ANDRITZ GROUP
Company presentation January 2016
Contents
1
ANDRITZ GROUP overview
2
Business areas – market update
3
Long-term goals and summary/outlook
The ANDRITZ GROUP
Overview
ANDRITZ is a globally leading supplier of plants, equipment, and services for hydropower stations, the pulp and paper industry, the
metal-working and steel industries, and solid/liquid separation in the municipal and industrial sectors
Headquarters: Graz, Austria
Global presence: over 250 production sites and service/sales companies worldwide
KEY FINANCIAL FIGURES 2014
Unit
Order intake
2014
MEUR*
6,101.0
Order backlog (as of end of period)
MEUR
7,510.6
Sales
MEUR
5,859.3
EBITA
MEUR
379.5
Net income (including non-controlling interests)
MEUR
210.0
-
24,853
Employees (as of end of period; without apprentices)
* MEUR = million euro
3
Company presentation January 2016
Company profile
Worldwide leading position in four business areas
30-35%*
30-35%*
25%*
10%*
Product offerings:
electromechanical
equipment for hydropower plants (turbines,
generators); pumps;
turbo generators
Product offerings:
equipment for
production of all types of
pulp, paper, tissue, and
board; energy boilers
Product offerings:
presses for
metalforming (Schuler);
systems for production
of stainless steel,
carbon steel, and nonferrous metal strip;
industrial furnace plants
Product offerings:
equipment for
solid/liquid separation
for municipalities and
various industries;
equipment for production of animal feed
and biomass pellets
Order
intake:
Sales:
Order
intake:
Sales:
Order
intake:
Sales:
Order
intake:
1,817
1,752
1,996
1,969
1,693
1,550
596
587
MEUR
MEUR
MEUR
MEUR
MEUR
MEUR
MEUR
MEUR
Note: figures above relate to the FY 2014
* Average share of ANDRITZ GROUP’s total order intake
4
Company presentation January 2016
Sales:
Strengthening of market position
Growth through organic expansion and acquisitions
Compound Annual Growth Rate (CAGR) of Group sales 2004-2014:
+14% p. a. (thereof approximately half organic growth)
Acquisitions by business area since 1990
HYDRO
2006 VA TECH HYDRO
2007 Tigép
2008 GE Hydro business
2008 GEHI (JV)
2010 Precision Machine
2010 Hammerfest Strøm (59%)
2010 Ritz
2011 Hemicycle Controls
PULP & PAPER
1990 Sprout-Bauer
1992 Durametal
1994 Kone Wood
1998 Kvaerner Hymac
1999 Winberg
2000 Ahlstrom Machinery
2000 Lamb Baling Line
2000 Voith Andritz Tissue LLC (JV)
2002 ABB Drying
2003 IDEAS Simulation
2003 Acutest Oy
2003 Fiedler
2004 EMS (JV)
2005 Cybermetrics
2005 Universal Dynamics Group
2006 Küsters
2006 Carbona
2006 Pilão
2007 Bachofen + Meier
2007 Sindus
2008 Kufferath
2009 Rollteck
2010 Rieter Perfojet
2010 DMT/Biax
2011 AE&E Austria
2011 Iggesund Tools
2011
2011
2012
2013
2015
Tristar Industries
Asselin-Thibeau
AES
MeWa
Euroslot
METALS
1997 Sundwig
1998 Thermtec
2000 Kohler
2002 SELAS SAS Furnace Div.
2004 Kaiser
2005 Lynson
2008 Maerz
2012 Bricmont
2012 Soutec
2013 Schuler (> 95%)
2013 FBB Engineering
2014 Herr-Voss Stamco
2015 Yadon (51%)*
SEPARATION
1992 TCW Engineering
1995 Jesma-Matador
1996 Guinard
2000 UMT
2002 3SYS
2004 Bird Machine
2004 NETZSCH Filtration
2004 Fluid Bed Systems
2005 Lenser Filtration
2006 CONTEC Decanter
2009 Delkor Capital Equipment
2009 Frautech
2010 KMPT
2012 Gouda
2013 Shende Machinery
5,859
5,711
5,177
4,596
3,610
3,283
2,710
1,744
1,481
* Closing expected for end of 2015/early 2016
5
3,554
3,198
Company presentation January 2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sales (MEUR)
Order intake (MEUR)
Contents
1
Major developments since last Capital Market Day
2
Business areas – market update
3
Long-term goals and summary/outlook
HYDRO
Challenging, but solid market environment
Large-scale plants
>> Solid, but rather slow project activity for
Small-scale plants
Good activity, especially in emerging
modernizations in Europe and North America markets (high energy demand, low capex
>> Pumped storage projects on hold due to low
Market
needs)
Pumps
Demand for special pumps
to remain at good level
(irrigation, water transport,
electricity prices
nuclear, etc.)
update
>> Greenfield hydropower projects in emerging
markets, however awards expected only in
the long term
Competition
Outlook
Stable competition at challenging level. Main competitors: GE/Alstom, Voith
Stable -
Stable +/-
Long-term
average growth
potential:
3-4% p.a.
