Arbonia Ag · SIX:ARBN
Arbonia — FY2016 Earnings Presentation
47 slides from Arbonia's earnings presentation, Feb 28, 2017
Slide 1: Arbonia – 2016 Results – 28 February 2017
(Former AFG) Arbonia – 2016 Results – 28 February 2017 Alexander von Witzleben, CEO Felix Bodmer, CFO 1
Slide 2: Results of 2016 In line with Guidance
Results of 2016 ln line with Guidance 2016 Guidance 2016 All figures in CHF M 2016 2015 ∆ Net revenues 995 941 +1%1 ~1’000 EBITDA Excl. one-time effects Incl. one-time effects 66 69 57 27 +16% +158% ~65 Group result Incl. one-time effects 8 -177 n/a Net debt 225 22 n/a 1. Net revenues: adjusted
Slide 3: Highlights 2016 Major acquisitions, relocations completed
Highlights 2016 Major acquisitions, relocations completed Improved business profile Two relocations to by two major acquisitions Eastern Europe completed Takeover of Looser Holding by a combined cash (21%) & share (79%) Building Envelope offer: >98% acceptance level achieved Transfer of PVC window
Slide 4: Agenda
Agenda 1. Financials 2016 Measures deliver first results 2. Transformation of Arbonia Update on key measures 3. Outlook New Arbonia Group and guidance 2017 Questions Arbonia – 2016 Results | 28 February 2017 4
Slide 5: Income Statement Including one-time effects
Income Statement Including one-time effects In CHF M 2016 in % 2015 in % Net revenues 995.3 100.0 941.4 100.0 Cost of material and goods -435.9 -43.8 -431.3 -45.8 Personnel expenses -347.9 -35.0 -352.0 -37.4 Other operating expenses -146.8 -14.7 -157.6 -16.7 EBITDA 68.7 6.9 26.6 2.8 Depreciation, am
Slide 6: Reconciliation to adjusted numbers
Reconciliation to adjusted numbers 2016 without Actual Building Building Building one-time In CHF M 2016 Techn. Envelope Security Others effects Net revenues 995.3 995.3 EBITDA 68.7 4.4 -0.6 1.0 -7.5 66.0 EBIT 29.1 0.1 -0.3 2.4 28.6 Group result 7.6 -0.8 0.1 -0.2 5.9 12.2 Presentation of the respect
Slide 7: Adjusted Income Statement Without one-time effects
Adjusted Income Statement Without one-time effects In CHF M 2016 in % 2015 in % Net revenues 995.3 100.0 941.4 100.0 Cost of material and goods -436.9 -43.9 -431.3 -45.8 Personnel expenses -343.2 -34.5 -335.1 -35.6 Other operating expenses -150.7 -15.1 -143.8 -15.3 EBITDA 66.0 6.6 56.7 6.0 Depreciat
Slide 8: Net Revenues by Division / Region
Net Revenues by Division / Region Regional shifts mainly through acquisitions Net revenues by Division Net revenues by Region 16% (16%) 34% (33%) 34% (37%) 49% (49%) 35% (35%) 32% (30%) Building Technology Building Security Switzerland Germany RoW Building Envelope Note: Figures in brackets represen
Slide 9: Development of Net Revenues by Divisions
Development of Net Revenues by Divisions Organic growth in transformation phase Δ Acqui- Δ Δ Net revenues as reported Currency Organic 2016 2015 Year sition 1st half- 2nd half- in CHF M Effects growth1 Total Effects year year Arbonia 995.3 941.4 5.7% 0.7% 4.1% 0.9% 2.3% -0.3% Building Technology 486
Slide 10: Revenue breakdown for other Key Regions
Revenue breakdown for other Key Regions Including FX effects and effects from acquisitions in CHF M 20161 20152 % Poland 60′842 62′238 -2.2 Italy 51′900 48′031 +8.1 France 42′040 40′436 +4.0 Czech Republic 25′712 21′878 +17.5 Slovakia 25′660 22′432 +14.4 Russia 23′549 25′876 -9.0 Austria 20′975 18′
Slide 11: EBITDA- / EBIT-margins per Division
EBITDA- / EBIT-margins per Division Slight improvements in transformation year 15% 11.0% 11.9% 10% EBITDA margin, 5.1% 4.4% 5% adjusted 2.0% 2.2% 2015 0% 2016 Building Technology Building Envelope Building Security 15% 10% 7.3% 8.2% EBIT 5% margin, 2.4% 2.4% 2015 adjusted 0% 2016 -5% -2.4% -1.7% Bui
