Sfs Group Ag · SIX:SFSN
Sfs — H1 2023 Earnings Presentation
43 slides from Sfs's earnings presentation, Jul 18, 2023
Slide 1: Presentation 1H 2023 results
Presentation 1H 2023 results | July 18, 2023 | Public Presentation 1H 2023 results Heerbrugg | July 18, 2023 Valeria Hörler, Heerbrugg,
Slide 2: Today's speakers
Today’s speakers Welcome to the presentation on our 1H 2023 results Jens Breu, CEO Volker Dostmann, CFO Presentation 1H 2023 results | July 18, 2023 | Public | 2
Slide 3: Agenda
Agenda 01 Positioning of SFS Jens Breu 02 Key takeaways Jens Breu 03 Development of key financials Volker Dostmann 04 Development by segment Jens Breu 05 Guidance 2023 & Group priorities Jens Breu 06 Q&A Jens Breu & Volker Dostmann Presentation 1H 2023 results | July 18, 2023 | Public | 3
Slide 4: Positioning of SFS
Positioning of SFS Presentation 1H 2023 results | July 18, 2023 | Public | 4
Slide 5: We are by your side – 24/7
Mission critical products for selected end markets We are by your side – 24/7 Presentation 1H 2023 results | July 18, 2023 | Public | 5
Slide 6: SFS value proposition: Inventing success together
SFS value proposition Inventing success together Presentation 1H 2023 results | July 18, 2023 | Public | 6
Slide 7: SFS value engineering
SFS value engineering Synergies in tooling based technologies Presentation 1H 2023 results | July 18, 2023 | Public | 7
Slide 8: Global sales & manufacturing platform
Global sales & manufacturing platform 140 locations Customer proximity supported by local presence in 35 countries North America Europe Asia, others 40 Locations 85 Locations 15 Locations (7 Production sites) (20 Production sites) (5 Production sites) Presentation 1H 2023 results | July 18, 2023 | P
Slide 9: Our focused business activities
Our focused business activities Sustainable growth through the cycle Presentation 1H 2023 results | July 18, 2023 | Public | 9
Slide 10: Key takeaways
Key takeaways Presentation 1H 2023 results | July 18, 2023 | Public | 10
Slide 11: Key takeaways: Progress achieved
Key takeaways Progress achieved • First half of 2023 characterized by mixed business performance and destocking effects in end markets, as well as continued ramp-up of innovation programs • Total third party sales (sales) of CHF 1,580.7 million generated, corresponding to another strong increase of
Slide 12: Key takeaways | Environment
Key takeaways | Environment Excellent progress on emissions and renewable energy Presentation 1H 2023 results | July 18, 2023 | Public | 12
Slide 13: Key takeaways | Social
Key takeaways | Social Dual training secured; accident rate too high Presentation 1H 2023 results | July 18, 2023 | Public | 13
Slide 14: Organizational changes as of beginning of 2024
Organizational changes as of beginning of 2024 Foster customer centricity of organization Presentation 1H 2023 results | July 18, 2023 | Public | 14
Slide 15: Development of key financials
Development of key financials Presentation 1H 2023 results | July 18, 2023 | Public | 15
Slide 16: Sales bridge
Sales bridge Varying end market dynamics Current year 1H 2023 In CHF million 1H 2022 Organic growth CHF million % % 1,650 1,600 –52 1,581 Segment EC –22 –4.3% 6.8% 1,550 Segment FS 14 4.2% 16.1% 1,500 Segment D&L 17 4.8% 7.2% 1,450 401 1,400 • EC segment faced headwind due to destocking 1,350 effect
Slide 17: Sales breakdown
Sales breakdown Ongoing shift towards Industrial & Europe 100% 100% 9.6% 7.8% 8.7% 11.2% 12.7% 11.1% 20.0% 21.6% 16.5% 10.9% 22.4% 10.1% 11.5% 80% 80% 16.6% 7.5% 7.7% 7.2% 22.7% 27.7% 18.5% 21.6% 21.8% 18.8% 22.7% 20.9% 19.9% 5.6% 60% 60% 5.5% 15.8% 11.1% 40% 29.6% 40% 60.4% 31.1% 31.4% 39.0% 35.4%
Slide 18: Operating profitability
