Oc Oerlikon Corporation Ag · SIX:OERL
Oc Oerlikon — Q2 2020 Earnings Presentation
26 slides from Oc Oerlikon's earnings presentation, Aug 4, 2020
Slide 1: Cost/cash measures ahead of schedule – Manmade Fibers Segment on track
Cost/cash measures ahead of schedule – Manmade Fibers Segment on track Dr. Roland Fischer, CEO Philipp Müller, CFO 2Q20 and 1H20 Results Pfäffikon, August 4, 2020
Slide 2: Agenda
Agenda 1 Business Update and Oerlikon’s response to COVID-19 pandemic impacts 2 2Q20 Financial and Business Review 3 Appendix Page 2 Oerlikon Analyst Presentation - Q2 2020 August 4, 2020
Slide 3: Manmade Fibers remains on track; cost/cash measures in Surface Solutions ahead of schedule
Manmade Fibers remains on track; cost/cash measures in Surface Solutions ahead of schedule ▪ 1H order intake at CHF 510 million positions segment well for future 1 Manmade Fibers remains on track despite COVID-19 pandemic ▪ 2020 delivery schedules remain on track ▪ Nonwoven business concluded 15 con
Slide 4: Our Priority: adjust the structural cost base to return to 16–18% Group EBITDA margin
Our Priority: adjust the structural cost base in order to return to 16 – 18% Group EBITDA margin Program is focused on Surface Solutions ▪ Optimization focus areas: ▪ HQ and support function optimization ▪ Structural footprint and legal entity rationalization ▪ Rightsizing Additive Manufacturing ▪ P
Slide 5: Expected near-term impacts of COVID-19 pandemic on Oerlikon's served markets
Expected near-term impacts of COVID-19 pandemic on Oerlikon’s served markets Filament and General Industrial Tooling Automotive Aviation Nonwoven & Other ▪ Large filament producers ▪ Sharp deterioration in industrial ▪ Sharp deterioration in industrial ▪ Global production volumes ▪ COVID-19 create p
Slide 6: Improving resilience to position the Group well for the post global pandemic environment
Improving resilience to position the Group well for the post global pandemic environment 1 World-class Surface Solutions technology leader that will emerge from the crisis more profitable and with higher returns 2 Broader and stronger Manmade Fibers Segment that continues to deliver above average re
Slide 7: Agenda
Agenda 1 Business Update and Oerlikon’s response to COVID-19 pandemic impacts 2 2Q20 Financial and Business Review 3 Appendix Page 7 Oerlikon Analyst Presentation - Q2 2020 August 4, 2020
Slide 8: Group impacted by COVID-19 pandemic in 2Q20; OMF performed well with strong bookings
Group impacted by COVID-19 pandemic in 2Q20; OMF performed well with strong bookings in CHF million 2Q20 2Q19 y-o-y HY20 HY19 y-o-y ▪ 2Q20 Group Orders declined by 10.1% vs. 2Q19 due to significant COVID-19 impact on Surface Solutions – Order intake 604 672 -10.1% 1'081 1'352 -20.1% Manmade Fibers o
Slide 9: Surface Solutions Segment – performance impacted by slowdown in all end markets
Surface Solutions Segment – performance impacted by slowdown in all end markets, cost actions initiated OPERATIONAL PERFORMANCE MARKET DEVELOPMENT 3% Asia / Pacific ▪ Global lock-downs had a significant negative impact on ▪ All end-markets have been heavily impacted by the 22% sales across geographi
Slide 10: Manmade Fibers Segment – strong 2Q order intake; full year deliveries on-track
Manmade Fibers Segment – strong 2Q order intake; Full year deliveries on-track OPERATIONAL PERFORMANCE MARKET DEVELOPMENT 5% Asia / Pacific ▪ Strong order bookings in 2Q20 of CHF 366m – ▪ Textile Applications (Filament/Texturing) with continued 3% 14% 1H order intake > 500M strong market conditions
Slide 11: Strong balance sheet with an equity ratio of 37% despite COVID-19 pandemic and dividend in 1H20
Strong balance sheet with an equity ratio of 37 % despite COVID-19 pandemic and dividend in 1H20 in CHF million H1 2020 FY 2019 Cash and cash equivalents 600 658 Trade and trade notes receivables 291 309 Inventories 359 338 Property, plant and equipment 591 634 Goodwill and intangible assets 1’131 1
Slide 12: Prioritization of CAPEX investments in 1H; in line with strategy to improve capital efficiency
