SANDVIK MACHINING SOLUTIONS TO ACQUIRE SOFTWARE COMPANY METROLOGIC GROUP 27 APRIL 2018

Transcription

1 SANDVIK MACHINING SOLUTIONS TO ACQUIRE SOFTWARE COMPANY METROLOGIC GROUP 27 APRIL 2018

2 INTRODUCTION 2

3 CAPITAL MARKETS DAY, NOVEMBER 2017 From a world leading player in the niche industry of metal cutting, to a leading solutions provider to the wider manufacturing industry delivering accelerated growth with maintained high profitability and returns 3

4 SANDVIK MACHINING SOLUTIONS STRATEGY FOCUSED ON GROWTH AND DIGITAL MANUFACTURING 01 Protect and strengthen Sandvik Machining Solutions core business and grow in niches 02 Develop and expand digital offering 03 Adjacent growth Broadening Sandvik Machining Solutions offer in digital manufacturing 4

5 SOLUTION DESIGN COMPONENT CONCEPT COMPONENT DESIGN & PROCESS PLANNING PROCESS DEFINITION PROCESS OPTIMIZATION MACHINING PREPARATION MACHINING OUTPUT VALIDATION 5

6 OUTPUT VALIDATION SOLUTION DESIGN COMPONENT CONCEPT COMPONENT DESIGN & PROCESS PLANNING Digitalization throughout the value chain PROCESS DEFINITION PROCESS OPTIMIZATION MACHINING MACHINING PREPARATION 6

7 OUTPUT VALIDATION SOLUTION DESIGN Digitalization throughout the value chain MACHINING MACHINING PREPARATION 7

8 SANDVIK MACHINING SOLUTIONS DIGITAL STRATEGY: BUILDING A SEAMLESS DIGITAL THREAD FOR MANUFACTURING VERIFICATION & EVALUATION Closed learning loop accelerating improved productivity and quality DESIGN & PLANNING MACHINING PREPARATION 8

9 THE FIRST STEP ON A TRANSFORMATIVE JOURNEY Manufacturing companies are demanding in-line metrology; instant feedback on quality, to reduce scrap and allow for in-line adjustments Integration of MACHINING and VERIFICATION & EVALUATION is a key enabler for - in-line metrology - continuous improvements - an integrated manufacturing chain Combining Sandvik Machining Solutions and Metrologic would be a first decisive step to take the lead in this development VERIFICATION & EVALUATION MACHINING Closed learning loop accelerating improved productivity and quality DESIGN & PLANNING PREPARATION 9

10 METROLOGY IS MOVING FROM THE MEASUREMENT ROOMS INTO THE MACHINES TRADITIONAL MANUFACTURING 1 2 FINISHED PRODUCT The finished component PRODUCTION LINE The component is machined in CNC machines with Sandvik s metal cutting tools is brought into the 3 METROLOGY AREA measurement room where quality and requirements are validated Delay from machining to evaluation Slow feedback IN-LINE METROLOGY 1 IN-LINE With in-line metrology customers the component is being validated while being machined, or in conjunction with machining. Instant feedback on quality In-line corrections Reduced lead time 10

11 INTEGRATION OF MACHINING & VERIFICATION NUMEROUS CUSTOMER BENEFITS FROM INTEGRATING METROLOGY WITH SANDVIK MACHINING SOLUTIONS' CORE BUSINESS Four direct customer benefit areas Numerous indirect customer benefit areas Reduced leadtime LESS SCRAP FEWER RECALLS LESS REWORK EFFICIENCY GAINS Quality overhead costs Time to produce reports Complaint Management Extra inspection 11

12 METROLOGIC GROUP 12

13 METROLOGIC GROUP AT A GLANCE COMPANY PROFILE Established: 1980 Offices: CEO Revenue: Employees: 160 France (HQ), USA, Germany, Italy, Brazil, China Bertrand Gili c. 43M 1, EBITDA margin accretive to Sandvik Machining Solutions Customers 2 Europe (54%), US (36%), RoW (9%) CUSTOMER SEGMENTS Automotive Aerospace Construction & Agriculture Medical Transportation Engineering WORLDWIDE PRESENCE Energy Metalworking Education & Research OVERVIEW Metrologic is a leader in agnostic metrology software, offering software for metrology, automation and robotics control Well positioned in key manufacturing trends with promising product roadmap irobot recently released, a new universal solution that enables users to control a robot and a measuring device simultaneously Growth opportunities thanks to growing metrology segment as well as new product offerings Metrologic operates through the local offices in France, Germany, Italy, China, Brazil and the US September YE, Revenue

