S&T AG Q Results

Transcription

1 S&T AG Q Results Hannes Niederhauser, CEO Richard Neuwirth, CFO August 2018

2 S&T at a Glance 1 S&T provides IoT 4.0 technology S&T offers vertical IoT solutions and security appliances for Industrial/Infotainment/Smart Energy/Medical IoT grows fast: Bn. devices will be connected to the internet 2 S&T offers embedded computers via its subsidiary Kontron IoT ready upgradeable to appliances Markets: Europe, North America, China PL RU 3 S&T is an IT service provider with regional focus Germany, Austria, Switzerland (DACH) Eastern Europe DE FR CZ SK MD 4 5 S&T in figures 2017: EUR 882 Mio. revenues and EUR 68 Mio. EBITDA 6M 2018: EUR 423 Mio. and EUR 37 Mio. EBITDA employees in more than 25 countries Listed at Frankfurt stock exchange Member of the TecDAX ~EUR 1.5 Bn. market cap 1000% share growth from 2012 ~EUR 2 to 2018 ~EUR 23 Headquarter in Linz, Austria CH AT SI HR HU RS ME AL MK RO BG 2

3 S&T Highlights Profit Focus Revenue 6M/2018 (6M 2017): +11% EBITDA 6M/2018 (6M 2017): +35% EUR 422,7 Mio. (EUR 381,4 Mio.) EUR 36,7 Mio. (EUR 27,2 Mio.) Leading IoT alliance Cooperation with Foxconn intensified Alliance with Microsoft and Intel for Industry 4.0 Cloud Solutions Finance Growth EUR 140,0 Mio. liquid funds, EUR 46,2 Mio. net cash (June 30, 2018) Solid balance sheet: 45,3% equity ratio (June 30, 2018) Strong background to finance organic and an-organic growth Shareholder Focus TecDAX listed since Sept years growth path of share price: 46% CAGR per year Continuous dividend increase: 2014: 7ct; 2015: 8ct; 2016: 10ct; 2017: 13ct 3

4 S&T Business Model IT Services IoT Solutions Industry 4.0 Embedded Systems Services EE Eastern Europe DACH Region Revenue plan 2018: EUR 410 Mio.* Targets: GM > 30% EBITDA > 5% Growth pa: 5% Services DACH Industrial Infotainment Medical Medical Smart Energy Smart Energy Industrial Revenue plan 2018: EUR 450 Mio.* Targets: GM > 45% EBITDA > 12% Growth pa: >10% Communications Communications Revenue plan 2018: EUR 190 Mio.* Targets: GM > 30% EBITDA > 8% Growth pa: 8% Avionics DACH/Eastern Europe Mainly Europe America * incl. I/C revenues 4

5 Internet of Things market What is Internet of Things IoT? Embedded market: Starting around year 2000: machines had been equipped with computers to become intelligent IoT market: Starting with year 2010: intelligent machines had been connected to the Internet to communicate with each other = 4 th Industrial Revolution ( Industry 4.0 ) By year 2020 there will be expected 12 Bn. machines in the Internet vs. 4 Bn. humans using PCs Product in 2016 Market size CAGR Bn. connected devices Embedded Boards 3,2 Bn. 7,5 % Embedded System 3,5 Bn. 9,7 % Connectivity 16 Bn. 16,7 % Services 58 Bn. 15,7 % Total IoT in Bn. 18 % 2016: Average value of embedded systems is EUR 948 > connected to IoT it is EUR Source: IMS Report, ABI Research, Oracle 5

6 Embedded Cloud Edge Devices Gateways / PLC FOG Cloud Embedded Software customized IoT Interface Security On premises computing & storage Cooperation with Microsoft Azure Our Offer EaaS: Embedded as a Service Integration of IOT/IT end-to-end (IoT 4.0) Operation of IoT service (Cloud, on-premise) Business Model Installation and customization R&D fee Operation and maintenance fee Recurring revenues no product sales Intelligent machines are connected via Gateways to FOG (local embedded servers) or Embedded Cloud. Software driven (IoT, Artificial Intelligence, Autonomous Systems, FOG) End-to-End Solutions with IT integration. 6

7 Technology investments in Industry 4.0 to boost our margins Target Connect machines (Embedded Computers) to IoT grids Fosters long-term customer relationships Recurring service revenues result in Gross Margin > 50% Our unique new solutions SUSiEtec Software to connect end devices to cloud- and fog-analytics (6 customers won) TSN communication: Run real time machine language on standard IT connectivity Enables combinations IT (Information) and OT (Operations) End-to-end On-premises Edge Computing Edge Analytics & A.I. Strong and efficient engineering power #1 in engineering heads Cost efficient resources in-house in Eastern Europe R&D spending in 2017: EUR 115 Mio. (13% of Rev.) as of 40% paid by customers Sales; 643 Others; 813 Field Engineers; 515 Engineering;

