Sfs Group Ag · SIX:SFSN
Sfs — H1 2017 Earnings Presentation
35 slides from Sfs's earnings presentation, Jul 21, 2017
Slide 1: Welcome to the presentation of 1HY 2017 results
Welcome to the presentation of 1HY 2017 results International development, manufacturing and distribution specialist Focused in technology – diversified in end markets 2017-07-21 Presentation 1HY 2017 results I page 1
Slide 2: Today's speakers
Today's speakers Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer 2017-07-21 Presentation 1HY 2017 results I page 2
Slide 3: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-07-21 Presentation 1HY 2017 results I page 3
Slide 4: Key takeaways 1HY 2017
Key takeaways 1HY 2017 SFS achieved consolidated sales of CHF 778.6 million in the first half of 2017, representing a dynamic growth of 13.0% yoy Strong organic growth of 7.4% yoy supported by all segments; growth in core business even higher at 8.2% Significant improvement in profitability, l
Slide 5: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-07-21 Presentation 1HY 2017 results I page 5
Slide 6: Sales bridge 1HY 2017
Sales bridge 1HY 2017 CHF million 850 688.8 56.6 -5.5 47.4 -8.7 778.6 Reported growth 13.0% yoy (PY 2.7%) 800 organic +7.4% (PY -0.1%) core +8.2% (PY 2.5%) trade ti - 0.8% (PY -2.6%) 750 Scope +6.9% (PY 0.7%) FX impact -1.3% (PY 2.1%) 700 Trade activity with ti-inserts 650 USD 7.2m (PY 1
Slide 7: Sales breakdown 1HY 2017
Sales breakdown 1HY 2017 by end market by region 17.9% 26.1% 19.1% 21.5% 6.5% 17.9% 26.4% 23.1% 41.5% Construction Others Automotive Switzerland Europe America Asia Medical Electronics 2017-07-21 Presentation 1HY 2017 results I page 7
Slide 8: Operating profitability
Operating profitability in % of net sales in CHF million 25% 400 EBITA margin 14.2% +17.2m or +18.5% yoy 19.7% 19.4% 350 20.9% 20.3% 19.6% 19.5% 20% Success factor: profitable growth 300 gain of market share further ramp-ups 14.1% 14.4% 14.2% 250 15% 13.3% innovative products 13.6% 12.5%
Slide 9: Swiss franc exposure
Swiss franc exposure % share 60% Operating expenses in CHF Opex in Swiss francs 40.0% share 50% decline 430bps against 50% 49% FY 2016 46% 44.3% 40% Sales invoiced in CHF 40.0% 20.9% share decline 150bps against 30% 27% FY 2016 24% 23% 22.4% 20.9% Driver for decline is the 20% Sales in
Slide 10: Capital expenditure
Capital expenditure Capex in % of net sales Capex in CHF million 8% 160 Capex spending 6.2% of net 7.1% 6.6% sales 7% 140 70% share growth capex 6.2% 5.8% 5.9% 6% 120 Capex share by Segments 55% EC 5% 4.4% 100 27% FS 97.6 6% D&L 90.4 4% 80 84.6 12% Others 76.6 3% 60 48.3 Substantial
Slide 11: Net working capital
Net working capital NWC in % of net sales NWC Days outstanding 35% 280 Seasonal peak of NWC at balance sheet date 33.0% 32.5% 30% 240 32.5% of net sales 31.2% 30.3% 31.0% 118.7 days cash cycle 28.7% 25% 200 Ø Days Sales Outstanding 67 SFS Group (PY 67) 20% 160 80 EC (PY 79) 52 FS (PY 5
Slide 12: Free cash flow
Free cash flow Free cash flow in % of EBITDA CHF million 60% 300 Strong cash flow but also high 51.7% 52.2% increase in NWC (CHF) 125.5m cash flow (PY 106.2) 50% 250 - 44.0m increase NWC 47.7% 81.5m cf from operations 45.2% 40% 200 Free cash flow at CHF 33.2m 37.7% after capex of CHF 48.3m
Slide 13: Net cash and equity ratio
Net cash and equity ratio Equity in % of assets CHF million 90% 600 82.6% Free cash flow of CHF 33.2m 80.4% 81.3% mainly used for dividend payout 80% 500 with CHF 65.8m 76.3% 77.8% 70% 400 Change to net debt of CHF 62.7% 31.4m after black zero at YE 60% 300 Equity ratio remains strong with 50%
Slide 14: ROCE and RONOA
ROCE and RONOA Return in % NOA in CHF million 28% 7'000 Capital employed 27.1% 24.1% average of last 4 quarters 24% 26.0% 6'000 excluding intangible assets 23.0% EBITA measured at Ø CE 22.2% 22.4% 20% 5'000 ROCE 26.0% Net operating assets 16% 4'000 at year end CHF 1,960m 12.1% of whi
Slide 15: Summary of important KPI's
Summary of important KPI's CHF million 1HY2017 1HY2016 % yoy Sales 778.6 688.8 13.0% EBITDA margin 151.5 19.4% 135.7 19.7% 11.7% EBITA margin 110.5 14.2% 93.3 13.6% 18.5% Net income margin 56.9 7.3% 47.1 6.8% 20.8% Equity ratio 1,816.5 77.8% 1,733.5 81.3% 4.8% Net debt / cash -31.4 103.9 Capex % sal
Slide 16: Change to Swiss GAAP FER (1/3)
Change to Swiss GAAP FER (1/3) Main reasons for Board decision increasing complexity in IFRS IAS19r post-employment benefits Swiss GAAP FER to be adopted at year end 2017 for the first time restatement from 1 January 2016 onwards required comparable key data will be made available tran
Slide 17: Change to Swiss GAAP FER (2/3)
Change to Swiss GAAP FER (2/3) IAS19r post-employment benefits inappropriate for our Swiss pension scheme recurring high volatility in Income statement (2015: one time gain of CHF 18.2m) Statement of comprehensive income Balance sheet Provision for Swiss pension plan CHF million 10 2.9 0 -10 -
Slide 18: Change to Swiss GAAP FER (3/3)
