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January-June 2002

January-June 2002. Continued growth Q2 2002. IPO. SEKm. SEKm. 4 500. 450. 4 000. 400. 3 500. 350. Order intake. 3 000. 300. 2 500. 250. EBIT. 2 000. 200. Net sales. 1 500. 150. 1 000. 100. 500. 50. 0. 0. Q4. Q1. Q2. Q3. Q4. Q1. Q2. Q3. Q4. Q1. Q2. Q3. Q4.

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January-June 2002

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  1. January-June 2002

  2. Continued growth Q2 2002 IPO SEKm SEKm 4 500 450 4 000 400 3 500 350 Order intake 3 000 300 2 500 250 EBIT 2 000 200 Net sales 1 500 150 1 000 100 500 50 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 1995 1996 1997 1998 1999 2000 2001 2002 Excluding Alecta (SPP) surplus refund of SEK 15 million in Q3, 2000.

  3. Market development • Continued strong demand in non-cyclical industries • Europe • Strong demand for MCS • Strong demand from poultry industry • Americas • Strong demand in many areas • Demand for Zeol-products increasing • Low demand for MCS, mild winter, dry spring • Difficult comparison (Allison) • Asia • Strong development in Thailand • Recession in Japan

  4. January-June 2002 • Order increase 19% • currency and acquisition adjusted 4% • Net Sales growth 22% • currency and acquisition adjusted 7% • Operating earnings increase 22% • Operating margin 9.1% • Currency effect SEK 2 million • Acquisition of Polygon, Alfa, Svt in MCS • Acquisition of Glacier-Cor and Aerotech in HumiCool

  5. Dehumidification Food Preservation Pharma 38% of Munters 2001 5

  6. Dehumidification +5% • Strong development in Americas • Zeol orders improving • Many test installations for HCU (DryCool)

  7. Moisture Control Services Water damage restoration 34% of Munters 2001 Fire damage restoration

  8. MCS +51% / +12% • The solid growth in Europe continues • Restructuring in Australia starts to show result • Acquisition of Svt in July • Soft demand in USA, following the mild winter

  9. HumiCool Utilities Poultry 28%of Munters 2001 Comfort cooling

  10. HumiCool +13% • Strong growth • The Poultry Industry grows fast - expansion of capacity in Euroemme • PreCoolers for Gas turbines rapidly declining • Cost reduction program implemented within Water • Acquisition of Aerotech, no 2 in fans in US in July • Global leader in poultry cooling systems

  11. Munters’ strategy for growth Open new geographical markets Grow the Service business Global roll-out of existing applications Integration forward Underlying growth

  12. Customer segments 2002 Proforma incl acquisitions Other 17% Electronic 4% MCS 41% Utilities 8% Pharma 3% After sales 6% Food 21%

  13. Sales Manufacturing and Sales Net sales SEK 4.3 billion Employees 3 000 Global organization

  14. MCS 41% Net sales by Region 12 months rolling Without acquisitions With acquisitions SEK 3 990 m SEK 4 971 m Asia 10% Asia 10% Asia 8% Americas 40% Europe 50% Americas 40% Europe 50% Americas 36% Europe 56% 14

  15. DH 31% MCS 34% Net sales by Product Area 12 months rolling With acquisitions Without acquisitions SEK 3 990 m SEK 4 971 m HumiCool 27% HumiCool 28% DH 38% DH 38% MCS 34% MCS 42% 15

  16. Financial overview by Quarter SEK m 2001 2002 Q2 Q2 Growth Q1 Q3 Q4 Q1 974 1 159 19% Order intake 960 982 1 029 1 144 960 1 149 20% Net sales 851 1 020 1 063 1 052 92 114 24% EBIT 72 100 137 86 9.6 9.9 Margin % 8.5 9.8 12.8 8.2 55 65 19% Net earnings 41 59 85 49 105 121 15% Op. cash flow 47 72 245 93 ( bef.capex & tax)

  17. Financial overview Jan-June 2002 Growth January-June 1998 1999 2000 2001 2002 02/01 02/98 SEK m 1 934 2 303 19% Order intake 1 179 1 303 1 675 19% 1 811 2 201 22% Net sales 1 135 1 226 1 448 19% 164 200 22% EBIT 76 90 116 29% 1) 9.1 9.1 Margin % 6.7 7.4 8.0 96 114 19% Net earnings 43 55 66 29% 1) 152 178 17% Op. cash flow 86 108 140 20%

