Burckhardt Compression Holding Ag · SIX:BCHN
Burckhardt Compression — Investor Day (December 2016)
73 slides from Burckhardt Compression's investor day presentation, Dec 6, 2016
Slide 1: Welcome to the First Investor Day at Burckhardt Compression
WELCOME TO THE FIRST INVESTOR DAY AT BURCKHARDT COMPRESSION Marcel Pawlicek, CEO
Slide 2: Chairman's Note
CHAIRMAN’S NOTE Valentin Vogt, Chairman Investor Day December 6, 2016 Page 2
Slide 3: Burckhardt Compression and the History of Gas Compression
Burckhardt Compression and the History of Gas Compression Engineering Works Burckhardt Production of Liquefaction and Minority stake in Arkos established in Basel plastics transport of natural gas Field Services 1844 1883 1951 1971 2002 2007 2015 1878 1920 1935 1969 1982 2006 2013 2016 Beginning of
Slide 4: Recent History of Burckhardt Compression
Recent History of Burckhardt Compression 1996 - 1999 2000 - 2001 2002 - 2005 2006 - 2015 Private equity Ownership Division of large corporation Stock listed owner Market Stable Stable Favorable Very favorable environment • SYST: cyclical Growth No growth Shrinking Strong growth • SERV: continuous gr
Slide 5: Way Forward, BC Strategy
WAY FORWARD, BC STRATEGY Marcel Pawlicek, CEO Investor Day December 6, 2016 Page 5
Slide 6: Our Vision
Our Vision We are committed to becoming the first choice manufacturer of reciprocating compressors. Throughout a worldwide network we provide all products and services required during a reciprocating compressor's life cycle. Investor Day December 6, 2016 Page 6
Slide 7: Leader for Any Gas Compression Challenges in All Segments
Leader for Any Gas Compression Challenges in All Segments for Systems and Services Raw End products utilization materials • Power generation • Food packaging • Industrial gas distributers • Fuel (NGV / CNG) • Industrial foils • Food processing • Heating / cooking • Plastic bags • Steel production Ga
Slide 8: Global Changes Ahead
Global Changes Ahead Megatrends +35% Food Urbanization and increase of population +40% Water Shift in economic power +50% Energy Climate change and resource scarcity Digitalization Source: National Intelligence Council and PWC megatrends Investor Day December 6, 2016 Page 8
Slide 9: Megatrend Urbanization and Increase of Population
Megatrend Urbanization and Increase of Population Every week +1.5 mn people added to global urban population 90% of this growth will take place in emerging countries Huge demand on infrastructure, energy, services, job creation, climate and environment Today, IT uses 10% of our daily consume
Slide 10: Megatrend Shift in Economic Power
Megatrend Shift in Economic Power China: Shift from import economy to domestic production and consumption and export economy See «One belt, one road» movement India: Steady but slower growth BC with local production in China and India, as well as assembly sites in South Korea and the US Sa
Slide 11: Megatrend Climate Change and Resource Scarcity
Megatrend Climate Change and Resource Scarcity Resource scarcities Current models of production processes and consumption will change Energy demand for recycling Waste water and sea water treatment Gas instead of oil where possible 25% less CO2 emission when burned Less NOx and SOx F
Slide 12: Strong Growth in Asia Drives Increases in Oil Demand
Strong Growth in Asia Drives Increases in Oil Demand Source: BP Energy Outlook 2016 Investor Day December 6, 2016 Page 12
Slide 13: Demand for Natural Gas Grows Strongly
Demand for Natural Gas Grows Strongly World Energy Outlook 2016 ©OECD / IEA Investor Day December 6, 2016 Page 13
Slide 14: Share of LNG in Global Long-Distance Gas Trade
Share of LNG in Global Long-Distance Gas Trade World Energy Outlook 2016 ©OECD / IEA Investor Day December 6, 2016 Page 14
Slide 15: The Organization for the Future
The Organization for the Future CEO Marcel Pawlicek Corporate Marketing, Assistant Business Development and Olivia Ulrich Communications Marco Scanderbeg CHRO CFO Sandra Pitt Rolf Braendli Shenyang Yuanda Xi Wen Ren Executive Board President President Systems Division Services Division Fabrice Billa
Slide 16: Customer Requirements
