Burckhardt Compression Holding Ag · SIX:BCHN
Burckhardt Compression — H1 FY2019 Earnings Presentation
45 slides from Burckhardt Compression's earnings presentation, Nov 5, 2019
Slide 1: Results First-Half of FY19
BURCKHARDT COMPRESSION HOLDING AG RESULTS FIRST-HALF OF FY19 Winterthur, November 5, 2019
Slide 2: Content
Content About Burckhardt Compression Corporate Overview Review Systems Division Review Services Division Financials Guidance & Growth Areas Shareholders Results First Half of FY19 November 5, 2019 Page 2
Slide 3: About Burckhardt Compression
ABOUT BURCKHARDT COMPRESSION Results First Half of FY19 November 5, 2019 Page 3
Slide 4: About Burckhardt Compression
About Burckhardt Compression Burckhardt Compression is • the worldwide market leader in the field of reciprocating compressor systems • the only manufacturer and service provider that covers a full range of reciprocating compressor technologies and services Optimized solutions for our customers
Slide 5: About Burckhardt Compression
About Burckhardt Compression Founded 1844 Division of Sulzer Corporation 1969 – 2002 Management buyout 2002 Shareholders Public listed company SIX (BCHN) since IPO in 2006 • > 4’000 Shareholders • Market cap CHF 0.85 bn (30.9.2019) FTEs 1HY FY19 2’430 (1HY FY18: 2’306) Sales 1HY FY19 CHF
Slide 6: About Burckhardt Compression
About Burckhardt Compression Results First Half of FY19 November 5, 2019 Page 6
Slide 7: Market Segments
Market Segments Upstream Gas Transport Oil & Gas and Storage Petro- Refinery chemical/ Chemical Industry Industrial Gas Results First Half of FY19 November 5, 2019 Page 7
Slide 8: Reciprocating Compressor (Crosshead Design)
Reciprocating Compressor (Crosshead Design) Results First Half of FY19 November 5, 2019 Page 8
Slide 9: Corporate Overview
CORPORATE OVERVIEW Results First Half of FY19 November 5, 2019 Page 9
Slide 10: Financial Summary
Financial Summary Systems Division Services Division Others1) Total in CHF mn 1HY 1HY 1HY 1HY 1HY 1HY 1HY 1HY FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 Sales 172.6 158.5 103.6 99.6 276.2 258.1 Cost of -156.2 -152.9 -55.2 -56.0 -211.4 -208.9 goods sold Gross 16.4 5.6 48.4 43.5 64.8 49.2 profit Gross pr
Slide 11: Highlights
Highlights Sales and order intake above prior-year period EBIT and net income significantly above prior-year period Petrochemical and Chemical business on high level especially in China Solid performance of SYCC in China Set-up a Service Center in Qatar together with a local partner Fi
Slide 12: Set Backs
Set Backs Despite additional costs in LNGM significant reduction of operational losses in the Systems Division Low performance of Arkos LPGM business continues at low level Results First Half of FY19 November 5, 2019 Page 12
Slide 13: Review Systems Division
REVIEW SYSTEMS DIVISION Results First Half of FY19 November 5, 2019 Page 13
Slide 14: Systems Division Financials
Systems Division Financials Change in CHF mn 1HY FY19 1HY FY18 1HY FY18 / FY19 Order intake 213.1 183.0 +16.4% Sales 172.6 158.5 +8.9% Gross profit 16.4 5.6 +192.0% In % of sales 9.5% 3.6% EBIT -4.9 -13.6 In % of sales -2.8% -8.6% Results First Half of FY19 November 5, 2019 Page 14
Slide 15: Systems Division Key Figures
Systems Division Key Figures in CHF mn Order intake Sales 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 09 10 11 12 13 14 15 16 17 18 1HY 09 10 11 12 13 14 15 16 17 18 1HY 19 19 Gross profit EBIT 90 40 80 70 30 60 20 50 40 10 30 0 20 10 -10 0 -20 09 10 11 12 13 14 15 16 17 18
Slide 16: Systems Division Products and Market Strategy
Systems Division Products and Market Strategy Keep #1 market position Increase market share Products Burckhardt Shenyang Laby® Laby®-GI Hyper Process Gas Standard High Market Compressors Compressors Compressors Compressors Pressure API 618 Compressors Upstream Oil & Gas (UO&G) Gas Transport
Slide 17: Systems Division Upstream Oil & Gas
Systems Division Upstream Oil & Gas Market drivers US political support for domestic gas production & trends Productivity improvements in Enhanced Oil Recovery Changing energy mix leads to a globally increasing demand for gas Only segment that is directly affected by the oil price Growth o