Operating profitability Mix effects, partially higher cost base and lower utilization Reported, Reported, Adjusted, Adjusted, In CHF million In % of net sales Profitability CHF m % CHF m % 900 25 EBIT 189.9 12.1% 189.9 12.1% 21.3% 800 EBITDA 253.1 16.1% 253.1 16.1% 19.1% 19.1%* 700 18.6% 20 17.2% 15
Slide 19: Constant development
Constant development Growth driven by acquisition of Hoffmann In CHF million 1H 2023 1H 2022 +/– PY Net sales 1,573.7 100.0% 1,224.1 100.0% 28.6% Contribution margin 909.8 57.8% 738.4 60.3% 23.2% Personnel expenses –420.9 –26.8% –337.3 –27.6% Other OPEX –235.8 –14.9% –184.0 –15.0% EBITDA 253.1 16.1%
Slide 20: Earnings per share (EPS)
Earnings per share (EPS) EPS with solid development • Net income attributable to SFS (Nominator) +1.1% EPS in CHF 9 • Weighted average number of outstanding shares (Denominator) +2.8% 8 • Overall EPS –1.5% 7 6.95 6.51 6 5.47 5 4.90 4 3.42 3.37 3 2.50 2.20 2 1.80 1.80 1 0 2019 2020 2021 2022 1H 22 1H
Slide 21: Net working capital
Net working capital Positive development based on mix effects • Positive trend due to inclusion of Hoffmann NWC simplified* in % of net sales C2C simplified in days confirmed 35% 270 • Decreasing inventory as well as accounts payable 30.1% 30.3% 29.9% 28.9%** 240 30% 28.2% levels drove positive deve
Slide 22: Capital expenditure
Capital expenditure Investing to capture market potential CAPEX spending by 1H 2023 1H 2022 In CHF million In % of net sales segment % % 400 6.6% 7% EC 73% 70% 6.4% 6.1% 6.2% FS 12% 9% 350 6% 5.4% D&L 10% 8% 5.9% 5.2% 300 5.0% 5.6% 5% 4.3% • Decisive expansion to capture customer demand in 250 4.4%
Slide 23: Operating free cash flow (OFCF)
Operating free cash flow (OFCF) Recovery to previous levels ongoing In CHF million 1H 2023 1H 2022 In CHF million In % of EBITDA 58.7% CF before changes in NWC 202 174 360 60% Changes in NWC –51 –111 50.2% Cash flow from operations 151 63 300 50% CAPEX –82 –61 48.5% Operating free cash flow 69 2 240
Slide 24: Balance sheet ratios
Balance sheet ratios Equity ratio increasing • Important factors for net debt development: Equity ratio in % CHF million net cash/debt • Improved but soft generation of operating free cash 90% 600 flow 78.9% • Dividend payment in first half year 80% 75.5% 75.9% 400 • Expect debt level to slightly de
Slide 25: Return on capital
Return on capital ROCE impacted by EC segment | ROIC slightly improved • Bridge ROCE to ROIC In % of net sales • Impact from goodwill and net cash: –8.5% 30% 27.6% • Impact from tax effects: –3.8% 26.1% 25% 24.4%* 22.7% 21.1% 21.7% 19.9% 20% Adjusted EBIT Adjusted EBIT −Tax Rate 17.5% ROCE = ROIC =
Slide 26: KPI summary
KPI summary Stable development in challenging environment In CHF million 1H 2023 % 1H 2022 % +/– PY Third party sales 1,580.7 1,223.6 +29.2% Net sales 1,573.7 1,224.1 +28.6% EBITDA Margin 253.1 16.1% 217.7 17.7% –160bps EBIT Margin 189.9 12.1% 162.9 13.3% –120bps EBIT adj. Margin adj. 189.9 12.1% 17
Slide 27: Development by segment
Development by segment Presentation 1H 2023 results | July 18, 2023 | Public | 27
Slide 28: Headlines Engineered Components segment
Headlines Engineered Components segment Organizational course-setting • Reported sales of CHF 479.0 million, –8.5% vs. 1H 2022 • Mixed performance of divisions. Electronics impacted by destocking effects and reduced market demand • EBIT margin of 9.4% impacted by mix effects, uneven capacity utiliza
Slide 29: Automotive and Industrial division
Automotive and Industrial division Riveting aligns organizationally • Continued good growth momentum in Automotive • Capacity ramp-up of newly built facility in Heerbrugg for production of electric driving brake components and assemblies on track • Mixed development in Industrial: • Aircraft with co
