Annual Press and Analyst Conference of the Datwyler Group - Welcome to the 8 February 2019
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8 February 2019 Welcome to the Annual Press and Analyst Conference of the Datwyler Group
Agenda Review / Goals
Dirk Lambrecht, CEO
Datwyler Group
Continued profitable growth course
Sales increased by 5.4%, organic up by 2.0% NET REVENUE EBIT MARGIN
in CHF million in %
14
Record operating result (plus 4.6%) 1500
13 12.6 % 12.5 %
1200
12.0%
900
EBIT margin at 12.5%, despite considerable 600
12
11.0%
10.8 %
start-up cost for growth projects 300
11
0 10
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Net income of CHF 121 million
ROCE slightly lower due to high investments OPERATING RESULT (EBIT)
in CHF million
ROCE
24 in %
200 23.2%
22.8%
23
150 22.2%
1’362 170 12.5% 121 100
22
21.7%
million million EBIT
million 50 21 20.4%
margin
net revenue EBIT net result 0 20
in CHF in CHF in CHF 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
3 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Growth and rationalisation projects 2015 – 2020
First Line upgrade Health Care plant
Kesurdi, India
Acquisition Ott
Cleebronn, Germany
Acquisition Bins
New Health Care plant São Leopoldo, Brazil
Middletown, USA
New mixing plant
Novy Bydzov, Czech Republic
Modernization and expansion
New mixing plant of the ERP software package
Ningguo, China
Distrelec Enterprise Hub
Manchester, England
Acquisition Parco
Expansion Reichelt warehouse Ontario, USA Expansion Health Care plant
Sande, Germany Kesudi, India
New First Line mixing plant
Alken, Belgium
Acquisition Origom
Viadanica, Italy Lean & Clean upgrade automotive Digitalisation projects
Schattdorf, Switzerland
2015 2016 2017 2018 2019 2020
CHF 60 million CHF 78 million CHF 118 million CHF 138 million
Investment figures excluding acquisitions
4 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Strategic priorities – current examples
DRIVE Robotic process
automation (RPA)
Opening of the Health PROFITABLE Automated guided
Care plant in the USA vehicles (AGV)
GROWTH Use of big data
ACCELERATE
Access new
markets
DIGITALISATION
Modernization and expansion
Innovative new products of the ERP software package
and applications
Promotion of new techno-
logies and skills
Expansion into new Digitalisation of all HR
geographical markets processes
Vision of a self-learning
Reduction of resource consumption organisation
Increase of sustainability
INCREASE
AGILITY Employee survey underlines high Culture change
Expansion of Health Care levels of commitment and motivation
capacity in India Empowerment
of employees
5 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Datwyler Group
Two focused divisions
Sealing Solutions Technical Components
Sealing systems and solutions, plugs and piston Components and accessories for custom production
Products plugs, precision moulded parts made of elastomer of electro-mechanic goods (CPE), maintenance,
and metal, special profiles and seals automation, electronics and ICT
GLOBAL EUROPE
Health care, automotive, general industries Online distribution and branded wholesale
Markets
industry, commerce, universities, private customers,
retail trade and wholesale trade
Revenue CHF 891 million CHF 471 million
Employees 6’900* 1’100
*End of year includes acquisitions of Bins (September 2018) and Parco (October 2018)
6 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Sealing Solutions division
HEALTH CARE AUTOMOTIVE GENERAL INDUSTRY
revenue of CHF 390 million revenue of CHF 340 million revenue of CHF 160 million
7 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Sealing Solutions 2018
Further increase in operating result
Sales increased by 7.0%, organic up by 3.0% NET REVENUE EBIT MARGIN
in CHF million in %
19
18.1% 18.2 %
EBIT increases for the sixth time in a row 900
18
17.8%
17.5 %
600
EBIT margin at 17.5% 17
300 16.0%
16
Focus remains on growth projects 0 15
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Continued high investment activity in infrastructure
and plants, as well as marketing and engineering OPERATING RESULT EBIT ROCE
in CHF million in %
32 31.1 % 31.2%
150
31 30.5%
29.8%
891 156 17.5% 130 100 30
29
million million EBIT margin million 50
28
27.6%
net revenue EBIT Investments 0 27
2014 2015 2016 2017 2018
in CHF in CHF in CHF 2014 2015 2016 2017 2018
8 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Unique core competencies as clear differentiator
for leading market positions
Exceptional material and Innovative and customer Outstanding global
simulation expertise focused engineering processing quality
Development of high performance Tailor-made sealing solutions with Capability to set industry stan-
materials for various applications fast prototyping and in-house dards and apply them worldwide
mould shop using latest
Leading surface treatments Zero-defect-philosophy
technologies
Experts in simulation
Interdisciplinary teams Highly automated to minimise
More than 100 years of experience interaction of people and product
Co-engineer with customers
9 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Health Care
Health Care
Technology leader in a fast-growing market
Market Strategy Status
Structural growth trends Leading technological supplier Extended product portfolio
Attractive margins of high-quality components for Expansion of Firstline produc-
High entry barriers delivery systems for injectable tion capacities (USA and India)
drugs; growth significantly
Growth 4% to 7% Strengthen the global presence
above market average
in marketing and engineering
11 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comHigh-quality components for fast growing markets of
pre-filled syringes and injection devices
Pre-filled syringes Injection devices
Global market potential Global market potential
in USD billions in USD billions
CAGR 10% CAGR 15%
14 7.0
12 6.0
10 5.0
8 4.0
6 3.0
4 2.0
2 1.0
0 0.0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: VisionGain Source: VisionGain
12 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comFirst Line standard
We set the bar!
