Post on 31-Oct-2020
OC Oerlikon Investor Presentation
July 2012
Increase of profitability
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Agenda
Page 2
1 Business Overview
2 Business Development Q1 2012
3 Refinancing 2012
4 Outlook
5 Appendix
OC Oerlikon Investor Presentation, July 2012
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Graziano becomes part of Saurer AG
Oerlikon Space lifts off. Launch of first Euro-pean booster rocket, Ariane 4
Schweizerische Werkzeugma-schinenfabrik Oerlikon (SWO) is founded
Oerlikon-Bührle Holding floats on the stock market
Oerlikon-Bührle Group is split up. Core business is renamed Unaxis
1907 1946 1951 1968 1988 1992 1998 2005 2006 2008 2012
More than 100 years of history and Oerlikon’s ability to change
Foundation of Balzers
Foundation of Graziano
Comprehensive rebranding: Oerlikon stands by its business tradition and its Swiss values: quality, reliability, precision, and innovative flair
Takeover of Saurer AG with ist strong textile business
Announcement to divest the Solar Segment
Opening of the plant in Suzhou, China
New profitability level: Record EBIT margin at 10 percent
2011
Page 3
Swiss roots: Oerlikon was named after a suburb of Zurich
OC Oerlikon Investor Presentation, July 2012
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Business Overview Segments
Page 4
Textile Drive
Systems Vacuum Coating
Advanced Technologies
Solar
Textile solution provider
Mechatronic, hydrostatic and electric
drive systems
Full vacuum solutions,
components and services
Coating services and equipment
Manufacturing equipment
supplier of the semi, PV and
clean tech industries
Turn key solutions for
thin film silicon photovoltaic
Sales 2011*
EBIT 2011* 183
2’037
49
821
59
409
97
484
11
108
-10
323
* in CHF m
Group** ∆ to 2010
4’182
419
16%
>100%
Sale concluded: closing expected Q3 2012
** Group EBIT contains corporate/ elimination items, e.g. management and trademark fees, real estate income, income from IT services of CHF 30m
OC Oerlikon Investor Presentation, July 2012
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Business Overview Markets
Page 5 * Sales to third parties
Oerlikon is an innovative technology conglomerate
Oerlikon is focused on high quality businesses with leading positions in global markets
Innovation is at the core of Oerlikon business model across all segments
Oerlikon is an early mover in Asia where the company now enjoys a strong reputation and track record
Market capitalization of CHF 2.6 bn (as per 31.05.2012)
Market presence and example end markets of Oerlikon Group*
Food Clothing Transportation Infrastructure Energy Electronics Others
2011 Sales* split by geography (CHF m)
Asia 2'031
Europe 1'186
NorthAm 609
Others 356
Very diversified applications from Agriculture machinery components to machinery for the textile industry
Agriculture Technical clothing
Automotive Glass coatings
Wind turbines Touch- screens
Formula 1
defines percentage of total Group sales within respective market
* according to research by ubc consulting
OC Oerlikon Investor Presentation, July 2012
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Business Overview Long-term relationships with blue chip customers
Page 6
Preferred technology supplier to technology leaders in their respective industries
Global customer base and world leading brand names
Strong long-term customer relationships
OC Oerlikon Investor Presentation, July 2012
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Page 7
Company Overview Oerlikon Textile – Record EBIT margin of 9% - Focus on Asia
Market
Outlook 2012
Market and technology leader in Manmade Fibers
Strong market and technology position for all other textile applications
Segment expects a slight decline in order intake and sales
Slightly increasing profitability due to underlying performance improvement
Key Financials
CHF m FY 2010 FY 2011 Change
OI 2’509 1’977 –21 %
Sales* 1’653 2’037 +23 %
EBIT 21 183 >100 %
Competitive situation
Highlights 2011
Strong sales growth and record EBIT margin
Strengthening of market position in China
Operational streamlining (3 Business Units, relocation of management to Shanghai)
Innovations presented at ITMA trade show
Manmade fiber market steady at a high level
Natural fiber market saw the expected decline
Textile components market continued to grow
Regional growth drivers: China and India
China represents 40 % of Segment sales in 2011
* Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Company Overview Oerlikon Drive Systems – Return to profitability in 2011
Market
Outlook 2012
Highlights 2011
Leading provider for gear and transmission com-ponents as well as solutions in challenging niche markets
CHF m FY 2010 FY 2011 Change
OI 792 892 +13 %
Sales* 733 821 +12 %
EBIT –27 49 n/a
High demand and growth in heavy agriculture equipment and the energy sector as well as in construction machinery and material-handling equipment
Transmission systems for high-performance cars remained strong – prototypes for electric vehicles
India and China as growth regions
Key Financials
Competitive situation
Successful positioning of the Segment as a whole
Capacity expansion in Asia
Access to market strategy in Asia (China, India)
