Presentation - Schuler AG

COMPANY PRESENTATION – EIGENKAPITALFORUM FRANKFURT (November 22, 2011)
SCHULER - A HIDDEN CHAMPION BECOMES VISIBLE
TAKING SCHULER TO THE NEXT LEVEL
1

COMPANY PRESENTATION – NOVEMBER 2011 / / AGENDA
•// AGENDA
• Schuler – Global leader with strong competitive position
• Our strategy – innovation, growth and efficiency
• Financials
• Refinancing Schuler
• Why we become visible now
• Summary highlights & outlook
APPENDIX
• The Schuler share
• IR contact
2

SCHULER – GLOBAL LEADER WITH STRONG
COMPETITIVE POSITION

COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// MARKET AND TECHNOLOGY LEADERSHIP SINCE 1839
• Global market leader for metal-forming equipment
machinery
• Full-range supplier for the manufacturing industry:
complete pressing lines, single presses, auxiliary
automation systems and related services
• Technological innovation: key element of Schuler’s DNA
since the foundation of the Company
• Key customer industries: automotive, automotive
suppliers, packaging, household appliances, aerospace
and minting
• Global footprint: strong presence in more than 40
countries and production facilities on four continents
• Supportive anchor shareholder since foundation of the
company by Louis Schuler
4

COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// HIGHLY EXPERIENCED MANAGEMENT TEAM
Chief Executive Officer (CEO)
Chief Technology Officer (CTO)
Chief Market Officer (CMO)
Chief Financial Officer (CFO)
from October 1, 2011
Dipl.-Ing. Stefan
Klebert (MBA)
Dipl.-Ing. Joachim
Beyer
Dr. Markus Ernst
Dipl. Volksw. Marcus
Ketter (MBA)
Joined Schuler AG in 2010.
Formerly member of the
management board of
Thyssen Krupp Services AG
Joined Schuler AG in 2005.
Formerly 13 years in leading
functions at Müller
Weingarten AG
With Schuler AG since 1995
in several management
positions
Started at Schuler in July
2011. Worked as CFO for
ThyssenKrupp Elevator
GmbH in his last position
Over 50 years experience in forming systems, industrial services and performance
management, comprehensive knowledge of Schuler, its markets and customers
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COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// GLOBAL PRESENCE
USA
Canton, MI
USA
Hastings, MI
Germany Cech Republic
Mořkov
United
Kingdom
Walsall
Slowakia
Dubnica nad
Váhom
China
Beijing, Jinan, Tianjin
China
Shanghai, Dalian
France
Strasbourg
Spain
Barcelona
Switzerland
Gettnau
Mexico
Puebla, Saltillo
Italy
Turin
Russia
Moskau
India
Mumbai, Pune
Production & Service
Sales & Service
Brazil
São Paulo
• Schuler’s global presence enables close client relationships on local levels (production and services)
• Strong presence in Emerging Markets such as China, Brazil and India
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COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// STRONG GLOBAL MARKET POSITION
• Essential partner for metal forming
clients
• Important and leading player in the
international metal forming industry
• High barriers to entry due to essential
industry experience, technological
know-how and long-standing customer
relationships
Selected Key Customers
7

COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// UNMATCHED TECHNOLOGY ALONG THE ENTIRE VALUE CHAIN
BMW Supplier
Award 2011
Automotive
Press
Technologie
Solid
Forming
Technology
High-Speed
Technology
Stamping &
Cutting
Technology
Hydraulic
Press
Technology
Service
8

COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// Automotive Press Technology
Press lines Transfer- and ProgDie presses Tryout systems
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COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// Solid Forming Technology
Systems for cold forging
Systems for warm forging
Systems for hot forging
10

COMPANY PRESENTATION – NOVEMBER 2011 / / GLOBAL LEADER WITH STRONG COMPETITIVE POSITION
•// High-Speed Technology
Packaging industry
Coining technology
Manufacture of
electric motor laminations
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OUR STRATEGY

COMPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY – INNOVATION, GROWTH AND EFFICIENCY
•// CLEAR STRATEGY TO ACHIEVE AMBITIOUS MID-TERM TARGETS
€ 1,200 m
Innovation Efficiency
€650 m
> € 930 m
Growth
SOLID BASE
Actual
2009/10
Plan
2010/11
Target
2013/14
EBITDA 5% > 8% 10%
• Strong market share – partner of choice for OEMs worldwide
• Global sales and service network and technology leadership
• Experienced management with strong track record of growth and operational improvement
• Business streamlined and refocused along industry groups and technological clusters
• Successful turnaround in FY 2010/11
• Strong macro economic tailwind for late cyclical business leading to a record order intake
• Sales of more than €930 m and an EBITDA margin of over 8% targeted for FY 2010/11
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COPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY - INNOVATION
Innovation
Efficiency
Growth
•// FOCUS ON INNOVATION WITH NEW CTO POSITION
• CTO position with board level responsibility supported by a team of over
70 specialists across the Group exclusively focused on driving
innovation
• Defining the relevant technology clusters for profitable growth
• Implementing a platform strategy with standardized components
• Developing strategic products within defined technology clusters
• Innovation management through implementation of clearly defined
development processes
• Monitoring market and competitors extensively
Managing portfolio of Schuler Group of over 250 patents
Joachim Beyer
Chief Technical Officer
Member of the Board
• With Schuler since 2003
• From 1989 until 2002 several
leading functions at Müller
Weingarten AG
• After graduation in leading
position at the construction team
of Fleissner GmbH & Co
• Studied process engineering at
the Technical University of
Karlsruhe
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COPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY - INNOVATION
Innovation
Efficiency
Growth
•// HIGHLIGHTS OF INNOVATION AND TECHNOLOGY LEADERSHIP
ServoDirect
Technology
• Maximum flexibility, high
production rates and short
changeover times for die and
tooling
• Slide motion characteristics
adaptable to forming, die and
automation
• Improved throughput
performance compared to
conventional presses
• Maintenance-friendly handling
– flywheel, clutch and brake not
required
ICON V-Drive
vertical can
forming
• Forming higher-strength alloys
with the vertical drawn and wallironed
(DWI) process
• Saving raw material – higherstrength
alloys enable thinner
walled cans
• Ability to use of 100% recyclable
alloys
• Simplified production – from disc
straight to can
• Low maintenance servo
technology and shorter downtime
through easy die changes
Light-weight
volume
production
• Only combination of processes
and materials deliver results
• Schuler is the only
manufacturer for all production
processes in this area
• Aluminum forming
• Cold forming of tensile
steels
• Pressure Controlled
Hardening
• Hydroforming
• Plastic forming incl. Resin
Transfer Moulding (RTM)
for CFRP (carbon
materials)
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COMPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY – GROWTH
Innovation Efficiency
Growth
•// DRIVING GROWTH ACROSS THE PORTFOLIO
• Expanding into other promising segments whilst
maintaining a strong focus on the automotive
sector (OEM; Tier 0.5; Tier 1-3)
• Identification and definition of industry groups
