Investor Day 2012 - schmolz

Investor Day 2012
Focusing on sustainable performance
Emmenbrücke, May 10, 2012
Presenters at the 2012 SCHMOLZ + BICKENBACH Investor Day
Benedikt Niemeyer
CEO, SCHMOLZ +
BICKENBACH AG
Dr. Marcel Imhof
COO, SCHMOLZ +
BICKENBACH AG
Axel Euchner
CFO, SCHMOLZ +
BICKENBACH AG
Carlo Mischler
CEO Swiss Steel AG
Gerd Münch
CEO Steeltec AG
Dr. Martin Löwendick
Dr
Head of Business
Development,
SCHMOLZ +
BICKENBACH AG
Willi Fuchs
Head of Production
and Technology
Swiss Steel AG
Page 1
Dr. Ulrich Urlau
Head of R&D
Swiss Steel,
Coordination S+B
Group
Martin Allemann
Head of HR Swiss
Steel AG
Dragan Miletic
Head of Site
Infrastructure
Swiss Steel AG
Agenda
Focusing on sustainable performance – Welcome and introductory
presentation from Group Management
_ Strategic
S
i positioning
ii i
_ Financial update
_ Current trading
_ Introducing the topic of the day
Swiss Steel and Steeltec as part of the SCHMOLZ + BICKENBACH Group
_ Swiss Steel
_ Steeltec
Page 2
SCHMOLZ + BICKENBACH – at a glance
SCHMOLZ + BICKENBACH overview
_ Leading global provider of Specialty Long Steel solutions, with a
complete product range
_ Unique business model which benefits from full integration along the
entire Specialty Long Steel value chain
_ Flexible cost structure with ability to pass on raw material price
volatility
_ Well diversified across applications, customers, and regions
_ Sustainable position in capital-intensive industry; concluded major
M&A and CAPEX program
_ Experienced management team
Revenues by application industry, 2011 (in %)
Chemicals 1%
Plastic 2%
Transportation 3%
Construction 5%
Energy 9%
2007
2008
Revenues
4,247
4,092
2,052
3,119
3,943
growth in %
50.0%
(3.6)%
(49.9)%
52.0%
26.4%
EBITDA
2009
2010
417
234
(181)
233
296
9.8%
5.7%
(8.8)%
7.5%
7.5%
Net Debt /
EBITDA
2.3x
4.2x
n.a.
4.0x
2.9x
S
Shareholders:
SC O
SCHMOLZ+BICKENBACH
C
C KG
G (43%), G
GeBuKa (6%) and
freefloat (51%)
Revenues by product segment (in %)
Other 3%
Mining 1%
Aerospace 1%
Machinery 33%
Automotive 28%
2011
margin in %
Food & Beverage 1%
Other
Distribution 16%
Page 3
Key financials (in EUR m)
Tool Steel 12%
Quality &
Engineering
Steel 49%
Stainless Long
Steel 36%
Consistent strategy towards premium markets, yielding a global
leadership position in Specialty Long Steel solutions
Historic revenue development (in EUR m)
4,247
4,092
3,119
2,832
2,052
1,701
427
579
2003
2004
2005
Securing the
supply base
_ Acquisition
q
of Swiss
Steel
2006
2007
Complementing the
product offering
Acquisition
q
of:
_ EWK and KEP (2004/2005)
_ Ugitech (2006)
_ A. Finkl & Sons Co. (2007)
_ Sorel Forge (2007)
Disposal of:
_ Stahl Gerlafingen (65% shares in
2007; 35% in 2010)
Source: SMR, 2010, ranking by volume
Page 4
3,943
2008
2009
2010
2011
Achieving commercial
and operational excellence
_ Global presence
_ Customer management systems
_ Value creating investments into steel
mills
_ Customer specific development of new
products
Quality and Engineering Steel
#8 globally
#1 Europe
Stainless Long Steel
#2 globally
#1 Europe
Tool Steel
#1 globally
Unique business model which benefits from full integration along the
entire Specialty Long Steel value chain
Production
Description
Processing
_ Steel melting and/or
rolling/forging
_ 9 production facilities
_ State-of-the-art asset base
_ Focus on highly
specialized niche products
Distribution & Services
_ Bright bar shops (drawing, peeling)
_ 11 processing plants globally
_ Focus on geometry/ surface
precision and customization
_ Stocks and supply chain logistics,
services like sawing, hardening, etc
_ Over 86 distribution locations
worldwide
_ Over 60,000 articles in stock, selling
own and 3rd party products
(EUR m)
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
Revenues*
2,937
,
2,898
,
1,340
,
2,180
,
2,764
,
66
466
483
83
232
3
392
39
483
83
, 63
1,463
1,365
,365
758
58
1,132
, 3
1,417
,
(1.3)% (53.8)%
62.7%
26.8%
n.a.
