Georg Fischer AG · SIX:GF
Georg Fischer — FY2003 Earnings Presentation
63 slides from Georg Fischer's earnings presentation, Feb 24, 2004
Slide 1: Georg Fischer Corporation
Georg Fischer Corporation Annual media conference Kurt E. Stirnemann February 24, 2004 CEO
Slide 2: 2003: A testing year
2003: A testing year “We acted swiftly and effectively.” Kurt E. Stirnemann CEO Georg Fischer 24.02.2004 Annual media conference 2
Slide 3: Adding Quality to People's Lives
Adding Quality to People’s Lives Mobility Precision Comfort We make your trip We bring you We shape your pleasant and safe clean water daily life Georg Fischer 24.02.2004 Annual media conference 3
Slide 4: Mobility
Adding Quality to People’s Lives Mobility We make your trip pleasant and safe. People are increasingly mobile, and they have ever greater demands for comfort and safety in their vehicles. With its high-quality cast parts made of light metal and iron, GF Automotive makes it possible to build passenge
Slide 5: Comfort
Adding Quality to People’s Lives We bring you clean water. A secure supply of clean water is becoming one of the crucial challenges of this century. GF Piping Systems meets this worldwide demand for the supply of drinking water and enables the transport of liquids for industrial purposes. Comfort 24
Slide 6: Precision
Adding Quality to People’s Lives We shape your daily life. Serial production of consumer goods requires extreme precision and demanding manufacturing Precision technologies. The necessary moulds and tools are produced with machines and system solutions from GF Machine Tools. 24.02.2004 Annual media
Slide 7: GF Automotive
GF Automotive Pioneering technological development partner and manufacturer of highly durable cast components and systems in iron and light metal for the automotive industry. 24.02.2004 Annual media conference 7
Slide 8: GF Piping Systems
GF Piping Systems Leading supplier of piping systems in plastic and metal. Application-oriented system solutions and high-quality components for the transportation of water, gas and other liquids in the industrial, utility and domestic installations sectors. Global market presence. 24.02.2004 Annual
Slide 9: GF Machine Tools
GF Machine Tools Leading global system supplier in the tool and mould-making sector, with electric discharge machinery and high-speed milling machines, as well as the related automation systems and peripherals. Extremely precise tools and moulds are a decisive competitive element in the mass product
Slide 10: 2003 Financial Year
Georg Fischer Corporation 2003 Financial Year Kurt E. Stirnemann CEO
Slide 11: No shortage of challenges
No shortage of challenges Still waiting for recovery in key markets Market has bottomed out Positive signals in individual markets, but still no hard evidence of sustainable change Price pressure Reticent consumer behaviour, especially in Germany Exports more expensive in the dollar bloc Growth in C
Slide 12: Stronger into the future
Stronger into the future Restructuring plan on track, measures having an effect Operational profitability maintained • Thanks to significant earnings increase at GF Automotive Products and GF Piping Systems • Despite a cyclically led decline at GF Machine Tools 2nd half better than 1st half Increase
Slide 13: Restructuring planned in detail
Restructuring planned in detail Sustainable increase in earnings Strengthen capital base Reduction in net debt Structural and Subordinated cost-cutting Divestments convertible bond projects Restructuring plan Financing 24.02.2004 Annual media conference 13
Slide 14: Fitness programme powering ahead
