Burckhardt Compression Holding Ag · SIX:BCHN
Burckhardt Compression — FY2019 Earnings Presentation
35 slides from Burckhardt Compression's earnings presentation, Jun 2, 2020
Slide 1: Burckhardt Compression Holding AG Results FY 2019
BURCKHARDT COMPRESSION HOLDING AG RESULTS FY 2019 Winterthur, June 2, 2020
Slide 2: Disclaimer
Disclaimer This document may contain forward-looking statements including, but not limited to, projections of financial developments, market activity, or future performance of products. These forward-looking statements are subject to change based on known or unknown risks and various other factors t
Slide 3: Content
Content ⚫ Key Highlights ⚫ Market Dynamics ⚫ Operational Review ⚫ Financial Review ⚫ Strategic Update and Outlook ⚫ Appendix FY 2019 June 2, 2020 Page 3
Slide 4: Key Highlights
KEY HIGHLIGHTS Marcel Pawlicek CEO FY 2019 June 2, 2020 Page 4
Slide 5: Sales and EBIT guidance delivered; Q4 order intake impacted by Covid-19
Sales and EBIT guidance delivered; Q4 order intake impacted by Covid-19 ⚫ FY 2019 sales and profitability developments in line with guidance • Reported revenues up 5.1% y-o-y at CHF 629.6 mn with positive sales trends in both divisions • EBIT up 23.1% y-o-y at CHF 54.8 mn • EBIT margin at 8.7% up 1.
Slide 6: Executing on operational and strategic priorities against a challenging backdrop
Executing on operational and strategic priorities against a challenging backdrop at year-end ⚫ Highlights • Further improvement of Group financial performance with Systems EBIT positive again for the first time since FY 2015 • Acquisition of the remaining 60% of Arkos: fully consolidated within Serv
Slide 7: Swift and decisive response to Covid-19 to protect employees and mitigate business impact
Swift and decisive response to Covid-19 to protect employees and mitigate business impact ⚫ Crisis team implemented under leadership of CEO since February • Daily updates on global situation to ensure appropriate and timely response ⚫ Rapid actions taken to protect health and wellbeing of employees
Slide 8: Focus remains on mid-term targets while navigating uncertain operating environment
Focus remains on mid-term targets while proactively navigating uncertain operating environment ⚫ Limited impact of Covid-19 on operational activities • Diversified and favorable global manufacturing footprint: ability to gradually resume operations in China from mid February onwards • Broad global s
Slide 9: Market Dynamics
MARKET DYNAMICS Marcel Pawlicek CEO FY 2019 June 2, 2020 Page 9
Slide 10: Positive market development in the gas business driven by environmental regulations
Positive market development in the gas business driven by environmental regulations • US political support for domestic gas production Upstream • Changing energy mix leads to a globally increasing demand for gas Oil & Gas • Growth of middle-class in emerging countries driving the need for natural ga
Slide 11: Operational Review
OPERATIONAL REVIEW Marcel Pawlicek CEO FY 2019 June 2, 2020 Page 11
Slide 12: Systems Division: A return to profitability; LNGM costs resolved as guided
Systems Division: A return to profitability; LNGM costs resolved as guided ⚫ LNGM issues resolved in CHF mn FY 2019 FY 2018 Change ⚫ First successes with SYCC Order intake 361.2 428.0 -15.6% export products ⚫ Improvement of gross profit, Sales 388.3 375.4 +3.4% EBIT back in positive territory Gross
Slide 13: Services Division: Continued growth in engineering and OBC business
Services Division: Continued growth in engineering and OBC business; Arkos now fully consolidated ⚫ Acquisition of the remaining 60% in CHF mn FY 2019 FY 2018 Change of Arkos (consolidated as of Order intake 246.1 230.7 +6.7% December 2019) ⚫ Order intake up 6.7% (-0.9% net Sales 241.3 223.9 +7.8% o
Slide 14: Update on SYCC and Arkos
Update on SYCC and Arkos Shenyang Yuanda Compressor Arkos Field Service ⚫ Excellent operational and financial ⚫ Accelerate growth of more performance profitable Downstream business ⚫ First successes with SYCC export ⚫ Increase penetration of around 300 BC compressors through products Arkos’ network
Slide 15: Financial Review
FINANCIAL REVIEW Rolf Braendli CFO FY 2019 June 2, 2020 Page 15
Slide 16: Order Intake: Below all time record prior year
Order Intake: Below all time record prior year in CHF mn 700 ⚫ Order intake at CHF 607.3mn, 7.8% below prior-year record level 600 • -8.8% excluding currency translation and acquisition effects 500 ⚫ Systems Division: -15.6% to CHF 361.2 mn 400 • Orders mainly from Petrochemical, Gas Transport & Sto
Slide 17: Sales: Above CHF 600 mn for first time and on track for MRP target
Sales: Above CHF 600 mn for first-time and on track for MRP target in CHF mn 700 ⚫ Sales increase overall by 5.1% to CHF 629.6 mn 600 • +3.9% excluding currency translation and acquisition effects 500 ⚫ Systems Division: +3.4% to CHF 388.3 mn 400 • Benefitting from high order intake from the previou
