Ctt Systems Ab · OMXSTO:CTT
Ctt Systems Ab — Investor Presentation (March 2019)
41 slides from Ctt Systems Ab's investor presentation, Mar 6, 2019
Slide 1: Investor Presentation CTT Systems AB
INVESTOR PRESENTATION CTT SYSTEMS AB DANSKE BANK MARCH 6, 2019
Slide 2: The Humidity Paradox in Aircraft
The Humidity Paradox in Aircraft Moisture Shortage in the cabin air Moisture Excess and water accumulation in the Fuselage (despite dry cabin air)
Slide 3: Humidity Control in Aircraft
Humidity Control in Aircraft For a better climate – in the aircraft cabin and in the sky De-Humidifiers Humidifiers
Slide 4: CTT in short - Key Financial Data (2018)
CTT in short Key Financial Data (2018) Revenues / EBIT EBIT MARGIN Founded in 1991 HQ in Nyköping, Sweden Assembly and manufacturing in Nybro, Sweden 315 90 29 % 110 employees, ~70 in Nyköping Listed on Small Cap Nasdaq Stockholm EPS DPS (FY2018) Market Cap approx. 2000 MSEK 5.6 SEK 4.05
Slide 5: FY2018 Financial Summary
FY2018 Financial Summary Net Sales Up 15 % Generated record revenue, earnings and EPS 400 MSEK 315 300 252 273 315 MSEK (273) in Net Sales, up 15 % 90.2 MSEK (57.9) in operating profit (EBIT), up 56 % 200 EBIT Margin 29 % (21) 100 EPS increased 47 % to 5.56 SEK (3.79) Operational cash flow of 61.2 M
Slide 6: FY2018 Bridge Net Sales
FY2018 Bridge Net Sales Organic growth 13 % Currency FX Effect 2 % 15 % total growth Net Sales growth of 42 MSEK (15 %) driven by MSEK Increase Net Sales from OEM deliveries (22 MSEK) 315 Growing aftermarket (24 MSEK) , mainly -15 % -5 % 5% 5% consumables 31 % 21 % Retrofit and VIP slightly weaker C
Slide 7: FY2018 Profit Bridge
FY2018 Profit Bridge Volume, price, MSEK FY2017 mix and other Currency FY2018 Change Net Sales 273.2 36.7 5.4 315.3 42.1 EBIT 57.9 22.6 9.7 90.2 32.3 EBIT MARGIN 21% 29% 8 Adj. EBIT 62.2 22.6 2.6 87.4 25.1 Adj EBIT MARGIN 23% 28% 5 EBIT improvement of 32.3 MSEK: Business related factors account for
Slide 8: FY2018 Sales Segment Mix, YoY
FY2018 Sales Segment Mix, YoY OEM 40 % (38) and Aftermarket 32 % (28) Non-Core Non-Core 7% 8% IP IP 7% 8% OEM 38% OEM 40% 2017 2018 Aftermarket 28% Aftermarket 32% VIP Retrofit 5% 13% VIP Retrofit 4% 10%
Slide 9: Solid order backlog
Solid order backlog Q4 order intake of 46.5 MSEK (51.0) MSEK Q417 Q418 Change Backlog at high levels of 193.7 MSEK (144.1) due to Order intake 51.0 46.5 -4.5 OEM orders Good visibility in OEM with predictable deliveries Order Backlog 144.1 193.7 49.6 USDSEK 8.29 8.97 MSEK
Slide 10: Q1 2019E Forecast
Q1 2019E Forecast Q1 2019 Net Sales forecast: 100 Net Sales (MSEK) 80 - 85 MSEK (63.8), up 25 -33 % 90 25 - 33 % (compared to same period previous year) 80 - 85 80 70 60 50 40 30 20 10 0 Q118A Q418A Q119E
Slide 11: Performance Outlook 2019
Performance Outlook 2019 Net Sales 1H2019 Up 10 – 15 % (in USD) Higher OEM deliveries is expected to push Net Sales Humidifiers De-Humidifiers Airliner deliveries: up 10 - 15 % De-Humidifier deliveries: Record-high humidifier deliveries driven by down 5 % - up 5 % Significant ramp-up in A350 deliver
Slide 12: Market Position
Market Position Humidifier market strong De-humidifier market must obtain catalogue status on MAX and neo Commmercial Aircraft Humidifiers De-Humidifiers OEM-POSITION Sole OEM Supplier to All Next-Gen Widebodies Only provider but Only available on Boeing 737-800 MAX / neo key for growth COMPETITION
