Presentation third quarter November 2013

Presentation third quarter 2013 8 November 2013 Agenda Highlights • Strategic change • Operations Financial review Order book Goodtech – in brief Ou...
Author: Myrtle Gibson
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Presentation third quarter 2013 8 November 2013

Agenda Highlights • Strategic change • Operations Financial review Order book Goodtech – in brief Outlook • Growth plan

2

Highlights, strategic change evaluated Structual change evaluated: • Potental sale of Installation and Power business in Sweden(GIAB) • Process trigged by indicative offer from industrial investor • Indicative offer opened for other actors to give indicative price • Letter of Intent

• Bid process cancelled 14 October • Did not reach acceptable terms

Goodtech is now focusing on fulfilling recently released growth strategy

3

2013-11-07

Highlights – Strategic change - growth strategy Goodtech launches new growth strategy • Organic growth in business areas where Goodtech has strong position and positive market expectations • Expect strong market drivers within some market segments which is basis for three separate strategic initiatives • Energy / Power • Aquaculture • Oil & Gas

4

2013-11-07

Highlights, third quarter 2013 Turnover increased with 10,1 % to MNOK 596,2 in Q3 compared with Q3 2012 Turnover YTD increased accordingly 16,1 % to MNOK 1.818,7 EBITDA MNOK 26,7 (4,5%) in Q3, compared with MNOK 28,2 in Q3 2012 (5,2%) EBITDA YTD has increased to MNOK 74,5 (4,1%) from MNOK 50,3 (3,2%) in 2012 Strong improvement in earnings before tax, from MNOK 29,8 YTD 2012 to MNOK 50,9 YTD 2013 Order backlog of MNOK 1.333 at the end of Q3 2013, compared with MNOK 1.125 at the end of Q3 2012

5

Highlights, third quarter 2013 Continue with action plan in Solutions to improve earnings • Continuous improvement of systems and routines to increase margins and improve quality • Ongoing implementation of ERP system and improving Project Execution in Solutions and Environment • Cost reduction • Employed new managers and key personnel Successful completion of several larger projects

6

Highlights, third quarter 2013, Market Order backlog stabilized on a high level. MNOK 1.333, 18 % increase compared with Q3 2012 Some contracts in Q3: • MSEK 31,5 Infrastructure power contract to LKAB.

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MSEK 22,5 Installation contract to Merttainen mine, LKAB



MSEK 16,3 Maevaara Wind power plant – Power Substation



MSEK 15,0 Power supply / Installation contract – Gällivare hospital



MNOK 23,5 Pretreatment plant for Biogas for Sydskånes Avfallsaktiebolag



MSEK 15,0 Automatic Warehouse system for Plastal AB

Highlights, third quarter 2013, Market Significant contracts won after Q3

8



MSEK 107 power transmission turn-key contract with Svenska Kraftnät, Karlslund 400 kV



MSEK 34,6 in new contracts within production lines and automatic warehouse after Q3

Financial Review

9

Main figures (NOK 1.000) Revenues

YTD 13

YTD 12

Q3 13

Q3 12

2012

1 818 745

1 565 883

596 227

541 317

2 179 002

Product expenses

910 452

742 571

308 231

266 623

1 030 026

Salary expenses

655 160

591 210

205 095

183 610

821 407

Other operating expenses

178 667

181 770

56 209

62 845

250 908

74 465

50 332

26 693

28 240

76 661

EBITDA EBITDA %

4,1 %

3,2 %

4,5 %

5,2 %

3,5 %

Depreciation

17 595

17 080

5 924

5 698

22 854

2 391

0

2 391

0

0

EBIT

54 479

33 251

18 377

22 542

53 808

Net financial item s

-3 607

-3 469

-1 758

-2 443

-3 639

39

0

0

0

1 047

Profit before taxes

50 911

29 782

16 619

20 098

51 215

Taxes

11 318

8 339

3 478

5 628

-76

Net result from continuing operations

39 593

21 443

13 140

14 471

51 291

0

219

0

73

3 159

39 593

21 662

13 140

14 544

54 450

39 342

21 640

13 114

14 515

54 428

252

21

27

29

22

Non recurring item s

Share of Profit from Associated comp.