3.6% (52.0)%
69.0%
23.2%
n.a.
(6.7)% (44.5)%
49.3%
25.2%
growth in %
n.a.
EBITDA*
320
188
(113)
173
257
38
24
(13)
27
28
66
8
(34)
27
26
10.9%
6.5%
(8.5)%
7.9%
9.3%
8.0%
5.0%
(5.8)%
6.8%
5.9%
4.5%
0.6%
(4.5)%
2.3%
1.8%
margin in %
Offering one stop shop solutions to over 30,000 customers worldwide
pp
Application
industries
Automotive
Plastics
* Excluding intersegment revenues and before EBITDA reconciliation
Page 5
Medical
Engineering
Oil & Gas
Glass
5 main reasons why our strategic positioning is excellent
1
2
Leading position in attractive
niche markets of Specialty Long
Steel
Unique integrated business
model
_ Fully integrated value chain centred around customers
customers’ needs
_ Ability to mitigate demand fluctuations
_ Flexible cost structure
Diversified revenue streams
_ Wide range of application industries and diverse customer base
_ Broad geographic reach supported by high-value product portfolio
_ Loyal customer base (CRM approach, joint application engineering/R&D, switching cost/risk)
3
Sustainable position in capitalintensive industry
_ Well-invested, state-of-the-art asset base following a strategic acquisition and investment
program between 2005 and 2008, limiting future investment needs
_ Not actively looking for further strategic acquisitions in the near future, although selective
p
y bolt-on opportunities
pp
can be considered
complementary
Experienced management team
with proven track record
_ Experienced management team
_ Strong track record of implementing a well defined strategy
_ Demonstrated sustainable cost and working capital improvement
4
5
Page 6
_ Leader in all 3 product segments of Specialty Long Steel
_ Favourable industry characteristics and competitive environment
_ Solid long-term growth prospects in both volume and value, supported by global megatrends
Agenda
Focusing on sustainable performance – Welcome and introductory
presentation from Group Management
_ Strategic
S
i positioning
ii i
_ Financial update
_ Current trading
_ Introducing the topic of the day
Swiss Steel and Steeltec as part of the SCHMOLZ + BICKENBACH Group
_ Swiss Steel
_ Steeltec
Page 7
M k d iincrease iin earnings
Marked
i
andd operating
ti iimprovements
t realized
li d
_ Despite the challenging
g g environment, earnings
g and income have been considerably
improved in 2011
_ The long-term financing structure of the Group has been put on solid ground by the
conversion of the hybrid capital and the successful capital increase
_ By becoming fully operational, the new forging and steel plant of A. Finkl & Sons Co.
p
the competitive
p
position
p
in the keyy markets
will considerablyy improve
ADDITIONAL POTENTIALS FOR NEW MARKETS AND INNOVATIVE PRODUCTS HAVE BEEN
CREATED THE PROFILE AS A PROVIDER OF SPECIAL LONG STEEL HAS BEEN FURTHER
CREATED.
