Welcome to ÅF s Capital Markets Day

Transcription

1 Welcome to ÅF s Capital Markets Day

2 Agenda for the day History and ÅF in brief Current position Strategy Divisional introduction BREAK Deep Dives Automotive Energy Design Smart City Summary and questions Closing and LUNCH

3 ÅF Capital Markets Day Stockholm, November 8, 2017 Jonas Gustavsson, CEO 3

4 Development and ÅF in brief

5 ÅF in brief #3 among Nordic engineering companies Markets most comprehensive portfolio of service offer across industries International footprint ~10,000 employees Net sales 11.1 BSEK (2016)

6 Strong positions with diversified portfolio INFRASTRUCTURE INDUSTRY ENERGY DIGITAL

7 Diversified portfolio Public 31% Telecom 3% Petrocemical 3% Mining&Steel Production 2% Financial Services 2% Other - Mfg primarily Power 15% Defence 2% Private 69% Pulp&Paper 4% Life Science, Food & Pharma 8% Automotive & Vehicle 16% Real Estate 18% Rail & Roads 21% Numbers from 2016

8 Top 10 clients mix of strong national and international clients (Volvo Cars and AB Volvo) ~30 % of total revenue Combination of private and public clients Strong base for international growth

9 Solid financial performance Net Sales, BSEK ÅF has shown strong growth and competitive performance in the last decade and has outgrown the market ~3 times in the past 10 years with stable margins at 8-9% EBITA, MSEK 11,07 9,85 8,34 8,80 +12% p.a. +12% p.a ,86 4,57 4,69 4,34 5,13 5,

10 ÅF has combined solid organic growth with strong inorganic growth Inorganic/organic sales growth split, % change from previous year Inorganic Organic ÅF has grown by 12% p.a. over the last 10 years 8% acquired growth 4% organic growth The largest single contributor to the company s growth is the acquisition of Epsilon in 2012 (impacting the sales in 2013)

11 ÅF has combined solid organic growth with strategic acquisitions Acquired sales, BSEK Between 2008 and 2017, ÅF acquired 85 companies More than 50% of the total acquired sales stems from the five largest acquisitions Epsilon is the single largest acquisition Epsilon 2012 Reinertsen 2016 Edy Toscano 2016 Advansia 2012 PRC additional acquisitions Total

12 Good shareholder return Total return SEK Source: Nasdaq OMX Nordic

13 Continued increase of dividends SEK Stock Splits Ex Date Split From Split To Adjustment Factor 13/06/ /05/ /05/ ,00 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 0,41 0,50 0,310,13 0,25 0,88 0,69 1,00 1,88 0,44 1,631,63 0,25 0,33 0,00 0,63 0,75 1,631,63 2,002,00 2,75 2,50 3,75 3,50 3,25 4,50 Source: Nasdaq OMX Nordic 14

14 Current position and new structure

15 Today #3 among Nordic engineering companies 13,486 16,531 ÅF has the market s most comprehensive range of competencies and services to meet current global trends 11,070 5,019 SEK M

16 Four divisions with full P&L and international responsibility International Divisions INFRASTRUCTURE INDUSTRY ENERGY DIGITAL SOLUTIONS 39% 34% 12% 16% Decentralised governance BA:s with different challenges Approx share of total net sales

17 Four divisions with full P&L and international responsibility International Divisions Decentralised governance INFRASTRUCTURE INDUSTRY ENERGY DIGITAL SOLUTIONS BA BA BA BA BA:s with different challenges BA Buildings Rail&Road Project Management Water and Environment Architecture & Design

18 Four divisions with full P&L and international responsibility International Divisions Decentralised governance INFRASTRUCTURE INDUSTRY ENERGY DIGITAL SOLUTIONS BA BA BA BA BA BA BA BA BA:s with different challenges BA BA BA BA Buildings Rail&Road Project Management Water and Environment Architecture & Design Advanced Manufacturing Automotive R&D Food & Pharma Process Industry Product Development Product Development Plant Engineering Advanced Technical Service

19 Four divisions with full P&L and international responsibility International Divisions INFRASTRUCTURE INDUSTRY ENERGY BA BA BA BA BA BA BA BA BA BA BA BA DIGITAL SOLUTIONS Decentralised governance BA:s with different challenges BA BA BA BA BA Buildings Rail&Road Project Management Water and Environment Architecture & Design Advanced Manufacturing Automotive R&D Food & Pharma Process Industry Product Development Product Development Plant Engineering Advanced Technical Service Energy Scandinavia Energy Switzerland Energy Czech Republic Energy Finland International Operations

20 Four divisions with full P&L and international responsibility International Divisions Decentralised governance INFRASTRUCTURE INDUSTRY ENERGY DIGITAL SOLUTIONS BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA:s with different challenges BA BA BA BA BA Buildings Rail&Road Project Management Water and Environment Architecture & Design Advanced Manufacturing Automotive R&D Food & Pharma Process Industry Product Development Product Development Plant Engineering Advanced Technical Service Energy Scandinavia Energy Switzerland Energy Czech Republic Energy Finland International Operations Experience Design IT Solutions Embedded Systems Systems Management

21 and structured country organisations supporting efficiency and local business INFRASTRUCTURE INDUSTRY ENERGY DIGITAL SOLUTIONS

22 Strategy

23 Our vision Providing leading solutions for generations to come ÅF - Making Future

24 Our mission We create sustainable engineering and design solutions

25 Our values WE ARE Brave Devoted Team players

26 Growth drivers Smart cities and infrastructure Industrial digitalisation Future mobility Changing energy landscape 27

27 Changing customer dynamic Partnership and alliances related to new disruptive areas R&D Function and project delivery in customers development process Internationalisation with strong partners Design thinking

28 Urbanisation drives public investments Norwegian National Transportation Plan Bn NOK/each year The Sweden negotiation High speed trains, subways and residences. 29

29 Strategy based on four pillars GROWTH VALUE CREATION OPERATIONS PEOPLE International expansion into leading positions Business model shift to deliver higher value Operational excellence Best in class people practices

30 The new strategy

31 GROWTH - International expansion into leading positions Geographical expansion in core countries Solid market growth and market share gain Leading/substantial position Infrastructure, and full leverage from Industry, Energy and Digital International growth in selected niches Distinct ÅF competences and capabilities - establish footprint and expand Current areas: o o o o o Automotive R&D Advanced Manufacturing Food & Pharma Process Industries Lighting M&A bolt on and platforms Expansion in global investment projects Expert competence services and projects related to significant oneoff CAPEX project globally Structured evaluation to ensure leverage in corecountries

32 VALUE CREATION Business model shift to deliver higher value Scale and leverage repetitive deliveries State of the art project model enabling most complex projects Partnering and cooperation Development of professional service model XF-Teams

33 VALUE CREATION Business model shift to deliver higher value Products <5% Solutions Fixed price projects T&M Projects ~45% 1 Cross ÅF projects and solutions 2 Digitalization Professional Team (T&M) Professional services (T&M) ~50% 3 After market and operational maintenance

34 OPERATIONS Operational excellence INFRASTRUCTURE INDUSTRY ENERGY DIGITAL SOLUTIONS BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA BA Clear structure with full P&L and accountability Distinct plans for each BA turnaround profitability - growth Strengthened performance management

35 EBITA % OPERATIONS Operational excellence Portfolio Management 25,0% Business Area portfolio with different challenges 20,0% 15,0% 10,0% Evaluated on attractivity and profitable growth potential 5,0% 0,0% -15,0% -5,0% 5,0% 15,0% 25,0% 35,0% 45,0% Strong performance management with increased accountability -5,0% -10,0% GROWTH % 36

36 OPERATIONS Operational excellence Adjusted financial steering Support cross collaboration Continuously improve project steering Strengthen performance- and portfolio management Optimised pricing and sourcing Implementation of structured Low Cost Sourcing for key projects and deliveries Partner network 27,000 Strengthening strategic pricing process across ÅF Ethical commitment Adopted rules and principles creating the foundation of ÅF:s Ethical commitment

37 PEOPLE Best in class people practices

38 PEOPLE People engagement and development Strategy activation new clear strategic direction will increase engagement The most interesting careers Competence development via own academy ÅF Academy Competitive compensation and benefits

39 PEOPLE Leadership Common leadership platform manager guiding stars Leadership development in ÅF Academy Proactive and structured management & succession planning

40 PEOPLE Employer Branding 41

41 PEOPLE Recruitment So far this year we have welcomed 1500 new talents to ÅF We have 30 recruiters working to support our hiring managers Our recruiters are top 1% best recruiters on LinkedIn (globally!) We are thereby one of Sweden s largest and best recruitment firms! 42

42 PEOPLE Diversity and inclusion 43

43 Thank you!

44 Financial targets GROWTH 10 % organic growth and add on acquisitions Platform acquisitions on top

45 Growth - Net Sales 9,85 +12% p.a. 8,34 8,80 11,07 3,86 4,57 4,69 4,34 5,13 5,

46 Growth by acquisitions Koncept Stockholm Vatten & Miljöbyrån Teknoplan Quality Engineering Reinertsen Reinertsen Oil & Gas Sjöland&Thyselius 850 Ingenjörsprojekt Alteco sandellsandberg inuse Eitechs Automation business Solid Reinertsen (inkl Tegn 3) Erstad & Lekven Optiman 500 Edy Toscano 430 Estimated annual net sales 2,100 MSEK Midtconsult Traffic team 225 Aries 50 Light Bureau 6 47

47 Financial targets EBITA MARGIN 10 % over a business cycle

48 Profitability EBIT and EBIT % excl. items affecting comparability % % 800 8% 600 6% 400 4% 200 2% MSEK % 0% 49

49 Financial targets NET DEBT Net debt/ebita 2.5

50 Cash Flow from operating activities Dividend paid Stable cash flow MSEK Cash Flow from operating acivities Dividend paid 51

51 Low volatility in earnings ÅF EBIT margin Q Q At 3.0x ND/EBITDA 52

52 Financial targets GROWTH 10 % organic growth and add on acquisitions Platform acquisitions on top EBITA MARGIN 10 % over a business cycle NET DEBT Net debt/ebita 2.5

53 Summarising our strategy FINANCIAL TARGETS GROWTH 10 % organic growth and add on acquisitions Platform acquisitions on top EBITA MARGIN 10 % over a business cycle NET DEBT Net debt/ebita 2.5

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55 INFRASTRUCTURE DIVISION Mats Påhlsson Divisional Manager 57

56 INFRASTRUCTURE DIVISION Road & Rail Buildings Project Management Water & Environment Architecture & Design Location of operation: SWE, NO, DEN, CZECH REP, CH SWE, NO, DEN, CH SWE, NO SWE, CH SWE, NO, DEN, UK, CH Target Markets: SWE, NO, DEN, CZECH REP, CH SWE, NO, DEN, CH SWE, NO SWE, CH International 58

57 INFRASTRUCTURE DIVISION Global Trends Urbanisation Sustainability Digitalisation as Strategic Direction Smart city Growing our local business in core countries Developing identified growth areas 59

58 INDUSTRY DIVISION Jonas Larsson Divisional Manager 60

59 INDUSTRY DIVISION ADVANCED MANUFACTURING AUTOMOTIVE R&D FOOD & PHARMA PROCESS INDUSTRY PRODUCT DEVELOPMENT INDUSTRIAL ENGINEERING SPECIALIZED TECHNICAL SERVICES Location of operation: SWE SWE, China, Brazil UK SWE, Denmark, Estonia, NOR SWE, Czech Republic SWE, NOR SWE, Denmark SWE Target Markets: International International International International SWE, NOR, DEN, FIN SWE, NOR, DEN, FIN SWE, NOR, DEN, FIN 61

60 INDUSTRY DIVISION Global Trends High pace in technology development. Calls for partnering and outsourcing of packages. Need for new technology areas, e.g. software/r&d, additive manufacturing Need for productivity improvements in manufacturing processes. Changing landscape within Automotive, i.e. electro mobility, autonomy, connectivity. Strategic Direction as Accelerated international growth in four distinct segments. Strengthen position in Sweden, with growth into core countries for the other three. Leverage profitability from specialized services in all segments. Spearhead Industrial digitalization by process and business knowledge 62

61 ENERGY DIVISION Roberto Gerosa Divisional Manager 63

62 ENERGY DIVISION Global Trends World electricity generation increase of 69% by 2040 due to: population and economic growth in the emerging countries smart cities and future mobility going from fossil fuels to electricity. Transition of the energy markets in the European Core markets: Main growth in Renewable Energy, demand for reliable transmission and distribution networks, storage and digital solutions. Bulk energy needed in International markets: Investments in traditional generation projects and T&D grids providing base load capacity as Strategic Direction Core markets: Stretch along the value chain in each market and expand offering. Become the country s #1 leading energy company. International operations: Selected markets where international competence is valued and which are rich in energy investment opportunities. Be a leading player in selected markets. 64

63 ENERGY DIVISION BA Scandinavia BA Switzerland BA Czech Republic BA Finland BA International Energy Operations Segments Heat & Power Nuclear Energy Hydropower Renewable & Energy Strategy Transmission & Distribution Sales

64 DIGITAL SOLUTIONS DIVISION Lennart Waldenström Divisional Manager 66

65 DIGITAL SOLUTIONS DIVISION EXPERIENCE DESIGN IT SOLUTIONS EMBEDDED SYSTEMS SYSTEMS MANAGEMENT Location of operation: Target Markets: SWE, USA SWE, NOR SWE SWE International Scandinavian International Scandinavian 67

66 DIGITAL SOLUTIONS DIVISION Global Trends Intelligence inside products increasing Strategic Direction as Full service digitalization partner within ÅF Growth pillars Increasing demand for connectivity and low latency communication Increase solution delivery in Sweden, and select countries Connected products increase the need of analytics, usability and service design Defense industry is in great demand National expertise in connectivity and information infrastructure Scandinavian expertise within Systems Engineering for Defense 68

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