Fitness programme powering ahead Structural measures going according to plan • All measures communicated, instigated, completed in part • Costs/provisions charged mainly to 2003 • Total expenses will be only just over CHF 130 million • Alternatives to closure where feasible Divestments being pursued
Slide 15: Structural projects going according to plan
Structural projects going according to plan GF Automotive Lincoln: Sold + partly relocated Apc: Sold Bitterfeld: To be closed Wide-ranging action throughout the Corporation GF Piping Systems in the areas of Genua: Closed Huntingdon: To be closed Overheads Bedford: To be closed Schwab: Restructured P
Slide 16: Financing on firm foundation
Financing on firm foundation Convertible bond placed successfully Refinancing of Agie Charmilles Extension maturity profile of bank loans: Negotiations on track 24.02.2004 Annual media conference 16
Slide 17: Key figures Corporation 2003
Title figures: Key and Logo only Corporation 2003 [CHF m] 2003 2002 ∆ Order intake 3 385 3 480 -3% Sales 3 257 3 417 -5% Orders on hand 799 685 +17% EBITDA 282 275 +3% EBIT before special charges 96 80 +20% Special charges -192 EBIT -96 80 Profit -147 -20 Employees 13 247 13 737 -4% 24.02.2004 Annua
Slide 18: Corporation: Sales
Title and Logo Corporation: only Sales [CHF m] 3903 3848 4000 3417 3500 3239 3257 3000 2500 2000 1500 1000 500 0 1999 2000 2001 2002 2003 Corporation excl. Coperion Coperion 24.02.2004 Annual media conference 18
Slide 19: Sales maintained thanks to GF Automotive
Sales maintained thanks to GF Automotive 2003 sales by Corporate Group CHF m 2003 2002 ∆ GF Automotive 1,585 1,422 + 11 % GF Piping Systems 760 775 -2% GF Machine Tools 878 1’010 - 13 % Corporation (excl. Coperion) 3,257 3,242 + 0.5 % 24.02.2004 Annual media conference 19
Slide 20: Focused on three core businesses
Focused on three core businesses Sales Corporation 2003: CHF 3.26 bn 1 GF Automotive | 49% No. 1 in Europe, technology leader worldwide 2 GF Piping Systems | 23% Leading offering worldwide of piping systems in plastic and metal 3 GF Machine Tools | 27% World no. 1 in EDM, tooling and automation; maj
Slide 21: Sales breakdown by region
Title and Sales Logo only breakdown by region Year-back figures in brackets Asia/other 11% (10%) Switzerland 4% (5%) America Germany 9% (11%) 44% (42%) Europe 80% (79%) Rest of Europe 25% (24%) Austria 4% (4%) UK 3% (4%) 24.02.2004 Annual media conference 21
Slide 22: Operating profit: Corporation
Title and Logo Operating only profit: Corporation [CHF m] 500 460 450 400 356 343 350 267 275 282 300 250 200 175 156 150 96 100 80 50 0 1999 2000 2001 2002 2003 1) EBIT EBITDA 1) EBIT before special charges 24.02.2004 Annual media conference 22
Slide 23: Georg Fischer Core Businesses
Georg Fischer Core Businesses 2003 Financial Year Kurt E. Stirnemann Corporate Groups CEO
Slide 24: GF Automotive: Highlights 2003
GF Automotive: Highlights 2003 Sales growth 11%, counter to market trend Impressive rise in earnings: 45% Free cash flow improved significantly Streamlining of production capacity; restructuring plan implemented rapidly and decisively Present in all major vehicles Investment in new products paying o
Slide 25: GF Automotive: Key figures
TitleAutomotive: GF and Logo only Key figures 2003 2002 ∆ Sales CHF m 1 585 1 422 +11% EBITDA CHF m 168 146 +15% EBIT before special charges CHF m 61 42 +45% Special charges CHF m -128 EBIT CHF m -67 42 Net operating assets CHF m 693 783 -11% 1) RONOA % 8 5 +60% Employees 6 427 6 586 -2% EBITDA marg
Slide 26: GF Automotive: Sales