8 S&T acquisition strategy Excellent financial position and strong operating cash-flow EUR 140,0 Mio. cash (EUR 46,2 Mio. net cash) as of June 30, 2018 Use EUR 40 Mio. for repay debt and dividend Use EUR 15 Mio. for potential squeeze-out Kontron (S&T currently holds > 95% in Kontron) EUR 100 Mio. available for acquisitions and growth (working capital needed) Acquisitions targets technology pearls Complement our technology / American region with Software companies to offer IoT grids Target small technology companies = reasonable price despite high multiples (20+) 1510 R&D engineers Acquisitions targets volume suppliers Kontron model: buy embedded Hardware companies at reasonable prices (multiples <10) Use S&T technology and pearls to increase GM from 25% to 40% in growing IoT market (as with Kontron) Acquisition of Canadian software company Inocybe in August 2018 Price: USD 3,3 Mio. Revenues: USD 1,5 Mio. p.a. Acquisition of Exceet Electronics entities in GER, A, CH in Aug 2018 Price: EUR 30 Mio. Revenues: EUR 55 Mio. p.a. Strong cash position and cash flow supports organic and an-organic growth to EUR 2 Bn. in 2023 First acquisitions at reasonable cost conducted up the value chain adding IoT technology 8

9 Foxconn will intensify the cooperation with S&T Dragon 2 Manufacturing Dragon 4 IoT/Embedded Server Rising sun Joint Marketing China Status implemented In design, today samples, launch 2018 Start using Kontron brand by Ennoconn channel in China Target 2019 joint factory in China Joint technology leadership in industry 4.0 Foxconn becomes major customer of S&T Advantages Cost leader: Best manufacturing cost in the industry Apple quality Server product line branded Kontron Foxconn delivers Hardware / fog server S&T adds IoT Software Foxconn well connected Industry 4.0 sales to Foxconn factories Impact Add 3% GM (EUR 6 Mio.) Add EUR 400 Mio. Revenues (2021) Triple revenues in China within 3 years S&T benefits from manufacturing power of Foxconn, S&T becomes an important technology supplier to Foxconn 9

10 S&T Group Balance Sheet in EUR Mio EQUITY 335,6 331,9 NON-CURRENT ASSETS 262,1 268,0 NON-CURRENT LIABILITIES 116,9 134,6 Fixed assets 235,1 239,4 Long-term loans and borrowings 62,1 68,7 Other assets 27,0 28,6 Other non-current liabilities 54,8 65,9 CURRENT ASSETS 476,7 536,9 CURRENT LIABILITIES 286,3 338,4 Inventories 116,5 104,0 Trade accounts payable 122,0 154,8 Trade accounts receivable 151,9 171,1 Short-term borrowings 31,7 46,4 Cash and cash equivalents 140,0 216,9 Other current liabilities 132,6 137,2 Other assets 68,3 44,8 Assets 738,8 804,9 Liabilities & Equity 738,8 804,9 Equity Ratio 45% 41% Net Cash 46,2 101,8 Working Capital 149,6 121,5 Largest single customer contributes >3% to S&T Group turnover 10

11 Split by Segments 6M 2018 (in EUR Mio.) Revenue 6M 2017 versus 6M 2018 EBITDA 6M 2017 versus 6M ,6 199,9 171,6 185,3 21,8 86,6 77,6 9,5* 11,1 9,3 6,8* 5,4 IT Services IoT Solutions Embedded Systems 6M M 2018 IT Services IoT Solutions Embedded Systems 6M M 2018 * incl. HQ/Holding cost Long-term strategy of profitable revenue and profitability growth was continued in the first half of

12 The S&T Share a TecDAX member Shareholder Structure Ennoconn Corporation -24% grosso holding Gesellschaft mbh - 1% Hannes Niederhauser - 2% Allianz Global Investors GmbH - 4% Dorval Asset Management - 3% JPMorgan Asset Management - 4% Freefloat - 76% S&T outperforms TecDAX Shares: Price (August 1, 2018): EUR 24,44 EPS (2017): 43 Cent EPS w/o PPA amortization (2017): 51 Cent S&T AG (indexed) TecDAX (indexed) S&T AG (in EUR) Dividend (2017): 13 Cent (2016: 10 Cent) Market Cap (August 1, 2018): ~ EUR 1,5 Bn. Liquidity 2017: ~ EUR 750 Mio. p.a. 12

13 S&T s growth path continues: EUR 2 Bn. in 2023 EBITDA (in EUR Mio.) Revenue (in EUR Mio.) ~80,0 68,1 Embedded Systems IoT Solutions Industry ~1.000 IT Services 22,9 28,3 34, fc fc Backlog EUR Mio. 12/13 12/14 12/15 12/16 12/17 06/18 Project Pipeline Scheduled Orders GM 33,0 % 33,9 % 33,5% 35,7 % 36,6%* EBITDA 5,9% 6,0% 6,8% 7,7% 8,7%* * H1/ : we forecast close to EUR 1 Bn. revenues and at least EUR 80 Mio. EBITDA Long-term forecast 2023: we plan on doubling sales to EUR 2 billion during the next five years 13

