Arbonia Ag · SIX:ARBN
Arbonia — AFG Arbonia-Forster-Holding — H1 2015 Earnings Presentation
38 slides from Arbonia's earnings presentation, Aug 13, 2015
Slide 1: AFG – H1 2015 Results – 13 August 2015
AFG – H1 2015 Results – 13 August 2015 Alexander von Witzleben, CEO Felix Bodmer, CFO
Slide 2: Disclaimer and Forward-looking Statements
Disclaimer and Forward-looking Statements Disclaimer These materials do not constitute or form part, or all, of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities, nor shall part, or all, of these materials or their distribution fo
Slide 3: AFG Arbonia-Forster-Holding AG Divisions and key brands
AFG Arbonia-Forster-Holding AG Divisions and key brands AFG Arbonia-Forster-Holding AG Building Technology Building Envelope Building Security Heating Air-conditioning & Sanitary Windows & Profile Special Technology Ventilation Technology Equipment Exterior Doors Systems Doors 2014 2001 2004 2007 19
Slide 4: Profound Measures Summary
Profound Measures Summary H1 2015 Repositioning of AFG Strengthened capital base • CHF 425 M • RELOCATION • CHF 250 M net revenues of production footprint secured existing credit facility • CHF 16 M • WERTBAU • RIGHTS ISSUE EBITDA acquisition in Eastern Germany fully underwritten • 3.8% • FOCUS • CH
Slide 5: Repositioning of AFG
Repositioning of AFG Lowered cost base and redefined markets Today 2018 Swiss market leader with strong Leading European windows group outposts in Poland and Slovakia Integrated production network with Local production for local markets strong local market organizations Building ~75% of window
Slide 6: Agenda
Agenda 1. H1 2015 Disappointing results and difficult market environment 2. Repositioning of AFG Lowered cost base and redefined markets 3. Strengthened capital base Fully underwritten capital increase and agreement with lending banks 4. Outlook Consequent execution to achieve guidance 2018 Question
Slide 7: Income Statement
Income Statement One-time effects have negative impacts on result In CHF M 1-6/2015 in % 1-6/2014 in % Net revenues 425.1 100.0 447.0 100.0 Cost of material and goods -202.3 -47.6 -204.2 -45.7 Personnel expenses -165.9 -39.0 -169.2 -37.8 Other operating expenses -69.6 -16.4 -69.3 -15.5 EBITDA 16.1 3
Slide 8: Reconciliation to adjusted numbers
Reconciliation to adjusted numbers Impairments weigh on EBIT 1-6/2015 without Actual Building Building Building one-time In CHF M 1-6/2015 Techn. Envelope Security Others effects Net revenues 425.1 425.1 EBITDA 16.1 0.6 1.5 18.2 EBIT -125.4 20.3 100.0 -2.9 Group result -132.6 -9.5 -0.3 -19.9 Present
Slide 9: Adjusted Income Statement
Adjusted Income Statement Disappointing operating performance In CHF M 1-6/2015 in % 1-6/2014 in % Net revenues 425.1 100.0 447.0 100.0 Cost of material and goods -202.3 -47.6 -204.2 -45.7 Personnel expenses -163.8 -38.5 -167.9 -37.6 Other operating expenses -69.6 -16.4 -68.1 -15.2 EBITDA 18.2 4.3 2
Slide 10: Net revenues by Division / Country
Net revenues by Division / Country Sabiana acquisition influences split Net revenues by Division Net revenues by Country 17% (15%) 32% (28%) 37% (40%) 51% (48%) 32% (37%) 31% (32%) Building Technology Building Security Switzerland Germany RoW Building Envelope Figures in brackets represent H1 2014 f
Slide 11: Organic growth by Divisions
Organic growth by Divisions Negative FX effects and organic growth Net revenues as reported 1-6/2015 1-6/2014 Δ in CHF M AFG 425.1 447.0 -4.9% Building Technology 217.7 216.4 0.6% Building Envelope 135.9 163.3 -16.8% Building Security 71.3 66.3 7.6% Acqui- Currency Organic Effects in net revenues si
Slide 12: EBITDA- / EBIT-margins per Division
EBITDA- / EBIT-margins per Division Margin decline in all divisions 20% 15% 10.7% 10.5% EBITDA 10% 4.8% 6.2% 4.5% margin, 5% adjusted 0% 6/2014 6/2015 -5% -2.8% Building Technology Building Envelope Building Security 20% 15% 10% 7.4% 6.7% EBIT 4.1% 5% 2.0% margin, 0% 6/2014 adjusted -5% -0.6% 6/2015
Slide 13: Impairments
