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Capital Market Days 2011, AustriaANDRITZ GROUP
2 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Contents
Major developmentssince last CMD
Summary
Update on acquisitionsCMD goals
Business areas:update on markets
3 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Order intake Q3 2010-Q2 2011Strong increase with all-time high in Q2 2011
Order intake of the ANDRITZ GROUP (MEUR) ▬▬ Trendline
932 896
1,666
1,979
Q3 2010 Q4 2010 Q1 2011 Q2 2011
4 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Sales and EBITA margin Q3 2010-Q2 2011Solid development
7.5
8.5
6.1
7.0
897
1,089
924
1,095
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Q3 2010 Q4 2010 Q1 2011 Q2 20110
200
400
600
800
1,000
1,200
EBITA margin (%) Sales (MEUR)
EBITA margin Q3 2010-Q2 2011: avg. 7.3%
5 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Major orders (HYDRO)
Customer:Norte Energia, Brazil
Scope of supply:Three Francis turbinesand generators, excitation systems, six bulb turbines, and six generators
Start-up:First electricity generationby 2014, completion by2019
Order value:330 MEUR (bookedin Q3 2011)
Belo Monte
6 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Major orders (PULP & PAPER)Eldorado and Montes del Plata
Eldorado
Customer:Eldorado Papel e Celulose, Brazil
Scope of supply:Complete pulp production line, including drying and white liquor plant
Start-up:Q4 2012
Order value:300-350 MEUR (typical order value of comparable projects); booked in Q1 2011
Montes del Plata
Customer:Montes del Plata, Uruguay (joint venture of Stora Enso and Arauco)
Scope of supply:Complete pulp mill, including multi-year maintenance
Start-up:Q1 2013
Order value:700-750 MEUR* (typical order value of compar-able projects); booked in Q2 2011
* Excluding maintenance contract
7 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Major orders (METALS)Walsin and Bahru
Walsin
Customer:Walsin Lihwa Corporation, Taiwan
Scope of supply:Annealing and pickling line for stainless steel strip (hot and cold rolled strip)
Start-up:Q4 2012
Order value:70 MEUR (bookedIn Q4 2010)
Bahru
Customer:Bahru Stainless SHN BHD, Malaysia (joint venture of Acerinox, Spain, and Nisshin Steel, Japan)
Scope of supply:Annealing and pickling line for cold-rolled stainless steel strip
Start-up:Q4 2012
Order value:65 MEUR (booked in Q1 2011)
8 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
13,45714,267 14,655
15,856 16,119
June 30,2010
Sept. 30,2010
Dec. 31,2010
March 31,2011
June 30,2011
Market position maintained/further strengthened: A leader in hydro A leader in pulp A leader in stainless steel Improved market position in separation A leader in biomass pelleting
Solid profitability despite unchanged strong pricing pressure: Profitability increase in HYDRO Positive impact from restructuring measures taken
during the financial crisis offsets pricing pressure inPULP & PAPER
Acceptable earnings and margin development inMETALS despite lower sales
Employee growth:Evenly split increase between organic growth and acquisitions; organic growth mostly in HYDRO (temporary construction site workers)
Continuing acquisition strategy:Strengthening of product offerings and expansioninto new fields
Major strategic achievements since last CMD
+20%
Employees fromJune 30, 2010 to June 30, 2011:
9 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Contents
Major developmentssince last CMD
Summary
Update on acquisitionsCMD goals
Business areas:update on markets
10 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
In 2010/2011, companies with aggregate annual sales of 400 MEUR and 1,500 employees were acquired.
