Sfs Group Ag · SIX:SFSN
Sfs — FY2014 Earnings Presentation
35 slides from Sfs's earnings presentation, Mar 6, 2015
Slide 1: Welcome to the presentation of the FY2014 results
Welcome to the presentation of the FY2014 results Global precision engineering champion with Swiss heritage Focused in technology – diversified in end markets
Slide 2: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Developments by segments/divisions Jens Breu 4 Outlook on 2015 Heinrich Spoerry 5 Q&A 2015-03-06 Presentation FY2014 results / page 2
Slide 3: Highlights in the 2014 financial year (1/2)
Highlights in the 2014 financial year (1/2) Encouraging sales growth CHF 1,383.0m +5.1% in core business Proportionately faster EBITA growth CHF 195.4m +10.3% Important CAPEX for future growth CHF 97.6m +27.4% Strong R&D activities CHF 34.3m +59.5% Solid equity financing and balance sheet CHF 1,805.
Slide 4: Highlights in the 2014 financial year (2/2)
Highlights in the 2014 financial year (2/2) Listing on SIX Swiss Exchange on 7 May 2014 Primary Placement CHF 324m Secondary Placement CHF 380m Total Placement CHF 704m Increase of free float to 42.6% due to expiration of lock-ups Substantial new customer and project wins which will contribute
Slide 5: Financial Overview
Financial Overview CHF million 2014 2013 adj1 Growth y-o-y Gross Sales 1383.0 1330.6 + 3.9% EBITDA 271.4 251.6 + 7.9% as a % of Operating revenue 19.5 19.0 EBITA 195.4 177.1 + 10.3% as a % of Operating revenue 14.1 13.3 EBIT 141.5 124.0 + 14.1% as a % of Operating revenue 10.2 9.3 Net Income 110.2 8
Slide 6: Sales breakdown by regions and end markets
Sales breakdown by regions and end markets Share of sales by region Share of sales by end market 2013 Asia Switzerland Electro and Electronics Construction 24.4 25.0 24.8 sector 29.7 North America Automotive sector 9.8 21.3 21.3 Other sectors1 Europe 24.2 40.8 2014 Asia Switzerland Electro and Elect
Slide 7: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Developments by segments/divisions Jens Breu 4 Outlook on 2015 Heinrich Spoerry 5 Q&A 2015-03-06 Presentation FY2014 results / page 7
Slide 8: Sales bridge 2013 to 2014 financial year
Sales bridge 2013 to 2014 financial year CHF million 1'450 1,331 0 -12 0 64 1,383 Sales growth in core business 1'400 with 5.1% y-o-y 1'350 Growth in all three segments 7.1% in EC 1'300 3.4% in FS 1.6% in D&L 1'250 Reported sales up by 3.9% 1'200 change in scope of 1'150 consolidation
Slide 9: Strong contribution margin
Strong contribution margin % of operating revenue 70% CM with 63.2% 100 bps up y-o-y Contribution margin (CM) 6.3% CM growth 65% 62.2% 63.2% 62.7% 60.4% above-average growth with 60% profitable products change in scope of consoli- 55% 53.0% 52.3% 51.4% 52.8% dation 50% Operating expenses (op
Slide 10: Improved operating profitability
Improved operating profitability in % of operating revenue in CHF million 25% 400 Operating cash flow (EBITDA margin) close to 20% 350 19.5% 20% 19.0% Operating profit (EBITA) 17.3% 17.5% 300 increased by 10.3% y-o-y 14.1% 250 EBITA margin improved to 15% 13.3% 14.1% due to 11.5% 11.5% 195.4
Slide 11: Increased CAPEX to secure future growth
Increased CAPEX to secure future growth Capex in % of operating revenue Capex in CHF million 8% 160 Capex spending with 7.0% 7.0% above target range 7% 140 share of growth capex 68% 5.8% faster than expected ramp-up 6% 5.7% 120 5.3% of electronic parking brake advanced demand for 5% 97.6 100
Slide 12: Transitory increase of net working capital
Transitory increase of net working capital NWC in % of operating revenue NWC Days outstanding 35% 280 Peak in net working capital at 30.1% 30.2% year end 2014 29.2% 28.7% 30% 240 increased activity in Q4 in Engineered Components higher A/R outstanding 25% 200 more work in progess and raw mat
