Arbonia Ag · SIX:ARBN
Arbonia — AFG Arbonia-Forster-Holding — FY2013 Earnings Presentation
50 slides from Arbonia's earnings presentation, Mar 4, 2014
Slide 1: Welcome
AFG – FY 2013 Results – 04 March 2014 Welcome 1
Slide 2: Presenters
AFG – FY 2013 Results – 04 March 2014 Rudolf Graf, Chairman of the Board of Directors & CEO (ad interim) Felix Bodmer, CFO 2
Slide 3: Disclaimer
Disclaimer AFG Arbonia-Forster-Holding 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 a
Slide 4: Agenda
Agenda 1. Review 2013 (Rudolf Graf) 2. Strategy (Rudolf Graf) 3. Financial Results (Felix Bodmer 4. Outlook (Felix Bodmer) 5. Conclusion (Rudolf Graf) 6. Questions AFG – Annual Results 2013 – 04 March 2014 4
Slide 5: Review 2013: Financial key figures
Review 2013: Financial key figures Reported net loss, lack of revenue growth AFG Group Net revenues: CHF 1’286 million (-0.3%) Flat development, despite a major changes in group structure vs. 2012 EBITDA: CHF 100.6 million (+16.3%), 7.8% margin Improved mix effects from new business portfolio result
Slide 6: Review 2013: Key figures future core business
Review 2013: Key figures future core business Disappointing growth, clearly higher profitability Continued Operations Net revenues: CHF 1’004 million (+0.3% org.) Still disappointing, as reshaping of group portfolio diverted focus from growth EBITDA adjusted: CHF 102.2 million (+9.4%), 10.2% margin
Slide 7: Review 2013: Positive achievements
Review 2013: Positive achievements Foundation set for future success Portfolio focused, Bleeders sold or separated Allows full focus on expansion towards building envelope and interiors Structure of industrial holding successfully established Organisation in place; lean corporate administration to b
Slide 8: 2013 – Open issues for 2014
2013 – Open issues for 2014 Highest priority for new management team STI divestment target to be completed by end 2014 Divestment process initiated, will mark end of portfolio reshaping Industrial holding structure has to reflect size core business Ensure efficient organisation with empowered divisi
Slide 9: New management approach
New management approach New style in running the AFG Industrial Holding No. 1 Priority: Organic growth Acquisitions， only for portfolio suplementing Thorough execution: No overload of the organisation Lean & efficient corporate organisation: Empower divisions and trust in the leaders you cho
Slide 10: Agenda
Agenda 1. Review 2013 2. Strategy 3. Financial Results 4. Outlook 5. Conclusion AFG – Annual Results 2013 – 04 March 2014 10
Slide 11: Leading construction components group
Leading construction components group Mission AFG is a technologically leading international construction-related building supplier convincing through innovative solutions and services for increased room comfort, quality of life and sustainability. Vision We make buildings efficient, safe and comfor
Slide 12: AFG Businesses respond to global market trends
AFG Businesses respond to global market trends Strategic alignment is confirmed Global market trends Group Divisions’ Energy Efficiency Safety & Security Well-Being focus Building Envelope Internationalisation, XXX XXX XXX production footprint Building Technology Heating, Cooling, Energy XXX XXX XXX
Slide 13: The AFG Industry Holding
The AFG Industry Holding Three profitable core divisions Building Technology Building Envelope Building Security Heating Sanitary Windows Profile Unique Technology Equipment Systems Doors Revs. 2013: CHF 445 Mio. Revs. 2013: CHF 411 Mio. Revs. 2013: CHF146 Mio. Adj. EBIT ‘13: CHF 39 Mio. Adj. EBIT ‘
Slide 14: Value creation in all businesses
