smt scharf ag dieselgetriebene lok · dieselgetriebene lok ... smt scharf polska sp.z.o.o 100 %...

November 2017 | 1

SMT Scharf AG

Investor Presentation

German Equity Forum 2017

Frankfurt, November 27-29, 2017

Hans Joachim Theiß, CEO

Dieselgetriebene Lok

Dieselgetriebene Zahnradlok

Batteriegetriebene Lok

November 2017 | 2

Executive Summary

Management Board

Products and Services

Business System and Organisation

Market and Competition Analysis

Strategy

Current figures (group)

Content

November 2017 | 3

SMT Scharf at a glace

• Global market and technology leader in rail systems and chair lifts for underground mining

• Potential to unlock further application possibilities and markets in the future

• Highly specialized engineering company with more than 50 years of experience and global presence

• New products, innovations and business segments hold opportunities for growth

• High market share in all target markets – round about one third of all monorails installed worldwide are produced

by SMT Scharf

• Well positioned in major mining nations like China, Russia or South Africa

• Solid business in cyclical market environment due to large contribution of service related business to total revenue

• Sustainable financing structure based on low debt and equity capital ratio > 60 %

• Low break even point mirrors successful measures of operative excellence

• Robust medium-term growth potential (due to strategic measures and upcoming mining boom)

• Global trends towards automation and higher security standards in mining support growth

Global market leader in it’s niche with a stable business

model and growth opportunities

Executive Summary | Management Board | Products & Services | Business System & Organisation | Market & Competition Analysis | Strategy | Current Figures

November 2017 | 4

Hans Joachim Theiss (CEO)

• Responsible for finance, controlling, strategic corporate development, M&A, Investor Relations

• >10 years CEO in comparable medium-sized companies and >10 years experience in consulting

• Resigned as Deputy Chairman of SMT Scharf’s Supervisory Board

Rolf F. Oberhaus (CSO)

• Responsible for sales, service and market development, board member since January 2016

• Longstanding experience in executive positions in mining, railroad and steel industries

• Comprehensive network in markets essential for SMT Scharf

Wolfgang Embert (COO)

• Responsible for product development, production areas and construction

• Shaping product development in 7 years as technical director at SMT Scharf

• Extensive product, production, sector and market expertise through >20 years of sector experience

Management Board

Longstanding experience combined with

expertise in consulting


Services

• Main product monorail

• Unsurpassed reliability

• Innovational strength and

continuous product development

• Expandability of

transportation solutions

• Highest safety standards

fullfilled (explosion control)

Overview of the product range

Specialized in solutions for mining transport

Railway systems

Monorail hanging railways,

floor-bound railways

Chairlifts

Other/New


November 2017 | 6

Our offering: combining products to a

transport system


November 2017 | 7

• After sales revenues constitute a major part of

SMT’s business model

• ~50 % of SMT‘s revenues (core business) are

attributable to after sales services

Spare parts

Maintenance & repair services

Product overhaul (after 5-8 years of operation)

• Successful introduction of maintenance

contracts into the South African market

• Generation of recurring income streams from

customers throughout the life cycle of the

products

• High customer satisfaction Replacement with

new SMT products, starting a new cycle

Stable After Sales business thanks to

long product life cycle

Typical product life cycle

New

product

Overhaul

Maintenance/

repairs

Maintenance/

repairs


November 2017 | 8

Strong After Sales business as source of revenue

Exemplary product lifetime revenues (with preventive maintenance)

Maintenance/ repairs

Overhaul

Maintenance/ repairs

New product

Total lifetime revenues


November 2017 | 9

Group structure

Broad international standing and close to customers

* Other 50 %: Shandong Liye Equipment Co. Ltd.

100 %

Scharf Mining Machinery (Beijing) Co., Ltd.

50 % *

Shandong XinSha Monorail Co. Ltd.

1,25 %

OOO SMT Scharf Russia

100 %

OOO SMT Scharf Service

SMT Scharf AG

100 %

SMT Scharf Saar GmbH (i. L.)

100 %

SMT Scharf Polska Sp.z.o.o

100 %

Scharf Mining Machinery (Xuzhou) Co., Ltd.

100 %

SMT Scharf Africa (Pty) Ltd.

100 %

TOW SMT Scharf Ukraina

98,75 %

OOO SMT Scharf Russia

100 %

SMT Scharf GmbH

100 %

Nowilan GmbH

100 %

SMT Scharf Sudamerica SpA (i. G.)


November 2017 | 10

Worldwide sales in all relevant mining markets

SMT Scharf subsidiaries Joint venturesSMT Scharf HQ Active sales territories


November 2017 | 11

• Thousands of

underground mines

• Annual equipment

needs estimated to be

1 bn EUR

• Deposits all over the

world

• Globally correlated

commodity prices

• High raw material

prices, high mining

investments

• Low raw material

prices, low mining

investments

• Increase in efficiency

(„larger, stronger,

deeper“)

• Local „me too“

competition

Global underground market for rail-bound transport systems

SMT Scharf meets all market demands

Strong market share

and growth potential

International

development team

satisfy customer

needs

Financially sound

company with low

break-even point

Global presence of

international

subsidiaries

SIZE INTERNATIONALITY CYCLICALITY INNOVATION PRESSURE


November 2017 | 12

Recovery of raw material prices in 2017

Source: http://www.sxcoal.com/site/index/en

• Cyclical low point probably passed due to increasing price levels in 2017

• Consolidation of coal mining supply side in Chinese market

• New steel plants in China: demand for high-quality coking coal grows

• Sustainable upward trend remains to be seen

• Strong price-“comeback” possibly depends on technical reasons


+

t (years)

