Arbonia Ag · SIX:ARBN
Arbonia — AFG Arbonia-Forster-Holding — FY2015 Earnings Presentation
41 slides from Arbonia's earnings presentation, Mar 1, 2016
Slide 1: AFG – 2015 Results – 1 March 2016
AFG – 2015 Results – 1 March 2016 Alexander von Witzleben, CEO Felix Bodmer, CFO 1
Slide 2: Divisions and key brands
AFG Arbonia-Forster-Holding AG Divisions and key brands AFG Arbonia-Forster-Holding AG Building Technology Building Envelope Building Security Heating Air-conditioning & Sanitary Windows & Profile Special Technology Ventilation Technology Equipment Exterior Doors Systems Doors 1 1. AFG acquired a sh
Slide 3: Guidance 2015 achieved
Guidance 2015 achieved Repositioning and Restructuring ongoing Guidance 2015 Full year 2015 Guidance 2018 (August 2015) +3% Organic sales growth p.a. -3% to -5% -4% sales growth p.a. EBITDA1 (CHF M) >50 57 >100 EBITDA (CHF M) Net loss (CHF M) 160-190 177 Substantial Net debt (CHF M) 50 22 FC
Slide 4: Agenda
Agenda 1. 2015 Financial measures allow looking ahead 2. Repositioning and Restructuring of AFG (Update) Consequent execution 3. Outlook Short- and long-term guidance Questions AFG – 2015 results – 1 March 2016 4
Slide 5: Income Statement – Continued Operations
Income Statement – Continued Operations High impact from one-time effects In CHF M 2015 in % 2014 in % Net revenues 941.4 100.0 1017.4 100.0 Cost of material and goods -431.3 -45.8 -450.7 -44.3 Personnel expenses -352.0 -37.4 -344.7 -33.9 Other operating expenses -157.6 -16.7 -152.6 -15.0 EBITDA 26.
Slide 6: Reconciliation to adjusted numbers
Reconciliation to adjusted numbers Impairments and restructurings weigh on EBIT 2015 without Actual Building Building Building one-time In CHF M 2015 Techn. Envelope Security Others effects Net revenues 941.4 941.4 EBITDA 26.6 5.1 14.8 10.3 56.7 EBIT -158.4 24.1 99.6 20.7 0.4 16.5 Group result -177.
Slide 7: Adjusted Income Statement
Adjusted Income Statement Operating performance as expected In CHF M 2015 in % 2014 in % Net revenues 941.4 100.0 1017.4 100.0 Cost of material and goods -431.3 -45.8 -450.7 -44.3 Personnel expenses -335.1 -35.6 -343.1 -33.7 Other operating expenses -143.8 -15.3 -150.2 -14.8 EBITDA 56.7 6.0 79.7 7.8
Slide 8: Net revenues by Division / Region
Net revenues by Division / Region Influenced by acquisitions of Sabiana & Wertbau Net revenues by Division Net revenues by Region 16% (15%) 33% (31%) 37% (40%) 49% (48%) 35% (37%) 30% (29%) Building Technology Building Security Switzerland Germany RoW Building Envelope Note: Figures in brackets repr
Slide 9: Organic growth by divisions
Organic growth by divisions Negative FX effects and organic growth Acqui- Net revenues as reported Currency Organic 2015 2014 Δ sition in CHF M effects growth1 effects AFG 941.4 1017.4 -7.5% -7.9% 4.7% -4.4% Building Technology 462.2 490.2 -5.7% -12.2% 7.3% -0.7%2 Building Envelope 331.4 376.0 -11.9
Slide 10: Revenue breakdown for other key regions
Revenue breakdown for other key regions Regions show a heterogeneous development 2015 Δ Other key regions in CHF M 2015 / 2014 Comments Poland 62.2 = Italy 48.0 ++ Sabiana France 40.4 + Sabiana Russia 25.9 -- Heating Technology Slovakia 22.4 = Czech Republic 21.9 + Heating Technology / Windows Austr
Slide 11: EBITDA- / EBIT-margins per division
EBITDA- / EBIT-margins per division Margin decline in all divisions 15% 11.3% 11.0% 10% 8.9% EBITDA 6.4% margin, 5.1% 5% adjusted 2.0% 2014 0% 2015 Building Technology Building Envelope Building Security 15% 10% 8.0% 7.3% 6.8% EBIT 5% margin, 1.6% 2.4% 2014 adjusted 0% 2015 -5% -2.4% Building Techno
Slide 12: Impairments
Impairments Balance sheet risks addressed Remaining per 31 December 2015 Intangible Impairment Goodwill assets from In CHF M requirements PPA1 Total as of 31 December 2015 144.8 41.1 54.9 Sabiana 20.3 23.6 29.9 EgoKiefer 81.4 - - Slovaktual - 14.4 7.9 Dobroplast 18.2 - 10.9 Wertbau - 3.1 2.2 RWD Sch
Slide 13: Balance Sheet
Balance Sheet In CHF M 1′200 1′000 Current Current liabilities 800 assets Current Current 28.3% 36.3% assets liabilities 600 51.8% 46.4% Non-current liabilities Non-current 34.2% 400 Non-current liabilities 14.6% assets Non-current 63.7% assets Shareholders' Shareholders' 200 equity equity 48.2% 39.
Slide 14: Balance Sheet – Equity ratio adjusted increased to 45%
Balance Sheet Equity ratio adjusted increased to 45% 31.12.2015 – reported 31.12.2015 – adjusted (pro-forma) In CHF M In CHF M 1′000 1′000 800 Current Current 800 assets liabilities Current Current liabilities 600 51.8% 46.4% 600 assets 38.1% Non-current 50.8% Non-current 400 liabilit. 14.6% 400 lia
Slide 15: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio AFG today almost free of debt In CHF M Leverage ratio1 0 0.0x -22 -50 0.5x -100 1.0x -150 -131 1.5x -151 -167 -200 2.0x Leverage Ratio1 -222 -250 2.5x Net Debt -300 3.0x 2011 2012 2013 2014 2015 1. Leverage ratio = Net debt / EBITDA AFG – 2015 results – 1 March 2016 15
Slide 16: Free Cash Flow
Free Cash Flow Improvement through NWC In CHF M 40 38 20 13 16 38 0 -20 -20 -40 -60 -52 -80 2011 2012 2013 2014 2015 Free cash flow (Cash flow from operating and investing activities) AFG – 2015 results – 1 March 2016 16
Slide 17: Development of Investments
Development of Investments Capex below previous years’ average In CHF M 200 150 100 50 67 58 39 46 20 0 2011 2012 20131 20141 2015 Acquisition of subsidiaries Intangible assets Property, plant, equipment 1) Continued Operations AFG – 2015 results – 1 March 2016 17
Slide 18: Operating Net Working Capital
Operating Net Working Capital In CHF M 200 20% 150 15% 100 10% 147 138 130 135 119 50 5% 0 0% 2011 2012 2013 2014 2015 % Net revenues Operating net working capital Note: Operating NWC = Accounts receivable + inventories – accounts payable – advances from customers AFG – 2015 results – 1 March 2016 1
Slide 19: Agenda
Agenda 1. 2015 Financial measures allow looking ahead 2. Repositioning and Restructuring of AFG (Update) Consequent execution 3. Outlook Short- and long-term guidance Questions AFG –2015 results – 1 March 2016 19
Slide 20: Recap from H1 results 2015
Recap from H1 results 2015 Need to restructure and reposition AFG Continued weak financial performance Restructure and reposition AFG to ensure long-term Sustained market pressure competitiveness in Europe New FX-reality AFG – 2015 results – 1 March 2016 20
Slide 21: Repositioning of AFG
Repositioning of AFG Lowered cost base and redefined markets Today 2018 Swiss market leader with strong outposts Leading European windows group in Poland and Slovakia Integrated production network with strong Local production for local markets local market organizations Building ~75% of window
Slide 22: Restructuring and repositioning of AFG
Restructuring and repositioning of AFG Key strategic measures Objective: Long-term competitiveness in Europe Focus of AFG 1 2 3 Building supplier Relocation of Focus on Lean production divisional industrial Europe footprint strategies holding Energy efficiency Strengthened capital base & conti
Slide 23: Relocation of production footprint
1 Relocation of production footprint Four production sites in Switzerland affected Production Labour cost footprint Relocations advantage1 Transfer of PVC production from Altstätten to >80% Slovaktual; completed 2015 (80 FTEs) Transfer of PVC production from Villeneuve to >80% Building Slovaktua
Slide 24: Relocation of production footprint – progressing according to plan
1 Relocation of production footprint Progressing according to plan Closure of Swiss Expansion of sites in Operational production sites Eastern Europe1 excellence PVC Closure communicated – Product quality assured and Relocation of production Altstätten production in transition delivery problems fr
Slide 25: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology Ambition: Leading HVAC1 solutions Business units Today Ambition Market leader in Rationalize footprint and secure cost leadership; invest of steel radiators in CHF >25 M into radiator factory; savings of CHF > 5 M p.a.2 DE and CH Consolidate radiator
Slide 26: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology Product range completion by resident. ventilation Thermal Transfer – Indoor Air Quality Convection Radiation Ventilation A/C & IAQ2 Industrial / commercial application Residential Ventilation Residential application AFG the #1 in DE and CH for residentia