7
Company presentation January 2016
Stable +/-
Large-scale hydro projects with potential order values
of > 100 MEUR for electro-mechanical equipment
Advance work
agreement signed.
ANDRITZ HYDRO
share ~ 250 MEUR.
Expected to be
booked as order
intake not before
end of H1 2016
8
Planned projects
Country
MW Total plant
Time frame
São Luiz do Tapajós
Inga 3
Site C
Koralm
Swansea Bay
Grand Coulee Units G19-G21
Turbine upgrade/rehabilitation
Baleh
Grand Coulee Rewind – 3rd
Powerhouse
Upper Cisokan
Nachtigal
Nam Theun 1
Mangla – Rehab
McNary – Runner Replacement
Brazil
Congo
Canada
Austria
United Kingdom
8,040
4,800
1,302
918
352
Medium to long term
Medium to long term
Effective within next 2-3 years
Effective within next 2-3 years
Expected to be booked in 2016
United States
Malaysia
1,800-2,310
1,325
Effective within next 2-3 years
Effective within next 2-3 years
United States
Indonesia
Cameroon
Laos
Pakistan
United States
1,800-2,310
1,040
419
533
888
980-1,127
Effective within next 2-3 years
Effective within next 2-3 years
Effective within next 2-3 years
Effective within next 2-3 years
Effective within next 2-3 years
Effective within next 2-3 years
Company presentation January 2016
PULP & PAPER
Good project activity, but unchanged challenging competition
Pulp
Paper/packaging
>> Investments in greenfield pulp mills to
continue
Market
>> Modernization projects to increase
capacity, efficiency, and profitability of
existing mills
update
>> Green energy investments
>> Stable demand for tissue and
containerboard machines,
predominantly in emerging
markets
>> More stringent quality
requirements for food
packaging
>> Some selective biomass pelleting projects
Competition
Stable +/-
Long-term
average growth
potential:
2-3% p.a.
Company presentation January 2016
Service
>> Stable and good Good potential to
project activity
grow organically
for nonwoven
and by
acquisitions
>> Good potential in
certain niches
>> Plastic film:
sharp market
decline due to
overcapacity
Unchanged challenging competition. Main pulp competitor: Valmet
Outlook
9
Nonwoven/plastic film
Stable +/-
PULP & PAPER
Good project activity for greenfield pulps mills
Mozambique:
Chile:
Owner – project Capacity/a.* Planned start-up
Arauco – Bio-Bio
1.6
Owner
2018 et seq.
Portucel
Capacity/a.* Planned start-up
1.5
2019 et seq.
Finland:
Brazil:
Owner – project
Eldorado – Três Lagoas
Veracel – Eunápolis
Braxel – Peixes
CRPE Holding S.A –
Ribas do Rio Pardo
Suzano – Imperatriz
Fibria – Aracruz
Capacity/a.* Planned start-up
2.3
2.0
2.0
2018 et seq.
2019 et seq.
2019 et seq.
2.2
1.3
1.7
2019 et seq.
2019 et seq.
2019 et seq.
Owner – project
Capacity/a.* Planned start-up
Finnpulp – Kuopio
1.1
2019 et seq.
China:
Owner – project
Guangxi Jingui –
Qinzhou City
Capacity/a* Planned start-up
1.2
2019 et seq.
* Annual capacity in million tons (may change over time); source: Pöyry. Capacity/year refers to added gross capacity (i.e. relevant as accessible market) without taking into account possible
shut-downs of existing capacities
10
Company presentation January 2016
METALS
Unchanged slow project activity in metalforming
Metalforming
Carbon Steel / Stainless steel
>> Good demand from automotive manufacturers,
Investment activity to remain at low
especially in Asia and Americas until beginning of
level.
Market
2015; since Q1 2015 slow-down of project activity,
More investment activities lately in
update
realization of current projects still unclear.
carbon and stainless in Europe.
Aluminum
Stable project activity.
>> Stable demand from other industries
Stable competition at challenging level
Competition
Main competitors from Japan and China
Outlook
Main competitors: Danieli, SMS, Primetals (Mitsubishi/VAI)
Stable -
Stable -
Long-term
average growth
potential:
4-5% p.a.