Net income/loss from discontinued operation Net result Attributable to: Ow ners of the parent Non-controlling interests Sum

10

39 593

21 662

13 140

14 544

54 450

Earnings per share from continuing operations

1,22

0,66

0,41

0,45

1,58

Deluted earnings per share

1,22

0,66

0,41

0,45

1,58

Quarterly revenues and earnings - historical

 700

 30

Revenues

 500

 25

MNOK 

MNOK 

 600

 20

 400  15

 300  10

 200

 100

 5

 ‐

 ‐

11

EBITDA

Financial highlights – Balance sheet NOK m illion

30.09.13

Fixed tangible assets

30.09.12

31.12.12

51,2

47,9

46,7

Intangible Assets

685,3

648,3

645,8

Total Fixed Assets

736,5

696,2

692,5

27,9

27,7

82,9

705,2

681,0

668,0

Cash Other Current Assets Total Current Assets Total Assets

733,1

708,7

750,9

1 469,6 -

1 404,9 -

1 443,3

Total equity

716,4

660,0

687,8

Long Term Liabilities Interest Bearing

46,6

130,3

113,2

Other Long Term Liabilities

15,4

15,9

10,9

Current Liabilities Interest Bearing

153,2

67,7

25,8

Other Current Liabilities

538,0

531,0

605,6

Total Equity and Debt

1 469,6

1 404,9

1 443,3

Net Interest Bearing Debt

171,9

170,3

56,1

Equity Ratio (%)

48,7 %

47,0 %

47,7 %

Net Gearing (%)

24,0 %

25,8 %

8,2 %

1,1

1,2

1,2

Liquidity Ratio Definitions: Net Gearing (%): Net interest Bearing Debt/Total equity Liquidity Ratio : Current Assets/Current Liabilities

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Financial highlights – Cash flow NOK 1.000

YTD 13

YTD 12

Q3 13

Q3 12

2012

Cash flow from operations

-45 607

5 897

-25 164

-51 802

115 593

Cash flow from investments

-11 272

-8 117

-8 473

-4 025

-7 221

Cash flow from financials

-134 721

-46 852

-8 035

-7 325

-59 142

Net changes in cash from period

-191 600

-49 072

-41 672

-63 152

49 230

82 857

32 973

-64 136

47 326

32 973

Net Cash funds at beginning of period Effects of exchange rate fluctuation on cash held

4 943

994

2 008

722

654

-103 800

-15 104

-103 800

-15 104

82 857

27 935

27 684

27 935

27 684

82 857

Overdraft facility

-131 735

-42 788

-131 735

-42 788

0

Net Cash funds at end of period

-103 800

-15 104

-103 800

-15 104

82 857

Net Cash funds at end of period *) *) Consisting of Cash and cash equivalents - balance sheet

Undraw n credit facilities amounts to MNOK 125,4 at the end of Q3 13

13

Cash flow from operations and EBITDA Development in Cash flow from operations and EBITDA on 12 months rolling basis

150 000

100 000

50 000

Cash flow from operations 12 months rolling basis EBITDA 12 months rolling basis

0 Q3 2011 -50 000

-100 000

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Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Employees per business area  1 800  1 600  1 400  1 200  1 000  800  600  400  200  ‐

Projects & Services

Infra

Solutions

Environment

Products

Total no. of employees by 30.06.2013: 1508 15

Admin

Order backlog  1 400

 1 200

MNOK 

 1 000

 800

 600

 400

 200

 ‐

Projects & Services

16

Infra

Solutions

Environment

Products

Business areas – figures and facts

Projects & Services

17

Infra

Solutions

Environment

Products

Business unit: Projects & Services (P&S)  450

Revenue EBITDA EBITDA margin % Order backlog No. of employees

YTD 13

YTD 12

Q3 13

Q3 12

2012

1 179 577

1 016 135

391 671

353 563

1 424 007

62 754

22 749

24 788

17 170

44 587

5,3 %

2,2 %

6,3 %

4,9 %

3,1 %

795 482

537 869

795 482

537 869

618 134

1 206

1 154

1 206

1 154

1 101

Revenues

 400  350 MNOK 

NOK 1.000

 300  250  200

Highlights



• • • •

P&S business unit has performed very well in the quarter Turnover increased with 10,8 % in Q3 compared with Q3 2012. YTD turnover has increased 16,1 % compared with 2012 EBITDA increased with 44,4 % in Q3 2013 compares with Q3 2012. EBITDA has increased to MNOK 62,8 YTD compared with MNOK 22,7 YTD 2012 Margin has improved to 6,3% in Q3 2013 and 5,3% YTD. Order backlog increased 47,9% compared with Q3 last year Won MSEK 107 contract with Svenska Kraftnät after Q3 P&S workforce is gradually increasing

