Slide 1: Welcome to the Media and Analysts Conference
Welcome to the Media and Analysts Conference Zurich, 7 March 2014 berthiez bumotec dörries droop+rein heckert scharmann sip starrag ttl wmw
Slide 2: Agenda
Agenda Overview Walter Fust, Chairman Markets and technologies Frank Brinken, CEO (until Apr-2014) Financial review Gerold Brütsch, CFO Outlook Walter Börsch, CEO (from Apr-2014) Questions and answers 1
Slide 3: Agenda
Agenda Overview Walter Fust, Chairman Markets and technologies Frank Brinken, CEO (until Apr-2014) Financial review Gerold Brütsch, CFO Outlook Walter Börsch, CEO (from Apr-2014) Questions and answers 2
Slide 4: Overview 2013
Overview 2013 Order intake up by 17 % to CHF 425 million – Revenues up by 2 % to CHF 391 million EBIT before restructuring costs up by 6 % to CHF 22 million – operating margin 5.7 % Net profit up 4 % to CHF 13.5 million – earnings per share CHF 3.97 Strong balance sheet thanks to increased equity ra
Slide 5: Order intake benchmark: Starrag Group vs. sector
Order intake benchmark: Starrag Group vs. sector 4
Slide 6: Attractive total shareholder return
Attractive total shareholder return Total shareholder return 1 year = 25.9 % p.a. 3 years = 5.2 % p.a. 5 years = 9.2 % p.a. 5
Slide 7: 2013: further improvement of our strong position
2013: further improvement of our strong position Bumotec acquisition a success, capturing group synergies Solid position in Asia New machine range specially adapted for emerging markets Accelerated product and process innovations Continuation of internal process improvement programs Planned changes
Slide 8: Agenda
Agenda Overview Walter Fust, Chairman Markets and technologies Frank Brinken, CEO (until Apr-2014) Financial review Gerold Brütsch, CFO Outlook Walter Börsch, CEO (from Apr-2014) Questions and answers 7
Slide 9: Order intake better than market, solid backlog
Order intake better than market, solid backlog CHF m 450 425 400 364 348 350 300 275 250 238 239 200 188 188 150 124 104 100 50 0 2009 2010 2011 2012 2013 Order intake Order backlog 8
Slide 10: Development of order intake
Development of order intake CHF m 450 5 400 34 22 350 300 250 425 200 364 150 100 50 0 2012 Acquisition Organic FX translation 2013 growth Growth rate +16.7 % 9
Slide 11: Order intake by market segment
Order intake by market segment CHF m 450 400 350 Aerospace 175 109 41 % 300 108 Energy 250 20 14 3% 200 59 46 137 Industrial 150 64 167 39 % 19 95 100 31 53 50 59 86 98 Transport 71 69 34 17 % 0 2009 2010 2011 2012 2013 10
Slide 12: Market segment trends
Market segment trends Target markets Aerospace Energy Transport Industrial 36 % 9% 24 % 31 % Solid civil aircraft market Dormant wind energy in Slowdown in European truck Solid luxury watch growth Boeing / Airbus build rate Europe / USA plant investments Growth in jewellery increases Insignificant c
Slide 13: Order intake by region
Order intake by region CHF m 450 America 24 6% 400 77 Asia 350 50 18 % 35 300 102 104 250 200 7 Europe 26 324 76 % 150 50 89 100 211 210 50 112 93 0 2009 2010 2011 2012 2013 12
Slide 14: World machine tool consumption
World machine tool consumption USD b CN US DE KR JP MX IT RU Total market volume 2013: USD 54 billion BR Rank 1 to 15 are 92 % of global market TW IN TR CA CH FR 0 2 4 6 8 10 12 14 Note: Data for China has been reduced to account for the high percentage of non-CNC machines that are almost universall
Slide 15: Machine tool industry Germany - Cutting
Machine tool industry Germany - Cutting 240 200 160 120 80 40 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Order intake Sales [Index, nominal – trend values (seasonally adjusted and rolling)] Note: indexed base sales 2010=100, Data till Decemb
Slide 16: Cecimo MTIX confirms positive outlook
Cecimo MTIX confirms positive outlook 300 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CECIMO MTIX 12mths MTIX moving average 15
Slide 17: EBITR margin peer group
EBITR margin peer group Starrag Feintool GF AC Hardinge DMG Tornos Makino Mori Seiki Okuma Hermle Mikron (CH) (CH) (CH) (US) (DE) (CH) (JP) (JP) (JP) (DE) (CH) 25% 20% 15.3% 15% 10% 5.7% 5.1% 5.9% 6.0% 4.0% 4.8% 5% 2.1% 1.1% 0.1% 0% -5% -10% -15% -14.3% -20% 2011 2012 2013 (2013: Makino, Mori Seiki,
Slide 18: Successful trade fairs
Successful trade fairs Leading trade fairs 2013: EMO Hannover IMTEX Indian Metal-Cutting Machine Tool Exhib. CIMT China International Machine Tool Show Metalloobrabotka Moskau 17
Slide 19: Group Strategy
Group Strategy Innovative Machine Portfolio Basic Starrag Group Strategy Global Leading Customer Service Technology Excellence Provider 18
Slide 20: Changing Technology in Aircraft Design
Changing Technology in Aircraft Design Move to larger and more complex structures with closer tolerances 19