11
Company presentation January 2016
Stable +/-
METALS
Vehicle density per 1,000 inhabitant – world (2000-2014)
2000
2007
2014
800 804
732
554 524 572
592
557 576
310
230
152
195
107 128
106
11
Germany
Japan
USA
Russia
Source: IHS Automotive
12
Company presentation January 2016
Brazil
29
China
7
10
India
22
SEPARATION
Mixed development of markets
Municipal
Market
Investment activity at reasonable
levels, mainly in developed
markets
Feed
>> Reasonable demand in food Continuing at solid level
processing and chemicals
Stable demand to
continue
Very fragmented market with global and regional competitors
Competition
Stable +/-
Stable +/-
Long-term
average growth
potential:
2-3% p.a.
13
Biomass pelleting
>> Low project activity in
mining/minerals
update
Outlook
Industrial
Company presentation January 2016
Stable +
Stable +
Contents
1
Major developments since last Capital Market Day
2
Business areas – market update
3
Long-term goals and summary/outlook
Outlook for 2016
Investment activity expected to remain at last years‘ levels
Project activity for
Good project activity for
Low project and
Low project activity in
modernizations and new
modernizations and
investment activity both
mining to remain;
hydropower stations to
capacity increases to
in metalforming for
solid project activity in
continue at subdued
continue; solid pipeline
automotive industry and
environment, food,
level; satisfactory
for greenfield pulp mill
steel/aluminum to
chemicals and
market activity for
projects
continue
feed/biomass pelleting
pumps to continue
stable -
15
stable +/-
Company presentation January 2016
stable -
stable +/-
Long-term EBITA margin goal per business area
HYDRO
PULP & PAPER
14.7
Long-term goal:
7.5
8.3
8.3
8.1
8.3
7.6
7.3
8.5-9.0%
2011
2012
2013
2011
5.4
5.2
2012
2014 Q3 2015
5.2
2013
2014
-1.8
METALS
Long-term goal:
7.0-8.0%
4.1*
Long-term goal:
7.7
7.8
8.0-9.0%
6.9
3.7
2010
2011
2012
2013
2014
3.8
Q3
2015
-2.0
2010
* Including restructuring expenses of ~40 MEUR for Schuler
** Schuler: 8.8%
16
Q3
2015
SEPARATION
7.1**
6.2
7.0-8.0%
5.9
2010
2010
Long-term goal:
6.4
Company presentation January 2016
2011
2012
2013
-0.1
2014 Q3 2015
Target to continue long-term profitable growth
Goal: further improve profitability with top-line sales growth
Medium-term:
Increase EBITA
margin to 7-8%
with sales
growth
Average
2005-2009:
6.0%
Average
2000-2004:
%
8.0
6,204
7.2
5.3%
7.0
6.3
6.0
5.2
5.0
5.3
6.1
6.1
6.4
7.2
6.9
6.5
5,859
5,711*
6.5
6.9
6.4
5,177
5.1
5,000
4,589
4,596
5.1
MEUR
6,000
4.7
4,000
3,554
3,610
3,198
3,283
4.0
3,000
2,710
3.0
2.9*
2,000
2.0
1.0
1,319
937
1,481
1,110
1,744
1,225
1,000
0.0
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
EBITA margin (%)
2010
2011
2012
2013
2014
Q1-Q3
2015
2015E**
Sales (MEUR)
* Including Schuler as of March 1, 2013; no pro forma figures are available for the reference periods of previous years ** Consensus as of November 11, 2015
17
Company presentation January 2016
Group Strategy – Main goals
Growth
Profitability
 Focus on growth markets with higher growth
opportunities
 Service: increase share of service sales to 35%
 EBITA margin: regain 7% and improve to 8% with top-line
sales growth
 Expansion of product portfolio through R&D
and acquisitions
 Dividend: payout ratio at least ~50% and mid-term
increase to ~60%
 Achieve long-term growth of 5–8 % p.a. depending
on market growth and acquisitions
Global
market
leader
Technological Leadership
 Achieving the status of preferred supplier
by virtue of its technology, quality and
references
 Offer best ROI for customer
 Sustainability in development of innovative technologies
 Focus R&D: environmental protection, enhancing
energy efficiency, clean power generation
18
Company presentation January 2016
Global Footprint
 Balanced global presence
 Emerging markets expansion
 Further shift of manufacturing
capacities to emerging markets
 goal of 50% by 2017 vs. 42% in 2014