Bystronic AG · SIX:BYS
Bystronic — Investor Day (November 2021)
66 slides from Bystronic's investor day presentation, Nov 30, 2021
Slide 1: Capital Markets Day
Capital Markets Day November 30, 2021 in Niederönz
Slide 2: Agenda
Agenda Time Topic Speaker 09:00 Arrival in Niederönz and registration 09:30 Markets and Strategy 2025 Alex Waser, Chief Executive Officer Innovation and technology Christoph Rüttimann, Chief Technology Officer Smart Factory solutions Alberto Martinez, Chief Digital Officer Service as a business Eamo
Slide 3: Today’s speakers
Today’s speakers Alex Waser Beat Neukom Christoph Rüttimann Chief Executive Officer Chief Financial Officer Chief Technology Officer joined Bystronic in 2013 joined Bystronic in 2021 joined Bystronic in 2017 Alberto Martinez Eamon Doherty Michael Präger Chief Digital Officer Chief Service Officer Ch
Slide 4: Markets and Strategy 2025
Markets and Strategy 2025 We are well positioned in attractive growth industries We have laid the foundation for future growth Alex Waser Chief Executive Officer joined Bystronic in 2013 We are on track to deliver on our 2025 strategic and financial targets Swiss citizen © Bystronic | Capital Market
Slide 5: We have transformed into a pure-play innovation leader in the sheet metal processing market
We have transformed into a pure-play innovation leader in the sheet metal processing market 1 We are an innovation leader creating value for our customers 2 We are well positioned in attractive end markets with potential for sustainable growth 3 We strive for industry-leading profitability based on
Slide 6: We create customer value with our systems, software and services
We create customer value with our systems, software and services Laser cutting We innovate and Tube cutting produce systems for CHF 801 million 7% EBIT margin Bending sheet metal processing net sales in 2020 in the first half of 2021 applications Automation We develop and Software implement software
Slide 7: Sheet metal is more relevant than ever and enables growth for countless everyday products
Sheet metal is more relevant than ever and enables growth for countless everyday products What is sheet metal? What makes sheet metal so versatile? Available in sheets Ideal balance between high strength and relatively light weight Available in coils Broader range of applications and enhanced formab
Slide 8: Our business is well-diversified across end-industries
Our business is well-diversified across end-industries … Early-cycle Mid-cycle Late-cycle • Transportation • Technology • Materials • Industrials • Communication services • Utilities • Agriculture • Energy • Governmental programs • Capital goods • Construction equipment • Real estate … as we serve s
Slide 9: Sheet metal enables growth for a wide range of industries and products around the globe
Sheet metal enables growth for a wide range of industries and products around the globe Transportation Real estate Electronics Agriculture • Trains (cladding, doors, • Kitchen appliances • Electrical cabinets • Tractors electrical housings) • Tube column • Storage for data • Harvesters • Automobile
Slide 10: We are active in a large, growing market – aligned with global mega trends
We are active in a large, growing market – aligned with global mega trends Estimated market size in CHF billion 1 Megatrends drive growth for sheet metal industry E-mobility boom 14.6 • Charging stations • Laminates for motors • Battery housings 5.5 Electronics 9.1 • Enclosers for various electronic
Slide 11: Sweet spot with strong positions in service and software
Sweet spot with strong positions in service and software - expansion potential for applications Few mid-sized players Long tail of various players Market share1 ~20% ~15% ~12% Range of applications Focus on selected Focus on selected (e.g. cutting, bending) applications applications Expansion potent
Slide 12: Enabling growth for our diversified customer base
Enabling growth for our diversified customer base in the growing sheet metal processing industry Job shops Contract manufacturers with To be successful, our or without their own products customers need automated solutions to ensure Our top 10 Large companies Including: customers … flexible productio
Slide 13: Building blocks for value creation are in place – focusing on delivery
Building blocks for value creation are in place – focusing on delivery Targets by 2025 Strategy 2025 Organic growth complemented with selective M&A to expand portfolio > 5% annual organic sales growth Systems Cutting.Bending.Automation. > 12% EBIT margin + Portfolio expansion Regiona- lization Softw
Slide 14: Innovation and technology
Innovation and technology Innovation is the lifeblood of Bystronic and it is what makes our customers successful in their business Our innovation strategy ensures that we remain at the forefront of the latest technologies Christoph Rüttimann Chief Technology Officer joined Bystronic in 2017 We are e