Slide 18: Systems Division Gas Transport and Storage
Systems Division Gas Transport and Storage Market drivers Changing global energy mix towards gas & trends Importance of natural gas as a clean and inexpensive source of energy Feedstock for the Petrochemical industry changing to low-cost LPG/LEG (e.g. in the US) Gas is found in areas where i
Slide 19: Systems Division Refinery
Systems Division Refinery Market drivers Older/less efficient technologies trigger new equipment & trends or replacement of existing Growing demand for clean fuels due to environmental regulations (Euro V & VI) Flexibility to process different crude oil qualities Strategic importance of refi
Slide 20: Systems Division Petrochemical / Chemical Industry
Systems Division Petrochemical / Chemical Industry Market drivers Annual ~2% demand growth for plastics based on & trends increased world population & middle class growth in India and China Shift of production to countries with low feed stock price (e.g. US) Older technologies/less efficient p
Slide 21: Systems Division Industrial Gases
Systems Division Industrial Gases Market drivers World population growth leads to increasing demand & trends for industrial gases (e.g. medical, food & beverage, fertilizers (CO2), inert gas) Hydrogen to be used as fuel (busses, cars, trains, fuel cell power plants) Pressure to reduce CO2 lead
Slide 22: Review Services Division
REVIEW SERVICES DIVISION Results First Half of FY19 November 5, 2019 Page 22
Slide 23: Services Division Financials
Services Division Financials Change in CHF mn 1HY FY19 1HY FY18 1HY FY18 / FY19 Order intake 116.5 120.3 -3.2% Sales 103.6 99.6 +4.0% Gross profit 48.4 43.5 +11.2% In % of sales 46.7% 43.7% EBIT 23.3 20.6 +13.1% In % of sales 22.5% 20.7% Results First Half of FY19 November 5, 2019 Page 23
Slide 24: Services Division Key Figures
Services Division Key Figures in CHF mn Order intake Sales 250 250 200 200 150 150 100 100 50 50 0 0 09 10 11 12 13 14 15 16 17 18 1HY 09 10 11 12 13 14 15 16 17 18 1HY 19 19 Gross profit EBIT 120 70 100 60 80 50 40 60 30 40 20 20 10 0 0 09 10 11 12 13 14 15 16 17 18 1HY 09 10 11 12 13 14 15 16 17 1
Slide 25: Services Division Business Overview
Services Division Business Overview Market drivers High worldwide population of reciprocating & trends compressors (~72’000 units with a market size of about CHF 2.7 bn) Increasing BC & SYCC compressor population Increasing mean time between overhaul (MTBO) and reduction of operating costs A
Slide 26: Financials
FINANCIALS Results First Half of FY19 November 5, 2019 Page 26
Slide 27: Order Intake
Order Intake Increase of order intake by 8.7% to in CHF mn CHF 329.5 mn 700 Systems Division 600 • +16.4% to CHF 213.1 mn • Orders from Petrochemical, Gas 500 Transport and Storage and Refinery 400 Services Division • -3.2% to CHF 116.5 mn 300 • Order intake almost at very high prior-year leve
Slide 28: Sales
Sales Increase of sales by 7.0% to in CHF mn CHF 276.2 mn 700 Systems Division 600 • +8.9% to CHF 172.6 mn • Under-proportional sales in H1 FY19 500 due to cyclicality of business 400 Services Division • +4.0% to CHF 103.6 mn 300 • Growth in all areas 200 100 0 09 10 11 12 13 14 15 16 17 18 1H
Slide 29: Sales and Gross Margin by Division
Sales and Gross Margin by Division In CHF mn FY17 FY18 1 HY FY18 1 HY FY19 Systems GSP 384.4 375.4 158.5 172.6 Division GP 27.2 7.1% 30.5 8.1% 5.6 3.6% 16.4 9.5% Services GSP 210.2 223.9 99.6 103.6 Division GP 97.9 46.6% 105.2 47.0% 43.5 43.7% 48.4 46.7% GSP 594.6 599.3 258.1 276.2 Total GP 125.1 21
Slide 30: SGA and EBIT
SGA and EBIT SGA amounting to 16.3% of sales in CHF mn ROS (prior-year period: 16.0%) 80 25% • Total SGA CHF 45.1 mn (prior-year 22% 70 period: CHF 41.3 mn) 20% 20% • Further expansion of Service activities 60 17% 20% 16%16% in the Middle East 15% 50 • Build up of Service organization to 15% suppo
Slide 31: EBIT Development 1HY FY18 to 1HY FY19
EBIT Development 1HY FY18 to 1HY FY19 in CHF mn Results First Half of FY19 November 5, 2019 Page 31
