Indus Holding Ag · XETR:INH
Indus — H1 2018 Earnings Presentation
42 slides from Indus's earnings presentation, Aug 14, 2018
Slide 1: Presentation of the Results for the First Half-Year of 2018
Bergisch Gladbach, PRESENTATION OF THE RESULTS 14 August 2018 FOR THE FIRST HALF-YEAR OF 2018
Slide 2: Agenda
AGENDA 1 INDUS AT A GLANCE 2 STRATEGIC REPORT FOR H1 2018 3 FINANCIAL DEVELOPMENT IN H1 2018 AND OUTLOOK 4 DIVIDEND AND SHARE 5 APPENDIX 2
Slide 3: We are passionate about SMEs
INDUS business model We are passionate about SMEs … ARE THE LEADING SPECIALIST IN LONG-TERM INVESTMENT AND DEVELOPMENT IN THE GERMAN SME SECTOR. … INVEST IN SME HIDDEN CHAMPIONS. WE … BUILD ON A DIVERSIFIED PORTFOLIO OF 45 COMPANIES IN THE GERMAN-SPEAKING AREA. … ENSURE GROWTH AND STABLE EARNINGS BY
Slide 4: Broad positioning ensures greater stability
INDUS business model Broad portfolio as a core strategic element 000 000 000111 CONSTRUCTION/ AUTOMOTIVE ENGINEERING MEDICAL METALS INFRASTRUCTURE TECHNOLOGY ENGINEERING/ TECHNOLOGY LIFE SCIENCE 11 9 11 5 9 BROAD POSITIONING ENSURES GREATER STABILITY 4
Slide 5: Long-term oriented company model
INDUS business model Long-term oriented company model Short to medium-term Long-term investments return-driven investments without exit orientation ξ Large Caps: ξ INDUS Holding Apax, Blackstone, KKR BUY ξ Aalberts ξ Mid Caps: BUY and Industries DBAG, 3i, Odewald and HOLD ξ Gesco ξ Small Caps: ξ Gre
Slide 6: Investment criteria of INDUS Holding: who fits in well
INDUS business model Investment criteria of INDUS Holding Broadly diversified Niche customer position Double digit base Own operating industrial profit margin added value Growth per- Equity rate spectives, >30% also interna- tionally EBIT Cash flow EUR 2-10 orientation million Sales of WHO Low level
Slide 7: External growth in our industries of the future
INDUS business model External growth* in our industries of the future TECHNOLOGY AUTOMATION/ ENERGY AND FOR INFRA- MEASURE- ENVIRON- STRUCTURE MENT AND MENTAL AND LOGISTICS CONTROL ENGINEERING TECHNOLOGY MEDICAL ENGINEERING CONSTRUCTION AND AND LIFE SCIENCE SECURITY TECHNOLOGY * Two examples for gro
Slide 8: Accompanying SME hidden champions in the long term
INDUS business model Accompanying SME hidden champions in the long term MAJORITY SHARE- HOLDER Property, plant Know-how and equipment INDUS Investments Strategic DEVELOP- sparring Development MENT CONSULTANT Innovation BANK HOLDING Networking Knowledge Acquisitions transfer FINANCE Financing tasks i
Slide 9: Focus on long-term value increase
INDUS business model Focus on long-term value increase 2017 45 2012 1,640.6 m 2008 38 10,210 41 1,105.3 m 920.1 m 6,859 2009 5,862 13.09.1995 2002 40 IPO 2000 39 769.5 m 32 680.3 m 5,371 1995 1989 16 523.6 m 4,484 Foundation Financial of INDUS Dotcom crisis 187.0 m 3,559 bubble 1,263 bursts First ac
Slide 10: Agenda
AGENDA 1 INDUS AT A GLANCE 2 STRATEGIC REPORT FOR H1 2018 3 FINANCIAL DEVELOPMENT IN H1 2018 AND OUTLOOK 4 DIVIDEND AND SHARE 5 APPENDIX 10
Slide 11: Strategic growth with COMPASS 2020
Strategic report Strategic growth with COMPASS 2020 GROWTH 1-2 INVESTMENT ACQUISITIONS ACQUISITIONS OBJECTIVE (portfolio level) (p.a.) 10% INNOVATION PLUS X PORTFOLIO UP TO 4 EBIT ENHANCEMENT ACQUISITIONS INTERNATIO- MARGIN (investments level) (p.a.) NALIZATION 11