Several acquisitions in 2010/2011: Strengthening of marketposition in HYDRO, PULP & PAPER, and SEPARATION1
1 The ENVIRONMENT & PROCESS business area was renamed ANDRITZ SEPARATION as of October 1, 20112 Acquisition of 33.3% stake
2►
►
►
11 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
ANDRITZ Energy & Environment (AE&E)More than 150 years of experience
1 Name since 20082 Founded as ATB Beteiligungs GmbH in 2001, renamed to A-TEC Industries AG in 2004
20112002/201019991991/1992190018541853
AE Energie-technik GmbH
Babcock Borsig-Gruppe
Insolvency of AE Energie-technik (2002) AE&E Austria GmbH & Co KG1
A-TEC Group2
insolvencyin 2010
ANDRITZ Energy & Environment GmbH
ANDRITZ GROUP
AustrianEnergy & Environment SGP/WaagnerBiro GmbH
VA-TECH Group
Aktien-gesellschaftR. Ph. Waagner
Waagner-Biró: Rudolf Philipp Waagneropens an ironmongery business, Anton Birófounds a building locksmith’s shop
Simmering-Graz-Pauker: foundation of a copper-smith’s shop by Josef Pauker
The best way from A to A
12 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
AE&E: Positive business development,integration in line with planned schedule
Business area:PULP & PAPER
Employees:325
Annual sales:~ 250-300 MEUR
Profitability:As planned, still below business area’s profitability; further improvement targeted over the next 2-3 years
Integration:In line with planned schedule; expected to be finalized by end of 2012 ▲ Bubbling fluidized bed boiler, M-real Hallein AG, Austria
13 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
AE&E added important technologies
Boilers: Biomass RDF sludge Circulating fluidized
bed technology
Flue gas cleaning: Thermal power
business
Service
Air pollution control technologies for Lauta,
Germany, delivered by AE&E ►
14 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Major orders AE&EVeolia and Donghae
Veolia
Donghae
Customer:OTV, France (Veolia)
Scope of supply:Four bubbling fluidized bed boilers for the world’s largest thermal wastewater sludge treatment plant in Hong Kong, China
Start-up:Q3 2013
Customer:POSCO, South Korea
Scope of supply:The first circulating fluidized bed boiler, fired exclusively with biomass for the Donghaebiomass power plant, South Korea
Start-up:Q2 2013
15 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Business area:PULP & PAPER (Service)
Products and services:Knife systems for pulp wood chipping and saw mills
Synergy:Multiplies ANDRITZ’sexisting knife sales to the pulp industry
Employees:160
Annual sales:25 MEUR
ANDRITZ Iggesund Tools strengthens
▲ TurnKnife system by ANDRITZ Iggesund Tools
and complements PULP & PAPER’s wood processing area
16 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Business area:PULP & PAPER (Service)
Products and services:Systems for drylaid nonwoven production, mainly for textile and hygiene applications
Synergy:With the existing nonwoven expertise of ANDRITZ Küsters and ANDRITZ Perfojet, ANDRITZ is able to supply complete vertical system solutions for production of nonwovens
Employees:200
Annual sales:40 MEUR
ANDRITZ Asselin-Thibeau strengthensnonwoven product portfolio
▲ Filtration line of ANDRITZ Asselin-Thibeau
17 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Contents
Major developmentssince last CMD
Summary
Update on acquisitionsCMD goals
Business areas:update on markets
18 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
HYDROSolid market environment and strong long-term drivers
H1 2011
Good project activity worldwide: modernization of existing plants in Europe and North America; new hydropower plants mainly in emerging markets; continuing low market activity in China
Good development of order intake in all divisions, including the pumps and turbo generator businesses
Sales and earnings increased compared to reference period of last year
Current environment and mid-/long-term drivers
Change of energy policy towards increased usage of renewable energies may lead to increasing demand for energy storage facilities (pumped storage systems)
Replacement of existing aged installed base in Europe and North America
Growing electricity demand in emerging markets
Climate change – green electricity
19 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
PULP & PAPERSolid market, unchanged strong long-term drivers
H1 2011 Good project activity for modernization and capacity increases of
existing pulp mills; continuing pipeline of greenfield pulp mills next order awards expected for 2012/2013
Order intake substantially up compared to H1 2010 mainly due to large order from Montes del Plata
Unchanged strong competition
Current environment and mid-/long-term drivers Long-term build up of greenfield pulp production capacities in South
America to continue during the next years