Slide 15: We focus on customers to develop solutions for present and future challenges
We focus on customers to develop solutions for present and future challenges … based on future-oriented Right products… … in different price segments technologies Our customers need the best Our customers want to choose their Our customers make high products for their systems from different segments
Slide 16: Our innovation strategy ensures that we remain at the forefront of the latest technologies
Our innovation strategy ensures that we remain at the forefront of the latest technologies Spotting Developing Creating Our technology radar constantly With our corporate venturing We exchange know-how across our screens the market to identify the program, we invest in early-stage regions and co-cre
Slide 17: We monitor trends in technology to build them out as a business
Spotting We monitor trends in technology to build them out as a business Trends in the field of automation Our R&D teams constantly screen market developments Example radar Process Case study Smart Factory Detection of defective parts is Drones key to automated manufacturing Picking processes Intral
Slide 18: We invest in emerging technologies to be the first to commercialize new features
Developing We invest in emerging technologies to be the first to commercialize new features Our objectives Our proof point with Early access to new and disruptive technologies Equity investment in 2018 with a low single-digit-million Co-innovation to develop the Quick-Cut feature for tube cutting sy
Slide 19: We open up new market segments by leveraging our know-how from different regions
Creating We open up new market segments by leveraging our know-how from different regions Combination of know-how from high-end laser cutting systems and entry-level products from DNE to serve customers globally with a silver segment product DNE BySmart ByStar Entry-level Gold segment segment Silver
Slide 20: Our regional R&D organization leverages our acquisition of DNE in China
Creating Our regional R&D organization leverages our acquisition of DNE in China We combine DNE’s know-how on local Chinese systems with Bystronic’s global experience… …to develop products for new market segments and thereby expand our addressable market Launch of DNE Global in 2022 DNE Global DNE E
Slide 21: Our global agile organization is close to our customers to ensure speed to market
Our global agile organization is close to our customers to ensure speed to market Our global R&D organization serves all regions through Germany dedicated regional Competence Competence Center Bending Centers and innovates to improve end-to-end processes for our Switzerland customers Competence Cent
Slide 22: Track record of our innovation mindset
Track record of our innovation mindset 50% of our systems were launched on the market < 3 years ago Innovation rate1 per quarter in % Trend line 10% of our employees are active 50.0 in research & development 40.0 30.0 20.0 10.0 80% of innovations are co- 0.0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q
Slide 23: Innovation is a key element of our Strategy 2025
Innovation is a key element of our Strategy 2025 Targets by 2025 Contribution to targets > 5% annual organic sales growth > 50% innovation ratio ensures rapid innovation capabilities and drives sales and profitability > 12% EBIT margin Efficiency gains thanks to Design-to-Cost Systems Cutting.Bendin
Slide 24: Smart Factory solutions
Smart Factory solutions We offer solutions from a single source for customers in different stages of digital maturity We digitalize our customers to increase their efficiency and flexibility to adapt to unexpected changes Alberto Martinez Chief Digital Officer joined Bystronic in 2018 With our solut
Slide 25: We understand the challenges our customers face in their day-to-day business
We understand the challenges our customers face in their day-to-day business Heterogenity Speed and planning Limited communication Human subjectivity • Systems, software and • Job shops are • Information exchange • Decisions are based on technologies from dependent on fast and between back office, i
Slide 26: We join our customers on their journey from individual systems to the Smart Factory
We join our customers on their journey from individual systems to the Smart Factory System Production Cell Smart Factory • Cutting • Automation for cutting or • Smart Factory = • Bending bending processes interoperability of all • Tube • Material flow processes within a company • Third-party applica
Slide 27: We offer solutions for all our customers, no matter their stage of digital maturity
We offer solutions for all our customers, no matter their stage of digital maturity Digital maturity of our customers Champion Challenger Player Explorer Starter Number of customers System Production cell Smart Factory System software Automation software Smart Factory software • Device controls • “B
