Oc Oerlikon Corporation Ag · SIX:OERL
Oc Oerlikon — FY2018 Earnings Presentation
37 slides from Oc Oerlikon's earnings presentation, Mar 5, 2019
Slide 1: Strong operating performance in all businesses – CHF 1.00 dividend proposal
Strong operating performance in all businesses – CHF 1.00 dividend proposal Dr. Roland Fischer, CEO Jürg Fedier, CFO Annual Analyst Conference Zurich, March 5, 2019
Slide 2: Agenda
Agenda 1 Introduction 2 Business Review 2018 3 Financial Review 2018 4 Outlook 5 Appendix Page 2 Oerlikon Analyst Presentation - FY 2018 March 5, 2019
Slide 3: Strong performance in 2018 – good prospects for 2019
Strong performance in 2018 – good prospects for 2019 ▪ Group order intake up 23.5 % - Group sales up 26.2 %, driven by strong 1 Delivering on growth performance in Surface Solutions and Manmade Fibers ▪ Group’s EBITDA margin strong at 15.6 %, after investments in Surface Solutions and the Additive M
Slide 4: Agenda
Agenda 1 Introduction 2 Business Review 2018 3 Financial Review 2018 4 Outlook 5 Appendix Page 4 Oerlikon Analyst Presentation - FY 2018 March 5, 2019
Slide 5: Surface Solutions Segment – Delivering strong organic growth and 18.6% EBITDA margin
Surface Solutions Segment – Delivering strong organic growth and 18.6 % EBITDA margin OPERATIONAL PERFORMANCE MARKET DEVELOPMENT 4% ▪ Profitable growth in orders and sales driven by General ▪ Tooling market running on high business levels Asia / Pacific Industry, Automotive and Aviation ▪ Continued
Slide 6: Manmade Fibers Segment – Healthy order intake level maintained and strong sales increase
Manmade Fibers Segment – Healthy order intake level maintained and strong sales increase achieved OPERATIONAL PERFORMANCE MARKET DEVELOPMENT 6% ▪ Record top-line growth and double-digit operating ▪ Continued consolidation in the Chinese filament Asia / Pacific 9% profitability in FY18 equipment mark
Slide 7: Agenda
Agenda 1 Introduction 2 Business Review 2018 3 Financial Review 2018 4 Outlook 5 Appendix Page 7 Oerlikon Analyst Presentation - FY 2018 March 5, 2019
Slide 8: Group performance builds on strong top-line growth in both Segments
Group performance builds on strong top-line growth in both Segments and investments in the future1 in CHF million 4Q18 4Q17 y-o-y FY18 FY17 y-o-y ▪ Surface Solutions Segment with double-digit increase in orders and sales year-over-year and higher sales in all regions Order intake 641 616 4.1% 2'731
Slide 9: Business split – Ongoing recovery in Manmade Fibers reflected in Group splits
Business split1 – Ongoing recovery in Manmade Fibers reflected in Group splits Segment sales split Segment EBITDA split FY 2018 58% 42% FY 2018 -1% 70% 31% FY 2017 66% 34% FY 2017 -3% 86% 17% in % of sales in % of EBITDA Surface Solutions Manmade Fibers Surface Solutions Manmade Fibers Others Region
Slide 10: FX impact on Orders, Sales and EBITDA in FY 2018
FX impact on Orders, Sales and EBITDA in FY 2018 Order intake FY 2018 Sales FY 2018 EBITDA FY 2018 In CHF million In CHF million In CHF million 1.7% 1.7% 1.5% 2'731 2'684 2'609 2'564 406 400 1 -48 1 -46 -3 -3 15.6 15.6 Margin in % FY 2018 Transaction Translation FY 2018 FX FY 2018 Transaction Transl
Slide 11: Result from continuing operations positively impacted by higher EBIT and improved financial result
Result from continuing operations1 positively impacted by higher EBIT and improved financial result in CHF million 2018 2017 Δ Result before interest and taxes (EBIT) 243 168 44.6 % in % of sales 9.3 % 8.1 % Financial result -3 -9 66.7 % Result before taxes (EBT) 240 159 50.9 % in % of sales 9.2 % 7
Slide 12: Strong unleveraged balance sheet with an equity ratio of 44%
Strong unleveraged balance sheet with an equity ratio of 44 % in CHF million 2018 2017 Cash and cash equivalents 764 871 Trade and trade notes receivables 305 447 Inventories 343 461 Property, plant and equipment 667 845 Goodwill and intangible assets 1’139 1’229 Assets classified as held for sale 8
Slide 13: Group CapEx to depreciation ratio exceeding mid-term target corridor
