Oc Oerlikon Corporation Ag · SIX:OERL
Oc Oerlikon — FY2023 Earnings Presentation
34 slides from Oc Oerlikon's earnings presentation, Feb 20, 2024
Slide 1: 2023 Financial Results
2023 Financial Results 20 February 2024 Page 1
Slide 2: Agenda
Agenda 1 Strategy Update & 2023 Overview 2 Financials & Outlook 3 Q&A Page 2
Slide 3: Oerlikon finalizing portfolio transformation started 10 years ago
Oerlikon finalizing portfolio transformation started 10 years ago From 5 Divisions in 2014 … To 2 Divisions 2019 - 2024 2024 - 2026 ▪ Limited synergies given Surface different end markets, Solutions geographies, customers, Market Leaders in business models and cycles sweet spots with technology entr
Slide 4: By taking the last step Oerlikon unlocks value for Polymer Processing Solutions
By taking the last step Oerlikon unlocks value for Polymer Processing Solutions Distinguish and leverage potential of attractive asset Attractive asset with low capital intensity; benefiting from structural mid- 1 term growth driven by increasing population/wealth and limited alternatives: Filament
Slide 5: By taking the last step Oerlikon unlocks value for Surface Solutions
By taking the last step Oerlikon unlocks value for Surface Solutions Become distinct and agile in a fragmented market Become agile, dynamic and independent by merging overhead; set free 1 capacity, supporting efficient operations in tensed geopolitical environment Unlock Pure focus on growth opportu
Slide 6: Developed Surface Solutions into a diversified technology leader close to customers
Developed Surface Solutions into a diversified technology leader close to customers 2013 2023 End markets focused on Tooling Diversified end markets aligned to key megatrends Sales Energy Diversified Luxury Tooling the end Automotive Tooling General markets industry Automotive Aviation Specialized i
Slide 7: Oerlikon Surface Solutions is well positioned for profitable growth
Oerlikon Surface Solutions is well positioned for profitable growth Market leader in sweet spot with technology entry barrier Attractively #1 >30k positioned Market leader Integrated Global and diverse Customers incl. in surface solutions high-tech offering end markets industry leaders 4 - 6% profit
Slide 8: 2023 summary
2023 summary Managed short-term headwinds and executed operationally Financials 2.5bn 2.7 bn 16.5% 8.7% 2023 Order intake Sales Op. EBITDA margin Operational EBIT margin ▪ Group financials impacted by downturn in Polymer Processing Solutions; expect the division to benefit in 2024 from implemented c
Slide 9: 2023: Challenging macro environment impacting Oerlikon
2023: Challenging macro environment impacting Oerlikon Macro challenges … … weighing on industrial production in Surface Solutions Geopolitical tensions + Subdued recovery in China + High inflation Impacting + Oerlikon … weighing on customers’ Cautious consumer spending profitability in Polymer Proc
Slide 10: Challenging end markets
Challenging end markets Surface Solutions Polymer Processing Solutions General Ind. & Tooling Automotive Luxury Aviation Filament Non-Filament 28% of 2023 Group sales 14% 6% 8% 26% 18% 2023 markets 2024E markets 2023 2024E 2023 2024E 2023 2024E 2023 2024E 2023 2024E ▪ Euro Area and US ▪ Receiving mi
Slide 11: Continued operational execution despite challenging environment
Continued operational execution despite challenging environment Lead in Drive Strengthen innovation sustainability resilience p. 12-13, 28-29 p. 14, 23, 27 p. 18 Next generation coatings extending Optimized portfolio towards structurally On track with 2030 ESG targets technology leadership higher pr
Slide 12: Extending technology leadership with next generation surface solutions
Oerlikon is extending its’ technology leadership with next generation surface solutions Leadership across broad Innovations Applied across diversified technology portfolio end markets 1. BALINIT ALCRONA EVO coating solution p.13 1. Tooling 2. BALINIT MAYURA coating solution 2. Tooling 3. BALIQ TISIN
Slide 13: Deep dive: BALINIT ALCRONA success story
Deep dive: BALINIT ALCRONA success story BALINIT ALCRONA BALINIT ALCRONA PRO BALINIT ALCRONA EVO 2004 launch 2010 launch 2024 launch “A revolutionary tool coating has just opened a ▪ Introduced new standard 2 representing ▪ Defining once again new benchmark in completely new productivity dimension i
Slide 14: Sustainability is in Oerlikon's DNA
Sustainability is in Oerlikon’s DNA Progress towards Oerlikon’s coatings for Tooling and 2030 ESG targets Aviation save >100% of Swiss CO2 emissions Scope 1 & 2: Reduced emission intensity 1 : ▪ 100% electricity from renewable 0 20x lifetime extension 2 of a metal sources now used in 26 sites tool t
Slide 15: Conclusion: 2023 with robust operational execution, future-proofing the company
Conclusion: 2023 with robust operational execution, future- proofing the company Market leaders in sweet spot with technology entry barrier 2 attractively ▪ #1 in coating solutions and filament positioned ▪ Strong value proposition & small cost on customers’ bill of material divisions ▪ Cutting-edge
Slide 16: Financials & Outlook
Financials & Outlook Philipp Müller CFO
Slide 17: 2023 financial overview
