ANDRITZ Energy & Environment Capital Market Days 2012, Germany
Contents 1. History and integration into the ANDRITZ GROUP 2. AE&Eʼs products and markets 3. Summary
ANDRITZ Energy & Environmentʼs history More than 150 years of experience 1853 1854 1900 1991/1992 1999 2002/2010 2011 Simmering- Graz- Pauker: foundation of a coppersmith s shop by Josef Pauker Waagner- Biró: In 1854, Rudolf P. Waagner opens an ironmongery business; in the same year, Anton Biró founds a building locksmith s shop Aktiengesellschaft R. Ph. Waagner Austrian Energy & Environment SGP/Waagner Biró GmbH VA-TECH- Gruppe AE Energietechnik GmbH Babcock Borsig- Gruppe AE&E Austria GmbH & Co KG 1 A-TEC- Gruppe 2 ANDRITZ Energy & Environment GmbH, part of the ANDRITZ GROUP 1 Name used from 2008 until takeover by ANDRITZ; 2 Founded as ATB Beteiligungs GmbH in 2001, renamed to A-TEC Industries AG in 2004 3
Integration into the PULP & PAPER business area already completed Three AE&E business units: Air pollution control: separate division within PULP & PAPER (P&P) business area Steam generators and plants: integrated into existing P&P division Power plant services: integrated into existing P&P division Air pollution control Recovery and power Kraft and paper mill services Fiber technologies Pulping and fiber Pulp drying and biax film Paper and nonwoven Automation solutions Maintenance solutions Steam generators and plants Power plant services Synergies: Boiler business within pulp and paper industries ANDRITZ products used in AE&E systems (e.g. pumps, band filter, automation) AE&E s products and services favorably strengthen and extend the PULP & PAPER portfolio AE&E: Sales of ~150-200 MEUR/a ~340 employees as of September 30, 2012 Locations in Austria (Graz and Vienna), China (Shanghai), the US, and Chile 4
Contents 1. History and integration into the ANDRITZ GROUP 2. AE&Eʼs products and markets 3. Summary
Air pollution control Wide product range with more than 200 references Products: Wet flue gas cleaning/wet limestone FGD Dry flue gas cleaning (see right-hand side) Multi-stage flue gas cleaning DeNOx systems/selective catalytic reduction (SCR) Turceni, Romania Ledvice, Czech Republic Slovnaft, Slovakia Lünen, Germany Karlsruhe, Germany Moerdijk, Netherlands Neurath, Germany Witzenhausen, Germany Average order size: ~50 MEUR 6
Rising emission standards drive market for air pollution control Market drivers: Market potential: Competitive position: Customer industries: Emission standards in EU and USA Regulation changes regarding new emission standards in several countries (e.g. Chile, India) ~3.4 bn. EUR p.a. globally; AE&E currently has access to markets with a potential of ~1.4 bn. EUR p.a. (e.g. planned market entry in the USA 2012/2013) Leading flue gas cleaning supplier in Europe One of the market leaders in China (AE&E technology, installed by licensees) Power stations, waste recycling facilities, cement industry, chemical industry, refineries, iron and steel industry, municipalities (energy from waste and biomass) Emission regulations in the USA: Despite some uncertainty concerning timing and scope, EPA (Environmental Protection Agency) will likely continue to move towards increasingly stringent emission limits that require air pollution controls, e.g.: Boiler MACT 1 : reducing hazardous air pollutants; EPA estimates that ~14,000 boilers will be affected CSAPR 2 : significant reduction in SO 2 and NOx emissions MATS 3 : standards for coal-fired and oil-fired power plants If all regulations come into force, experts estimate that the air pollution market in the USA could increase up to 2.4 bn. EUR p.a. (current market volume in the USA without these regulation drivers: 0.8 MEUR p.a.) 1 Maximum Achievable Control Technology; 2 Cross-State Air Pollution Rule; 3 Mercury and Air Toxics Standards 7
US power production by fuel type Coal and gas as prime energy sources Annual totals; in thousand Megawatt hours 4,500,000 4,000,000 3,858,453 3,883,187 3,970,554 4,055,421 4,156,746 4,064,701 4,119,387 4,125,059 4,105,735 3,950,331 3,500,000 3,000,000 2,500,000 18.2% 17.1% 18.3% 19.1% 20.4% 21.9% 21.7% 23.6% 24.2% 25.0% 2,000,000 Other Renewable Hydroelectric Nuclear Natural gas Petroleum Coal 1,500,000 1,000,000 50.0% 50.8% 49.8% 49.6% 49.0% 48.5% 48.2% 44.4% 44.8% 42.2% 500,000 0 Source: EIA 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 8
