Datwyler Group – A focused industrial supplier · 124 million. net result . in CHF . 163 million. EBIT . in CHF. ... Industry leading particle level specifications. Globalization

Datwyler Group –A focused industrial supplier

11 January 2019Swiss Equities Baader Conference 2019Reto Welte, CFO

Datwyler Group

Sealing Solutions division

Technical Components division

Questions and answers

Agenda

SE Baader Conference 2019, 11 Jan, Bad Ragaz © DATWYLER, www.datwyler.com3

Datwyler GroupWorldwide presence – leading market positions

> 8’000 employees

50operating companies

> 1’300 million US-$ annual revenue

> 100 countries with sale

Two divisionsSealing Solutions

Technical Components

Datwyler Group Continued profitable growth in first half 2018

12.6%EBIT

margin

694.1 million

net revenue in CHF

124 millionnet result in CHF

163 million

EBIT in CHF

7.7% revenue growth, 2.5% organic

13.2% EBIT increase to CHF 90.7 million

Improvement of EBIT margin to 13.1%

Net result up 17.3% to CHF 62.5 million

Significant increase in ROCE to 24.1%

13.1%EBIT

margin

62.5 millionnet result in CHF

90.7 million

EBIT in CHF

ROCE is calculated by dividing the EBIT of the last twelve months (= LTM) by the average capital employed of the same period.



Outlook 2018Focus on profitable growth – promising acquisitions

– Datwyler Group:– Revenue between CHF 1‘350 million and CHF 1‘400 million– EBIT margin in the target range of 12 to 15%

– Sealing Solutions division:– Above market growth in the important segments Health Care

and Automotive thanks to strong order book– Newly acquired companies Parco and Bins offer attractive

opportunities for profitable growth in the future – Technical Components division:

– Focus on accelerating profitable growth– New Distrelec Enterprise Hub continuously increases

its operational performance

Datwyler GroupSuccessful portfolio management

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

-750

-500

-250

0

250

500

750

1000

1250

1500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EBIT

Mar

gin

Sale

s

Sales Acquisitions Divestments EBIT margin


Datwyler GroupSharpened strategic priorities

DRIVEPROFITABLEGROWTH

INCREASEAGILITY

ACCELERATEDIGITALISATION



Datwyler GroupContinuity thanks to majority shareholder

The Board of Directors of the listedDätwyler Holding Inc. holds themajority of the capital and the voteson a fiduciary basis without anybeneficial ownership.

Investments in Datwyler companies only.

100%

Dätwyler Führungs AG

100%

Directors of Dätwyler Holding Inc. represents registered shareholders (bound by a shareholders’ agreement)

78.39% votes56.01% capital

Pema Holding AGFree float

21.61% votes43.99% capital

Dätwyler Holding Inc.


Datwyler GroupLong-term and sustainable management approachGoal of sustainable profitable growth for the benefit of all stakeholdersBalance economic, social and environmental responsibilityCode of Conduct for employees and suppliersMember of the UN Global CompactSustainability reporting according to the guidelines of the Global Reporting Initiative (GRI)Report to the Carbon Disclosure Project

Datwyler GroupTwo focused divisions

Sealing Solutions Technical Components

ProductsSealing systems and solutions, elastomer and aluminium/plastic closures, stoppers and plungers; precision moulded elastomer and metal components; special seals, profiles and gaskets

Distribution of maintenance, automation electronic and ICT components and accessories (online distribution and branded wholesale)

MarketsGLOBALHealth care, automotive, civil engineering and consumer goods

EUROPEManufacturing companies, trades, retailers, wholesalers, universities, private consumers

Revenue 2017 CHF 830 million CHF 460 million

Employees 7’000 1'100


Datwyler Group




Agenda


AUTOMOTIVEHEALTH CARE GENERAL INDUSTRY


Multi-market know-how for system-critical sealing components


Applications:− Brake systems− Fuel and tank systems− CNG and LPG− Exhaust gas treatment− Powertrain, suspension− Thermoplasts and LSR− E-Mobility, electrification