Profitability recovered to an EBIT margin of 6 %
Agriculture, construction, energy and sports cars markets show stable demand
Slight sales growth
Further increase in profitability due to operational excellence programs
* Sales to third parties
Page 8 OC Oerlikon Investor Presentation, July 2012
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Company Overview Oerlikon Vacuum – Record EBIT margin of 14%
Market
Outlook 2012
Highlights 2011
Strong market and technology position with further potential for profitable growth
CHF m FY 2010 FY 2011 Change
OI 438 400 –9 %
Sales* 410 409 -
EBIT 30 59 +97 %
The process and surface-treatment industries and the analytics market were performance driver
Overall market demand weakened, in particular the solar and the semiconductor industry
Tapping of new application areas including degasification of steel and production of LED
Market environment expected to become more challenging
Potential gain in market share due to new products, additional capacity and expansion in the solution and service network
Stable sales and margin improvement
Key Financials
Competitive situation
Record EBIT margin of 14% achieved
Growing Asian market served in the region
Expansion of production capabilities in China to increase capacity by 30%
MAGiNTEGRA completed product portfolio
* Sales to third parties
Page 9 OC Oerlikon Investor Presentation, July 2012
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Company Overview Oerlikon Coating – Sales growth and breakthrough innovation
Market
Outlook 2012
Highlights 2011
Market and technology leader in Physical Vapor Deposition (PVD)
CHF m FY 2010 FY 2011 Change
OI 422 484 +15 %
Sales* 422 484 +15 %
EBIT 52 97 +87 %
Continuing high demand from the automotive industry, especially in Europe, as key growth driver
Demand for environmentally friendly solutions
New applications for coated precision components
Stable global outlook for the automotive industry
Further regional expansion and opening of new coating centers
Slight sales growth and profitability to remain stable at a high level
Key Financials
Competitive situation
4 new coating centers in China, India and Poland; expansion of existing centers
New innovation S3p™ and attendant coating system INGENIA
Successful expansion into additional application areas of coated precision components
15 % sales growth, record 20 % EBIT margin
* Sales to third parties
Page 10 OC Oerlikon Investor Presentation, July 2012
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Company Overview Oerlikon Advanced Technologies – Increase in profitability
Market
Outlook 2012
Highlights 2011
Highly specialized equipment supplier with unique technology competence in PVD coating
CHF m FY 2010 FY 2011 Change
OI 129 88 -32 %
Sales* 129 108 -16 %
EBIT 10 11 +10 %
Cooling of the semiconductor equipment market
Nanotechnology and solar markets impacted by the current market environment
Optical storage media solutions continue to trend lower
Market penetration of HEXAGON system for semiconductor applications (advanced packaging)
Further development of technology to address e.g. energy efficiency management and energy conversion applications
Sales to increase slightly, margin to decrease
Key Financials
Competitive situation
New HEXAGON packaging system launched; increased productivity and reduced maintenance
New SOLARIS production system offers further application opportunities
* Sales to third parties
Page 11 OC Oerlikon Investor Presentation, July 2012
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Key Success Factors – Overview
Page 12
Operational Excellence
All Segments achieved substantial gains in Operational Excellence Improvement in business processes Systematic execution of initiatives
Innovation Innovation is an integral part of Oerlikon’s DNA Continued expenditures in R&D: CHF 213 million in 2011 Focus on long-term customer benefits
Global Footprint
Taking advantage of growth opportunities around the world Sharpened focus on the most important growth markets – China and India Penetration of under-represented growth markets (e.g. Brazil, Russia)
Markets Focus on structural growth markets Trends toward urbanization, a growing middle class and technical advancement
are offering opportunities for profitable growth
OC Oerlikon Investor Presentation, July 2012
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Key Success Factors Operational Excellence
Page 13
Oerlikon Vacuum Oerlikon Drive Systems
Operational Excellence executed by employees
Automation in Indian factory re-placed manual labor processes
Measures
Modernization of operations, integration of workforce, introduction of lean production Key achievements
30 % higher production output
40 % less workforce required
No lay-offs due to higher demand
Measures
Teamwork project to identify work- place improvements, workplace organization methodologies
Key achievements
Manufacturing output up 30 %
Reduced footprint
Flow of materials optimized
Reduction of inventory
Oerlikon Solar
Measures Transformation and optimization of procurement process
Key achievements
Reduction of suppliers from 1,700 to little more than 500
Key supplier approach
