Gurit full year results presentation 2011

Wind Energy Tooling MarineTransportation

Gurit Investor Presentation Analyst and Media ConferenceFY 2011 results Rudolf Hadorn, CEOMarkus Knuesli Amacker, CFO

March 16, 2012

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 FY 2011

� Strategy deployment: Completed core material offering range with Balsa acquisition and set-up Engineered Structures business unit for future growth in large, light weight composite structures beyond current target markets

� Sales Growth: Achieved strong sales momentum of CHFm 344.7 in a challenging market environment in 2011; +23.1% growth FX adjusted, +10.6% in reported CHF

� Profitability: Maintained 8% operational EBIT margin; scored 9% Group EBIT margin

� Investment in future: Maintained high investment pace with combined Capex and acquisitions of CHFm 28.0

Slide 3

Corporate

Key Messages FY 2011

� Net Debt: CHFm 32.6, affected by funding for growth, less favorable sales terms with clients (Wind Energy) and investment in future

� Balance sheet: Remains very solid with 53% equity ratio

� Leadership: Business units Tooling and Marine with new General Managers appointed in 2011, Engineered Structures staffed

� Outlook 2012: Optimistic view, despite uncertainties around Wind Energy recovery in China and RES timing and amounts in the US

� Dividend: Gurit Board of Directors proposes to distribute CHF 15 per bearer share (out of reserves from capital contributions); Dividend yield 3.7%

Slide 4

Corporate

FY 2011 – Overview

� Group - net sales at CHFm 344.7; +23.1% FX adjusted; +10.6% in CHF� Wind Energy - net sales CHFm 196.7; +39.7% FX adjusted; +24.1 % in CHF� Tooling - net sales of CHFm 43.2; +11.9% FX adjusted; -0.4% in CHF � Transportation - net sales of CHFm 51.9; +0.9% FX adjusted; -5.7% in CHF� Marine - net sales of CHFm 52.1;+8.1% FX adjusted;-2.8% in CHF

Net sales

Earnings

� Operational EBIT of CHFm 27.6, up CHFm 2.8 compared with FY 2010;� Operational EBIT margin at 8%, EBIT margin at 9%,� EBITDA margin at 13.0%� Net Result of CHFm 22.3� Solid equity ratio at 53% of balance sheet

� Fixed cost absorption benefit through growth, especially in prepregs� Flexible operations model maintained to master high demand changes� Material sourcing terms and dual sourcing shares improved during 2011� Material utilization variances now globally well under control

Costmanagement

Investments

� CAPEX: CHFm 10.1; 2.9% of net sales� R&D: CHFm 5.3; 1.5% of net sales� Balsa business acquisition 2011 payment of CHFm 13.7 and

earn-out of Tooling of CHFm 4.2, mainly financed by additional borrowing

Slide 5

Corporate

Business Strategy – Being a Global Leader

2007 2010 2013

Mainly European� Prepreg, corecell foam,

formulated� Few and dominant clients� Low gross margin

«Converter model»

Getting global� Focus on Asia:

50% staff / 30% sales� Built full line of core material,

B3SmartPac, tooling� Rapid growth of customer base� Rising value add through

core material and tooling strategy

Being global: � Adding focus on India and

South American markets� Leading position in top global

customers in each target market� Strong value add through full

offering deployment � Component opportunities

Slide 6


Review by Business Unit

Wind Energy

Wind Energy

Slide 8

Wind Energy

Wind Energy – Business Overview

� Leading global supplier of advanced composite materials for the wind power energy industry in Europe, the Americas and Asia

� Major customers – wind turbine blade manufacturers � Unique Selling Proposition

� Structural design know how� Chemistry expertise and material processing� Prototyping capabilities for all relevant blade material categories

Markets,Customers

Market drivers,Offering enhancements

Market position

� The trend towards renewable energy generation

� Structural change in wind power industry

� Offering range of structural core materials completed in 2011

� Addressable market 2011 ca. CHFm 600; Gurit market share ca. 33%� Globally positioned, strength in Europe and Asia� Amongst the top 3 global core material producers� Leading position in glass prepreg, leader in carbon prepreg since 2011

Slide 9

Wind Energy

0

100

200

300

400

500

2010 2014

Cumulative installed MW*

America

Asia /Pacific

Europe

Wind Energy – Strategy and Achievements

Strategy� Building and developing a global

structural core material presence� Benefit from the leading position

in carbon and glass prepreg

Achievements 2011� Acquisition of the Balsa core business:

