Datwyler Group –A focused industrial supplier
11 January 2019Swiss Equities Baader Conference 2019Reto Welte, CFO
Datwyler Group
Sealing Solutions division
Technical Components division
Questions and answers
Agenda
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Datwyler GroupWorldwide presence – leading market positions
> 8’000 employees
50operating companies
> 1’300 million US-$ annual revenue
> 100 countries with sale
Two divisionsSealing Solutions
Technical Components
Datwyler Group Continued profitable growth in first half 2018
12.6%EBIT
margin
694.1 million
net revenue in CHF
124 millionnet result in CHF
163 million
EBIT in CHF
7.7% revenue growth, 2.5% organic
13.2% EBIT increase to CHF 90.7 million
Improvement of EBIT margin to 13.1%
Net result up 17.3% to CHF 62.5 million
Significant increase in ROCE to 24.1%
13.1%EBIT
margin
62.5 millionnet result in CHF
90.7 million
EBIT in CHF
ROCE is calculated by dividing the EBIT of the last twelve months (= LTM) by the average capital employed of the same period.
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Outlook 2018Focus on profitable growth – promising acquisitions
– Datwyler Group:– Revenue between CHF 1‘350 million and CHF 1‘400 million– EBIT margin in the target range of 12 to 15%
– Sealing Solutions division:– Above market growth in the important segments Health Care
and Automotive thanks to strong order book– Newly acquired companies Parco and Bins offer attractive
opportunities for profitable growth in the future – Technical Components division:
– Focus on accelerating profitable growth– New Distrelec Enterprise Hub continuously increases
its operational performance
Datwyler GroupSuccessful portfolio management
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
-750
-500
-250
0
250
500
750
1000
1250
1500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EBIT
Mar
gin
Sale
s
Sales Acquisitions Divestments EBIT margin
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Datwyler GroupSharpened strategic priorities
DRIVEPROFITABLEGROWTH
INCREASEAGILITY
ACCELERATEDIGITALISATION
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Datwyler GroupContinuity thanks to majority shareholder
The Board of Directors of the listedDätwyler Holding Inc. holds themajority of the capital and the voteson a fiduciary basis without anybeneficial ownership.
Investments in Datwyler companies only.
100%
Dätwyler Führungs AG
100%
Directors of Dätwyler Holding Inc. represents registered shareholders (bound by a shareholders’ agreement)
78.39% votes56.01% capital
Pema Holding AGFree float
21.61% votes43.99% capital
Dätwyler Holding Inc.
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Datwyler GroupLong-term and sustainable management approachGoal of sustainable profitable growth for the benefit of all stakeholdersBalance economic, social and environmental responsibilityCode of Conduct for employees and suppliersMember of the UN Global CompactSustainability reporting according to the guidelines of the Global Reporting Initiative (GRI)Report to the Carbon Disclosure Project
Datwyler GroupTwo focused divisions
Sealing Solutions Technical Components
ProductsSealing systems and solutions, elastomer and aluminium/plastic closures, stoppers and plungers; precision moulded elastomer and metal components; special seals, profiles and gaskets
Distribution of maintenance, automation electronic and ICT components and accessories (online distribution and branded wholesale)
MarketsGLOBALHealth care, automotive, civil engineering and consumer goods
EUROPEManufacturing companies, trades, retailers, wholesalers, universities, private consumers
Revenue 2017 CHF 830 million CHF 460 million
Employees 7’000 1'100
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Datwyler Group
Sealing Solutions division
Technical Components division
Questions and answers
Agenda
Sealing Solutions division
AUTOMOTIVEHEALTH CARE GENERAL INDUSTRY
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Multi-market know-how for system-critical sealing components
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Applications:− Brake systems− Fuel and tank systems− CNG and LPG− Exhaust gas treatment− Powertrain, suspension− Thermoplasts and LSR− E-Mobility, electrification
Applications:− Prefilled syringe and cartridge
drug delivery systems− Medical devices− Elastomeric closures and
aluminium seals
Applications: − Consumer Goods− Civil Engineering− Oil & Gas− Power tools, valves & fittings− Machines for process industries− Water and waste water− Hydraulic and pneumatic
GENERAL INDUSTRYAUTOMOTIVEHEALTH CARE
Unique core competencies as a strong base for leading market positions
