Burckhardt Compression Holding Ag · SIX:BCHN

Burckhardt Compression — H1 FY2018 Earnings Presentation

46 slides from Burckhardt Compression's earnings presentation, Oct 30, 2018

  1. Slide 1: Burckhardt Compression Holding AG Results First-Half of FY18

    BURCKHARDT COMPRESSION HOLDING AG RESULTS FIRST-HALF OF FY18 Winterthur, October 30, 2018

  2. Slide 2: Content

    Content  About Burckhardt Compression  Corporate Overview  Review Systems Division  Review Services Division  Financials  Guidance & Growth Areas  Shareholders Results First Half of FY18 October 30, 2018 Page 2

  3. Slide 3: About Burckhardt Compression

    ABOUT BURCKHARDT COMPRESSION Results First Half of FY18 October 30, 2018 Page 3

  4. Slide 4: About Burckhardt Compression

    About Burckhardt Compression  Burckhardt Compression is  the worldwide market leader in the field of reciprocating compressor systems  the only manufacturer and service provider that covers a full range of reciprocating compressor technologies and services  Optimized solutions for our customers

  5. Slide 5: About Burckhardt Compression

    About Burckhardt Compression  Founded 1844  Division of Sulzer Corporation 1969 – 2002  Management buyout 2002  Shareholders Public listed company SIX (BCHN) since IPO in 2006  > 4’000 Shareholders  Market cap CHF 1.2 bn (28.9.2018)  FTEs 1HY FY18 2’306 (1HY FY17: 2’192)  Sales 1HY FY18 CHF

  6. Slide 6: About Burckhardt Compression

    About Burckhardt Compression Burckhardt Compression Manufacturing/Assembly Locations Burckhardt Compression Subsidiaries, Associates and Service Centers Results First Half of FY18 October 30, 2018 Page 6

  7. Slide 7: Market Segments

    Market Segments Upstream Gas Transport Oil & Gas and Storage Petro- Refinery chemical/ Chemical Industry Industrial Gas Results First Half of FY18 October 30, 2018 Page 7

  8. Slide 8: Reciprocating Compressor (Crosshead Design)

    Reciprocating Compressor (Crosshead Design) Results First Half of FY18 October 30, 2018 Page 8

  9. Slide 9: Corporate Overview

    CORPORATE OVERVIEW Results First Half of FY18 October 30, 2018 Page 9

  10. Slide 10: Financial Summary

    Financial Summary Systems Division Services Division Others1) Total in CHF mn 1HY 1HY 1HY 1HY 1HY 1HY 1HY 1HY FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 Sales 158.5 192.8 99.6 94.2 258.1 287.0 Cost of -152.9 -181.4 -56.0 -50.7 -208.9 -232.1 goods sold Gross 5.6 11.4 43.5 43.5 49.2 54.9 profit Gross pro

  11. Slide 11: Highlights

    Highlights  Significantly higher order intake in both divisions  Maintained leading market position in China and positive market development in India and in the US  Signed agreement with Exxon Mobile for distribution and marketing of lubrication oils for LDPE applications  Signed new service agr

  12. Slide 12: Set Backs

    Set Backs  Under-proportional financial performance in first half-year due to cyclicality of the business  Profitability in the Systems Division still under pressure due to:  Additional costs in the LNGM business  Completion of projects that had been affected by sharp rise in material procuremen

  13. Slide 13: Review Systems Division

    REVIEW SYSTEMS DIVISION Results First Half of FY18 October 30, 2018 Page 13

  14. Slide 14: Systems Division Financials

    Systems Division Financials Change in CHF mn 1HY FY18 1HY FY17 1HY FY17 / FY18 Order intake 183.0 117.7 +55.5% Sales 158.5 192.8 -17.8% Gross profit 5.6 11.4 -50.9% In % of sales 3.6% 5.9% EBIT -13.6 -7.4 In % of sales -8.6% -3.8% Results First Half of FY18 October 30, 2018 Page 14

  15. Slide 15: Systems Division Key Figures

    Systems Division Key Figures in CHF mn Order intake Sales 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 08 09 10 11 12 13 14 15 16 17 1HY 08 09 10 11 12 13 14 15 16 17 1HY 18 18 Gross profit EBIT 100 40 80 30 20 60 10 40 0 20 -10 0 -20 08 09 10 11 12 13 14 15 16 17 1HY 08 09 10 1

  16. Slide 16: Systems Division Profitability Improvement Initiatives

    Systems Division Profitability Improvement Initiatives  Profitability improvement initiatives are on track  Highlights in 1HY FY18:  Further expansion of Global Support Center in Pune, India – 70 FTEs to support engineering, contracting and IT worldwide  Expanded value engineering and global pro

  17. Slide 17: Systems Division Products and Market Strategy

    Systems Division Products and Market Strategy Keep #1 market position Increase market share Products B-Line M-Line Laby® Laby®-GI Hyper Process Gas Standard High Market Compressors Compressors Compressors Compressors Pressure API 618 Compressors Upstream Oil & Gas (UO&G)     Gas Transport and St

