Capital Market Days - China 2007atl.g.andritz.com/c/com2011/00/01/61/16195/1/1/0/... ·...

Slide No. 1presented by G. Schmölzer

Headline: Arial bold, (28-)32 pt, black

Capital Market Days - China 2007

Investor Days China – October 2007 Slide No. 2

Andritz Foshan locations

FOSHAN



Andritz Technologies Ltd. (ATC)

Andritz Wolfensberger Special Alloy Foundry (AnWo)

Andritz Industrial Park - Foshan Sanshui District (ATC)

Andritz-Kenflo Foshan Pump Co. Ltd. (AKFP)


1.Andritz Kenflo

2.Andritz Technologies

Agenda


Andritz-Kenflo Foshan Pump Co. Ltd. (AKFP)



Andritz Kenflo

• Introduction

• Business development

• Development of headcount


135 270 450 718

1,305

1,922

2,603

3,288

4,290

2,174

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 FC2007

Piec

es

AKFP ATC AAG

Business Scope:Market, sell and manufacture of S-Pumps and SF-Pumps, Export pumps to AAG.

Location:Foshan – Guangdong / PRC

Andritz - Kenflo• Investment: US$ 2,400,000• AAG Share: 60%• KENFLO: 40%• Products: Stock pumps, MC pumps, other ANDRITZ & KENFLO’S • Prod. Scale: 1,000 – 2,000 Pumps / Year• Employees: 20 – 90 planned (<5 a)• JV Contract: 20 years • Technology: 10 years• Area (m²): Land 4,500 m², Shop: 2,600 m², Office: 400 m²


Business development

0

5

10

15

20

25

30

1999 2000 2001 2002 2003 2004 2005 2006 Budget2007

M. R

MB

Total investments EBITA

CAPEX / EBITA

* after allocation of expat costs

*

Capex: additions to tangible and intangible assets


Return on Equity

0%

10%

20%

30%

40%

50%

60%

1999 2000 2001 2002 2003 2004 2005 2006



Development of headcount – Andritz Kenflo

106

71

179

1019483

5449

42

127

145157

0

20

40

60

80

100

120

140

160

180

200

Dec-04 Dec-05 Dec-06 YTD Sep 2007TOTAL WORKERS TOTAL SALARIED GRAND TOTAL


• Overview• Andritz China operations• Future plans and challenges

Andritz Technologies Ltd.






Andritz Technologies Ltd. (ATC)

Slide No. 14

Overview

• Introduction

• Business development

• Development of headcount


Registered Capital: 5,900,000 EURAAG Share: 100%Year of Establishment: 2002Products: entire Andritz product rangeProd. Scale: 500,000 production hoursEmployees: 627 (Aug. 2007)Area (m²): Land: 26,000 m², Shop: 11,000 m² Office: 3,200 m²Tax payments: 30 M.RMB (2006), 10 M.RMB (2005)

Scope of supplying:• Environmental and Process Industries • Pulp and Paper Industries • Power and Water Supply • Steel Milling • Feed and Biofuel Technology

Location:Foshan – Guangdong / PRC

ISO 9001:2000Certification (since June 1, 2006)

SAP Business System Implemented

Andritz Technologies


The drivers for the above average growth are:

Vision

Andritz Technologies Ltd. (ATC) China as a company of the global Andritz group shall generate its growth through providing contributions to China and the SEA markets.

ATC shall master the cyclicality of its business and the risks inherent in its projects, provide stability to its shareholders and for employees offering a challenging and rewarding environment that motivates its best people spend their entire career with Andritz.

Innovation & quality

Cost leadership

State-of-the-art supply chain management


Organization

ExpatsChinese

GM - ESGM - PS GM - PM GM - HM GM - PCGM - WB GM - KSGM - FT

HR Han Xuebing

IT Zhu Jingsong

GM - PEW GM - PD GM - OPGM - AC

Controller Wen Jing

QM L. Pestel

Han Bangw

u

T. Pfister

R. H

ickey

G. Beckingham

H. Bartisch

H. Bartisch

R. D

okter

PresidentG. Schmölzer

P. Hofer

GM - PF

H. H

aase

J. Kämäräinen

C. D

anklmaier

N. R

osgen

R. D

okter


Organization – Recently introduced divison: PD

ExpatsChinese

PD Andritz GroupErich Weitgasser

Product ManagementWang Shensan

TBD(2007)

Delivery ManagerTBD(2008) TBD(2007)