Optimization of supply chain
Lowered production costs
ThinFab: On-time delivery increased to 99%
OC Oerlikon Investor Presentation, July 2012
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Key Success Factors Innovation – R&D expenditures of CHF 213 million in 2011
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Oerlikon Textile
Autocoro 8: new rotor-spinning machine presented at ITMA
Innovation core Individually driven spinning positions with up to 200,000 rpm
Key customer benefits
Productivity up to 25 % higher
Up to 480 spinning positions
Increased flexibility
Future potential Attracting new customers and markets
Oerlikon Advanced Tech. Oerlikon Coating
Innovation core Transfer of optimized transport concept to demanding 300 mm advanced packaging applications Key customer benefits
Two to three times faster
Simultaneous wafer move
Half as much floor space
Future potential Entering new applications and markets
Innovation core Significantly faster processing time; S3P™ opens unique application possibilites
Key customer benefits
Up to eight different coating processes per day
Smooth and dense coatings
Future potential Entering new applications and markets with PVD technology
HEXAGON: solution for advan-ced packaging technologies
INGENIA with S3P™: the quantum leap in PVD coating
OC Oerlikon Investor Presentation, July 2012
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Key Success Factors Global footprint – BRIC region
Page 15
Brazil and Russia China India
Oerlikon’s exposure 2011: 2–3 % of Group sales in Brazil, 1–2% in Russia
Key initiatives
Developing comprehensive market penetration strategy for Russia and Brazil
Growth opportunities from infrastructure projects and industrial expansion
Country representatives
Oerlikon’s exposure 2011: 10 % of Group sales Production sites for Coating, Drive Systems (DS)
Key initiatives
Serving rapidly increasing domestic demand, e.g. Textile
DS capacity increase
Coating centers to serve domestic automotive industry
Country representative
Oerlikon’s exposure 2011: 28 % of Group sales, Suzhou is one of the largest locations worldwide
Key initiatives
Management transferred
New Drive Systems factory
Expansion of Vacuum/Coating
Trainee program for college graduates in Suzhou
Country representative
Market intelligence to understand opportunities
Oerlikon is transforming from an exporter to a local company
Expanding in South Asia’s largest growth market
OC Oerlikon Investor Presentation, July 2012
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China has become Oerlikon’s most important market BRIC region
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Key figures 2011
Asia: 49 % of Group sales
China:
28 % of Group sales
17 sites
2,525 employees
Largest sites: - Suzhou - Jintan - Wuxi
Oerlikon is transforming from an exporter to a local company
*Sales to third parties
Oerlikon Sales in China* (in CHF m)
487
877
1124
0
200
400
600
800
1000
1200
2009 2010 2011
Major customers in China:
OC Oerlikon Investor Presentation, July 2012
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We are close to our customers
Suzhou Shanghai
Wuxi Jintan
Beijing Tianjin
Xi’an
Urumqi
Chengdu
Dongguan Guangzhou
Wenling
Zhengzhou
Hanzhong
Jinan
Chongqing
Natural Fibers: Production, sales service Manmade Fibers: Production, service Textile Components: Production, service Balzers Coating: Coating center Drive Systems: Production, service
Natural Fibers: Sales, service Manmade Fibers: Sales Textile Components: Sales Vacuum: Sales, service Drive Systems: Sales, service
Coating: Coating center
Coating: Coating center Vacuum: Production, sale service
Coating: Coating center
Natural Fibers: Production, sales service
Manmade Fibers: Production
Manmade Fibers: PD, Service production Vacuum: Sales, service
Coating: Coating center
Coating: Coating center
Coating: Coating center
Coating: Coating center
Coating: Coating center
Natural Fibers: Sales
Natural Fibers: Sales
Vacuum Sales, service
Page 17 OC Oerlikon Investor Presentation, July 2012
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Agenda
Page 18
1 Business Overview
2 Business Development Q1 2012
3 Refinancing 2012
4 Outlook
5 Appendix
OC Oerlikon Investor Presentation, July 2012
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Increase transparency by reporting profitability Group EBIT margin* improves to 11.8 %
in CHF m / in %
Continued profitability improvement
Reported EBIT margin of 15.8 % include
one-time effect of CHF 39 million in Textile (Sale of Arbon property)
Adjusted for currency effects, sales would have increased by 11 %
Growth in the US and Asia; China in particular (China sales increased by 34 %)
Operational Excellence programs to drive profitability
Oerlikon included in SMIM Index and STOXX Europe 600
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Consistent execution of portfolio optimization
Order intake Sales**
Q1 2012 cont. op.
996
Q1 2011 restated
1,126
-12% 906
+6%
Q1 2012 cont. op.
961
Q1 2011 restated
EBIT
39
106
+43%
Q1 2012 cont. op.
152
113
Q1 2011 restated
Order backlog
1,693
-21%
Q1 2012 cont. op.
1,345
Q1 2011 restated
EBIT margin*
11.7 +1%
Q1 2012 cont. op.