  18. Slide 18: Systems Division Upstream Oil & Gas

    Systems Division Upstream Oil & Gas Market drivers  US political support for domestic gas production & trends  Productivity improvements in Enhanced Oil Recovery  Changing energy mix leads to a globally increasing demand for gas  Oil price development  Growth of middle-class in emerging countri

  19. Slide 19: Systems Division Gas Transport and Storage

    Systems Division Gas Transport and Storage Market drivers  Changing global energy mix towards gas & trends  Importance of natural gas as a clean and inexpensive source of energy  Feedstock for the Petrochemical industry changing to low-cost LPG/LEG (e.g. in the US)  Gas is found in areas where i

  20. Slide 20: Systems Division Refinery

    Systems Division Refinery Market drivers  Older/less efficient technologies trigger new equipment & trends or replacement of existing  Growing demand for clean fuels due to environmental regulations (Euro V & VI)  Flexibility to process different crude oil qualities  Strategic importance of refi

  21. Slide 21: Systems Division Petrochemical / Chemical Industry

    Systems Division Petrochemical / Chemical Industry Market drivers  Annual ~2% demand growth for plastics based on & trends increased world population & middle class growth in India and China  Shift of production to countries with low feed stock price (e.g. US)  Older technologies/less efficient p

  22. Slide 22: Systems Division Industrial Gases

    Systems Division Industrial Gases Market drivers  World population growth leads to increasing demand & trends for industrial gases (e.g. medical, food & beverage, fertilizers (CO2), inert gas)  Hydrogen to be used as fuel (busses, cars, trains, fuel cell power plants)  Pressure to reduce CO2 lead

  23. Slide 23: Review Services Division

    REVIEW SERVICES DIVISION Results First Half of FY18 October 30, 2018 Page 23

  24. Slide 24: Services Division Financials

    Services Division Financials Change in CHF mn 1HY FY18 1HY FY17 1HY FY17 / FY18 Order intake 120.3 94.9 +26.7% Sales 99.6 94.2 +5.7% Gross profit 43.5 43.5 0.0% In % of sales 43.7% 46.2% EBIT 20.6 22.3 -7.6% In % of sales 20.7% 23.7% Results First Half of FY18 October 30, 2018 Page 24

  25. Slide 25: Services Division Key Figures

    Services Division Key Figures in CHF mn Order intake Sales 250 250 200 200 150 150 100 100 50 50 0 0 08 09 10 11 12 13 14 15 16 17 1HY 08 09 10 11 12 13 14 15 16 17 1HY 18 18 Gross profit EBIT 120 60 100 50 80 40 60 30 40 20 20 10 0 0 08 09 10 11 12 13 14 15 16 17 1HY 08 09 10 11 12 13 14 15 16 17 1

  26. Slide 26: Services Division Business Overview

    Services Division Business Overview Market drivers  High worldwide population of reciprocating & trends compressors (~72’000 units with a market size of about CHF 2.7 bn)  Increasing BC & SYCC compressor population  Increasing mean time between overhaul (MTBO) and reduction of operating costs  A

  27. Slide 27: Financials

    FINANCIALS Results First Half of FY18 October 30, 2018 Page 27

  28. Slide 28: Order Intake

    Order Intake  Significant increase of order intake in CHF mn by 42.6% to CHF 303.3 mn 600  Systems Division 500  +55.5% to CHF 183.0 mn  Orders from Gas Transport and 400 Storage, Refinery, Petrochemical and Industrial Gas 300  Services Division  +26.7% to CHF 120.3 mn 200  Orders for enginee

  29. Slide 29: Sales

    Sales  Total sales decrease by -10.1% to in CHF mn CHF 258.1 mn 700  Systems Division 600  -17.8% to CHF 158.5 mn  Under-proportional sales in H1 FY18 500 due to cyclicality of business 400  Services Division  +5.7% to CHF 99.6 mn 300  Growth in all areas including Monitoring and Diagnostics

  30. Slide 30: Sales and Gross Margin by Division

    Sales and Gross Margin by Division In CHF mn FY16 FY17 1HY FY17 1 HY FY18 Systems GSP 367.2 384.4 192.8 158.5 Division GP 36.5 9.9% 27.2 7.1% 11.4 5.9% 5.6 3.6% Services GSP 190.5 210.2 94.2 99.6 Division GP 94.0 49.4% 97.9 46.6% 43.5 46.2% 43.5 43.7% GSP 557.7 594.8 287.0 258.1 Total GP 130.5 23.4%

  31. Slide 31: SGA and EBIT

    SGA and EBIT  SGA amounting to 16.0% of sales in CHF mn ROS (prior year period: 14.2%) 100 25%  Total SGA CHF 41.3 mn (prior year 90 22% 22% period: CHF 40.8 mn) 20% 20% 80 20%  EBIT CHF 5.6 mn or -56.0% below 70 16% prior year period 60 17% 15% 15% 16%  ROS of 2.2% (prior year period: 4.5%) 50

