Sulzer Ag · SIX:SUN
Sulzer — Investor Day (October 2008)
22 slides from Sulzer's investor day presentation, Oct 20, 2008
Slide 1: Capital Market Day 2008 Financial Statements
Capital Market Day 2008 Financial Statements Peter Meier, CFO | Status October 20, 2008
Slide 2: Financial performance of Sulzer 2003–2007 (indexed)
Financial performance of Sulzer 2003–2007 (indexed) 400 400 350 350 300 300 EBIT 250 250 ROCE 200 200 ROS 150 150 Sales Capital employed 100 100 50 50 0 0 20031) 2) 20042) 2005 2006 2007 1) Before restructuring costs at Sulzer Pumps (CHF 23 million) 2) Before goodwill amortization Capital Market Day
Slide 3: Financial performance 2003–2008: EBIT composition
Financial performance 2003–2008 EBIT composition millions of CHF 450 400 350 300 Other 250 9 (incl. venture 416 division until 2005) 200 150 8 298 Divisions 5 100 218 185 188 128 50 107 0 -2 -11 -18 -23 -50 20031)2) 20042) 2005 2006 2007 H1-07 H1-08 1) Before restructuring costs at Sulzer Pumps (CHF
Slide 4: Financial performance 2003–2007: Net income
Financial performance 2003–2007 Net income millions of CHF 394 400 EBIT1) 350 296 300 Tax 287 250 Net financial income 225 200 167 Net income 150 136 131 100 89 72 50 42 14 13 14 0 –4 –2 -50 –16 -34 –50 -100 –84 -150 -120 2003 2004 2005 2006 2007 1) 2003 and 2004 before goodwill amortization Capital
Slide 5: Tax position
Tax position 2006 2007 H1-08 EBIT 295.6 393.5 227.4 Financial income 12.5 14.1 –3.4 EBT 308.1 407.6 224.0 Tax –83.5 –120.2 –63.6 in % 27.1% 29.5% 28.4% Higher tax charge due to improved pretax income (EBT) Lower corporate tax rates in Germany and UK Capital Market Day 2008 | Peter Meier, CFO | S
Slide 6: Tax strategy
Tax strategy Managerial Managerial optimization has priority optimization/ (e.g. accountability) efficiency Tax consolidation structure is in place whenever possible Tax exposure is limited Tax losses carried forward have been mainly consumed or expected to be consumed (capitalized) Target
Slide 7: Dividend policy
Dividend policy Payout ratio reported: approximately one-third of net income with due consideration to liquidity and funding requirements as well as continuity in CHF 2003 2004 2005 2006 2007 Earnings per 1.18 2.01 3.60 6.23 8.35 share1) Dividend1) 0.60 0.90 1.40 2.30 2.80 Ratio 51% 45% 39% 37% 34%
Slide 8: Performance measurement: Measuring value creation
Performance measurement: Measuring value creation ROS (EBIT/sales) Used for simple orientation and benchmarking Communication with financial community ROCE (pre-tax) Key measurement for operations Threshold for divisions: above 12% DCF and related tools Annual EVA-type calculations Midra
Slide 9: Strong cash flow generation January-June 2008
Strong cash flow generation January-June 2008 2008 2007 millions of CHF Jan. – Jun. Jan. – Jun. Cash flow statement according to IFRS EBITDA 275.9 229.2 Changes in net current assets/provisions -30.4 -122.3 Interests, income tax, rest -69.2 -95.5 Cash flow from operating activities 176.3 11.4 Capita
Slide 10: Strong and healthy balance sheet
Strong and healthy balance sheet Net liquidity Balance sheet ratios millions of CHF millions of CHF Cash and marketable securities Equity Liabilities Debt Equity in % of total assets Gearing in % 800 (debt/equity) Net liquidity 3 500 60% 600 551 3 000 50% 400 362 385 344 301 2 500 40% 305 229 200 30
Slide 11: Financing policy—leverage
Financing policy—leverage Balance sheet ratios millions of CHF Equity Liabilities Capital allocation Equity in % of total assets Gearing in % (debt/equity) High focus on organic 3 500 60% growth 3 000 50% Continued focus on acquisitions 2 500 40% 2 000 30% 1 500 20% 1 000 500 10% 0 0% 2005 2006
Slide 12: Financing policy
Financing policy Leverage: Determined by policy to maintain perceived investment grade (~BBB) for debt EBITDA multiple ≤ 3x Interest coverage ≥ 6x financial debt Leverage: = ~0.4 financial debt + equity corresponds to gearing of 0.67 (debt/equity) Capital Market Day 2008 | Peter Meier, CFO | S
Slide 13: Capital expenditure (Capex)
Capital expenditure (Capex) 2006 2007 H1-08 Addition to assets 106.0 134.8 47.3 Disposal of assets 53.1 29.7 14.7 Net additions 52.9 105.1 32.6 Depreciation/amortization 80.5 107.8 48.5 Thereof amortization 3.7 18.4 6.8 Majority of the capex spending is towards capacity increases, efficiency measure
Slide 14: Sulzer Real Estate (operationally nonessential)
Sulzer Real Estate (operationally nonessential) Sulzer Areal Sulzer Park Rüti Capital Market Day 2008 | Peter Meier, CFO | Slide 14
Slide 15: Sulzer Areal, Winterthur
Sulzer Real Estate (operationally nonessential) Sulzer Areal, Winterthur Total 270 000 m2 Sold 142 000 m2 Remaining 128 000 m2 Capital Market Day 2008 | Peter Meier, CFO | Slide 15
Slide 16: Sulzer Park, Winterthur
Sulzer Real Estate (operationally nonessential) Sulzer Park, Winterthur Total 660 000 m2 Sold 215 000 m2 Remaining 400 000 m2 Essential 45 000 m2 Capital Market Day 2008 | Peter Meier, CFO | Slide 16
Slide 17: Sulzer Real Estate: Rüti
Sulzer Real Estate (operationally nonessential) Rüti Total 90 000 m2 Remaining 90 000 m2 Capital Market Day 2008 | Peter Meier, CFO | Slide 17
Slide 18: Sulzer Real Estate: Book value and strategy
Sulzer Real Estate (operationally nonessential) Book value (as of June 30, 2008) CHF 133 million, located mainly in Switzerland Strategy Sell properties in due course Optimizing value Setting development priorities Manage rental income meanwhile Expectations Annual EBIT contribution CHF
Slide 19: Summary
Summary Strong performance and profitability improvements mainly driven by divisional operational improvements and by the markets Strong high quality backlog ensuring future resilience Currency translation impact to remain significant in 2008, while sales and costs predominantly being incurred
Slide 20: Agenda
Agenda Market overview- Innovation in solutions Divisional overview Financial statements Wrap-up Capital Market Day 2008 | Peter Meier, CFO | Slide 20
Slide 21: Capital Market Day 2008
Capital Market Day 2008 Peter Meier, CFO | Status October 20, 2008
Slide 22: Safe Harbor Statement
THE SAFE HARBOR STATEMENT UNDER THE US PRIVATE SECURITIES LITIGATION REFORM ACT 1995 This presentation contains forward-looking statements, including but not limited to, projections of future performance of materials and products, containing risks and uncertainties. These statements are subject to c