Oc Oerlikon Corporation Ag · SIX:OERL
Oc Oerlikon — Q2 2019 Earnings Presentation
33 slides from Oc Oerlikon's earnings presentation, Aug 6, 2019
Slide 1: Resilient performance in challenging environment – guidance adjusted
Resilient performance in challenging environment – guidance adjusted Dr. Roland Fischer, CEO Jürg Fedier, CFO Q2 / HY 2019 Business Update August 6, 2019
Slide 2: Agenda
Agenda 1 Q2 2019 Business Update 2 Q2 2019 Financial Review 3 Outlook 4 Appendix Page 2 Oerlikon Q2 2019 business update August 6, 2019
Slide 3: Resilient performance in challenging environment – guidance adjusted
Resilient performance in challenging environment – guidance adjusted ▪ Group sales up 5.3 % y-o-y for the quarter and 4.3 % for the first half of 1 the year despite challenging market environment Maintaining top line growth ▪ Group order intake -0.7 % for the quarter and -5.7 % y-o-y for the first h
Slide 4: Surface Solutions Segment – Top-line and profitability impacted by adverse market environment
Surface Solutions Segment – Top-line and profitability impacted by adverse market environment OPERATIONAL PERFORMANCE MARKET DEVELOPMENT 5% ▪ Decline in orders and sales across all markets, driven by ▪ Tooling industry shows reduced activity in challenging Asia / Pacific slowdown in Automotive, Tool
Slide 5: Manmade Fibers Segment – Strong order intake and record sales at exceptional profitability level
Manmade Fibers Segment – Strong order intake and record sales at exceptional profitability level OPERATIONAL PERFORMANCE MARKET DEVELOPMENT ▪ Strong order intake sustained in Textile Applications, ▪ Maintaining strong top-line levels in Textile Applications 7% 3% Asia / Pacific especially for DTY1 m
Slide 6: Agenda
Agenda 1 Q2 2019 Business Update 2 Q2 2019 Financial Review 3 Outlook 4 Appendix Page 6 Oerlikon Q2 2019 business update August 6, 2019
Slide 7: Group performance driven by Manmade Fibers, compensating for softer Surface Solutions markets
Group performance driven by Manmade Fibers, compensating for softer Surface Solutions markets in CHF million 2Q19 2Q18 y-o-y HY19 HY18 y-o-y ▪ Surface Solutions Segment with decline in order intake and sales; operating profitability lower as a result of product and Order intake 672 677 -0.7% 1'352 1
Slide 8: FX impact on Orders, Sales and EBITDA in Q2 2019
FX impact on Orders, Sales and EBITDA in Q2 2019 Order intake Q2 2019 Sales Q2 2019 EBITDA Q2 2019 In CHF million In CHF million In CHF million -2.7% -2.8% -3.2% 672 691 700 720 121 125 -2 20 -1 21 1 3 17.3 17.4 Margin in % Q2 2019 Transaction Translation Q2 2019 FX Q2 2019 Transaction Translation Q
Slide 9: Business split – Segment splits reflecting strong performance of Manmade Fibers
Business split – Segment splits reflecting strong performance of Manmade Fibers Segment sales split Segment EBITDA split Q2 2019 54% 46% Q2 2019 53% 47% 0% Q2 2018 59% 41% Q2 2018 71% 28% 1% in % of total sales in % of EBITDA Surface Solutions Manmade Fibers Surface Solutions Manmade Fibers Other Re
Slide 10: Result from continuing operations impacted by lower EBIT and financial result
Result from continuing operations impacted by lower EBIT and financial result in CHF million H1 2019 H1 2018 Δ Order intake 1’352 1’434 -5.7 % Sales 1’324 1’269 4.3 % EBITDA 214 208 2.9 % in % of sales 16.2 % 16.4 % Result before interest and taxes (EBIT) 115 128 -10.2 % in % of sales 8.7 % 10.1 % F
Slide 11: Strong unleveraged balance sheet with an equity ratio of 48 %
Strong unleveraged balance sheet with an equity ratio of 48 % in CHF million H1 2019 FY 2018 Cash and cash equivalents 717 764 Trade and trade notes receivables 354 305 Inventories 376 343 Property, plant and equipment 610 667 Right-of-use assets 223 - Goodwill and intangible assets 1’116 1’139 Asse