14 Summary Achievements FY/2017 results over plan Growth of 90% in net income and 35% in EBITDA in H Kontron GM improved Next Targets Ongoing GM Improvement to 40% and EBITDA to 10% Leadership in IoT/Industry 4.0 Intensify Foxconn cooperation Risks Big players enter our niches in Industry 4.0 US-Dollar development Address right technology trends Opportunities Benefit from Foxconn strengths Cost efficient engineering in EE High growth in Industry

15 Appendix - S&T Key Figures In Mio. EUR M M 2018 Revenues 503,7 882,0 381,4 422,7 Gross Profit (Margin) 168,9 (33,5%) 315,0 (35,7%) 146,0 (38,3%) 154,8 (36,6%) EBITDA (Margin) 34,4 (6,8%) 68,1 (7,7%) 27,2 (7,1%) 36,7 (8,7%) EBIT before PPA amortization 28,2 47,9 17,3 25,8 Net Income 20,4 29,4 9,2 17,2 EBITDA Interest Coverage Ratio 7,9 9,8 7,9 10,8 Net Cash 32,0 101,8 3,2 46,2 Working Capital 119,2 121,5 119,4 149,6 Equity Ratio 36,0% 41,2% 37,4% 45,4% Operating Cashflow 61,4* 44,9-4,6-15,9 Employees * Includes EUR 26 Mio. one-time effect in Kontron 15

16 Appendix - Experienced Management Team Executive Board Hannes Niederhauser Richard Neuwirth Peter Sturz Michael Jeske Carlos Queiroz CEO CFO Extended Management Board COO Services EE COO Services DACH COO IoT / Europe Laurent Remont Michael Riegert Olga Sinenko Steve Chen Robert Courteau CTO EVP America/Asia EVP Smart energy EVP Asia EVP Communication 16

17 Appendix - Industry 4.0 Smart factory Hybrid, On-Premise, or Private Cloud Embedded Cloud Server on-premise/greenfield Industrial Server/Workstation on-premise/greenfield HMI Process & Data Visualization Ethernet & TSN Switching Connecting Brownfield & Greenfield Embedded Box PC /Edge Computing Gateway Applications / Brownfield Embedded Box PC /Fog Computing Edge Analytics/Realtime Control Boards & Modules Base Technology: Secure/IoT ready 17

18 Appendix Customer project application examples TGW Logistic Group GmbH Output Management Heidelberger Druckmaschinen AG Industry Computer Platforms Drägerwerk AG Healthcare Solutions easyjet In-Flight Entertainment & Connectivity W.A.G. payment solution IT Infrastructure ÖBB Austria Transit Information Systems 18

19 Disclaimer This document includes 'forward-looking statements'. Forward-looking statements are all statements, which do not describe facts of the past, but containing the words "believe", "estimate", "expect", "anticipate", "assume", "plan", "intend", "could", and words of similar meaning. These forward-looking statements are subject to inherent risks and uncertainties since they relate to future events and are based on current assumptions and estimates of S&T AG, which might not occur at all or occur not as assumed. They therefore do not constitute a guarantee for the occurrence of future results or performances of S&T AG. The actual financial position and the actual results of S&T AG, as well as the overall economic development and the regulatory environment may differ materially from the expectations, which are assumed explicitly or implicitly in the forward-looking statements and do not comply to them. Analysts and investors, and any other person or entity that may need to take decisions, or prepare or release opinions about the shares / securities issued by S&T AG are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this document. Past performance cannot be relied upon as a guide to future performance. Except as required by applicable law, S&T AG undertakes no obligation to revise these forward-looking statements to reflect events and circumstances after the date of this presentation, including, without limitation, changes in S&T s business or strategy or to reflect the occurrence of unanticipated events. The financial information and opinions contained in this document are unaudited and are subject to change without notice. This document contains summarized information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information, including if it is necessary, any fuller disclosure document published by S&T AG. None of the Company, its subsidiaries or affiliates or by any of its officers, directors, employees, advisors, representatives or agents shall be liable whatsoever for any loss however arising, directly or indirectly, from any use of this document its content or otherwise arising in connection with this document. This document or any of the information contained herein do not constitute, form part of or shall be construed as an offer or invitation to purchase, subscribe, sale or exchange, nor a request for an offer of purchase, subscription, sale or exchange of shares / securities of S&T AG, or any advice or recommendation with respect to such shares / securities. This document or a part of it shall not form the basis of or relied upon in connection with any contract or commitment whatsoever. This document does not constitute an offer to purchase securities in the United States, Canada, Australia, South Africa and Japan. Securities, including the bond of S&T AG may not be sold or offered for sale within the United States or to or for the account of / in favor of US citizens (as defined in Regulation S under the U.S. Securities Act of 1933 in the current version (the "Securities Act") unless they are registered under the regulations of the Securities Act or unless they are subject to an exemption from registration. Neither S&T AG nor any other person intend to register the offer or a part thereof in the United States or to make a public offer of the securities in the United States.