Slide 32: Net Income
Net Income Net income CHF 11.8 mn or in CHF mn 392.5% above prior-year period 70 25% • Share of result of Arkos Field Services CHF -0.5 mn 60 (prior-year period CHF -0.4 mn), 20% 40% ownership 50 16% 15% • Financial expenses CHF -2.0 mn 15% 40 (prior-year period CHF -2.2 mn), 13% 15% 12% 12% inclu
Slide 33: Balance Sheet Positions
Balance Sheet Positions Balance sheet total declined by 1HY 1HY In CHF mn 2018 CHF 32.9 mn or -3.9% compared to FY18 FY19 year end FY 2018 Property, Plant & 191.2 179.4 185.7 • Reduction of accounts receivables Equipment Inventories 222.0 217.7 258.5 Equity ratio at similar level as FY 2018 - Th
Slide 34: Cash Flow and Net Financial Position
Cash Flow and Net Financial Position Decrease in net financial position In CHF mn 2018 1HY 1HY FY18 FY19 • Lower cash flow from operating activities increased WIP due to Cash Initial Balance 75.1 75.1 83.0 higher order intake Cash Flow from 41.8 44.3 19.0 Operating Activities • Dividend payment
Slide 35: Capital Investments (Additions to fixed Assets)
Capital Investments (Additions to fixed Assets) 90 47 35 30 25 20 1) 3) 15 2) 10 4) 4) 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 1) Including purchase of real estate in the amount of CHF 77.0 mn 2) Including CHF 5.8 mn investments in real estate (construction of a new building of P
Slide 36: Guidance & Growth Areas
GUIDANCE & GROWTH AREAS Results First Half of FY19 November 5, 2019 Page 36
Slide 37: Guidance Financial Targets
Guidance Financial Targets Guidance FY 2019 Order Intake FY 2019 ≥ FY 2018 Sales CHF 600 mn – CHF 640 mn FY 2019 slightly above FY 2018 EBIT Margin 2nd semester FY 2019 higher than 1st semester FY 2019 Dividend Policy Payout ratio between 50 – 70% of net profit Results First Half of FY19 November 5,
Slide 38: Growth Areas
Growth Areas Organic growth Systems Division: Capitalize on recent geographical expansions and acquisitions Refinery business Applications for clean fuels and CO2 reduction Services Division: Capitalize on increasing OEM Systems business Use leading OEM expertise for further growth in OBC
Slide 39: Mid-Range Plan 2018-2022 Targets 2022
Mid-Range Plan 2018-2022 Targets 2022 Systems Division • Sales CHF 340 mn BC Group • Keep leading market position in all segments • Sales CHF 700 mn • Use strong global presence and • Keep leading market position in Shenyang Yuanda Compressor Systems Division • Focus on operational excellence • Be
Slide 40: Shareholders
SHAREHOLDERS Results First Half of FY19 November 5, 2019 Page 40
Slide 41: Burckhardt Compression Shareholder Structure
Burckhardt Compression Shareholder Structure 30 Institutional MBO Shareholder Group Shareholders 0.3% - 2.9% 12.40% NN Group N.V. 28.09% 6.93% Atlantic Value General Partner Ltd. 5.03% (Mondrian) 4.95% JO Hambro Capital Management Limited 3.86% 3.49% Invesco 3.24% 29.00% 3.01% Ameriprise Financial I
Slide 42: Performance of BCHN Share Compared to the SPI Index
Performance of BCHN Share Compared to the SPI Index BCHN CHF 250.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 26.6.06 30.3.07 31.3.08 31.3.09 31.3.10 31.3.11 30.3.12 30.3.13 30.9.14 30.9.15 30.9.16 29.9.17 28.9.18 30.9.19 85.00 199.50 317.00 106.00 208.00 244.20 247.50 35
Slide 43: Seven Good Reasons to Invest in Burckhardt Compression
Seven Good Reasons to Invest in Burckhardt Compression Clear focus on gas compression Predictable Market leader in the dividend policy global gas compression business Both boards hold a substantial stake in Growing and attractive the company service business Business supports Mission-critical equipm
Slide 44: Disclaimer
Disclaimer This document may contain forward-looking statements including, but not limited to, projections of financial developments, market activity, or future performance of products. These forward-looking statements are subject to change based on known or unknown risks and various other factors t
Slide 45: CF Burckhardt
CF Burckhardt y Compression Compressors for a Lifetime”
Burckhardt Compression Holding — H1 FY2019 Earnings Presentation on 6ix