Slide 21: Starrag Answer: Flexible ECOSPEED Large Part Manufacturing System
Starrag Answer: Flexible ECOSPEED® Large Part Manufacturing System Raw material: Length = 20 m / 1‘600 kg Finished part: Length = 16 m / 175 kg Seven machining centers 20 x 2 m Automated, integrated process control 20
Slide 22: Star performer
Star performer Complete manufacturing cell for production of car body dies Global standard for stamping die plants Multiple large milling machines, setting-up stations and multi-functional robotic cells Droop+Rein with long-standing successful customer co-operation 21
Slide 23: Innovation: Starrag cryogenic cooling system
Innovation: Starrag cryogenic cooling system Improved cost position = faster production + reduced tool wear First time presented at EMO 2013 EMO Innovation Award from German Magazine MM Maschinenmarkt Productivity up 70 %! Cutting speed up from 320 m/min. to 400 m/min. 22
Slide 24: Innovation: Bumotec S 191 multi
Innovation: Bumotec S 100 multi New highly dynamic machining center Revolutionizing serial production of small precision parts For parts of max. 80x80x80 millimeters (brass, aluminium, stainless steel………..) < 0.5 sec. chip-to-chip time! Up to 144 tools 23
Slide 25: Innovation: Heckert DBF - combining three processes
Innovation: Heckert DBF - combining three processes Cost, Flexibility and Precision Improvement for the Oil and Gas Exploration Market Drilling Equipment, Petrochemical Valves, Complex Shapes Turning, drilling, milling (DBF) in a single clamping Unique head technology with a large axis path in the r
Slide 26: HEC DBF 630 / 800: capturing group synergies
HEC DBF 630 / 800: capturing group synergies Heckert / Scharmann New machining concept from blank to finished part Valve application example (formerly multi stage process) Complete machining now in one set up Total machining time 4 to 4.5 hours Machining time saving 77 % Lead time reduction 95 % 25
Slide 27: New plant in India inaugurated January 2013
New plant in India inaugurated 25 January 2013 Clean, modern, safe Energy efficient manufacturing plant German quality – Made in India 26
Slide 28: Top 10 in terms of performance
Top 10 in terms of performance Ranked number 10 in 2012 in the combined overall performance of SPI medium companies (without banks/financial services) Ranked number 15 over 2009 to 2012 in the combined overall performance of SPI medium companies (without banks/financial services) Ranked number 3 in
Slide 29: Starrag Leadership Academy
Starrag Leadership Academy Leadership skills recognized as strategic value driver 150 mid-level managers trained in modern leadership skills in cross-location and cross- functional groups in 2013 Foundation for closer cooperation and integration Must complete to be eligible for promotions Roll-out i
Slide 30: Summary 2013: Strong position further improved
Summary 2013: Strong position further improved Bumotec aquisition a success: translation group synergies into growth New US Technology Center in existing Starrag US premises Indian plant investment to caputure future Asian growth Extension of machine range specially adapted for emerging markets Four
Slide 31: Agenda
Agenda Overview Walter Fust, Chairman Markets and technologies Frank Brinken, CEO (until Apr-2014) Financial review Gerold Brütsch, CFO Outlook Walter Börsch, CEO (from Apr-2014) Questions and answers 30
Slide 32: Significant events with impact on financial reporting
Significant events with impact on financial reporting Full year consolidation of Bumotec (acquired end of May 2012) Slight increase in FX rates: EUR/CHF 1.24 compared to 1.22 in 2012 First time application of IAS 19 resulting in prior year restatement: Impact on net equity 31.12.2012 -1.9m CHF Impac
Slide 33: Order intake
Order intake CHF m 140 560 120 425 480 4 quarter rolling 364 100 400 348 quarterly 80 320 188 60 240 188 40 160 20 80 0 0 2009 2010 2011 2012 2013 Order intake in 2013: +16.7 % 32
Slide 34: Drivers of sales revenue 2012 to 2013
Drivers of sales revenue 2012 to 2013 CHF m 450 -16 400 18 5 350 300 250 200 384 391 150 100 50 0 2012 Acquisition Organic FX translation 2013 growth Sales revenue in 2013: +1.7% 33
Slide 35: Income statement to EBITR
Income statement to EBITR CHF m Income Expense 450 5.7 % 5.5 % 400 21 22 EBITR 350 Sales revenue 300 -4.5% 158 Material expense 166 250 Personnel expense 200 384 +1.7% 391 Operating expense Depreciation 150 +7.0% 145 135 Other 100 EBITR 50 54 +2.2% 55 0 6 4 13 13 2012 2013 2012 2013 Higher gross mar
Slide 36: From EBITR to net profit
