Investor Presentation • May 6, 2021
Investor Presentation
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Hannes Niederhauser, CEO Richard Neuwirth, CFO
May 2021
› Strong order intake in Q1/2021 of EUR 404 Mio.
› Chip shortage impact: EUR 10.5 Mio. of not delivered orders in Q1
(in EUR Mio.)
Q1 2021 was impacted by chip shortage and USD | We reiterate our FY 2021 guidance of min. EUR 1.4 Bn. @ min. EUR 140 Mio. EBITDA
| Mio EUR |
31/03/2021 | 31/12/2020 | 31/03/2021 | 31/12/2020 | |
|---|---|---|---|---|---|
| NON-CURRENT ASSETS |
506 1 |
506 0 |
CAPITAL AND RESERVES |
412 8 |
409 5 |
| Fixed Assets |
469 7 |
469 3 |
Equity | 412 8 |
409 5 |
| as of , plant and Property equipment |
133 4 |
135 1 |
as of shares Treasury |
-34 9 |
-26 2 |
| as of Goodwill |
201 2 |
199 5 |
NON-CURRENT LIABILITIES |
386 5 |
353 8 |
| Other Assets |
36 3 |
36 6 |
loans borrowings and Long-term |
251 3 |
218 8 |
| CURRENT ASSETS |
740 8 |
740 7 |
Other Liabilities Non-Current |
135 3 |
135 0 |
| Inventories | 171 1 |
159 9 |
CURRENT LIABILITIES |
447 5 |
483 4 |
| Trade receivables |
183 3 |
204 5 |
Trade payables |
170 3 |
210 0 |
| from Contract Assets Customers |
28 6 |
23 6 |
Liabilities from Contract Customers |
68 9 |
69 7 |
| Cash and cash equivalents |
278 4 |
281 9 |
Short-term loans and borrowings |
60 1 |
42 8 |
| Other receivables and prepayments |
79 4 |
70 9 |
Other Liabilities Current |
148 3 |
160 9 |
| Total Assets |
1 246 9 , |
1 246 6 , |
Total Liabilities & Equity |
1 246 9 , |
1 246 6 , |
| Equity Ratio |
1% 33 |
8% 32 |
|---|---|---|
| Cash/Net Debt* Net |
-33 0 |
20 3 |
| Working Capital excluding 15** IFRS |
184 1 |
154 3 |
* Definition Net Cash: Cash and cash equivalents less non-current and current financing liabilities (excl. liabilities from leasing according to IFRS 16)
** Definition Working Capital: Inventories plus trade receivables less trade payables (excl. IFRS 15 contract assets and liabilities)
OPERATING CASH FLOW (IN EUR MIO.) 26,7 61,4 44,9 35,5 83,4 140,8 100 120 140 2015 2016 2017 2018 2019 2020 -25.8 -13 6.4 -26.8 Q1-18 Q1-19 Q1-21 Q1-20
| (IN EUR MIO.) | KPI DEVELOPMENT | |||
|---|---|---|---|---|
| in EUR Mio. |
2018 | 2019 | 2020 | Q1-2021 |
| Revenue | 990 | 1,123 | 1,255 | 294 |
| Inventory | 74 days (131 Mio.) |
73 days (147 Mio.) |
68 days (160 Mio.) |
94 days (171 Mio.) |
| A/R | 75 days (202 Mio.) |
69 days (212 Mio.) |
59 days (205 Mio.) |
57 days (183 Mio.) |
| Factoring | 56 Mio. (20%) | 63 Mio. (23%) | 77 Mio. (26%) | 56 Mio. (23%) |
| IN TEUR | EBIT ADJUSTMENTS |
|---|---|
| 12,705 | STATED EBIT |
| -312 | Expenses stock options |
| -296 | Restructuring costs Iskratel |
| -458 | Restructuring costs North America |
| 1,033 | Change in accruals – settlement AT tax authorities (see next slide) |
| -33 | ONE TIME PROFIT EFFECTS |
| 4,150 | R&D Capitalization |
| -3,109 | R&D Amortization |
| 1,041 | IMPACT R&D CAPITALIZATION |
| 11,697 | ADJUSTED EBIT |
| -2,554 | PPA Amortization |
| 14,251 | ADJUSTED EBIT BEFORE PPA |
| IN TEUR | OP. CASHFLOW ADJUSTMENTS |
|---|---|
| -26,805 | STATED OP. CASHFLOW |
| 20,616 | Reduction in A/R factored from 31.12.2020 to 31.03.2021 |