Slide 12: Group CapEx to depreciation ratio back in mid-term target corridor
Group CapEx to depreciation ratio back in mid-term target corridor1 CapEx Depreciation & amortization1 CapEx / depr. & amort. ratio1 In CHF million In CHF million In CHF million +5% -16% 79 63 60 1.8 1.71 66 1.6 1.47 1.4 1.43 1.44 1.16 1.2 1.09 1.01 1.05 Mid-term target corridor 1.0 0.8 0.6 0.4 0.2
Slide 13: Consolidated cash flow statement H1 2019
Consolidated cash flow statement H1 2019 -142 in CHF million 547 -678 194 -206 858 Receivables1 -58 Inventories -40 717 Payables/liabilities -38 -1 Contract liabilities -73 Other 3 Total -206 CAPEX PP&E -54 Dividends paid -341 CAPEX intangibles -17 Repayment of debt -319 Disposal of Group companies,
Slide 14: Return On Capital Employed (ROCE)
Return On Capital Employed (ROCE) Q2 20191 FY 20183 EBIT 230 243 12.1% - Total current income tax -67 -63 11.1% - Total deferred tax income 8 -4 9.5% 8.2% NOPAT 171 176 5.7% Net Operating Assets 1’849 1’526 + Current income tax receivables 17 17 -19.8% + Deferred tax assets 131 110 - Current income
Slide 15: Agenda
Agenda 1 Q2 2019 Business Update 2 Q2 2019 Financial Review 3 Outlook 4 Appendix Page 15 Oerlikon Q2 2019 business update August 6, 2019
Slide 16: 2019 Group outlook adjusted – maintaining prior year's levels despite challenging markets
2019 Group outlook adjusted – maintaining prior year’s levels despite challenging markets Underlying Group / Segment assumptions intake Order 2'731 up to Oerlikon Group Surface Solutions Segment 2’700 ▪ Order Intake and sales expected to deliver ▪ Order intake and sales expected to be FY 2018 FY 201
Slide 17: Q&A
Q&A 1 Resilient performance with top line growth despite challenging markets 2 Delivering 17.3 % EBITDA margin while continuing investments in future growth 3 Adjusting guidance for full year 2019 Page 17 Oerlikon Q2 2019 business update August 6, 2019
Slide 18: Agenda
Agenda 1 Q2 2019 Business Update 2 Q2 2019 Financial Review 3 Outlook 4 Appendix Page 18 Oerlikon Q2 2019 business update August 6, 2019
Slide 19: Oerlikon Group – Key financial figures
Oerlikon Group – Key financial figures Solid performance in the first half of 2019 in CHF million Key financial figures H1 2019 H1 2018 Δ Order intake 1’352 1’434 -5.7 % Sales 1’324 1’269 4.3 % EBITDA margin 16.2 % 16.4 % -0.2 pp Cash flow from operations -11 194 n/a Net working capital 122 -791 n/a
Slide 20: Oerlikon Segments – Key financial figures
Oerlikon Segments – Key financial figures in CHF million Key financial figures H1 2019 H1 2018 Δ Surface Solutions Order intake 759 779 -2.6 % Sales 750 755 -0.7 % EBITDA margin 16.6 % 19.7 % -3.1 pp Net operating assets 1’782 1’5841 12.5 % Manmade Fibers Order intake 593 655 -9.5 % Sales 574 514 11
Slide 21: New end market split – Oerlikon Manmade Fibers
New end market split – Oerlikon Manmade Fibers Old business split New business split Filament spinning / Filament spinning / 16% Textile Applications 12% Texturing Texturing 12% 17% Sales BCF1 / IDY2 / Sales BCF1 / CP3 Special Filament 1Q19 Extrusion & Recycling 2Q19 31% 67% 31% Staple Fibers / CP3
Slide 22: EBITDA to EBIT bridge for Oerlikon Group
EBITDA to EBIT bridge for Oerlikon Group EBITDA to EBIT bridge – Q2 2019 EBITDA to EBIT bridge – Q2 2018 In CHF million In CHF million 121 113 -24 -34 89 87 -10 -10 -7 72 -7 70 EBITDA Depr. & Imp. EBITA Amor.of acqu. Other Amor. EBIT EBITDA Depr. & Imp. EBITA Amor.of acqu. Other Amor. EBIT intangibl
Slide 23: EBITDA to EBIT bridge per Segment – Q2 2019