Customer Requirements Systems Division Services Division Response times Weeks up to months Hours and days Delivery times Months up to years Days and weeks Order types • Engineered projects with intense • Majority of business depends on project management smaller orders • Average order size CHF 5’0
Slide 17: Way Forward
Way Forward Goal Systems Division Increase Services Division overall profitability Investor Day December 6, 2016 Page 17
Slide 18: Global Well Positioned to Reach our Vision and Goals
Global Well Positioned to Reach our Vision and Goals Burckhardt Compression Burckhardt Compression Manufacturing / Assembly Subsidiaries and Service Locations Centers Investor Day December 6, 2016 Page 18
Slide 19: Markets
MARKETS Marco Scanderbeg, Vice President Corporate Marketing, Communications & Business Development Investor Day December 6, 2016 Page 19
Slide 20: Markets – From Basic Materials to Various End Products
Markets – From Basic Materials to Various End Products RAW OUR MARKET SEGMENTS AND END PRODUCTS / MATERIALS RECIPROCATING COMPRESSOR APPLICATIONS UTILIZATION Compressed Power generation natural gas, Propane, Fuel (NGV / CNG) Butane Heating / cooking Gasoline UPSTREAM GAS TRANSPORT Diesel O
Slide 21: Markets – Upstream Oil & Gas
Markets – Upstream Oil & Gas RAW OUR MARKET SEGMENTS AND END PRODUCTS / MATERIALS RECIPROCATING COMPRESSOR APPLICATIONS UTILIZATION Compressed Power generation natural gas, Propane, Fuel (NGV / CNG) Butane Heating / cooking Gasoline UPSTREAM GAS TRANSPORT Diesel OIL & GAS AND STORAGE Polye
Slide 22: Upstream Oil & Gas – Main Applications
Upstream Oil & Gas – Main Applications Onshore and offshore applications: Enhanced Oil Recovery (EOR) Gas re-injection Gas & oil lift Acid gas injection (H2S, CO2) Gas gathering Gas processing / treatment LNG FPSO Investor Day December 6, 2016 Page 22
Slide 23: Upstream Oil & Gas
Upstream Oil & Gas Market drivers Future crude oil and natural gas price development Keep flexibility with offshore applications Shale gas activities Aging oil fields with declining production Drilling of oil and gas is getting more demanding Expected market Once the oil price picks up s
Slide 24: Markets – Gas Transport & Storage
Markets – Gas Transport & Storage RAW OUR MARKET SEGMENTS AND END PRODUCTS / MATERIALS RECIPROCATING COMPRESSOR APPLICATIONS UTILIZATION Compressed Power generation natural gas, Propane, Fuel (NGV / CNG) Butane Heating / cooking Gasoline UPSTREAM GAS TRANSPORT Diesel OIL & GAS AND STORAGE
Slide 25: Gas Transport and Storage – Main Applications
Gas Transport and Storage – Main Applications Onshore and offshore applications: Boil-off gas handling (BOG) Liquefied Natural Gas (LNG) Liquefied Petroleum Gas (LPG) Pipeline feed applications Underground gas storage Fuel gas injection for ME-GI dual fuel propulsion system (DFDM) Floa
Slide 26: Gas Transport and Storage
Gas Transport and Storage Market drivers Long-term increasing demand for gas as a substitute for oil and coal Importance of natural gas as a clean and inexpensive source of energy Gas is found in areas where it is not used Move from onshore to offshore activities (FSRU) Expected market Mar
Slide 27: Markets – Refinery
Markets – Refinery RAW OUR MARKET SEGMENTS AND END PRODUCTS / MATERIALS RECIPROCATING COMPRESSOR APPLICATIONS UTILIZATION Compressed Power generation natural gas, Propane, Fuel (NGV / CNG) Butane Heating / cooking Gasoline UPSTREAM GAS TRANSPORT Diesel OIL & GAS AND STORAGE Polyethylene,
Slide 28: Refinery – Main Applications
Refinery – Main Applications Hydrogen and hydrogen mix gases for various process steps Hydrotreating Hydrocracking Reforming Isomerisation Desulphurisation Dearomatisation Hydroalkylation Investor Day December 6, 2016 Page 28
Slide 29: Impression of a Modern Refinery Under Construction
Impression of a Modern Refinery Under Construction – Jamnagar Complex, India (1.2 mn barrels / day) © Bechtel Investor Day December 6, 2016 Page 29
Slide 30: Refinery in Collombey, Switzerland
Refinery in Collombey, Switzerland – Small Capacity & Not Cost Effective Decomissioned How does such a complex process plant work? Where are reciprocating compressor solutions needed? Investor Day December 6, 2016 Page 30
Slide 31: How Does a Typical Refinery Work?