besides automotive with substantial growth
potential (e.g. packaging, drives & generators)
• Re-alignment of the sales force towards
targeted growth industries
• Diversification of customer base improves
stability of the business and reduces cyclicality
Diversify revenue growth and capitalize on
opportunities beyond strong market position in
automotives
Defense
Railway
Drives &
Generators
Minting
Automotive OEM
Tier 0.5
Aerospace
Packaging
Appliances
Large Pipes
Tier 1-3
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COMPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY – GROWTH
Innovation Efficiency
•// DRIVING GROWTH THROUGH ENHANCED SERVICE OFFERING
Growth
• Increasing importance of comprehensive “life cycle support” and
“performance enhancement” for customer facilities offers
substantial growth potential in high margin business
• Capitalize on already installed product base of more than 20,000
presses to leverage further opportunities to grow
• Re-alignment of service offering during 2011 will help to capitalize
on growth potential
• Strengthening of local service entities while centralising overall
functions such as spare part supply and logistics
• 25 % of group revenue already service-related
30%
40%
30%
Retrofits
Spare Parts
Repairs, maintenance, other
Service (in €m)
FY
2008/2009
FY
2009/2010
Q3
2009/2010
Q3
2010/2011
Change
yoy (Q3)
Sales 178,8 168.3 106.4 149.6 +47%
% of Group Sales 22% 26% 24% 23% -1%pt
Enhance service offering to disproportionately grow service related revenues
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COMPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY – GROWTH
Innovation Efficiency
Growth
•// CAPITALIZING ON EMERGING MARKETS DYNAMIC
• Established production plants in Sao Paulo (Brazil)
and Shanghai / Dalian (China)
• Dominant market share in China (premium car
manufacturers > 50%) (Schuler internal research)
• Schuler is already the preferred partner of many local
OEMs which recently outperformed international
OEMs
Local OEMs
Multinational OEMs
17,400
14,400
22,100
27,400
28,900
33,100
• Chinese automobile industry is expected to grow by
8% p. a. on average until 2015, which translates into
some 1 m new cars p. a. (IHS Global Insight)
Source: IHS Global Insight
Schuler is perfectly positioned to capture the dynamic growth deriving from
Emerging Markets in Asia-Pacific, Latin America and Eastern Europe
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COMPANY PRESENTATION – NOVEMBER 2011 / / OUR STRATEGY – EFFICIENCY
Innovation
Efficiency
Growth
•// SCHULER PRESSEN GMBH AS THE NEW COMBINED POWER
• Take-over of key competitor Müller Weingarten in 2007 to form undisputed world technology leader
• Start of new growth and strategy programme “ZusammenWachsen” in early 2011 to fully integrate Müller
Weingarten in the Schuler organisation and enhance efficiency as well as productivity
• Global recession already led to a large scale of structural efficiency measures whilst successfully avoiding lay-offs of
highly skilled workforce and the loss of knowledge
…FURTHER EFFICIENCY IMPROVEMENTS ON THE WAY
• Centralisation and streamlining of all group wide procurement activities
• Globalisation of supply chain
• Identification of twin structures within the company
• Implementation of platform strategy throughout the whole production
Schuler expects further synergy potential !
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FINANCIALS