11.8
Q1 2011 restated
** Sales to third parties * Excluding one-time effect of property sale Arbon, CH OC Oerlikon Investor Presentation, July 2012
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Execution of portfolio optimization
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Announcements
Solar Segment (announced March 2, 2012)
Divestment of Solar Segment to Tokyo Electron (TEL), Japan
Transaction based on EV of CHF 250 million
Closing expected in summer,
mainly dependent on merger control approval in China
Sale of property (announced March 23, 2012)
Sale of 200 000 sqm property in Arbon, Switzerland
Lease back of 14 000 sqm production and office space
One-time effect on EBIT of CHF 39 m recognized in Segment Textile
Optical Disc (announced April 3, 2012)
Announcement to exit Optical Disc equipment business
Continue to provide high-quality services and spare parts
Focus on growth areas
Drive Systems operations (announced April 10, 2012)
Announcement to streamline manufacturing footprint
Number of production facilities in Italy to be reduced from seven to five
Closing of Garessio plant and non-binding LOI to sell Porretta Terme
Pilatus Flugzeugwerke AG (announced April 16, 2012)
Sale of 13.97 % minority stake
Purchase price undisclosed, Book value CHF 28 m
Positive one-time effect in financial result in Q2
OC Oerlikon Investor Presentation, July 2012
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Textile
Vacuum
Oerlikon Segments 1/2
Page 21
Good start in the financial year 2012
Solar industry remained weak
China showed some weakness vs. Q1 2011
Process industry, coating and R&D stable
Drive Systems
Stable demand in mining, energy and agriculture
Increased demand in construction
North America as growth driver
Operational streamlining in Italy
Ramp-up of China production facility according to schedule
Manmade fiber steady at a high level
Natural fiber saw first improvements in order intake from Q4 trough
Autocoro 8 well received in the market
Strong growth in China
China represents 53 % of Q1 Segment sales
OC Oerlikon Investor Presentation, July 2012
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Coating
Oerlikon Segments 2/2
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Good start in the financial year 2012
Advanced Technologies
First signs of recovery in semiconductor industry
Structural changes by exiting optical disc market with impact on inventory
Focus on growth areas such as semiconductor and energy conversion, storage and efficiency management
Strong automotive sector in established markets like Europe, the US and Japan
Tools and high-volume components in automotive
Continued expansion of capacity especially in Asia
OC Oerlikon Investor Presentation, July 2012
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Key figures by Segment Q1 2012
Order intake
Order backlog
Sales* Δ to Q1 2011 (restated)
EBIT % of sales
EBIT (excl. sale of Arbon property)
% of sales
in CHF m Vacuum
103
80
98 -3.9 %
14 14.1 %
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Textile
504
1,031
496 8.3 %
90 18.1 %
Coating
127
n/a
127 1.6 %
27 21.3 %
51 10.3 %
Adv.Tech.
31
23
16 -
-2 n/a
Drive
231
211
224 9.3 %
19 8.5 %
* Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Q1 2012 ROCE: Improvement in 12 month rolling NOPAT and stable Capital Employed
Oerlikon Group creates value by earning premium over cost of capital
ROCE
Return On Capital Employed (ROCE) ROCE = NOPAT / Capital Employed
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17.6%
Q1 2012 continued operations
FY 2011 restated
16.5%
FY 2011 reported
14.9%
in % Oerlikon definition of ROCE 2011
reported 2011
restated
EBIT 419 429
- Total current income tax -78 -75
- Total deferred income tax -13 -8
NOPAT 328 346
Net Operating Assets 2'205 2'108
+ Current tax receivables 18 17
+ Deferred tax assets 111 109
- Current income tax payables -61 -59
- Deferred tax liabilities -73 -72
Capital Employed 2‘200 2'103
OC Oerlikon Investor Presentation, July 2012
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Agenda
Page 25
1 Business Overview
2 Business Development Q1 2012
3 Refinancing 2012
3 Outlook
5 Appendix
OC Oerlikon Investor Presentation, July 2012
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Refinancing 2012 Considerations and execution on refinancing 2012
Page 26 OC Oerlikon Investor Presentation, July 2012
Current situation
Financing structure clearly shaped by the restructuring situation of the year 2010
Existing Syndicated Facility has very high interest costs and a lot of legal restrictions
Successful turnaround since 2010 and new level of profitability in 2011
Net debt at 31.12.2011 was CHF 86m
Net debt/EBITDA-levels have been very low between 0 and 1 during the last six quarters
Oerlikon’s objectives
in the refinancing
process
Ensure long term liquidity
Reduce interest costs, administrative burden and complexity
Create higher operating and strategic flexibility
Widen and diversify our financing sources and achieve first-time entry to Capital Markets
Achieve a financing structure that is aligned to actual financial condition
Enhance positive market perception
Limit the number of participants for New Syndicated Loan to core banks
Execution of refinancing actions
New CHF 800m Syndicated Facility Agreement has been signed as per 05.06.2012
Important improvements in financial terms & conditions and strategic flexibility
Successful placement of a 4 year CHF 300 million domestic bond (Coupon of 4.25 %)
Strong demand demonstrates re-established confidence in underlying performance
Refinancing of existing facilities expected to be finalized in July
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Refinancing 2012 Key features of New Syndicated Credit Facility
Page 27 OC Oerlikon Investor Presentation, July 2012
Size of the Facilities
Duration
Total Facility amount: CHF 800m, thereof CHF 700m Revolving Credit Facility (Facility A)
Facility A: CHF 450m for cash drawings and CHF 250m Ancillary Facilities
CHF 100m optional term loan (Facility B) – optional tranche as short-term buffer
Facilities to become effective upon successful issuance/settlement of a Swiss Bond
Facility A: 3 years +1 +1 (extension upon request of Oerlikon, subject to approval of the Lenders)
Facility B: 12 months (starting from Effective Date)
Security No asset pledges, no upstream guarantees
Financial Covenants
Total Borrowing / EBITDA
EBITDA / Net Interest Expense
Absolute Equity covenant
Pricing Margin between 2.00 – 3.00 % according to margin grid, initial margin of 2.50%
