Slide 1: Presentation FY2018 results
Presentation FY2018 results Zurich, 8 March 2019
Slide 2: Today's speakers
Today’s speakers Welcome to the presentation on our FY 2018 results Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation FY 2018 results | 8 March 2019 2
Slide 3: Table of contents
Table of contents 1. Positioning of SFS Jens Breu 2. Key takeaways Jens Breu 3. Development by segment Jens Breu 4. Development of key financials Rolf Frei 5. Guidance 2019 Jens Breu 6. Q&A Jens Breu / Rolf Frei Presentation FY 2018 results | 8 March 2019 3
Slide 4: Positioning of SFS
Positioning of SFS Presentation FY 2018 results | 8 March 2019 4
Slide 5: We are by your side – 24/7
Mission critical products for selected niche applications We are by your side – 24/7 Presentation FY 2018 results | 8 March 2019 5
Slide 6: Value proposition: Inventing success together
Value proposition Inventing success together Relevant mega trends for SFS Value proposition of SFS • Digital revolution • Economic globalization • Evolving consumption • Resources constraints • Demographic asymmetries Presentation FY 2018 results | 8 March 2019 6
Slide 7: Key takeaways
Key takeaways Presentation FY 2018 results | 8 March 2019 7
Slide 8: Key takeaways: Solid business performance
Key takeaways Solid business performance • Sales increased in FY2018 by 6.5% to CHF 1,739m • fueled by broadly based organic growth of 5.0% in core business • Fastening Systems segment showed strongest development • unexpected decline in sales in Q4/2018 • Operating profit rose by 4.2% on a like-for
Slide 9: Development by segment
Development by segment Presentation FY 2018 results | 8 March 2019 9
Slide 10: Headlines Engineered Components segment
Headlines Engineered Components segment All 4 divisions contributed to growth development • Sales increase of 4.4% to CHF 967m supported by all divisions • Growth fuelled by ramp-up of new projects • Attractive profitability of 18.2% EBIT margin • burdened in 1H 2018 by increased raw material cost a
Slide 11: Key messages Automotive division
Key messages Automotive division Continued above-market growth • Growth fueled by launch and ramp-up of innovative customer projects • Trend towards autonomous driving and electrification of cars proved to be reliable innovation and growth drivers • Unexpected drop in demand in Q4/2018 • Expecting s
Slide 12: Key messages Electronics division
Key messages Electronics division Penetration of new applications • Modest sales growth achieved • Proved strong competitive position in mobile devices, HDD and lifestyle electronics • Significant progress in lifestyle electronics • Successful entry into new application area • based on cold forming
Slide 13: Key messages Industrial division
Key messages Industrial division Stable sales trends – strong project pipeline • Experienced overall stable sales; mixed development by business units • Successful acquisition of new growth projects • Still sluggish development in Aircraft business due to • lower demand for Airbus A380 • flatter ram
Slide 14: Key messages Medical division
Key messages Medical division Achieved accelerated growth dynamics • Growth momentum continuously improved neurology minimally invasive surgery over the course of FY2018 • Development driven by launching new cardiac care diabetic care customer projects • Manufacturing platforms close to the medtec c
Slide 15: Headlines Fastening Systems segment
Headlines Fastening Systems segment Important progress achieved • Continued strong momentum resulted in sales growth of 13.8% y-o-y • Organic growth contributed 5.6% • driven by market success of innovative products • supported by good market environment • Initial consolidation of HECO in 2nd half c
Slide 16: Key messages Construction division
Key messages Construction division Market position strenghtened • Repeated attractive growth development; broadly based by regions and product groups • Successfully expanded market share thanks to innovative products, systems and services • Trends to greater safety, energy efficiency and esthetics a
Slide 17: Strategic collaboration with Triangle Fasteners
Strategic collaboration with Triangle Fasteners Negotiations are well advanced • Since October 2018 SFS Group has been engaged in discussions on a strategic collaboration with Triangle Fasteners (USA) • Negotiations are well advanced • Expecting final results in the next few weeks • Strategic ration
Slide 18: Key messages Riveting division
Key messages Riveting division Broad market spectrum covered • Solid growth development driven by • healthy market environment • good results in various application areas • Compelling competitive position to benefit from trends like electrification of assembly lines and 100% quality control • Succes
Slide 19: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Accelerated growth achieved • Attractive organic sales growth of 5.1% achieved (excluding the sale of the security systems business) – well above Swiss GDP • Primary sales drivers were • new ecommerce site (www.sfs.ch) • tool business • construction related
Slide 20: Key messages Distribution & Logistics segment
Key messages Distribution & Logistics segment Multi-channel activities strengthened • Strengthened and widened online presence • new ecommerce web site (www.sfs.ch) • significant growth with existing customers • led to new customer wins • Attractive network of retail pick-up points (HandwerkStadt) e
Slide 21: Development of key financials
Development of key financials Presentation FY 2018 results | 8 March 2019 21