Slide 28: Our Smart Factory software covers all the relevant steps of our customers’ production processes
Our Smart Factory software covers all the relevant steps of our customers’ production processes Start of E2E process Customer of sheet Shareholders, institutes, Our solution metal processing company banks Sheet metal factory … combines systems and automation from any brand into a flexible network …
Slide 29: Our potential to make our customers’ daily work easier
Our potential to make our customers’ daily work easier… © Bystronic | Capital Markets Day 2021 29
Slide 30: … by having their production under control
… by having their production under control and full transparency in real time © Bystronic | Capital Markets Day 2021 30
Slide 31: Successful partnership and joint innovation with Kurago
Successful partnership and joint innovation with December 2019 September 2020 March 2021 Today First half-year 2022 Product Partnership Acquisition First customers Software launch development • Bystronic and Kurago • Joint development • Bystronic acquires • Tests with selected • Launch of software p
Slide 32: Roadmap to leverage our cloud-based Smart Factory solutions
Roadmap to leverage our cloud-based Smart Factory solutions Business model (1) Subscription / pay-per-use 2022 Subscription Software Deployment of customization for automatic updates individual factory from the cloud Benefits 2025 Subscription model, resulting in operating expenses for the customer,
Slide 33: Our Smart Factory solutions are key elements of our Strategy 2025
Our Smart Factory solutions are key elements of our Strategy 2025 Targets by 2025 Contribution to targets > 5% annual organic sales growth Attract new customers with software solutions and expand relationship to generate additional sales of systems > 12% EBIT margin Revenues in the single-digit mill
Slide 34: Service as a business
Service as a business Our modular service portfolio covers the entire product lifecycle and ensures peace of mind for our customers Our service business is a key element to remain close to our customers and strengthen our relationship with them Eamon Doherty Chief Service Officer joined Bystronic in
Slide 35: We understand the challenges our customers face in their daily business
We understand the challenges our customers face in their daily business Downtime is Tight production Limited in-house know- Complexity costly timelines how In manufacturing Unexpected Customers have limited Maintenance and spare environments, speed is maintenance interrupts in-house know-how and par
Slide 36: Be the trusted partner for customers
Be the trusted partner for customers Proactive Predictive People Our ByCare Program and 360° We are building up capabilities Our employees are dedicated, Customer Advisor ensure a to enhance the prediction of experienced, and well-trained close partnership, reducing downtime by coupling the enabling
Slide 37: Our modular service packages ensure customers’ peace of mind
Our modular service packages ensure customers’ peace of mind Share of new systems sold together with a service package YTD 2021* Service products are standardized 10% and available across markets and segments* 65% Extended Modular service portfolio to attract maintenance and support a wide range of
Slide 38: Our 360° Customer Advisor program ensures uptime
Our 360° Customer Advisor program ensures uptime We offer our customers a health check for their systems and add value to customer visits 1 Identify the problem and need for interventions 2 Recommend action to ensure continued uptime 3 Highlight the benefits of the early intervention © Bystronic | C
Slide 39: Our people enable our customers’ success
Our people enable our customers’ success Global support – local implementation > 70 service technicians hired in 2021 ~100 additional technicians to be hired in 2022 Global training function established We are transitioning from product-focused training to skills and competency based training Enabli
Slide 40: Our service business has laid the foundations for future growth
Our service business has laid the foundations for future growth Service portfolio covers ~12% sales CAGR to achieve • after-sales our ambitions for 2025 • consumables ~CHF 330 m • maintenance • spare parts High ambitions to accelerate our sales growth based on 4% CAGR launch of modular service progr
Slide 41: Our service business is a key element of our Strategy 2025
Our service business is a key element of our Strategy 2025 Targets by 2025 Contribution to targets > 5% annual organic sales growth Recurring revenues provide resilience and overproportional growth over the cycle > 12% EBIT margin ~CHF 330 million sales from service business by 2025 Systems Cutting.