Value creation in all businesses Consistent execution of existing programs Strategic Objectives 1. Industrial Holding Right setup 1 structure ‘Management & Performance 1. Revenues & Cost of Sales 2. Operational Right operational 2. Procurement 2 framework Excellence 3. Production 4. Administration T
Slide 15: Growth contributors I: Heating Technology
Growth contributors I Business Unit Heating Technology Products/Systems System Solutions (x-optimised) New products (heat pumps) Innovation: cooling, room ventilation, sub floor convectors (Ascotherm eco) Cross-selling opportunities Markets Germany: Heat pumps Switzerland: Panel heating, industrial
Slide 16: Growth contributors II: Sanitary Equipment
Growth contributors II Business Unit Sanitary Equipment Products/Systems new Cada XS Markets Hubs Russia, China, Middle East (Organisation, Shops, flagship stores) Entering Swiss market Entering Eastern Europe AFG – Annual Results 2013 – 04 March 2014 16
Slide 17: Growth contributors III: Building Envelope
Growth contributors III Division Building Envelope Products/Systems Innovation: ventilation in windows Low cost PVC line for Switzerland Aluminium and roof windows (Skylight) New mobile service units (CH) Markets International growth focus on Austria, France, Germany, Italy and Russia Reinforce mark
Slide 18: Growth contributors IV: Profile Systems
Growth contributors IV Business Unit Profile Systems Products New applications in “safety & security” area: fire protection door E30, finger protection door El30 Cross-selling Forster/RWD Schlatter Markets Improving economies in Eurozone to support construction industry Development direct distributi
Slide 19: Growth contributors V: RWD Schlatter AG
Growth contributors V Business Unit RWD Schlatter AG Products Ecology (FSC, natureplus, EPD*) *Environmental Product Declaration Automation (EBZF, MRL) Einbruchschutz, Brandschutz, Zutrittskontrolle, Fluchtwegtechnik Fire protection, smoke protection New products (Verbundlüfter, Forster/RWDS-Door) S
Slide 20: Internationalisation in China
Economic growth drivers in strategic markets Internationalisation in China Strategic Region Forecasted Growth China 50 <5 Urbanisation, Demography, CHF Mio. Private Income 2011 2018 2013 2014 Opening of three Kermi flagship Expansion numbers of Kermi flagship stores (Heating) stores (Heating) Doubli
Slide 21: Internationalisation in Russia
Economic growth drivers in strategic markets Internationalisation in Russia Strategic Region Forecasted Growth Russia >100 Governmental Investments, <30 CHF Mio. Private Demand 2011 2018 2013 2014 New Business Model Heating with Development regional sales network extended service & local warehouse H
Slide 22: Internationalisation in Middle East
Economic growth drivers in strategic markets Internationalisation in Middle East Strategic Region Forecasted Growth ME 15 Geographic Intersection, 1 CHF Mio. Expats Inflow 2011 2018 2013 2014 ***** Anjum – Hotel in Mekka Development of regional Sanitary (1’600 shower enclosures) distribution network
Slide 23: Agenda
Agenda 1. Review 2013 2. Strategy 3. Financial Results 4. Outlook 5. Conclusion AFG – Annual Results 2013 – 04 March 2014 23
Slide 24: Income Statement – AFG Group
Income Statement – AFG Group As reported in million CHF 2013 in % 2012 in % Net revenues 1'285.5 100.0 1'288.9 100.0 Cost of material and goods -556.1 -43.3 -563.4 -43.7 Personnel expenses -450.2 -35.0 -460.4 -35.7 Other operating expenses -191.2 -14.9 -196.7 -15.3 EBITDA 100.6 7.8 86.5 6.7 Deprecia
Slide 25: Income Statement – Continued Operations
Income Statement – Continued Operations Core Business as reported in million CHF 2013 in % 2012 in % Net revenues 1'004.0 100.0 919.3 100.0 Cost of material and goods -429.6 -42.8 -403.9 -43.9 Personnel expenses -341.8 -34.0 -319.9 -34.8 Other operating expenses -136.7 -13.6 -120.1 -13.1 EBITDA 102.