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Engineering
Development of tailor-made sealing solutions from prototype to large-scale production
Interdisciplinary teams
Co-engineering with customers
Processing Quality
Capability to set industry standards and deliver best-in-class manufacturing programmes
Zero-defect-philosophy
Large-scale production
Global Services
International manu-facturing locations and worldwide support
Global manufacturing standards
Material &Simulation Expertise
Development of high-performance materialsfor various applications
Surface treatments
Experts in simulation
Leading positions in attractive global market segments
Significant market and
growth potential
CHF 2'400 million
CHF 1'600 million
CHF 650 million
CHF 250 million
2
Health Care
Automotive
Consumer Goods
Civil Engineering
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HealthCare
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Health Care offer overview
High quality compo-nents and closures for injectable drugs (Container closures, injection systems, diagnostic and disposables)
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High-quality components for fast growing pre-filled syringes
Ideal containers for biotech medicines and vaccines: Limit property changes during transfer from vials to syringes
Correct dose improves patient safety
Technological developments allow higher levels of self-administration
Datwyler elastomer stoppers are system-critical0
2
4
6
8
10
12
14
2017 2018 2019 2020 2021 2022 2023 2024 2025
Global market potential for pre-filled syringes in USD
billions
CAGR 10%
Source: VisionGain 2016
Novel (wearable) devices like injection devices for self-administration of drugs
Pre-filled syringes for the growing ophthalmic market
Need to upgrade production equipment within First Line for small components (diameter smaller than 7 mm)
Challenges especially for automated camera inspection and coating
Generate new business in a rapidly growing market niche
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Attractive ophthalmic market
Trend towards ever smaller components
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Datwyler value propositionProvide answers to market trends and customers’ needs
MARKET TRENDS DATWYLER SOLUTION
Development of innovative, complex and sensitive drugs
1. Best-in-class compounds2. Best-in-class fluoropolymer coatings3. Best-in-class analytical expertise
More stringent authority expectations 4. Zero defect philosophy5. Full cleanroom zoning6. State-of-the-art automation7. State-of-the-art camera inspection8. Industry leading particle level specifications
Globalization and supply chain optimization 9. Increased global capacity 10. Regional sourcing11. Supply flexibility
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Omni Flex is the state-of-the-art coating solution to meet the highest demands for quality and performance of highly sensitive, large molecules drugs:
Best-in-class fluoropolymer coating
Omni Flex key features:− proprietary, inert fluoropolymer
spray coating− total coverage− covalent bound to rubber− barrier properties− thin and flexible: ≈20µm
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Automotive offer overview
Precision sealsfor application in vehicles (brakes, fuel and enginemanagement, comfort andsafetyapplications)
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System-critical componentsfor selective catalytic reduction (SCR)
Diesel emissions require additional treatment due to worldwide tightening of emissions regulationsSelective Catalytic Reduction (SCR) is the leading technology and the most effectiveSeveral system-critical sealing components for the conveyor and dispensing module in each SCR systemEnormous challenges in terms of geometry, tolerances, cleanliness, adhesion and resistance to high temperatures, pressure and aggressive media
0
2
4
6
8
10
12
14
2016 2017 2018 2019 2020 2021 2022
Number of diesel vehicles with SCR-Systems in millions
worldwide
Source: VisionGain
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Components for electric motor
Source: Bosch
Plug Seals & Cable
Bushings
Thermally conductiveMaterials
Vibration-control systems
ConductiveSeals
Bearing Seals
Integrated Housing
Concepts Housing gaskets
Encoders
Cassettes
Connector Seals for
Cooling CyclesRadial Shaft Seals
Cover Seals
Acquisition of German company Ott 2016Specialist for tools and injection molded products in liquid silicone rubber (LSR) and thermoplastic materials
Thermoplastics and LSR opens up new possibilities for the sealing challenges in electric vehicles