SHARPENED
Page 8
P iti trends
Positive
t d persist
i t andd allow
ll ffor moderate
d t optimism
ti i
_ Stable development in the most important sales industries – automotive and
transportation, plant- and machinery-construction as well as energy
_ USA: increasing trends expected in the whole energy market
_ Europa: trends show stable or slightly slower development
_ Overseas markets: stable increase in demand expected
Page 9
F
Focussing
i on special
i l llong steel
t l andd bbenefit
fit from
f
potentials
t ti l
_ The Production Division features a ggood capacity
p y utilisation in the first quarter
q
and expects
p
a
stable and sustainable development for the rest of the year
_ The Processing Division continues to focus on tailor-made customer solutions with
high quality steel products
high-quality
_ The Distribution + Services Division further extends its downstream process capacity
_ At Group level we expect:
_ a stable to slightly improving performance of earnings and profitability
_ a slight reduction of net debt resulting in an additional improvement of gearing
andd equity
it ratio
ti allowing
ll i us to
t further
f th approachh the
th defined
d fi d financial
fi
i l ttargets
t
Page 10
The bond issuance helps to diversify funding sources
and to further
f rther extend
e tend the maturity
mat rit profile
Pro forma capitalization (in EUR m)
Pro forma debt maturity profile (in EUR m)*
286
287
289
279
2012
2013
2014
2015
2016
2017
2018
IPEX Loan and Other
Debt
Senior Secured Credit
Facilities (drawn)
Senior Secured Notes
Senior Secured Credit
Facilities (undrawn)
ABS facility
* Carrying amount excluding unamortized transaction costs
** Total capitalization is the sum of total Debt (carrying amount) and total Equity
Page 11
2019
As of December 31, 2011
Cash and cash equivalents
Senior Secured Credit Facilities
ABS Facility
Senior Secured Notes
IPEX Loan
Other Debt
T t lD
Total
Debt
bt ((carrying
i amount)t)
Unamortized transaction costs
Total Debt (principal amount)
Total Equity
Total capitalization**
Actual Adjustments As adjusted
(101)
(16)
(116)
588
(274)
314
287
–
287
–
289
289
43
–
43
43
–
43
961
15
976
15
10
25
976
25
1,001
844
(1)
843
1,805
14
1,820
Liquidity considerations
_ No significant
g
near-term debt maturities
_ Availability of undrawn committed financing
_ EUR 116m cash and cash equivalents available pro forma for the
transaction
Agenda
Focusing on sustainable performance – Welcome and introductory
presentation from Group Management
_ Strategic
S
i positioning
ii i
_ Financial update
_ Current trading
_ Introducing the topic of the day
Swiss Steel and Steeltec as part of the SCHMOLZ + BICKENBACH Group
_ Swiss Steel
_ Steeltec
Page 12
Special steel for a variety of industries
_ Globally booming energy sector – oil and gas industry
_ Ongoing growth
gro th of aautomotive
tomoti e and transportation industries
ind stries
_ Special steel is hardly exposed to substitution as it benefits from
g q y characteristics
high-quality
Page 13
Business climate of selected industries
Ifo business climate of selected steel processing
industries – 3-months floating averages
Incoming orders of selected industries
– Germany
G
(Index: 2008=100)
(Index: 2008=100, seasonally adjusted,
110
140
100
120
90
100
80
80
70
60
60
50
40
Metalware
Metallwaren
Mechanical
Engineering
Maschinenbau
20
Automotive
Kraftwagen
40
2008
2009
2010
2011
2012
Automotive
Kraftwagen
Main construction trade
Bauhauptgewerbe
30
Main
construction trade
Bauhauptgewerbe
0
Mechanical Engineering
Maschinenbau
Metalware
Metallwaren
Haushaltswaren
Hardware
20
2008
2009
2010
2011
2012
_ After a sharp rise in demand at the beginning of 2011, a negative development is visible
in most industries during the second half of the year
_ Nevertheless, at the beginning of 2012, a recovery trend has started in many industries
Page 14
Source: Wirtschaftsvereinigung Stahl, ifo, Federal Statistical Office
Revenue and EBITDA increased in difficult market conditions
Business Development
Q1 2012
Q4 2011
Change to
Q4 2011
(in %)
Revenue
EURm
1,027.1
922.2
+11.4%
EBITDA
EURm
73.1
47.7
+53.2%
EBITDA M i
EBITDA-Margin
%
7.11
5.22
