Andritz Ag · VIE:ANDR
Andritz — Andritz Ag Graz Akt — Q3 2023 Earnings Presentation
32 slides from Andritz's earnings presentation, Nov 2, 2023
Slide 1: Andritz Group Results Q3 / Q1-Q3 2023
ANDRITZ GROUP RESULTS Q3 / Q1-Q3 2023 NOVEMBER 2, 2023
Slide 2: Agenda: Q3 2023 at a glance
AGENDA 1 Q 3 2 0 2 3 AT A G L AN C E
Slide 3: Strong growth of revenue and earnings, backlog remains elevated
STRONG GROWTH OF REVENUE AND EARNINGS, BACKLOG REMAINS ELEVATED DESPITE WEAK LARGE ORDER BOOKINGS IN Q3 Major financial KPIs Q3 2023 ORDER INTAKE REVENUE ORDER BACKLOG 1.8 billion EUR 2.1 billion EUR 10.4 billion EUR (Q3 2022: 2.7 billion EUR / -33%) (Q3 2022: 1.9 billion EUR / +11%) (Q3 2022: 10.8
Slide 4: Year-to-date book-to-bill ratio above 1 with strong conversion of backlog
YEAR-TO-DATE BOOK-TO-BILL-RATIO ABOVE 1 WITH STRONG CONVERSION OF BACKLOG INTO REVENUE AND EARNINGS Major financial KPIs Q1-Q3 2023 ORDER INTAKE REVENUE ORDER BACKLOG 6.5 billion EUR 6.2 billion EUR 10.4 billion EUR (Q1-Q3 2022: 7.5 billion EUR / -13%) (Q1-Q3 2022: 5.2 billion EUR / +19%) (Q1-Q3 202
Slide 5: Dedert International acquisition
DEDERT INTERNATIONAL ACQUISITION Strengthening our position with dryers and evaporators for the starch, proteins and biofuel industry • A leading engineering company offering complementary technologies in growing markets with a good regional fit • Combined portfolio enables complete solutions from d
Slide 6: NAF acquisition
NAF ACQUISITION Strengthening our automation solutions with a complementary key player in the valve segment of the pulp and paper industry • NAF manufactures manual, automated, and control valves for safe process control in Pulp & Paper mills • Development of integrated process and automation soluti
Slide 7: Agenda: Performance Q-Q / Y-Y
AGENDA 2 P E R F O R M AN C E Q 1 - Q 3 / Q 3 2 0 2 3
Slide 8: Service and mid-size projects well on track, missing large orders in Pulp & Paper
SERVICE AND MID-SIZE-PROJECTS WELL ON TRACK, MISSING LARGE ORDERS IN PULP & PAPER Q3 2022 included 1,000 MEUR Order intake (OI) from two large projects ORDER INTAKE* ORDER INTAKE BY BUSINESS AREA* ORDER INTAKE BY REGION Q1-Q3 2023 VS. Q1-Q3 2022 (%) -13% Q3 2023 Q3 2022 +/- Pulp & Paper 615 1,529 -6
Slide 9: Growing order intake from service and mid-size capital business
GROWING ORDER INTAKE FROM SERVICE AND MID-SIZE CAPITAL BUSINESS Missing OI from large projects determines decrease in Q1-Q3 2023 Order intake IN MEUR 9,263 1,767 8,328 7,880 893 7,282 1,213 6,646 6,516 1,394 6,101 6,018 655 6,108 785 5,611 5,580 5,578 666 635 273 832 287 117 4,143 4,075 4,924 710 3,
Slide 10: Significant increase of revenue based on execution of high order backlog
SIGNIFICANT INCREASE OF REVENUE BASED ON EXECUTION OF HIGH ORDER BACKLOG Significant increase in Q1-Q3 2023 in all four business areas mainly driven by large capital orders REVENUE* REVENUE BY BUSINESS AREA* REVENUE SPLIT: CAPITAL / SERVICE Q1-Q3 2023 VS. Q1-Q3 2022 (%) Q3 2023 Q3 2022 +/- +19% Pulp
Slide 11: Stable growth of service revenue
STABLE GROWTH OF SERVICE REVENUE 5-yr CAGR of 9.0% well above growth target for the group IN MEUR 3,319 2,999 2,666 2,608 2,443 2,424 2,155 2018 2019 2020 2021 2022 last 4 Q1-Q3 2023 quarters 11 / ANDRITZ / RESULTS OF THE ANDRITZ GROUP FOR Q1-Q3 2023 / NOVEMBER 2, 2023 / © ANDRITZ GROUP
Slide 12: Stable growth of service business continues to support profitability (Q3)