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Refinancing 2012 Key features of the Bonds
Page 28 OC Oerlikon Investor Presentation, July 2012
Maturity 4 years
Swiss Bond Unrated transaction – debut for Oerlikon
CHF 300m
Coupon 4.25 %
Pricing date 13 June 2012
Settlement date
13 July 2012
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Agenda
Page 29
1 Business Overview
2 Business Development Q1 2012
3 Refinancing 2012
4 Outlook
5 Appendix
OC Oerlikon Investor Presentation, July 2012
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Outlook Oerlikon Group 2012 Next financial reporting: Q2 2012 on August 3
Page 30
Assumptions: No recession scenario
Successful closing of Solar Segment divestment
Based on the existing full year guidance, we see
upside potential in business volume and profitability
Significant one-off effects:
Property sale of Arbon, Switzerland (CHF 39 m EBIT)
Sale of minority stake Pilatus Flugzeugwerke AG
(positive financial income)
Dividend policy in place
Guidance FY 2012 based on current currency exchange rates
Continued focus on efficiency and portfolio optimization – Disciplined execution of Operational Excellence measures
OC Oerlikon Investor Presentation, July 2012
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Investment Case
Page 31
Leading position in attractive growth markets
Sustainable improved EBIT margin
Underlying performance improvement
Solid Balance Sheet/Low Debt
Strong Cash Flow/Dividend
Technological Leadership/ Innovation
Limited Swiss Franc exposure
Global player/ Strong interna-tional footprint
OC Oerlikon Investor Presentation, July 2012
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Agenda
Page 32
1 Business Overview
2 Business Development Q1 2012
3 Refinancing 2012
4 Outlook
5 Appendix
OC Oerlikon Investor Presentation, July 2012
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Vision Mission Tagline
Oerlikon’s Identity
Page 33 OC Oerlikon Investor Presentation, July 2012
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Company Overview Management Track Record – Management Board
Jürg Fedier
(1955; Swiss Citizen)
Chief Financial Officer, January 2009
Mr. Fedier started his career at Dow Chemical in Horgen (Switzerland) in 1978. Over the following years, he held various managerial positions in treasury operations in EMEA. Jürg Fedier was appointed Treasurer of Dow Germany in 1987 and Assistant Treasurer USA in 1993. Two years, later he became Treasurer of Dow Japan. In 1998, Jürg Fedier became Global Business Finance Director of the Epoxy Products and Intermediates division in Horgen (Switzerland) before being appointed Global Business Finance Director of Thermosets (USA in 2000). Before returning to Switzerland in March 2006 as Head of Finance of Dow Europe and a member of the Executive Board, Jürg Fedier served as Vice President Finance for Performance Chemicals
In March 2007 he took over as CFO of Ciba in Basel (Switzerland). Over the course of his career, Jürg Fedier has served on several Boards of Directors
After graduating from college of Commerce in 1978 in Zurich (Switzerland), Jürg Fedier completed several international executive management programs at the International Institute for Management in Lausanne (Switzerland) and the University of Michigan (USA) between 1990 and 2002
Dr. Michael Buscher
(1965; German Citizen)
Chief Executive Officer, May 2010
Before joining Oerlikon, Dr. Buscher held various positions at Bombardier (previously AEG Westinghouse, AEG Schienenfahrzeuge, ABB Henschel, ABB Daimler-Benz Transportation, Daimler Chrysler Rail Systems)
In 1990, Dr. Buscher began his career as Scientific Assistant. From 1995, he served as System Engineer. In 1997 he was appointed Technical Project Manager and in 2000 he assumed an Engineering Director position covering several sites. In 2003, Dr. Michael Buscher relocated to Switzerland and became Vice President of the Business Unit Locomotives, responsible for global Engineering. One year later he additionally became Site Coordinator Zurich and a member of the Management Team of Bombardier Switzerland. In 2007, Dr. Michael Buscher was appointed President of the Global business Unit Propulsion & Controls, which he very successfully developed until he left Bombardier and joined Oerlikon.
In the course of his career he also served on several boards
Dr. Buscher holds a Master’s degree and gained a PhD in Electrical Engineering from the Technical University of Darmstadt (Germany)
Adrian Cojocaru
(1965; Romanian Citizen)
Chief Human Resources Officer, November 2010
Adrian Cojocaru has more than 20 years of professional experience. He served in different HR positions such as Regional Chief Human Resources Officer Middle East & Africa for LG Electronics (2009-2010), base in Dubai (UAE).
Prior to this, Adrian Cojocaru held management functions at Reader’s Digest (UK, 2008-2009) and Coca-Cola (Romania), among others.
Over the course of this career he successfully carried out a wide range of HR and organisation development projects
Adrian Cojocaru graduated as mechanical engineer from the faculty of Engineering & Management of Technological Systems of the Polytechnic University in Bucharest (Romania) and continued his studies in the UK, where he attended the M.S. In Organisational Consulting at the Ashridge Business School
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Company Overview Management Track Record – Segment CEOs
From 1998, Andreas R. Dill has occupied diverse managerial positions within the Semiconductor and Coating segments at Oerlikon. Andreas R. Dill has occupied the position of CEO of Adv. Tech. since 2010
Prior to joining Oerlikon, Andreas R. Dill occupied several managerial and engineering positions at Zevatech AG (Switzerland) from 1985 to 1998
Andreas R. Dill graduated from the ETH as an Electrical Engineer. He also performed post graduate research at McGill University, Canada
Clement Woon (1960, Singapore Citizen)
Gary J. Lehman (1952, US Citizen)
Dr. Hans Brändle (1961, Swiss Citizen)
Andreas R. Dill (1954, Swiss Citizen)
Dr. Andreas Widl (1966, Austrian)
From 1992 to now, Dr. Hans Brändle has occupied various managerial positions within Oerlikon Balzers segment. He occupied the position of Executive Vice President from 2005 to 2006 and the position of CEO since 2006
Prior to joining Oerlikon, Dr. Hans Brändle worked as a visiting scientist for IBM Almaden Research (USA) from 1991 to 1992
Dr. Hans Brändle studied Physical Chemistry and obtained a PhD in Physics from the ETH (Switzerland) and an executive MBA from the University of St. Gallen.