 100  50  ‐

30

EBITDA  25 MNOK 

• •

 150

 20

 15

 10

 5

 ‐

 (5)

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Business unit: Infra NOK 1.000

YTD 13

YTD 12

Q3 13

Q3 12

2012

Revenue

224 428

138 822

73 482

50 995

204 142

7 735

2 923

1 096

1 226

4 937

90

EBITDA margin % Order backlog No. of employees

3,4 %

2,1 %

1,5 %

2,4 %

2,4 %

80

347 389

330 439

347 389

330 439

291 906

70

65

52

65

52

54

MNOK 

EBITDA

100

60

Highlights



• •

Infra business is increasing. Turnover increased with 44,1 % in Q3 2013 compared with Q3 2012, and 61,7% YTD 2013 compared with YTD 2012 EBITDA Q3 is on same level as 2012. EBITDA YTD 2013 more than doubled compared with YTD 2012. Margin low in Q3 but increased to 3,4% YTD compared to 2,1 % YTD 2012 Reservations related to one specific project has reduced earnings High activity level • •

• •

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Executing larger projects. Infra has passed critical milestones in some projects in the period Continues to employ more personnel

Order backlog is still on a high level due to strong order intake in 2012 / 2013 Market look promising in the longer perspective

50 40 30 20 10 0

7

6

MNOK 



Revenues

5

4

3

2

1

0

EBITDA

Business unit: Solutions YTD 13

YTD 12

Q3 13

Q3 12

2012

Revenue

152 911

196 521

43 094

70 797

256 843

EBITDA

-5 287

9 041

-2 199

1 815

8 455

EBITDA margin %

-3,5 %

4,6 %

-5,1 %

2,6 %

3,3 %

Order backlog

49 060

96 691

49 060

96 691

71 733

145

146

145

146

145

No. of employees

 80

Revenues

 70  60

MNOK 

NOK 1.000

 50  40

Highlights

 30



 20

• •





 ‐

 4

 3

 2

 1

Further corrective actions have been taken to improve earnings • •



Cost due to lack of quality in projects within timber handling and weak performance in production lines projects

 10

MNOK 



Won new orders in, and after Q3 -MSEK 15,0 Automatic Warehouse system for Plastal AB -MSEK 34,6 in new contracts within production lines and automatic warehouse after Q3 Largest production line delivered by Solutions has been approved and taken over by customer. Delivered on schedule Very positive feedback from customer Turnover in Q3 2013 lower than Q3 2012 EBITDA margin in Q3 and YTD is negative

Project management has been strengthened. Change of management personnel Implementation of new project admin system ongoing

Market outlook is in general positive, several prospects. Full focus on Market and Sales

 ‐

 (1)

 (2)

 (3)

20

EBITDA

Business unit: Environment YTD 13

YTD 12

Q3 13

Q3 12

2012

 90

Revenue

213 207

175 237

75 786

58 026

239 282

 80

EBITDA

9 377

13 045

3 560

6 470

17 088

 70

EBITDA margin %

4,4 %

7,4 %

4,7 %

11,2 %

7,1 %

132 253

151 430

132 253

151 430

147 820

78

70

78

70

71

Order backlog No. of employees

MNOK 

NOK 1.000

Revenues

 60  50  40

Highlights •



 30

Turnover increased with 30,7 % in Q3 2013 compared with Q3 2012. YTD 2013 increased with 21,7% compared with YTD 2012

 20  10  ‐

Drop in EBITDA in Q3 - Implementation of ERP and moving to new offices as part of growth strategy

 7

causes some extra cost and drop in EBITDA - Lower sale of Biovac® in Q3



Environment, larger project business is performing well with increasing turnover Order backlog still on a high level

MNOK 



 6

 5

 4

 3

 2



Lower activity in the Norwegian SBR / Biovac® market in Q3 - Postponed public orders in certain geographical areas



Increasing activities in Swedish market continues looks promising

 1

 ‐

21

EBITDA

Business unit: Products YTD 13

YTD 12

Q3 13

Q3 12

2012

Revenue

69 374

58 490

18 994

15 800

80 082

EBITDA

6 547

6 848

1 575

2 514

8 766

EBITDA margin %

9,4 %

11,7 %

8,3 %

15,9 %

10,9 %

Order backlog

8 881

8 246

8 881

8 246

13 496

23

23

23

23

22

No. of employees

 30

Revenues

 25

MNOK 

NOK 1.000

 20

 15

Highlights



Turnover increased with 20% in Q3 2013 compared with Q3 2012. YTD 2013 increased with 18,6% compared with YTD 2012

 5

 ‐

EBITDA lower in Q3 2013 compared with Q3 2012, but EBITDA margin is still good with 8,3% in Q3 and 9,4% YTD 2013



Implementation of new ERP system has been completed



Positive market outlook

 4

EBITDA

MNOK 



 10

 3

 2

22



OEM and System Integrator business is performing well.