Also ideal material and technology for the mega-trends of weight-reduction and increased connectivitySuitable for complex part geometries
Thermoplastic and liquid silicone rubber (LSR) competence as ideal base for new opportunities
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Bins, BrazilCHF 20 million revenue, 1 plant, 350 employeesImprove access to South America’s automotive industry
Parco, USACHF 60 million revenue, 4 plants, 275 employeesExpand O-ring business; open up new industries
Two recent acquisitions in the Automotive segment
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New attractive market segments
Oil & Gas
Power Tools Pumps & Valves
Water Filtration Aerospace
Datwyler Group
Sealing Solutions division
Technical Components division
Questions and answers
Agenda
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Three strong brands in Europe
> 650'000customers
> 250'000products in stock
> 55%share of e-commerce
CHF 190average order value18
languages of online shops and catalogues
CHF 459 million revenue
> 1'500suppliers
> 1'100employees
> 11'000packages per day
> 200'000webshop visits per day
99%on-time delivery
Omni-channel approache-commerce, catalogue,call centre, field sales,
technical support
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Four important market segments
Maintenance, Repair, Operations
Electronic Design Engineers
Wholesale/Consumer Electronics
CHF 3 bnEstimated target market
size EDE/Production Europe high-service distribution
CHF 6 bnEstimated target market size MRO Europe high-service distribution
Automation
CHF 3 bnEstimated target market size Wholesale/Consumer Electronics Europe
FOCUS ONB2B/
INDUSTRIAL
CHF 6 bnEstimated target market size Automation Europe high-service distribution
NEDIS ONLY
EDEElectronic DesignEngineersPrototyping
High Service Distributor
MANUFACTURERDIRECTLY
Volume Distributor
High Service Distributor
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R&D Pilot Small OEM Large OEM Service Maintenance RepairEducation Prototype Small series
Customer needs - in the course of the product life cycle
Dis
tribu
tion
Volu
mes
Custom Production of Electromechanical Goods (CPE)
Technical Components
MROMaintenanceRepair, Operations
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Business model high service distribution
Core competencesDistribution and logisticsEase of doing business International expansioneCommerce Product managementincl. own brands
Status update for the three brands of Technical Components
StrategyBecome market leader of CPE segment in Europe
StatusBuilt proposition team in ManchesterDelivered major web shop improvementsBuilding segment capability in Manchester Deploying digital personalisation tools
Adapting value proposition andstrengthening of customer segmentation
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StrategyProfessional products, discount prices focused on European B2B market
StatusStrong growth in internationalisationImproving presence in B2B market Maintain efficient cost to serve
Successful international expansion
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StrategyThe preferred choice after A brands
StatusNew brand launched in August 2018 NPI sales recoveredGood customer feedback Operating model being finished
Focus on one strong product brand «Nedis»
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Clear vision Fit for purpose organisationDemand generation to improve
Distrelec
Focus on conversion to new own brandEnsure new product sales growth continues
Nedis
Accelerate existing plansReichelt named Dis-tributor of the year2018 in Germany
Reichelt
Clearly defined measures in place to accelerateprofitable growth
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Improvements in underlying KPI’s and profitability continueClear need to grow share in B2B
Further opportunities to extract value from existing sales identified
Technical Components
Datwyler Group
Sealing Solutions division
Technical Components division
Questions and answers
Agenda
DisclaimerThis presentation contains forward-looking statements that reflect the Group’scurrent expectations regarding market conditions and future events and aretherefore subject to a number of risks, uncertainties and assumptions. Unanticipated events could cause actual results to differ from those predictedand from the information contained in this presentation. All forward-lookingstatements in this presentation are qualified in their entirety by the foregoing.
Dätwyler Holding Inc.Gotthardstrasse 31, 6460 AltdorfT +41 41 875 11 00, F + 41 41 875 12 [email protected], www.datwyler.com