Sfs Group Ag · SIX:SFSN
Sfs — FY2015 Earnings Presentation
37 slides from Sfs's earnings presentation, Mar 4, 2016
Slide 1: Welcome to the presentation of the FY2015 results
Welcome to the presentation of the FY2015 results International development, manufacturing and distribution specialist Focused in technology – diversified in end markets 2016-03-04 Presentation FY2015 results I page 1
Slide 2: Today's speakers
Today's speakers Heinrich Spoerry Chairman of the Board of Directors Jens Breu Chief Executive Officer Rolf Frei Chief Financial Officer 2016-03-04 Presentation FY2015 results I page 2
Slide 3: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Review 2015 / guidance 2016 Jens Breu 5 Q&A 2016-03-04 Presentation FY2015 results I page 3
Slide 4: Key takeaways FY2015
Key takeaways FY2015 Solid sales growth in local currency of 4.6%; reported sales in line with the prior year at CHF 1,376m Growth fueled by projects in relation with autonomous driving and progress in fastening systems Unfavorable currency effects diminished profitability by CHF 47,5m Signi
Slide 5: Since 2007 the € lost 35% of its value to the CHF
Since 2007 the € lost 35% of its value to the CHF EUR / CHF exchange rate SNB abandons peg of CHF to EUR 2016-03-04 Presentation FY2015 results I page 5
Slide 6: Sales bridge
Sales bridge CHF million 1'500 1'383 35 29 -71 1'376 Reported growth -0.5% yoy 1'450 Organic +2.5% (PY 4.8%) M&A +2.1% (PY 0.0%) 1'400 FX impact -5.1% (PY -0.9%) 1'350 Like-for-like growth by segment 1'300 4.3% in EC (1HY 13.9% / PY 7.1%) 1'250 4.9% in FS (1HY 2.5% / PY 3.4%) -4.0% i
Slide 7: Sales breakdown by regions
Sales breakdown by regions 2014 2015 Total sales: CHF 1,383m Total sales: CHF 1,376m Switzerland Switzerland Asia 23.4 Asia 22.9 24.6 CH 23.4% 25.9 25.9% 22.9% % % 12.0% America Europe 41.4% America 10.6 12.0 39.2% Europe Europe 41.4 39.2 2016-03-04 Presentation FY2015 results I page 7
Slide 8: Employee breakdown by regions (FTE)
Employee breakdown by regions (FTE) 2014 2015 Total FTE: 8,688 Total FTE: 8,330 Switzerland Switzerland Asia, RoW 2,255 Asia, RoW 2,250 4,199 26% 3,770 27% 48% 45% Europe Europe 1,732 1,758 20% America 21% America 502 552 6% 7% 2016-03-04 Presentation FY2015 results I page 8
Slide 9: EBITA bridge
EBITA bridge CHF million 230 195.4 6.8 2.8 14.1 -43.9 -3.6 171.6 14.9 186.5 220 210 200 14.1% 190 13.6% 180 12.5% 170 160 150 140 130 2014 Organic Change Improvement FX FX 2015 adj IAS 19r 2015 in sope CH transaction translation 2016-03-04 Presentation FY2015 results I page 9
Slide 10: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Developments by segments Jens Breu 4 Review 2015 / guidance 2016 Jens Breu 5 Q&A 2016-03-04 Presentation FY2015 results I page 10
Slide 11: Financial overview
Financial overview CHF million 2015 2014 yoy Gross sales 1,376.3 1,383.0 -6.7 FX impact on profitability -47.5 EBITDA 267.3 271.4 -4.1 as a % of net sales 19.5 19.6 EBITA 186.5 195.4 -8.9 as a % of net sales 13.6 14.1 EBITA adjusted 171.6 195.4 -23.8 as a % of net sales 12.5 14.1 Net income 105.0 11
Slide 12: Operating profitability
Operating profitability in % of net sales in CHF million 25% 400 Profitability adjusted for one time book gains 350 19.5% 20.8% 20% 19.0% EBITDA and EBITA suffer from 17.3% 17.5% 300 unfavorable FX impact with CHF 47.5m 14.1% 250 15.2% 15% Operating cash flow down from 13.3% 11.5% 11.5% 19.5%
Slide 13: Capital expenditure
Capital expenditure Capex in % of net sales Capex in CHF million 8% 160 Capex spending with 6.6% 7.1% Share of growth capex 70% 7% 140 Advanced demand for 5.8% 6.6% localization 6% 5.7% 120 5.3% Triggered by projects wins from this and prior year 5% 100 Enabling future growth 90.4 97.6 4%