TitleAutomotive: GF and Logo only Sales [CHF m] 1800 1585 1600 1446 1425 1422 1400 1189 1200 1000 800 600 400 200 0 1999 2000 2001 2002 2003 Sales 24.02.2004 Annual media conference 26
Slide 27: GF Automotive: Operating profit
TitleAutomotive: GF and Logo only Operating profit [CHF m] 180 178 168 160 147 146 139 140 120 100 80 71 60 61 60 41 42 40 20 0 1999 2000 2001 2002 2003 1) EBIT EBITDA 1) EBIT before special charges 24.02.2004 Annual media conference 27
Slide 28: GF Automotive strategy: More GF per car
GF Automotive strategy: More GF per car More cast parts per vehicle • Complete range of solutions • Substitution of forged and sheet metal parts by cast parts in iron and light metal Expansion in China Focus on installation-ready components 24.02.2004 Annual media conference 28
Slide 29: GF Piping Systems: Highlights 2003
GF Piping Systems: Highlights 2003 Investment slump in industry, plus currency factors, prevent sales expansion Impressive 36% rise in earnings thanks to lower costs Utilities continue growing Industry showing early signs of recovery in project business Improved earnings on domestic installations Fu
Slide 30: GF Piping Systems: Key figures
TitlePiping GF and Logo only Key figures Systems: 2003 2002 ∆ Sales CHF m 760 775 -2% EBITDA CHF m 81 74 +9% EBIT before special charges CHF m 38 28 +36% Special charges CHF m -36 EBIT CHF m 2 28 Net operating assets CHF m 420 490 -14% 1) RONOA % 8 5 +60% Employees 3 294 3 416 -4% EBITDA margin % 11
Slide 31: GF Piping Systems: Sales
TitlePiping GF and Logo only Sales Systems: [CHF m] 1000 887 845 775 760 800 673 600 400 200 0 1999 2000 2001 2002 2003 Sales 24.02.2004 Annual media conference 31
Slide 32: GF Piping Systems: Operating profit
TitlePiping GF and Logo only Operating profit Systems: [CHF m] 120 117 100 81 81 80 75 73 74 60 38 38 40 32 28 20 0 1) 1999 2000 2001 2002 2003 EBIT EBITDA 1) EBIT before special charges 24.02.2004 Annual media conference 32
Slide 33: GF Piping Systems strategy: Grow with global need for water
GF Piping Systems strategy: Grow with the global need for water Expand applications in the pharmaceutical, medical and food and beverage sectors Serve the global need for water Strong position in China as springboard for expansion 24.02.2004 Annual media conference 33
Slide 34: GF Machine Tools: Highlights 2003
GF Machine Tools: Highlights 2003 Market still difficult, resulting in 13% lower sales and negative EBIT Europe and USA: Bottomed out mid-2003 Asia: Rising demand, especially in China. Sales outstripped America for first time Profitability-raising programme in progress Target 2004: Return to the pro
Slide 35: GF Machine Tools: Key figures
TitleMachine GF and Logo only Key figures Tools: 2003 2002 ∆ Sales CHF m 878 1 010 -13% EBITDA CHF m 22 50 -56% EBIT before special charges CHF m -6 22 Special charges CHF m -27 EBIT CHF m -33 22 Net operating assets CHF m 518 611 -15% 1) RONOA % -1 4 Employees 3 111 3 275 -5% EBITDA margin % 3 5 -4
Slide 36: GF Machine Tools: Sales
TitleMachine GF and Logo only Sales Tools: [CHF m] 1400 1249 1243 1200 1010 1000 901 878 800 600 400 200 0 1999 2000 2001 2002 2003 Sales 24.02.2004 Annual media conference 36
Slide 37: GF Machine Tools: Operating profit
TitleMachine GF and Logo only Operating profit Tools: [CHF m] 140 135 120 111 100 92 80 69 59 60 49 50 40 22 22 20 -6 0 -20 1999 2000 2001 2002 2003 1) EBIT EBITDA 1) EBIT before special charges 24.02.2004 Annual media conference 37
Slide 38: GF Machine Tools strategy: Expansion in China
