gurit 1hy 2014 results presentation
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Gurit 1HY 2014 Results
Friday, August 22, 2014
CorporateSlide 2
This presentation may include forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Gurit Holding AG about the future results of operations, financial condition, liquidity, performance and similar circumstances.
Such statements are made on the basis of assumptions and expectations which may prove to be erroneous, although Gurit Holding AG believes them to be reasonable at this time.
Corporate
Key Messages Business Result 1HY 2014
Strong sales development in all businesses and markets, thanks to recovery in the global wind energy market, but also high demand in some segments of the marine market. Component business continues to grow at double-digit rates.
Profitability continues to recover with an operating profit of CHF 7.7 million or 4.6% of net sales, and CHF 7.1 million net profit after a loss of CHF 2.4 million for the same period last year.
CAPEX limited with CHF 4.3 million, partially for some factory extensions in Automotive and Tooling, and for Gurit (Hungary).
Net cash flow from operating activities negative CHF 1.8 million due to increased NWC, driven by higher sales and some inventory build-up.
Balance sheet remains very solid with an equity ratio of 67%.
Slide 3
CorporateSlide 4
Further Key Notes on Business Results 1HY 2014
Net sales 1HY 2014vs 1HY 2013
Earnings
Cost and Expenses
Cash flow andBalance Sheet
Group CHF 167.0 million; +28.8%CM Wind Energy CHF 66.8 million; +22.8% CM Other CHF 62.0 million; +13.4% Tooling CHF 25.2 million; +136.3%Automotive CHF 9.1 million; +31.7%Eng. Structures (ES) CHF 4.0 million; +29.8%
Operating profit CHF 7.7 million, up from CHF 0.6 million in 1HY 2013
Operating profit margin at 4.6%, up from 0.5% in 1HY 2013
Profit for the period of CHF 7.1 million after CHF -2.4 million in 1HY 2013
Improved loading, particularly in Tooling and carbon prepreg manufacturingRamp-up inefficiencies in AutomotiveSome reduced operational issues in Gurit Composite Materials Select increases in SG&A to strengthen the organisation in Sales, HR and IT
Capex contained (PPE, Intangibles): CHF 4.3 million or 2.6% of net sales
Operating Cash flow CHF -1.8 million; after + CHF 1.7 million a year ago
Still solid equity ratio of 67% (71% at the end of December 2013)
Corporate
0
5
10
15
20
25
30
35
40
1HY 2011 2HY 2011 1HY 2012 2HY 2012 1HY 2013 2HY 2013 1HY 2014
Tooling Automotive Engineered Structures
0
20
40
60
80
100
120
140
1HY 2011 2HY 2011 1HY 2012 2HY 2012 1HY 2013 2HY 2013 1 HY 2014
Wind Energy Aerospace Industrial & Marine
Net Sales Development by Target Markets
Slide 5
Gurit Composite Materials
Wind Energy sales continue to recover steadily
Aerospace sales with single-digit growth
Further double-digit growing sales in Marine and Industrial applications
Gurit Systems and Engineering
Strong sales recovery which started in Tolling in 2HY 2013 continues with large deliveries into Europe and China
Continuously strong growth in Automotive and Engineered Structures
MCHF
MCHF
Corporate
Strategy Deployment 2014 – Key Points
Slide 6
• Automotive exterior panel press application for bigger series progressed, first pressed parts delivered to first customer
• Increased sales effort and successful qualifications for new offerings for existing and new composite materials markets (e.g. visual carbon prepreg for automotive, balistic protection material, etc.)