Slide 12: Income Statement Arbonia including continued Looser business
Income Statement Arbonia including continued Looser business Arbonia Looser *) Arbonia In CHF M adjusted adjusted “new” Net revenues 995.3 300.1 1’295.4 EBITDA 66.0 42.8 108.8 EBIT 28.6 22.7 51.3 *) Looser without Coating Arbonia – 2016 Results | 28 February 2017 12
Slide 13: Net Revenues and EBITDA by Divisions
Net Revenues and EBITDA by Divisions Improvement in almost all segments 2016 2015 Net EBITDA Net EBITDA in CHF M revenues adjusted revenues adjusted Arbonia 1295.4 8.4% 1212.4 7.6% Building Technology 486.8 11.9% 462.2 11.0% Building Envelope 350.8 2.2% 331.4 2.0% Building Security 395.4 10.0% 362.5
Slide 14: Net Revenues by Division Equal size of Divisions
Net Revenues by Division Equal size of Divisions Net revenues by Division – Net revenues by Division – Arbonia «reported» incl. Looser (without Coatings) 5% (5%) 16% (16%) 30% (30%) 38% (38%) 49% (49%) 35% (35%) 27% (27%) Building Technology Building Security Building Technology Building Security Bu
Slide 15: Net Revenues by Regions
Net Revenues by Regions Germany clearly strongest market Net revenues by Regions – Net revenues by Regions – Arbonia «reported» incl. Looser (without Coatings) 34% (33%) 34% (37%) 30% (30%) 31% (33%) 32% (30%) 39% (37%) Switzerland Germany RoW Switzerland Germany RoW Note: Figures in brackets repres
Slide 16: Balance Sheet Stronger equity
Balance Sheet Stronger equity In CHF M 1'600 1'400 Current Current 1'200 assets liabilities 38.7% 39.5% 1'000 Non-current 800 liabilities 12.7% Current Current liabilities assets 600 46.4% 51.8% Non-current assets Shareholders' Non-current 400 61.3% equity liabilities 14.6% Non-current 47.9% Shareho
Slide 17: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio Impacted by Looser acquisition In CHF M Leverage ratio1 0 0.0x -22 -50 0.5x -100 1.0x -150 -131 1.5x -151 -200 2.0x Leverage Ratio1 -222 -225 -250 2.5x Net Debt -300 3.0x 2012 2013 2014 2015 2016 Sale of Coating Business for approximately CHF M 100 leads to Leverage Ratio
Slide 18: Free Cash Flow
Free Cash Flow Impacted from Looser and Koralle acquisitions In CHF M 40 38 20 16 0 -20 -20 -40 -60 -52 -67 -80 2012 2013 2014 2015 2016 Free cash flow (Cash flow from operating and investing activities) Arbonia – 2016 Results | 28 February 2017 18
Slide 19: Development of Investments
Development of Investments CAPEX driven by relocations In CHF M 200 150 100 50 58 46 57 39 20 0 2012 20131 20141 2015 2016 Acquisition of subsidiaries Property, plant, equipment Intangible assets 1) Continued Operations Arbonia – 2016 Results | 28 February 2017 19
Slide 20: Operating Net Working Capital
Operating Net Working Capital On previous year’s level despite relocations In CHF M 200 20% 150 15% 100 10% 130 135 138 113 122 50 5% 0 0% 2012 2013 2014 2015 2016 % Net revenues Operating net working capital Note: Operating NWC = Accounts receivable + inventories – accounts payable – advances from
Slide 21: Agenda
Agenda 1. Financials 2016 Measures deliver first results 2. Transformation of Arbonia Update on key measures 3. Outlook New Arbonia Group and guidance 2017 Questions Arbonia – 2016 Results | 28 February 2017 21
Slide 22: Restructuring and repositioning of Arbonia
Restructuring and repositioning of Arbonia As shown August 13, 2015 Key strategic measures Objective: Long-term competitiveness in Europe Focus of Arbonia 1 2 3 Building supplier Relocation of Focus on Lean production divisional industrial Europe footprint strategies holding Energy efficiency Str