Dr. Andreas Widl occupied managerial positions for Unaxis and thus joined Oerlikon as part of the Vacuum segment. He occupies the position of CEO of the segment since 2008
Prior to joining Oerlikon, Dr. Andreas Widl worked as a Senior Technology manager for Mannesmann from 1992 to 1999 and several engineering and managerial positions at GE from 1999 to 2004
Dr. Andreas Widl obtained a Physics Diploma and a PhD in Physics from the Technical University of Munich (Germany)
Gary J. Lehman joined Oerlikon in 2003 as business unit head of Oerlikon Fairfield and has occupied the position of CEO for Drive Systems segment since 2011
From 1994 to 2003, prior to joining Oerlikon, Gary J. Lehman was Senior Vice President for ITT Automotive and President and CEO for Philips Lighting and Electronics (USA). He was also the founder and manager of The Cannelton group
Gary J. Lehman obtained a Master of Business Administration from Case Western Reserve University and a BS Management from Purdue University (USA)
Clement Woon joined Oerlikon in 2012 as CEO for Textile segment based on its strong leadership skills, focus on change and transformation, its customer orientation and know-how in Technology and Service Business
Prior to joining Oerlikon, Clement Woon was president and CEO of SATS Ltd
He also occupied several leadership positions at Leica Geosystems AG and became President of the company
Prior to that, he held several leadership positions within Thomson Consumer Electronics
Page 35 OC Oerlikon Investor Presentation, July 2012
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Oerlikon Shares
Page 36
Oerlikon Shares Oerlikon Shareholder Structure
Oerlikon Share Price Development
As of June 22, 2012, Indexed; 100 percent = Closing price per December 31, 2011
Listed on Swiss Exchange (SIX) since 1975
Securities symbol: OERL
Securities number 81 682
ISIN: CH0000816824
No. of shares outstanding: 323 124 010 shares
Re-entry to Swiss SMIM on April 17, 2012
Addition to STOXX Europe 600 as of June 18, 2012
48,68% Free Float 51,32%
Treasury Shares (part of Free Float)
0,14%
Renova Group
OC Oerlikon Investor Presentation, July 2012
90.0
100.0
110.0
120.0
130.0
140.0
150.0
160.0
170.0
180.0
190.0
30.1
2.1
1
06.0
1.1
2
13.0
1.1
2
20.0
1.1
2
27.0
1.1
2
03.0
2.1
2
10.0
2.1
2
17.0
2.1
2
24.0
2.1
2
02.0
3.1
2
09.0
3.1
2
16.0
3.1
2
23.0
3.1
2
30.0
3.1
2
06.0
4.1
2
13.0
4.1
2
20.0
4.1
2
27.0
4.1
2
04.0
5.1
2
11.0
5.1
2
18.0
5.1
2
25.0
5.1
2
01.0
6.1
2
08.0
6.1
2
15.0
6.1
2
22.0
6.1
2
Oerlikon STOXX 600 SMI SMIM
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Coverage 9 Buy/Accumulate – 2 Hold/Marketweight
Page 37
Broker (as of July 27, 2012)
Analyst Recommendation Date of last update
Target Price
AlphaValue Pierre-Yves Gauthier Buy 06.05.2012 12.00
Bank am Bellevue Michael Studer Hold 02.05.2012 9.50
Bank Vontobel Michael Foeth Buy 06.06.2012 11.00
Berenberg Bank Benjamin Glaeser Buy 27.06.2012 10.30
Credit Suisse Patrick Laager Neutral 30.04.2012 9.50
Helvea SA Reto Amstalden Accumulate 30.04.2012 10.60
Kepler CM Christoph Ladner Buy 30.04.2012 11.00
Main First Bank Thomas Baumann Buy 30.04.2012 9.75
Societe Generale Jean Baptiste Roussille Buy 30.04.2012 9.30
UBS Torsten Wyss Buy 02.05.2012 11.50
Zürcher Kantonalbank Armin Rechberger Overweight 02.05.2012 -
CONSENSUS 10.45
OC Oerlikon Investor Presentation, July 2012
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Financial Calendar 2012
Page 38
March 5, 2012 FY Results 2011 and publication of Annual Report 2011
- Media & Analyst Conference, Zurich
April 12, 2012 Annual General Meeting of Shareholders