Slide 12: COMPASS 2020: strategic report first half-year 2018
COMPASS 2020 Strategic for the first half-year 2018 3 strategic acquisitions INVESTMENT COMPASS 2020 ξ AURORA: EE Electronic Equipment, Weert (NL) ξ OFA: Trading company for medical aids (DE) ξ Acquisition of a supplier of high-quality air- conditioning devices (DE) by another portfolio DEVELOP/GROW
Slide 13: Portfolio further strengthened in 2018
COMPASS 2020 – Investments Portfolio further strengthened in 2018 Strengthening of portfolio TR Metalltechnik OFA acquires trading company for medical aids WIESAUPLAST- PMC de México* Portfolio company acquires supplier of air-conditioning devices 2013 2014 2015 2016 2017 2017 2018 Growth acquisitio
Slide 14: Strategic acquisitions 2018
COMPASS 2020 – Investments Strategic acquisitions 2018 EE ELECTRONIC TRADING COMPANY SUPPLIER OF AIR- EQUIPMENT B.V. FOR MEDICAL AIDS CONDITIONING DEVICES ξ AURORA acquires ξ OFA acquires the ξ Portfolio company electronics specialist activities of a southern acquires a renowned as a strategic addit
Slide 15: Focus remains on innovation
COMPASS 2020 – Innovation Focus remains on innovation DEVELOP NEW ACQUIRE TECHNOLOGIES YOUNGER AND MARKETS COMPANIES MAKE MORE SUPPORT FUNDS INNOVATION AVAILABLE PROCESS FOR R&D PROMOTE THE COOPERATION WITH RESEARCH NETWORK OF INSTITUTIONS THE PORTFOLIO AND COMPANIES UNIVERSITIES 15
Slide 16: Strengthening the portfolio through internationalization
Strategic report – Internationalization Strengthening the portfolio through internationalization ACQUISITION OF COMPANIES FUNDS FOR THE EXPANSION INTERNATIONALIZATION ON INVESTMENTS’ LEVEL OF DISTRIBUTION SUPPORT TARGET CUSTOMERS LOCAL ABROAD CONTENT ACCOMPANYING GERMAN HEDGING CUSTOMERS ABROAD CURR
Slide 17: Portfolio companies have a presence in 30 countries
Strategic report – Internationalization Portfolio companies meanwhile have a presence in 30 countries 1 Canada 2 USA 3 Mexico 4 Brazil 5 Great Britain 6 The Netherlands 7 Switzerland 8 Austria 9 Germany 10 Italy 11 Hungary 12 Denmark 13 Czech Republic 14 Poland 15 Slowakia Germany 16 Serbia 17 Finla
Slide 18: Agenda
AGENDA 1 INDUS AT A GLANCE 2 STRATEGIC REPORT FOR H1 2018 3 FINANCIAL DEVELOPMENT IN H1 2018 AND OUTLOOK 4 DIVIDEND AND SHARE 5 APPENDIX 18
Slide 19: A look back at H1 2018
INDUS in figures A look back at H1 2018 INDUS CONTINUES POSITIVE TREND ξ REVENUES: Portfolio companies benefit from continued good economic situation; mostly organic growth ξ RESULTS: Rising cost of materials and personnel expenses continue to weigh on operating result; difficult situation for Autom
Slide 20: H1 2018 at a glance
INDUS in figures H1 2018 at a glance EARNINGS FIGURES (in EUR millions) H1 2018 + ̋LQ CASHFLOW FIGURES (in EUR millions) H1 2018 + ̋LQ Sales 844.7 803.5 5.1 Operating cashflow -22.4 9.8 <-100 EBITDA 109.4 103.4 5.8 Cash flow from operating activity -33.5 -1.1 ≥100 EBIT 76.2 72.7 4.8 Cash flow from i
Slide 21: Income statement 01.01.2018 – 30.06.2018
INDUS in figures Income statement from 01.01.2018 – 30.06.2018 Revenues growing again EBIT margin: 9.0% Improved net Adjusted EBIT margin: 9.6% interest income Slightly incl. repositionings, primarily due to lower increased cost of materials acquisition of tax rate and personnel expenses minority in
