Sfs Group Ag · SIX:SFSN
Sfs — FY2021 Earnings Presentation
46 slides from Sfs's earnings presentation, Mar 4, 2022
Slide 1: Presentation FY2021 results
Presentation FY2021 results Heerbrugg, March 4, 2022
Slide 2: Today's speakers
Today’s speakers Welcome to the presentation of our FY 2021 results Jens Breu Volker Dostmann Chief Executive Officer Chief Financial Officer Presentation FY 2021 results | March 4, 2022 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 Volker Dostmann 5. Outlook 2022 Jens Breu 6. Q&A Presentation FY 2021 results | March 4, 2022 3
Slide 4: Positioning of SFS
Positioning of SFS Presentation FY 2021 results | March 4, 2022 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 2021 results | March 4, 2022 5
Slide 6: … for a holistic view on sustainability
Sustainable thinking and acting is part of our DNA … for a holistic view on sustainability Presentation FY 2021 results | March 4, 2022 6
Slide 7: Segments and Competences
Segments and Competences Focus on technology and knowledge sharing Presentation FY 2021 results | March 4, 2022 7
Slide 8: Strategic core pillars
Strategic core pillars Effectiveness proven during COVID-19 pandemic • Customer proximity essential for value proposition “Local for local” • Reliable delivery performance • End markets and regions Diversification • Sales channels • Continued investments in innovation Solid financial position • Real
Slide 9: Key takeaways
Key takeaways Presentation FY 2021 results | March 4, 2022 9
Slide 10: 2021 at a glance
2021 at a glance Record results and inclusion of Hoffmann • In a dynamic market environment characterized by high demand, supply chain bottlenecks and the COVID-19 pandemic, SFS boosted its sales by 11.0% to a record of CHF 1,893.1 million • All segments and regions contributed to the growth, enable
Slide 11: Addition of Hoffmann (1/2)
Addition of Hoffmann (1/2) Internationalization of the D&L segment • SFS establishes international presence in quality tools with Hoffmann • Both companies positioned as leading pro- viders in their industries, share similar value proposition and value systems and look back GARANT: Outstanding tools
Slide 12: Addition of Hoffmann (2/2)
Addition of Hoffmann (2/2) Internationalization of the D&L segment • In 2021 Hoffmann generated around EUR 1,000 million in sales with a workforce of approx. 3,000 • Joining forces will mark a milestone and result in attractive growth opportunities: • Cross-selling of mechanical fastening systems an
Slide 13: Development by segment
Development by segment Presentation FY 2021 results | March 4, 2022 13
Slide 14: Headlines Engineered Components segment
Headlines Engineered Components segment Greater profitability through higher capacity utilization • Substantial recovery driven by pent-up demand in automotive-related areas and industrial sectors, negatively impacted by supply chain bottlenecks in the second half of the year • FY21 reported sales o
Slide 15: Key messages Automotive division
Key messages Automotive division Market recovery lost momentum in second half of year • After good recovery in 1H driven by strong catch-up effects, 2H increasingly impacted by shortages in semiconductor supply chain • Large project wins in electric brake systems testimony to strong competitive posi
Slide 16: Key messages Electronics division
Key messages Electronics division Good development, with record results in first half-year • Record-high results in first half-year – second half-year troubled by supply chain bottlenecks • Good development in Lifestyle Electronics and Accessories, stable demand in Smartphones • Unexpectedly strong
Slide 17: Key messages Industrial division
Key messages Industrial division Significant recovery in demand throughout the year • Recovery that began in the second half of 2020 encompassed nearly every niche market served by the division • Not materially impacted by product shortages, many business areas achieved revenues above pre-pandemic l