Air pollution control Important orders and start-ups since ANDRITZ takeover AES Gener/ Norgener, Chile: Local authority of Timisoara, Romania: CEZ/Skoda Praha Invest, Czech Republic On EPC basis: two turnkey flue gas desulphurization plants including two fabric filters for the Tocopilla coal-fired power plant; flue gas desulphurization plant, fabric filter, and bag filter plant for the Ventanas coal-fired power station Start-up: 2013 Flue gas cleaning plant forming part of a modernization project to promote environmental protection in the combined heat and power plant of Timisoara Start-up: 2013 Flue gas desulphurization plant for the Tusimice II coal-fired power plant Start-up: 2011 Flue gas cleaning plant for Timisoara, Romania 9
Air pollution control Acquisition of AES, USA Products and services: ANDRITZ has acquired Allied Environmental Solutions (AES), now ANDRITZ Environmental Solutions, a supplier of air quality control technology for the power generation market in the USA Strategic fit and goal: Strengthening of existing AE&E portfolio and market entry for AE&E products/services in the USA Headquarters: Columbia, Maryland, USA Number of employees: ~40 Annual sales: ~30 MEUR Dry scrubbing technology for Circulating Fluidized Bed (CFB) boiler Fabric filter systems, especially for coal-fired power plants 10
Steam generators and plants Full range of boiler technology with more than 200 references Products: Bubbling fluidized bed boilers Circulating fluidized bed boilers (see right-hand side) Sulfite liquor boilers Soda liquor boilers Blast furnace gas boilers Bollnäs, Sweden Yunus Emre, Turkey Maxau, Germany Busan, South Korea Hong Kong, China Eisenhüttenstadt, Germany Amakhulu, South Africa Voestalpine Stahl, Austria Average order size: ~40-60 MEUR 11
Strong global market position in the boiler business Market drivers: Renewable energy incentives Emission regulations Landfill ban Market potential: Competitive position 1 : ~1 bn. EUR p.a. globally Global market leader in bubbling fluidized bed boilers as well as Customer industries: sulfite and soda liquor boilers One of the market leaders in circulating fluidized bed boilers and blast furnace gas boilers Pulp and paper industry, utility companies, steel mills, petrochemical and chemical industry M-real, Austria: fluidized bed technology for the pulp and paper industry 1 Worldwide except India and China (currently not AE&E markets) 12
Steam generators and plants Important orders since ANDRITZ takeover Tembec, Canada Sulfite liquor boiler for the Temiscaming pulp mill Start-up: 2013 Left: Temiscaming Right: Blackburn Meadows Bottom: Donghae E.ON Climate & Renewables UK Biomass, UK Bubbling fluidized bed boiler plant for the Blackburn Meadows renewable energy plant Start-up: 2014 Posco Engineering & Construction, South Korea Circulating fluidized bed boiler for the Donghae biomass power plant Start-up: 2013 13
Power plant services More than 400 references worldwide Portfolio: Rebuild and upgrades Spare and wear parts Plant operation and maintenance Field service and consultancy R&D Bergkamen, Germany OMV, Austria Golbey Norske Skog, France Zweckel, Germany Klabin, Brazil Eisenhüttenstadt, Germany Vasilikos, Cyprus Ataka, Egypt Average order size: rebuilds ~5 MEUR, replacements/spare and wear parts: ~0.5 MEUR 14
Old installed base and legal requirements as main drivers Market drivers: Market potential: Competitive position: Customer industries: Old installed base drives demand for replacements, spare parts, and life time extensions New emission limits (modernizations) CO 2 cost optimization (efficiency improvement, fuel conversion to biomass, green projects) ~700 MEUR p.a. in the pulp and paper industry globally Strong position in service for OEM installations Goal: world market leader for boiler service in the pulp and paper industry (together with the pulp and paper services unit of PULP & PAPER business area) Pulp and paper industry, steel industry, utilities, refineries, waste incineration 15
Power plant services Important orders since ANDRITZ takeover Electricity Authority of Cyprus East Delta Electricity Production Company, Egypt Propower GmbH Eisenhüttenstadt, Germany Boiler conversion from oil to gas firing at the Vasilikos power station Start-up: 2013 Rehabilitation of two boilers at the Ataka plant Start-up: end of 2011 Annual shutdown at the Eisenhüttenstadt mill Vasilikos, Cyprus Eisenhüttenstadt, Germany Ataka, Egypt 16
Contents 1. History and integration into the ANDRITZ GROUP 2. AE&Eʼs products and markets 3. Summary
Summary Integration of AE&E already completed AE&E s products and services favorably strengthen and extend the PULP & PAPER portfolio Several important orders and start-ups since acquisition AE&E among the world market leaders in all three business units More stringent environmental regulations and old installed base should support long-term growth 18
ANDRITZ Energy & Environment Capital Market Days 2012, Germany
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. According to IFRS.