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Tesmec — Investor Presentation 2016
Sep 8, 2016
4055_ip_2016-09-08_2bb50434-69a5-47a7-9c29-a2a420874b6e.pdf
Investor Presentation
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Partner in a changing world
1H2016 results presentation 8
Solutions partner for your world
Tesmec Group is leader in the market of the infrastructures related to the transport and distribution of energy, data and material.
We focus on strategic markets for the growth and modernization of every country.
Market overview & Strategic update
1H2016 Economic Results
| GROUP (€ mln) | 1H2016 | 1H2015 | Delta % |
|---|---|---|---|
| Revenues | 74,0 | 85,1 | -13,0% |
| EBITDA | 7,4 | 14,2 | -47,9% |
| % on Revenues | 10% | 17% | |
| EBIT | 1,4 | 9,6 | -85,4% |
| % on Revenues | 2% | 11% | |
| Profit Before Taxes | -1,3 | 8,9 | -114,6% |
| % on Revenues | -2% | 10% | |
| NET INCOME | -1,3 | 6,5 | -120,0% |
| % on Revenues | -2% | 8% | |
| GROUP (€ mln) | 1H2016 | 2015 | Delta % |
| NFP (IAS17) | 104,8 | 89,9 | 16,6% |
| NFP (without IAS17) | 87,6 | 72,1 | 21,5% |
| ENERGY | 1H2016 | 1H2015Delta % | |
|---|---|---|---|
| Revenues | 22,2 | 45,9 | -51,6% |
| EBITDA | 2,5 | 8,2 | -69,5% |
| % on Revenues | 11% | 18% |
| TRENCHERS | 1H2016 | 1H2015Delta % | |
|---|---|---|---|
| Revenues | 49,4 | 38,6 | 28,0% |
| EBITDA | 4,7 | 6,2 | -24,2% |
| % on Revenues | 10% | 16% |
| RAILWAY | 1H2016 | 1H2015 | Delta % |
|---|---|---|---|
| Revenues | 2,4 | 0,6 | 284,0% |
| EBITDA | 0,2 | -0,2 | 200,0% |
| % on Revenues | 8% | -32% |
- REVENUES FROM SERVICES: +71,8% IN 1H2016
- 1H2015: POSITIVELY AFFECTED BY EXTRAORDINARY ORDER OF STRINGING EQUIPMENT AND BADWILL FROM MARAIS ACQUISITION
- CONSOLIDATION OF BERTEL AND CPT IMPACTS ON MARGINS
Revenues
EBITDA 1H2016
1H2015 Cost variances reflect heavier service activity 1H2016
| Financial Information (Euro mln) | 1H2016 | 1Q2016 | 2015 |
|---|---|---|---|
| Net Working Capital | 70,0 | 80,6 | 63,5 |
| Non Current assets | 87,1 | 81,8 | 83,9 |
| Other Long Term assets/liabilities | (1,2) | (1,2) | (1,7) |
| Net Invested Capital | 155,9 | 161,2 | 145,7 |
| Net Financial Indebtness | 104,8 | 107,1 | 89,9 |
| Equity | 51,1 | 54,1 | 55,8 |
| Total Sources of Financing | 155,9 | 161,2 | 145,7 |
| Working Capital Evolution | ||||
|---|---|---|---|---|
| Euro Mln | 1H2016 | 1Q2016 | 2015 | Days 1H2016 |
| Trade Receivables | 53,8 | 63,2 | 50,9 | 131 |
| Inventories | 60,1 | 60,1 | 58,9 | 152 |
| Work in progress contracts | 2,3 | 2,7 | 3,8 | |
| Trade Payables | (32,7) | (34,0) | (39,0) | -80 |
| Other Current Assets/(Liabilities) | (13,5) | (11,4) | (11,1) | -33 |
| Net Working Capital | 70,0 | 80,6 | 63,5 |
Increase in business VOLUMES and MARGINS
Relevant projects related to the offer of VALUE ADDED SOLUTIONS and complementary services
Finalization of orders and important ongoing negotiations for INNOVATIVE RAILCARS that will replace the existing vehicles
Consolidation of the INTEGRATION STRATEGY and significant business opportunities in key countries
Trencher business highlights
Business model:
FROM sales TO value added solutions and services
Need of integrated technological platforms for TELECOM and ENERGY
REPOSITIONING in the market segment of SERVICES and INTEGRATED SOLUTIONS
FIBER OPTIC PROJECTS with international contractors; positive RENTAL ACTIVITIES in France
REORGANIZATION of TESMEC USA subsidiary:
- Costs efficiency strong reduction of workforce
- Partial reduction of production capacity focusing on rental activities
2H2016 outlook
BUSINESS MODEL:
- Reduction of stock with decrease of working capital
- Further reduction of cost of materials (from 51% in 1H2015 to 42% in 1H2016)
Growing OPPORTUNITIES in TLC and ENERGY CALBES MARKET, especially in Africa & Australia/NZ
Launch of Tesmec MICROTRENCHING TECHNOLOGY in USA for the new ultra broadband networks projects
Railway business highlights
Certified technologies already in compliance with the highest standards of the European rules
Growing pressure on SAFETY and ENVIRONMENTAL issues
DESIGN of INNOVATIVE RAILCARS that will replace the existing vehicles:
- equipped with Automatic Train Control System that provides enhanced levels of safety