Thanks to decades of working
together with the leading
pharmaceutical companies,
Datwyler anticipated market
trends.
First Line today represents the
highest level of innovation,
quality and safety in the
production of elastomeric
components on a global level.
13New Health Care Plant in Middletown, USA
Show case of Industry 4.0
PAPERLESS PRODUCTION
Digital traceability, auto-
mated order processing
AUTOMATION & INTEGRATION
High automation, AGVs,
ICT integration, RFID
DIGITAL BACKBONE
ERP with S/4 Hana, CRM,
Archestra
14 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comOur global health care footprint
Alken Karlsbad-Ittersbach
Belgium Germany
Pennsauken
USA China
Montegaldella Local presence under
evaluation
Italy
Pregnana
Middletown Italy
USA
Kesurdi
India
First Line
Primary
Advanced
packaging A global strategic approach with a local / regional presence is
Essential
a key success factor in the pharmaceutical market.
Secondary packaging
15 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comAuto- motive
Automotive
Global presence with our own production plants
Market Strategy Status
High-quality system-critical Leading global supplier of Bins acquisition in South America
sealing components in the system-critical and customer- Extended product portfolio for
automotive industry. specific applications in various electric mobility
Growth of 2% to 5%. vehicle types New production standard "Lean
and Clean" with cleanroom
technology for highest requirements
17 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comMegatrend environmental friendliness makes
SCR-technology a growth segment
Number of diesel vehicles Diesel emissions require additional
with SCR-systems treatment due to worldwide stricter
in millions worldwide emissions regulations.
20 Selective Catalytic Reduction (SCR) is
18 the leading technology and the most
16 effective.
14
Datwyler is the preferred partner for
12
sealing components from both leading
10
8
SCR providers.
6 Trend towards SUVs with higher fuel
4 consumption. OEMs can only achieve
2 CO2 fleet limits with lower-consumption
0 diesel models.
2016 2017 2018 2019 2020 2021 2022 2023
Source: PwC AutoFacts 01/2019, Frost und Sullivan
18 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comLean and Clean – fit for the future! Innovative production concept as a good example of customer proximity Meets highest customer requirements for purity and precision Unique combination of clean room technology, highly automated production cells and lean processes. Benefits of synergies from heath care production 19
Thermoplastic and liquid silicone rubber (LSR) competence as ideal base for new opportunities Acquisition of German company Ott 2016 Specialized in tools and injection moulded products in liquid silicone rubber (LSR) and thermoplastic materials Thermoplastics and LSR opens up new possibilities for the sealing requirements in electric vehicles Ideal technology and materials for complex part geometries, as well as for megatrends weight reduction and improved connectivity 20 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Bins acquisition opens up South America Bins is a leading supplier of sealing components for the South American automotive industry Proven material and engineering competencies Regional expansion: with Bins, Datwyler is now present with its own production facilities in all major automotive markets all over the world Use of the Bins distribution network for General Industries customers
General Industry
General Industries
Expansion into new attractive markets
Market Strategy Status
Products, systems and equip- Development of new attractive Acquisition of Parco in the USA:
ment with demand for specific markets on the basis of existing Significant expansion of O-ring
and demanding sealing core competencies for system- business and development of new
components and solutions critical components and industries, in particular oil and gas
Growth of 2% to 5% acquisitions. Further growth in The O-ring business has potential for
Consumer Goods. organic and acquisitive growth
23 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comAttractive markets for high-quality sealing solutions
Oil & Gas Civil Engineering
Consumer Goods Power Tools
24 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comO-rings as an ideal addition
to the existing product portfolio
Global market potential for Highly fragmented market offers
O-rings in Euro billion opportunities for further acquisition-
3.5 based growth
CAGR 3.2%
3.0
Organic growth with existing customers
and by gaining market share
2.5
Continuously growing market
2.0
System-critical functions of O-rings in
1.5 various systems and plants
1.0
Increasing demands placed on elasto-
mer compounds and functionality
0.5
0.0
2018 2019 2020 2021 2022 2023 2024 2025
Source: Schlegel and Partner
25 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comParco acquisition to grow our global O-ring business On profitable growth path as leading supplier of O-rings and sealing components in North America Proven material and engineering competences, industry-leading quality and strong market positions Opening up several new market seg- ments such as Oil & Gas, Aerospace, Water Filtration, Plumbing & Valves