STABLE GROWTH OF SERVICE BUSINESS CONTINUES TO SUPPORT PROFITABILITY Q3 2023: Service revenue and share of total revenue PULP & PAPER METALS ANDRITZ GROUP 25% (26%) 423 MEUR 43% 115 MEUR (Q3 22: (46%) (Q3 22: 394 MEUR) 57% 103 MEUR) (64%) 75% 39% (74%) Service revenue (40%) 829 MEUR (Q3 22: 763 MEUR
Slide 13: Stable growth of service business continues to support profitability (Q1-Q3)
STABLE GROWTH OF SERVICE BUSINESS CONTINUES TO SUPPORT PROFITABILITY Q1-Q3 2023: Service revenue and share of total revenue PULP & PAPER METALS ANDRITZ GROUP 24% (25%) 1,233 MEUR 42% 330 MEUR (Q1-Q3 22: (46%) (Q1-Q3 22: 1,101 MEUR) 286 MEUR) 58% (64%) 39% 76% (75%) Service revenue (40%) 2,424 MEUR (
Slide 14: Order backlog of 10.4 billion EUR ensures sufficient workload
ORDER BACKLOG OF 10.4 BILLION EUR AT END OF Q3 2023 ENSURES SUFFICIENT WORKLOAD IN FUTURE QUARTERS Order Backlog supports nearly 1 year secured capital revenue -4% IN MEUR ORDER BACKLOG BY BUSINESS AREA 10,822 Q1-Q3 2023 VS. Q1-Q3 2022 10,408 10,569 10,361 9,859 9,977 9,435 Separation IN MEUR 8,121
Slide 15: Earnings significantly increased due to strong sales growth
EARNINGS SIGNIFICANTLY INCREASED DUE TO STRONG SALES GROWTH AND IMPROVED UNDERLYING PROFITABILITY Profitability remains on a very solid level EBITA AND EBITA MARGIN* EBITA AND EBITA MARGIN* (REPORTED) (ADJUSTED) +20% +21% 509.0 513.2 (8.2%) (8.3%) EBITA (reported) significantly up q/q and y/y 425.8
Slide 16: Stable operational profitability in all business areas, Metals further improving
STABLE OPERATIONAL PROFITABILITY IN ALL BUSINESS AREAS, METALS FURTHER IMPROVING Reported EBITA margin (in %) PULP & PAPER METALS GROUP 8.4 8.2 8.2 8.1 10.1 10.0 10.4 10.3 3.6 4.7 4.5 2.3 Q1-Q3 Q1-Q3 Q3 2022 Q3 2023 Q1-Q3 Q1-Q3 Q3 2022 Q3 2023 2022 2023 2022 2023 HYDRO SEPARATION 12.2 11.7 11.6 12.2
Slide 17: EBITDA to net income bridge Q1-Q3 2023
EBITDA TO NET INCOME BRIDGE Q1-Q3 2023 Favorable development of amortization and financial results support further increase in net income margin IN MEUR TAX RATE: 26.5% (557.1)* (26.5%)* EPS: 3.55 EUR (2.71 EUR)* (425.8)* (-131.3)* (377.7)* (357.1)* (-48.1)* (-20.6)* (262.3)* (-94.8)* 10.2%** 8.2%**
Slide 18: Cash flow from operating activities Q1-Q3 2023
CASH FLOW FROM OPERATING ACTIVITIES Q1-Q3 2023 Cash Flow Q1-Q3 turned positive due to strong Q3 IN MEUR (-51.2)* Change in net working capital: -286 MEUR increase in contract assets (-) (179.4)* -117 MEUR increase in inventories (-) +108 MEUR decrease in receivables (+) -58 MEUR decrease in liabilit
Slide 19: Cash flow development
CASH FLOW DEVELOPMENT Cash Flow volatility is driven by working capital fluctuations during regular "order to cash cycle“ in capital business – average Free Cash Flow 2016-2022 at 308 MEUR 822 IN MEUR 711 665 530 526 462 367 370 330 247 last 7y avg. 264 Free Cash Flow 308 MEUR 130 75 8 -83 -129 2016
Slide 20: Cash flow development
CASH FLOW DEVELOPMENT Cash Flow volatility is driven by working capital fluctuations during regular "order to cash cycle" in capital business IN MEUR OPERATING CASH FLOW 3-YEARS ROLLING AVERAGE OPERATING CASH FLOW 604 346 567 268 447 430 227 207 359 186 296 155 154 264 207 84 69 57 43 31 30 -31 -48
Slide 21: Liquidity remains strong