Slide 22: Reconciliation to adjusted operating result H1 2018
INDUS in figures Reconciliation to adjusted operating result H1 2018 EBIT MARGIN: 9.0% ADJ. EBIT MARGIN: 9.6% (in EUR milions) 81.2 78.5 * Depreciation/Amortization from fair value adjustments relate to identified assets at fair value in connection with acquisitions made by the INDUS Group. ** Impac
Slide 23: Consolidated statement of cash flows
INDUS in figures Consolidated statement of cash flows 01.01.2018 – 30.06.2018 135.9 102.1 H1 2018 incl. Strong increase in investments in property, working capital due to Incl. repayment plant and equipment and expanded business of contingent acquisition of EE activity and to partly purchase price E
Slide 24: Segments: Overview H1 2018
INDUS in figures Segments: Overview H1 2018 Medical Construction/ Automotive Engineering/ Metals (in EUR millions) Infrastructure Technology Engineering Life Science Technology Sales with external third parties 172.0 196.5 182.3 77.7 216.3 EBITDA 27.9 15.7 28.5 11.9 29.5 Depr./Amortization -4.9 -11.
Slide 25: Construction/Infrastructure H1 2018
INDUS in figures Construction/Infrastructure H1 2018 ξ Renewed increase in revenues and earnings (exclusively organic) due to continued good economic situation ξ Supply network infrastructure is a strong area ξ Portfolio companies performing at highest level close to capacity limits ξ Shortage of ra
Slide 26: Automotive Technology H1 2018
INDUS in figures Automotive Technology H1 2018 ξ Increase in revenues attributable to heating and air-conditioning systems for utility vehicles and first-time consolidation of EE Electronic Equipment (for AURORA) ξ Revenues of series production suppliers decline due to expiring contracts and declini
Slide 27: Engineering H1 2018
INDUS in figures Engineering H1 2018 ξ Revenues pick up due to strong logistic operations and to new acquisitions of the previous year (M+P and PEISELER, fully consolidated for first time in H1 2018) ξ Order situation at two portfolio companies in large- scale plant construction segment back to norm
Slide 28: Medical Engineering/Life Science H1 2018
INDUS in figures Medical Engineering/Life Science H1 2018 ξ Moderate decline in revenues ξ Product area of nonwoven applications adversely affected by unexpected loss of customers (very intense competition); expected to be compensated as of 2019 ξ Increased labor costs at segment’s international pro
Slide 29: Metals Technology H1 2018
INDUS in figures Metals Technology H1 2018 ξ Good revenue growth ξ Strong increase in carbide tools area ξ Repositioning exercise at a portfolio company proceeding to plan ξ Clearly disproportionate increase in operating result leads to strong improvement in margin ξ EBIT margin for full year expect
Slide 30: Outlook 2018: world economy
Outlook 2018 The world economy ξ While growth will be slightly less dynamic, the economic environment remains generally positive in the current fiscal year. ξ Geopolitical hotspots, the threat of a trade war and the potential risk of a hard Brexit are putting a damper on the German economy. ξ But ec
Slide 31: Outlook 2018: INDUS sectors
Outlook 2018 INDUS sectors ξ CONSTRUCTION: Economic framework remains very good; capacities restricted by shortage of raw materials and skilled labour; construction and security technology are sectors of the future for INDUS ξ AUTOMOTIVE TECHNOLOGY: General decline in sales at automotive suppliers a