Slide 13: Attractive free cash flow conversion
Attractive free cash flow conversion Free cash flow in % of EBITDA CHF million 60% 300 Freee cash flow CHF 102m 51.7% down by 26.7% y-o-y 48.4% due to higher NWC and 50% 250 strong capex 37.7% Cash flow conversion 37.7% 40% 200 31.0% below Ø of 42% 30% 139 150 102 20% 90 100 64 10% 50 Fr
Slide 14: Stable return on net operating assets
Stable return on net operating assets EBITA in % of NOA NOA in CHF million 20.2% 20.4% 20% 19.1% 4'000 Operational NOA before intangible assets (Swiss GAAP) RONOA I is measured at pre-tax profit (EBITA) 15.5% just above the 20% mark 15% 3'000 13.7% Total NOA does include 10.6% 10.7% intangib
Slide 15: Solid balance sheet structure
Solid balance sheet structure Equity in % of assets CHF million 80.4% Capital increase strengthened 80% 800 the balance sheet ratios 76.5% Net proceeds from IPO 70% 600 CHF 311.3m 62.7% 54.7% Equity ratio up to 80.4% 60% 333.0 400 Back to a net cash position with CHF 87.7m 50% 200 87.7 40% 0
Slide 16: Increased dividend in line with policy
Increased dividend in line with policy Payout ratio in % Divdend per share in CHF 90% 2.20 Payout ratio on net income CHF 1.50 51% 80% 2.00 70% 1.80 Payout ratio on cash net income CHF 1.50 36.4% 60% 1.60 1.75 51.0% 50% 1.40 37.5% 40% 1.20 27.0% 27.8% 30% 1.00 1.50 20% 0.80 1.00 10% 0.60
Slide 17: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Developments by segments/divisions Jens Breu 4 Outlook on 2015 Heinrich Spoerry 5 Q&A 2015-03-06 Presentation FY2014 results / page 17
Slide 18: Headlines Engineered Components
Headlines Engineered Components Strong sales growth of 8.1 % y-o-y in core business Dynamic development due to launch of numerous projects Additional innovation projects in ramp-up phase that will fuel growth over coming years EBITA margin lifted slightly higher to good level of 19.1% plea
Slide 19: Market growth and increased SFS content
Market growth and increased SFS content Global light vehicle production summary by region (000s) Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 Europe 19,285 19,502 20,118 20,021 20,465 21,319 22,104 22,318 22,379 Americas 19,731 20,711 20,807 21,268 21,897 22,463 22,943 23,560 23,767 Asia 42,484
Slide 20: Highlights 2014 Automotive division
Highlights 2014 Automotive division Market success and technology projects Customer wins for ABS and brake systems Medina (USA) Simultanous ramp up Development of ball of high volume screw drive production in North for parking brake America, Europe and applications Asia to serve global Heerbrugg (CH
Slide 21: Growth driver Airbus
Growth driver Airbus Production schedule Airbus Current Expected peak production Product lines production 2014 2015 2016 2017 per month per month A320 family. 42 493 502 527 532 46 (April 2016) A330 10 109 98 98 99 9 (April 2015) A380 2.7 29 29 30 30 2.7 (April 2014) A350XWB 2.2 14 32 69 104 13 (201
Slide 22: First success with Chinese smartphone OEMs
First success with Chinese smartphone OEMs Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 Electronics division: Smart phones / Consumer Hard disk drives business units mobile devices electronics 2015-03-06 Presentation FY2014 results / page 22
Slide 23: Headlines Fastening Systems
Headlines Fastening Systems Sales of CHF 336.7 million; 3.4% growth y-o-y (comparable basis) Good momentum from industrial applications Intensive efforts to upgrade product range offered under SFS intec and GESIPA brands Rapid progress on numerous programs to improve operating efficiency; in
Slide 24: Highlights 2014 Construction division