How Does a Typical Refinery Work? Processes in a Refinery Separation Physically Conversion Chemically Crude Oil Increase Quality Forming of aromatics Cleaning Physically, chemically Support (Waste-)Water, Catalysts, H2,… Investor Day December 6, 2016 Page 31
Slide 32: Refinery
Refinery Market drivers Growing demand for clean fuels due to environmental regulations Flexibility to process different crude oil qualities Modernization of old infrastructure Strategic importance of refining capacity for independent supply Oil producing countries capturing a greater shar
Slide 33: Markets – Petrochemical / Chemical Industry
Markets – Petrochemical / Chemical Industry RAW OUR MARKET SEGMENTS AND END PRODUCTS / MATERIALS RECIPROCATING COMPRESSOR APPLICATIONS UTILIZATION Compressed Power generation natural gas, Propane, Fuel (NGV / CNG) Butane Heating / cooking Gasoline UPSTREAM GAS TRANSPORT Diesel OIL & GAS AN
Slide 34: Petrochemical / Chemical Industry – Main Applications
Petrochemical / Chemical Industry – Main Applications Polyethylene / Polypropylene Low density polyethylene (LDPE) Linear low density polyethylene (LLDPE) High density polyethylene (HDPE) Ethylene oxide (EO) Ethylene glycol (EG) Rubber Aromatics / BTX, Alcohols, Ammonia, Urea Wet o
Slide 35: Petrochemical / Chemical Industry
Petrochemical / Chemical Industry Market drivers GDP growth for polyolefin products in emerging countries Shift of production to countries with low feed stock price Shift from commodity to specialty products Expected market New LDPE projects (high pressure) under discussion development Con
Slide 36: Markets – Industrial Gases
Markets – Industrial Gases RAW OUR MARKET SEGMENTS AND END PRODUCTS / MATERIALS RECIPROCATING COMPRESSOR APPLICATIONS UTILIZATION Compressed Power generation natural gas, Propane, Fuel (NGV / CNG) Butane Heating / cooking Gasoline UPSTREAM GAS TRANSPORT Diesel OIL & GAS AND STORAGE Polyeth
Slide 37: Industrial Gases – Main Applications / Gases Handled
Industrial Gases – Main Applications / Gases Handeled Hydrogen generation Air separation Gas bottle filling Oxygen Nitrogen Carbon monoxide Carbon dioxide High pressure CO2 Chlorine Gases for polysilicon production Bone-dry gases Investor Day December 6, 2016 Page 37
Slide 38: Industrial Gases
Industrial Gases Market drivers Growing population and industrialization in emerging countries Sustainable demand for industrial gases in food, tobacco, paper, chemical, agriculture, mining, construction and health care industry De-carbonization initiatives replacing hydrocarbons by hydrogen E
Slide 39: Product and Market Strategy
Product and Market Strategy – Creating Value in the Various Applications of Each Market Segment Products Laby® Laby®-GI Process Gas Hyper Standard High Components Compressors Compressors Compressor Compressors Pressure and Service Market API 618 Compressors Upstream oil & gas Gas transport
Slide 40: Systems Division (SYST)
SYSTEMS DIVISION (SYST) Fabrice Billard, President SYST Investor Day December 6, 2016 Page 40
Slide 41: Way Forward
Way Forward Goal Increase Services Division Systems Division overall profitability Investor Day December 6, 2016 Page 41
Slide 42: Keep Leading Market Position in All Segments
Keep Leading Market Position in All Segments Keep #1 market position Increase market share Products Laby® Laby®-GI Process Gas Standard High Compressors Compressors Hyper- Compressor Pressure Market Compressors API 618 Compressors Upstream oil & gas Gas transport and storage Refinery
Slide 43: Qualified Employees Around the World
Qualified Employees Around the World Manufacturing and Assembly in Key Markets Burckhardt Compression Manufacturing / Assembly Locations Investor Day December 6, 2016 Page 43
Slide 44: Use our Strong Global Presence: BC Manufacturing Locations
Use our Strong Global Presence BC Manufacturing Locations Winterthur, Switzerland Busan, Korea Houston, TX, USA Pune, India Investor Day December 6, 2016 Page 44
Slide 45: Shenyang Yuanda Compressor Co., Ltd.