COMPANY PRESENTATION – NOVEMBER 2011 / / FINANCIALS
•//
RECORD ORDER INTAKE Q3 2010/11
€m 1,122 €m
1,122

COMPANY PRESENTATION – NOVEMBER 2011 / / FINANCIALS
•// STRONG GLOBAL PRESENCE IN ALL REGIONS (ORDER INTAKE)
[in EUR million]
9M
2009/10
2008/09
2007/08
2006/07
2005/06
Germany
0 100 200 300 400
9M
2009/10
2008/09
2007/08
2006/07
2005/06
Asia
0 100 200 300 400
9M
2009/10
2008/09
2007/08
2006/07
2005/06
Europe w/o Germany
38 %
0 100 200 300 400
47 %
9M
2009/10
2008/09
2007/08
2006/07
2005/06
Other
0 25 50 75 100
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COMPANY PRESENTATION – NOVEMBER 2011 / / FINANCIALS
•// STRONG TURNAROUND POST GLOBAL RECESSION
Key Financials
(in €m)
FY (1)
2008/2009
FY (1)
2009/2010
Q3
2009/2010
Q3
2010/2011
Change
yoy (Q3)
Sales 823.1 650.3 447.1 659.2 +47%
Gross profit
[% of total
output]
419,2
+52,6%
398.1
60.0%
467.3
59.5%
684.2
53.1%
+46%
-6%pt
New orders 590.5 818.4 491.8 1,122.0 +128%
Order backlog (2) 507.1 675.3 551.8 1,138.0 +106%
EBITDA
EBITDA-Marge
EBIT
EBIT-Marge
-2.9
-0.4%
-43.9
-5.3%
30.0
4.6%
17.1
2.6%
11.9
2.7%
-3.6
-0.8%
57.4
8.7%
40.4
6.1%
+382%
6 %pt
n. a.
7 %pt
CAPEX 12.2 16.7 9.4 6.0 -32%
ROCE (%) -9.4% 4.1% -1.1% (4) 15.2% (4) 16 %pt
Employees (2)(3) 5,332 4,969 4,970 5,067 +2%
Return to profitability on all profit levels; Record order backlog of € 1.1 bn in Q3 2010/11
FY 2010/11 targets upgraded: sales over € 930 m, EBITDA margin of > 8%
(1) Year-end 30 th September (2) As of effective day (3) incl. apprentices (4) full year effect
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COMPANY PRESENTATION – NOVEMBER 2011 / / FINANCIALS
•// CASH FLOW
Key Financials (in
€m)
FY (1)
2008/2009
FY (1)
2009/2010
Q3
2009/2010
Q3
2010/2011
Change
yoy (Q3)
Net result -64.9 -11.8 -21.4 12.3 n.a.
Depreciation and
Amortization
Changes
Net Working
Capital
40.9 12.9 15.5 17.0 +10%
-9.6 64.7 62.0 79.1 +27%
Provisions / other 0.7 -11.5 -18.4 -15.5 -16%
Cash flow from
operating activities
-32.9 54.3 37.7 92.7 +146%
CAPEX -12.2 -16.7 -9.4 -6.0 -36%
Other +4.3 +5.3 +7.1 +6.7 -6%
Cash flow from
investing activities
-7.9 11.4 16.5 -0.7 n.a.
Free Cash flow -40.8 65.7 54.2 92.0 +70%
Strong turnaround post global recession
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REFINANCING SCHULER

COMPANY PRESENTATION – NOVEMBER 2011 / / REFINANCING SCHULER
•// CAPITAL INCREASE SUCCESSFULLY COMPLETED IN JUNE 2011
Strong results
• 6.5 million new common shares issued
• Subscription price of EUR 10.50
• New shares almost 4x oversubscribed
• Relatively stable stock price during the transaction
• Company’s capital stock increased by € 16.90 m to €
76.05 m (equal to 29,25 million shares)
Broadened investor base
3% 1%
Proceeds
of around € 68 m
strengthened
Schuler’s
capital basis to
push ahead with
its strategic goals
26

COMPANY PRESENTATION – NOVEMBER 2011 / / REFINANCING SCHULER
•// NET DEBT SUCCESSFULLY REDUCED
Net debt
Equity
(Post capital
increase)
* Excluding one-offs
(Post capital
increase)
27

COMPANY PRESENTATION – NOVEMBER 2011 / / REFINANCING SCHULER
•// NEW FIVE YEAR SYNDICATED LOAN AGREEMENT
• Solid financial base of € 450 m secured for five years
• Guarantee facility tranche of € 300 m; credit facility tranche of € 150 m which may also be
used as guarantee facility; option to extend volume by an additional guarantee facility
tranche of € 50 m if required
• Contract period: Five years (November 2011 until end of September 2016)
• Significant improvement in credit conditions:
• expected interest savings of € 10 m for the remainder of financial year 2011/2012
• considerable higher interest savings over the next years as improved conditions will
then impact the entire fiscal year
• Agreement realized mainly with existing syndicate of banks and credit insurance companies
Solid financial base secured for five years with significant improvement in conditions
28