LIQUIDITY REMAINS STRONG Net Liquidity increased in Q3 2023 by 125 MEUR with liquid funds stable at ~1.6 billion EUR Optimization of balance sheet by 100 MEUR Schuldscheindarlehen repayment in Q3 2023 Note: Since January 1, 2019, lease liabilities are excluded from the calculation of net liqudity; 2
Slide 22: Key figures Q3/Q1-Q3 2023 at a glance
KEY FIGURES Q3/Q1-Q3 2023 AT A GLANCE Revenue and earnings significantly increased, order intake and cash flow less favorable UNIT Q3 2023 Q3 2022 +/- Q1-Q3 2023 Q1-Q3 2022 +/- 2022 Order intake MEUR 1,804 2,683 -33% 6,516 7,451 -13% 9,263 • Order intake reduced due to missing large orders mainly in
Slide 23: Agenda: Update of business areas
AGENDA 3 U P D AT E O F B U S I N E S S AR E AS
Slide 24: Pulp & Paper: strong increase in revenue and earnings, less OI from large orders
PULP & PAPER: STRONG INCREASE IN REVENUE AND EARNINGS, BUT LESS OI FROM LARGE ORDERS OI q/q: > 700 MEUR large order booked in Q3 2022, but no major order booked in Q3 2023 UNIT Q3 2023 Q3 2022 +/- Q1-Q3 2023 Q1-Q3 2022 +/- 2022 ORDER INTAKE BY REGION Order intake MEUR 615 1,529 -60% 2,451 3,561 -31%
Slide 25: Metals: significant growth of revenue and strong increase in earnings
METALS: SIGNIFICANT GROWTH OF REVENUE AND STRONG INCREASE IN EARNINGS AND MARGINS In Q3 2023 first major order for a complete green hydrogen plant booked in Metals Processing UNIT Q3 2023 Q3 2022 +/- Q1-Q3 2023 Q1-Q3 2022 +/- 2022 ORDER INTAKE BY REGION Order intake MEUR 568 564 +1% 1,745 1,555 +12%
Slide 26: Salzgitter orders one of Europe's largest green hydrogen plants
SALZGITTER ORDERS ONE OF EUROPE‘S LARGEST GREEN HYDROGEN PLANTS On track and determined: Our quest to become a leading solution provider for green hydrogen production • Following the engineering order for Koppö Energia, Finland, we won an EPC contract for a 100 MW green hydrogen plant from Salzgitte
Slide 27: Hydro: stable order intake, increased revenue at slightly reduced margins
HYDRO: STABLE ORDER INTAKE, INCREASED REVENUE AT SLIGHTLY REDUCED MARGINS Q3 2023 margin influenced by a gross margin deterioration in one major capital project UNIT Q3 2023 Q3 2022 +/- Q1-Q3 2023 Q1-Q3 2022 +/- 2022 ORDER INTAKE BY REGION Order intake MEUR 324 304 +7% 1,410 1,410 +0% 1,721 Q1-Q3 20
Slide 28: Separation: stable order intake and ongoing growth of revenue and earnings
SEPARATION: STABLE ORDER INTAKE AND ONGOING GROWTH OF REVENUE AND EARNINGS Order intake picked slightly up in Q3 2023 - strong Q3 earnings UNIT Q3 2023 Q3 2022 +/- Q1-Q3 2023 Q1-Q3 2022 +/- 2022 ORDER INTAKE BY REGION Order intake MEUR 296 286 +4% 909 926 -2% 1,238 Q1-Q3 2023 VS. Q1-Q3 2022 (%) Orde
Slide 29: Agenda: Outlook
AGENDA 4 OUTLOOK
Slide 30: Market outlook and financial guidance
MARKET OUTLOOK AND FINANCIAL GUIDANCE Market outlook not changed and financial guidance 2023 confirmed MARKET OUTLOOK • High interest rates and slow economy will impact project and investment decisions. • Demand for green products and service remains stable. • Economic and geopolitical challenges ar
Slide 31: Andritz Group Results Q3 / Q1-Q3 2023
ANDRITZ GROUP RESULTS Q3 / Q1-Q3 2023 NOVEMBER 2, 2023
Slide 32: Legal disclaimer
LEGAL DISCLAIMER © ANDRITZ AG 2023 This presentation contains valuable, proprietary property belonging to ANDRITZ AG or its affiliates (“the ANDRITZ GROUP”), an d no licenses or other intellectual property rights are granted herein, nor shall the contents of this presentation form part of any sales