ANDRITZ GROUP Capital Market Day 2013, Germany

Transcription

1 ANDRITZ GROUP Capital Market Day 2013, Germany

2 Contents Major developments since last Capital Market Day Update on market and outlook for the business areas Capital Market Days: goals and summary 2

3 Acquisition of ANDRITZ Gouda (1) Complementing drying business of SEPARATION Products and services: Drying equipment, mainly drum dryers and paddle dryers, for food industry (e.g. baby food), chemical industry, and municipalities Strategic fit: Complementation and extension of ANDRITZ SEPARATIONʼs drying portfolio Locations: Netherlands (headquarters), Germany, France, China, Singapore, Indonesia, and USA Number of employees: ~140 Annual sales: ~40 MEUR Drum dryer of ANDRITZ Gouda 3

4 ANDRITZ Gouda (2) Sales by region and important customers Important customers: Danone Heinz Petrobras PWT/Ambarli Emsland Nestlé National Starch Tate & Lyle Unilever BASF Cargill Veolia Roquette Frères 9 China 8 Others 12 Asia (without China) Sales by region 2012 in % 54 Europe 4 South America Paddle dryer of ANDRITZ Gouda 13 North America 4

5 Acquisition of majority stake in Shende Machinery Strengthening of pelleting business, especially in Asia Products and services: Systems for mid-size animal/aquatic feed and biomass pelleting Strategic fit: Strengthening of ANDRITZ SEPARATIONʼs portfolio and enhancement of position in China and other Asian countries Locations: Netherlands (headquarters), Germany, France, China, Singapore, Indonesia, and USA Pellet mill of Shende Machinery Number of employees: ~120 Annual sales: ~20 MEUR Dies and rolls for pellet mill 5

6 Organic and external growth ANDRITZ GROUP since 2005 Sales (MEUR) ANDRITZ GROUP sales 2012: 5,177 MEUR Organic growth of acquisitions: 759 Acquisitions: 1,525 ANDRITZ GROUP sales 2005: 1,744 MEUR Organic growth of Group companies 2005: 1,149 ANDRITZ GROUP

7 Where has the growth come from? Growth trends by business area HYDRO: Organic growth plus market share gains in selective markets (Europe, North America) PULP & PAPER: Growth in line with market; 25% weight of large-scale contracts in 2011, now <10% METALS: Since 2009, the old ANDRITZ METALS segment has stayed at low post-crisis level (except furnaces), strong organic growth of Schuler with slight market share gains SEPARATION: Most of growth organically driven; both segments (solid/liquid separation, feed and biofuel) contributed to that growth 7

8 Contents Major developments since last Capital Market Day Update on market and outlook for the business areas Capital Market Days: goals and summary 8

9 HYDRO Global market volume substantially below peak levels MARKET Large-scale projects: Solid demand for rehabilitation and modernization to continue due to age of installed base Some greenfield hydropower projects in emerging markets (Africa, South America) Small-scale projects: Good activity to continue, especially in emerging markets (high energy demand, low capex needs) Pumps: Demand for special pumps to remain high (irrigation, water transport, etc.) COMPETITION Stable at challenging level Asian competitors? Submersible motor pump for drainage purposes in iron ore mines. The pumps are 13.4 meters long and have an outer diameter of just 80 centimeters. A complete pump unit weighs 9.5 tons. 9

10 HYDRO Cumulative installed hydropower capacity (GW) Strong growth from 2006 onwards : expected average annual growth of 3.2% CAGR : 2.6% CAGR : 3.7% CAGR : 3.4% CAGR 2013E-2020E: 3.2% CAGR E: 3.3% ,017 1,058 1,093 1,128 1,167 1,200 1,237 1,280 1,320 1, E 2014E 2015E 2016E 2017E 2018E 2019E 2020E Source: GlobalData 10

11 HYDRO Favorable long-term potential for rehabilitation/modernization Units older than 30 years (in % of installed capacity in operation) 55% of installed capacity older than 30 years! % Source: ANDRITZ; Platts UDI 11

12 HYDRO: based on 55% share of capacity being older than 30 years, it would take 58 years to modernize this fleet Installed hydropower capacity 2012 (1,058 GW) by region in % Todayʼs annual 10 GW rehab rate is not sufficient to stop aging of existing fleet! Source: GlobalData, Hydropower&Dams World Atlas 12

13 PULP & PAPER Reasonable project activity, but fierce competition MARKET Pulp: Investments in greenfield pulp mills to continue, mid-term some order awards in South America and Asia Modernization projects to increase efficiency and profitability of existing mills Green energy investments Regionally different development for biomass pelleting projects Paper and packaging: Solid demand for tissue and container board machines Nonwoven and plastic film: Reasonable project activity Service: Good potential to grow organically and by acquisitions COMPETITION Stiff price competition for greenfield projects to continue Challenging environment for brownfield projects Consequences of Metso split-up? ANDRITZ will deliver a biomass boiler to the new Värtaverket combined heat and power in Stockholm, Sweden. The will largely replace fossil-based fuels like coal and oil with eco-friendly biomass. 13