From EBITR to net profit CHF m 2013 2012 EBITR 22.4 21.1 Restructuring costs -3.4 - EBIT 19.0 21.1 Interest -0.3 -0.1 FX result 0.3 -1.0 Other -1.0 -1.5 Earnings before tax EBT 18.0 18.5 Income tax -4.5 -5.5 Earnings after tax EAT 13.5 13.0 Tax rate 25 % 30 % Restructuring costs due to the vanishing
Slide 37: Balance sheet
Balance sheet CHF m Assets Liabilities 400 350 7 6 Cash and cash equivalents 32 22 300 Receivables 107 111 157 149 250 Inventories 200 73 81 Fixed assets 150 Financial liabilities 100 184 194 136 134 Operating liabilities 50 Shareholders' equity 0 2012 2013 2012 2013 Solid financing with stable bala
Slide 38: Capital employed
Capital employed CHF m 400 80% 350 70% Net operating assets average (NOA) 300 60% 52% Sales revenue 48% 50% 250 47% 50% 44% NOA to sales revenue 200 384 391 40% 354 150 30% 252 100 199 202 20% 181 157 122 50 99 10% 0 0% 2009 2010 2011 2012 2013 Increase back to normal levels, pre-financing of future
Slide 39: Free cashflow
Free cashflow CHF m 40 32.4 30 7.9 20 15.7 10 8.8 11.2 0 -2.4 6.1 -10 0.6 -9.2 EBITDA Other Net working Cashflow from CapEx Free cashflow Dividend Other Change capital operations in cash 38
Slide 40: Share information
Share information 2013 2012 Earnings per share (CHF) 3.97 3.81 Profit distribution per share (CHF) 1) 1.80 1.80 Share price at year end (CHF) 75.75 61.60 Market capitalization (CHF million) 255 207 - as % of shareholders‘ equity 132 % 112 % Total shareholder return 25.9 % 26.7 % 1) Withholding tax f
Slide 41: Solid base for future success
Solid base for future success Level of order intake up by 17 % to CHF 425 million – Revenues up by 2 % to CHF 391 million EBIT before restructuring costs up by 6 % to CHF 22 million – operating margin 5.7 % Net profit up 4 % to CHF 13.5 million – earnings per share CHF 3.97 Strong balance sheet than
Slide 42: Agenda
Agenda Overview Walter Fust, Chairman Markets and technologies Frank Brinken, CEO (until Apr-2014) Financial review Gerold Brütsch, CFO Outlook Walter Börsch, CEO (from Apr-2014) Questions and answers 41
Slide 43: Machine tool consumption: Long-term shift to Asia unchanged
Machine tool consumption: Long-term shift to Asia unchanged 100% 21% 21% 43% 75% 15% 13% 50% 25% 64% 66% 25% 32% 0% 2002 2012 2017 Europe America Asia Source: CECIMO presentation 5 February 2014. 42
Slide 44: Expanding presence in China with new Technology Center Shanghai
Expanding presence in China with new Technology Center Shanghai Machine and technology demonstration Customer training facilities 43
Slide 45: Innovation: Starrag LX 021 capturing group synergies
Innovation: Starrag LX 021 capturing group synergies Joint development Bumotec/Starrag Allows continuous automated unattended production of small turbine blades Specifically designed for high volume high precision gas and steam turbine markets Allows machining of all future special alloys with an in
Slide 46: Fitness programm for seasoned machine
Fitness programm for seasoned machine Back to highest precision after 30 years of life Modern CNC control for high productivity 60 Mikron precision on 10 meter workpiece 300 service engineers at 60 locations worldwide ensure professional life-time support 45
Slide 47: Priorities 2014
Priorities 2014 Further strengthen market position through global sales and customer support organization for all brands, keep course in Asia New products and processes incorporating group wide technology synergies Customer Service: moving technical competence closer to customers, pro-active marketi
Slide 48: Financial targets
Financial targets Guidance 2014 Mid-term target Order intake growth FY 2014 ≥ FY 2013 5 - 8 % p.a. Sales growth FY 2014 > FY 2013 5 - 8 % p.a. 8 % p.a. over EBIT margin FY 2014 > FY 2013 the cycle 35 - 50 % of 35 - 50 % of Dividend policy net income net income 47
Slide 49: Continued sustainable value creation for our shareholders
Continued sustainable value creation for our shareholders Steadily creating value for investors Recession proven business model Attractive total shareholder returns (2013: 25.9 %; 2009 – 2013: 9.2 % p.a.) Increased dividend pay-out ratio of 35 % to 50 % of net income as from fiscal 2013 Resilience i
Slide 50: Corporate calendar / Contact
Corporate calendar / Contact 12.04.2014 Annual general meeting in Rorschacherberg 09.05.2014 Q1 2014 results 25.07.2014 Letter to shareholders on H1 2014 results 04.11.2014 Q3 2014 results 26.01.2015 Initial information on 2014 results 06.03.2015 Presentation of 2014 results for analysts and media i
Slide 51: Agenda
Agenda Overview Walter Fust, Chairman Markets and technologies Frank Brinken, CEO (until Apr-2014) Financial review Gerold Brütsch, CFO Outlook Walter Börsch, CEO (from Apr-2014) Questions and answers 50
Slide 52: We look forward to your questions!