� Completed the core material offering � Created a further solid platform for

organic growth in future� New carbon fibre products� Carbon fibre prepreg sales growing for

light weight blade applications� Further market penetration success in

China and India� Prepreg equipment upgrades for higher

speed and better quality of product 0

10

20

30

40

50

60

70

80

90

2007 2008 2009 2010 2011

Number of Gurit Customers in 2010

America

Asia / Pacific

Europe

Source: Company Data

Source: BTM Consult, 2010

* Gurit estimate is more conservative

Slide 10

Wind Energy

Wind Energy – Results and Outlook

Market environment 2011� Late in 2011, Chinese Wind Energy market turned

from growth to contraction, high competition and consolidation of WT bladers

� European Wind Energy business still moderate� American market overall moderate, strong for GuritResults FY 2011� Net sales of CHFm 196.7

� Up 24.1% vs. 2010; FX adj. +39.7%� Excluding the effect of the Balsa acquisition:

Up 17.2% vs 2010; FX adj. +31.9%� EBIT margin below Group averageOutlook 2012� Fair volume, price competitive markets in Europe� US market strong for Gurit for most of 2012,

2013 momentum unclear pending the PTC Production Tax Credits decisions

� China market recovery from low volume, low prices expected in late 2012/13

0

10

20

30

40

50

60

70

Q12010

Q22010

Q32010

Q42010

Q12011

Q2*2011

Q3*2011

Q4*2011

CHFm Wind Energy: Net Sales

Slide 11

*incl. Acquisition Balseurop

Tooling

Tooling

Slide 12

Tooling

Tooling – Business Overview

� Global leader as largest fully integrated, highly specialized, independent quality mould manufacturer

� Tooling for wind energy blade manufacturers� Addressed markets – global wind energy market customers

Markets, Customers


Market position

� Importance of Asia as a wind turbine blade manufacturing region� Globally fast growing client base for fast, affordable and quality mould

making capability of Gurit Tooling in Americas, Europe and Africa� Demand for longer blade moulds for on- and off-shore markets� Emerging wind energy markets in India and South America (Brazil)

� Addressable market size of ca. CHFm 90 globally in 2011� Global #1 market position with market share of between 45 and 50%� Leading market position in China and strongly growing in India� Started well in Europe, the Americas and Africa

Slide 13

Tooling

Tooling – Strategy and Achievements

Strategy� Maintain leader position in Asia for wind

turbine blade moulds� Complete the out-of-China export business of

wind turbine blade moulds to markets not yet fully covered in Europe and the Americas

� Widen the scope of tooling beyond Wind Energy composite mould needs

Achievements 2011� Most sales 2011 realized with export contracts � Built up an international project mgt. skill base

to support many new blade types and clients� Built up a service organization for the installed

mould base in India and Europe� Completed installation of major new campus

in Taicang, China � New General Manager, Bing Chen

0

50

100

150

200

2010 2014

Industry growth potential

Total

CHFm

Source: Gurit / Market research estimates

Slide 14

Tooling

02468

1012141618

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

CHFm Tooling: Net Sales

05

101520253035404550

2007 2008 2009 2010 2011

CHFm Tooling: Net Sales

Tooling – Results and Outlook

Market environment 2011� Recovery of the Chinese market for turbine

rotor blade moulds� Export of moulds to India, the USA, South-

Africa and Europe continues to develop very dynamically

Results FY 2011 � Net sales of CHFm 43.2

� Stable vs 2010 in CHF; FX adj. +11.9%� EBIT margin above Group average

Outlook � China blade design changes, mould demand is

very low in 2012 � Rapidly growing export demand for moulds

made in China will cover most of the sales� Expecting a slower start but accelerating

demand from known projects during 2012

Pre-acquisition period

Slide 15

Transportation

Transportation

Slide 16

Transportation

Transportation – Business Overview

� Aerospace/Rail� Prepreg material for aircraft interiors, secondary structures, lightweight rail

panels� Global customers throughout the supply chain of commercial aircraft� Addressable market 2011: ca. CHFm 185

� Automotive � Tier 1 composite body panels supplier to leading OEM’s of high-end vehicles � Addressable market 2011: ca. CHFm 20

Markets,Customers


Market position

� Safety and comfort in mobility combined with lower weight and higher fuel efficiency

� Widening market and shorter innovation cycles in aerospace� Automotive – Conversion form traditional materials� Rail – Increasing interest in urban transit, especially in China

� Aerospace � Leader in Airbus interiors and secondary structures ; market share in 2011 of ca. 24%� Interior supplier with global presence

� Automotive � Presently four customers, seeing ongoing industry interest� Prime supplier to Aston Martin� Market share in premium panel segment of ca. 34%