  32. Slide 32: EBIT Development 1HY FY17 to 1HY FY18

    EBIT Development 1HY FY17 to 1HY FY18 in CHF mn Results First Half of FY18 October 30, 2018 Page 32

  33. Slide 33: Net Income

    Net Income  Net income CHF 2.4 mn or in CHF mn 72.6% below prior year period 80 25%  Share of result of Arkos Field Services CHF -0.4 mn 70 (prior year period CHF -0.4 mn), 20% 60 40% ownership 17% 16%  Financial expenses CHF -2.2 mn 50 15% 15% (prior year period CHF -0.8 mn), 13% 15% 12% 40 11%

  34. Slide 34: Balance Sheet Positions

    Balance Sheet Positions  Balance sheet total declined by 1HY 1HY In CHF mn 2017 CHF -1.6 mn or -0.2% compared to FY17 FY18 prior year period Property, Plant & 193.2 198.2 179.4 Equipment  Reduction of accounts receivables Inventories 210.7 216.8 217.7 resulting from collection of overdue - Thereof

  35. Slide 35: Cash Flow and Net Financial Position

    Cash Flow and Net Financial Position  Improved net financial position In CHF mn 2017 1HY 1HY FY17 FY18  Higher cash flow from operating activities Cash Initial Balance 74.9 74.9 75.1  Dividend payment of Cash Flow from 44.4 26.0 44.3 Operating Activities CHF 6.00/ share for FY17 Cash Flow from (t

  36. Slide 36: Capital Investments (Additions to fixed Assets)

    Capital Investments (Additions to fixed Assets) 90 47 35 30 25 20 1) 3) 15 2) 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 E2018 1) Including purchase of real estate in the amount of CHF 77.0 mn 2) Including CHF 5.8 mn investments in real estate (construction of a new building of Prognost in

  37. Slide 37: Guidance & Growth Areas

    GUIDANCE & GROWTH AREAS Results First Half of FY18 October 30, 2018 Page 37

  38. Slide 38: Guidance Financial Targets

    Guidance Financial Targets Guidance FY 2018 Systems Division: FY 2018 = FY 2017 Order Intake Services Division: continues to grow Sales At prior year level Systems Division: FY 2018 ≥ FY 2017 Gross Margin Services Division: FY 2018 = FY 2017 FY 2018 slightly above FY 2017 EBIT Margin 2nd semester FY

  39. Slide 39: Growth Areas

    Growth Areas Organic growth Systems Division:  Capitalize on recent geographical expansions and acquisitions  Refinery business Services Division:  Grow in all business areas  Further selective geographical expansion Acquisitions Services Division:  Add-on acquisitions (focus OBC business) Resu

  40. Slide 40: Mid-Range Plan 2018-2022 Targets 2022

    Mid-Range Plan 2018-2022  Targets 2022 Confirmed as presented on January 9, 2018 Systems Division • Sales CHF 340 mn BC Group • Keep leading market position in all segments • Sales CHF 700 mn • Use strong global presence and • Keep leading market position in Shenyang Yuanda Compressor Systems Divis

  41. Slide 41: Shareholders

    SHAREHOLDERS Results First Half of FY18 October 30, 2018 Page 41

  42. Slide 42: Burckhardt Compression Shareholder Structure

    Burckhardt Compression Shareholder Structure 20 Institutional MBO Shareholder Group Shareholders 0.3% - 2.9% 13.00% 12.40% NN Group N.V. 6.93% JO Hambro Capital Management Limited 6.13% 4.99% Atlantic Value General Partner Ltd. (Mondrian) 3.49% 44.01% 3.03% Ameriprise Financial Inc. 3.01% 3.01% Cred

  43. Slide 43: Performance of BCHN Share Compared to the SPI Index

    Performance of BCHN Share Compared to the SPI Index BCHN 341.40 SPI 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 26.6.06 30.3.07 31.3.08 31.3.09 31.3.10 31.3.11 30.3.12 30.3.13 30.9.14 30.9.15 30.9.16 29.9.17 28.9.18 85.00 199.50 317.00 106.00 208.00 244.20 247.50 355.30 442.50 3

  44. Slide 44: Seven Good Reasons to Invest in Burckhardt Compression

    Seven Good Reasons to Invest in Burckhardt Compression Global presence and Divisional setup: closeness to the customer • Economic stability in cyclical market conditions • Agility on the respective markets Attractive markets with predictable long-term growth potential One strong brand Broad experien

  45. Slide 45: Disclaimer

    Disclaimer This document may contain forward-looking statements including, but not limited to, projections of financial developments, market activity, or future performance of products. These forward-looking statements are subject to change based on known or unknown risks and various other factors t

  46. Slide 46: CF Burckhardt

    CF Burckhardt y Compression Compressors for a Lifetime”

Burckhardt Compression Holding — H1 FY2018 Earnings Presentation on 6ix