Applications:− Prefilled syringe and cartridge

drug delivery systems− Medical devices− Elastomeric closures and

aluminium seals

Applications: − Consumer Goods− Civil Engineering− Oil & Gas− Power tools, valves & fittings− Machines for process industries− Water and waste water− Hydraulic and pneumatic

GENERAL INDUSTRYAUTOMOTIVEHEALTH CARE

Unique core competencies as a strong base for leading market positions


Engineering

Development of tailor-made sealing solutions from prototype to large-scale production

Interdisciplinary teams

Co-engineering with customers

Processing Quality

Capability to set industry standards and deliver best-in-class manufacturing programmes

Zero-defect-philosophy

Large-scale production

Global Services

International manu-facturing locations and worldwide support

Global manufacturing standards

Material &Simulation Expertise

Development of high-performance materialsfor various applications

Surface treatments

Experts in simulation

Leading positions in attractive global market segments

Significant market and

growth potential

CHF 2'400 million

CHF 1'600 million

CHF 650 million

CHF 250 million

2

Health Care

Automotive

Consumer Goods

Civil Engineering


HealthCare


Health Care offer overview

High quality compo-nents and closures for injectable drugs (Container closures, injection systems, diagnostic and disposables)


High-quality components for fast growing pre-filled syringes

Ideal containers for biotech medicines and vaccines: Limit property changes during transfer from vials to syringes

Correct dose improves patient safety

Technological developments allow higher levels of self-administration

Datwyler elastomer stoppers are system-critical0

2

4

6

8

10

12

14

2017 2018 2019 2020 2021 2022 2023 2024 2025

Global market potential for pre-filled syringes in USD

billions

CAGR 10%

Source: VisionGain 2016

Novel (wearable) devices like injection devices for self-administration of drugs

Pre-filled syringes for the growing ophthalmic market

Need to upgrade production equipment within First Line for small components (diameter smaller than 7 mm)

Challenges especially for automated camera inspection and coating

Generate new business in a rapidly growing market niche


Attractive ophthalmic market

Trend towards ever smaller components


Datwyler value propositionProvide answers to market trends and customers’ needs

MARKET TRENDS DATWYLER SOLUTION

Development of innovative, complex and sensitive drugs

1. Best-in-class compounds2. Best-in-class fluoropolymer coatings3. Best-in-class analytical expertise

More stringent authority expectations 4. Zero defect philosophy5. Full cleanroom zoning6. State-of-the-art automation7. State-of-the-art camera inspection8. Industry leading particle level specifications

Globalization and supply chain optimization 9. Increased global capacity 10. Regional sourcing11. Supply flexibility

21

Omni Flex is the state-of-the-art coating solution to meet the highest demands for quality and performance of highly sensitive, large molecules drugs:

Best-in-class fluoropolymer coating

Omni Flex key features:− proprietary, inert fluoropolymer

spray coating− total coverage− covalent bound to rubber− barrier properties− thin and flexible: ≈20µm


Automotive offer overview

Precision sealsfor application in vehicles (brakes, fuel and enginemanagement, comfort andsafetyapplications)


System-critical componentsfor selective catalytic reduction (SCR)

Diesel emissions require additional treatment due to worldwide tightening of emissions regulationsSelective Catalytic Reduction (SCR) is the leading technology and the most effectiveSeveral system-critical sealing components for the conveyor and dispensing module in each SCR systemEnormous challenges in terms of geometry, tolerances, cleanliness, adhesion and resistance to high temperatures, pressure and aggressive media

0

2

4

6

8

10

12

14

2016 2017 2018 2019 2020 2021 2022

Number of diesel vehicles with SCR-Systems in millions

worldwide

Source: VisionGain


Components for electric motor

Source: Bosch

Plug Seals & Cable

Bushings

Thermally conductiveMaterials

Vibration-control systems

ConductiveSeals

Bearing Seals

Integrated Housing

Concepts Housing gaskets

Encoders

Cassettes

Connector Seals for

Cooling CyclesRadial Shaft Seals

Cover Seals

Acquisition of German company Ott 2016Specialist for tools and injection molded products in liquid silicone rubber (LSR) and thermoplastic materials