• Won first qualifications for new PVC offering and started to address the PVC logistics issues in Europe
• Selected for a material qualification programme by Boeing
• New operations in Hungary went live with first successfull deliveries of bus components
Development by Target Markets
Wind Energy
Wind Energy
Slide 8
Wind Energy
Wind Energy – Strategy and Achievements
0
10
20
30
40
50
60
70
80
90
2007 2008 2009 2010 2011 2012 2013
Number of Gurit Customers
America
Asia / Pacific
Europe
Strategy Core materials: move from #3 to #2
position with 25-35% market share Carbon prepregs: maintain leading
position with shares >60% Optimize factory loadings and increase
efficiency Develop further cost-efficient, enabling
technologies to help reduce cost of KWH
Recent achievements Maintained leadership position in carbon
fibre prepregs SparPregTM, VelinoxTM and AirstreamTM
technology for cost-efficient, low-void, thick laminates at ambient temperatures
Extended Balsa wood offering to new customers, doubled run rate of sales
* Source: GWEC
Slide 9
0
10
20
30
40
50
60
70
2011 2012 2013 2014 2015 2016 2017
GW installed annually*
America
Asia / Pacific
EMEA
Wind Energy
Wind Energy – Results and Outlook
010203040506070
Q12012
Q2 Q3 Q4 Q12013
Q2 Q3 Q4 Q12014
Q2
CHFm Wind Energy: Quarterly Net Sales
Slide 10
Market environment 2014 USA – Continued at good pace following the
recovery during the second half of 2013 Asia – marked improvement, still some price
pressure and bad payment conditions requiring containment measures
Europe – stable in soft market, steady customer demand, apart from glass prepreg
Sales 1HY 2014 Net sales of CHF 66.8 million, up 22.8% vs.
1HY 2013, and 6.0% vs. 2HY 2013Outlook Asia: Strong rebound 2014 but tough terms
(prices, payment terms) US: Good momentum due to PCT reaching
out to 2014 for started projects and expected to be extended for 2015
Momentum to come from extended core material offering
0
50
100
150
200
250
2009 2010 2011 2012 2013
CHFm Wind Energy: Annual Net Sales
Aerospace
Aerospace
Slide 11
Aerospace
Aerospace – Strategy and Achievements
Strategy Maintain leading position in aircraft interiors
and certain structural applications at Airbus Develop position in Boeing and others Attack structural material market for
business and regional jets as well as for nacelles
Focus on next-generation, cost-out materials
Recent achievements Cost-out efforts on aerospace materials Intensive customer care, new sales leads
in traditional and new geographic areas Selected for a production qualification
program by Boeing Upgrading the product offering and
innovations
Slide 12
0
100
200
300
400
500
600
2012 2016
CHFm Industry Growth Potential –
Accessible Market
0
50
100
150
200
250
Boeing interiors andsecond. struct.*
Nacelles Structural materialBusiness and regional jets
CHFm
Size of new Aero market opportunities
* Also included in current accessible market
Aerospace
Aerospace – Results and Outlook
Market environment Steady Aerospace market with
growing build rates for some programs Some cost-out pressures creating
new offering opportunities, as well
Sales 1HY 2014 Net sales of CHF 24.5 million
Up 4.1% vs 1HY 2013 and 4.4% vs 2HY 2013
Outlook Gain market share in mid size OEMs Qualification in Boeing with significant
mid-term sales potential
Slide 13
9.5
10
10.5
11
11.5
12
12.5
13
Q12012
Q2 Q3 Q4 Q12013
Q2 Q3 Q4 Q12014
Q2
CHFm Aerospace: Quarterly Net Sales
0
20
40
60
80
2009 2010 2011 2012 2013
CHFm Aerospace: Annual Net Sales
Industrial & Marine
Industrial & Marine
Slide 14
Industrial & Marine
Industrial & Marine –Strategy and Achievements
Strategy Marine Penetrate all geographies and segments
Mediterranean, Middle East and Far East All boat sectors incl. commercial, military
and production vessels
Strategy Industrial Penetrate the ballistic protection prepreg market
with existing and slightly adapted products. Use distribution model and full material offering tactically for new industrial applications
Sell existing and slightly adapted prepreg, and formulated systems into Automotive markets for structural and visual carbon applications
Recent achievements Significant amount of superyacht projects won Increased proximity to ballistic protection and
automotive customers
Slide 15
0
50
100
150
2010 2014
Marine Growth Potential
Asia / Pacific
North America
Europe
CHFm
0
50
100
150
200
250
Civil constructionapplications
Other industrial (e.g. Medical,Ballistic , LNG Carriers,
Consumer electronics etc..)