  18. Regional analysis January–June Net sales Growth EBIT margin Europe 1 235 35% 7.9% Americas 783 7% 12.6% Asia 221 13% 10.5% Total Group 2 201 22% 9.1%

  19. Financial overview Rolling 12 months July - June SEK m Growth 98/99 99/00 00/01 01/02 20% 4 314 Order intake 2 507 2 980 3 581 21% 4 284 Net sales 2 492 2 816 3 542 23% 437 EBIT 219 263 354 1) 10.2 Margin % 8.7 9.3 10.0 27% Net earnings 135 155 203 258 1) 1) Excluding Alecta (SPP) surplus refund in Q3 2000 amounting to SEK 10.5 m after tax 19

  20. Key ratios Jan–June 2002 2001 2002 Return on capital employed1) (%) 32.0 33.8 Interest coverage ratio (times) 14.3 18.4 Net debt (SEK m) 337 381 Net debt/Equity ratio 0.38 0.38 Earnings per share (SEK) 3.83 4.58 1) Rolling 12 months

  21. Less currency effect and more acquisitions Net sales, Jan 1- June 30 2001: 1 811 Currency effect +14 +1% Net sales acquisitions +258 +14% Organic growth +118 +7% Net sales, Jan 1-June 30 2002: 2 201 +22%

  22. Order intake SEK m 1 200 +19% +19% 1994 1 100 1995 +19% 1996 +25% 1 000 1997 1998 900 1999 2000 800 2001 2002 700 600 500 400 300 200 100 0 Q1 Q2 Q3 Q4 22

  23. Net sales SEK m 1 200 +20% 1994 +14% 1 100 +24% 1995 +28% 1996 1 000 1997 900 1998 800 1999 2000 700 2001 600 2002 500 400 300 200 100 0 Q1 Q2 Q3 Q4 23

  24. Backlog SEK m 700 +5% -2% 1994 +5% 650 1995 +16% 600 1996 1997 550 1998 500 1999 450 2000 2001 400 2002 350 300 250 200 150 100 50 0 Q1 Q2 Q3 Q4 24

  25. EBIT SEK m +20% 140 1994 130 1995 120 +24% 1996 110 1997 +31% 100 1998 1999 +19% 90 2000 80 2001 70 2002 60 50 40 30 20 10 0 Q1 Q2 Q3 Q4 25

  26. Acquisitions 1) Company Munters Time Sales Robart MCS-EU 98 5 Euroemme HC-EU 99 160 Nichimen DH-AS 99 10 Buildry MCS-EU 00 5 Mullins MCS-AS 01 35 Sundsvalls Totalsanering MCS-EU 01 13 M´Renov MCS-EU 01 13 ABB/SCR HC-EU 01 10 Glacier-Cor HC-AM 02-01 50 Polygon MCS-EU 02-01 450 Alfa Service MCS-EU 02-05 30 Svt MCS-EU 02-07 180 Aerotech HC-HC 02-07 180 1) In SEK millions

  27. Acquisition of

  28. Svt a leading PDR (Property Damage Restoration) supplier in Germany Cooperating with MCS Germany since 2 years

  29. MCS in Germany Together Munters + Svt The leading PDR company in Germany (together with Belfor and Sprint/ISS) Before The leader in Water Damage Restorationin Germany A leading Fire Damage Restoration supplier in Germany

  30. PDR competition in Germany Top 5 players have 35% market share • Belfor-Relectronic 60 million € • WDR + FDR, mainly commercial and industrial • Sprint Sanierung 50 million € • WDR + FDR, mainly residential and commercial • Owned by an insurance company since 1997 • -8 million € operating loss in 2000 • Munters 25 million € • Only WDR, mainly residential and commercial • Svt 20 million € • Only FDR, mainly residential and commercial • Vatro-ISS Damage Control 10 milion € • WDR+FDR, mainly residential and commercial • Acquired by ISS in 2001

  31. Svt - Basic Facts • Started 1969 in Fire Damage Restoration,Expanded in Fire Protection systems in 1972 • Strategic alliance with MCS Germany since Dec. 2000 • Restriction of MCS-DE to Water Damages • Restriction of Svt to Fire Damages • Common Sales & Marketing activities • Revenue 60 million € in 2001 • 66% Fire Protection, • 34% Fire Damage Restoration;EBIT 12 % in Fire Damage Restoration • Accelerated growth since 2000