Slide 14: Net working capital
Net working capital NWC in % of net sales at year end Days outstanding 35% 280 Increase in NWC due to growing key customers with long 30% 240 payment terms 31.0% 30.1% 30.3% Ø DSO 69 (PY Ø 65) 29.2% 28.7% 25% 200 Average DSO EC 82 days (PY 75) 20% 160 FS 52 days (PY 51) D&L 46 days (PY 4
Slide 15: Free cash flow
Free cash flow Free cash flow in % of EBITDA CHF million 60% 300 Strong free cash flow. Funds of 51.7% CHF 121m after cash out for 48.4% Interest and taxes 50% 250 45.2% Increase in NWC Capex 37.7% 40% 200 Free cash flow used to Acquire 100% Allchemet 30% 150 31.0% Invest 30% in HECO G
Slide 16: Return on net operating assets
Return on net operating assets EBITA in % of NOA NOA in CHF million at year end 20.2% 20.4% 20% 4'000 Unfavorable FX development 19.1% also impacts return on NOA 17.8% Operational NOA stable at 15.5% CHF 965m in spite of growth 15% 3'000 and high level capex 13.7% Adjusted EBITA yield at 10.7%
Slide 17: Net cash and equity ratio
Net cash and equity ratio Equity in % of assets CHF million Equity ratio remains strong at 90% 800 above 80% 82.6% 80.4% 80% 600 Net cash at CHF 127m 76.5% 70% 400 In addition financial policy would 62.7% 333.0 54.7% allow further borrowings 60% 127.4 200 Leverage ratio of up to 1.5 times EB
Slide 18: Payout ratio
Payout ratio Payout ratio in % Divdend per share in CHF 60% 2.60 BoD will propose a dividend of 55% 54% 2.40 CHF 1.50 per share (PY 1.50) 51% Same as previous year and 50% 2.20 no increase 45% 2.00 To show solidarity with 40% 38% 1.80 Swiss employees, who 36% 37% beared part of the burden 35%
Slide 19: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Review 2015 / guidance 2016 Jens Breu 5 Q&A 2016-03-04 Presentation FY2015 results I page 19
Slide 20: Headlines Engineered Components (EC)
Headlines Engineered Components (EC) Solid organic sales growth of 4.3% yoy (comparable basis; including M&A and constant FX +6.1%) Driven by strong demand from automotive and aircraft Execution of new projects on track and contributing to the fast top line growth Attractive profitability ac
Slide 21: EC: Applications to facilite autonomous driving
EC: Applications to facilite autonomous driving Auto pilot Highway assist Highway pilot Automated parking Parking break Active driving break Actuators for electronic brake systems 2016-03-04 Presentation FY2015 results I page 21
Slide 22: EC: Additional project wins support growth
EC: Additional project wins support growth CAGR 2011 – 2015 in Automotive sales of 8.6% Trend towards autonomous driving remains basis for innovation and growth New project wins create substantial additional sales of approx. CHF 18m and underpin the strong competitive position Explanations • P
Slide 23: EC: Opportunities as supplier to medical sector
EC: Opportunities as supplier to medical sector Still small but attractive business Customer wins for ABS and brake segment in terms of growth and systems profitability Attractive partner to the growing medical components industry Technological expertise Know how in industrialising products
Slide 24: EC: Successfully broadened customer base
EC: Successfully broadened customer base Successfully delivered on first projects Proof of SFS's competitive Customer with leading Chinese wins for ABS smartphone and brakeposition in the industry OEMs systems Focus on extending scope of Sales development with a leading Chinese smartphone OEM 50
Slide 25: EC: Attractive field of consumer electronics
