Oc Oerlikon Corporation Ag · SIX:OERL
Oc Oerlikon — FY2019 Earnings Presentation
35 slides from Oc Oerlikon's earnings presentation, Mar 3, 2020
Slide 1: Resilient 2019 results in challenging markets – Comprehensive productivity program initiated
Resilient 2019 results in challenging markets – Comprehensive productivity program initiated Dr. Roland Fischer, CEO Philipp Müller, CFO Annual Analyst Conference Zurich, March 3, 2020
Slide 2: Agenda
Agenda 1 Business Review 2019 2 Financial Review 2019 3 Outlook 5 Appendix Page 2 Oerlikon Analyst Presentation - FY 2019 March 3, 2020
Slide 3: Resilient performance in 2019 – positioning Oerlikon for 2020 and beyond
Resilient performance in 2019 – positioning Oerlikon for 2020 and beyond ▪ Successful divestment of Drive Systems 1 Execution on strategy in 2019 ▪ Investment in organic and inorganic growth in Surface Solutions to strengthen market and technological leadership ▪ Initiation of share buyback ▪ Sustai
Slide 4: Surface Solutions Segment – maintaining sales in adverse markets, margin impacted by restructuring
Surface Solutions Segment – maintaining sales in adverse markets, margin impacted by restructuring OPERATIONAL PERFORMANCE MARKET DEVELOPMENT 4% ▪ Decline in orders across almost all markets, driven by ▪ Tooling industry softened given overall global economic Asia / Pacific slowdown in Automotive, T
Slide 5: Manmade Fibers Segment – Sustained high order intake and sales
Manmade Fibers Segment – Sustained high order intake and sales – FY profitability improved OPERATIONAL PERFORMANCE MARKET DEVELOPMENT ▪ Strong order intake sustained in FY 2019, book-to-bill ▪ Textile Applications (Filament/Texturing) with continued 6% Asia / Pacific exceeding 1 for the fourth conse
Slide 6: Agenda
Agenda 1 Business Review 2019 2 Financial Review 2019 3 Outlook 4 Appendix Page 6 Oerlikon Analyst Presentation - FY 2019 March 3, 2020
Slide 7: Robust performance in challenging market conditions – comprehensive productivity program for the future
Robust performance in challenging market conditions – comprehensive productivity program for the future in CHF million 4Q19 4Q18 y-o-y FY19 FY18 y-o-y ▪ Group Sales up 1.1 % organically; showing strength of portfolio ▪ Group Orders decreased due to weakness in key markets in Order intake 612 641 -4.
Slide 8: FX impact on Orders, Sales and EBITDA in FY 2019
FX impact on Orders, Sales and EBITDA in FY 2019 Order intake FY 2019 Sales FY 2019 EBITDA FY 2019 In CHF million In CHF million In CHF million -2.2% -2.2% -1.5% 2'590 2'648 2'593 2'650 366 371 -4 62 -3 61 -4 9 14.1 14.1 Margin in % FY 2019 Transaction Translation FY 2019 FX FY 2019 Transaction Tran
Slide 9: Net income impacted by non-cash effects from divestment of Drive Systems
Net income impacted by non-cash effects1 from divestment of Drive Systems – tax rate improved in CHF million 2019 2018 Δ Result before interest and taxes (EBIT) 164 243 -32.5 % in % of sales 6.3 % 9.3 % Financial result -15 -3 >100 % Result before taxes (EBT) 149 240 -37.9 % in % of sales 5.7 % 9.2
Slide 10: Strong unleveraged balance sheet with an equity ratio of 49 %
Strong unleveraged balance sheet with an equity ratio of 49 % in CHF million 2019 2018 Cash and cash equivalents 658 764 Trade and trade notes receivables 309 305 Inventories 338 343 Property, plant and equipment 634 667 Goodwill and intangible assets 1’117 1’139 Assets classified as held for sale -
Slide 11: CapEx to depreciation ratio exceeding target corridor for future growth
CapEx to depreciation ratio exceeding target corridor for future growth – converging towards corridor to continue CapEx Depreciation & amortization1 CapEx / depr. & amort. ratio In CHF million In CHF million -14% 207 179 +4% 1.8 1.71 126 1.6 1.47 121 1.42 1.4 1.431.44 1.16 1.2 1.09 Mid-term 1.01 tar
Slide 12: Consolidated cash flow statement 2019