  32. Svt – Business Model • Headquarter near Hamburg, 10 Business Locations organized in 5 regional legal entities • 38 Branch + Project managers • Lean back-office and administration • Tight network of well controlled subcontractors “Svt-Leistungspartner” • Expandable: modular + replicable • Strong brand and reputation

  33. Present situation • Successful cooperation since December 2000 • Accelerated growth of Svt • New Svt reconditioning center in Hannover (June 2001) • Common sales and marketing with MCS

  34. Strategic Fit Munters–Svt • Underlying growth: Yes • Integration forward: Yes • Global roll out: Yes • Capitalize on service Munters becomescapabilities: a leader in Germany • Open newgeographical markets: No • Similar customer base: Yes

  35. Synergies Market: • Wider combined customer coverage • Offer customers attractive and demanded range of service • Cross selling • Roll out “Polygon concept” Platform for Extension of Service Offer: • Document Restoration • Technical Reconditioning • Mould Remediation Efficiency: • Administration, finance • IT • Training

  36. Deal structure • Combined share and net asset deal • Fixed price of € 10.0 million • Earn-out as multiple of EBIT 2002 and 2003, maximum € 5.0 million • Current Svt majority owner remains in Management until December 2003 • Consolidated in Munters from July 1st

  37. Aerotech Munters becomes the world leader in ventilation & cooling systems for agriculture & horticulture

  38. The Poultry Industry CELdek Fans The aghort industry is dominated by poultry • 30% of the world’s meat consumption is poultry meat • Estimated growth of 3% p.a to year 2008 • Highest feed conversion ratio of all meat products • Evaporative cooling enhances productivity and combines low running cost and low investment • Fastest growth in Asia and South America • 78% of US broiler managers have ventilation & cooling systems as the first priority for upgrade

  39. Cooling systems salesbreak down (US) Service 12% Heaters 8% Fans 39% Vents & Curtains 8% Water Distribution 14% Pads Controls 9% 10%

  40. Fans for Ag/Hort Industry Euroemme(IT)* Acme(US)* 15% 28% Aerotech(US)* Chore Time(US) 17% GSI (US) 5% Hired Hand(US)* 5% 10% American 10% Coolair (US) 10% Others Total Market SEK 1 000 million * Actual Data, Others are Estimates

  41. Cooling Pads for Ag/Hort Industry 12% 15% General Shelters (US) Munters Others 73% Total Market SEK 300 million

  42. Integration Forward in the Ag/Hort Industry Together Before Leader of cooling systems in Europe & Asia Leader of cooling components in Americas Global leader of ventilation & cooling systems for Agriculture & Horticulture No 2 ventilation company in US for Ag & Hort

  43. Munters’ strategy for growth Open new geographical markets Grow the Service business Global roll-out of existing applications Integration forward Underlying growth

  44. Strategic Fit Munters–Aerotech • Underlying growth: Estimated 3% p.a. growth to 2008 • Integration forward: From pads to ventilation & cooling systems • Global roll out: With Aerotech and Euroemme, Munters becomes undisputed leader in systems share • Capitalize on service capabilities: The cooling systems business opens after sales opportunities for replacement pads and parts • Open new geographical markets: Systems offerings now as strong in Americas as in Europe & Asia

  45. Synergies • Cross selling / benchmarking Euroemme - low cost and Aerotech - high performance • Offering complete ventilation & cooling system solutions worldwide • CELdek sales • Materials management - cost reduction • Rationalizing of distribution US and Asia

  46. Component market vs. Systems market 1999 - Before Euroemme acquisition 2002 - After acquisition Munters 67% of a SEK 225 million pad market Munters 24% of a SEK 3 000 million systems market

  47. Aerotech, Basic Facts • 100% of business in AgHort • Globally recognized as ventilation technology leader • Family owned business founded in 1947 • Headquartered in Mason, Michigan • # 2 in the US • 15% export • Revenues USD 18 million • Strengthening US poultry market • JV assembly in Vietnam started 2000

  48. Deal structure • USD 5.5 million at closing (plus interest bearing debt of USD 2.0 million) • Earn out for 2002: capped at USD 2.5 million • Earn out for 2003: capped at USD 3.5 million • Total acquisition capped at USD 10.5 million

  49. The Humidity Expert

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