- Lucerne
April 30, 2012
Q1 results
- Analyst Conference Call
August 3, 2012 Q2 results and publication of Interim Report 2012
- Media & Analyst Conference, Zurich
October 30, 2012 Q3 results
- Analyst Conference Call
OC Oerlikon Investor Presentation, July 2012
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Oerlikon on a new level
Page 39
Sales* FY 2009 – FY 2011 (in CHF m)
224
5
-592
> 100%
FY 2011 FY 2010 FY 2009
FY 2009
2,877
3,601
+16%
FY 2011
4,182
FY 2010
Net debt FY 2009 – FY 2011 (in CHF m)
-86
-274
FY 2011 FY 2010 FY 2009
-1,646
EBIT FY 2009 – FY 2011 (in CHF m)
419
51
-589
>100%
FY 2011 FY 2010 FY 2009
Net profit/loss FY 2009 – FY 2011 (in CHF m)
* Sales to third parties OC Oerlikon Investor Presentation, July 2012
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Oerlikon Group key figures FY 2011
in CHF m
Page 40
Order intake 4,043 4,520 –11 %
Order backlog 1,481 1,702 –13 %
Sales* 4,182 3,601 +16 %
EBITDA % of sales
605 14 %
278 8 %
>100 %
Net profit % of sales
224 5 %
5 0 %
>100%
FY 2010 FY 2011 Δ
2,205 2,196 0 % Net Operating Assets (incl. goodwill and brands)
EBIT % of sales
419 10 %
51 1 %
>100 %
Cash flow from operating activities before changes in net current assets
541 354 +53 %
* Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Key figures by Segment FY 2011
Order intake
Order backlog
Sales* Δ to 2010
EBITDA % of sales
EBIT % of sales
in CHF m Vacuum
400
77
409 -
72 18 %
Page 41
59 14%
Net Operating Assets 165
Employees 1,472
Textile
1,977
1,053
2,037 23 %
233 11 %
Coating
484
n/a
484 15%
141 29 %
183 9 %
97 20 %
618 303
6,230 2,986
Adv.Tech.
88
8
108 -16%
14 13 %
11 10 %
82
200
Drive
892
213
821 12%
94 11 %
49 6 %
936
5,471
Solar
202
130
323 27 %
17 5 %
-10 n/a
97
660
* Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Order backlog Order intake by Segments
in CHF m
62100
Adv. Tech.
Coating
-11%
FY 2011
4,043
-41
Solar
-28
Vacuum
-38
Drive Textile
-532
FY 2010
4,520 -13%
FY 2011
1,702
1,481
FY 2010
Order bridge by Segment
Page 42
-21% +15% -12% -9% +13% -32%
Growth rate
in CHF m
OC Oerlikon Investor Presentation, July 2012
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626988
384
+16%
FY 2011
4,182
Adv. Tech.
-21
Coating Solar Vacuum
-1
Drive Textile FY 2010
3,601
Sales bridge by Segment
Page 43
Sales* by Segment
in CHF m
Growth rate
+23% +15% +27% 0% +12% -16%
* Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Oerlikon benefits from growth opportunities worldwide
Asian markets fueled sales up by 27 %; Europe up by 9 %; North America up by 1 %; Other regions up by 14 %
Assessment of emerging markets (BRIC) to better balance geographical diversification
Sales* by location Sales* by market region
28%
49%
15%
8%
Europe
Asia/Pacific
Other regions
North America
18%
12%
69%Europe
Asia/ Pacific
Other regions
1%
North America
Sales by location and region FY 2011
Page 44 * Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Constant range of investments in R&D to secure technological leadership
Page 45
Investments in R&D in the range of 5 – 7 % of sales
in CHF m / as % of sales
213
239
210
247
274260
7
56
5
0
50
100
150
200
250
300
0
1
2
3
4
5
6
7
8
FY 2011
5
FY 2010
7
FY 2009 FY 2008 FY 2007 FY 2006
OC Oerlikon Investor Presentation, July 2012
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FX impact on Sales, EBIT and EBIT margin
Page 46
+484+22
+12%
FY 2011 FX impact adj.
+4,688
Translation effects
Transaction effect
FY 2011 reported
+4,182
Oerlikon Group Sales* FY 2011
in CHF m
Oerlikon Group EBIT FY 2011
in CHF m
+51+20
+419
+17%
FY 2011 FX impact adj.