| 754 | Cash effect from one time profit effects |
| -5,435 | ADJUSTED OP. CASHFLOW |
| ORGANIC GROWTH | |||
|---|---|---|---|
| in TEUR | Q1-2020 | Q1-2021 | |
| Stated revenue | 270,079 | 294,093 | |
| M&A adjust Iskratel | -16,879 | ||
| M&A adjust Citycomp | -9,948 | ||
| M&A adjust HCS | -1,427 | ||
| M&A adjust KAD, MED | 1,321 | ||
| FX adjust | +6,480 | ||
| ORGANIC GROWTH | 1.3% |
| ACCRUALS ANALYSIS (in TEUR) |
P&L impact | 2019 | 2020 | Q1-2021 | Comment |
|---|---|---|---|---|---|
| TOTAL ACCRUALS | no | 84,348 | 67,319 | ||
| Accruals added by acquisitions |
no | 57,651 * |
2,567 | 502 | * EUR 54 Mio. Kapsch |
| Accruals used via P&L | no | -24,238 ** |
-21,600 ** |
-2,670 | ** EUR 32 Mio. Kapsch |
| Accruals added via P&L | yes | 9,190 | 8,110 | 651 | |
| Accruals released via P&L | yes | -14,086 | -2,202 | -1,714 | |
| P&L impact by accrual changes | 4,896 | -5,908 | 1,063 |
| RECURRING REVENUES* (in EUR Mio.) |
2019 | in % | 2020 | in % | Q1-21 | in % |
|---|---|---|---|---|---|---|
| Recurring Revenues |
288 | 25.6 | 344 | 27.4 | 101 | 34.3 |
* Stated Recurring revenues include Software, SLAs and maintenance (not Hardware sold with SLA, info to come 12/2021)
| GEOGRAPHICAL SPLIT Q1-2021 (in %) |
Revenue | EBITDA |
|---|---|---|
| Europe | 81.5% | 95,1% |
| North America | 7.4% | -2.8% |
| Asia | 6.5% | 3.8% |
| RUS/BY/MD | 4.6% | 3.9% |
COMMUTE & TRAVEL
Promotion of train travel, videoconferencing and Home-office work
Expansion of renewable energy usage, e.g. own photovoltaic systems
3 years plan to coordinate ESG topics on group level, clear target to improve ESG Ratings (MSCI to at least BB).
continue to increase share of women in S&T management positions from 21.6% up to 25.6% equaling the current gender distribution in S&T, new female SVB member
Group-wide online compliance training tool to be implemented in 2021
increased audit committee independency since June 2020
New Stock Option Plan for broad employee base established, further initiatives to secure on fair and equal remuneration planned (including new targets/MTI)
| ŝ | ۰ | |
|---|---|---|
Intensify communication with "Kleinaktionären", e.g. new shareholder website was set up
| Preparation Scope Reporting expansion ESG-Goal extension ESG-Risk assessment Update Materiality Analysis |
I and II Evaluation ESG-Goals Implementation Stage II Improved reporting according to recognised ESG standards |
Implementation Stage III Finalization Continuous Improvement Process |
|---|---|---|
| Stakeholder Dialog | ||
| Steps 2021 | Steps 2022 | Steps 2023 |
* 3 rd Party revenue including intercompany revenue in Mio. EUR
** EBITDA before charged management fees from S&T AG (part of IT Services Segment); EBITDA after management fees: MEUR 12.3 (Q1-2021), MEUR 7.2 (Q1-2020)
*** HQ-fee adjusted EBITDA in % of external revenue
* 3 rd Party revenue including intercompany revenue in Mio. EUR
** EBITDA before charged management fees from S&T AG (part of IT Services Segment); EBITDA after management fees: MEUR -0.8 (Q1-2021), MEUR 2.1 (Q1-2020)
*** HQ-fee adjusted EBITDA in % of external revenue
GUIDANCE TRACK RECORD (EBITDA FC VS ACT) (in EUR Mio.) 30.4 50 80 100 115 34.4 68.1 90.5 111.7 130.0 -5 15 35 55 75 95 115 135 2016 2017 2018 2019 2020