Slide 18: Key Figures: Unchanged dividend proposed
Key Figures: Unchanged dividend proposed in CHF mn FY 2019 FY 2018 Change ⚫ Gross margin up 1.2 percentage points • Strong improvement in SYST Order intake 607.3 658.7 -7.8% • Lower gross margin in SERV due to sub- Sales 629.6 599.3 +5.1% par gross margin of Arkos Gross profit 149.8 135.7 +10.4% ⚫ S
Slide 19: Balance Sheet Positions: Liquidity secured
Balance Sheet Positions: Liquidity secured FY FY ⚫ Increase of balance sheet total by in CHF mn 2019 2018 4.0% to CHF 883.0 mn Property, Plant & 202.6 191.2 • Arkos fully consolidated Equipment • Increase in Property, Plant & Equipment Inventories 264.5 222.0 due to assets under construction → - The
Slide 20: Capital Investments (additions to Fixed Assets)
Capital Investments (additions to Fixed Assets) 90 47 35 30 4) 25 20 1) 3) 15 2) 10 5 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 E2020 1) Including purchase of real estate in the amount of CHF 77.0 mn 2) Including CHF 5.8 mn investments in real estate (construction of a new building of Prog
Slide 21: Cash Flow and Net Financial Position
Cash Flow and Net Financial Position FY FY ⚫ Lower net financial position (net in CHF mn 2019 2018 debt) of CHF -91.7 mn Cash Initial Balance 83.0 75.1 • Cash flow from operating activities Cash Flow from increased by CHF 8.9 mn, despite 50.7 41.8 high net working capital Operating Activities • High
Slide 22: Strategic Update and Outlook
STRATEGIC UPDATE AND OUTLOOK Marcel Pawlicek CEO FY 2019 June 2, 2020 Page 22
Slide 23: Mid-Range Plan 2018-2022 Status FY 2019
Mid-Range Plan 2018-2022 Status FY 2019 Systems Division • Current sales above MRP target • EBIT margin 1.7% Services Division • Current sales behind MRP target • EBIT margin 22.7% BC Group • Current sales on track • EBIT margin 8.7% FY 2017 May 29, 2018 Page 23
Slide 24: Key Priorities for FY 2020
Key Priorities for FY 2020 Maximize combined potential of SYCC, Arkos, JSW and proactively navigate the Covid-19 crisis ⚫ Systems Division • Further drive profitability • Push new applications such as hydrogen in mobility • Defend leading market position ⚫ Services Division • Integrate Arkos and inc
Slide 25: Mid-term market outlook for gas business remains attractive
Mid-term market outlook for gas business remains attractive Upstream • With current low oil price no major activities and investments in the oil sector Oil & Gas • Environmental regulations drive further development of natural gas production and flare gas recovery Gas • Further development of LNG as
Slide 26: Financial guidance
Financial guidance Guidance FY 2020 Sales > CHF 650 mn EBIT Margin Stable Dividend Policy Payout ratio between 50 – 70% of net profit FY 2019 June 2, 2020 Page 26
Slide 27: Compressors for a Lifetime
&, Burckhardt y Compression Compressors for a Lifetime”
Slide 28: Appendix
APPENDIX FY 2019 June 2, 2020 Page 28
Slide 29: Who we are
Who we are ⚫ Burckhardt Compression is • the worldwide market leader in the field of reciprocating compressor systems • the only manufacturer and service provider that covers a full range of reciprocating compressor technologies and services ⚫ Optimized solutions for our customers reciprocating comp
Slide 30: Company summary
Company summary ⚫ Founded 1844 ⚫ Division of Sulzer Corporation 1969 – 2002 ⚫ Management buyout 2002 ⚫ Shareholders Public listed company SIX (BCHN) since IPO in 2006 • > 3’500 shareholders • Market cap CHF 654.2 mn (31.3.2020) ⚫ Headcount (FTEs worldwide) 2’621 (FY 2018: 2’346) ⚫ Sales FY 2019 CHF
Slide 31: Our global network
Our global network FY 2019 June 2, 2020 Page 31
Slide 32: Our Products and Markets
Our Products and Markets B-Line Products M-Line Laby® Laby®-GI Process Gas Hyper Standard High Components Compressors Compressors Compressor Compressors Pressure and Service Markets API 618 Compressors Upstream oil & gas Gas transport & storage Refinery Petrochemical / Chemic
Slide 33: Earnings and Dividend per Share
Earnings and Dividend per Share in CHF Earnings per Share in CHF Dividend per Share 18.00 12.00 16.93 16.42 16.34 15.87 16.00 15.22 10.00 10.00 10.00 10.00 14.00 16.68 9.00 12.00 8.00 7.00 7.00 10.00 9.56 9.12 6.00 6.00 6.00 8.51 8.15 6.00 8.00 5.00 6.00 4.00 4.00 2.00 2.00 0.00 0.00 10 11 12 13 14
Slide 34: Burckhardt Compression Shareholder Structure
Burckhardt Compression Shareholder Structure 34 Institutional MBO Shareholder Group Shareholders 0.3% - 2.9% 12.40% 29.80% NN Group N.V. 10.31% 5.03% Atlantic Value General Partner Ltd. (Mondrian) 3.49% 3.05% Ameriprise Financial Inc. 3.04% Vontobel Fonds 3.01% 29.87% BlackRock > 3’500 Individual UB
Slide 35: Compressors for a Lifetime
&, Burckhardt y Compression Compressors for a Lifetime”
Burckhardt Compression Holding — FY2019 Earnings Presentation on 6ix