Slide 32: Outlook 2018: INDUS Group
Outlook 2018 INDUS Group ξ COMPASS 2020 strategy to be continued in 2018 ξ Continued sharpening of strategic priorities such as innovation and digitization ξ Continuation of the investment drive (EUR 88 million planned for property, plant and equipment and intangible assets) ξ Further acquisitions p
Slide 33: Guidance for the Group confirmed
Outlook 2018 Guidance for the Group confirmed OUTGROW THE MARKET AS A WHOLE GROUP 2017 2018p Sales EUR 1,640.6 million EUR 1.65 - 1.70 billion EBIT EUR 152.9 million EUR 154 - 160 million Acquisitions 2 growth 2 growth acquisitions acquisitions Investments in property, plant, EUR 79.0 million EUR 88
Slide 34: Agenda
AGENDA 1 INDUS AT A GLANCE 2 STRATEGIC REPORT FOR H1 2018 3 FINANCIAL DEVELOPMENT IN H1 2018 AND OUTLOOK 4 DIVIDEND AND SHARE 5 APPENDIX 34
Slide 35: INDUS Holding AG practices a stable dividend policy
Share and dividend Reliable participation in success INDUS HOLDING AG PRACTICES ξ Dividend of EUR 1.50 per share A STABLE DIVIDEND POLICY paid for FY 2017 (EUR 1.35 in previous year). ξ INDUS Holding AG’s profit distribution thus totals EUR 36.7 million, which is equivalent to 43.9% of the distribut
Slide 36: Anchor shareholders support long-term course of business
Share and dividend Very stable shareholder base ANCHOR SHAREHOLDERS SUPPORT LONG-TERM COURSE OF BUSINESS WKN/ISIN 620010/DE 000 620 010 8 OF INDUS HOLDING AG Established/IPO 1986/1995 Fiscal year 01.01. – 31.12. Capital stock EUR 63,6 milion Number of shares 24,450,509 no-name bearer shares Last cap
Slide 37: Analysts' estimates and target prices
Share and dividend Analysts‘ estimates and target prices EXPERTS PREDICT FURTHER UPWARD MOVEMENT ξ INDUS share currently covered by seven banks and investment firms. ξ Most recently, Equinet Bank started equity research on INDUS again in August 2017. ξ The average target price currently stands at EU
Slide 38: Solid performance in a volatile market
Share and dividend Price performance SOLID PERFORMANCE IN A VOLATILE MARKET 200 150 100 50 0 -50 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 INDUS Holding AG DAX Index SDAX Performance Index PERFORMANCE SINCE COMPASS 2020
Slide 39: Agenda
AGENDA 1 INDUS AT A GLANCE 2 STRATEGIC REPORT FOR H1 2018 3 FINANCIAL DEVELOPMENT IN H1 2018 AND OUTLOOK 4 DIVIDEND AND SHARE 5 APPENDIX 39
Slide 40: Financial calendar
Financial calendar Publication and capital market dates DATE EVENT VENUE 14 August 2018 Interim Report on H1/Q2 2018 Publication 16 August 2018 Roadshow Frankfurt/Main 29 August 2018 Commerzbank Sector Conference Frankfurt/Main 4 September 2018 Roadshow Zurich 5 September 2018 Zurich Capital Market
Slide 41: Performance in the past five years
INDUS in figures Performance in the past five years SALES (in EUR millions) EBIT (in EUR millions) and EBIT MARGIN (in %) 180 20.0% 1,640.6 160 152.9 18.0% 1,444.3 144.9 1,388.9 136.3 16.0% 1,255.7 140 127.2 1,186.8 118.6 14.0% 120 12.0% 100 10.0% 80 10.0% 10.1% 9.8% 10.0% 9.3% 8.0% 60 6.0% 40 4.0%
Slide 42: Performance of the segments in the past five years
INDUS in figures Performance of the segments in the past five years 42