Sfs Group Ag · SIX:SFSN
Sfs — H1 2018 Earnings Presentation
34 slides from Sfs's earnings presentation, Jul 20, 2018
Slide 1: Presentation 1H 2018 results
Presentation 1H 2018 results Heerbrugg, 20 July 2018
Slide 2: Today's speakers
Today’s speakers Welcome to the presentation on our 1H 2018 results Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation 1H 2018 results | 20 July 2018 2
Slide 3: Table of contents
Table of contents 1. Introduction & key takeaways 1H 2018 Jens Breu 2. Development by segment Jens Breu 3. Development of key financials Rolf Frei 4. Guidance 2018 Rolf Frei 5. Q&A Jens Breu / Rolf Frei Presentation 1H 2018 results | 20 July 2018 3
Slide 4: Key takeaways 1H 2018
Key takeaways 1H 2018 Presentation 1H 2018 results | 20 July 2018 4
Slide 5: Key takeaways: Continued dynamic growth
Key takeaways Continued dynamic growth • Continued dynamic growth momentum • gross sales reached CHF 855.9m, 9.9% higher than 1H 2017 • maintained good organic growth pace (7.1%) • growth driven by all segments and regions • Attractive earnings generation temporarily burdened by special operational
Slide 6: Development by segment
Development by segment Presentation 1H 2018 results | 20 July 2018 6
Slide 7: Headlines Engineered Components segment
Headlines Engineered Components segment Growth maintained • Growth continued; sales reached CHF 473m, an increase of 10.5%, whereof organic 7.6% • Automotive and Electronics confirm their role as growth drivers • Medical pleasingly returned back to growth • Attractive earnings power still burdened •
Slide 8: Key messages Automotive division
Key messages Automotive division Driven by stable innovation trends • Continued to significantly outgrow the industry by ramping up new projects • Stable trends, e.g. electrification of cars, create innovation and growth opportunities • Time-consuming pass-through of increased raw materials cost des
Slide 9: Key messages Electronics division
Key messages Electronics division On the growth track • Continued strong sales growth in mobile devices and HDD applications • Weaker USD, higher raw material prices and substantial advance outlays for new projects weighed on divisional profitability • These new projects mainly deploying cold formin
Slide 10: Key messages Industrial division
Key messages Industrial division Mixed performance by application area • Some areas like industrial applications showed strong to very strong growth rates, while the aircraft business experienced a slowdown • Reason for this is on the one hand the lower production rates of the A380 and on the other
Slide 11: Key messages Medical division
Key messages Medical division Back on the growth path • Medical division returned to growth track as expected thanks to its strong pipeline of innovative customer projects • Achieved sales records at three out of the four manufacturing locations within the first six months of 2018 • For 2H 2018 the
Slide 12: Headlines Fastening Systems segment
Headlines Fastening Systems segment Growth driven by innovation • Strong sales growth momentum maintained with +12.0%, whereof organic growth of 6.9% • Expanded market position thanks to its offering of compelling products and services • Increased profitability to EBIT margin of 9.4% • Experienced t
Slide 13: Key messages Construction division
Key messages Construction division Market position strengthened • Successfully expanded its position in an ongoing favorable market environment thanks to its innovative products • Significant progress in areas of flat roof, hinge technology and cladding systems • Substantial progress with various pr
Slide 14: Key messages Riveting division
Key messages Riveting division Broadly based sales growth achieved • Solid sales growth was broadly based • Solutions for the automotive industry again showed the fastest growth • With the iBird Pro, GESIPA presented a new generation of battery-powered rivet setting tools offering extensive IoT func
Slide 15: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Accelerated sales growth achieved • Achieved accelerated sales growth of 5.9% significantly above Swiss GDP • Growth was broadly based across the various product categories • EBIT margin reached 7.2% (PY 7.0%) • Considerable increase in procurement costs co
Slide 16: Key messages Distribution & Logistics segment
Key messages Distribution & Logistics segment Market profile sharpened • New online store (www.sfs.ch), launched in February, received positive customer feedback and generated attractive growth • Positioned Allchemet as single partner offering the full product range of SFS for customers in commercia