Automotive: Materials forbody panels, clear carbon,
structural parts
CHFmMinimum size of new Industrial
market opportunities
Industrial & Marine
Industrial & Marine –Results and Outlook
Market environment Marine business recovering gradually with
more momentum in superyacht and race boats, regionally in Europe and UAE
Addressable Automotive composite material market growing strongly
Sales 1HY 2014 Net sales of CHF 37.5 million
Up 20.5% vs. 1HY 2013 and 18.1% vs. 2HY 2013, in particular due to large deliveries to the superyacht segment
Outlook Development of sales into new markets in
particular ballistic protection and Automotive
Slide 16
05
10152025
Q12012
Q2 Q3 Q4 Q12013
Q2 Q3 Q4 Q12014
Q2
Industrial and Marine: Quarterly Net SalesCHFm
*: Excluding engineering sales
0
10
20
30
40
50
60
70
2009 2010 2011* 2012* 2013*
Industrial and Marine: Annual Net SalesCHFm
Tooling
Tooling
Slide 17
Tooling
Tooling – Strategy and Achievements
Strategy Asia: Leader in affordable, quickly available
quality moulds for wind turbine blades Internationally: High quality, custom tailored,
affordable, quick and higher-volume mould-making and outsourcing partner of choice
Penetrate residual European and American client base during 2014/2015 also for multi-megawatt projects (Blade length >70 m)
Widen scope of Tooling beyond Wind Energy Transportation racks and fixtures Marine: Plugs, moulds for spars and hulls
Recent achievements Taken full benefit from recovered wind energy
market Improved production efficiency Won significant new customers in Europe Improved mould heating and cooling systems
with new modules for high-end customers
Source: Gurit / Market research estimates
Slide 18
Tooling
0
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30
40
50
2009 2010 2011 2012 2013
CHFm Tooling: Annual Net Sales
0
5
10
15
Q1 2012Q2 Q3 Q4 Q1 2013Q2 Q3 Q4 Q1 2014Q2
CHFm Tooling: Quarterly Net Sales
Tooling – Results and Outlook
Market environment Continuous strong demand for new moulds in
all regions Trend to longer, special moulds in small series,
but also increased needs for repetitive orders for large series of moulds
Trend to outsource mould manufacturing continues at OEMs
Sales 1HY 2014 Net sales of CHF 25.2 million
Up 136.3% vs. 1HY 2013 Factory fully loaded
Outlook Good market conditions with strong demand
should continue to prevail High production efficiency should continue to
ensure a strong operating profit contribution from this activity
Slide 19
Pre-acquisition
Automotive
Automotive
Slide 20
Automotive
Automotive – Strategy and Achievements
Strategy Automotive Pursue the two strategic avenues:
Further grow client/project base for complex, smaller series, class-A, lightweight exterior car body panels
Launch press mould technology, class-A, up to 200oC temperature resistant, less complex, higher volume exterior panels using the CBS material matrix. Complete industrialization of press manufacturing process
Recent achievements Production site expansion in UK completed Transfer of first automotive parts to Hungary initiated First pressed visual carbon roof delivered to customer Press curing cycle time significantly reduced to around 7
minutes
Slide 21
0
20
40
60
80
100
120
Car body panels up to 25'000 upa
CHFmSize of new Automotive press technology
parts market
Automotive
0
5
10
15
20
2009 2010 2011 2012 2013
CHFm Automotive: Annual Net Sales
Automotive – Results and Outlook