2023 financial overview 2023 sales and margins impacted by challenging markets ▪ Order intake -12.6% YoY FX adj., FX with significant headwind: including +4.2% from M&A 1 Vs CHF Since Jan 2023 3) Since Jan 2020 3) -17.8% FX adj.: -12.6% ▪ Driven by postponements in Polymer 2’990 Orders Processing So
Slide 18: Strengthening the base for profitable growth
Strengthening the base for profitable growth Admin expenses ▪ 24% overhead savings since 2019, despite 3 acquisitions -24% 276 Cost ▪ Proactive cost actions initiated in 209 Q4’22 ahead of filament headwinds efficiency ▪ Continued focus on efficiency incl. digitalization and footprint optimization o
Slide 19: Surface Solutions with 7% organic sales growth despite contracting PMIs
Surface Solutions with 7% organic sales growth despite contracting PMIs Markets Orders Sales Operational EBITDA ▪ Cautious customer purchasing ▪ Increased +13.2% FX adjusted; ▪ Improved +16.4% FX adj. incl. +9.4% ▪ Margin impacted by higher input costs behavior in 2023 due to macro including +8.9% f
Slide 20: Polymer Processing Solutions impacted by order postponements; cost measures on track
Polymer Processing Solutions impacted by order postponements; cost measures on track Markets Orders Sales Operational EBITDA ▪ Filament market impacted by customers ▪ Impacted mainly by order ▪ Impacted by order postponements in ▪ Margin affected by operating leverage, postponing orders; structural
Slide 21: Focus on Cash Flow and ROCE
Focus on Cash Flow and ROCE Operating FCF Underlying ROCE impacted by Filament downturn impacted by challenging environment 2023 ▪ Operating FCF transitorily impacted by NWC 2023 ▪ Reached 7.7% operational ROCE 1 when excluding Riri, down YoY and lower EBITDA mainly due to lower operational EBITDA a
Slide 22: Focus on balance sheet and dividend
Focus on balance sheet and dividend Net debt / operational EBITDA transitory Commitment to maintaining balance sheet higher strength ▪ Increased to 2.6x ▪ Expect YE’24 leverage ratio to be between 2.5x and 3.0x ▪ Driven by Riri acquisition and filament ▪ Continued tight focus on cost, NWC, Capex and
Slide 23: Leading ESG ratings
Leading ESG ratings 1 Oerlikon ESG rated top 15% within industrial sector Sustainalytics MSCI EcoVadis ISS ESG 19 C 21 AAA low medium risk 61 risk AA 52 Silver C- Bronze 29 A <45 D+ External medium risk validation and Sector average 2023 score Current Sector average 2023 score Current Sector average
Slide 24: 2024 Guidance
2024 Guidance Surface Solutions growth offset by postponements in Polymer Processing; improving economics of filament customers ▪ Sales impacted by customers’ postponed investment decisions in Polymer Processing 1 High single- Sales digit % Solutions; partly offset by growth in Surface Solutions dec
Slide 25: cerlikon
cerlikon
Slide 26: Appendix
Appendix
Slide 27: On track with 2030 ESG targets
On track with 2030 ESG targets 2023 updates Progress towards 2030 targets 0 ▪ GHG emission intensity (scope 1&2) Reduce emission benefiting from more renewables and energy intensity (scope 1&2) in relevant Reduce % of 21% efficiency actions, e.g. 26 sites now use 27% electricity from 100% renewable
Slide 28: Leveraging core competencies to grow in adjacent markets: battery shielding
Oerlikon is leveraging its’ core competencies to grow in adjacent markets: battery shielding Leadership in surface Expanded into heat Oerlikon global reach 1 and materials knowhow 2 shielding technology 3 and customer base ▪ Surface Solutions with long-standing track record ▪ Acquired thermal insula
Slide 29: Oerlikon continues to lead innovation in Filament winders
Oerlikon continues to lead innovation in Filament winders WINGS POY WINGS POY 1800 & 2024 Continue 2007 launch 2014 WINGS FDY launch 2025 to innovate ▪ Disrupted POY market with new technology; ▪ Launched WINGS FDY (2011) with ▪ Continue defining benchmark in winder became immediately blockbuster re
Slide 30: 2023 reconciliation of profitability measures
2023 reconciliation of profitability measures EBITDA to EBIT bridge 1 Impairment mainly related to AM realignment Group Surface Solutions Polymer Processing Solutions Impairment mainly related to FY 23 FY 22 FY 23 FY 22 FY 23 FY 22 2 discontinued Teknoweb EBITDA 384 418 230 226 143 193 One-off provi
Slide 31: Q4 reconciliation of profitability measures
Q4 reconciliation of profitability measures EBITDA to EBIT bridge 1 Impairment mainly related to AM realignment Group Surface Solutions Polymer Processing Solutions Q4' 23 Q4' 22 Q4' 23 Q4' 22 Q4' 23 Q4' 22 Impairment mainly related to 2 discontinued Teknoweb EBITDA 64 55 48 49 15 5 One-off provisio
Slide 32: Return on Capital Employed (ROCE)
Return on Capital Employed (ROCE) 2022 2023 12.1% 10.8% EBIT 176 105 - Total current income tax -89 -67 7.7% excl. M&A - Total deferred income tax 20 25 8.2% 7.6% NOPAT 107 63 7.0% 6.5% 5.7% Net Operating Assets 2'063 2'429 + Current income tax receivables 19 27 3.1% 5.3% + Deferred tax assets 117 1
Slide 33: Investor Relations
Investor Relations Stephan Gick Stephan.gick@oerlikon.com +41 58 360 98 50 Aymeric Jamin Aymeric.jamin@oerlikon.com +41 58 360 96 59 ir@oerlikon.com www.oerlikon.com/en/investors
Slide 34: 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