Shenyang Yuanda Compressor Co., Ltd. New Markets, Products and Supply Chain Access Number 1 in China Compressors for Petrochemical Chemical Oil& Gas industry R&D center Foundry Local supply chain Investor Day December 6, 2016 Page 45
Slide 46: Services Division (SERV)
SERVICES DIVISION (SERV) Martin Wendel, President SERV Investor Day December 6, 2016 Page 46
Slide 47: Way Forward
Way Forward Goal Increase Systems Division overall Services Division profitability Investor Day December 6, 2016 Page 47
Slide 48: Our Portfolio – Spare Parts Responsible for More than 50%
Our Portfolio – To Date Spare Parts are Responsible for More than 50% of the Business Monitoring Condition monitoring with emphasis on safety protection and early failure detection. Engineering Customized revamp, upgrade and repair Revamps / Repair services based on in-house design & engineering com
Slide 49: Our Regional Set-Up – Strengthened Local Presence
Our Regional Set-Up – Strengthened Local Presence through Acquisitions and new Service Centers Acquisition of Shenyang Yuanda and cooperation with Arkos substantially improved local presence in the two largest markets Seven service centers have been opened over the past five years and the first
Slide 50: Financial Topics
FINANCIAL TOPICS Rolf Braendli, CFO Investor Day December 6, 2016 Page 50
Slide 51: Balance Sheet – Assets
Balance Sheet – Assets step growth due to acquisition of Shenyang Yuanda Investor Day December 6, 2016 Page 51
Slide 52: Balance Sheet – Liabilities and Equity
Balance Sheet – Liabilities and Equity step growth due to acquisition of Shenyang Yuanda Investor Day December 6, 2016 Page 52
Slide 53: Changes in Equity FY 2015 – 1HY 2016
Changes in Equity FY 2015 1HY 2016 CHF mn 450 21 47 1 400 355 350 -51 321 -34 -10 300 -8 250 200 150 100 50 0 Equity FY Non-contr. Net Income Other Put Option Dividends Currency IAS 19 Equity HY 2015 Interest (SYCC) Translation 2016 (SYCC) Differences Investor Day December 6, 2016 Page 53
Slide 54: Equity Ratio
Equity Ratio Equity ratio reduced to 35% in CHF mn EQUITY Equity Ratio due to SYCC acquisition Temporary leverage due to partial financing of acquisition with mortgages and loans Equity is reduced by CHF 50.7 mn due to recognition of SYCC put option in line with IFRS (NPV of assumed remaining
Slide 55: Shenyang Yuanda (SYCC) Results 1HY 2016
Shenyang Yuanda (SYCC) Results 1HY 2016 SYCC “Operation”: 1HY 1HY 1HY Solid performance in mn CHF 2016*) 2016*) 2016*) Development of sales within SYCC „OPERATION“ SYCC „DEPRECIATION“ SYCC TOTAL expectations despite challenging market environment in China Sales 41.0 41.0 YTD EBIT above expec
Slide 56: Financial Targets
Financial Targets Guidance FY 2016 (incl. SYCC) Guidance FY 2017 (incl. SYCC) Order Intake CHF 450 – 500 mn Continued growth in the Services Division; no upturn in the Systems Division order intake expected until FY 2018 Sales CHF > 600 mn About CHF 100 mn lower than FY 2016 Gross Margin Systems Div
Slide 57: BC Culture / HR Development
BC CULTURE / HR DEVELOPMENT Sandra Pitt, CHRO Investor Day December 6, 2016 Page 57
Slide 58: Rapid Globalization
Rapid Globalization 2002 (MBO) 2016 400 employees approx. 2’300 employees 3/4 in Switzerland 1/3 in Switzerland Investor Day December 6, 2016 Page 58
Slide 59: Global Well Positioned to Reach our Vision and Goals
Global Well Positioned to Reach our Vision and Goals Built up of new assembly sites in South Korea and USA Acquisitions in China and Germany Cooperation in USA Subsidiaries in over 20 countries around the globe Investor Day December 6, 2016 Page 59
Slide 60: Development of Corporate Culture