Slide 27: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology Leverage cross-selling Cross-selling of Kermi/Arbonia Cross-selling of Sabiana products products by Sabiana in IT by Arbonia and Prolux in DE/CH Main products Radiators Steel panel Floor heat. Radiant panels Unit heaters Fan coils Sales responsibility
Slide 28: Divisional strategies – Building Envelope
2 Divisional strategies – Building Envelope Transformation into one integrated organization So far: In future: Group of individual companies One integrated organization2 Building Envelope Building Envelope Finance, Market/Sales Operations HR, IT Switzerland Wood4 – Thuringia Germany Lead PVC – Prave
Slide 29: Divisional strategies – Building Envelope
2 Divisional strategies – Building Envelope Production-Footprint in comparison Main production sites Largest Central European Players Production sites3 Sales (€ M)4 PVC 35 ~365 PVC 3 ~340 Wood2 3 ~190 PVC 12 ~190 1 ~165 Specific market PVC requirements1 Avg. cost of a blue collar worker per year (CH
Slide 30: Divisional strategies – Building Envelope
2 Divisional strategies – Building Envelope Ambition: European leader in windows Market Ambition Largest Central European Players5 1. Internorm / 6 EUR ~365 M7 Fragmented German windows market: Top 20 with a market share of only ~23% 2. G EUR ~340 M8 Top 101 PVC 3. WERU / Unilux EUR ~190 M #2 Top 31
Slide 31: Divisional strategies – Building Security
2 Divisional strategies – Building Security Strengthen leading positions Business units Today Ambition Market leader for Strengthen leadership position in Europe through premium steel Leveraging direct distribution in Germany, Austria, UK, systems in Poland, Denmark and Luxembourg Profile Inte
Slide 32: Lean industrial holding
3 Lean industrial holding Major reduction of holding costs Today Ambition Fully-fletched industrial holding Lean industrial Duplication of functions at corporate level holding with close (e.g. HR, procurement, sustainability) management of divisions Cost-intensive setup (HQ / AFG Arena) Reduction of
Slide 33: Lean industrial holding
3 Lean industrial holding Cost reduction to 1% of revenues by 2018 Holding cost reduction of ~50% Measures CHF (M) Termination of AFG-Arena sponsoring -24% 20 -22% Compensation reduction for the Chairman of the Board of Directors and the CEO 15 -14% -49% Reduction of external advisors and 12 o
Slide 34: Progressing well – still many challenges ahead
Repositioning and restructuring of AFG Progressing well – still many challenges ahead Selective key measures1 Phase I (2015 H2) Phase II (2016) Phase III (2017) 2018 Developed clearly Reinforce Swiss market Expand position in Ger- Divisional defined divisional position for windows man window
Slide 35: Agenda
Agenda 1. 2015 Financial measures allow looking ahead 2. Repositioning and Restructuring of AFG (Update) Consequent execution 3. Outlook Short- and mid-term guidance Questions AFG – 2015 results – 1 March 2016 35
Slide 36: Outlook
Outlook EBITDA of > CHF 100 M by 2018 Guidance 2016 Guidance 2018 Initiated long-term measures Consequent execution with slight positive impact of measures to achieve Sales Sales growth p.a. CHF ~970 M +3% EBITDA1 EBITDA Slightly above 2015 > CHF 100 M Updated guidance 2016 with H1 results 1. Operat
Slide 37: Achieving Guidance 2018
Achieving Guidance 2018 Well balanced contribution across divisions EBITDA guidance Drivers EBITDA Building Technology > CHF 100 M Consolidate radiator market in Western Europe Further expand into growing segments (e.g. ventilation) Maintain leading position in shower enclosures CHF 57 M1 Buil
Slide 38: Summary
Summary Building Technology Addressing market dynamics through further expansion into growing market segments and active consolidation of radiator market Building Envelope Transformation of challenged Swiss position into leading major European Why AFG? player based on best production footprint i
Slide 39: Questions?
Questions? AFG – 2015 results – 1 March 2016 39
Slide 40: Disclaimer
Disclaimer AFG Arbonia-Forster-Holding AG is making great efforts to include accurate and up-to-date information in this document, however we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim a
Slide 41: Thank you
Bare Building the Difference Thank you 41
AFG Arbonia-Forster-Holding — FY2015 Earnings Presentation on 6ix