Slide 26: Reconciliation to adjusted numbers – AFG Group
Reconciliation to adjusted numbers – AFG Group Impairments at STI/Kitchens impact profitability in million CHF Actual Division Division Division Division Others 2013 2013 HTS KR ST STI Without one-time effects Net revenues 1'285.5 1'285.5 EBITDA 100.6 -3.2 -0.0 -2.3 +2.4 +2.4 99.9 EBIT -22.8 +0.7 +9
Slide 27: Adjusted Income Statement – AFG Group
Adjusted Income Statement – AFG Group Improved due to Desinvestments/Acquisitions in million CHF 2013 2012 ∆% Net revenues 1'285.5 1'288.9 -0.3 Cost of material and goods -555.6 -556.7 Personnel expenses -450.7 -458.4 Other operating expenses -186.6 -190.2 EBITDA 99.9 96.4 +3.6 in % of net revenues
Slide 28: Adj. Income Statement – Continued Operations
Adj. Income Statement – Continued Operations Higher revenues, group result improved in million CHF 2013 2012 ∆% Net revenues 1'004.0 919.3 +9.2 Cost of material and goods -429.6 -403.9 Personnel expenses -341.6 -319.2 Other operating expenses -134.3 -116.4 EBITDA 102.2 93.4 +9.4 in % of net revenues
Slide 29: Net revenues by Division / Country AFG Group
Net revenues by Division / Country AFG Group Reflects Acquisition & Desinvestments Net revenues by Division Net revenues by Country 5% 8% (5%) (10%) RoW 25% (20%) 35% (35%) 14% (19%) Switzerland Germany 48% (51%) 27% (29%) 38% (31%) Heating and Sanitary Windows and Doors Kitchens and Refrigeration S
Slide 30: Net revenues / EBITDA adjusted / EBIT adjusted
Net revenues / EBITDA adjusted / EBIT adjusted Flat revenues, margins slightly up in million CHF 1'800 18.0% 1'600 16.0% 1'384 1'414 1'400 1'347 14.0% 1'289 1'286 1'200 12.0% 1'000 10.0% 800 8.0% 600 6.0% 400 4.0% 200 2.0% 0 0.0% 2009 2010 2011 2012 2013 Net revenues EBITDA adj. EBIT adj. AFG – Annu
Slide 31: EBITDA- / EBIT-margins per Division
EBITDA- / EBIT-margins per Division Impact from price pressure in Core Divisions EBITDA margin, adjusted 20% 12.9% 12.3% 10.9% 10.9% 10% 8.8% 5.5% 1.5% 0% -0.8% -2.1% -0.4% 2012 -10% 2013 -20% Heating Windows Kitchens and Steel Surface and Sanitary and Doors Refrigeration Technology Technology EBIT
Slide 32: Balance Sheet
Balance Sheet Increased equity-ratio despite impairments in million CHF 1'200 1'000 Current liabilities 25.2% Current assets Current liabilities 800 51.5% Current assets 35.9% 51.7% Non-current 600 Non-current liabilities 42.7% liabilities 400 28.0% Non-current Non-current assets Shareholders' 200 a
Slide 33: Free Cash Flow
Free Cash Flow 1) Clearly positive without acquisition effect in million CHF 150 125 112 100 75 60 50 38 31 2) 25 13 0 2009 2010 2011 2012 2013 -25 -20 -50 1) Cash flow from operating and investing activities 2) Free cash flow without acquisitions and desinvestments AFG – Annual Results 2013 – 04 Ma
Slide 34: Development of Investments
Development of Investments Capex of CHF 44 Mio. below previous years in million CHF 125 100 75 50 67 67 58 25 44 39 0 2009 2010 2011 2012 2013 Property, plant, equipment Intangible assets Acquisition of subsidiaries AFG – Annual Results 2013 – 04 March 2014 34
Slide 35: Changes in Operating Net Working Capital
Changes in Operating Net Working Capital Slight increase driven by STI / Windows & Doors in million CHF 200 20.0% 180 18.0% 160 16.0% 140 14.0% 120 12.0% 100 10.0% 80 8.0% 60 6.0% 40 4.0% 20 2.0% 0 0.0% 2009 2010 2011 2012 2013 Operating net working capital % Net revenues Operating NWC = Accounts re
Slide 36: Net Indebtedness and Leverage Ratio
Net Indebtedness and Leverage Ratio Solidly financed at 1.5x net debt / EBITDA in million CHF 0 0.0 X 2009 2010 2011 2012 2013 -50 0.5 X -100 1.0 X -150 1.5 X -131 -151 -169 -167 -200 2.0 X -250 2.5 X -239 -300 3.0 X Net indebtedness Leverage Ratio AFG – Annual Results 2013 – 04 March 2014 36
Slide 37: Maturities of Financial Debt
Maturities of Financial Debt Financial flexibility maintained with synd. loan in million CHF 300 250 250 200 200 150 132 100 50 - - - 0 2014 2015 2016 2017 2018 2019- Bond 2010 – 2016, CHF 200 million US private placement 2004 – 2014, USD 160 million Syndicated loan 2013 – 2018, CHF 250 million Othe
Slide 38: Agenda
Agenda 1. Review 2013 2. Strategy 3. Financial Results 4. Outlook 5. Conclusion AFG – Annual Results 2013 – 04 March 2014 38
Slide 39: Looking ahead to the New AFG
Looking ahead to the New AFG Revenues and adj. EBIT of future Core business Net revenues, in million CHF 2013 2012 ∆% Division Building Technology 445.4 456.2 -2.4 Division Building Envelope 410.8 320.1 28.3 Division Building Security 146.2 141.6 3.3 Others / Elimination 1.6 1.8 12.5 Total 1'004.0 9
Slide 40: Net revenues by Division/Country Core Business
Net revenues by Division/Country Core Business Core business Net revenues by Division Net revenues by Country 15% (15%) RoW 27% (22%) 44% (50%) Switzerland 44% (47%) 41% (35%) Germany 29% (31%) Building Technology Building Envelope Building Security Figures in brackets represent last year's figures.
