Andritz Ag · VIE:ANDR
Andritz — H1 2019 Earnings Presentation
31 slides from Andritz's earnings presentation, Aug 2, 2019
Slide 1: Results for Q2 / H1 2019
RESULTS FOR Q2 / H1 2019 ANDRITZ GROUP AUGUST 2, 2019
Slide 2: Chapter Overview
CHAPTER OVERVIEW 01 Q2 2019 AT A GLANCE 02 PERFORMANCE Q2 2019 AND MARKET UPDATE 03 UPDATE OF BUSINESS AREAS 04 2 / ANDRITZ / RESULTS OF THE ANDRITZ GROUP FOR H1 2019 / AUGUST 2, 2019 / © ANDRITZ GROUP
Slide 3: Q2 2019 at a Glance
Q2 2019 AT A GLANCE Overall solid business development, however mixed by business area • Group order intake, at over 2 billion euros, reached the second highest quarterly order intake in the company’s history • Very high order intake in Pulp & Paper with strong development across all divisions • Hyd
Slide 4: Chapter Overview
CHAPTER OVERVIEW 01 Q2 2019 AT A GLANCE 02 PERFORMANCE Q2 2019 AND MARKET UPDATE 03 UPDATE OF BUSINESS AREAS 04 4 / ANDRITZ / RESULTS OF THE ANDRITZ GROUP FOR H1 2019 / AUGUST 2, 2019 / © ANDRITZ GROUP
Slide 5: Significant Increase of Order Intake in Q2 2019
SIGNIFICANT INCREASE OF ORDER INTAKE IN Q2 2019 Mainly driven by strong increase in Pulp & Paper; Hydro, Metals, Separation down y/y ORDER INTAKE Q2 2019 (IN MEUR) ORDER INTAKE BY BUSINESS AREA (IN MEUR) ORDER INTAKE H1 2019 (IN MEUR) Q2 2019 Q2 2018 +/- +13% Hydro 288 318 -10% 3,705 Pulp & Paper 1,
Slide 6: Quarterly Development of Order Intake
QUARTERLY DEVELOPMENT OF ORDER INTAKE Aggregated order intake of the last four quarters amounts to ~7.1 bn. EUR ORDER INTAKE BY REGION MEUR +18% MEUR H1 2019 (H1 2018) IN % 2,500 2,250 8,000 1,908 2,047 2,000 1,737 1,658 Emerging Markets: 1,431 1,470 1,532 1,560 1,467 1,533 1,469 6,000 46% (49%) 4%
Slide 7: Increase of Group Sales Driven by Pulp & Paper
INCREASE OF GROUP SALES DRIVEN BY PULP & PAPER Very favorable development in Pulp & Paper; Hydro and Metals down on q/q SALES Q2 2019 (IN MEUR) SALES BY BUSINESS AREA (IN MEUR) SALES H1 2019 (IN MEUR) Q2 2019 Q2 2018 +/- Hydro 337 375 -10% Pulp & Paper 708 551 +29% +11% Metals 371 395 -6% 3,062 Sepa
Slide 8: Further Increase of Service Business
FURTHER INCREASE OF SERVICE BUSINESS Quarterly development of service sales (in MEUR) +27% 800 2,600 702 * 700 651 558 560 594 587 2,400 600 514 511 461 470 465 468 465 482 469 2,200 500 403 437 428 400 2,000 300 1,800 200 1,600 100 0 1,400 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
Slide 9: Service Business by Business Area
SERVICE BUSINESS BY BUSINESS AREA % of total business area sales HYDRO PULP & PAPER ANDRITZ Fabrics and Rolls provides machine clothings 54 48 and roll covers for paper, tissue, and board machines. 41 42 35 37 26 25 26 29 28 28 2014 2015 2016 2017 2018 H1 2019 2014 2015 2016 2017 2018 H1 2019 METALS
Slide 10: Group Order Backlog Significantly Up Compared to End of 2018
GROUP ORDER BACKLOG SIGNIFICANTLY UP COMPARED TO END OF 2018 ORDER BACKLOG (AS OF END OF PERIOD; IN MEUR) +13% ORDER BACKLOG Q2 2019 BY BUSINESS AREA 7,786 (IN %) 7,349 7,724 7,324 7,148 7,076 7,044 6,892 6,789 6,974 6,849 6,651 6,841 6,883 7,084 7,261 6,383 6,553 6% 21% 33% 40% Q1 15 Q2 15 Q3 15 Q4
Slide 11: Earnings and Profitability Practically Unchanged Despite Sales Increase
EARNINGS AND PROFITABILITY PRACTICALLY UNCHANGED DESPITE SALES INCREASE Unsatisfactory performance of Metals EBITA (IN MEUR) AND EBITA MARGIN Q2 2019 (IN %) EBITA (IN MEUR) AND EBITA MARGIN H1 2019 (IN %) Q2 2019: +7% • Despite increase in sales, EBITA remained 177.5 practically unchanged at 94.7 ME