WHY WE BECOME VISIBLE NOW

COMPANY PRESENTATION – NOVEMBER 2011 / / WHY WE BECOME VISIBLE NOW
•// SIGNIFICANT INCREASE OF FREEFLOAT THROUGH CAPITAL INCREASE
Shareholder structure pre rights issue
Shareholder structure post rights issue
Kreissparkasse Biberach
7.5%
Schuler-Beteiligungen GmbH
50.2%
Kreissparkasse Biberach
6.3%
Schuler-Beteiligungen GmbH
39.1%
Süddeutsche
Beteiligungen
GmbH
16.4%
Süddeutsche
Beteiligungen
GmbH
12.7%
Freefloat
25.9%
Freefloat
41.9%
30

COMPANY PRESENTATION – NOVEMBER 2011 / / WHY WE BECOME VISIBLE NOW
•// SIGNIFICANT FREEFLOAT MARKETCAP OF 104 Mio. EUR (Share price 8.50 EUR) *)
Süddeutsche
Beteiligungen GmbH
Kreissparkasse
Biberach
Schuler-Beteiligungen
GmbH
Schuler-Beteiligungen
GmbH
Kreissparkasse
Biberach
Freefloat
Süddeutsche
Beteiligungen GmbH
Freefloat
ISIN DE0007210601
11.375 million ordinary shares
No trading
ISIN DE000A0V9A22
17.875 million ordinary shares
Xetra trading
*) 41.9% x 29.25 Mio. Shares x 8.50 EUR = 104 Mio. EUR Market Cap
31

COMPANY PRESENTATION – NOVEMBER 2011 / / WHY WE BECOME VISIBLE NOW
•//
PRIME STANDARD AS A PRE-CONDITION FOR SDAX ADMISSION
Increasing investor transparency
EU-Regulated Market
Prime standard
General standard
Exchange Regulated Market
Statutory transparency
regulations, e.g.:
• Annual and interim reports in
accordance with IFRS
• Publication of directors‘ dealings
• Ad hoc disclosures 1)
• Announcement of reporting
thresholds 1)
• Compulsory offer with change of
control 2)
Applicable statutory provisions,
e.g.:
Entry Standard • Insider trading rules 1)
• Market Abuse Directive 1)
• Provisions governing public
offering 3)
First Quotation Board
(Open Market)
Source: Deutsche Börse Group
1) WpHG, the German Securities Act
2) WpUG, the Securities Acquisition and Takeover Act
3) WpPG, the German Securtities and Prospectus Act
4) For Non-EU companies with prospectus IFRS, US GAAP, Japanese GAAP or Canadian GAAP
Additional transparency
regulations:
• Quarterly financial statements in
English
• Corporate action timetable
• Analyst conference
Additional transparency
requirements:
• Anual and interim report in
accordance with nat. GAAP or
IFRS 4)
• Significant company news
• Company profile and corporate
calender
Except for
quarterly financial
statements,
Schuler already
meets all prime
standard
requirements
Schuler AG listed
in Prime Standard
of Frankfurt Stock
Exchange as of
October 1, 2011
32

COMPANY PRESENTATION – NOVEMBER 2011 / / WHY WE BECOME VISIBLE NOW
•// SDAX-ADMISSION AS LOGICAL STEP
Advantages
• Vast visibility
• Larger and diversified investor base
• Increased attention abroad
• Better comparability within benchmark index
• Higher awareness of media and public
SDAX participation offers significant advantages for Schuler AG
33

COMPANY PRESENTATION – NOVEMBER 2011 / / WHY WE BECOME VISIBLE NOW
•// SCHULER AG AS A FUTURE DIVIDEND-PAYING STOCK
Dividend benchmark
• Schuler AG is
currently planning to
implement a dividend
policy to be effective
from October 2011
onwards
• Benchmark is
relevant for Schuler’s
future policy
• Sector average
2006-2010: 28%
• Targeted dividend
ratio on Peergroup
level
*) As Percentage of Group Net Profit
34