+490
Translation effects
Transaction effect
FY 2011 reported
10.5 10.0
30 % growth normalized for currency impact compared to FY 2010 (CHF 3,601 million)
Only minor impact on EBIT margin
EBIT margin in %
* Sales to third parties
OC Oerlikon Investor Presentation, July 2012
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Strong improvement in EBIT and RONA following turn-around in 2010,
Despite the strong recovery, Net Operating Assets remained stable in 2011
Stringent asset management and improved profitability led to improved RONA
EBIT and Net Operating Assets* RONA*
Strong improvement in Return on Net Assets (RONA)*
Page 47
19.0%
FY 2011 FY 2010
2.3%
FY 2009
-20.9%
FY 2008**
-1.7% 419
51
-589
-59
FY 2011
2,205
FY 2010
2,196
FY 2009
2,821
FY 2008**
3,498
in CHF m in %
** 2008 restated *Net Operating Assets include goodwill and brands; RONA is defined as EBIT / Net Operating Assets including goodwill and brands
OC Oerlikon Investor Presentation, July 2012
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Oerlikon increased net profitability
Result before interests and taxes (EBIT) in % of sales
Financial result in % of sales
Result before taxes (EBT) in % of sales
Income taxes
in % of EBT
Net profit in % of sales
in CHF m FY 2010 FY 2011
51 +1 %
-58
-7 n/a
12 n/a
Δ
>100 %
n/a
n/a
n/a
Page 48
5 0 %
>100 %
419 +10 %
-104
315 +8 %
-91 29 %
224 5 %
OC Oerlikon Investor Presentation, July 2012
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Financial Result
Page 49
315
57419
EBT FY 2011
Foreign currency loss, net
-11
Other financial expenses
-21
Interest on provisions for post-employment benefit plans
-11
Interest on financial debt
-73
Other financial income
Interest income
EBIT FY 2011
Financial income +12
Financial expense -116
in CHF m
OC Oerlikon Investor Presentation, July 2012
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Tax Result
Page 50
78
224
315
Net Profit FY 2011
Deferred tax expense
13
Current income tax expense
EBT FY 2011
Tax rate of 29 %
Current income tax due to profitability contribution of most subsidiaries
Main tax payers in China, India and Germany
Deferred tax expenses mainly due to utilization of tax loss carry forwards
Mid-term targeted tax rate of around 30%
in CHF m
OC Oerlikon Investor Presentation, July 2012
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Restoration of solid balance sheet
1) Net debt / Equity
Page 51
Cash and cash equivalents
in CHF m
Trade receivables
Inventories
Property, plant and equipment
Total other assets
Total assets
Current and non-current loans and borrowings
Total liabilities
Gearing1)
Total equity
Equity ratio
Net debt
Total other liabilities
Intangible assets
Non-current post-empl. benefit provisions
Trade payables
Current customer advances
FY 2011
742
635
582
915
1,261
438
5%
4,573
856
525
654
2,963
1,610
35%
86
457
471
FY 2010
751
588
468
942
1,293
433
19%
4,475
1,078
499
690
3,021
1,454
32%
274
419
335
OC Oerlikon Investor Presentation, July 2012
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Net Working Capital*
** 2007 restated
* Net Working Capital is defined as trade receivables + inventories – trade payables – current customer advances
Page 52
Net Working Capital* FY 2007- FY 2011
289302
499
837772
17%
FY 2008
18%
FY 2007**
14%
FY 2011
7%
FY 2010
8%
FY 2009
Net working capital
decreased despite higher
inventory related to higher
sales and was mainly
influenced by increased
customer advances
Net Working Capital FY 2011
at 7 % of 12-month
rolling sales
in % of sales and CHF m
OC Oerlikon Investor Presentation, July 2012
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1.39
0.950.77
2.26
0.63
1.58
Depreciation & amortization* CAPEX
CAPEX / depreciation &
amortization ratio*
167
150
+11%
FY 2011 FY 2010
195
175
-10%
FY 2011 FY 2010 2007** 2008** 2006** 2009
Mid-term
target
corridor
1.20
1.00
2010
in CHF m in CHF m
CAPEX nearing depreciation level
** Restated
* Excluding impairment
Page 53
FY 2011
OC Oerlikon Investor Presentation, July 2012
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Consolidated Cash Flow Statement FY 2011
742
541
756
-14
Cash and cash equivalents at the end of the year
Translation adjustments on cash and cash equivalents
6
Financing activities
-172
Investing activities
-283
Changes in net current assets
-106
Operating activities before changes in net current assets
Cash and cash equivalents at the beginning of the year
152 Operating Free Cash Flow
CAPEX PP&E -141 CAPEX intangibles -26 Increase in marketable securities -129 Proceeds, interest and Others 13 Total -283
in CHF m
Interest paid -52 Repayment of financial debt -139 Other 19 Total -172
Receivables -127 Inventories -128 Payables/liabilities 7 Customer advances 143 Hedge accounting -1 Total -106
Page 54 OC Oerlikon Investor Presentation, July 2012
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Dividend policy and dividend for 2011 Dividend yield of 4 %
Page 55
Dividend policy to pay out up to 40 % of net profit
AGM approved to pay out
CHF 0.20 per share for 2011
0.27
0.68
Up to 40% of net profit Net profit per share 2011
0.20
0.27
Max. pay-out Dividend proposal
Dividend distributed from the reserve from capital contribution
Dividend yield of 4 % based on a share price of CHF 5.03 at year-end 2011
OC Oerlikon Investor Presentation, July 2012
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Investor Relations Contact
Page 56
OC Oerlikon Management AG Churerstrasse 120 CH-8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Investor Relations Phone: +41 58 360 9622 Mobile: +41 79 810 8211 eMail: ir@oerlikon.com
OC Oerlikon Investor Presentation, July 2012
Oerlikon has made great efforts to include accurate and up-to-date information in this document. However, we make no representation or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoever for the use of it.
This presentation is based on information currently available to management. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected. Oerlikon is under no obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
All information provided in this document is not intended as, and may not be construed as, an offer or solicitation for the purchase or disposal, trading or any transaction in any Oerlikon securities. Investors must not rely on this information for investment decisions.
Disclaimer
Page 57 OC Oerlikon Investor Presentation, July 2012