Slide 41: Building Technology division
Building Technology division Heating Technology & Sanitary Equipment in million CHF, resp. in % 2012 2013 2014 Net revenues 456.2 445.4 Adjusted organic growth -0.3% -2.1% ~ 3% EBITDA margin, adjusted 12.9% 12.3% EBIT margin, adjusted 9.6% 8.8% > 8% Outlook and initiatives 2014: Focus on growth in
Slide 42: Building Envelope division
Building Envelope division Windows in million CHF, resp. in % 2012 2013 2014 Net revenues 320.1 410.8 Adjusted organic growth -3.8% +2.1% 1-3% EBITDA margin, adjusted 11.0% 11.5% EBIT margin, adjusted 7.3% 7.5% > 7% Outlook and initiatives 2014: Consistent integration of Dobroplast Key priority
Slide 43: Building Security division
Building Security division Doors & Profile Systems in million CHF, resp. in % 2012 2013 2014 Net revenues 141.6 146.2 Adjusted organic growth +1.1% +3.2% 3-5% EBITDA margin, adjusted 9.4% 11.4% EBIT margin, adjusted 7.3% 9.4% > 8% Outlook and initiatives 2014: Opportunities from new European permi
Slide 44: AFG's mid-term targets
AFG‘s mid-term targets Getting gradually at 8% EBIT-margin Financial targets 2015: Growth 3-5% p.a. EBIT-margin >8% realisticly achieved in 2016/17 ROCE >10% FCF >CHF 50 million 40% Revenues outside realisticly achieved core markets D/CH in 2016/17 Net debt < CHF 200 million (1.0-2.0x EB
Slide 45: Outlook 2014 AFG Group
Outlook 2014 AFG Group Heterogeneous regional trends: - Core markets CH / D stable on high level - Growth opportunities in Eastern Europe, Russia and Middle East Selective investments into organic growth will pay-off midterm: - Project ‘Footprint’ at ‘Building Envelope’ (Windows) - Completing sy
Slide 46: Important events 2014 / 2015
Agenda Important events 2014 / 2015 25 April 2014 Annual General Meeting 2013 07 August 2014 Half-year results 2014 12 November 2014 Investors day 22 January 2015 Release of 2014 net revenues Financial media / analyst‘s conference presenting 03 March 2015 2014 results AFG – Annual Results 2013 – 04
Slide 47: Agenda
Agenda 1. Review 2013 2. Strategy 3. Financial Results 4. Outlook 5. Conclusion AFG – Annual Results 2013 – 04 March 2014 47
Slide 48: Conclusion & key takeaways
Conclusion & key takeaways 1. STI divestment marks end of portfolio clean-up 2. Group strategy is fully confirmed 3. Priorities of management: Execution and Growth 4. Focus on organic growth without any transformative acquisitions; priority on integration of acquired units (Dobroplast, PZP HEATING)
Slide 49: Your questions
Your questions AFG – Annual Results 2013 – 04 March 2014 49
Slide 50: Thank you
Aare Building the Difference Thank you 50
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