Quality Inspector

Tang Guohui Ji HongDelivery Manager Quality Inspector

TBD(2007)Delivery Manager Quality Inspector

Robert Dokter

ATC

TBD(2008)Martin KrobothService EngineerDelivery Management

PD Andritz GroupJelesic Guenther

PD Andrtiz GroupPetschauer Franz

PresidentG. Schmölzer

GMPM/PD

Writzl WalterPD

Martin Kroboth

Quality Management

SAP AdministrationWang Shengsan

Assistant

Gan Jindong

TBD



70

237306

603

900

0100200300400500600700800900

1000

2003 2004 2005 2006 2007 Budget

M. R

MB

Orders

3997

280

432

754

0100

200300

400500

600700

800900

2003 2004 2005 2006 2007 Budget

M.R

MB

Sales


-8

27

4349

-3-20

-10

0

10

20

30

40

50

60

2003 2004 2005 2006 2007 Budget

MR

MB

EBITA




-20

-10

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 Budget 2007

M. R

MB

Total investments EBITA

* after allocation of expat costs

*

CAPEX / EBITA

Capex: additions to tangible and intangible assets



Return on Equity

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

2003 2004 2005 2006 BUDGET 2007



Lee & Man Industries / Anhui ShanYing / APP

Main customers

-500

50100150200250300350400

2004 2005 2006 2007 Budget

M. R

MB

-5

0

5

10

15

20

25

30

35

M. R

MB

INCOMING ORDERS SALES EBITA

Fiber Preparation



Refiners sold

0

20

40

60

80

100

120

140

160

2003 2004 2005 2006 2007 FC-9

piec

es

Foshan Graz



Separation Technologies

-60-40-20

020406080

100120140160

2002 2003 2004 2005 2006 2007 Budget

M. R

MB

-8

-4

0

4

8

12

16

20

M. R

MB

INCOMING ORDERS SALES EBITA

Shanghai Zhuyuan / Guangzhou Liede / Shandong Huatai

Main customers


Development of headacount - ATC

268

100

163

266

359

177

281

479

627

77

213

118

0

100

200

300

400

500

600

700

Dec-04 Dec-05 Dec-06 YTD Aug 2007

TOTAL WORKERS TOTAL SALARIED GRAND TOTAL


Employee age structure

11%

33%

28%

14%

10%4%

Age Distribution <20

Age Distribution 20-24





Age Distribution >50

salaried

Employee headcount = 305Age average = 31.9

1%

16%

27%

30%

17%

8%

1%

Age Distribution <20






Age Distribution >50

hourly

Employee headcount = 229Age average = 30.8

ageAVERAGE 31


Employee education level

0,4%

7,7%

67,0%

8,1%

5,6%

5,6%

5,6% DoctorMasterBachelorCollegeHigh Middle SchoolTechnical SchoolJunior School or Primary School

3,6%

18,5%

42,6%

35,3%

salaried hourly

education0.2%

4.0%

37.3%

9.5%

14.3%

19.4%

15.3%

total


Employee retainment

WHATwe did in the

past years to retain

employees

GOAL

• Base salary increase by 3-8%,promotion: 20% of salaried employees

• Implement housing fund; cover allemployees for social insurance

• Retirement fund• Income benchmarking• Employee job satisfaction;

survey and supervisor evaluation• Performance reviews• Social activities

PROBLEMS• Find sufficient number of

qualified employees to meet requirements

• Employee training needs tofit fast growth requirements

attrition rate2%





Andritz Foshan Locations

Andritz Industrial Park - Foshan Sanshui District (ATC)

Andritz Wolfensberger Special Alloy Foundry (AnWo)


Andritz Industrial Park - Foshan Sanshui District

• Screen baskets• Screen rotors• Disk Filter sectors• Agitators• Dies• Cleaners

Offers manufacturing environment in a 20,000 m² facility to support:

• Chipper wear parts• Centrifuge components and repairs• Feed technology components• Assembly of bale handling lines• Fabrication of various components


Andritz – Wolfensberger Special Alloy Foundry Co., Ltd

Andritz Wolfensberger

Business Idea and Scope of Business:• Foundry for Special Stainless Steel Castings to

cover our own needs• Technology provider • Key technology not yet introduced in Chinese

foundries to a satisfying extent

Investment, ownership contribution:• Total Investment: 7.0 MEUR (Phase 1 & 2)• Contribution Andritz AG: 65%• Contribution Wolfensberger AG: 35%

Production of raw castings with heat treatment and rough machining

Quality inspection (Non-destructive and destructive testing)




Slide No. 35

Future plans and challenges

• Basis

• Strategy and targets

• Challenges


Basis• Chinese economy will continue to

grow by at least 8% per year• Chinese population still to grow in

the next 10 years• No outbreak of war and large

pandemics will occur• Political relationship of China with

major powers will remain stable• No major economic conflicts will

arise (e.g. China vs. Europe)• In all strategic business areas China

and SEA will continue to invest• New large scale events will be

brought to China (e.g. World Expo inShanghai 2010)

• Labor force will continue to beavailable at good cost / performancerelationship

New trends (e.g. energysaving needs) will bring up new developments forwhich Andritz is able to offer good answers

RMB will continue to appreciate moderately also in the future while US$ will become weaker and Euro will also become stronger

New economical impulseswill come from the „Stan“countries who especiallyfavor China based business(e.g. Pakistan, Uzbekistan)


Strategy

• We will provide for intrinsic growth of our business at a 25 + % average pace per year.

• We maintain an EBITA level of above 8%. • We will utilize our position in China to provide for a basis to

expand the business into the neighboring and SEA countries. • We are capable of handling almost 100% of the globally

available Andritz technologies.• We will generate the profit from assigned own markets.• We will serve as a low cost supplier to satisfy I/C requirements.

WE WANT TO

GROWinto an important positionwithin the Andritz Group.


Targets

• Be able to manufacture / sourcealmost all Andritz products in China

• Become the 4th largest company in the Andritz Group in terms of businessvolume by 2012

• Keep the staff turnoverrate (unwanted) at below 2% per year. Foster loyalty of the staffwhile maintaining a highly efficient workingenvironment• Be within top 3 in

terms of businessvolume in all strategicbusiness fields in China

• Be # 1 in technology and quality in all strategicbusiness fields in China


• Carefully study the market• JV - carefully select the partner• Implement state-of-the-art product technology• Use state-of-the-art manufacturing technologies• Use domestically available manuf. equipment• Base the business initially at least 30% on export• Use international image / brand name

Critical success factors

• Implement company in developed area• Control product quality strictly• Carefully select people• Adapt product to local market requirements• Ensure sufficient support from HQ• Start small – grow fast• Focus on core business


Challenges

Maintain loyal work force

THE BIGGEST CHALLENGE ..

.. is to keep up with the market developments and requirements whilethe company is still being built up / established and has to bemanouvered through a continuous expansion and start up phase.

… are new products and new processes every day...

Find ways to control the investmentsize while being able to grow and source products at high quality levels


谢谢您们

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