- particular focus on sustainable and green solutions
- patented technologies, certification in Europe and USA
Participation at Innotrans in Berlin presenting Tesmec advanced METHODOLOGIES for CATENARY INSTALLATION and MAINTENANCE
2H2016 outlook
Investments of rail operators for the RENEWAL OF EXISTING FLEET to satisfy new rail regulations
New relevant AWARD for full maintenance service on multipurpose units in Italy, recurrent revenues
Effective COLLABORATIONS with Railway Authorities and participation in the main tenders as qualified supplier
Energy business highlights
Consolidation of the integration strategy in the sector smart technologies for power lines
Increasing demand of MODERNIZATION and EFFICIENCY of power grids worldwide
COMPLETION of SOLUTIONS PORTFOLIO in order to face the new technological challenges related to renewable energy sources and distributed generation
Projects of GRIDS INTERCONNECTION and INTEGRATION of RENEWABLE ENERGIES in the networks discussed also at CIGRÉ event in Paris
CYCLICALITY of the STRINGING MARKET and dependence from the release of BIG PROJECTS 2H2016 outlook
OPPORTUNITIES in strategic countries like Italy, Russia and South America
Strategic LONG TERM COLLABORATIONS with the major power companies for grids efficiency
ONGOING NEGOTIATIONS in the commercial pipeline of STRINGING SEGMENT
Order Book 1H2016 ENERGY
17,8 22,2 10,4 14,8 0 5 10 15 20 25 Order book FY 2015 1H2016 Revenues Order Intake Order book 1H2016 € mln
Summary 1H2016 Profit & Loss statement
| Profit & Loss Account (€ mln) | 1H2016 | 1H2015 | Delta vs 2015 |
Delta % |
|---|---|---|---|---|
| Net Revenues | 74,0 | 85,1 | (11,1) | -13,0% |
| Raw materials costs (-) |
(31,1) | (44,0) | 12,9 | -29% |
| Cost for services (-) | (15,4) | (13,8) | (1,6) | 12% |
| Personnel Costs (-) | (19,8) | (16,1) | (3,7) | 23% |
| Other operating revenues/costs (+/-) | (2,9) | 0,6 | (3,5) | -583% |
| Portion of gain/(losses) from equity investments evaluated using the equity method |
- | (0,1) | 0,1 | -100% |
| Capitalized R&D expenses | 2,6 | 2,5 | 0,1 | 4 % |
| Total operating costs | (66,6) | (70,9) | 4,3 | -6,1% |
| % on Net Revenues | (90%) | (83%) | ||
| EBITDA | 7,4 | 14,2 | -6,8 | -47,9% |
| % on Net Revenues | 10% | 17% | ||
| Depreciation, amortization (-) | (6,0) | (4,6) | (1,4) | 30% |
| EBIT | 1,4 | 9,6 | -8,2 | -85,4% |
| % on Net Revenues | 2 % |
11% | ||
| Net Financial Income/Expenses (+/-) | (2,7) | (0,7) | (2,0) | 286% |
| Taxes (-) | - | (2,4) | 2,4 | -100% |
| Minorities | - | - | - | - |
| Net Income (Loss) | -1,3 | 6,5 | (7,8) | -120,0% |
| % on Net Revenues | -2% | 8 % |
Summary 1H2016 Balance Sheet
| Balance Sheet (€ mln) | 1H2016 | 2015 |
|---|---|---|
| Inventory | 60,1 | 58,9 |
| Work in progress contracts | 2,3 | 3,8 |
| Accounts receivable | 53,8 | 50,9 |
| Accounts payable (-) | (32,7) | (39,0) |
| Op. working capital | 83,5 | 74,6 |
| Other current assets (liabilities) | (13,5) | (11,1) |
| Net working capital | 70,0 | 63,5 |
| Tangible assets | 64,1 | 65,3 |
| Intangible assets | 19,3 | 13,8 |
| Financial assets | 3,7 | 4,8 |
| Fixed assets | 87,1 | 83,9 |
| Net long term liabilities | (1,2) | (1,7) |
| Net invested capital | 155,9 | 145,7 |
| Cash & near cash items (-) | (28,8) | (21,2) |
| Short term financial assets (-) | (7,2) | (11,8) |
| Short term borrowing | 61,2 | 45,2 |
| Medium-long term borrowing | 79,6 | 77,7 |
| Net financial position | 104,8 | 89,9 |
| Equity | 51,1 | 55,8 |
| Funds | 155,9 | 145,7 |
Disclaimer
The Manager responsible for preparing the company's financial reports, Andrea Bramani, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.
Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially.
Any estimates or forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Tesmec S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these estimates or forward-looking statements or in connection with any use by any third party of such estimates or forward-looking statements.
This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state.
In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified tables and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these tables and indicators should not be treated as a substitute for the standard ones required by IFRS.