Impairments Balance sheet risks addressed Remaining per 30 June 2015 Intangible Impairment Goodwill assets from In CHF M requirements PPA 1 Total as of 30 June 2015 121.2 44.7 56.9 EgoKiefer 82.6 - - RWD Schlatter - 8.1 5.7 Slovaktual - 13.9 8.0 Dobroplast 18.2 - 11.8 Sabiana 20.3 22.7 29.6 Others -
Slide 14: Balance Sheet
Balance Sheet Financial Covenant for Equity Ratio broken In CHF M 1′000 900 Current 800 Current liabilities assets 33.2% 700 47.7% Current assets Current 600 46.5% liabilities Non-current 500 63.3% liabilities 29.8% 400 300 Non-current Non-current Non-current assets Shareholders' 200 assets liabilit
Slide 15: Free Cash Flow, adjusted
Free Cash Flow, adjusted 1 NWC measures resulted in positive impact In CHF M 0 -10 -6 -20 -30 -40 -50 -45 -60 -70 -69 -70 -80 06/2012 06/2013 6/2014 6/2015 1. Free cash flow without acquisition / disposal of subsidiaries, adjusted AFG – H1 2015 results – 13 August 2015 15
Slide 16: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio1 Financial Covenant for Leverage Ratio1 broken In CHF M 0 0.0x -50 0.5x 1.0x -100 1.5x -150 -131 -151 2.0x -167 -200 -202 2.5x Leverage Ratio -222 -229 -250 3.0x Net Debt -300 3.5x 2011 2012 2013 6/2014 2014 6/2015 Waiver for financial covenants from lending banks receive
Slide 17: Agenda
Agenda 1. H1 2015 Disappointing results and difficult market environment 2. Repositioning of AFG Lowered cost base and redefined markets 3. Strengthened capital base Fully underwritten capital increase and agreement with lending banks 4. Outlook Consequent execution to achieve guidance 2018 Question
Slide 18: Need to restructure and reposition AFG
Need to restructure and reposition AFG To ensure long-term competitiveness Continued weak financial performance Restructure and reposition AFG to ensure long-term Sustained market pressure competitiveness in Europe New FX-reality AFG – H1 2015 results – 13 August 2015 18
Slide 19: Restructuring and repositioning of AFG
Restructuring and repositioning of AFG Key strategic Pillars Objective: Long-term competitiveness in Europe Focus of AFG 1 2 3 Building supplier Relocation of Focus on Lean production divisional industrial Europe footprint strategies holding Energy efficiency Strengthened capital base & contin
Slide 20: Relocation of production footprint
1 Relocation of production footprint Three production sites in Switzerland affected Labour cost Production footprint Planned relocations advantage1 Transfer of PVC production from >80% Villeneuve to Slovaktual in 2016 (90 FTEs) Building Envelope Transfer of wood and wood/alu production >50% from
Slide 21: Focus on divisional strategies Building Envelope
2 Focus on divisional strategies Building Envelope: European leader in windows Market ambition Competitive position Scandinavian players • Inwido EUR ~540 M AFG's Ambition 2 of the 5 largest Central European Leading in • Dovista EUR ~450 M Outward-opening windows wood, wood/alu PVC window prod
Slide 22: Acquisition of Wertbau
2 Acquisition of Wertbau Missing piece to become major European player Cost efficient wood, wood/alu production Access to German market Established presence across Germany Network of 700 sales partners across Germany Reputation as high-quality supplier Fragmented overall market in Germany Fami
Slide 23: EgoKiefer to remain Swiss market leader
2 EgoKiefer to remain Swiss market leader ~25% market share in PVC, ~5% in wood/alu Designed, developed and tested in Switzerland Largest sales and service organization in Swiss market to serve our customers (incl. project mgmt) 10 own sales locations and over 350 branded dealers and sales par
Slide 24: Focus on divisional strategies Building Technology
2 Focus on divisional strategies Building Technology: Leading HVAC1 solutions Business units Today Ambition Market leader in Rationalize footprint and secure cost leadership steel radiators in Consolidate radiator market in Europe Heating DE and CH Expand in growing market segments (e.g. under
Slide 25: Focus on divisional strategies Building Security