Slide 42: ESG roadmap – Sustainability is at the core of our strategy 2025
ESG roadmap – Sustainability is at the core of our strategy 2025 Sustainability is the foundation for our business and we strive to create a real impact Our innovation is focused on helping customers and the sheet metal industry to become sustainable Michael Präger Chief ESG & Communications Officer
Slide 43: What does sustainability mean for Bystronic?
What does sustainability mean for Bystronic? Our organization Our customers & value chain Our industry & ecosystem We strive to create real impact and We enable our customers and our We co-create with partners intend to become truly sustainable in value chain to become more throughout our ecosystem
Slide 44: We have identified where we can make the biggest impact
We have identified where we can make the biggest impact in line with our Strategy 2025 Our material topics • Energy & Climate Change • Innovation, Digital & Software Technology • Talent Attraction & Human Capital Development • Resource Efficiency • Circular Economy & Zero Waste © Bystronic | Capital
Slide 45: We integrate sustainability in everything we do
We integrate sustainability in everything we do Organizational capabilities Employee engagement Talent management • Executive Program: True Business • Electromobility days (sustainable • Global leadership and young Sustainability at Institute for employee experiences) professionals development Busin
Slide 46: We drive sustainable engineering to decarbonize our customers´ business
We drive sustainable engineering to decarbonize our customers´ business (Scope 3 emissions) Energy-efficient solutions Resource efficiency Circular business models • 40% increase in energy efficiency • Modular machine design • Reuse, reduce, recycle approach from CO2 lasers -> fiber laser technology
Slide 47: We advance sustainability services through ecosystem partnerships
We advance sustainability services for the sheet metal industry through ecosystem partnerships Sustainability Services • Digital (hybrid) event for Bystronic customers • 6 ecosystem partners on stage • Focus on sustainable engineering and net zero manufacturing • Addressing customers´ needs for ener
Slide 48: We are committed to decarbonizing the sheet metal industry
We are committed to decarbonizing the sheet metal industry Our carbon footprint Decarbonization strategy > 95% of our footprint For the first time, we calculated our • Building Scope 3 emissions roadmap carbon footprint (Scope 1 & 2) for the • Execution acceleration Bystronic Group in 2021 • Renewab
Slide 49: We have implemented a governance structure for sustainability to accelerate impact
We have implemented a governance structure for sustainability to accelerate impact Changes in the Board proposed Board of Directors • Chairman Heinz Baumgartner Direction • Member Inge Delobelle CEO reporting Executive Committee Regular ESG updates in the Board of Directors Chief Communications & ES
Slide 50: Our ESG roadmap
Our ESG roadmap Actions completed Next steps Governance structure implemented Define ESG management compensation targets as of January 2022 • Regular Board updates • Clear management accountabilities • Dedicated Sustainability Council Develop strategy, ambitions, and targets in line Decarbonization
Slide 51: Sustainability is an enabler to achieve the targets of our Strategy 2025
Sustainability is an enabler to achieve the targets of our Strategy 2025 Targets by 2025 Contribution to targets > 5% annual organic sales growth Future-oriented business model with sustainability as the foundation of everything we do and a strong stakeholder co-creation approach > 12% EBIT margin D
Slide 52: Finance update
Finance update We drive top- and bottom-line growth by means of innovation, operational excellence and regionalization We pursue an asset-light business model with high returns on net operating assets Beat Neukom Chief Financial Officer joined Bystronic in 2021 Thanks to our strong balance sheet, we
Slide 53: Our financial track record
Our financial track record Net sales CAGR ~8% incl. acquisitions Average EBIT margin 10% 1 1’500 150 12.7 12.2 +8% 10.8 12 8.9 9.1 1’000 100 8 5.2 500 50 4 0 0 0 2015 2016 2017 2018 2019 2020 2021 E 2015 2016 2017 2018 2019 2020 2021 E Net sales in CHF m EBIT in CHF m EBIT margin % Average RONOA 30%
Slide 54: Reiterating our mid-term targets