| DIVIDEND & SHARE BUY BACKS |
2019 | 2020 | 2021 | Comment |
|---|---|---|---|---|
| Dividend (cent) | 16 | 30 | Dividend for FY 2020 = 1.4% of share price |
|
| Total Dividend (EUR Mio.) | 10.6 | 19.5 | 2019 no dividend (to get Covid-19 subsidies) | |
| Share Buy backs (EUR Mio.) |
14.6 | 20.3 | 21.0 | 2021: EUR 11 Mio. spend + new program |
| TOTAL SPENDINGS (EUR Mio.) |
25.2 | 20.3 | 40.5 |
2,7 02 0 500 1,000 1,500 2,000 2,500 3,000 Design wins 239 592 95 927 263 670 103 1,037 0 200 400 600 800 1,000 1,200 IT services IOT Europe IOT America Backlog 31.12.2020 31.03.2021 BACKLOG DEVELOPMENT REMAINS POSITIVE +11.8% + 17.0% +10.0% +8,4% +13.2%
| RECENT DESIGN WINS | COUNTRY | VOLUME EUR |
|---|---|---|
| Medical respirator machines | GER | 62 Mio. |
| Public contracts | PL | 46 Mio. |
| Control for high-speed train | CZ,LIT,DE,FR,UK | 81 Mio. |
| AI for robots | GER | 25 Mio. |
| Medical surgical robots | USA | 20 Mio. |
| TOP CUSTOMERS 2020 | COUNTRY | VOLUME EUR |
| Medical respirator machines | GER | 33 Mio. |
| Social media compression system | USA | 25 Mio. |
| Global leader in medical equipment | USA | 22 Mio. |
| Control for high-speed train | UK | 25 Mio. |
| Avionics Entertainment System | CN | 16 Mio. |
| Top 10 customers account for 19% of Revenues, totally >3000 customers |
Record order entry of EUR 404 Mio (Revenues EUR 294 Mio.) indicates strong further growth in FY2021
| Backlog EUR Mio. |
12/14 | 12/15 | 12/16 | 12/17 | 12/18 | 12/19 | 12/20 |
|---|---|---|---|---|---|---|---|
| Project Pipeline | 644 | 701 | 1,002 | 1,105 | 1,632 | 2,158 | 2,702 |
| Scheduled Orders | 157 | 181 | 306 | 474 | 841 | 841 | 927 |
| GM | 33.0 % | 33.9 % | 33.5% | 35.7 % | 35.0% | 36.3% | 36.3% | > 37% |
|---|---|---|---|---|---|---|---|---|
| EBITDA | 5.9% | 6.0% | 6.8% | 7.7% | 9.1% | 9.9% | 10.4% | >10% |
Guidance 2021: min. EUR 1,400 Mio. Revenue – min. EUR 140 Mio. EBITDA – EPS 100 cent
| GUIDANCE | 2021 | AGENDA 2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue: | minimum EUR 1,400 Mio. | 5 years plan | 2018 | 2023p | Growth | |||||||
| EBITDA: | minimum EUR 140 Mio. | Revenue | 990 Mio. | 2,000 Mio. | +102% | |||||||
| EPS: minimum 1 Euro |
EBITDA | 90.5 Mio. | 220 Mio | +143% | ||||||||
| EPS | 70 cent | 175 cent | +150% | |||||||||
| VISION 2030 | ||||||||||||
| Digitalization | SMART Technologies |
Transformation to 50% GM, 15% EBITDA |
M&A Strategy |
Brand Awareness |
Based on current forecasts and order backlog we confirm all short – mid and long-term plans
› MDAX membership
RISKS
› Growth areas America + China
› Q: Going into Q2, can you shed some light on how the semi shortage developed in April? Is it still a fact or do you see some improvements moving towards the end of Q2? How should we think of the phasing of the semi shortage?
› Q: Does the strong order intake you showed in the first quarter include any double orders of customers who want to be on the safe side to receive their orders?