GF Machine Tools strategy: Expansion in China Expand high-speed milling Expand service offering Consolidate technological leadership Strengthen position as no. 1 systems provider Expand strong Chinese base 24.02.2004 Annual media conference 38
Slide 39: Consolidated financial statements and financing
Georg Fischer Corporation Consolidated financial Friedrich Rufer statements and financing CFO
Slide 40: Table of contents
Table of contents 1 Income Statement before special charges 2 Currency impacts 3 Income Statement 4 Restructuring plan 5 Consolidated Balance Sheet 6 Free cash flow 7 Net debt 8 Financing 9 Outlook 24.02.2004 Annual media conference 40
Slide 41: Income Statement before special charges
Entwicklung Income Nettoverschuldung Statement before special charges 1) mill. CHF 2003 2002 Sales 3‘257 3‘242 EBITDA 282 279 EBIT before special charges 96 94 Financial result -46 -63 Net profit before taxes 50 33 1) 2002 adjusted by Coperion 24.02.2004 Annual media conference 41
Slide 42: Exchange rate effects 2002 / 2003
Exchange rate effects 2002 / 2003 Average rates against CHF 1.70 1.68 1.66 1.64 1.62 1.60 1.58 3’239 USD 2002 1.56 1.559 1.54 1.52 EUR 2003 1.50 1.521 1.48 1.46 EUR 2002 1.44 1.468 1.42 1.40 1.38 1.36 3’417 USD 2003 1.34 1.346 1 2 3 4 5 6 7 8 9 10 11 12 EUR 2002 EUR 2003 USD 2002 USD 2003 24.02.2004
Slide 43: Exchange rate effects on EBIT
Entwicklung Exchange Nettoverschuldung rate effects on EBIT mill. CHF Ø rates 2003 to 2002 USD and dependent currencies -17 EUR 3 Total -14 EBIT before special charges 96 EBIT if exchange rates had remained unchanged 110 24.02.2004 Annual media conference 43
Slide 44: Income statement
Income statement mill. CHF 2003 2002 Sales 3‘257 3‘417 -5% Gross value added 1‘272 1‘337 -5% Personnel expenses -990 -1‘062 -7% EBITDA 282 275 3% Depreciation -158 -154 3% Amortization -28 -41 -32% EBIT before special charges 96 80 20% Restructuring plan -131 Impairment Goodwill Die Casting -61 EBIT
Slide 45: Special charges
Special charges Restructuring plan CHF 130 million Value Machine adjustments Tools Social plans 50 25% 40 Automotive 50% Piping Systems 25% Relocations, transfers 40 24.02.2004 Annual media conference 45
Slide 46: Balance sheet - Assets
Balance sheet - Assets mill. CHF 2003 % 2002 % Property, plant, equipment 1‘054 1‘094 Intangible assets 271 367 Investments in associates 4 20 Other financial assets 157 133 Deferred tax assets 53 55 Non-current assets 1‘539 51 1‘669 53 Inventories 537 556 Trade accounts receivable 604 609 Other acc
Slide 47: Balance sheet – Liabilities and shareholders' equity
Balance sheet – Liabilities and shareholders’ equity mill. CHF 2003 % 2002 % Share capital 335 334 Share premium 128 130 Retained earnings 381 490 shareholders’ equity 844 28 954 31 Minority interests 88 3 100 3 Non-current liabilities 1‘220 40 1‘099 35 Current liabilities 888 29 972 31 Liabilities
Slide 48: Free cash flow 2003
Entwicklung Free des Freien Cashflow 2003 cash flow mill. CHF 2003 2002 EBITDA 282 275 Cash payments for special charges -24 Changes in net working capital 91 10 Capex -147 -171 Proceeds from disposal of - property, plant, equipment 17 16 - associates 2 2 Current income taxes -12 -9 Interest result,
Slide 49: Net debt
Net debt mill. CHF Net debt as of December 31, 2002 1‘077 Net debt as of December 31, 2003 926 Reduction net debt -151 24.02.2004 Annual media conference 49
Slide 50: Reduction net debt: Key factors
Reduction net debt Key factors mill. CHF 2003 EBITDA 282 - Capex -130 - Current income taxes -12 - Interest result, net -48 Operating cash surplus 92 92 Inventories, trade and other accounts receivable 70 Trade accounts payable 30 Management of net working capital 100 100 Restructuring plan -24 Misc