Development of Corporate Culture Development of our Corporate Culture from a Swiss-centric company to a truly global company Burckhardt Compression Values evolved to reflect our global partnerships and our culturally diverse workforce Partnership Performance Cooperation Dedication Investor Day D
Slide 61: Behavior
Behavior Success Factors Description Behavior As BC employees, we … As BC employees, we … … keep internal • Build relationships Think Customer and external customers at • Demonstrate quality focus the core of all thought and action • Live service orientation • Show initiative … actively seek Take Ow
Slide 62: Our Framework
Our Framework Corporate Culture Experience the values in daily routines in the company and in contact with stakeholders Values Leadership Behavior Expectation Guidelines Action important to us what we ask for what we live Definitions / Common understanding Investor Day December 6, 2016 Page 62
Slide 63: Elements of the Training & Development Portfolio
Elements of the Training & Development Portfolio Leadership Training Technical Training Leadership training based on the Field Service Training, Laby®, Values and Behaviors of Burckhardt Laby®-GI, Process Gas Compressor, Compression Level 1-3 Hyper Compressor etc. Local Training IMDP English, Projec
Slide 64: BC Education Campus
BC Education Campus Corporate Training Leadership, Development, Capability, Onboarding Technical Training Field Service Training, Laby®, Laby®-GI, Process Gas Compressor, Hyper Compressor Quality, Marketing & Communications, Sales, Contracting, SERV, F&A Customer Training Compressor Technology Train
Slide 65: High-Speed Applications
MARKET OPPORTUNITY ISO 13631 “HIGH-SPEED APPLICATIONS” Mauro Callioni, Head Applications Investor Day December 6, 2016 Page 65
Slide 66: Market Segments and Applications
Market Segments and Applications Upstream Oil & Gas Gas Transport & Storage Injection / withdrawal (Storage) Gas transmission (LNG terminal, LNG FPSO pipelines) Gas gathering (Well Head) Fuel gas boosting (Turbine Feed) Gas processing (H2, CO, Gas boosting station Ethane) Gas lif
Slide 67: High Speed Packages
High Speed Packages Gas and water Exhaust cooler system Gas engine Compressor Investor Day December 6, 2016 Page 67
Slide 68: Definitions and Differentiations
Definitions and Differentiations API 618 ISO 13631 (previous API 11P) Manufacturer Burckhardt Compression Shenyang Yuanda Design Moderate speed (< 1000 rpm) High speed (> 1000 rpm) Driver Electric motor Gas engine Cylinder cooling Water cooled Air cooled Service intervals 2-3 years 4-6 months becaus
Slide 69: LNG Dual-Fuel
LNG DUAL-FUEL Rainer Duebi, VP Design & Manufacturing Investor Day December 6, 2016 Page 69
Slide 70: LNG (Liquid Natural Gas) Carriers
LNG (Liquid Natural Gas) Carriers • First ship in operation Membrantank; typically used by 70% of all since 1980 operating LNG carriers • Transport of liquefied methane gas at cryogenic temperature (-164 ºC) in state of the art insulated cargo handling system • Up to 250’000 m3 liquid volume per car
Slide 71: Innovative and Technical Advantage
Innovative and Technical Advantage Advantage of the new propulsion systems Simplified system compared to old complex steam turbine propulsion System (In Use up to 2002) High efficiency (50%) Reduced fuel consumption Less emission (-25% CO2) «Creole Spirit» at DSME Yard, S. Korea delivered
Slide 72: Laby-GI Compressor
Laby®-GI Compressor Developed for the use on LNG carrier with state of the art membrane tank system Weight balanced of the moving parts – Less vibration induced to ship Use of cryogenic material to take the BOG at -165 ºC Highly reliable Laby® technology (in use since 1960 on LPG carrier)
Slide 73: Burckhardt Compression – Compressors for a Lifetime
&, Burckhardt y Compression Compressors for a Lifetime”
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