14 World consumption of papermaking fiber through 2025 Expected growth of 1.6% per year World consumption of papermaking fiber raw materials has grown from 289 million t in 1995 to 406 million t in 2011 ( annual average growth rate: 2.1%) The consumption is forecast to grow by an annual average of 1.6% in the long term, reaching 510 million t by 2025: Consumption of.. Recovered paper Chemical wood pulp Mechanical and semichemical wood pulps Non-wood pulps Source: Pöyry 2011 (million t) 2025E (million t) CAGR % % % % 14

15 Despite new capacities built, net capacity worldwide has only marginally increased ktons/a Development of net global chemical pulp production capacity (market pulp + integrated pulp) , , ,368 3, ,559 1,750 2,270 4, , , , , , , , , , , , , ,148 Chemical pulp production capacity: +/- ktons Total ktons 15

16 PULP & PAPER Planned major projects > 1 million tons Country Owner Project Capacity/ year* Planned start-up Brazil Klabin Ortigueira Brazil Eldorado Três Lagoas et seq Brazil Fibria Três Lagoas et seq Brazil Fibria Aracruz et seq Brazil Veracel Eunápolis et seq Brazil Brasileira de Celulose Peixes et seq Brazil Suzano Imperatriz et seq Brazil Portucel Brazil et seq Chile Arauco Bio-Bio et seq China Guangxi Jingui Qinzhou City et seq Indonesia Oki Pulp & Paper Mills Palembang et seq Mozambique Portucel Mozambique et seq * In million t; source: Pöyry In addition to the existing mill in Três Lagoas (photo), Brazil, Fibria plans to erect a second market pulp line. Eldorado Brasil announced two additional pulp lines in Três Lagoas 16

17 Each project enhances our reputation (1) ANDRITZ scope of supply Aracruz fiberline C, Brazil Veracel Celulose, Brazil 700,000 t/a; start-up ,000 t/a; start-up 2005 Cooking Washers Bleach Pulp dryer Woodyard Woodyard Cooking Washers Bleach Pulp dryer Baling line Evaps Recov. boiler WL Baling line Evaps Recov. boiler WL CMPC Santa Fe, Chile Botnia, Uruguay 780,000 t/a; start-up ,000,000 t/a; start-up 2007 Cooking Washers Bleach Pulp dryer Woodyard Woodyard Cooking Washers Bleach Pulp dryer Baling line Evaps Recov. boiler WL Baling line Evaps Recov. boiler WL Hunan Tiger Forest & Paper Group, China Fibria, Brazil 400,000 t/a; start-up ,250,000 t/a; start-up 2009 Cooking Washers Bleach Pulp dryer Woodyard Woodyard Cooking Washers Bleach Pulp dryer Baling line Evaps Recov. boiler WL Baling line Evaps Recov. boiler WL 17

18 Each project enhances our reputation (2) ANDRITZ scope of supply 700,000 t/a; start-up 2011 Zhanjiang Chenming Paper Group, China Cooking Washers Bleach Pulp dryer Baling line Evaps Recov. boiler WL 1,600,000 t/a; start-up 2012 Woodyard Woodyard Eldorado Celulose e Papel, Brazil Cooking Washers Oxygen delignifac. Screening Bleach Pulp dryer Baling line Evaps Recov. boiler WL and now we are working on Montes del Plata, Uruguay 1,600,000 t/a; start-up delayed beyond Q Woodyard Cooking Washers Oxygen delignifac. Screening Bleach Pulp dryer Baling line Evaps Recov. boiler WL 18

19 Update on pulp mill project in Uruguay ~ 95% of project finished Customer published in September that start-up of the mill is further delayed beyond Q Additional provisions likely if difficult labor situation on site continues When this contract was signed two years ago, it had all the ingredients for success: ANDRITZ successfully executed a similar project in good cooperation with owner (Fray Bentos pulp mill: successful start-up in 2007): Same country Same sub-suppliers Same capacity Difference is only related to labor-related strikes on site, which are impacting all suppliers and owners 19

20 ANDRITZ and EPC/large-scale contracts EPC contracts come inherently with generally manageable, but ultimately not fully avoidable risks ANDRITZ will limit EPC contracts to divisions where EPC scope offers superior value to customers customers that are willing to pay fair price for such superior value countries with good prospects for repeat orders In addition, ANDRITZ will continue to offer alternative supply structures such as open book, third-party general contractor etc. in circumstances, where the above mentioned criteria do not apply In the aggregate, EPC sales are not expected to exceed % of total sales 20