Slide 22
0
1
2
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4
5
Q1 2012Q2 Q3 Q4Q1 2013Q2 Q3 Q4Q1 2014Q2
CHFm Automotive: Quarterly Net Sales
Market environment Increasing interest of the automotive
market for composite material solutions
Sales 1HY 2014 Net sales of CHF 9.1 million
Up +31.7% vs. 1HY 2013 thanks to larger series and increased customer base
Outlook Improve efficiency of hand layup
production process Further reduce end to end press
technology production costs Finalize and validate industrialization
concept for preforming and post press finishing of panels
Corporate
Engineered Structures
Slide 23
Corporate
Engineered Structures –Strategy and Achievements
Strategy Establish Gurit early in new applications in
existing and newly emerging or converting industries
Leverage leading composites engineering, prototyping, tooling and manufacturing capabilities
Assess new industry trends and approach key players in concise manner
Address new markets outside traditional Gurit target markets
Recent achievements Large follow up orders for double decker
commuter buses Set up of an Hungarian manufacturing base as
a lower cost hub for manufacturing of composite components
Slide 24
Corporate
Engineered Structures –Results and Outlook
Market environment Hardly any existing market data Engineering for marine, construction and
new special projects Promote Gurit as expert of complex, big,
lightweight structures
Sales 1HY 2014 Net sales of CHF 4.0 million
Up +29.8% vs. 1HY 2013 Growth mainly due to increased
component sales
Outlook Volume growth thanks to additional
component sales
0
1
2
3
Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2
Eng. Structures: Quarterly Net SalesCHFm
Slide 25
01234567
2011 2012 2013
CHFm Eng. Structures: Semi‐annual Net Sales
Financial Results 1HY 2014
Corporate
Net Sales Analysis by Market
Slide 27
1HY 2012 2HY 2012 1HY 2013 2HY 2013 1HY 2014
Materials Systems & Engineering
195.6 155.4 129.7 151.5 167.0
Gurit Composite Materials sales continue to recover. Still solid growth in Gurit Composite Systems and Engineering.
• Gurit Composite Materials sales confirm the recovery started in summer 2013, driven by some strong demand in Marine and the recovering Wind Energy market.
• Continuous high double-digit growth in Gurit Composite Systems and Engineering thanks to strong demand in Tooling, extended series of car body parts and growth in the bus components business.
Net sales in CHFm
∆ 1HY 2014 vs 1HY 2013
∆ 1HY 2014 vs 1HY 2013
FX adj.Composite Materials 128.8 109.1 18.1% 19.2%CompositeSystems and Engineering
38.2 20.6 85.5% 86.6%
Total Net Sales 167.0 129.7 28.8% 29.9%
1HY 2013Net salesin CHFm
1HY 2014
Corporate
Operating Profit and EBIT Development
Slide 28
Operating profit margin of 4.6% during 1HY 2014
17.2
-4.5 0.6
5.9
7.7
17.2
-3.3 0.6
5.9
9.8
1HY 2012 2HY 2012 1HY 2013 2HY 2013 1 HY 2014
Operating profit (CHFm) EBIT (CHFm)
9.0%
-4.6%
-1.3%
3.4%
5.1%
8.8%
-2.9% 0.5%
3.9%4.6%
1HY2012
2HY2012
1HY2013
2HY2013
1HY2014
RONA (incl. Goodwill) Operating profit (% Net sales)
• Operating profit and profit margin continue to rise thanks to
• increased volumes• loading and efficiency gains,
particularly in Tooling • some tailwind from
procurement
• EBIT favorably impacted by CHF 2.1 million gain on real estate sale
• No significant change in the asset basis of the Company, hence Rona follows essentially the Operating profit development.
