 Average et seq.: 2000-2004: Average 6.0-7.0% 6.1% 2005-2009: 5.0% 7.3 7.3 6.1 6.1 6.2 6.0 6.4 5.8
Slide 40: EBITA margin goal METALS
EBITA margin goal METALS 7.0-8.0% Factors influencing margin: >> Development of automobile market >> Unchanged low investment activity in stainless >> Expansion of service business steel due to ongoing overcapacities >> Success of Schuler restructuring >> M&A 2010 et seq.: Average 2005-2009: 7.0-8.0
Slide 41: EBITA margin goal SEPARATION
EBITA margin goal SEPARATION 8.0-9.0% Factors influencing margin: >> Cost overruns on some projects >> Investment in expansion of service business and new markets >> M&A 2010 et seq.: Average 2005-2009: 8.0-9.0% 6.9% Average 7.8 7.6 7.7 7.8 2000-2004: 6.5 6.5 6.9 6.2 3.1% 3.8 3.2 3.3 3 Product 2.2 i
Slide 42: Confirmation of dividend payout ratio goal
Confirmation of dividend payout ratio goal Consistent dividend policy Dividend goals: >> Maintain payout ratio at a minimum of ~50% >> Mid-term increase to ~60% Dividend per share (EUR) 1.20 1.10 0.85 0.50 0.55 0.50 0.50 0.38 0.18 0.25 0.11 0.13 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 43: Summary and goals
Summary and goals Summary: >> Continuation of long-term structural trends within all four business >> Focus on cost optimization and projects areas should support continued long-term organic growth of ANDRITZ with reasonable risk/reward profile >> Acquisitions will remain strategic focus to compleme
Slide 44: ANDRITZ GROUP Capital Market Day 2014, Austria
ANDRITZ GROUP Capital Market Day 2014, Austria