We look forward to your questions! 51
Slide 53: Legal note
Legal note The economic projections and predictions contained in this information relate to future facts. Such projections and predictions are subject to risks uncertainties and changes which cannot be foreseen and which are beyond the control of the issuer. Starrag Group is therefore not in a posit
Slide 54: Thank you for your interest!
We would be pleased to invite you to a buffet lunch. Thank you for your interest! berthiez bumotec dörries droop+rein heckert scharmann sip starrag ttl wmw
Slide 55: High-precision machine tools for greater productivity
High-precision machine tools for greater productivity Starrag Group is a global technology leader in manufacturing high-precision machine tools for milling turning, boring and grinding of small, medium-sized and larger workpieces of metallic and composite materials. Principle customers are internati
Slide 56: Machine tool industry
Machine tool industry EUR b 80 70 67 62 60 58 54 51 50 48 46 40 42 40 42 40 37 36 36 38 33 32 34 34 34 34 33 32 30 30 29 28 29 27 30 25 27 25 24 23 20 10 0 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 World production machine tools 1980 – 2012
Slide 57: Common strategy based on three pillars
Common strategy based on three pillars Leading metal cutting Leading cutting Leading global machine tools technology support customer service Milling, turning, boring, Center of Production Through life cycle support grinding Excellence Preventive maintenance High-end products Engineering services pr
Slide 58: Global presence in sales, application and service support
Global presence in sales, application and service support Manufacturing plant, Sales and service organization Sales and service organization Service hubs 57
Slide 59: Strong brands enhancing the overall potential for success
Strong brands enhancing the overall potential for success berthiez bumotec Each brand with high level dörries of customer trust in its specific application area droop+rein Innovative technologies of heckert each brand radiate across all group brands scharmann Starrag Group Collaboratively fulfilling
Slide 60: Target markets and product positioning
Target markets and product positioning Aerospace Energy Transport Industrial Share of 2009 to 36 % 9% 24 % 31 % 2013 order intake Business Unit 1 - Starrag ██ ██ - TTL ██ ██ Business Unit 2 - Heckert ██ ██ ██ - WMW ██ ██ Business Unit 3 - Berthiez ██ ██ - Dörries ██ ██ ██ ██ - Droop+Rein ██ ██ ██ ██
Slide 61: Multi-niche strategic positioning
Multi-niche strategic positioning Starrag Starrag Group Number of players High competition intensity Gantries and boring mills Horizontal machining centers Precisely productive Vertical machining centers 100 240 320 400 500 630 800 1000 1250 1600 1800 2100 > 2500 Machine / workpiece size 60
Slide 62: Share details
Share details Market capitalisation year-end 2013: CHF 254 million Listed at SIX Swiss Exchange Main Standard Symbol STGN, Valor number 236‘106, ISIN CH00023610608 3‘360‘000 registered shares with a nominal value of CHF 8.50 each Stable shareholder structure Free Float 29.9 % 55.0 % Walter Fust 5.7
Slide 63: Top management
Top management Walter Fust (1941, Swiss) Prof. Dr. Frank Brinken (1948, Swiss) Walter Börsch (1959, German) Gerold Brütsch (1966, Swiss) has been a member of Starrag Group assumed office as CEO of Starrag Group in will be CEO of Starrag Group from 12th has been Chief Financial Officer (CFO) of Holdi
Slide 64: Our pedigree: 150 years tradition for innovation
Our pedigree: 150 years tradition for innovation Dörries SIP Heckert Droop+Rein Starrag Berthiez Bumotec Scharmann Mönchen- Geneva Chemnitz Bielefeld Rorschach St. Etienne Sâles gladbach 1862 1884 1885 1890 1897 1916 1973 Scientific Machine Bicycle Machine Textile Machine instruments tools manufactu
Slide 65: Starrag Group
Starrag Group