Slide 23: Progressing well – still challenges ahead
Restructuring and repositioning of Arbonia Progressing well – still challenges ahead Selective key measures1 Phase I Phase II Phase III 2018 (2015 H2) (2016) (2017) 1 Initiate closure of 4 Relocate PVC windows Relocate wood/alu Relocation of production sites in CH from Villeneuve to SK win
Slide 24: Relocation of production footprint
1 Relocation of production footprint Arbonia – 2016 Results | 28 February 2017 24
Slide 25: Relocation of production footprint Progressing according to plan
1 Relocation of production footprint Progressing according to plan Closure of Swiss Expansion of sites in Operational production sites Eastern Europe1 excellence Process completed PVC Closure communicated – Relocation of production Product quality assured and Altstätten production in transit
Slide 26: Two major relocations completed end of 2016
1 Relocation of production footprint Two major relocations completed end of 2016 New PVC production halls New special radiator factory in Pravenec (SK) in Stříbro (CZ) Most modern PVC production facilities in Europe Modern factory for special radiators Total CAPEX of CHF 19 M Total CAPEX of
Slide 27: Focus on divisional strategies
2 Focus on divisional strategies Arbonia – 2016 Results | 28 February 2017 27
Slide 28: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology Securing cost leadership EBITDA Margin1 (% of revenues) Building Building Technology Technology 2016 2018 11.0%1 11.8% 8.5% 10.1% 7% 8% 10% 11% 12% 13% 7.3%2 9.0%3 10.7% 11.5%4 Ambition: most profitable company in our markets 1. EBITDA 2015 for competito
Slide 29: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology Key measures to secure cost leadership Investments into operations Sales growth Investment of CHF 30 M into radiator Expansion in growing segments Heating factories (DE/CZ) Residential ventilation Technology Relocation of production from Arbon to
Slide 30: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology Resident. Ventilation completes product range Thermal Transfer Convection Radiation Ventilation A/C Industrial / commercial application Residential Ventilation Residential application Arbonia the No.1 in DE+CH for residential heat Product range Arbonia t
Slide 31: Divisional strategies – Building Technology
2 Divisional strategies – Building Technology No. 1 for shower enclosures in Europe European players Market positions of Kermi & Koralle in for shower enclosures the key markets for high-quality showers Sales (€ M)1 Pre acquisition Post acquisition Main production site of 1. Novellini No.1 Koralle
Slide 32: Divisional strategies – Building Envelope
2 Divisional strategies – Building Envelope Ambition: European leader in windows Market Ambition Largest Central European Players4 Fragmented German windows 1. Internorm / 5 € ~370 M6 market: Top 20 with a market share of only ~23% 2. G EUR ~ € 325 M7 Top 101 No.18 PVC 3. € ~185 M Wood and 4. WERU /
Slide 33: Production-Footprint in comparison
2 Divisional strategies – Building Envelope Production-Footprint in comparison Main production sites Largest Central European Players Production sites3 Sales (€ M)4 PVC 35 ~370 PVC 3 ~325 Wood2 12 ~185 PVC 3 ~170 1 ~160 Specific market PVC requirements1 Avg. cost of a blue collar worker per year (CH
Slide 34: Divisional strategies – Build. Security (Doors)