EC: Attractive field of consumer electronics Growth opportunities in consumer electronics Customer wins for ABS and brake systems Attractive project pipeline in the field of consumer electronics demonstrates SFS's strong competitive position Augmented reality glasses Adventure cameras Gaming
Slide 26: Headlines Fastening Systems (FS)
Headlines Fastening Systems (FS) Mixed markets; solid demand in North America, Central and Northern Europe, no material recovery in Southern Europe Excluding currency effects, sales rose by 4.9% compared to PY Recently introduced product innovations were major contributor Strong CHF had mate
Slide 27: FS: Strengthening the competitive position
FS: Strengthening the competitive position Entered strategic partnership with HECO Acquired 30% stake through capital increase Combined product ranges and sales channels strengthen market position Realizing operational synergies through consolidation of product manufacturing Operational perfor
Slide 28: FS: Creating value through product innovations
FS: Creating value through product innovations Creating value by optimising entire fastening process Customerwins for ABS Solutions to and brake improve efficiency, reliability and systems ergonomics Requires perfect interplay between fasteners, installation tools, workplace and process control P
Slide 29: Headlines Distribution & Logistics (D&L)
Headlines Distribution & Logistics (D&L) Strong price pressure following the SNB decision of 15 January Immediate price concessions resulted in one-time margin contraction Significant drop in demand, particularly from industrial custo- mers (destocking effect), sales down 4.0% comparable yoy
Slide 30: D&L: Strengthened market position
D&L: Strengthened market position Important contracts gained thanks to M2M New automated inventory management systems 'M2M' presented in spring 2015 Result of several years of R&D efforts and exemplary for Industry 4.0 applications Customer wins 2015 Underscored technology leadership Value f
Slide 31: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Review 2015 / guidance 2016 Jens Breu 5 Q&A 2016-03-04 Presentation FY2015 results I page 31
Slide 32: Review 2015
Review 2015 Review 2015 1HY15 A 2HY15E A A FY2015E A A Gross sales reported 3.9% -3.4% -4.3% +/- 0% -0.5% • Organic growth 6.1% 0.0% -0.6% 3.0% 2.5% • Change in scope 3.3% 1.2% 1.0% 2.2% 2.1% • Negative FX impact -5.5% -4.6% -4.7% -5.2% -5.1% EBITA margin adjusted 10.6% 13.6% 14.3% 12.1% 12.5% to 15
Slide 33: Guidance 2016 and midterm outlook
Guidance 2016 and midterm outlook Guidance Actual Expectations FY2015 FY 2016 Midterm Gross sales reported -0.5% 2% – 4% 5% – 7% • Organic growth 2.5% 1% – 3% 4% – 5% • Change in scope 2.1% 1% – 1% 1% – 2% • FX impact -5.1% n/a n/a EBITA margin adjusted 12.5% 13% – 14% >15% FY = Financial Year 2016-
Slide 34: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Review 2015 / guidance 2016 Jens Breu 5 Q&A 2016-03-04 Presentation FY2015 results I page 34
Slide 35: Q&A
Q&A Heinrich Spoerry Jens Breu Rolf Frei Chairman of the Board Chief Executive Officer Chief Financial Officer 2016-03-04 Presentation FY2015 results I page 35
Slide 36: More than 8'000 employees – one target
More than 8'000 employees – one target Creating value with In Depth technological competence International presence Application and industry expertise Long-term relationships 2016-03-04 Presentation FY2015 results I page 36
Slide 37: Disclaimer
Disclaimer This presentation includes forward looking statements. These statements reflect the SFS Group's current assesment of market conditions and future events. The statements are therefore subject to risks, uncertainties and assumptions. Unforseen events may lead to deviations of the actual res