+36.5%
36 %
Q1 2012
Q1 2011
Change to
Q4 2011
(in %)
_ Compared to last quarter 2011 revenue increased and EBITDA improved
_ In Q1 2012, the development in the demand for our products varied
considerably
id bl according
di to region,
i with
i h European
E
markets
k being
b i subdued
bd d
by the uncertainty resulting from the financial and economic crisis, and
Revenue
EURm
1,027.1
1,057.2
-2.8%
further increases in sales volumes and revenues in the North American
market by the commissioning of the new forging and steelmaking plant
_ Despite the difficult market conditions, in total there was only a marginal
decline in revenue of 2.8% to EUR 1,027.1 million
_ The slightly lower volumes and the continuing pressure on margins in
Europe caused EBITDA to decrease by 8.7% to EUR 73.1 million
EBITDA
EURm
EBITDA-Margin
%
Page 15
73.1
80.1
-8.7%
7.1
7.6
-6.6%
Financial Position will be further optimized –
Announcement of dividend for 2011
Financial Position
Q1 2012
2011
Change to
2011
(in %)
_ After the usual rundown in inventories at year-end, operating working
capital at the end of the first quarter increased again due to seasonal
effects and was the main cause of an increase in net financial liabilities
Net debt
EURm
905.5
860.4
+5.2%
of 5.2% to EUR 905.5 million
_ The planned issue in mid-May 2012 of a bond for a nominal value of
EUR 300 million would broaden the financing basis and further optimize
the maturity structure
Announcement of dividend
Dividend per share
Total dividend payment
Page 16
2011
2010
CHF
0 10
0.10
0 00
0.00
EURm
9.8
0.0
_ The General Meeting of the Board of Directors decided to pay a dividend
of CHF 00.10
10 per share from the capital contribution reserves
reserves,
corresponding to a total dividend payment of EUR 9.8 million
Significant order backlog creates strong visibility for the next four months
Volume and revenue development (in kt and EUR m)
4,247
Order backlog (in kt)
CAGR
2009-2011
4,092
619
3,943
2,306
2,052
521
38 6%
38.6%
3,119
CAGR
2009-2011
35.4%
397
2,274
2,001
284
1 375
1,375
28.6%
n.a.
2007
2008
Revenue
2009
2010
2011
Volume
_ Despite challenging H2 2011 environment, strong growth in
revenues and volume in 2011 in all regions driven by:
_ recovery in the automotive and automotive component
supply industry
_ stronger demand in the machine construction, oil and gas
and mining industries
Page 17
n.a.
2007
2008
2009
2010
2011
Order backlog
_ Order backlog at relatively high level compared to the five year
history
_ Order backlog at the end of Q1 was in the same range as at
the end of 2011; order intake in April was only slightly below
budget expectations
Agenda
Focusing on sustainable performance – Welcome and introductory
presentation from Group Management
_ Strategic
S
i positioning
ii i
_ Financial update
_ Current trading
_ Introducing the topic of the day
Swiss Steel and Steeltec as part of the SCHMOLZ + BICKENBACH Group
_ Swiss Steel
_ Steeltec
Page 18
Sustainability as a corporate philosophy is embedded in our Group’s
strategy
Leading strategic
position
Our fundamental principles
_ Conservation of resources
_ Energy efficiency
_ Recyclability of the products
_ Minimisation of emissions
_ Safety in the workplace
_ Continuous innovation and renewal
High performance
products
Fueled by Mega
Trends:
_ Resource scarcity
_ CO2 emission
reduction
_ Population
p
growth
g
_ Increasing mobility
needs
_ Open dialogue with our
stakeholders
Low
environmental
footprint
Focus of today’s meeting – the “6P”
_ High Performance Products
_ Preserving the Planet
_ Protecting our People
Page 19
Financial
performance
People, knowhow,
expertise
Employee safety and health is fundamental to sustainability
Examples for safety, health, and medical
activities at SCHMOLZ + BICKENBACH
_ Safety training for new and injured employees
_ Review personal protective equipment
_ Hearing Conservation Program
_ Accident inspection and job hazard analysis
_ Safety meetings
_ Crisis Communication
_ First Aid and Bloodborne Pathogens training
_ Sight test for driving licenses
_ Employee surveys
_ Blood pressure, cholesterol and diabetes tests
_ Spo
Sport activities,
ac es, e.g.