Thermoplastics and LSR opens up new possibilities for the sealing challenges in electric vehicles

Also ideal material and technology for the mega-trends of weight-reduction and increased connectivitySuitable for complex part geometries

Thermoplastic and liquid silicone rubber (LSR) competence as ideal base for new opportunities


Bins, BrazilCHF 20 million revenue, 1 plant, 350 employeesImprove access to South America’s automotive industry

Parco, USACHF 60 million revenue, 4 plants, 275 employeesExpand O-ring business; open up new industries

Two recent acquisitions in the Automotive segment



New attractive market segments

Oil & Gas

Power Tools Pumps & Valves

Water Filtration Aerospace

Datwyler Group




Agenda


Three strong brands in Europe

> 650'000customers

> 250'000products in stock

> 55%share of e-commerce

CHF 190average order value18

languages of online shops and catalogues

CHF 459 million revenue

> 1'500suppliers

> 1'100employees

> 11'000packages per day

> 200'000webshop visits per day

99%on-time delivery

Omni-channel approache-commerce, catalogue,call centre, field sales,

technical support


Four important market segments

Maintenance, Repair, Operations

Electronic Design Engineers

Wholesale/Consumer Electronics

CHF 3 bnEstimated target market

size EDE/Production Europe high-service distribution

CHF 6 bnEstimated target market size MRO Europe high-service distribution

Automation

CHF 3 bnEstimated target market size Wholesale/Consumer Electronics Europe

FOCUS ONB2B/

INDUSTRIAL

CHF 6 bnEstimated target market size Automation Europe high-service distribution

NEDIS ONLY

EDEElectronic DesignEngineersPrototyping

High Service Distributor

MANUFACTURERDIRECTLY

Volume Distributor

High Service Distributor

31

R&D Pilot Small OEM Large OEM Service Maintenance RepairEducation Prototype Small series

Customer needs - in the course of the product life cycle

Dis

tribu

tion

Volu

mes

Custom Production of Electromechanical Goods (CPE)


MROMaintenanceRepair, Operations

SE Baader Conference 2019, 11 Jan, Bad Ragaz © DATWYLER, www.datwyler.com

Business model high service distribution

Core competencesDistribution and logisticsEase of doing business International expansioneCommerce Product managementincl. own brands

Status update for the three brands of Technical Components

StrategyBecome market leader of CPE segment in Europe

StatusBuilt proposition team in ManchesterDelivered major web shop improvementsBuilding segment capability in Manchester Deploying digital personalisation tools

Adapting value proposition andstrengthening of customer segmentation


StrategyProfessional products, discount prices focused on European B2B market

StatusStrong growth in internationalisationImproving presence in B2B market Maintain efficient cost to serve

Successful international expansion


StrategyThe preferred choice after A brands

StatusNew brand launched in August 2018 NPI sales recoveredGood customer feedback Operating model being finished

Focus on one strong product brand «Nedis»


Clear vision Fit for purpose organisationDemand generation to improve

Distrelec

Focus on conversion to new own brandEnsure new product sales growth continues

Nedis

Accelerate existing plansReichelt named Dis-tributor of the year2018 in Germany

Reichelt

Clearly defined measures in place to accelerateprofitable growth


Improvements in underlying KPI’s and profitability continueClear need to grow share in B2B

Further opportunities to extract value from existing sales identified


Datwyler Group




Agenda

DisclaimerThis presentation contains forward-looking statements that reflect the Group’scurrent expectations regarding market conditions and future events and aretherefore subject to a number of risks, uncertainties and assumptions. Unanticipated events could cause actual results to differ from those predictedand from the information contained in this presentation. All forward-lookingstatements in this presentation are qualified in their entirety by the foregoing.

Dätwyler Holding Inc.Gotthardstrasse 31, 6460 AltdorfT +41 41 875 11 00, F + 41 41 875 12 [email protected], www.datwyler.com

Documents

Datwyler Group – A focused industrial supplier · 124 million. net result . in CHF . 163 million. EBIT . in CHF. ... Industry leading particle level specifications. Globalization