Corporate
Operating Profit Bridge 1HY 2013 to 1HY 2014
Slide 29
A largely volume driven, significant recovery of the operating profit
Corporate
2.4 2.5
0.70.4
0.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Tax expense atthe average taxrate of 25%
Non tax‐effectedlosses
Tax rate mix Other effects Actual incometax expense
Exchange Result and Tax
Slide 30
Stable exchange result and improved tax ratio
0.9
-1.6
0-0.8
0.3
1HY 2012 2HY 2012 1HY 2013 2HY 2013 1HY 2014
Closely monitored and hedged balance sheet exposures keep exchange result small
Improved income tax rate thanks to higher profits in low income tax jurisdictions and reduced non tax effected losses
Exchange result (in CHFm)
Income tax expense (in CHFm)
Corporate
Net Result 1HY 2014
Slide 31
Profit recovery started in summer 2013 continues
CHFm % NS CHFm % NSNet sales 167.0 100.0% 129.7 100.0%Gross margin 81.9 49.0% 60.5 46.7%Operating expenses -74.3 -44.5% -60.7 -46.8%Operating profit before one-offs 7.6 4.5% -0.2 -0.2%One-off items 0.1 0.1% 0.8 0.6%Operating profit 7.7 4.6% 0.6 0.5%Non-operating & extraordinary result 2.1 1.2% 0.0 0.0%EBIT 9.8 5.8% 0.6 0.5%Interest income and expenses -0.3 -0.2% -0.3 -0.2%Exchange gains and losses 0.3 0.2% 0.0 0.0%Other financial income and expenses -0.1 -0.1% -0.1 -0.1%Taxes -2.5 -1.5% -2.5 -1.9%Net result 7.1 4.3% -2.4 -1.8%
Earnings per bearer share
Consolidated P&L 1HY 2014 1HY 2013
CHF 15.19 CHF -5.05
Corporate
1.7
-1.8
1HY 2013 1HY 2014
Cash flow from operating activitiesin CHFm
Cash Flow
Slide 32
Increasing net working capital following sales recovery reduces the cash flow
6.4
-0.9
Dec 2013 June 2014
Net cash in CHFm
1HY 2014 1HY 2013
CHFm CHFmEBIT 9.8 0.6Depreciation, amortisation, impairment 4.5 5.3Change in working capital -10.6 -4.6Other cash flow from operating activities -5.5 0.4Net cash flows from operating activities -1.8 1.7Purchase of PPE and Intangibles -4.3 -2.8Proceeds from sale of PPE 2.2 0.0Change in borrowings 5.7 -9.6Distribution to shareholders -3.5 -7.0Acquisition of subsidiaries 0.0 0.2Repayments of loans receivable 0.0 0.4Purchase of treasury shares -0.2 -0.2CHANGE IN CASH AND CASH EQUIVALENTS -1.9 -17.3
Consolidated Cash Flow
Corporate
Balance Sheet
Slide 33
Strong equity ratio of 67% despite increased net working capital
• The net working capital increase required some additional borrowing
• No significant changes in payment terms granted to customers
• Stable fixed assets as investments did not exceed depreciation
• Slightly reduced, but still solid equity ratio of 67%
CHFm % CHFm %Cash and cash equivalents 21.7 9% 23.1 10%Trade receivables 77.5 32% 63.0 28%Inventories 47.7 20% 37.5 17%Other current assets 17.6 7% 21.1 10%Deferred income tax assets 1.5 1% 1.0 0%Property, plant and equipment 70.0 29% 70.3 32%Intangible assets 5.4 2% 5.3 2%Other non-current assets 0.2 0% 0.9 0%TOTAL ASSETS 241.6 100% 222.1 100%
CHFm % CHFm %Borrowings 22.6 9% 16.7 8%Trade payables 28.0 12% 19.4 9%Other current liabilities 22.5 9% 23.7 11%Deferred income tax liabilities 0.7 0% 0.8 0%Provisions 6.1 3% 4.1 2%Equity 161.7 67% 157.3 71%TOTAL LIABILITIES AND EQUITY 241.6 100% 222.1 100%
Consolidated Assets Jun 2014 Dec 2013
Consolidated Liabilities and Equity Jun 2014 Dec 2013
Outlook
Corporate
Outlook
Gurit expects similar business conditions for the remainder of 2014 and an operating profit margin around the level achieved in the first half year.
Slide 35
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