e g Düsseldorf
üsse do Marathon
aa o
_ Integration Management Program
…
Page 20
In 2010
2010, Deutsche Edelstahlwerke received an Environmental Award
Dr. Harry Lehmann (Fachsbereichsleiter Umweltplanung
und Nachhaltigkeitsstrategien Umweltbundesamt),
Umweltbundesamt) Antje
Gräb, Alexandra Schumacher und Max Heumann von der
Abteilung Anlagentechnik / Klima- und Umweltschutz
Deutsche Edelstahlwerke GmbH
Page 21
Since 2009, progressive implementation of energy management
system in Düsseldorf
STEP 1
Decision to initially survey
electricity consumption and
installation of energy
management software
STEP 2
Definition of action plan
_ Drawing
D i off energy balance
b l
_ Weak-point analysis
_ Setting of priorities
_ Research and selection of
methods
_ Post-calculation
and verification
of energy efficiency
STEP 3
Integration of water, gas and
compressed air into energy
management system
Energy management system will be
certified in 2012
Page 22
Example: Impact of new electric lighting in
Düsseldorf
_ Pilot project area in warehouse
_ saving 57% of energy used for lighting
_ reduction of CO2 by 150 t
_ Pilot project office
_ saving 68% of energy used
for lighting by only 62% capacity
installed
THE NEW FORGING AND STEELMAKING
PLANT OF A. FINKL & SONS CO. AS A
SUSTAINABLE INVESTMENT
Bilanzmedienkonferenz
& Analystenpräsentation Geschäftsjahr 2011 / Zürich, 7. März 2012 / Seite 2
Page 23
Technological and operational milestone
_ Melting and machining capacity will increase from 100 000 t to 250 000 t per year
_ 157 million USD invested from 2007 – 2011
_ Fully automated alloying system for high precision alloy calibration creates innovation potential
_ Vertical production process to cover complete cycle from production to machining within plant
_ Costs of production optimised
Page 24
State of the art technology in all processes
State-of-the-art
_ Electric-arc furnace with 90 – 112 t maximum capacity per melt depending on specifications
_ 5.8 meter diameter shell / state-of-the-art control system / lances technology for carbon and
oxygen injection
_ 3 forging areas
_ 4 box furnaces for light forgings up to max. 1 500 t
_ 6 car-bottom furnaces for medium and heavy forging up to 4 500 – 10 000 t
_ Equipped with the newest burner technology
Page 25
CO2-neutral
neutral production
_ Considerable reduction of emissions in the city of Chicago through the relocation of the site:
_ less noise, less traffic, lower CO2 emissions in the city
_ Commitment for environment protection:
_ Environment programme “Forging a Fresher America” – 6 million trees planted to date
_ Creation of new jobs:
_ 300 employees
l
retained;
i d potential
i l ffor 100 additional
ddi i l jobs
j b in
i the
h new plant
l
Page 26
Agenda
Focusing on sustainable performance – Welcome and introductory
presentation from Group Management
_ Strategic
S
i positioning
ii i
_ Financial update
_ Current trading
_ Introducing the topic of the day
Swiss Steel and Steeltec as part of the SCHMOLZ + BICKENBACH Group
_ Swiss Steel
_ Steeltec
Page 27
Swiss Steel: am Anfang der Wertschöpfungskette
Ziehereien
Schälbetriebe
Schmieden
Schraubenhersteller
Komponenten
Zulieferer
Automobilbauer
Page 28
Besondere Fähigkeiten einer Unternehmung führen zu strategischen
Erfolgspositionen (SEP)
Swiss Steel besetzt folgende strategische Erfolgspositionen, aus denen sie den
Konkurrenzkampf führt:
_ Swiss Steel ist der zuverlässigste Lieferant im Zielmarkt
_ Swiss Steel ist der produktivste Stahlhersteller des Zielmarktes
Page 29
Swiss Steel erste SEP:
wir sind der zuverlässigste Lieferant im Zielmarkt
Die Schlüsselfaktoren unserer Spitzenposition:
_ überdurchschnittliche Termin
Termin- und Liefertreue durch strikte Einhaltung des Walzprogrammes
dank
Æ schlanke und weitgehend EDV-gestützte Abläufe in der Auftragsabwicklung
Æ Ausgeprägter
ä
Miteinander-Geist
G zwischen Aussendienst, Innendienst, Produktionsplanung,
Spedition
Æ hohe Prozessdisziplin, gleichwohl Delegierung von Entscheidungskompetenz ganz unten wo
die Informationen vorhanden sind und die Tragweite abschätzbar ist.