Expansion of pulp capacities expected in China and Russia (medium-/long-term)
Continuing demand for biomass/recovery boilers due to increasingenvironmental regulations/incentives (e.g. USA, Canada)
Stable project activity for recycled fiber lines and tissue machines
20 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
METALSBottom reached, but no strong recovery in sight
H1 2011
Overall low project activity worldwide with no major capex in Europe and North America; reasonable investment activity in Asia and South America
Order intake in H1 2011 up compared to H1 2010, however no strong recovery for full year 2011 expected
Sales, earnings, and profitability at reasonable levels
Current environment and mid-/long-term drivers
Continuing low capacity utilization in the stainless steel industry; bottom appears to have been reached
Weak cash flows at customers limit capex for next few quarters
Single investments in special segments (automotive China)
21 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
SEPARATIONGood environment for municipal and industrial equipment
H1 2011
Good project activity in municipal business (Europe and China); good demand from industrial customers
Order intake up compared to reference level of last year due to both strong organic market growth and acquisitions
Satisfactory business development
Current environment and mid-/long-term drivers
Municipal business: expected to continue at good level
Industrial business: high project activity expected to remain for the coming quarters
Growing environmental awareness and more stringent regulations to support demand for environmental equipment
22 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
FEED & BIOFUELSatisfactory market environment for feed and biomass
H1 2011
Good project activity in the animal feed sector, mainly in South America, Asia, and Eastern Europe; continued solid project activity for biomass/wood pelleting equipment, mainly in Europe and North America
Order intake down compared to H1 2010; however, increase in Q2 2011 compared toQ2 2010
Continuing expenditures for biomass expansion
Current environment and mid-/long-term drivers
Good pipeline of feed equipment projects
High investment activity in biomass pelleting lines expected to continue
23 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Contents
Major developmentssince last CMD
Summary
Update on acquisitionsCMD goals
Business areas:update on markets
24 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Order intake and sales 2006-2010CAGR of actuals pretty in line with long-term goal
2,891
3,750 3,705
3,350
4,132
3,1803,498
3,848
4,233
2006 2007 2008 2009 2010Actual CAGR goal +10%
Order intake (MEUR)
2,710
3,283
3,610
3,198
3,554
2,9813,279
3,607
3,968
2006 2007 2008 2009 2010Actual CAGR goal +10%
Sales (MEUR)CAGR 2006-2010: +9.3% CAGR 2006-2010: +7.0%
25 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
CMD 2004: Become a 2.0 bn. EUR company
by 2007 – target reached in 2006
CMD 2005: Reach EBITA margin of 7.0% by 2008 Increase dividend payout ratio to 40% over
the next few years – target reached in 2008
CMD 2006: Increase of sales towards 3.0 bn. EUR
in 2007 – target reached in 2007
CMD 2007: Reach EBITA margin of 7.0% by 2008
CMD 2008: Increase of sales up to 4.5 bn. EUR by 2010/2011 7.0% EBITA margin on a sustainable basis Increase dividend payout ratio to ~ 50% by 2010
Review on goals of past Capital Market DaysAchievement of some targets delayed due to crisis
CMD 2009: Goal to increase sales up to 4.5 bn. EUR
by 2010/2011 delayed due to financial and economic crisis
7.0% EBITA margin over the cycle ( ) Increase dividend payout ratio to ~ 50%
by 2010 Renewable energy sales ≥ 50% of Group
sales
CMD 2010: Increase of sales up to 4.5 bn. EUR
by 2013/2014 7.0% EBITA margin over the cycle ( ) Earnings per share of 4.15 EUR by 2014
26 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
937
1,3191,110 1,225
1,4811,744
2,710
3,283
3,610
3,198
3,554
> 4,000
2,012
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2011E
Given the strong sales development YTD 2011 and the high order backlog, sales for 2011 most likely to increase to over 4.0 bn. EUR.
Over 4.0 bn. EUR sales for 2011 likelyUpdate on sales goal
Sales of the ANDRITZ GROUP (MEUR)
27 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
9371,319
1,110 1,2251,481
1,744
2,710
3,2833,610
3,1983,554
> 4,500
> 4,000
2,012
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2011E 2012E
Target to reach more than 4.5 bn. EUR sales in 2012, supported by receipt of some large orders in 2011 (especially Montes del Plata) as well as sales contributions from companies acquired in 2010 and 2011; however, achievement of goals might be negatively impacted by severe macroeconomic slowdown.