Consolidated cash flow statement 20191 in CHF million -201 416 -170 -760 322 858 658 -10 ▪ Operating cash flow impacted by changes in net current assets predominantly attributable to expected decrease of CHF 132 m in contract liabilities (customer advances) ▪ Investing cash flow reflects the disposa
Slide 13: Return On Capital Employed (ROCE)
Return On Capital Employed (ROCE) FY 20191 FY 2018 EBIT 164 243 12.1% - Total current income tax -65 -63 11.1% - Total deferred tax income 26 -4 8.2% NOPAT 125 176 7.0% 5.7% Net Operating Assets 1’826 1’526 + Current income tax receivables 15 17 -19.8% + Deferred tax assets 141 110 - Current income
Slide 14: Attractive dividend of CHF 1.00 per share proposed
Attractive dividend of CHF 1.00 per share proposed – ordinary dividend CHF 0.35 + extraordinary dividend CHF 0.65 Underlying EPS Dividend proposal for FY 2019 In CHF per share In CHF per share extraordinary dividend ordinary dividend 97% 0.76 1.00 1.00 0.72 Payout ratio of ordinary dividend 88% 0.61
Slide 15: Agenda
Agenda 1 Business Review 2019 2 Financial Review 2019 3 Outlook 4 Appendix Page 15 Oerlikon Analyst Presentation - FY 2019 March 3, 2020
Slide 16: 2020 Outlook – Robust top-line and defending a solid operating profitability
2020 Outlook – Robust top-line and defending a solid operating profitability – Launch of productivity program 2'590 2’500 – 2’600 Underlying Group / Segment assumptions intake Order Oerlikon Group Surface Solutions Segment ▪ Overall sentiment remains affected by ▪ Roughly flat sales despite challeng
Slide 17: Prepare Oerlikon for the future – Become more agile and more cost efficient
Prepare Oerlikon for the future – Become more agile and more cost efficient – Targeting significant mid-term benefits Market Uncertainties Remain Position & Invest in the Future ▪ All key end markets remain attractive despite currently facing structural or ▪ Initiated Oerlikon Next Level – comprehen
Slide 18: Summary
Summary 1 2019: Resilient performance in challenging market environment 2 Attractive dividend proposed 3 Committed to strategy and capital allocation 4 2020: Order intake and sales between CHF 2.5 – 2.6 bn; EBITDA 15.0 – 15.5% before exceptional items (reported 14.0 – 14.5%) 5 Page 18 Medium term: C
Slide 19: Agenda
Agenda 1 Business Review 2019 2 Financial Review 2019 3 Outlook 4 Appendix Page 19 Oerlikon Analyst Presentation - FY 2019 March 3, 2020
Slide 20: Oerlikon Group – Key financial figures
Oerlikon Group – Key financial figures in CHF million Key financial figures 2019 2018 2017 2016 2015 Order intake1 2’590 2’731 2’211 2’413 2’537 Sales (3rd parties) 1 2’593 2’609 2’068 2’331 2’671 EBITDA margin1, 2 14.1 %7 15.6 % 15.6 % 14.3 % 12.7 % Cash flow from operations3 322 429 404 293 289 Ne
Slide 21: Oerlikon Segments – Key financial figures
Oerlikon Segments – Key financial figures in CHF million Key financial figures 2019 2018 2017 2016 2015 Surface Solutions Order intake 1’468 1’574 1’412 1’236 1’233 Sales (3rd parties) 1’488 1’511 1’370 1’238 1’229 EBITDA margin 15.6 %1 18.6 % 20.1 % 22.2 % 21.4 % Net operating assets 1’771 1’584 1’
Slide 22: Business split – Ongoing recovery in Manmade Fibers
Business split – Ongoing recovery in Manmade Fibers reflected in Group splits Segment sales split Segment EBITDA split FY 2019 57% 43% FY 2019 -3% 64% 39% FY 2018 58% 42% FY 2018 -2% 70% 32% in % of sales in % of EBITDA Surface Solutions Manmade Fibers Surface Solutions Manmade Fibers Others Regiona
Slide 23: EBITDA to EBIT bridge for Oerlikon Group
EBITDA to EBIT bridge for Oerlikon Group EBITDA to EBIT bridge – FY 2019 EBITDA to EBIT bridge – FY 2018 In CHF million In CHF million 406 366 -98 308 -133 -40 233 -25 243 -40 -28 164 EBITDA Depr. & Imp. EBITA Amor.of acqu. Other Amor. EBIT EBITDA Depr. & Imp. EBITA Amor.of acqu. Other Amor. EBIT in
Slide 24: EBITDA to EBIT bridge per Segment – FY 2019
EBITDA to EBIT bridge per Segment – FY 2019 Surface Solutions Segment Manmade Fibers Segment In CHF million In CHF million 234 -112 144 -18 126 -3 117 -6 122 -38 -19 65 EBITDA Depr. & Imp. EBITA Amor. of acqu. Other Amor. EBIT EBITDA Depr. & Imp. EBITA Amor. of acqu. Other Amor. EBIT intangibles int