Slide 30: Electronics and Medical division
Electronics and Medical division Electronics earliest in destocking cycle • Electronics confronted with inventory reductions by major HDD customers and reduced consumer demand in Mobile Phones and Lifestyle Electronics • First expansion phase at the Nantong site in completion. New space mainly used
Slide 31: Headlines Fastening Systems segment
Headlines Fastening Systems segment Stable market demand • Despite enduring market demand across major industries, reported sales of CHF 330.4 million down –1.2% vs. 1H 2022 due to unfavorable FX • High inventory levels throughout the entire construction market supply chain resulting in more intense
Slide 32: Construction and Riveting division
Construction and Riveting division Implement organizational changes • Good results in both regions Europe and North America for Construction • Expansion of production capacity in Exeter, Pennsylvania (USA) on track • Application areas in the Riveting division performed positively as well • Riveting
Slide 33: Construction division – Presence in NA expanded
Construction division – Presence in NA expanded Acquisition of CSS per July 1, 2023 • Business concerning fasteners and other products of Connective Systems & Supply, Inc. (CSS) acquired • Acquisition enables SFS to strengthen its market position in the United States with two new distribution sites
Slide 34: Headlines Distribution & Logistics segment
Headlines Distribution & Logistics segment Strong results • Overall good market demand led to reported sales of CHF 771.3 million (+110.9% vs. 1H 2022), +4.8% on a like-for-like basis • Positive trend continued. Business with customers in Switzerland slowed down • Scope effects from the first-time c
Slide 35: D&L Switzerland and D&L International division
D&L Switzerland and D&L International division Realizing potential • Decisive work by cross-divisional teams continued to leverage potential business opportunities: • Roadmap for evaluation and implementation of shared, efficient processes and platforms for an optimized customer journey • Roadmap fo
Slide 36: Guidance 2023 & Group priorities
Guidance 2023 & Group priorities Presentation 1H 2023 results | July 18, 2023 | Public | 36
Slide 37: Updated guidance 2023
Updated guidance 2023 First-time full consolidation of Hoffmann 2022A 2023G 2023G March 3 Updated July 18 (CHF) (CHF) (CHF) Sales (in local currencies, incl. M&A) 2,746 m 3.2–3.3 billion* 3.1–3.3 billion* * Including first-time consolidation of Hoffmann for full year. Before consolidation effects, s
Slide 38: SFS Group priorities
SFS Group priorities Focus on specific priorities Sustain- Megatrends Growth Customers Profitability ability Focus on application Investments in Ensure reliable Balance production Integrate sustainable areas with strong future growth projects supply capability capacity with demand acting and thinkin
Slide 39: Agenda: IR events in 2024
Agenda IR events in 2024 Publication of first information on financial year 2023 Friday, January 19, 2024 Publication of financial year results 2023 Friday, March 1, 2024 31th Annual General Meeting Wednesday, April 24, 2024 IR Contact investor.relations@sfs.com Presentation 1H 2023 results | July 1
Slide 40: Q&A
Q&A Presentation 1H 2023 results | July 18, 2023 | Public | 40
Slide 41: Today's speakers
Today’s speakers Any questions? Jens Breu, CEO Volker Dostmann, CFO Presentation 1H 2023 results | July 18, 2023 | Public | 41
Slide 42: Thank you for your attention!
Thank you for your attention! Presentation 1H 2023 results | July 18, 2023 | Public | 42
Slide 43: Inventing success together
Inventing success together