_ hohe Abschlusskompetenzen des Verkäufers
Verkäufers, dessen Wort zählt
Æ akzeptierte und geschätzte Verhandlungspartner
Æ Swiss Steel als seriösester Lieferant angesehen
Page 30
Swiss Steel zweite SEP:
wir sind der Produktivste Stahlhersteller im Zielmarkt
_ Schlanke Personalinfrastruktur
_ ständige Prozessoptimierung
_ Kluge Investitionspolitik
_ Rohmaterialkosten und Teil der Wertschöpfungskosten in Euro oder mit dem Euro
schwankend
Page 31
Zukünftige Stossrichtungen
Æ Halten der strategischen Erfolgspositionen durch
_ Kontinuierliche Prozessoptimierung
_ konsequenter Investitionsplan 2012-2016
2012 2016
Æ Neue strategische Erfolgsposition besetzen:
_ Wir sind die innovativen Speziallösungsanbieter im Zielmarkt
Æ Schonung der Ressourcen und der Umwelt: ein starker Treiber unserer Anstrengungen
und Investitionen in der Vergangenheit wie in der Zukunft
Page 32
Agenda
Focusing on sustainable performance – Welcome and introductory
presentation from Group Management
_ Strategic
S
i positioning
ii i
_ Financial update
_ Current trading
_ Introducing the topic of the day
Swiss Steel and Steeltec as part of the SCHMOLZ + BICKENBACH Group
_ Swiss Steel
_ Steeltec
Page 33
Mission
Unsere Mission Stahl für anspruchsvolle Teile
Wir haben uns der Aufgabe verschrieben, die Möglichkeiten des Werkstoffs Stahl auszuschöpfen
für die rationelle und sichere Herstellung hochbeanspruchter Bauteile
Bauteile.
Page 34
Vision
Rohmateriallieferant
Halbzeughersteller
Teilehersteller
Systemhersteller
_ „Premium“-Lieferant und anerkannter Entwicklungspartner für die
Automobilzulieferindustrie und OEMs
_ Technologieführerschaft für Hochfeste Sonderstähle über den gesamten
Wertschöpfungsprozess
_ World Class Performance
„
Page 35
OEM
ETG® / HSX®
Hoch- / Höherfeste Sonderstähle
ETG® und HSX® bieten neue Möglichkeiten bei der Teilefertigung:
_ Gewichtseinsparung durch gleichmässige und hohe Festigkeit über den Querschnitt und den
ganzen Dimensionsbereich
_ gleichmässige Qualität von Los zu Los
Durch den Einsatz von ETG® und HSX® werden Fertigungsprozesse optimiert:
_ höhere Zerspanungsleistung, prozessfähiger Spanbruch
_ Entfall von Zusatzoperationen wir Härten, Richten, Schleifen, etc.
_ längere
lä
Werkzeugstandzeiten
W k
t d it
_ Mehrmaschinenbedienung / Geisterschichten
´ ETG® und HSX® = kürzere Prozesse
= niedrigere Teilekosten
= mehr Wettbewerbskraft!
Page 36
Industrie Segmente
Industrie-Segmente
Automobil
Maschinen/Apparate/Hydraulik
> 60 %
< 40 %
Décolletage
Page 37
ETG® / HSX®-Anwendungen
Anwendungen im Automobil
Arbeitsdrücke
Sicherheitsteile
Wellen in
Elektroantrieben
ETG®100:
≤ 1’600 bar
HSX®110:
≤ 22’400
400 bar
HSX®130HD: > 2’400 bar
Hydraulische
Systeme
Getriebe
Dieseleinspritzsystem
Page 38
Investor relations contact information
_ Axel Euchner, Chief Financial Officer
_ Phone:
+41 41 209 50 35
_ Fax:
+41 41 209 50 36
_ Mail:
a.euchner@schmolz-bickenbach.com
_ Internet:
www.schmolz-bickenbach.com
Page 39