14 METROLOGIC PRODUCT OVERVIEW THREE MAIN SOFTWARE PRODUCTS SOFTWARE ONLINE Measuring machine/device connection, steering, measuring, live data acquisition, analysis, reporting VALUE PROPOSITION Agnostic: all brands of hardware, all kind of metrology machines and devices Reduces complexity and simplifies cross-site comparison Shortened set up times, increased process speed Large data sets, e.g. CAD, point cloud, big data OFFLINE Programming, planning, simulation, optimization INLINE / INMACHINE Software to manage complex robot assisted measuring Hardware independent programming and simulation 550 virtual machines available Complete virtual probe library All types of robots and brands All types of measuring devices Significant reduction of complexity and preparation time 14

15 AGNOSTIC METROLOGY SOFTWARE TRADITIONAL CUSTOMER SETUP AGNOSTIC SW CUSTOMER SETUP NEW TECHNOLOGY PLAYER 15 Transparent metrology data, consolidated and shared Cross-site comparison Increased automation Faster to adapt to new technologies

16 RATIONALE 16

17 METROLOGIC A PERFECT STRATEGIC FIT Premium player with strong brand name and high customer loyalty Leader in agnostic metrology software Strong customer overlap with broad customer base in Automotive and Aerospace Key competence in integration and connection of shop floor systems Strong software development resources and capabilities COMPLEMENTARY TO SANDVIK MACHINING SOLUTIONS CORE OFFERING, ENABLER TO REACH OUR LONG TERM VISION IN DIGITAL 17

18 NEW PRODUCT AREA WITHIN SANDVIK MACHINING SOLUTIONS BUILDING A DIGITAL GROWTH PLATFORM SANDVIK MACHINING SOLUTIONS Business Area Executing Sandvik Machining Solutions digital strategy and decentralization by building a leading and integrated portfolio of brands & solutions CORE PA 1) CORE PA SANDVIK ADDITIVE MANUFACTURING NEW PRODUCT AREA Product Area New PA main mission: portfolio development and management. Driving growth organically and through M&A CODE String of pearls strategy acquired brands kept and developed, supported by strong Center of Digital Excellence (CODE) TDM SYSTEMS METROLOGIC XXX Business Unit CORE ADJACENT 18 1) Sandvik Coromant, Walter, SECO, Dormer Pramet, SMS Supply

19 BALANCING SANDVIK MACHINING SOLUTIONS INTEGRATION WITH STRONG INDEPENDENCE SEVERAL VALUE CREATION DRIVERS CONTINGENT ON INTEGRATION WITH SANDVIK MACHINING SOLUTIONS Leverage productivity centers for lead generation and to showcase solutions Leverage Sandvik Machining Solutions key account sales force for lead generation Develop integrated Sandvik Machining Solutions / Metrologic offerings, leveraging resources and technology within new product area HOWEVER, NEED TO KEEP METROLOGIC AUTONOMOUS TO PROTECT CORE BUSINESS Continue to develop high quality software Continue high customer involvement to drive satisfaction Ensure agnostic position towards OEMs 19

20 TRANSACTION OVERVIEW & FINANCIAL IMPACT 20

21 TRANSACTION OVERVIEW TRANSACTION CONSIDERATIONS FINANCIAL BENEFITS Enterprise value: 360 MEUR Sellers: Astorg V FPCI Funding: cash deal Estimated closing: expect to close the transaction in mid 2018, following works council consultation and subject to customary regulatory approvals Synergies: revenue synergies by leveraging Sandvik Machining Solutions customer base, sales force and productivity centers Financial profile: margin accretive to Sandvik Machining Solutions EPS impact: neutral to slightly accretive to EPS in Year 1 21

22 FINANCIAL IMPACT ON GROUP IMPACT ON GROUP S P&L EPS neutral to slightly accretive MARGIN slightly accretive ROCE slightly negative IMPACT ON KEY METRICS NET GEARING limited impact NET DEBT/EBITDA limited impact SANDVIK GROUP (SEKM) Q AS REPORTED Q PROFORMA NET DEBT 14,690 18,391 GROUP METRICS NET GEARING

23 SUMMARY 23

24 A FIRST STEP IN METROLOGY, A DECISIVE EXPANSION IN DIGITAL MANUFACTURING Strong strategic fit Clear growth synergies Step towards digital manufacturing 24

25 QUESTIONS & ANSWERS 25