2 Divisional strategies – Build. Security (Doors) From Swiss niche player to No.2 in Europe Combined market position for interior doors in Central Europe Product portfolio complementarity Arbonia with strong position Segment Special doors Standard doors in home market No.3 Looser with strong positio
Slide 35: Lean industrial holding
3 Lean industrial holding Arbonia – 2016 Results | 28 February 2017 35
Slide 36: Lean industrial holding
3 Lean industrial holding Cost reduction to <1% of revenues by 2018 Holding cost reduction of ~50% Measures CHF (M) Termination of AFG-Arena sponsoring -24% -28% Compensation reduction for Chairman and CEO positions -35% Reduction of external advisors & overhead costs 14 13 5 3 1 Hea
Slide 37: Agenda
Agenda 1. Financials 2016 Measures deliver first results 2. Transformation of Arbonia Update on key measures 3. Outlook New Arbonia Group and guidance 2017 Questions Arbonia – 2016 Results | 28 February 2017 37
Slide 38: Business profile of new Arbonia Group
3 Business profile of new Arbonia Group Arbonia Group Net sales 2016: CHF 1’295 M1 EBITDA 2016: CHF 109 M1,2; 8.4% of net sales (EBITDA incl. one-time effects of CHF 112 M) Building Industrial Windows Doors Technology Services Leading position for Leading position for Leading position for interior H
Slide 39: Sale of Looser's coating business
Sale of Looser’s coating business Disposal of individual companies Looser’s coating business Current status of disposal Packaging coatings Plastic tubes/laminates (asset deal) • Coatings for packaging in food, • Sale to Siegwerk Druckfarben AG cosmetics and pharmaceuticals • Signing and Closing as
Slide 40: Development of our key markets (Top 4)
Development of our key markets (Top 4) Stable to positive outlook for 2017 Top 4 markets represent ~80% Germany (No. 1) Market growth 2017 vs. 2016 of total sales of Arbonia Group1 Residential Residential Non- New Renovation Residential Market growth Poland (No. 3) 2017 vs. 2016 +4.0% 0.0% +0.5% Res
Slide 41: German residential construction market
German residential construction market Long-term outlook Housing completions (k) 400 337 326 315 289 292 292 291 300 260 245 220 232 220 Catch-up in 192 Expected completion 200 181 later years 164 lag implied by capacity lags 100 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 202
Slide 42: Guidance of new Arbonia Group
Guidance of new Arbonia Group1 After integration of Looser Holding AFG and Looser 2016 Arbonia 2017 without Coatings Pro-forma consolidation without Coatings without Coatings Sales (CHF M) 995 300 1’295 ~1’300 EBITDA2 (CHF M) 66 43 109 >110 Sustainable free cash flows and dividend capacity from 2018
Slide 43: New Arbonia Group Investment case
New Arbonia Group Investment case A leading building component supplier in Central Europe for Building Technology Strong market positions for core products in Europe Further expansion in growing segments (underfloor heating, ventilation) Expansion of cost leadership through rationalisation o
Slide 44: Diverse shareholder structure
Diverse shareholder structure Strong shareholder base Arbonia shareholder structure as of 31 December 2016 Artemis 20% 3% Leo Looser 12% Looser & Stocker-Looser family Free Float 65% (share of <3% per individual shareholder) Free-float market Lock-up of Looser & Stocker-Looser capitalization: CHF 73
Slide 45: Questions?
Questions? Arbonia – 2016 Results | 28 February 2017 45
Slide 46: Thank you
ARBONIA @& Thank you 46
Slide 47: Disclaimer
Disclaimer Arbonia AG is making great efforts to include accurate and up-to-date information in this document, however we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoe