CEMENTING A STRONGER FUTURE March 27, 2013 Financial Year 2012 - - PowerPoint PPT Presentation

cementing a stronger future
SMART_READER_LITE
LIVE PREVIEW

CEMENTING A STRONGER FUTURE March 27, 2013 Financial Year 2012 - - PowerPoint PPT Presentation

Investor and analyst webcast presentation Jouni Salo, CEO, Yizhen Zhu, COO Asia Pacific CEMENTING A STRONGER FUTURE March 27, 2013 Financial Year 2012 Results - KHD Humboldt Wedag International AG Financial Performance Q4 2012 - Strongest


slide-1
SLIDE 1

Investor and analyst webcast presentation Jouni Salo, CEO, Yizhen Zhu, COO Asia Pacific

Financial Year 2012 Results - KHD Humboldt Wedag International AG March 27, 2013

CEMENTING A STRONGER FUTURE

slide-2
SLIDE 2

Q4 2012 - Strongest quarter of the year

  • Traditionally strong quarter
  • Announced order from India, Holcim Jamul

for € 69 million

  • New project from Italcementi
  • Grinding project in Africa

Financial Performance Page 1 / 19 Full Year Results 2012

Q4 2012 Q4 Key Figures in € million Order Intake 128 Revenues 70 EBIT 3 EBIT Margin 4.3% Order backlog 491

slide-3
SLIDE 3

Page 2 / 19

2012 in brief: Challenging environment

Full Year Results 2012 At a glance

Business

  • Significant growth in
  • rder intake and backlog
  • Slight decline in revenue
  • EBIT and EBIT margin

within guidance corridor Financials

  • Solid liquidity
  • Stable equity
  • New bonding line of

€ 130 million Industry

  • Strong competition and

margin pressure

  • Continued project delays

and postponements

slide-4
SLIDE 4

Agenda Business Performance Financial Performance Achievements Outlook 2013

Page 3 / 19 Full Year Results 2012

slide-5
SLIDE 5

CN +8%

Slow but continuous growth in cement consumption 2012

Business Performance Page 4 / 19 Full Year Results 2012 IN +6% BR +6% RU +11% US +9% NG +10% World + 5% TR -3% ID +13% Global Cement Consumption 2012 in %

Sources: BNP Paribas, CW Group Report, KHD

China (59%) India (6%) USA (2%) Brasil (2%) Russia (2%) Rest of the World (29%)

slide-6
SLIDE 6

Key markets still uncertain

Business Performance Page 5 / 19 Full Year Results 2012

India

  • Slower growth with very few capacity

expansion projects in 2012

  • Rising raw material and energy costs

Turkey

  • Sharp decline in construction and

infrastructure spending

  • Stronger competition

Russia

  • Double digit growth in cement

consumption, however utilization rates remained low

  • Investments planned in infrastructure

Americas

  • Slow start in US, with utilization picking

up in second half but far below pre- crisis levels

  • Some growth in South America

Asia Pacific

  • New projects in Southeast Asia

Mining Markets

  • Sharp decrease in iron ore demand,

especially in China

  • Major customers critically reviewing all

CAPEX projects

slide-7
SLIDE 7

Agenda Business Performance Financial Performance Achievements Outlook 2013

Page 6 / 19 Full Year Results 2012

slide-8
SLIDE 8

Significant growth in order intake and backlog

  • AVIC partnership - proof of concept with new
  • rders in Malaysia (YTL Group/ € 100 million),

Venezuela (Invecem), Turkey (SÖNMEZ)

  • Additional orders in Russia (EUROCEMENT / € 80

million), India (Holcim Jamul / € 69 million) and Italy (Italcementi)

  • Service business order intake equaled 12% of

total order intake

  • Lower demand for HPGR technology in the mining

industry resulting in order intake of € 18 million

Financial Performance Page 7 / 19 Full Year Results 2012 Order backlog and order intake in € million 224,7 293,7 410,9 491,0 100 200 300 400 500 600 Order Intake Order Backlog 2011 2012 + 82.9 % + 67.2 %

slide-9
SLIDE 9

Delays in project execution continue to impact revenue

  • Unsatisfactory order intake from previous years

led to lower revenues

  • High order backlog does not immediately

translate into revenue

  • Financing conditions remained difficult for some
  • f the customers and regions
  • Biggest revenue contribution from India, followed

by Turkey and Russia

Financial Performance

Page 8 / 19 Full Year Results 2012 234.6 213.5 50 100 150 200 250 300 2011 2012 Revenue in € million

  • 9.0 %
slide-10
SLIDE 10

17.6 6.4 7.5% 3.0% 0% 2% 4% 6% 8% 10% 2 4 6 8 10 12 14 16 18 20 2011 2012

Earnings before interest and taxes and margin in within guidance

  • Postponed revenues cause EBIT reduction of

€ 8.7 million

  • Gross profit declined from € 52.5 million to € 43.8

million

  • Gross profit margin remained on satisfactory

level of 20.5%

  • Sales expenses of € 13.6 million as well as R&D

costs of € 3.6 million on similar level as in previous year

  • Administrative expenses of € 18.5 million remain

virtually unchanged

Financial Performance

Page 9 / 19 Full Year Results 2012 EBIT and EBIT margin in € million and %

slide-11
SLIDE 11

Group net results and dividend proposal

  • Group net profit at € 7.0 million
  • EPS 14 cents per share
  • Proposal to distribute € 3.0 million of the