Highlights 2014 Construction division Market success and technology projects Customer wins for ABSMarket and brake introduction of new systems JB-D/L system at 'fensterbau frontale' in Nuremberg (GER) isoweld® project Fondation Jérôme Seydoux-Pathé in Paris (FRA) Timber construction: Le Musée de Vin
Slide 25: Highlights 2014 Riveting division
Highlights 2014 Riveting division GESIPA® - the experts in blind riveting Customer wins for ABS and brake Worldwide roll out of a demonstration systems and technology center concept PowerBird® Pro Gold Edition Extremely strong and durable riveting battery tool generation TAURUS® 1Speed Rivet, ou
Slide 26: Headlines Distribution & Logistics
Headlines Distribution & Logistics Distribution & Logistics increased its sales on comparable basis by 1.6% to CHF 319.1 million EBITA margin excluding non- recurring items was held at 8.0%. Margin equates with a high return on capital given the relatively low capital employed in this business
Slide 27: Highlights 2014 Distribution & Logistics
Highlights 2014 Distribution & Logistics New customer and project wins with logistic solutions Case 'Swiss premium industrial' Customer benefit Standardized solution ready for roll-out at customer's sites Increased product range through integration of third party suppliers Flexible platform al
Slide 28: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Developments by segments/divisions Jens Breu 4 Outlook on 2015 Heinrich Spoerry 5 Q&A 2015-03-06 Presentation FY2014 results / page 28
Slide 29: Impact of appreciation of Swiss franc on SFS
Impact of appreciation of Swiss franc on SFS The appreciation of the Swiss franc has a significant impact on the profitability of our Swiss engineering and manufacturing operations (SFS intec AG) at an exchange rate of 1.05 EUR/CHF EBITA Margin will drop significantly The Swiss Distribution & Lo
Slide 30: Measures to cope with the stronger Swiss franc
Measures to cope with the stronger Swiss franc Additional measures for future profit enhancements Profit In SwissImprovement entities: Program in Switzerland Hiring freeze reduction of head count by attrition Increase of weekly working hours from 42 h to 44 h Reduction of fixed management co
Slide 31: Illustrative impact on EBITA 2015 vs 2014
Illustrative impact on EBITA 2015 vs 2014 EBITA Planned CHFm 2015 growth at constant FX-rates 200 Additional profit improvement Translation program impact Transaction impact FX-Rate 1.22/€ 1.05/€ 150 2014 2015 estimated 2015-03-06 Presentation FY2014 results / page 31
Slide 32: Outlook for 2015
Outlook for 2015 Good progress achieved in 2014 and good business momentum: significant new project wins contribute to future growth technology leadership confirmed market leadership in targeted niche markets strengthened Sales growth in core business at constant exchange rates 5 - 7% (unc
Slide 33: Agenda
Agenda 1 Introduction and overview Heinrich Spoerry 2 Comments on development of key financials Rolf Frei 3 Developments by segments/divisions Jens Breu 4 Outlook on 2015 Heinrich Spoerry 5 Q&A 2015-03-06 Presentation FY2014 results / page 33
Slide 34: More than 8,000 employees – one target
More than 8,000 employees – one target Creating value with In Depth Technological Competence International Presence Application and Industry Expertise Long-term Relationships 2015-03-06 Presentation FY2014 results / page 34
Slide 35: Disclaimer
Disclaimer This presentation includes forward looking statements. These statements reflect the SFS Group's current assesment of market conditions and future events. The statements are therefore subject to risks, uncertainties and assumptions. Unforseen events may lead to deviations of the actual res