Sfs Group Ag · SIX:SFSN
Sfs — H1 2022 Earnings Presentation
45 slides from Sfs's earnings presentation, Aug 26, 2022
Slide 1: Presentation 1H 2022 results
Presentation 1H 2022 results Heerbrugg, August 26, 2022
Slide 2: Today's speakers
Today’s speakers Welcome to the presentation on our 1H 2022 results Jens Breu Volker Dostmann Chief Executive Officer Chief Financial Officer Presentation 1H 2022 results | August 26, 2022 2
Slide 3: Agenda
Agenda 1. Positioning of SFS 2. Key takeaways 3. Development by segment 4. Development of key financials 5. Guidance 2022 & Group priorities 6. Q&A Presentation 1H 2022 results | August 26, 2022 3
Slide 4: Positioning of SFS
Positioning of SFS
Slide 5: We are by your side – 24/7
Mission critical products for selected niche applications We are by your side – 24/7 Presentation 1H 2022 results | August 26, 2022 5
Slide 6: Our focused business activities: Tailored solutions for selected niche applications
Our focused business activities Tailored solutions for selected niche applications Presentation 1H 2022 results | August 26, 2022 6
Slide 7: Our focused business activities: Synergies in tooling based technologies
Our focused business activities Synergies in tooling based technologies Development and industrialization of tooling based, Development and distribution of application specific tools Development and trade of tools, fasteners and work customized precision components and assemblies and fasteners equip
Slide 8: SFS value proposition over all segments
SFS value proposition over all segments Inventing success together Presentation 1H 2022 results | August 26, 2022 8
Slide 9: Our focused business activities: Sustainable growth through the cycle
Our focused business activities Sustainable growth through the cycle Innovation Megatrends Digital revolution Leverage of global platforms Resources • Local-for-local business constraints development • Increase share of wallet Economic Operational excellence • Reduction of supply chain globalization
Slide 10: Key takeaways
Key takeaways
Slide 11: Key takeaways: Growth exceeds expectations
Key takeaways Growth exceeds expectations • Good growth, exceeding expectations in all regions and end markets except for automotive • Transaction with Hoffmann closed on May 11 • 1H 2022 gross sales climbed to CHF 1,223.6 million (+27.8% vs. PY), consisting of organic growth (9.8%) and the first-ti
Slide 12: Development by segment
Development by segment
Slide 13: Headlines Engineered Components segment
Headlines Engineered Components segment Varying conditions in end markets • Good sales growth overall lead to 1H 2022 Key figures Engineered Components reported sales of CHF 523.4 m (+6.4% YOY) 2022 +/– 2021 In CHF million (unaudited) 1H PY 1H • Industrial, Electronics and Medical took advantage of
Slide 14: Key messages Automotive division
Key messages Automotive division Shortages in supply chain hamper development • Reduced demand due to shortages in customer supply chain (i.e. semiconductor, cable harnesses) • Division's own raw material availability not affected • Investments in project-specific production capacity expansion in He
Slide 15: Key messages Electronics division
Key messages Electronics division Continued high demand • Growth driven by strong demand, mainly in Lifestyle Electronics • Mobile Devices with slightly positive development, while demand for HDD applications was subdued • Consistently good product availability and efficient supply chains allowed fo
Slide 16: Key messages Industrial division
Key messages Industrial division Growth trend maintained in most niche markets • Division remained on growth track in nearly all niche markets • Particularly strong order intake in the first quarter, partially driven by inventory restocking effects on customer side • Demand for aircraft components p
Slide 17: Key messages Medical division