EBITDA to EBIT bridge per Segment – Q2 2019 Surface Solutions Segment Manmade Fibers Segment In CHF million In CHF million 64 -28 57 -4 53 -1 51 -1 36 -10 -5 21 EBITDA Depr. & Imp. EBITA Amor. of acqu. Other Amor. EBIT EBITDA Depr. & Imp. EBITA Amor. of acqu. Other Amor. EBIT intangibles intangibles
Slide 24: R&D and CapEx on Segment level
R&D and CapEx on Segment level R&D expenses H1 2019 CapEx H1 2019 Surface Solutions (7%) Surface Solutions (7%) 8% 23% 15% Manmade Fibers (3%) Manmade Fibers (2%) CHF CHF (% of Segment sales) 66m 65m Corporate (% of Segment sales) 77% 77% Depreciation & Amortization H1 2019 CapEx / Depr. & Amort. H1
Slide 25: Asset allocation and employees on Segment level
Asset allocation and employees on Segment level Net operating assets H1 2019 Employees (FTE) by Segment H1 2019 Surface Solutions 4% Surface Solutions 3% 0% Manmade Fibers Manmade Fibers 26% CHF 11’020 Corporate 1’850m Corporate 71% 96% Operating Assets H1 2019 Employees (FTE) by Region H1 2019 3% 4
Slide 26: Net working capital increased due to lower contract liabilities
Net working capital increased due to lower contract liabilities In CHF million; as % of sales 14% 15% 14% 6% 9% 4% 4% -3% 394 391 316 167 125 122 108 -79 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 20171 FY 2018 HY 2019 1 Net working capital is defined as trade receivables + inventories – trade payab
Slide 27: Constant range of investments in R&D at high level of CHF 60 million in H1 2019
Constant range of investments in R&D at high level of CHF 60 million in H1 2019 In CHF million; as % of sales 120 116 12 110 106 11 101 103 100 96 94 95 10 90 9 80 8 70 7 60 60 6 5% 5% 50 5 4% 4% 4% 4% 4% 40 4 3% 30 3 20 2 10 1 0 0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 HY 2019 ▪ R&
Slide 28: Oerlikon Transformation – Streamlining the portfolio and focus on Surface Solutions
Oerlikon Transformation – Streamlining the portfolio and focus on Surface Solutions Total investments Coating Coating Surface Solutions Surface Solutions Surface Solutions Surface Solutions Surface Solutions Acquisitions Segment: CHF 1.1BN Segment: Segment: Segment: Segment: Segment: Segment: Rox Me
Slide 29: Oerlikon shares
Oerlikon shares Oerlikon shares Oerlikon shareholder structure1 as of July 31, 2019 ▪ Listed on Swiss Exchange (SIX) since 1973 Liwet Holding AG ▪ Securities symbol: OERL 41.34% ▪ Securities number 81 682 BlackRock Inc. ▪ ISIN: CH0000816824 Black Creek IM 52.19% ▪ Number of shares outstanding: 339 7
Slide 30: Coverage – 7 Buy / Add – 7 Hold / Neutral – 0 Sell
Coverage – 7 Buy / Add – 7 Hold / Neutral – 0 Sell / Underperform Broker Analyst Recommendation Date of last update Target price AlphaValue Luis Pereira Buy 12.07.2019 14.60 Baader Helvea Christian Obst Hold 29.07.2019 12.50 Berenberg Bank Marta Bruska Hold 05.03.2019 16.00 Credit Suisse Patrick Laa
Slide 31: Financial Calendar 2019 / 2020
Financial Calendar 2019 / 2020 August 6, 2019 Q2 / H1 2019 results - Media & Analyst Conference Call November 5, 2019 Q3 / 9M 2019 results - Media & Analyst Conference Call March 3, 2020 Q4 / FY 2019 results - Media & Analyst Conference in Zurich April 7, 2020 Annual General Meeting of Shareholders
Slide 32: Investor Relations Contact
Investor Relations Contact OC Oerlikon Management AG, Pfäffikon Churerstrasse 120 CH – 8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Corporate Communications, Investor Relations & Marketing Phone: +41-58-360-9622 Mobile: +41-79-810-8211 E-mail: a.schwarzwaelder@oerlikon.com Page 32 Oer
Slide 33: Disclaimer
Disclaimer OC Oerlikon Corporation AG, Pfäffikon, (together with its affiliates hereinafter referred to as “Oerlikon”) has made great efforts to include accurate and up-to-date information in this document. However, Oerlikon makes no representation or warranties, expressed or implied, as to the trut