Slide 13: FY2018 Product / Segment Performance
FY2018 Product / Segment Performance OEM deliveries drive product population – Tailwind from ramp-up on both Boeing 787 and A350 Products / Delivery Comments Full Year 2018 vs. 2017 Segment Growth Units Humidifier +20 % Driven by OEM deliveries to Boeing 787 and A350 Flight Deck +15 % A350 and Boein
Slide 14: Aerospace is a particular space
Aerospace is a particular space Aerospace market OEM Supply Chain Model Regulated market High Development costs Oligopolistic Commercial Aircraft Market Pushing consolidation in Supply High Barriers-to-Entry OEM Sales with lower margins Long Product life-time Aftermarket sales with higher margin OEM
Slide 15: Good industry to be the niche leader
Good industry to be the niche leader Commercial aviation resilient long-term growth Further tensions in geopolitics and Growing middle-class in emerging markets trade could affect outlook negatively Globalization and urbanization if escalating 2018E 2019E Revenue Passenger Miles +6.5% +6% Deliveries
Slide 16: The Humidifier Business
THE HUMIDIFIER BUSINESS
Slide 17: Humidifier Onboard - Elevates Cabin Climate
Humidifier Onboard - Elevates Cabin Climate Sole OEM-Supplier to all new widebodies Flight Deck Crew Rest Passenger Cabin (A350 / Boeing 777X)
Slide 18: To feel well, the inflight climate must be earth equivalent
TO FEEL WELL, THE INFLIGHT CLIMATE MUST BE EARTH EQUIVALENT The newest wide-body aircraft operate with lower cabin altitude, more fresh air, temperature zones, and draft-free ventilation. Cabin Climate Score Card Inflight Cabin Climate vs. Normal Indoor Living Conditions Temperature Air Oxygen / Cle
Slide 19: Drier than any place on earth - First class and business class
DRIER THAN ANY PLACE ON EARTH - FIRST CLASS AND BUSINESS CLASS Relative Humidity, % 25 12% 15 5% 7% 3% 5 Flight Deck First Class Business Class Economy Average Cabin Humidity without active humidification system
Slide 20: Inflight Humidification (IFH)
INFLIGHT HUMIDIFICATION (IFH) Elevates the cabin climate so it remains at earthlike conditions during the entire flight IFH maintains air humidity at ground-like levels (22 % RH) Fitted with the optional IFH, Inflight Humidification Basic Configuration without Active Humidification Relative Humidity
Slide 21: Humidifier Onboard - Sole Supplier for All New Widebody Aircraft
Humidifier Onboard Sole Supplier for All New Widebody Aircraft CRC Flight Cabin Deck A380 2 - - 787 2 1 - A350 2 1 3 777X 2 1 2 MC-21 - 1 -
Slide 22: Humidifiers Onboard Boeing 787
HUMIDIFIERS ONBOARD BOEING 787 ALL CREW RESTS 85 % FLIGHT DECK SELECTION
Slide 23: Installed base drives the Aftermarket
Installed base drives the Aftermarket Humidifier OEM Deliveries Aftermarket is driven by humidifier population 2500 Units 25 % Record-High Humidifier deliveries in 2018 Population at airlines growing 33 % 2014-2018 CAGR 33 % 2000 1500 1000 500 0 2014 2015 2016 2017 2018
Slide 24: Diversified humidifier population
Diversified humidifier population Aftermarket revenues global and diversified – Strong position in China 7% United Airlines More than 50 airline customers Largest customers account for 7 % each 7% American Airlines 10 Largest Airlines account for 55 % Japan Airlines 40+ Airlines account for remainin
Slide 25: Strong position in China