Slide 18: Key messages Medical division
Key messages Medical division Slightly positive development • Overall slightly positive organic sales trend, however, varying across product categories • Demand for instruments/implants for orthopedic surgeries still impacted by COVID-19 pandemic. Applications for sports medicine showed good growth
Slide 19: Headlines Fastening Systems segment
Headlines Fastening Systems segment Record results achieved • In dynamic market environment, good market positioning and robust supply chains led to record sales of CHF 574.9 m (+17.4% YOY) • High market demand put supply chains and material prices under considerable strain • Ongoing efforts to expa
Slide 20: Key messages Construction division
Key messages Construction division Consistently high market demand • Strong demand led to exceptionally good growth in all application areas in Europe and North America • Market share gains achieved thanks to robust supply chains, good material availability and high degree of in-house value-add • Gl
Slide 21: Key messages Riveting division
Key messages Riveting division Dynamic demand, 2H dampened by semicon shortage • Stable growth achieved, driven by industrial- and construction-related areas • Reduced demand from automotive customers in the course of the year • Innovative product solutions such as connected tools and sustainability
Slide 22: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Establishing an international presence in quality tools • Stable growth throughout the year resulting in reported sales of CHF 343.0 m (+8.2% YOY) • Maintained broad focus on customer needs with continued offering of innovative solutions and organizational
Slide 23: Key messages Distribution & Logistics segment
Key messages Distribution & Logistics segment Leverage combined SFS - Hoffmann growth potential • Further penetration of key accounts (“share of wallet”) Use platforms • Targeted acquisition of customers with high potential • Development of regional growth strategies based on local expertise Delib
Slide 24: Development of key financials
Development of key financials Presentation FY 2021 results | March 4, 2022 24
Slide 25: Sales bridge
Sales bridge Sales growth fueled by strong organic development In CHF million Sales Growth Current Year Current Year Prior Year CHF million % % 1,900 13 -3 1,893 178 Total 188 11.0% –4.3% Organic 178 10.3% –3.2% 1,850 Scope 13 0.8% 3.0% 1,800 FX impact –3 –0.1% –4.1% 1,750 Organic Current Year Curre
Slide 26: Development of organic sales
Development of organic sales Rebound in first semester | increasingly challenging 2H In CHF million Organic sales growth PYM Total Year +10.3% 600 80% 1H21 +23.6% vs. PY 2H21 –0.5% vs. PY 500 473 485 484 471 464 60% 448 426 400 348 40% 300 39.7% 20% 200 10.4% 0% 100 2.6% -3.4% 0 -20% Q1 Q2 Q3 Q4 Org
Slide 27: Sales breakdown
Sales breakdown Pent-up demand in Automotive and Industrial in Europe Other industries Automotive Europe Asia, others 20.2% 21.3% 37.8% 21.6% PY 18.7% PY 21.6% PY 35.4% PY 22.4% Medical 7.2% PY 7.7% Electronics Construction Switzerland America 19.9% 31.4% 18.8% 21.8% PY 20.9% PY 31.1% PY 19.5% PY 22
Slide 28: Sales development
Sales development Growth ability over the cycle confirmed In CHF million 2,400 24% 20.7% 21.3% 19.1% 19.7% 19.5% 19.2% 19.1% 2,000 18.9% 18.5% 18.6% 20% 17.3% 17.1% 15.5% 1,600 16% 1,200 11.7% 12% 1,781 1,893 1,633 1,739 1,705 800 8% 1,327 1,331 1,383 1,376 1,437 1,122 1,096 1,068 1,193 400 4% 0 0%
Slide 29: Operating profitability
Operating profitability Driven by capacity utilization and cost discipline In CHF million In % of net sales Profitability Reported, Reported, Adjusted, Adjusted, CHF m % CHF m % 600 25 EBIT 301.7 15.9% 298.6 15.7% 22.4% 21.5% 19.2% 20.5% EBITDA 407.1 21.5% 404.0 21.3% 500 19.8% 19.2% 18.6% 20 17.1%
Slide 30: Net working capital