2 Focus on divisional strategies Building Security: Strengthen leading positions Business units Today Ambition Market leader for Strengthen leadership position in Europe through premium steel Entry into direct distribution in Germany, Austria, UK, systems in Poland, Denmark and Luxembourg Profil
Slide 26: Lean industrial holding
3 Lean industrial holding Major reduction of holding costs Today Ambition Fully-fletched industrial holding Lean industrial Duplication of functions at corporate level holding with close (e.g. HR, procurement, sustainability) management of divisions Cost-intensive setup (HQ / AFG Arena) Reduction of
Slide 27: Agenda
Agenda 1. H1 2015 Disappointing results and difficult market environment 2. Repositioning of AFG Lowered cost base and redefined markets 3. Strengthened capital base Fully underwritten capital increase and agreement with lending banks 4. Outlook Consequent execution to achieve guidance 2018 Question
Slide 28: Strengthened capital base
Strengthened capital base Capital increase & syndicated credit facility Key aspects Discounted rights issue with tradable subscription rights Capital CHF 200 M Underwritten by syndicate of banks and fully supported by increase anchor shareholder Artemis Successful negotiation with lending bank
Slide 29: Capital increase Financial effects
Capital increase Financial effects Shareholder equity and net debt development Financial effects FY2014 H1-2015 FY2015 (illustrative) Decrease leverage ratio CHF M 400 to below 1.5x2 Increase equity ratio to Capital > 40% mid-term increase CHF 200 M 200 Shareholder equity Increase operational
Slide 30: Capital Increase Use of Proceeds
Capital Increase Use of Proceeds Reduce net debt & increase equity base after announced impairments Fund costs in relation to the proposed repositioning of AFG Secure re-financing of 2016 bond maturity General corporate purposes AFG – H1 2015 results – 13 August 2015 30
Slide 31: Maturity profile of financial debt
Maturity profile of financial debt AFG fully financed until 2018 500 CHFMM CHF Illustrative 450 150 150 400 Available Available amount under amount under 350 synd. loan synd. loan 300 100 100 100 100 250 Used amount Repayment of Cash capital Available amount under synd. loan synd. loan increase synd
Slide 32: Transaction overview and next steps
Transaction overview and next steps Capital increase of CHF 200 million Transaction overview Expected timeline Public offering in Switzerland (Rights offering) 14.-19.8. First Roadshow Offering Institutional offering outside the US and Switzerland (RegS) Invitation to extraordinary general 21.8.
Slide 33: Agenda
Agenda 1. H1 2015 Disappointing results and difficult market environment 2. Repositioning of AFG Lowered cost base and redefined markets 3. Strengthened capital base Fully underwritten capital increase and agreement with lending banks 4. Outlook Consequent execution to achieve guidance 2018 Question
Slide 34: Outlook
Outlook EBITDA of > CHF 100 M by 2018 Guidance full year 2015 Guidance 2018 Negative outlook for Consequent execution full year 2015 of measures to achieve Organic sales EBITDA1 Sales growth p.a. EBITDA growth > CHF 50 M +3% > CHF 100 M -3% to -5% Net loss Net debt Free cash flow CHF 160–190 M CHF 5
Slide 35: Achieving Guidance 2018
Achieving Guidance 2018 Well balanced contribution across divisions EBITDA guidance Drivers EBITDA Building Technology > CHF 100 M Consolidate radiator market in Western Europe Further expand into growing segments (e.g. ventilation) Maintain leading position in shower enclosures Building Envel
Slide 36: Summary
Summary Building Technology Addressing market dynamics through further expansion into growing market segments and active consolidation of radiator market Building Envelope Transformation of challenged Swiss position into leading major European Why AFG? player based on best production footprint i
Slide 37: Questions?
Questions? AFG – H1 2015 results – 13 August 2015 37
Slide 38: Thank you
Bare Building the Difference Thank you
AFG Arbonia-Forster-Holding — H1 2015 Earnings Presentation on 6ix