Technical Components division
ONLINE DISTRIBUTION WHOLESALE DISTRIBUTION
revenue CHF 390 million revenue CHF 80 million
27 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comTechnical Components 2018
Increased focus on more attractive customer segments
Organic sales maintained despite targeted custo- NET REVENUE EBIT MARGIN
in CHF million in %
mer/range streamlining at Nedis and Reichelt 600
6
4.6 %
5
4
Growth in B2B core business of online distribution 400
3 2.0%
2.4%
3.1%
200 2
Operating result and EBIT margin improved de- 1 0.1%
spite one-time cost for Nedis' one-brand strategy 0
2014 2015 2016 2017 2018
0
2014 2015 2016 2017 2018
Improvement of ROCE through low capital
expenditure OPERATING RESULT EBIT
in CHF million 11.4%
ROCE
in %
12
25
10
20 6.7%
8
471 15 3.1% 3 15 6 4.5%
5.2%
million million EBIT margin million
10
5
4
2 0.1%
net revenue EBIT investments 0 0
2014 2015 2016 2017 2018
in CHF in CHF in CHF 2014 2015 2016 2017 2018
28 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comThree strong brands in Europe
> 700'000 > 1'500
customers suppliers
CHF 471 million > 250'000
revenue products in stock
> 60% > 1'100
share of e-commerce employees
> 230'000 > 12'000
webshop visits per day packages per day
Omni-channel approach CHF 200
18 average order value
e-commerce, catalogue,
languages of online
call centre, field sales, 99%
shops and catalogues
technical support on-time delivery
29 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comAdapting value proposition and
strengthening of customer segmentation
Market Strategy Status
Online distribution of time-critical Strive for market leadership in Establishment of a proposition
components and accessories for the CPE segment in selected team and segment capability
CPE, maintenance, automation, markets in Europe (Custom in Manchester
electronics and ICT; megatrends Production of Electromechanical Important web shop improvements
digitalisation, Internet of Things, implemented
Goods)
automation, robotics; growth 1% to
Deploy digital personalization tools
2% above GDP
30 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comBusiness Model High Service Distribution
Technical Components
Manufacturer
directly
Distribution Volumes
EDE
Volume MRO
Electronic Design
Distributor Maintenance
Engineers
Repair, Operations
Prototyping
High Service Distributor High Service Distributor
Custom Production of Electromechanical Goods (CPE)
R&D Pilot Small OEM Large OEM Service Maintenance Repair
Education Prototype Small series
Customer needs - in the course of the product life cycle
31 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comSuccessful international expansion
with focus on B2B customers
Market Strategy Status
Online distribution of time- Professional products at Strong growth in new geographic
critical components and acces- markets
discount prices, international
sories for electronics, automa- Increased focus on B2B customers
expansion in Europe with focus
tion, ICT and maintenance; on attractive business-to- Completed expansion of ware-
mega-trends digitalisation, house capacities
business customers
Internet of Things, automation; Maintain efficient cost to serve
growth 1% to 2% above GDP
32 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comOne-brand strategy as the basis
of an updated business model
Market Strategy Status
Wholesale of home/consumer The preferred choice of A- New brand introduced in 2018
electronics for online and offline brands for home/consumer Sales of new products on track
resellers in Europe; megatrends electronics with sales support Good customer feedback
Smart Home and Home from exclusive contract
Security; growth 1% to 2% Operating model being finished
manufacturers
above GDP
33 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.comDatwyler Group goals 2019 Course set for future profitable growth Datwyler Group: – Revenue between CHF 1’450 and 1’500 million – Target range for EBIT margin from 12% to 15% Sealing Solutions: – Growth in Health Care market thanks to new capacities – Geographical expansion in the automotive market with Bins Foto – Integrate Parco and leverage cross-selling opportunities aktualisieren in the General Industries market Technical Components: – Distrelec: Increased focus on CPE customers – Reichelt: Accelerate international expansion – Nedis: Develop new customer groups 34 Annual Press and Analyst Conference | 08.02.2019 | © Datwyler | www.datwyler.com
Disclaimer This presentation contains forward-looking statements that reflect the Group’s current expectations regarding market conditions and future events and are therefore subject to a number of risks, uncertainties and assumptions. Unanticipated events could cause actual results to differ from those predicted and from the information contained in this presentation. All forward-looking statements in this presentation are qualified in their entirety by the foregoing. Dätwyler Holding Inc. Gotthardstrasse 31, 6460 Altdorf T +41 41 875 11 00, F + 41 41 875 12 05 info@datwyler.com, www.datwyler.com
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