Georg Fischer Ag · SIX:GF
Georg Fischer — FY2018 Earnings Presentation
35 slides from Georg Fischer's earnings presentation, Feb 27, 2019
Slide 1: Financial Analysts' Conference 2018 financial year
Financial Analysts' Conference 2018 financial year Yves Serra, Andreas Müller 27.02.2019
Slide 2: A successful year 2018
GF Corporation A successful year 2018 • Top line up by 10% to CHF 4’572 million, organic growth at 7% • EBIT increased to CHF 382 million, 9% above previous year • Earnings per share grew 11% to CHF 69 • Proposed dividend increased to CHF 25 / share (from CHF 23) 2 Financial Analysts' Conference | 2
Slide 3: Major steps achieved towards strategic transformation
GF Corporation Major steps achieved towards strategic transformation • Name of GF Automotive changed to GF Casting Solutions • Acquisition done in promising aerospace castings • Two large German automotive iron foundries divested 3 Financial Analysts' Conference | 2018 financial year
Slide 4: All three divisions grew, GF Piping Systems the most
GF Corporation All three divisions grew, GF Piping Systems the most 2017 2018 Strategy Objectives (Organic sales growth in %) in % 12.1 9.8 8.2 8.9 3 ~ 5% 7.4 6.5 5.2 5.4 GF GF Piping Systems GF Casting Solutions GF Machining Solutions 4 Financial Analysts' Conference | 2018 financial year
Slide 5: Profitability well in line with strategy objectives
GF Corporation Profitability well in line with strategy objectives 2017 2018 Strategy Objectives (EBIT margin in %) in % 10 ~ 12% 8 ~ 9% 6 ~ 8% 6 ~ 8% 11.3 11.9 8.5 8.4 8.3 8.3 6.3 5.1 GF GF Piping Systems GF Casting Solutions GF Machining Solutions 5 Financial Analysts' Conference | 2018 financial
Slide 6: ROIC above target range
GF Corporation ROIC above target range 2017 2018 ROIC Objectives (ROIC in %) in % 18 ~ 22% 27.2 27.5 22.4 22.9 24.1 20.3 19.5 16.1 WACC 8% GF GF Piping Systems GF Casting Solutions GF Machining Solutions 6 Financial Analysts' Conference | 2018 financial year
Slide 7: GF Piping Systems: High growth, high profitability
GF Piping Systems High growth, high profitability • Sales up 9% to CHF 1’821 million, organically 8% • Industry and utility sector with double digit growth • All regions increased, America the most • EBIT up 15% to CHF 217 million Desalination plant 7 Financial Analysts' Conference | 2018 financial
Slide 8: New products, new segments support sales growth
GF Piping Systems New products, new segments support sales growth COOL-FIT 4.0 A whole line of digital smart valves Cooling of data centers 8 Financial Analysts' Conference | 2018 financial year
Slide 9: Sales up, profitability down
GF Casting Solutions Sales up, profitability down • High order intake, especially for e-cars • Sales up 14% to 1’687 million, organic growth at 5% • EBIT reached CHF 86 million down from CHF 93 million in 2017, due to plant ramp-up investments Housing of E-Motor for Audi Q6 e-tron 9 Financial Analys
Slide 10: Aerospace casting specialist acquired, two German iron casting plants divested
GF Casting Solutions Aerospace casting specialist acquired, two German automotive iron casting plants divested … Precicast (Switzerland) Singen / Mettmann (Germany) Aircraft engine rear vane … profitability objectives accordingly increased 10 Financial Analysts' Conference | 2018 financial year
Slide 11: GF Machining Solutions: Well balanced worldwide presence supports profitable growth
GF Machining Solutions Well balanced worldwide presence supports profitable growth • High growth in Aerospace and medical sectors, especially in US • China market subdued in 2nd half-year on trade tensions concerns • Sales up 8% to CHF 1’066 million, organic growth at 5% • EBIT reached CHF 88 millio