› Q: What was the order intake in Q1 2020?
› Q: On the project pipeline when I did the calculation correct, it has grown even more than the order intake. Could you share some information on this in terms of vertical markets?
› S&T: Yes, the pipeline was growing even more. The public sector does currently extremely well. Surprisingly even in the USA. A country that never touched railways, now has a significant budget under the Biden administration. We compete here for high speed trains in California, which is usually a typically European business. Governments like to spend money for infrastructure projects, and environmental programs, and programs that help them to transform their economy.
We also see industry coming back, with a lot of orders coming from smart factories and smart industrialization. Why coming back? The more robots you have in a factory, the less it is important how much you pay the worker per hour. It is the robot anyway who does the job and the robots cost the same everywhere. So apart from the costs which are similar, also for sustainably reasons, there is a trend of bringing production back.
Still strong is health and medical. We recently won a design win for surgical robots and there is a big trend to get data of all kind of medical systems centralized.
Markets that don't do well now are avionics – we don't see that picking up, and when we talk about industry – the "not so smart" industrial equipment, the not connected equipment. Like human machine interfaces for PLC's, which is a very traditional industrial equipment.
Last segment that is also doing well is e-mobility. S&T designs systems for several autonomous driving vehicles. S&T will never be a big player in the mass market but we see a niche in professional use. We just got a design win for autonomous mining machines.
› Q: Going into On the avionics business, to get a sense on how this should develop going forward – obviously the industry is still in a very though stage, on the other hand what we do see from airlines the procurement of new aircraft, which is more efficient, has not ended. The business that you have with upgrade vs. new aircraft delivery's how is that split and in general would you rather see given the Q1 development a steeper decline of the business or not necessarily?
› Q: On SusieTec. You mentioned additional revenue of EUR 250 million out of software licenses. Is that a figure that you expect for the near future?
› Q: The Iskratel revenue contribution in Q4 was 35 million but only 17 million in Q1 2021. Could you please clarify what is causing the seasonality in Iskratel revenues?
› S&T: The split between refurbished and new, we are serving both, and the split is probably 50:50 or a little bit more refurbished than new equipment. In Europe avionics currently is dead, in the US they slowly start to have more incountry flights again. On the other hand, the European industry is in a better shape because of subsidies, whereas the American is in much worse shape.
Currently we can get reasonable business only in China. China's in-country flights haven't been affected by any crises and we have good opportunities there. The forecast form avionics department is 18 million this year, we had less than 3 million in Q1.
› S&T: Iskratel has a lot of seasonality, also this year we are planning again, 35 million or more in Q4 2021. A lot of the Iskratel business is public business, which means it is planned and carried out according to the calendar year. At the end of the year the projects are finalized, you get paid and you can recognize the revenues. We are already working in Q1 on the revenues that we recognize at the end of the year. Midterm we expect that 5G IOT solutions will also attract more private business, which will reduce the seasonality.
› Q: On your plan to start a 4 th segment – from the current IT Services business, proximately which share of revenue will be shifted to the new segment IOT EE?
› Q: On M&A given that we are in May and you target is 100 million, acquisition of additional revenues, how committed are you in any case to achieve this kind of target? Would you be potentially willing to pay higher prices? Do you push for achieving the revenue target at any price?
› S&T: We don't have the exact numbers yet but estimate 30-35% to be IoT business and 2/3 to be IT Services. However, the IoT part is growing faster, so by the time we implement the new segment split, it will be already a higher number than the estimated one.
› S&T: Internally we have very clear rules how we do acquisitions, for example we declared that we will not do acquisitions in problematic areas, like Russia. Another rule is that since S&T is valued at 10 times EBITDA, we will not buy companies more expansive than S&T. We will walk away from the deal if the price is not in a range where we expect it. This year we walked away from 3 to 4 deals already because they were too expensive. There will be always companies in financial troubles. Private equity cannot restructure them like us they have no synergies to raise. When prices are too high, we will not achieve 100 million this year but probably buy 200 million next year.
› Q: What was the M&A contribution in Q1?
› Q: How should we think about the decline of factoring? Do you have plans to exit from factoring as you obviously have some access cash?
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