Due to extremely high order intake expected for 2011 and given the prevailing uncertainties with regard to the global economy, company growth rates for 2013 and 2014 might be slightly lower than in recent past; however:
Confirmation of goal to increase sales long-term by 10% p.a. on average.
for 2012 targeted due to high order intake 2011Long-term sales growth: Over 4.5 bn. EUR sales
Sales of the ANDRITZ GROUP (MEUR)
28 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
2010 et seq.: 7.0% over the cycle
Update on Group EBITA margin goal 7.0% over the cycle
7.2
5.1
6.56.46.16.16.3
5.15.35.24.7
6.6
937
2,012
> 4,500
3,198
3,6103,2832,710
1,7441,481
1,2251,1101,319
3,554> 4,000
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2011E 2012E0
1,000
2,000
3,000
4,000
5,000
6,000
EBITA margin (%) Sales (MEUR)
*
* Including restructuring expenses
2005-2009: avg. 6.0% 2000-2004: avg. 5.3%
29 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
EBITA margin goal HYDRO7.0-8.0%
5.9 5.7
7.3 7.3 7.57.5
2006 2007 2008 2009 2010 H1 2011 2010 et seq.
2006*-2009: avg. 6.6%
2010 et seq.: 7.0-8.0%
* Figures before 2006 (VATH was acquired in 2006) are not representative/valid for comparison with today’s HYDRO business area
30 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
EBITA margin goal PULP & PAPER6.0-7.0%
5.1
6.15.8
6.1
7.3
6.2
7.3
1.9*
5.86.2 6.0
5.0
6.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2010 etseq.
2010 et seq.: 6.0-7.0%
2005-2009: avg. 5.0%
2000-2004: avg. 6.1%
* Including restructuring expenses
31 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
EBITA margin goal METALS4.0-6.0%
3.8 3.6
4.8
2.5
5.1
3.7
5.4
4.3
7.17.5
6.9
5.8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2010 etseq.
2010 et seq.: 4.0-6.0%2005-2009: avg. 6.3%
2000-2004: avg. 4.0%
32 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
EBITA margin goal SEPARATION7.0-9.0%
5.3
0.81.4
4.5
5.7
7.67.47.1
5.76.1
3.0
7.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2010 etseq.
2010 et seq.: 7.0-9.0%2005-2009: avg. 6.8%
2000-2004: avg. 3.0%
33 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
EBITA margin goal FEED & BIOFUEL7.0-8.0%
0.8
3.94.8
2.2
8.8
0.8
8.0
9.78.8
7.7
3.0
7.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011 2010 etseq.
2010 et seq.: 7.0-8.0%2005-2009: avg. 7.0%
2000-2004: avg. 2.9%
34 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Update on dividend goalSustainable dividend payout ratio on top of strong sales growth
Confirmation of dividend goals: Keep payout ratio at least at 50% Mid-term increase to ~ 60%
48.9%52.9%40.3%38.3%
32.5%32.6%34.3%44.2%44.1%
2002 2003 2004 2005 2006 2007 2008 2009 2010
1.00 1.101.000.75
0.500.350.250.23
1.70
2002 2003 2004 2005 2006 2007 2008 2009 2010
Dividend per share (EUR)
Payout ratio
35 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
4.23
3.693.48
0.450.71
0.51 0.57
1.03
1.53
2.312.61 2.73
1.89
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E
EPS(EUR)
CAGR 2000-2010: +22.7%CAGR 2000-2012E: +20.5%
Assumptions for 2011E EPS calculation: 4.0 bn. EUR sales, 7% EBITA margin, 30% tax rate, 52 mio. shares Assumptions for 2012E EPS calculation: 4.5 bn. EUR sales, 7% EBITA margin, 30% tax rate, 52 mio. shares
Earnings per share (pro forma)
36 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Contents
Major developmentssince last CMD
Summary
Update on acquisitionsCMD goals
Business areas:update on markets
37 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Summary
Market position further strengthened
Strong increase of order intake due to several major orders
Favorable sales development and solid profitability despite unchanged strong pricing pressure
Short-term uncertainties with regard to further development of global economy and/or China; however, long-term marketdrivers still in place to support long-term company growth
Capital Market Days’ goals 2011: Sales for 2011 will most likely increase to over 4.0 bn. EUR Target to reach sales of over 4.5 bn. EUR for 2012 Confirmation of Group’s EBITA margin goal of 7% over the
cycle Dividend: Keep payout ratio at least at 50% and increase
mid-term to ~ 60%
Capital Market Days 2011, AustriaANDRITZ GROUP
39 ANDRITZ GROUP – Wolfgang Leitner – Capital Market Days 2011, Austria
Certain statements contained in this presentation constitute ‛forward-looking statements.’ These statements, which contain the words ‛believe’, ‛intend’, ‛expect’ and words of similar meaning, reflect management’s beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially.
As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.
According to IFRS.
Disclaimer
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