STRONG POSITION IN CHINA cp fl Fa 73 hh = CHINA SOUTHERN AIRLINES AIR CHINA Pa R Sm Sf car re) ios hep 4 4 CHINA EASTERN NE il fi! XIAMENAIR g 8A | en ys HONGKONG AIRLINES HAINAN AIRLINES Nie) rat BAe
Slide 26: Healthy outlook for widebody deliveries / demand
OEM widebody Healthy outlook for widebody deliveries / demand market - CTT sole OEM supplier to latest widebody programs Boeing 787: Production ramped-up in 2018 to meet targeted 14 a/c per month A350: Targeting production rate of 10 a/c per month in 2019 Boeing 777X: First test flights in 2019 Back
Slide 27: Strategy for flight deck and crew rest humidifier
Humidifier Strategy for flight deck and crew rest humidifier Onboard - Growth driven by mirroring and market momentum Flight deck humidifier is the most mature market segment OEM opportunities will increase in 2019 and 2020 driven by Mirroring selection from Boeing 787 and/or A350 to new platforms s
Slide 28: Strategy for cabin humidifiers
Humidifier Strategy for cabin humidifiers Onboard - Growth driven by OEM and harmonize demand Retrofit opportunities will increase in 2019 and 2020 driven by Harmonize demand when first four airlines take delivery of cabin humidifiers on A350 and Boeing 777X in 2019/2020 Competitive demand from airl
Slide 29: The De-Humidifier Business
THE DE-HUMIDIFIER BUSINESS
Slide 30: Fuselage Condensation in All Aircraft
ON EVERY FLIGHT FUSELAGE CONDENSATION IN ALL AIRCRAFT
Slide 31: How to cut 200+ kg? Add kg!
HOW TO CUT 200+ KG? ADD 25 KG!
Slide 32: Dehumidifier Checkmates Fuselage Condensation
Dehumidifier Checkmates Fuselage Condensation Niche market Strong foothold in Northern Europe / Russia BFE on Boeing 737-800 Standard equip on Boeing 787 – De-selected from 2020 The Zonal Drying™ system can cut 200 -300 kg of excess weight in Boeing 737-800/A320 aircraft; generating the following ad
Slide 33: Supporting Trends
SUPPORTING TRENDS High-density cabin layouts gain traction Longer operations (more flight hours)
Slide 34: Fuselage condensation causes problems
Fuselage condensation causes problems Excess weight leads to more fuel burn and unnecessary green gas emissions plus moisture failures, repair and problems Heavily Corroded Plug for Door Indication Water on Skin Side of Insulation Radar Altimeter Carpet Soaked Door 2/3 Door 3L Water on Skin Side of
Slide 35: All aircraft face fuselage condensation
NOX ALL AIRCRAFT FACE FUSELAGE CONDENSATION EVERY KG COUNTS CO2
Slide 36: All-Fleet Equipped
ALL-FLEET EQUIPPED REFUSES TO ACCEPT EXCESS WEIGHT FROM CONDENSATION Fleet 59 737NG Yearly Saving: 4000-5500 ton of CO2 emissions…
Slide 37: Every kg counts - On every flight
Every kg counts – On every flight Transavia already saved 30,000-50,000 ton of CO2 emissions Fleet 68 737NG Transavia has line fitted its entire fleet from its inception Still counting: 4500-6500 ton per year in less CO2 every year…
Slide 38: All-Fleet: Greener & Cleaner Operations, Pobeda
ALL-FLEET Greener & Cleaner Operations: Pobeda (Aeroflot) Saving 1500-2000 ton of CO2 emissions every year… Fleet 21 737NG
Slide 39: Strategy for De-Humidifiers
Strategy for De-Humidifiers - OEM to be driven by retrofit orders Success Factors Strategy Zonal Drying™ market is limited until A321-trial systems catalogue status at MAX / neo Boeing 737MAX STC Retrofit drives OEM A320-family airlines to retrofit Key to win airline retrofit awards from Boeing 737-
Slide 40: Two A350 Airline Awards
TWO A350 AIRLINE AWARDS
Slide 41: Slide 41