Group CapEx to depreciation ratio exceeding mid-term target corridor for future growth1 CapEx Depreciation & amortization CapEx / depr. & amort. ratio In CHF million In CHF million In CHF million +22% +5% 207 121 115 1.8 1.71 169 1.6 1.47 1.4 1.43 1.44 1.16 Mid-term 1.2 1.09 target corridor 1.01 1.0
Slide 14: Consolidated cash flow statement 2018
Consolidated cash flow statement 20181 in CHF million -12 69 -342 429 Receivables -6 -149 871 Inventories -83 858 Payables/liabilities 73 -19 Contract liabilities 84 Non-cash imp. hedge acc. 1 Total 69 Dividends paid -118 Repayment of debt -5 Interest paid -16 Purchase of PP&E -232 Purchase of intan
Slide 15: Return On Capital Employed (ROCE)
Return On Capital Employed (ROCE) In % 20183 20172 EBIT 243 219 12.1% - Total current income tax -63 -75 11.1% - Total deferred tax income -4 11 8.2% NOPAT 176 155 5.7% Net Operating Assets 1’526 1’949 + Current income tax receivables 17 28 -19.8% + Deferred tax assets 110 151 - Current income tax p
Slide 16: Attractive dividend of CHF 1.00 per share proposed
Attractive dividend of CHF 1.00 per share proposed – ordinary dividend CHF 0.35 / extraordinary dividend CHF 0.65 Underlying EPS Dividend proposal for FY 2018 In CHF per share In CHF per share extraordinary dividend ordinary dividend 97% 0.85 1.00 Payout ratio of ordinary dividend 0.76 0.72 0.61 70%
Slide 17: Agenda
Agenda 1 Introduction 2 Business Review 2018 3 Financial Review 2018 4 Outlook 5 Appendix Page 17 Oerlikon Analyst Presentation - FY 2018 March 5, 2019
Slide 18: Strategic portfolio priorities confirmed – focus on execution and operational performance
Strategic portfolio priorities confirmed – focus on execution and operational performance CHF 2 609 million sales (2018) Surface Solutions Segment Manmade Fibers Segment CHF 1 511 million CHF 1 099 million World market leader with widest ranging portfolio of surface technologies, From melt to yarn,
Slide 19: Investments in future profitable organic growth across all businesses
Investments in future profitable organic growth across all businesses Surface Solutions Segment Manmade Fibers Segment Investment in competence centers, in particular for ePD, CVD Investment in Factory 4.0 and digitalization solutions and Oil & Gas Further investments in regional expansion, mainly i
Slide 20: 2019 Group outlook – Strong top-line growth and defending an attractive profitability level
2019 Group outlook – Strong top-line growth and defending an attractive profitability level Underlying Group / Segment assumptions intake Order 2'731 >2’700 Oerlikon Group Surface Solutions Segment ▪ Order Intake and Sales expected to ▪ Order intake expected to grow around 4 % FY 2018 FY 2019E excee
Slide 21: Summary
Summary 1 Delivering on growth in both Segments in 2018 2 Executing on strategy 3 Attractive dividend 4 Continued growth in 2019 and investment for the future 5 Page 21 Strengthening industrial experience on the Board of Directors Oerlikon Analyst Presentation - FY 2018 March 5, 2019
Slide 22: Agenda
Agenda 1 Introduction 2 Business Review 2017 3 Financial Review 2017 4 Outlook 5 Appendix Page 22 Oerlikon Analyst Presentation - FY 2018 March 5, 2019
Slide 23: Oerlikon Group – Key financial figures
Oerlikon Group – Key financial figures1 in CHF million Key financial figures 2018 2017 2016 2015 2014 Order intake 2’731 2’211 2’413 2’537 2’647 Sales (3rd parties) 2’609 2’068 2’331 2’671 2’825 EBITDA margin 15.6 % 15.6 % 14.3 % 12.7 %3 16.8 % Cash flow from operations2 429 404 293 289 256 Net work
Slide 24: Oerlikon Segments – Key financial figures
Oerlikon Segments – Key financial figures in CHF million Key financial figures 2018 20171 2016 2015 2014 Surface Solutions Order intake 1’574 1’412 1’236 1’233 965 Sales (3rd parties) 1’511 1’370 1’238 1’229 973 EBITDA margin 18.6 % 20.1 % 22.2 % 21.4 % 18.8 % Net operating assets 1’584 1’519 1’372
Slide 25: EBITDA to EBIT bridge for Oerlikon Group
EBITDA to EBIT bridge for Oerlikon Group EBITDA to EBIT bridge – FY 20181 EBITDA to EBIT bridge – FY 20172 In CHF million In CHF million 322 406 -98 -95 308 227 -40 243 -35 -25 -24 168 EBITDA Depr. & Imp. EBITA Amor.of acqu. Other Amor. EBIT EBITDA Depr. & Imp. EBITA Amor.of acqu. Other Amor. EBIT i
Slide 26: EBITDA to EBIT bridge per Segment – FY 2018