Slide 51: Corporate financing
Corporate financing Restructuring plan Improvement debt ratio • Increase in EBITDA • Decrease of net debt Convertible debenture loan falls due in January 2005 CHF 208 mill. 24.02.2004 Annual media conference 51
Slide 52: Corporate financing: Three-stage programme
Corporate financing Three-stage programme mill. CHF Subordinated convertible bond November 2003 150 √ Refinancing Agie Charmilles • Syndicated loan 160 √ • Subordinated loan Georg Fischer 90 √ Extension of the maturity profile bank loans Georg Fischer 250 Financing secured, appropriate reserve 24.02
Slide 53: Outlook 2004
Outlook 2004 Earnings situation: sustainable increase in EBIT upswing divestitures low tax burden Net debt: free cash flow proceeds from divestitures increase in EBITDA better debt ratio 24.02.2004 Annual media conference 53
Slide 54: Outlook
Georg Fischer Corporation Outlook Kurt E. Stirnemann CEO
Slide 55: We're well placed
We’re well placed Strong momentum in restructuring plan - implementation is mobilizing both forces and hearts Demanding divestments without any loss of value Financing on firm foundation We feel the pulse of the market and are strategically well positioned Potential for organic growth and higher ear
Slide 56: Close to the customer - world-wide
Close to the customer - world-wide ... Australia 13 000 employees 200 sites in 30 countries Automotive Piping Systems Machine Tools 24.02.2004 Annual media conference 56
Slide 57: ... with an ever-stronger base in China
... with an ever-stronger base in China All 3 Groups present Australia CHF 244 m sales 1224 employees at 20 sites 9 production sites Automotive Piping Systems Sales, CHF m Employees 6000 Machine Tools 300 5000 250 4000 200 150 3000 100 2000 50 1000 0 0 1999 2000 2001 2002 2003 GER SWI AUT CHI UK USA
Slide 58: Enormous potential for GF products in China
Enormous potential for GF products in China Mobility Precision Comfort No. of vehicles “Workshop of the world” China now largest expanding at market for Homes and 20% p.a. tooling machines infrastructure (18% of global market) for 1 billion people 24.02.2004 Annual media conference 58
Slide 59: Targets for 2004
Targets for 2004 Leverage the potential of an additional CHF 100 million EBIT from the restructuring plan. Achieve an attractive result despite last tranche of structural costs. Lower net debt further. Exploit growth areas in all divisions; first tangible signals from our markets. Drive ahead with e
Slide 60: Value potential
Value potential Medium-term profitability goals Sales CHF 4 bn • Market recovery • Further progress in operational performance • Organic growth through new applications EBIT margin (ROS) 8% ( 10%) • Through higher contributions RONOA 18% ROE 15% +GF+ Medium to long-term financing framework Net debt
Slide 61: Keep an eye on GF
Keep an eye on GF “Georg Fischer is an attractive stock because... ...we are quick to recognize market trends ... we act swiftly and decisively ...we offer technological advantages ...we guarantee quality and integrity” Kurt E. Stirnemann CEO Georg Fischer 24.02.2004 Annual media conference 61
Slide 62: Georg Fischer
Adding Quality to People’s Lives Mobility Precision Comfort Georg Fischer 24.02.2004 Annual media conference 62
Slide 63: Disclaimer
Disclaimer This document is for presentation The management of Georg Fischer purposes only and should not be does not accept any liability whatsoever construed as an offer, invitation or with respect to the use of this solicitation to subscribe for, purchase presentation. or sell any investment. Nei