Slide 22: Layout of Financial report
Layout of Financial report Streamlined to become more reader-friendly • Objectives of the streamlining • reduce complexity • increase clarity and value • structure notes reader-friendly • Changed layout • important issues first • combined general notes with tables • Focused on key information • supp
Slide 23: Sales bridge
Sales bridge Strong organic growth of 5.0% at core business CHF million • Reported growth of 6.5% (PY 13.7) 1,800 • Core business 5.0% (PY 7.8) 1,633 80 -11 15 22 1,739 • Trade - 0.7% (PY -0.4) 1,700 • Scope 0.8% (PY 5.8) • FX impact 1.4% (PY 0.5) 1,600 • Like-for-like growth by segment 1,500 • 3.2%
Slide 24: Sales growth core business
Sales growth core business Unexpected decline Nov / Dec | stabilized Jan / Feb in CHF million yoy in % yoy 20 20% 2018 2019 15 15% 10 10% 5 5% 0 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb -5 -2.2% -2.1% -2.2% -5% -10 -8.3% -10% Presentation FY 2018 results | 8 March 2019 24
Slide 25: Sales breakdown
Sales breakdown Balanced and stable sales mix 2018 data 2018 data 2017 data 2017 data by end markets by regions 19.7% 26.5% 20.8% 20.4% 20.6% 25.3% 22.0% 20.9% 6.5% 6.4% 17.7% 17.2% 41.1% 26.3% 21.0% 39.9% 26.2% 21.5% Construction Others Automotive Medical Electronics Switzerland Europe America Asia
Slide 26: Operating profitability
Operating profitability EBIT burdened by mix effects and soft Q4 in % of net sales in CHF million • Improvement in 2H with EBIT margin 14.4% 25% 500 vs. 1H EBIT margin 13.6% 21.3% 19.7% 19.8% • Strong growth in FS and D&L segments with 20% 18.5% 19.2% 400 below average EBIT margin • Sharp and unexpe
Slide 27: Operating profitability: strong track record
Operating profitability Strong track record over the last 12 years Sales in CHF million EBITDA margin adjusted 19.7% 20.7% 19.1% 18.9% 19.5% 19.2% 2'000 18.5% 20% 17.0% 17.3% 17.1% 15.5% 1,739 1'600 16% 1,633 11.7% 1,437 1,383 1,376 1,334 1,331 1,327 1'200 12% 1,193 1,122 1,093 1,068 800 8% 400 4% 0
Slide 28: Swiss franc exposure
Swiss franc exposure Opex in Swiss francs reached target range % share • Operating expenses in Swiss francs 60% • 40.2% share of group OPEX Opex in Swiss francs • at upper end of target range <40% 50% 49.4% 46.1% 44.3% • Drivers for strategically targeted reduction 40% 39.8% 40.2% • international M&
Slide 29: Net working capital
Net working capital Stable development in past five years in % of net sales in days • NWC slightly lower at 30% of net sales 35% 175 30.3% 31.0% 31.2% 31.1% 30.3% • equals 111 working days 30% 150 • increase of NWC CHF 25m • measured at year end 25% 125 114 113 113 111 111 • Ø Days Sales Outstanding
Slide 30: Capital expenditure
Capital expenditure Record spending to secure future growth in % of net sales in CHF million • CAPEX spending 8.6% 10% 250 • to increase capacity, efficiency, productivity 8.6% • to support future growth 8% 200 8.1% 6.6% • CAPEX spending by region 7.1% • 36% Switzerland (PY 43) 6% 150 149.1 5.9% • 1
Slide 31: Free cash flow
Free cash flow CAPEX drives free cash flow & conversion rate in % of EBITDA in CHF million • Strong cash flow from operations 60% 300 used for CAPEX 51.2% • 263m cash from operations 50% 47.6% 250 • -149m CAPEX • 114m free cash flow 40% 34.4% 200 37.4% • Conversion rate 34.4% 30% 150 157 • driven by
Slide 32: Balance sheet ratios
Balance sheet ratios Solid equity and strong financial flexibility Equity ratio in % CHF million net cash • Equity ratio remains strong and healthy 90% 180 at 74.4% 78.4% 80% 74.4% 160 • target range >60% 74.0% 67.2% 70% 71.6% 140 • Financial flexibility for growth secured by 60% 120 128 • net cash
Slide 33: Return on capital
Return on capital Attractive return on Ø capital employed Return in % • Average capital employed (Ø CE) 30% 27.8% • ROCE at 22.7% 25.9% • EBIT adjusted in % of Ø CE 25% 24.3% 22.7% • above target range of >20% 20.6% 20% • Return on invested capital • ROIC at 9.7% after tax 15% • EBIT adjusted less t
Slide 34: Payout ratio
Payout ratio Stable dividend at ~ 40% of net income Payout ratio in % Payout per share in CHF • BoD will propose a payout per share 70% 4.20 of CHF 2.00 62.7% at reported net income • increase by 5.3% 60% 3.60 50.6% 52.6% • CHF 1.66 capital reserve 50% 3.00 • CHF 0.34 retained earnings 40.8% 44.8% 3
Slide 35: KPI summary
KPI summary Good growth, healthy profitability and funding In CHF million 2018 % 2017 % yoy Sales 1,738.6 1,632.7 6.5% EBITDA margin 332.8 19.2% 323.5 19.8% 2.9% EBIT adjusted margin 243.1 14.0% 233.3 14.3% 4.2% Net income margin 193.9 11.2% 159.1 9.7% 21.9% Equity ratio 1,204.6 74.4% 1,087.0 71.6%
Slide 36: Guidance 2019
Guidance 2019 Presentation FY 2018 results | 8 March 2019 36
Slide 37: Guidance FY2019
Guidance FY2019 Continued positive development 2018A 2019G Gross sales reported 6.5% 3 – 5% EBIT adjusted 14.0% 13 – 15% A = Actual G = Guidance For 2019, we expect extraordinary effects to burden reported EBIT by a high single-digit to a low double-digit CHFm amount due to • commissioning of the ne
Slide 38: Q&A
Q&A Presentation FY 2018 results | 8 March 2019 38
Slide 39: Q&A: Any questions?
Q&A Any questions? Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer Presentation FY 2018 results | 8 March 2019 39
Slide 40: Thank you for your attention
Thank you for your attention Presentation FY 2018 results | 8 March 2019 40
Slide 41: Presentation FY 2018 results | 8 March 2019
Presentation FY 2018 results | 8 March 2019 41
Slide 42: 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