Slide 17: Development of key financials
Development of key financials Presentation 1H 2018 results | 20 July 2018 17
Slide 18: Sales bridge: Dynamic organic growth of 7.1%
Sales bridge Dynamic organic growth of 7.1% CHF million • Reported growth of 9.9% yoy (PY 13.0%) 900 778.6 55.3 -2.2 24.2 855.9 • 7.1% organic growth (PY 7.4%) • -0.3% change in scope (PY 6.9%) 800 • 3.1% FX impact (PY -1.3%) 700 • Organic growth by segment • 7.6% Engineered Components (PY 9.3%) • 6
Slide 19: Sales breakdown by end market and region
Sales breakdown Automotive and Europe with slightly higher share by end market by region PY 41.5% PY 17.9% PY 23.1% PY 26.4% PY 6.5% PY 17.9% PY 26.1% PY 21.5% PY 19.1% Presentation 1H 2018 results | 20 July 2018 19
Slide 20: Operating profitability
Operating profitability Temporary effects burden results by ~1% Reported EBIT CHF million Adjusted EBITA / EBITDA % • EBIT 1H18 500 25% • CHF 116m or 13.6% of net sales 21.3% (PYCHF 111m or 14.2% adjusted of net sales) 19.7% 19.8% 19.6% • first time with zero amortization of 400 18.5% 20% intangible
Slide 21: Net working capital
Net working capital Stable development at seasonally high point NWC Days outstanding NWC in % of net sales • NWC at end of June 300 36% • seasonally higher than at year end • at 32% of net sales under control 250 31.2% 31.1% 32.5% 32.0% 30% 30.3% 31.0% • cash-2-cash cycle stable at 117 days 200 24%
Slide 22: CAPEX
CAPEX Growth projects and Nantong factory well under way CAPEX CHF million CAPEX in % of net sales • CAPEX spending 250 10% • at 8.1% of net sales or CHF 70m • pace since year end kept 200 8% • increase capacity, efficiency and productivity 8.1% 8.1% • support future growth projects 7.1% • expect >8
Slide 23: Free cash flow
Free cash flow Strong cash flow fully finances NWC and CAPEX FCF in CHF million FCF in % of EBITDA • Cash flow remains strong and covers the 300 60% cash out for increase in NWC and CAPEX 51.2% • CHF 143m cash flow before NWC (PY 125) 250 47.6% 50% • CHF -39m increase NWC (PY -44) • CHF -70m CAPEX (
Slide 24: Balance sheet
Balance sheet Solid equity and strong financial flexibility Net Cash CHF million Equity ratio in % • Equity remains strong and healthy 200 80% • stable and solid above 70% 78.4% 74.0% • value at CHF 1.1bn 67.2% 71.6% 68.3% 71.1% 150 60% • Net cash production influenced by 128 • CHF 104m cash flow fr
Slide 25: Return on capital
Return on capital Stable development with potential for improvement Return on capital in % • ROCE stable development above 20% 30% 27.8% • EBITA measured at Ø CE 25.9% 24.2% 23.1% • target range >20% 25% 24.3% 20.6% • ROIC remains flat just below 10% 20% • EBITA less tax as % of invested capital ROC
Slide 26: SFS Group key message
SFS Group key message Dynamic growth, good profitability and solid financing • Financial development on track in CHF million • Sales growth 9.9% yoy, organic 7.1% 1H 2018 1H 2017 yoy • EBIT margin of 13.6% burdened by Sales 855.9 778.6 9.9% temporary operational effects of ~1% Net sales 854.6 779.5
Slide 27: Guidance 2018
Guidance 2018 Presentation 1H 2018 results | 20 July 2018 27
Slide 28: SFS Group Guidance: 2H stronger than 1H
SFS Group Guidance Historically 2H sales and EBIT margin stronger than 1H • Net Sales Sales and EBIT in CHF million • is historically stronger than 1H • seasonality in construction industry 1H16A 2H16A 1H17A 2H17A 1H18A • important product launches by electronic Net sales 688.2 748.5 779.5 855.3 854
Slide 29: SFS Group Guidance: Growth expectation raised
SFS Group Guidance Growth expectation raised and EBIT margin confirmed • Raising growth expectation to 7 – 9% Sales growth and EBIT margin • 7 - 8% growth expected in 2H; of which • 4 - 5 % organic growth; slightly lower due to 2017A 2018G 1H18A 2H18G 2018G base effect yoy Sales 13.7% 5 - 7% 9.9% 7
Slide 30: Q&A
Q&A Presentation 1H 2018 results | 20 July 2018 30
Slide 31: Q&A
Q&A Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation 1H 2018 results | 20 July 2018 31
Slide 32: Thank you for your attention
Thank you for your attention Presentation 1H 2018 results | 20 July 2018 32
Slide 33: Presentation 1H 2018 results | 20 July 2018
Presentation 1H 2018 results | 20 July 2018 33
Slide 34: Disclaimer
Disclaimer This presentation includes forward looking statements. These statements reflect the SFS Group's current assessment of market conditions and future events. The statements are therefore subject to risks, uncertainties and assumptions. Unforeseen events may lead to deviations of the actual r