Slide 17

Transportation

0

50

100

150

200

250

300

350

2010 2014

CHFmIndustry Growth Potential - Accessible Markets

Auto

Aero/Rail

Slide 18

Transportation – Strategy and Achievements

Strategy� Expanding the leading position in aircraft

interiors and certain structural applications� Grow the client and business base for

premium car body panels � Develop an offering for automated panel

pressing of high temperature, class A surface parts for bigger volume car series

� Leveraging and expanding competencies into Rail markets

Achievements 2011� Aerospace business

� Intensified cooperation with Airbus Tier 1 partners for flooring/interiors

� Automotive business � Won (1) and renewed (1) contract� Innovation efforts on panel manufacturing

automation started


TransportationSlide 19

Transportation – Results and Outlook

Market environment 2011� Underlying aerospace market grows at a high

single-digit rate � Growing sales development in the automotive

business

Results FY 2011� Net sales of CHFm 51.9

� Down 5.7% vs 2010; FX adj. +0.9%.� EBIT margin above Group average

Outlook � Finalize follow-up contracts Aerospace

supplies 2012 – 2014 � Continue to build Automotive and gain further

orders 0

4

8

12

16

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

CH

Fm

Transportation: Net Sales

Marine

Marine

Slide 20

Marine

Marine – Business Overview

� Marine business – Gurit’s product and service brand SP-High Modulus � Working alongside the world’s leading boat designers and builders � Offering an integrated solution of structural design, materials science

manufacturing technology and process engineering � Global Marine market – superyachts, race boats, production craft, commercial

and military boats

Markets, Customers


Market position

� Americas and Europe market growth favorable, APAC hit by high FX � Second hand boat markets cleared, demand for new boats setting in� Full line offering range as a “one stop shop” gets more traction � SP-High Modulus complementary presence and competencies� B3SmartPac to address series builds market, adding momentum in USA

� Premier supplier of epoxy based technology and core materials� Addressable market in 2011: ca. CHFm 222 (in 2008: ca. CHFm 400)� Market share 2011 ca. 25% with the following positions by segment:

� #1 for Marine Structural Engineering� #2 for Prepreg� #3 for Core materials

Slide 21

MarineSlide 22

Marine – Strategy and Achievements

Strategy� Global reach and leverage globally

leading structural engineering position� Expand into new geographic markets and

boat segments� Focus on growth areas: Mediterranean,

Middle East and Far East� Address new boat categories: commercial,

military and production vessels� Penetrate production boat market with B3

SmartPac

Achievements 2011� Established US presence in Bristol, Rhode

Island, restructured Australia presence� Introduced Balsa, PET and PVC to customers� Wins with carbon prepreg clients for mast

applications� Global roll out of B3 SmartPac ongoing� New General Manager, Giorgio Vismara

0

50

100

150

2010 2014

Industry growth potential

Asia / Pacific

North America

Europe

CHFm


MarineSlide 23

Marine – Results and Outlook

Market environment 2011� Marine business recovers gradually� European and American markets developed

quite well� Rising activities in China and South East Asia� Australia and New Zealand suffered from

strong Australian dollar

Results FY 2011� Net sales of CHFm 52.1

� Down 2.8% vs 2010; FX adj. +8.1%� EBIT margin below Group average

Outlook� Increased organic growth levels� Sales starting to grow in race and superyachts � B3 SmartPacs development in production

boats

*incl. Acquisition High Modulus

Marine

Engineered Structures

Slide 24

With permission of SL Rasch

Corporate

Engineered Structures – System Solutions in advance composites

Slide 25


Financial Results 2011

Corporate

Net Sales Analysis by Markets

Net Salesin CHFm

2011 2010 @ 2011 FX rates

2010 ∆ 2011 vs 2010 FX adj.

Wind Energy 196.7 140.8 158.5 39.7%

Tooling 43.2 38.6 43.4 11.9%

Transportation 51.9 51.4 55.0 0.9%

Marine 52.1 48.2 53.6 8.1%

Others 0.8 1.0 1.1 (15.4)%

Group 344.7 280.0 311.6 23.1%

Slide 27

� Strong increase in Wind Energy sales driven by carbon fiber prepreg and Balsa.

� Another year of growth in Tooling sales after weak H1 2011, thanks to fast development of export sales.

� Slow but steady recovery in Marine.

� Growth excluding Balseurop acquisition of 19.2% at constant translation rates.

Net sales in CHFm

156.4 155.2 163.1181.6

311.6

344.7

Corporate

EBIT and Operational EBIT development

Slide 28

� Strong operating EBIT margin of 9.9% during H2 2011, thanks to good loading and cost control.

� CHFm 2.8 or (11.3%) inrease in operational EBIT for FY 2011 vs FY 2010, despite the negative translation impact due to the strong CHF.

� The increased Net working capital needs have been financed by the addtional operating EBIT, resulting in a stable RONA yoy.