Key messages Medical division Record high order intake in first half-year • Positive sales development in all application areas. Demand for instruments and implants for orthopedic surgeries recovered, as back- log of postponed elective surgeries cleared • Shortages in availability of skilled labor a
Slide 18: Headlines Fastening Systems segment
Headlines Fastening Systems segment Market dynamics unchanged • Strong demand in construction industry Key figures Fastening Systems supported both divisions and resulted in 1H 2022 +/– 2021 2022 sales of CHF 334.5 m (+14.1% YOY) In CHF million (unaudited) 1H PY 1H • Other markets served by Riveting
Slide 19: Key messages Construction division
Key messages Construction division Continued strong demand above expectations • Division continued its growth trajectory and exceeded expectations • All application areas in both Europe and North America contributed to development • Only limited effects from interest rate hikes and rising inflation,
Slide 20: Key messages Riveting division
Key messages Riveting division Development varied by area of application • Overall flattish development with stable growth in industrial manufacturing and construction-related applications • Demand from automotive market remained subdued owing to shortages in customer supply chains (i.e. semiconduct
Slide 21: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Transaction with Hoffmann closed on May 11 • Overall good market demand lead to report- Key figures Distribution & Logistics ed sales of CHF 365.7 m (+111.9% YOY), of 2022 +/– 2021 which organic +7.2% YOY In CHF million (unaudited) 1H PY 1H • Hoffmann contr
Slide 22: Key messages D&L Switzerland division
Key messages D&L Switzerland division Growth trajectory maintained • The division recorded solid organic growth at a comparable rate to the prior-year period • Growth was mainly supported by industrial manufacturing customers across the major product groups tools and fastening systems • Market deman
Slide 23: Key messages D&L International division
Key messages D&L International division Participated at good market momentum • D&L International participated at positive environment in industrial manufacturing industry and achieved good growth, mainly in Europe and North America • Physical product shows were held for the first time since the outb
Slide 24: Development of key financials
Development of key financials
Slide 25: Sales bridge
Sales bridge Solid growth and step-change from Hoffmann inclusion In CHF million Sales Growth Current Year Current Year Prior Year CHF million % % 1,250 –12 1,224 Total 266 27.8% 23.8% 1,200 Organic 93 9.8% 23.6% 1,150 185 Scope 185 19.3% 1.4% 1,100 FX impact –12 –1.3% –1.2% 93 1,050 1,000 Organic C
Slide 26: Organic sales development per quarter
Organic sales development per quarter Volatility remains high 40% 39.8% 30% 20% 9.9% 10.5% 8.9% 10% 7.5% 6.7% 4.1% 1.4% 10.4% 2.6% 0.7% 0.9% 0% –2.4% –1.0% –1.7% –3.1% –3.4% -10% -20% –21.0% -30% 2018 2019 2020 2021 2022 Weakening global economy COVID-19 Rebound SCM/Ukraine Presentation 1H 2022 resu
Slide 27: Sales breakdown
Sales breakdown Shifts towards industrial manufacturing & Europe 100% 100% 10.4% 8.7% 7.9% 8.7% 9.2% 20.8% 20.0% 22.4% 21.6% 18.1% 10.6% 11.0% 10.8% 11.5% 80% 18.7% 80% 6.5% 7.5% 7.7% 7.2% 17.7% 21.6% 20.1% 6.2% 22.7% 21.8% 19.7% 18.8% 20.9% 19.9% 60% 17.0% 60% 40% 26.5% 29.6% 40% 41.1% 39.0% 46.1%
Slide 28: Operating profitability
Operating profitability Solid demand, uneven utilization | Swings challenging In CHF million In % of net sales Profitability Reported, Reported, Adjusted, Adjusted, CHF m % CHF m % 600 25 22.1% EBIT 162.9 13.3% 179.5 14.7% EBITDA 217.1 17.7% 233.7 19.1% 500 19.2% 19.1% 19.1% 18.6% 20 16.8% 400 • Sup
Slide 29: Operating profitability and seasonal patterns
Operating profitability and seasonal patterns 2022 as of May incl. Hoffmann | 2H unclear EBIT adjusted in CHF million EBIT adjusted margin in % 250 16.6% 16.8% 18 16 14.4% 14.2% 14.7% 14.7% 200 13.6% 14 12.6% 179.5 161.0 12 154.3 150 137.6 127.1 129.9 9.2% 10 116.0 109.2 8 100 6 71.0 4 50 2 0 0 1H 1