Slide 25: Tax rate of 26 % driven by favorable country mix
Tax rate of 26 % driven by favorable country mix and divestment of Drive Systems segment In CHF million 149 -65 110 26 EBT FY 2019 Current income tax expense Deferred tax income Result from continuing operations FY 2019 ▪ Main tax-paying entities are in China, Switzerland and Germany ▪ Tax rate expe
Slide 26: Active net working capital management and increased contract liabilities
Active net working capital management and increased contract liabilities In CHF million; as % of sales 14% 15% 14% 4% 4% 6% 3% -3% 394 391 316 167 125 108 70 -79 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Net working capital is defined as trade and notes receivables + inventorie
Slide 27: Constant range of investments in R&D at high level
Constant range of investments in R&D at high level of CHF 122 million in 2019 In CHF million; as % of sales 130 11 122 120 116 10 110 106 101 103 9 100 96 94 95 8 90 80 7 70 6 5% 60 5% 5 4% 4% 4% 4% 4% 50 4 40 3% 3 30 2 20 10 1 0 0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 ▪ R&
Slide 28: R&D and CapEx on Segment level
R&D and CapEx on Segment level R&D expenses FY 2019 CapEx FY 2019 6% Surface Solutions (7%) 24% Surface Solutions (9%) 18% Manmade Fibers (3%) CHF Manmade Fibers (3%) CHF 127m 179m (% of Segment sales) Corporate 76% 76% (% of Segment sales) Depreciation & Amortization FY 2019 CapEx / Depr. & Amort.
Slide 29: Asset allocation and employees on Segment level
Asset allocation and employees on Segment level Net operating assets FY 2019 Employees (FTE) by Segment FY 2019 2% 3% Surface Solutions 1% Surface Solutions 27% Manmade Fibers CHF Manmade Fibers 11’134 1’826m Corporate Corporate 70% 97% Operating Assets FY 2019 Employees (FTE) by Region FY 2019 3% 3
Slide 30: Oerlikon Transformation – Streamlining the portfolio and focus on Surface Solutions
Oerlikon Transformation – Streamlining the portfolio and focus on Surface Solutions Total investments Coating Coating Surface Solutions Surface Solutions Surface Solutions Surface Solutions Surface Solutions Acquisitions Segment: CHF 1.2BN Segment: Segment: Segment: Segment: Segment: Segment: Rox Me
Slide 31: Oerlikon shares
Oerlikon shares Oerlikon shares Oerlikon shareholder structure1 as of December 31, 2019 ▪ Listed on Swiss Exchange (SIX) since 1973 Liwet Holding AG ▪ Securities symbol: OERL 41.34% ▪ Securities number 81 682 Black Creek IM ▪ ISIN: CH0000816824 Others (incl. 1.65 % treasury shares) 55.63% ▪ Number o
Slide 32: Coverage – 7 Buy / Add – 6 Hold / Neutral – 0 Sell
Coverage – 7 Buy / Add – 6 Hold / Neutral – 0 Sell / Underperform Broker Analyst Recommendation Date of last update Target price AlphaValue Luis Pereira Buy 27.02.2020 12.70 Baader Helvea Christian Obst Add 18.12.2019 12.50 Berenberg Bank Marta Bruska Hold 05.03.2019 n/a Credit Suisse Patrick Laager
Slide 33: Financial Calendar 2020
Financial Calendar 2020 March 3, 2020 Q4 / FY 2019 results - Media & Analyst Conference in Zurich April 7, 2020 Annual General Meeting of Shareholders - KKL Lucerne May 5, 2020 Q1 2020 results - Media & Analyst Conference Call August 4, 2020 Q2 / HY 2020 results - Media & Analyst Conference Call Nov
Slide 34: Investor Relations Contact
Investor Relations Contact Andreas Schwarzwälder Head of Corporate Communications, Investor Relations & Marketing Phone: +41-58-360-9622 Mobile: +41-79-810-8211 E-mail: a.schwarzwaelder@oerlikon.com OC Oerlikon Management AG, Pfäffikon Churerstrasse 120 CH – 8808 Pfäffikon SZ Switzerland Page 34 Oer
Slide 35: Disclaimer
Disclaimer OC Oerlikon Corporation AG, Pfäffikon, (together with its affiliates hereinafter referred to as “Oerlikon”) has made great efforts to include accurate and up-to-date information in this document. However, Oerlikon makes no representation or warranties, expressed or implied, as to the trut