Net working capital Significant increase in Inventory levels NWC simplified in % of net sales C2C simplified in days • NWC measured at year end 35% 150 31.1% 30.3% 30.3% Ø Days Sales 29.8% 29.9% Current Year Prior Year Outstanding (DSO) 30% Total SFS Group 64.8 65.6 113 120 111 109 111 109 Segment E
Slide 31: Capital expenditure
Capital expenditure At beginning of investment cycle In CHF million In % of net sales • CAPEX spending 300 10% • to increase capacity, efficiency, productivity 8.6% • to support future growth 8.1% 250 8% CAPEX spending Current Year Prior Year 7.7% 6.6% 6.4% by region % % 200 6.1% 5.2% Switzerland 59
Slide 32: Free cash flow
Free cash flow CAPEX increase fully financed by cash flow In CHF million In % of EBITDA • Good cash generation (in CHF): 58.7% Current Year Prior Year 300 60% Cash flow from operations 324 m 296 m 50.2% 48.5% CAPEX –121 m 104 m 50% 240 Operating free cash flow 203 m 192 m 203 192 40% 34.4% 180 161 2
Slide 33: Balance sheet ratios
Balance sheet ratios Strong balance sheet and very high liquidity Equity ratio in % CHF million net cash/debt • Financial flexibility stems from • Net cash position 90% 350 • Unused and existing credit facilities 80% 74.4% 75.5% 75.9% 78.9% 71.6% 300 • Strong cash flows 279 70% • Diligent balance sh
Slide 34: Return on capital
Return on capital Capacity utilization boosts returns Return on capital • Development of Return on Capital Employed mainly driven by strong operating profitability 30% 26.1% 24.6% • Bridge to Return on Invested Capital 25% 22.7% • Impact from CHF 1,000 m 21.1% 19.9% goodwill: –10.3% 20% • Impact fro
Slide 35: Effective tax rate
Effective tax rate ETR expected to fluctuate around 17.5% Effective tax rate in % • ETR target range since 2019: 16–19% 25% • In 2021 shift of taxable profit towards higher 17.6% 20.0% adj. tax rate countries, partially counterbalanced 20% with usage of tax loss carryforwards 17.5% 17.8% 16.1% • 201
Slide 36: Payout ratio
Payout ratio Increased dividend payout Payout ratio in % Payout per share in CHF • BoD to propose a payout per share of CHF 2.20 • out of retained earnings 50% 44.8% 4.0 • total cash out CHF 82.5 m 3.5 38.7% • payout ratio 33.3% 40% 36.9% 36.5% 33.3% 3.0 32.7% • Total cash out will be max. CHF 86.0
Slide 37: KPI summary
KPI summary Good growth, healthy profitability and funding In CHF million 2021 % 2020 % YOY Sales – 1,893.1 – 1,704.9 – +11.0% EBITDA margin 407.1 21.5% 327.6 19.2% +230 bps EBIT margin 301.7 15.9% 227.4 13.3% +260 bps Net income margin 248.0 13.1% 184.8 10.8% +230 bps Equity ratio 1,450.4 78.9% 1,2
Slide 38: Outlook 2022
Outlook 2022 Presentation FY 2021 results | March 4, 2022 38
Slide 39: Guidance 2022
Guidance 2022 SFS stand-alone, w/o Hoffmann 2021A 2022G: mid-term guidance Gross sales CHF 1'893 m Growth 3–6% (in local currencies, incl. M&A but w/o Hoffmann) EBIT margin 15.9% 13–16% A = Actual G = Guidance • Guidance will be updated after closing of the Hoffmann transaction Presentation FY 2021
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: Q&A
Q&A Presentation FY 2021 results | March 4, 2022 41
Slide 42: Q&A Any questions?
Q&A Any questions? Jens Breu Volker Dostmann Chief Executive Officer Chief Financial Officer Presentation FY 2021 results | March 4, 2022 42
Slide 43: Coming up – Our IR agenda for FY2022
Coming up Our IR agenda for FY2022 • Annual General Meeting: IR Contact: 27 April 2022 (without physical presence) investor.relations@sfs.com • Publication of Sustainability Report 2021 https://sustainability.sfs.com/en End of May • Investor Day, Nuremberg (DE) After closing of Hoffmann transaction
Slide 44: Thank you for your attention
Thank you for your attention Presentation FY 2021 results | March 4, 2022 44
Slide 45: Presentation FY 2021 results | March 4, 2022
Presentation FY 2021 results | March 4, 2022 45
Slide 46: 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