Slide 12: New integrated 3D printing systems will support future sales growth
GF Machining Solutions New integrated 3D printing systems will support future sales growth DMP Factory 500 Fuel Injection nozzles 12 Financial Analysts' Conference | 2018 financial year
Slide 13: Consolidated financial statements
Andreas Müller, CFO Consolidated financial statements 13 Financial Analysts' Conference | 2018 financial year
Slide 14: Solid growth at all three divisions
GF Corporation Solid growth at all three divisions ∆% CHF million organic 2018 2017 growth 1) growth GF Piping Systems 1’821 1’678 8.5 % 8.2 % GF Casting Solutions 1’687 1’482 13.8 % 5.2 % GF Machining Solutions 1'066 992 7.5 % 5.4 % Corporation 4’572 4’150 10.2 % 6.5 % Sales 1st Semester 2’396 1’99
Slide 15: Sales per division
GF Corporation Sales per division ∆% CHF million organic 2018 2017 growth 1) growth GF Piping Systems 1’821 1’678 8.5 % 8.2 % GF Casting Solutions 1’687 1’482 13.8 % 5.2 %* GF Machining Solutions 1'066 992 7.5 % 5.4 % Corporation 4’572 4’150 10.2 % 6.5 % GF Casting Solutions (organic) adjusted for m
Slide 16: GF Piping Systems with 57% of the total EBIT
GF Corporation GF Piping Systems with 57% of the total EBIT EBIT (CHF million) EBIT margin % 2018 2017 2018 2017 GF Piping Systems 217 189 11.9 % 11.3 % GF Casting Solutions 86 93 5.1 % 6.3 % GF Machining Solutions 88 82 8.3 % 8.3 % Corporation 382 352 8.4 % 8.5 % EBIT 1st Semester 208 168 8.7 % 8.4
Slide 17: Adverse currency impact in the second half of 2018
GF Corporation Adverse currency impact in the second half of 2018 CHF million Sales EBIT H1 H2 Total H1 H2 Total EUR 93 -9 84 8 -1 7 USD -11 13 2 -3 -2 -5 CNY 23 -9 14 4 -2 2 TRY -9 -26 -35 -3 -5 -8 Others 1 -8 -7 0 -2 -2 Total currency impact 97 -39 58 6 -12 -6 17 Financial Analysts' Conference | 2
Slide 18: Currency impact per division
GF Corporation Currency impact per division CHF million Currency impact Sales EBIT GF Piping Systems -8 -9 GF Casting Solutions 52 2 GF Machining Solutions 14 2 GF Corporate Management - -1 Corporation 58 -6 18 Financial Analysts' Conference | 2018 financial year
Slide 19: EBIT increased by CHF 30 million
GF Corporation EBIT increased by CHF 30 million CHF million 2018 2017 ∆ Sales 4’572 4’150 10 % Gross value added 1’668 1’539 8% Personnel expenses -1’139 -1’048 9% EBITDA 529 491 8% Depreciation, amortization -147 -139 6% EBIT 382 352 9% Financial result -35 -31 13 % Ordinary result 347 321 8% Non-o
Slide 20: Balance Sheet: Total Assets reduced due to divestments
GF Corporation Balance Sheet Total Assets reduced due to divestments CHF million 2018 % 2017 % Cash and cash equivalents 542 633 Trade accounts receivable 697 754 Inventories on stock 779 773 Other current assets 110 117 Current assets 2’128 62 2’277 63 Property, plant, and equipment for own use 1’1
Slide 21: Balance Sheet: Equity ratio further increased to 41.5%
GF Corporation Balance Sheet Equity ratio further increased to 41.5% CHF million 2018 % 2017 % Current liabilities 1’124 1’418 Non-current liabilities 892 823 Liabilities 2’016 59 2’241 62 Share capital 4 4 Capital reserves 26 26 Treasury shares -9 -8 Retained earnings 1’361 1’295 Non-controlling in
Slide 22: Free cash flow
GF Corporation Free cash flow CHF million 2018 2017 EBITDA 529 491 Changes in net working capital -77 -30 Income taxes/interest paid -79 -82 Other changes 24 31 Cash flow from operating activities 397 410 Additions to property, plant, and equipment -234 -207 Cash flow from acquisitions/divestitures