Reiterating our mid-term targets Sales Profitability Capital efficiency >5% annual organic sales growth1 >12% >25% EBIT margin RONOA from 2019 to 2025 ~26% of revenues from services Industry-leading profitability Attractive returns on net operating assets 1. Targets set on the basis of 2019 net sale
Slide 55: We target >5% annual organic sales growth in the cycle from 2019 to 2025
We target >5% annual organic sales growth in the cycle from 2019 to 2025 ~8% organic sales CAGR to achieve our 2025 targets Growth drivers in systems business • Strongest growth expected in automation and solutions CHF 1.3 bn • New customers in different market segments • Leverage broader market pre
Slide 56: We focus on service, innovation and operational efficiency to drive bottom-line growth
We focus on service, innovation and operational efficiency to drive bottom-line growth Margin drivers ~18% EBIT CAGR to achieve • Strong growth of service business our 2025 targets CHF 155 m • Launch of new innovations and features • Focus on operational efficiency and local sourcing Service busines
Slide 57: Our asset-light business model results in an attractive RONOA
Our asset-light business model results in an attractive RONOA Lean production Balance sheet in CHF million 796 804 • We only manufacture after an order has been placed • Inventories are limited to mainly raw materials, components Cash, cash equivalents and spare parts & securities 273 481 Others 15
Slide 58: Our asset-light business model drives Free Cash Flow generation
Our asset-light business model drives Free Cash Flow generation Low capex-to-sales ratio proves asset-light business model Mid-term ~3% capex-to-sales ratio 4.0% Investments for expansion mainly Ø 2.7% relating to 2.0% • Brand Experience Centers • Competence Centers • Production and assembly 0.0% 20
Slide 59: Our strong balance sheet offers opportunities for shareholder returns and M&A
Our strong balance sheet offers opportunities for shareholder returns and M&A We have liquid assets Balance sheet ~ CHF 480 m as per June 30, 2021 Solid equity ratio at ~70% Cash and cash equivalents 420.8 Trade payables 92.6 Securities 60.0 Advance payments from customers 87.3 Trade receivables 128
Slide 60: Successful track record of strengthening and expanding our capabilities through M&A
Successful track record of strengthening and expanding our capabilities through M&A 2016 2017 2018 2019 2020 2021 FMG TTM TTM Kurago Weber Laserservice Kurago 100% acquired Strategic partnership 100% acquired Strategic partnership 100% acquired 100% acquired Switzerland Italy Italy Spain Netherlands
Slide 61: We are screening M&A opportunities to selectively strengthen our portfolio
We are screening M&A opportunities to selectively strengthen our portfolio Current portfolio Criteria Acquire additional applications ✓ Sheet metal processing Laser industry ✓ Bolt-on acquisitions or Tube medium-size Strenghten service organization ✓ Profitable business – no Bending restructuring ca
Slide 62: Reiterating our guidance and mid-term targets
Reiterating our guidance and mid-term targets Financial indications 2021 Mid-term Sales ~ 15% > 5% organically per year FX impact ~ 1% - EBIT margin 8-9% > 12% Tax rate ~ 21% 21-23% Capex ~ 3% of sales ~ 3% of sales © Bystronic | Capital Markets Day 2021 62
Slide 63: We have transformed into a pure-play innovation leader in the sheet metal processing market
We have transformed into a pure-play innovation leader in the sheet metal processing market 1 We are an innovation leader creating value for our customers 2 We are well positioned in attractive end markets with potential for sustainable growth 3 We strive for industry-leading profitability based on
Slide 64: Financial calendar
Financial calendar 2022 Jan 14, 2022 Baader Helvea Swiss Equities Conference Feb 4, 2022 Trading update 12M March 15, 2022 Full-year 2021 results April 14, 2022 Trading update Q1 April 26, 2022 AGM
Slide 65: Contacts
Contacts Beat Neukom Patrizia Meier Michael Präger Chief Financial Officer Head of Investor Relations Chief Communications & ESG Officer joined Bystronic in 2021 joined Bystronic in 2021 joined Bystronic in 2021 Contact: Contact: Contact: [email protected] [email protected] michael.p
Slide 66: Disclaimer
Disclaimer The information in this presentation about the business performance of the Bystronic Group is of a summary nature only. The information published in the Annual Report 2020 of Conzzeta AG, the company that preceded Bystronic AG until the end of April 2021, the half-year report 2021 of Byst