Company’s € 4.8 million net retained profits as a dividend to shareholders

  • Dividend proposal corresponds to 6 cents per

share

  • The Company’s remaining net retained profits
  • f € 1.8 million to be carried forward

Financial Performance Page 10 / 19 Full Year Results 2012 Earnings per share in € 0.28 0.14 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 2011 2012

slide-12
SLIDE 12

Balance Sheet: Continued high levels of equity and liquidity

  • Increase in current assets of € 20

million corresponds to € 17 million increase in current liabilities

  • Operating cash flow amounted to

negative € 11.3 million

  • Stable equity that corresponds to

equity ratio of 53.6 %

Financial Performance Page 11 / 19 Full Year Results 2012

15 17 300 283 116 136

50 100 150 200 250 300 350 400 450

2011 2012

Non-current assets Cash and cash equivalents Other current assets

234 234 53 40 145 162

50 100 150 200 250 300 350 400 450

2011 2012

Equity Non-current liabilities Current liabilities

slide-13
SLIDE 13

Balance Sheet: Cash Management

  • Dividend
  • € 6 million distributed in 2012
  • € 3 million distribution proposed for upcoming AGM
  • Dividend policy to be launched at AGM
  • Acquisitions
  • Hot list narrowed down to 10 possible targets
  • Mainly for services, new environmental technologies and increased

competitiveness

  • Possible share buyback – to be decided after AGM

Financial Performance Page 12 / 19 Full Year Results 2012

slide-14
SLIDE 14

Agenda Business Performance Financial Performance Achievements Outlook 2013

Page 13 / 19 Full Year Results 2012

slide-15
SLIDE 15

Achievements

Achievements Page 14 / 19 Full Year Results 2012

  • Increased market share and won new orders

under difficult market conditions

  • KHD and AVIC partnership is well-accepted in

the market

  • KHD wins order to build one of the most eco-

friendly cement plants in Europe in the Lake Garda region (Italcementi order from Nov 2012)

  • KHD’s Combustion Chamber wins award for

‘Most innovative technology for alternative fuels use’ at the 6th Global CemFuels Conference (Feb 2012)

  • Launched first roller press service facility in

India

slide-16
SLIDE 16

Agenda Business Performance Financial Performance Strategic Achievements in 2012 Outlook

Page 15 / 19 Full Year Results 2012

slide-17
SLIDE 17

Outlook – Markets 2013

Outlook

India

  • Timing of market comeback still

questionable

  • 70% utilization predicted for 2013

Turkey

  • Slowdown in Europe will affect growth

in Turkey

  • Utilization 60% - 70% predicted

Russia

  • New projects expected, including

modernization projects

  • Access to financing still a factor for

many customers Americas

  • Some markets in South America

gaining strength

  • Modernization projects in the US due to

environmental legislation

  • Brazil development uncertain

Asia Pacific

  • Pace of growth slowing down
  • Consolidation and environmental

requirements continue to shape Chinese cement industry Mining Markets

  • Continued cost reductions from major

mining companies will limit the number

  • f new projects

Sources: BNP Paribas, CW Group Report, KHD

Page 16 / 19 Full Year Results 2012

slide-18
SLIDE 18

Group strategic initiatives 2013 and onwards

  • Strong focus on project execution and profitability
  • Expansion of service business
  • Simplified legal and operational structure
  • Continued development of KHD competiveness by

strengthening our resources and capabilities in low-cost regions

  • Reduce SG&A costs in 2013

Outlook Page 17 / 19 Full Year Results 2012

slide-19
SLIDE 19

Group financial outlook 2013

Outlook Page 18 / 19 Full Year Results 2012

  • Solid order intake – driven by Russian market
  • Significantly higher revenues based on strong order backlog
  • Lower gross profit margin caused by projects won under fierce

competition and due to pass-through revenues

  • Slight increase in EBIT margin resulting from revenue growth and cost

reductions

slide-20
SLIDE 20

Disclaimer for Forward-Looking Information

This document contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements of the Company to differ materially from the expectations of the Company include, among other things, general business and economic conditions globally, commodity price volatility, industry trends, competition, changes in government and other regulation, including in relation to the environment, health and safety and taxation, labor relations and work stoppages, changes in political and economic stability, the failure to meet certain conditions of the offer and/or the failure to obtain the required approvals or clearances from regulatory and other agencies and bodies on a timely basis or at all, the inability to successfully integrate the operations and programs of businesses and/or companies acquired with those of the Company, incurring and/or experiencing unanticipated costs and/or delays or difficulties relating to integration of acquired businesses, disruptions in business operations due to reorganization activities and interest rate and currency fluctuations. Such forward-looking statements should therefore be construed in light of such factors. Other than in accordance with its legal or regulatory obligations, the Company is not under any obligation and the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about these and other assumptions, risks and uncertainties are set out in our financial statements for the year ended December 31, 2011.

Page 19 / 19 Full Year Results 2012