Slide 12: Profitability by Business Area
PROFITABILITY BY BUSINESS AREA EBITA margin (%) HYDRO PULP & PAPER METALS SEPARATION 10.6 9.9 10.0 9.2 9.4 7.5 6.9 6.5 5.9 6.0 5.4 5.3 4.8 4.0 4.3 1.7 2.0 2.4 -2.3 -0.9 FY 2018 Q2 2018 Q2 2019 H1 2018 H1 2019 FY 2018 Q2 2018 Q2 2019 H1 2018 H1 2019 FY 2018 Q2 2018 Q2 2019 H1 2018 H1 2019 FY 2018 Q2
Slide 13: Improvement of Net Working Capital in Q2 2019
IMPROVEMENT OF NET WORKING CAPITAL IN Q2 2019 Mainly driven by Pulp & Paper • Increase of contract liabilities due to increase of advance/progress payments for projects • Reduction of trade accounts receivable 13 / ANDRITZ / RESULTS OF THE ANDRITZ GROUP FOR H1 2019 / AUGUST 2, 2019 / © ANDRITZ GROUP
Slide 14: Significant Increase in Cash Flow from Operating Activities
SIGNIFICANT INCREASE IN CASH FLOW FROM OPERATING ACTIVITIES From -101 MEUR in H1 2018 to +272 MEUR in H1 2019 IN MEUR Split of total depreciation: • ~85 MEUR depreciation, thereof • ~12 MEUR from newly acquired companies and • ~23 MEUR from IFRS 16 Leasing • ~44 MEUR IFRS 3 Amortization, thereof • ~
Slide 15: EBITDA – Net Income Bridge H1 2019 vs. H1 2018
EBITDA – NET INCOME BRIDGE H1 2019 VS. H1 2018 H1 2019 H1 2018 • Leasing IFRS 16 (~23 MEUR) • newly acquired companies (~12 MEUR) Thereof ~30 MEUR for newly acquired companies (mainly Xerium) Metals Increase in interest expenses due to increase in financial liabilities issuance of Schuldscheindarl
Slide 16: Key Figures Q2 2019 / H1 2019 at a Glance
KEY FIGURES Q2 2019 / H1 2019 AT A GLANCE Decline of net income UNIT H1 2019 H1 2018 +/- Q2 2019 Q2 2018 +/- 2018 mainly due to • increased Order intake MEUR 3,705.2 3,269.3 +13.3% 2,047.1 1,736.5 +17.9% 6,646.2 depreciation and amortization of Order backlog (as of end of period) MEUR 7,724.2 6,841.
Slide 17: Chapter Overview
CHAPTER OVERVIEW 01 Q2 2019 AT A GLANCE 02 03 UPDATE OF BUSINESS AREAS 04 17 / ANDRITZ / RESULTS OF THE ANDRITZ GROUP FOR H1 2019 / AUGUST 2, 2019 / © ANDRITZ GROUP
Slide 18: Hydro (1): Unchanged Moderate Market Environment
HYDRO (1): UNCHANGED MODERATE MARKET ENVIRONMENT Selective award of individual projects, particularly in the growing Asian market • New hydropower plants Some new, larger projects are currently in the planning phase, especially in Southeast Asia and Africa; selective award of individual projects is
Slide 19: Hydro (2): Despite Decline in Sales, Improved Earnings and Margin Development
HYDRO (2): DESPITE DECLINE IN SALES, IMPROVED EARNINGS AND MARGIN DEVELOPMENT Order intake at unchanged low level UNIT H1 2019 H1 2018 +/- Q2 2019 Q2 2018 +/- 2018 Order intake below the low Order intake MEUR 601.8 753.1 -20.1% 287.9 318.2 -9.5% 1,445.8 level of last year Order backlog (as of end of
Slide 20: Pulp & Paper (1): Very Good Market Environment
PULP & PAPER (1): VERY GOOD MARKET ENVIRONMENT The HERB recovery boilers from ANDRITZ • Pulp maximize the production of green energy in pulp mills Very good project activity for both modernization of existing pulp mills and greenfield pulp mills (particularly in South America) • Paper Satisfactory m
Slide 21: Major Pulp Orders Received
MAJOR PULP ORDERS RECEIVED The white liquor plant delivered by ANDRITZ in 2016 for • Long-term maintenance and service contract for Arauco‘s MAPA project in Klabin’s pulp mill in Ortigueira, Paraná, Brazil, has one of the world’s largest recausticizing plants, with Chile. The service agreement for t