Slide 30: Swiss franc exposure
Swiss franc exposure Share of OPEX in Swiss francs further reduced • Denomination of OPEX in Swiss francs at 45% 34% 44.3% 39.8% 40.2% 39.3% • Drivers for strategically targeted reduction 40% 37.4% 38.4% • M&A outside CHF denomination • Improved productivity in CH 35% • Relocate processes outside CH
Slide 31: Long-term sales and EBITDA development
Long-term sales and EBITDA development Growth ability confirmed Sales in CHF million EBITDA margin adjusted 2,800 24% 20.7% 21.3% 19.1% 19.7% 19.5% 19.2% 2,400 18.9% 18.5% 18.6% 19.1% 19.1% 20% 17.3% 17.1% 2,000 15.5% 16% 1,600 11.7% 12% 2,800 1,224 1,200 8% 1,781 1,705 1,893 800 1,633 1,739 1,327 1
Slide 32: Net working capital
Net working capital Significant increase in inventory levels NWC measured at half-year NWC simplified* in % of net sales C2C simplified in days Ø Days Sales 35% 210 Current Year Prior Year 31.2% Outstanding (DSO) 30.3% 29.8% 30.3% 29.9% Total SFS Group 62.0 66.1 30% 28.9%** 180 Segment EC 82.3 85.5
Slide 33: Capital expenditure
Capital expenditure Investments into strategic projects continue CAPEX spending 1H 22 1H 21 In CHF million In % of net sales by region % % 350 10% Switzerland 50% 59% 8.6% Europe 15% 12% 300 America 13% 16% 8% Asia 22% 13% 250 6.6% 6.4% 6.1% 5.2% 5.4% 5.3% 6% 200 5.0% CAPEX spending 1H 22 1H 21 5.9%
Slide 34: Operating free cash flow
Operating free cash flow NWC increase and CAPEX burdening Operating FCF • Good cash generation (in CHF million): Operating FCF in CHF million In % of EBITDA 300 70% Current Year Prior Year CF before changes in NWC 174 186 58.7% 250 60% Changes in NWC –111 –50 50.2% 48.5% Cash flow from operations 63
Slide 35: Balance sheet ratios
Balance sheet ratios Successful refinancing of Hoffmann transaction • Leveraging Balance Sheet deployment Equity ratio in % CHF million net cash/debt • Net cash position 90% 500 • Renegotiation of RCF (CHF 600 m) 80% 74.4% 75.5% 75.9% 78.9% 78.3% 400 • Launching primeur dual tranch bond 279 300 70%
Slide 36: Return on capital
Return on capital ROCE remains on high level • Return on Capital Employed slightly below In % of net sales 1H 21 due to: 30% 28.3% 27.6% * • Lower and uneven utilization 26.1% • High NWC mainly replenishment of inventory 25% 22.7% 21.1% 19.9% • Bridge ROCE to ROIC 20% • Impact of goodwill and net ca
Slide 37: KPI summary
KPI summary Market position expanded In CHF million 1H 2022 % 1H 2021 % YOY Sales 1,223.6 957.8 +27.8% EBITDA margin adj. 233.7 19.1% 211.9 22.1% –300bps EBIT adjusted margin adj. 179.5 14.7% 161.0 16.8% –210bps Net income margin 131.5 10.7% 134.1 14.0% – 330bps Equity ratio 1,188.6 46.7% 1,370.7 78
Slide 38: Guidance 2022 & Group priorities
Guidance 2022 & Group priorities
Slide 39: Adjust Guidance FY2022 to mid-term guidance
Adjust Guidance FY2022 to mid-term guidance SFS and Hoffmann (8 months of consolidation) 2021A 2022G: 2022G: 2022G: (CHF) W/o Hoffmann Updated May 12 Updated Aug 26 Gross sales SFS stand- 1,893 m Growth 3–6% Growth 3–6% Growth 3–6% alone (in local currencies) Sales impact 8 months consolidation Hoff
Slide 40: SFS Group priorities
SFS Group priorities Focus on specific priorities Sustain- Megatrends Growth Customers Profitability ability Strengthen innova- Investments in Ensure reliable Balance production Integrate sustain- tion, especially in the future growth projects supply capability capacity with demand able acting and t
Slide 41: Coming up: Our IR agenda for remainder of FY2022
Coming up Our IR agenda for remainder of FY2022 Investor Day II in Heerbrugg (CH) on September 15 IR Contact: investor.relations@sfs.com Presentation 1H 2022 results | August 26, 2022 41
Slide 42: Q&A
Q&A wn mT (a)
Slide 43: Q&A Any questions?
Q&A Any questions? Jens Breu Volker Dostmann Chief Executive Officer Chief Financial Officer Presentation 1H 2022 results | August 26, 2022 43
Slide 44: Thank you for your attention
Thank you for your attention
Slide 45: Inventing success together
Inventing success together