SUMMARY HIGHLIGHTS & OUTLOOK

COMPANY PRESENTATION – NOVEMBER 2011 / / SUMMARY HIGHLIGHTS & OUTLOOK
•// STRONG POSITION TO REACH THE NEXT LEVEL
• Experienced management with strong track record
• Market leadership with unique product range and unmatched technological
know-how: maintain strong focus on innovation and technological leadership
• Global footprint and international production with a proven track record and
opportunities in Emerging Markets
• Strong macro economic tailwind for late cyclical business: Record order
backlog in Q3 2010/11
• Significantly improved business structure due to successful crisis
management during global recession: Strong EBITDA margin and potential for
further efficiency improvement already identified
• Sound financial basis after successful capital increase
• Clearly defined and ambitious mid-term financial targets
36

COMPANY PRESENTATION – NOVEMBER 2011 / / SUMMARY HIGHLIGHTS & OUTLOOK
•// POSITIVE OUTLOOK AND CLEARLY DEFINED TARGETS
FY2010/11 From 2011/12
• Increase of automobile demand in 2011 by
8% (64.5m cars) (VDA)
• BRIC states with high demand
• Growth of mechanical engineering sector in
2011 estimated to reach 11% globally, 8% in
Germany (VDMA)
• Sales: > €930m
• EBITDA margin targeted: >8%
• Full effect of durable cost reduction measures
• Implementation of the long-term growth
strategy and the continuous organizational
development
• Mid-term sales target of €1.2 bn for FY2013/14
• Mid-term EBITDA margin target 2013/14 of
10%
37

Thank you!
38

APPENDIX: THE SCHULER SHARE

COMPANY PRESENTATION – NOVEMBER 2011 / / APPENDIX SCHULER SHARE
•// ESTABLISHED SHARE ON THE FRANKFURT STOCK EXCHANGE
IPO March 23, 1999
Stock Exchange
Market Segment
Frankfurt and Stuttgart,
Regulated Market
Prime Standard
Number of Shares
(post capital increase)
29,250,000 shares
Nominal Capital € 76,050,000
split into:
- 11,375,000 ordinary shares
(ISIN DE0007210601) and
- 17,875,000 ordinary shares
(ISIN DE000A0V9A22)
Designated Sponsors
Close Brothers Seydler Bank AG
equinet Bank AG
Landesbank Baden-Württemberg
40

COMPANY PRESENTATION – NOVEMBER 2011 / / APPENDIX SCHULER SHARE
•// SUSTAINABLE SHARE PRICE PERFORMANCE
450
400
350
€9,58
(as of November 11,
2011)
300
250
200
150
100
50
Okt. 09 Dez. 09 Feb. 10 Apr. 10 Jun. 10 Aug. 10 Okt. 10 Dez. 10 Feb. 11 Apr. 11 Jun. 11 Aug. 11 Okt. 11
Schuler AG CDAX Index SDAX Index
41

APPENDIX: INVESTOR RELATIONS CONTACT

COMPANY PRESENTATION – NOVEMBER 2011 / / APPENDIX IR CONTACT
•// INVESTOR RELATIONS CONTACT
Thomas Herrlinger
Tel.: + 49 7161 66-204
Fax: + 49 7161 66-850
E-mail: thomas.herrlinger@schulergroup.com
Schuler AG
Bahnhofstraße 41
73033 Göppingen
Germany
www.schulergroup.com
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DISCLAIMER

This presentation contains forward looking statements which are subject to risks and uncertainties, in
particular regarding future events, future development of value, plans, strategies, expectations,
outlook, including statements in connection with potential profits. Schuler AG has based these
statements with regard to the future on its expectations with regard to future events and development
of value. The actual development may depart significantly from the predictions made in the statements
with regard to the future because of the uncertainty which is inherent in estimates, predictions and
prognoses. Schuler AG shall not assume any obligation to update the statements with regard to the
future and the associated estimates and assumptions, unless there are mandatory statutory provisions
to the contrary.
// Schuler AG shall not assume any warranty for the information provided in this presentation being upto-date,
accurate, complete or of good quality or for the suitability of the information for specific
purposes.
// Any liability of Schuler AG for loss caused by the use or non-use of the information provided or by
wrong or incomplete information is excluded.
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