Change to Swiss GAAP FER (3/3) Estimated major impacts (CHF) on reported IFRS key data Estimated equity impact 31.12.2016 - 978m Intangible assets (out of 1,028m) + 59m Provisions for Swiss pension plan + 43m Deferred income tax liabilties - 876m Total impact on Equity ~67% Total Equit
Slide 19: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-07-21 Presentation 1HY 2017 results I page 19
Slide 20: Headlines Engineered Components (EC)
Headlines Engineered Components (EC) Key figures Engineered Components Sales growth of 20.4% driven by dynamic organic growth and consolidation of Tegra Medical Organic growth fueled by successful project ramp-ups expanded market share Integration of Tegra Medical on track and project pipe
Slide 21: EC: Key messages Automotive division
EC: Key messages Automotive division Attractive growth development supported by successful project ramp-ups and generally good market environment Growth Successful acquisition of new projects further strengthening the project pipeline and creating basis for future growth Pleasing business tren
Slide 22: EC: Key messages Electronics division
EC: Key messages Electronics division Back on growth track as expected – despite continued run-off of trading business Growth supported by all application fields, successful product launches and increased wallet share with key accounts Investment of CHF 35 million in new sales and production s
Slide 23: EC: Key messages Industrial division
EC: Key messages Industrial division Expanded or at least held its market position in all application areas Project or market success in niche applications for various industries like telecommuni- cation or automation technology Aircraft continues to be a significant growth driver (e.g. ramp-u
Slide 24: EC: Key messages Medical division
EC: Key messages Medical division Integration of Tegra Medical, acquired late 2016, is on track Acquisition by SFS viewed positively by customers and employees Overall position in medical devices industry significantly strengthened from 1.5% to 6.5% of total group sales Uneven sales developm
Slide 25: Headlines Fastening Systems (FS)
Headlines Fastening Systems (FS) Key figures Fastening Systems Attractive comparable sales 2017 2016 2015 growth of 7.8% yoy in CHF million (unaudited) 1st half ± PY 1st half 1st half Third party sales 190.2 7.6% 176.7 157.9 Sales growth comparable* 7.8% Growth drivers: Net sales 198.9 7.7% 184.
Slide 26: FS: Key messages Construction division
FS: Key messages Construction division Enhanced compentence field Solid demand in the relevant construction markets Fall arrest (SOTER) Continued market success of our products on the back of innovation trends like energy efficiency, safety and prefabrication Increased attractiveness of produc
Slide 27: FS: Key messages Riveting division
FS: Key messages Riveting division Production strategy Riveting Olpe, GER Solid growth in its various market and application areas Thal, GER GESIPA setting tools are well positioned to address the needs Europe arising from the electrification of assembly lines and quality monitoring Walldorf, GE
Slide 28: Headlines Distribution & Logistics (D&L)
Headlines Distribution & Logistics (D&L) Key figures Distribution & Logistics Generally improved market 2017 2016 2015 environment in CHF million (unaudited) 1st half ± PY 1st half 1st half Third party sales 160.2 2.4% 156.5 154.5 Sales growth comparable* 2.5% Sales reached CHF 160.2 million, Ne
Slide 29: D&L: Key messages
D&L: Key messages 14 customer wins for logistic solutions in 1HY 2017 underpin the strong competitive position The customer wins for logistic solutions in FY2016 contributed more than CHF 4 million in sales in 1HY2017 Launch of new ecommerce platform in 2HY will further strengthen SFS' positio
Slide 30: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-07-21 Presentation 1HY 2017 results I page 30
Slide 31: Guidance
Guidance Actual Expectations FY2016 FY2017 Gross sales reported 4.4% 8 – 10% • Core business 5.9% 5 – 7% • Non-core trading business -3.9% approx. - 2% • Change in scope 1.5% approx. 5% • FX impact 0.9% n/a EBITA Marge adjusted 14.4% 14.2 – 15.2% FY = Financial Year 2017 03 30 Jahresinformation Schw
Slide 32: Agenda
Agenda 1 Welcome and key takeaways Jens Breu 2 Development of key financials Rolf Frei 3 Development by segment Jens Breu 4 Guidance 2017 Jens Breu 5 Q&A Jens Breu / Rolf Frei 2017-07-21 Presentation 1HY 2017 results I page 32
Slide 33: Q&A
Q&A Jens Breu Rolf Frei Chief Executive Officer Chief Financial Officer 2017-07-21 Presentation 1HY 2017 results I page 33
Slide 34: 9'000 employees – one target
9'000 employees – one target Creating value with In-depth technological competence International presence Application and industry expertise Long-term relationships 2017-07-21 Presentation 1HY 2017 results I page 34
Slide 35: Disclaimer
Disclaimer This presentation includes forward looking statements. These statements reflect the SFS Group's current assessment 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 re