Prioritization of CAPEX investments in 1H; in line with strategy to improve capital efficiency CapEx Depreciation & amortization1 CapEx / depr. & amort. ratio In CHF million In CHF million -27% 66 0% 1.71 1.8 48 63 63 1.6 1.43 1.44 1.47 1.42 1.4 1.2 1.09 1.0 1.16 1.01 0.8 0.76 0.6 0.4 0.2 0.0 1H19 1
Slide 13: Consolidated cash flow statement 1H20
Consolidated cash flow statement 1H20 in CHF million -58 658 59 -64 -57 600 14 -10 ▪ Cash from operating activities of CHF -5 m benefited from tight capital controls during challenging markets ▪ Investing cash flow reflects a disciplined use of cash with purchases of PPE reduced by CHF 30m YoY ▪ Fin
Slide 14: Summary and Q&A
Summary and Q&A 1 Strong order bookings of over CHF 500m and operational performance from Manmade Fibers in 1H20 in spite of the COVID-19 pandemic 2 Surface Solutions impacted by COVID-19 resulting from lower economic activities; technology, innovation and market position to take advantage of market
Slide 15: Agenda
Agenda 1 Business Update and Oerlikon’s response to COVID-19 pandemic impacts 2 2Q20 Financial and Business Review 3 Appendix Page 15 Oerlikon Analyst Presentation - Q2 2020 August 4, 2020
Slide 16: Net income impacted by COVID-19 pandemic
Net income impacted by COVID-19 pandemic in CHF million H1 2020 H1 2019 Δ Order intake 1’081 1’352 -20.1 % Sales 1’039 1’324 -21.5 % Operational EBITDA 114 218 -47.7 % In % of Sales 10.9% 16.4% EBITDA 92 214 In % of Sales -56.9% 8.9% 16.2% Operational EBIT 11 118 -90.5 % In % of Sales 1.1% 8.9% Resu
Slide 17: Reconciliation of Profitability Measures 1H 2020
Reconciliation of Profitability Measures 1H 2020 EBITDA to EBIT Bridges Group Surface Solutions Manmade Fibers in CHF million 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 EBITDA 92 214 35 125 56 91 Depreciation and Impairments -67 -66 -57 -56 -9 -9 EBITA 25 148 -22 69 47 82 Amortization of Acquir
Slide 18: Reconciliation of Profitability Measures 2Q 2020
Reconciliation of Profitability Measures 2Q 2020 EBITDA to EBIT Bridges Group Surface Solutions Manmade Fibers in CHF million 2Q 2020 2Q 2019 2Q 2020 2Q 2019 2Q 2020 2Q 2019 EBITDA 34 121 -4 64 37 57 Depreciation and Impairments -33 -33 -28 -28 -5 -4 EBITA 1 88 -32 36 33 53 Amortization of Acquired
Slide 19: Return On Capital Employed (ROCE)
Return On Capital Employed (ROCE) 1H 20201 FY 2019 12 Month Rolling EBIT 34 164 12.1% - Total current income tax -51 -65 - Total deferred tax income 32 26 NOPAT 14 125 8.2% 7.0% 5.7% Net Operating Assets 1’832 1’826 + Current income tax receivables 18 16 + Deferred tax assets 142 142 0.8% - Current
Slide 20: FX impact on Orders, Sales and EBITDA in 2Q 2020
FX impact on Orders, Sales and EBITDA in 2Q 2020 Order intake 2Q 2020 Sales 2Q 2020 EBITDA 2Q 2020 In CHF million In CHF million In CHF million -6.2% -6.0% -6.0% 644 542 36 604 40 510 32 34 2 0 0 0 6.7 6.7 Margin in % Q2 2020 Transaction Translation Q2 2020 FX Q2 2020 Transaction Translation Q2 2020
Slide 21: 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 1.2BN Segment: Segment: Segment: Segment: Segment: Segment: Rox Me
Slide 22: Oerlikon shares
Oerlikon shares Oerlikon shares Oerlikon shareholder structure1 as of March 31, 2020 ▪ Listed on Swiss Exchange (SIX) since 1973 Liwet Holding AG ▪ Securities symbol: OERL 41.34% ▪ Securities number 81 682 Black Creek IM ▪ ISIN: CH0000816824 Others (incl. 3.45 % treasury shares) 55.63% ▪ Number of s
Slide 23: Coverage – 7 Buy / Add – 5 Hold / Neutral – 1 Reduce
Coverage – 7 Buy / Add – 5 Hold / Neutral – 1 Reduce / Sell Broker Analyst Recommendation Date of last update Target price AlphaValue Luis Pereira Add 06/05/2020 9.00 Baader Helvea Christian Obst Reduce 01/07/2020 7.00 Berenberg Bank Marta Bruska n/a 05/03/2019 n/a Credit Suisse Patrick Laager Neutr
Slide 24: Financial Calendar 2020
Financial Calendar 2020 August 4, 2020 Q2 / HY 2020 results - Media & Analyst Conference Call November 3, 2020 Q3 / 9M 2020 results - Media & Analyst Conference Call Page 24 Oerlikon Analyst Presentation - Q2 2020 August 4, 2020
Slide 25: Investor Relations Contact
Investor Relations Contact 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 OC Oerlikon Management AG, Pfäffikon Churerstrasse 120 CH – 8808 Pfäffikon SZ Switzerland Page 25 Oer
Slide 26: 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