21 METALS Good activity in furnaces, low in carbon and stainless MARKET Metalforming: Automotive demand to slow down from record levels of past years; regionally different development: Europe ex Germany weak, Asia and South America good Stable demand from other industries Stainless steel: Investment activity to remain at very low level, no big capex plans by customers Carbon steel: Unchanged slow market; some early signs of recovery? Furnaces: Good demand to continue COMPETITION Stable at challenging level Depreciation of Yen to benefit Japanese competitors? Schuler successfully started up a 1,600 ton servo press for Miele, Germany. Miele increased the output by up to 50% with the new press. 21

22 METALS Entire process chain from hot rolled strip to finished parts rolling pickling heat treatment coating blanking forming part handling Core competence ANDRITZ METALS: processing lines for the production of steel and aluminum strips Core competence Schuler: press shop equipment 22

23 Consumption of flat strip mill products Car industry with the largest share Share of consumption of flat strip mill products by industry in Europe (in %) Total flat strip mill products in million metric tons Source: Eurofer 23

24 SEPARATION Slow market to continue MARKET Municipalities: Investment activity at reasonable levels Industries: Reasonable demand in food processing Low project activity in mining, minerals, and chemical industries Animal feed: Continuing at solid level Biomass pelleting: Good demand to continue ANDRITZ s product issues expected to be resolved in Q at the latest COMPETITION Challenging with many local competitors Biomass torrefaction pilot in Frohnleiten, Austria. The energy content of torrefied biomass is 20% higher than that of white wood pellets. 24

25 Contents Major developments since last Capital Market Day Update on market and outlook for the business areas Capital Market Days: goals and summary Foto: BMW AG/Martin Klindtworth 25

26 Review of Capital Market Daysʼ goals: sales and dividend goals achieved, pending margin goal reached in Goal achieved Goal not achieved Goal pending Sales: 3.0 bn. EUR Share of renewable energy sales > 50% 4.0/4.5 bn. EUR 5.0 bn. EUR EBITA margin: 7.0% (factual 6.5%) 7.0% (factual 5.1%*) 7.0% over the cycle: Goal achieved in (each 7.2%) Goal almost achieved in 2012 (6.9%) Average : 7.1% Dividend: ~40% payout ratio ~50% payout ratio ~50% payout ratio ~50% payout ratio * Including restructuring expenses; excluding: 6.0% 26

27 Earnings influencing factors 2013 and 2014 and margin improvement potential (1) Expected market and order intake development: Stable market development to continue in all four business areas, however no sign of major recovery for 2014 Excluding Schuler, ANDRITZ s order intake 2013 will be slightly lower than 2012 expected to remain stable in 2014 Chances for some larger orders in HYDRO and PULP & PAPER Operational measures and IFRS related issues: Given the expected developments as described above, certain, although limited capacity adjustments will be targeted in some areas Schuler: First round of simplifications of complex corporate structure and shift of value added to major markets expected by end of Q Purchase price allocation of intangibles (backlog, patents, customer relations) based on IFRS regulations lead to amortization of approx. 50 MEUR p.a. in 2013 and 2014, declining to below 30 MEUR p.a. from 2015 to

28 Earnings influencing factors 2013 and 2014 and margin improvement potential (2) Margin development: Short-term: Group margin impacted by one-off cost overruns in PULP & PAPER and SEPARATION; HYDRO stable at solid level; METALS supported by Schuler Ongoing review of opportunities for structural improvements: Schuler/Müller Weingarten, PULP & PAPER, METALS, SEPARATION Margin development Short-term Long-term ANDRITZ GROUP - + HYDRO o + PULP & PAPER - + METALS + o SEPARATION - ++ o stable + positive - negative Long-term: Upside due to targeted earnings improvement in PULP & PAPER as well as in SEPARATION; HYDRO to remain at good level 28

29 Target to continue long-term profitable growth Goal: maintain 7% and improve to 8% with top line sales growth : avg. 5.3% : avg. 6.0% Goal: 7%, improve to 8% with top line sales growth % MEUR * * Including restructuring expenses ** Including Schuler as of March 1, 2013; for the reference periods of last years, no pro-forma figures available 29

30 Confirmation of dividend payout ratio goal Consistent dividend policy Dividend goals: Keep payout ratio at least at ~50% Mid-term increase to ~60% Dividend per share (EUR) Payout ratio (%) 30

31 Summary Long-term structural trends within all four business areas should support long-term organic growth of ANDRITZ; however, currently subdued project activity in all business areas due to general economic environment being without clear direction ANDRITZ to adjust organization to market environment Acquisitions will remain strategic focus to complement product range and support long-term growth Capital Market Day goals 2013: EBITA margin: regain 7% and improve to 8% with top line sales growth Dividend: payout ratio at least at ~50% and mid-term increase to ~60% 31

32 ANDRITZ GROUP Capital Market Day 2013, Germany

33 Disclaimer 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. All figures according to IFRS. Due to the utilization of automatic calculation programs, differences can arise in the addition of rounded totals and percentages. MEUR = million euros. 33