Corporate

* Defined as Operating profit excluding other operating income and non-recurring expenses and excluding impairment

Operational EBIT* Bridge FY 2010 to FY 2011

Slide 29

24.827.6

15.7

4.1

2.9

2.6

9.9

3.0

3.8

3.0

2.88.0%

8.0%

0

10

20

30

40

50

60

in M

CH

F

Corporate

Exchange result and Tax

Slide 30

-1.2

-0.5

-0.1

0.5

-1.7

0.4

H1 2010 H2 2010 H1 2011 H2 2011 FY 2010 FY 2011

Exchange result (CHFm)

19

.6%

7.8

%

18

.9%

25

.0%

15

.8%

22

.5%

H1 2010 H2 2010 H1 2011 H2 2011 FY 2010 FY 2011

Tax rate (% of PBT)

� Improved balance sheet hedging reducing the exchange result in a versatile environment.

� Increased tax rate during H2 2011 mainly due to unfavourable country mix.

� Full year 2011 tax rate of 22.5% comparable to 21.3% posted in 2010 when excluding the significant one off effects incurred in H2 2010.

Corporate

Net Result FY 2011

FY 2011 FY 2010

CHFm % NS CHFm % NS

Net sales 344.7 100% 311.6 100%

Operational EBIT 27.6 8.0% 24.8 8.0%

Exceptional items 3.4 1.0% 7.9 2.5%

EBIT 31.0 9.0% 32.7 10.5%

EBITDA 44.8 13.0% 46.1 14.8%

Interest income and expenses (2.4) (0.7)% (1.2) (0.4)%

Exchange result and Other financial income and expenses

0.2 0.1% (1.9) (0.6)%

Taxes (6.5) (1.9)% (4.7) (1.5)%

Net result 22.3 6.5% 24.9 8.0%

Earnings per bearer share (in CHF) 47.83 53.45

Slide 31

Corporate

Cash Flow

FY 2011CHFm

FY 2010CHFm

EBIT 31.0 32.7

Depreciation, amortization, impairment 13.8 13.4

Change in working capital (35.1) (24.4)

Other cash flow from operating activities (12.2) (5.4)

Net cash flows from operating activity(2.5) 16.3

Purchase of PPE and intangibles, net (5.9) (20.9)

Acquisition of subsidiaries (17.9) 0.0

Change in borrowings 14.4 5.1

Dividend distribution (7.0) (7.0)

Other investing and financing activities 0.0 (0.4)

CHANGE IN CASH AND CASH EQUIVALENTS (18.9) (6.9)

Slide 32

Corporate

Balance Sheet

31 December 2011 31 December 2010

CONSOLIDATED ASSETS CHFm % CHFm %

Cash and cash equivalents 19.9 7% 40.1 17%

Trade receivables 81.5 30% 46.9 19%

Inventories 49.1 18% 36.2 15%

Other current assets 16.0 5% 11.5 5%

Deferred income tax assets 2.2 1% 2.5 1%

Property, plant and equipment 97.1 36% 97.1 40%

Intangible and other non current assets 7.1 3% 6.4 3%

TOTAL ASSETS 272.9 100% 240.7 100%

CONS. LIABILITIES AND EQUITY CHFm % CHFm %

Borrowings 52.5 19% 30.5 13%

Trade payables 24.2 9% 18.4 8%

Other current liabilities 23.6 9% 31.0 13%

Deferred income tax liabilities 12.9 5% 12.6 5%

Other non-current liabilities 13.8 5% 10.4 4%

Equity 145.9 53% 137.8 57%

TOTAL LIABILITIES AND EQUITY 272.9 100% 240.7 100%

Slide 33

� Trade NWC increased from CHFm 64.7 (21% of Net sales) to CHFm 106.0(31 % of Net sales).

� Addtional borrowing of CHFm 22 resulting mainly from Balseurop acquisition.

� Equity burdend by CHFm 19.3 Balseurop Goodwill but benefitting from CHFm 9.4 acquistion price adjustments.


Outlook and Guidance

Corporate

Outlook and Guidance

Guidance 2012

� Sales: Further organic growth potential in all target markets. Due to market volatility no numeric target can be provided for Gurit in 2012

� Operational EBIT margin: 8-10%

Mid-term

� Sales: Double-digit growth rate expected� Operational EBIT margin: 8-10%

Slide 35

Corporate

Agenda

Communication schedule 2012

� Annual General Meeting of Shareholders April 23, 2012

� Half-year results 2012 August 30, 2012

� Sales Q3 2012 October 26, 2012

Slide 36


Your questions, please

Gurit full year results presentation 2011

Investor Relations

Transcript of Gurit full year results presentation 2011