Well established market position within several markets



High activity level in the market in some segments in Q3



Increasing sales force = increasing activity

 1

 ‐

Goodtech – in brief: ” Goodtech shall be the leading supplier of automation, electrical, process, industrial engineering, and environmental solutions in the Nordic region.”

A considerable technology group - background Turnover increased from MNOK 130 in 2005 to MNOK 2.179 in 2012 Norsk Elektrisk Kabelfabrikk A/S founded

1913

New name: Goodtech Business idea: Environmental tech

1993

Includes automation and material handling into the business idea

2006

El & Industrimontage Svenska AB and Goodtech ASA merge into the ”New” Goodtech

El & Industrimontage AB founded 1994

2010 2013

MNOK

TURNOVER

YEAR

24

Goodtech in brief Approx 1.500 employees, with a revenue of NOK 2,2 billion Strong local presence with 39 offices in Sweden, Norway and Åland Headoffice in Oslo and listed on Oslo Stock Exchange Sweden Approx 1.170 employees 27 offices, from Kiruna in the north to Malmö in south Norway Approx 290 employees 10 offices, with headoffice in Oslo Åland Approx 40 employees Office in Mariehamn

25

Market drivers

Upgrade of infrastructure and energy systems

26

Increased efficiency and competitive ability within the industry

Society’s need for more environmental friendly solutions, products and projects

Organisation Goodtech is organised into five business areas • Projects & Services • Infra • Solutions • Environment • Products

Projects & Services

Infra

Solutions

Environment

Products

27

Solid service and product portfolio

Automation

Power technology

Installation

Industry technology



Innovative technologies and solutions



Turn-key projects



Broad specter of services and competence

Environment technology

28

Market segments

Energy

Wastewater & Biogas

Infrastructure

Public buildings

Oil & Industry

29

Gas

Highlights – Technology development Dedicated technology development activities in Solutions • Technology is platform for winning of several contracts lately Develop technology and standardized solutions to stimulate to repeat business in all business units Technology will be platform for part of growth strategy Negotiation of technology agreement with Dubal for Energy Recovery

30

Commercial and financial risks for Goodtech Commercial and market risk • •

Market for Industry projects and solutions – some risk Market for Infrastructure projects and solutions – some risk

Financial risks • • • •

In general small currency exposure In general small risk for contract cancellation In general small risk for loss on receivables In general some risk related to projects

Turn-key projects and deliveries •

Some risk related to project execution • Various complexity, size and duration of projects • Shortage of Project Managers



Reducing risk: • MQSP (Method, Quality, Safety and Procurement) department focus on training, improvement of methods and quality • Training Project managers and employments ongoing

Technology and product development •

31

Some risk related to technical issues and market positioning

Outlook 2013 - 2014

32

Outlook - Market Expect continuous upgrade and large investments within infrastructure, energy and oil & gas In general, promising markets for Goodtechs services, solutions and products – basis for organic growth The uncertainty in some markets due to uncertainty in the global economy seems to decrease. However still unpredictable

Brief market analysis: • • • • • • • •

33

Power and Energy market Infrastructure, railway/subway Industry, mines Industry, manufacturing Industry, paper Oil & Gas Industry Environment Public buildings

Summary / Outlook 2013 - 2014 Goodtech has improved operations – basis for further expansion • Well established in the Nordic market In 2013 - 2014 Goodtech shall build stronger positions within strategic areas • Continue to build the Goodtech brand • Organic growth – main focus • Long term strategic focus – build position within defined markets • Power (energy), Aquaculture, Oil & Gas

• Use customer focus and well established market position to increase business • Use of own product technology and technical competence • Open for non-organic growth within certain areas, consolidation possibilities in the market Maintain active dividend policy

34

The Goodtech Way!

Your success – our goal! 35