Slide 23: Capex CHF 234 million, Acquisitions CHF 154 million
GF Corporation Capex CHF 234 million Acquisitions CHF 154 million Innovation and production center, GFPS, Schaffhausen, Switzerland Precicast, Novazzano, Switzerland Biel, Switzerland GF Linamar, Mills River, USA 23 Financial Analysts' Conference | 2018 financial year
Slide 24: Key figures at a glance
GF Corporation Key figures at a glance 2018 2017 Net debt in CHF 238 183 Net debt / EBITDA (multiple) 0.4x 0.4x ROIC in % 22.4 20.3 Return on Equity in % 19.9 20.1 Earnings per share in CHF 69 62 Dividend (proposed) per share in CHF 25 23 Number of employees (incl. trainees) 15’027 15'835 24 Financi
Slide 25: Divestment of two European Iron Casting facilities
Divestment of two European Iron Casting facilities 25 Financial Analysts' Conference | 2018 financial year
Slide 26: Divestment of two European iron casting plants – impact on GF Casting Solutions
GF Corporation Divestment of two European iron casting plants – impact on GF Casting Solutions Sales split 2018 Sales split post transaction Aerospace / Energy Automotive (iron) Aerospace / Energy Industrial applications 5% 12% Automotive (iron) 6% ~13% Industrial applications ~ 20% ~11% 40% Automot
Slide 27: Divestment of two European iron casting plants – transaction details
GF Corporation Divestment of two European iron casting plants – transaction details • Deconsolidation of the two companies as of December 1, 2018 • Sale of two plants for CHF 52 million and sale of production equipment (including financing) for CHF 10 million • Purchase price was granted in full as
Slide 28: Profitability objectives for Strategy 2020 increased
GF Corporation Profitability objectives for Strategy 2020 increased … From To ROS 8-9% ROS 9-10% ROIC 18-22% ROIC 20-24% 28 Financial Analysts' Conference | 2018 financial year
Slide 29: Weight of GF Piping Systems substantially increased, automotive exposure reduced
GF Corporation … as weight of GF Piping Systems substantially increased ... CHF 4’572 million sales CHF 3’980 million sales (proforma) split pre-transaction split post-transaction GF Machining Solutions GF Machining Solutions 23% GF Piping Systems ~27% GF Piping Systems 40% ~46% GF Casting Solutions
Slide 30: Better balanced geographical footprint
GF Corporation This results in a better balanced geographical footprint CHF 4’572 million sales CHF 3’980 million sales (proforma) split pre-transaction split post-transaction Rest of world Rest of world 5% ~6% Asia 25% Asia ~29% ~47% 55% Europe Europe 15% ~18% Americas Americas 30 Financial Analyst
Slide 31: Outlook 2019
Outlook 2019 31 Financial Analysts' Conference | 2018 financial year
Slide 32: Outlook 2019
GF Corporation Outlook 2019 Uncertain and volatile market conditions, but • New products, new market segments to sustain GF Piping Systems continuous growth • Reshaped portfolio leads to higher profitability at GF Casting Solutions • Automation and new technologies to support growth at GF Machining
Slide 33: Outlook 2019
GF Corporation Outlook 2019 Further organic sales growth Profitability in line with revised 2020 targets 33 Financial Analysts' Conference | 2018 financial year
Slide 34: Thank you
Thank you 34 Financial Analysts' Conference | 2018 financial year
Slide 35: Disclaimer
Disclaimer This document is for presentation purposes only and should not be construed as an offer, invitation or solicitation to subscribe for, purchase or sell any investment. Neither it nor anything it contains shall form the basis of any contract whatsoever. Opinions expressed herein reflect the