Slide 22: Pulp & Paper (2): Very Favorable Business Development
PULP & PAPER (2): VERY FAVORABLE BUSINESS DEVELOPMENT Strong increase in order intake; earnings and profitability at favorable levels Order intake significantly UNIT H1 2019 H1 2018 +/- Q2 2019 Q2 2018 +/- 2018 up, both for the capital and Order intake MEUR 1,925.7 1,180.9 +63.1% 1,118.8 723.5 +54.6
Slide 23: Metals (1): Continued Low Project and Investment Activity in Metals Forming
METALS (1): CONTINUED LOW PROJECT AND INVESTMENT ACTIVITY IN METALS FORMING • Metals Forming Unchanged moderate project and investment activity due to the continuing weak international automotive market as well as due to the economic slow down in China • Metals Processing Reduced project activity. O
Slide 24: Restructuring of Schuler
RESTRUCTURING OF SCHULER Necessary cost and capacity cuts to reduce underabsorption Schuler headquarters in Göppingen, Germany. • Worldwide very low investment activity by automobile producers and their suppliers • Cost base of Schuler in Germany not competitive • Restructuring necessary to ensure l
Slide 25: Schuler: Order Intake and Sales 2013-H1 2019
SCHULER: ORDER INTAKE AND SALES 2013-H1 2019 Despite acquisitions order intake practically flat over the last five years ORDER INTAKE AND SALES (IN MEUR) AGGREGATED EBITDA 2013- H1 2019 (IN MEUR) • Purchased in 2013 (purchase price: 611 676 ~600 MEUR) business plan 1,233 1,2551,212 assumed lower s
Slide 26: Metals (2): Unsatisfactory Business Development
METALS (2): UNSATISFACTORY BUSINESS DEVELOPMENT Earnings and profitability down in Metals Processing and Metals Forming UNIT H1 2019 H1 2018 +/- Q2 2019 Q2 2018 +/- 2018 Order intake in Q2 2019 Order intake MEUR 809.8 946.7 -14.5% 461.7 478.9 -3.6% 1,931.8 only slightly down y/y Order backlog (as of
Slide 27: Separation (1): Good Project and Investment Activity Continued
SEPARATION (1): GOOD PROJECT AND INVESTMENT ACTIVITY CONTINUED Particularly for solid/liquid separation equipment • Municipal Investment activity at unchanged good levels (sewage sludge dewatering and drying) • Industrial Good project activity in chemicals, mining, and minerals; investment activity
Slide 28: Separation (2): Improved Business Development
SEPARATION (2): IMPROVED BUSINESS DEVELOPMENT Order intake below the very high level of last year, which included a larger order Order intake in Q2 2019 UNIT H1 2019 H1 2018 +/- Q2 2019 Q2 2018 +/- 2018 below the high level of last Order intake MEUR 367.9 388.6 -5.3% 178.7 215.9 -17.2% 696.7 year, w
Slide 29: Chapter Overview
CHAPTER OVERVIEW 01 Q2 2019 AT A GLANCE 02 03 04 29 / ANDRITZ / RESULTS OF THE ANDRITZ GROUP FOR H1 2019 / AUGUST 2, 2019 / © ANDRITZ GROUP
Slide 30: Outlook: Guidance for 2019 Confirmed
OUTLOOK: GUIDANCE FOR 2019 CONFIRMED Largely unchanged prospects for markets served • For 2019, ANDRITZ continues to expect a significant increase in sales compared to 2018 due to high order backlog and sales contributions by the companies acquired in 2018 • Profitability (EBITA margin) expected to
Slide 31: Disclaimer
DISCLAIMER This presentation contains valuable, proprietary property belonging to ANDRITZ AG or its affiliates (“the ANDRITZ GROUP”), and no licenses or other intellectual property rights are granted herein, nor shall the contents of this presentation form part of any sales contracts that may be con