EBITDA to EBIT bridge per Segment – FY 2018 Surface Solutions Segment Manmade Fibers Segment 283 128 -15 113 -82 -2 106 -5 201 -38 -19 144 EBITDA Depr. & Imp. EBITA Amor. of acqu. Other Amor. EBIT EBITDA Depr. & Imp. EBITA Amor. of acqu. Other Amor. EBIT intangibles intangibles ▪ Amortization of ide
Slide 27: Tax rate of 28% – Higher earnings with favorable country mix
Tax rate of 28 % – Higher earnings with favorable country mix and successful tax planning instruments In CHF million 240 -63 173 -4 EBT FY 2018 Current income tax expense Deferred tax income Result from continuing operations FY 2018 ▪ Main tax-paying entities are in China, Switzerland and Germany ▪
Slide 28: Active net working capital management and increased contract liabilities
Active net working capital management and increased contract liabilities In CHF million; as % of sales 14% 15% 14% 4% 4% 6% -3% 394 391 316 167 125 108 -79 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 20171 FY 20182 Net working capital is defined as trade and notes receivables + inventories – trade pa
Slide 29: Constant range of investments in R&D at high level
Constant range of investments in R&D at high level of CHF 116 million in 2018 In CHF million; as % of sales 120 116 11 110 106 10 101 103 100 96 94 95 9 90 8 80 7 70 6 60 5% 4% 5 50 4% 4% 4% 4% 4 40 3% 3 30 20 2 10 1 0 0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 20171 FY 20182 ▪ R&D essential to se
Slide 30: R&D and CapEx on Segment level
R&D and CapEx on Segment level R&D expenses FY 2018 CapEx FY 2018 6% Surface Solutions (6%) 26% Surface Solutions (11%) 12% Manmade Fibers (3%) CHF Manmade Fibers (2%) CHF 120m 207m (% of Segment sales) Corporate 74% 82% (% of Segment sales) Depreciation & Amortization FY 20181 CapEx / Depr. & Amort
Slide 31: Asset allocation and employees on Segment level
Asset allocation and employees on Segment level Net operating assets FY 2018 Employees (FTE) by Segment FY 2018 -4% 2% Surface Solutions 0% Surface Solutions 26% Manmade Fibers CHF Manmade Fibers 10’727 1’523m Corporate Corporate 72% 104% Operating Assets FY 2018 Employees (FTE) by Region FY 2018 2%
Slide 32: Oerlikon Transformation – Streamlining the portfolio and focus on Surface Solutions
Oerlikon Transformation – Streamlining the portfolio and focus on Surface Solutions Coating Segment: Coating Segment: Surface Solutions Segment: Manmade Fibers Segment: Surface Solutions Recentis & Primateria & Eicker KG, Rox acquisition Metco acquisition Laser Cladding Services Trützschler Nonwoven
Slide 33: Oerlikon shares
Oerlikon shares Oerlikon shares Oerlikon shareholder structure1 as of December 31, 2018 ▪ Listed on Swiss Exchange (SIX) since 1973 Liwet Holding AG ▪ Securities symbol: OERL 41.34% ▪ Securities number 81 682 BlackRock Inc. ▪ ISIN: CH0000816824 Black Creek IM 52.19% ▪ Number of shares outstanding: 3
Slide 34: Coverage – 8 Buy / Add – 6 Hold / Neutral – 0 Sell
Coverage – 8 Buy / Add – 6 Hold / Neutral – 0 Sell / Underperform Broker Analyst Recommendation Date of last update Target price AlphaValue Luis Pereira Buy 30.10.2018 17.50 Baader Helvea Reto Amstalden Buy 01.03.2019 17.00 Berenberg Bank Marta Bruska Hold 30.10.2018 16.00 Credit Suisse Patrick Laag
Slide 35: Financial Calendar 2019
Financial Calendar 2019 March 5, 2019 Q4 / FY 2018 results - Media & Analyst Conference in Zurich April 9, 2019 Annual General Meeting of Shareholders - KKL Lucerne May 7, 2019 Q1 2019 results - Media & Analyst Conference Call August 6, 2019 Q2 / HY 2019 results - Media & Analyst Conference Call Nov
Slide 36: Investor Relations Contact
Investor Relations Contact OC Oerlikon Management AG, Pfäffikon Churerstrasse 120 CH – 8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Investor Relations Head of Corporate Communications & Marketing ad interim Phone: +41-58-360-9622 Mobile: +41-79-810-8211 E-mail: a.schwarzwaelder@oerlik
Slide 37: Disclaimer
Disclaimer OC Oerlikon Corporation AG, Pfäffikon, (together with its affiliates hereinafter referred to as “Oerlikon”) has made great efforts to include accurate and up-to-date information in this document. However, Oerlikon makes no representation or warranties, expressed or implied, as to the trut