% Change

Length of the raw material cycle ~5-15 years

0

+

-

Raw material

prices

~0.5-2 5 10 15

Investment level

mining equipment

Mining cycle (schematic representation)

Mining investments cyclically follow raw material prices

Typical delay of

0.5 – 2 years

Source: SMT Scharf


Vision: Expanded product range in mining logistics

• Stable core business with solid margins and growth opportunities

• Evolved expertise in machine engineering with maximal customer focus

• Management expertise in mining

External growth Organic growth Operational excellence

• Localization of value chain

largely finished

• Increase in organizational and

operational efficiency according

to local market development

Core competencies

• “Buy & build” within the

niche market

• Possibility to expand core

positioning

• Starting a controlled offensive

• Expansion into new regions

• Hard Rock business

• Expansion of product range

Further development of the business model

Three-pillar strategy on a stable foundation


Increase international presence

Expand product range

Standardization

Acquisitions

• Expansion of local sales and service offices

• Tap new geographic markets

• Improvement of propulsion technology, control systems and diagnostic tools

• Further develop existing designs

• Development of new powerful and cost-effective applications

• Achieve shorter lead times

• Utilize local production

• Expand existing product and technology range

• Promote international alignment of SMT Scharf

• Increase market penetration

Strategic measures

Continuously utilizing strategic opportunities

Strategic partnerships• Extend product range

• Enter new markets


November 2017 | 16

Strategic measures successfully realized

next steps planned

Source: www.nowilan.de

Source: www.khmtunnel.com


Acquisition of drive technology

specialist Nowilan

Expansion of our product and

technology range with Nowilan,

who develops customer-specific

solutions on a project basis

Strategic partnership with

Mühlhäuser

Exclusive sales of the jointly developed

new tunnel solution by Mühlhäuser

November 2017 | 17

Strategic measures successfully realized in 2017

next steps planned


Foundation of a sales subsidiary in

Chile

Own distribution hub improves

leverage of potentials in South

American hard-rock mining

Strategic partnership with

Breuer-Motoren

SMT Scharf takes over the exclusive

distribution and after-sales business

for Breuer-Motoren in the core market

Russia

November 2017 | 18

Significant revenue increase in all divisions in 2017

Revenue share by region

Revenue share by operating segmentRevenue share by business type

Revenue share by product


November 2017 | 19

EBIT more than doubled in 9M 2017 due to economies of

scale, efficiency gains and lower provisions

Comparison of EBIT and operating performance


November 2017 | 20

Tailwinds from good order book position

Development of the order book position


November 2017 | 21

Receivables management continues to bear fruit

Balance sheet

Assets


November 2017 | 22

Still strong equity capital

Balance sheet

Liabilities and Equity


November 2017 | 23

Revenues and earnings in 9M 2017 above plan

Key performance indicators in target/actual comparison

Revenues: EUR 35.2 million (outlook: at least EUR 30.0 to 33.0 million)

EBIT margin: 10.6% (outlook: at least 5.0%)

Group net profit: EUR 3.7 million (outlook: increase compared to previous year)

Equity ratio: 68.5% (outlook: previous year's level of 66.1%)

Personnel expenses ratio: down to 24.7% (outlook: rising)

Raising the 2017 forecast: Revenues of at least EUR 44 to 48 million revenue

and EBIT of EUR 3.7 to 4.2 million

Positive expectations for 2018


November 2017 | 24

Source: Frankfurt Stock Exchange

Stable share price performance since June 2016

EUR

0

2

4

6

8

10

12

14

16

18

2016-06-01 2016-09-01 2016-12-01 2017-03-01 2017-06-01 2017-09-01

SMT Scharf Peer Group SDAX


November 2017 | 25

SMT Scharf at a glace

• Global market and technology leader in rail systems and chair lifts for underground mining

• Potential to unlock further application possibilities and markets in the future

• Highly specialized engineering company with more than 50 years of experience and global presence

• High market share in all target markets – round about one third of all monorails installed worldwide are produced by

SMT Scharf

• Well positioned in major mining nations like China, Russia or South Africa

• Solid business in cyclical market environment due to large contribution of service related business to total revenue

• Sustainable financing structure based on low debt and equity capital ratio > 60 %

• Robust medium-term growth potential (due to strategic measures and upcoming mining boom)

• Global trends towards automation and higher security standards in mining support growth

Global market leader in it’s niche with a stable business

model and growth opportunities


November 2017 | 26

Thank you for your attention

Glück Auf!

November 2017 | 27

Annex / Further information

November 2017 | 28

Above ground

Underground

Special machine

construction

Bunker Conveyor belt

Explosives

Mining:

Cutting drum,

Plough,

Continuous

Miner

Hand

tools

Bunker Conveyor belt

Monorail

Rubber tyre

vehicles

Rubber tyre

vehicles

Shaft hoisting system

Anchor Anchor

Energy

Electricity

Compressed air

Hydraulics

Automation /

Networking

Expansion

technology

Anchor

Where we are and what we do


November 2017 | 29

8%

12%

80%

57%24%

19%

USA: 671,8China: 3.242,5

Australia: 503,3

India: 707,6

Russia: 365,5

Poland: 130,9Kazkhstan: 97,9

Rest of the world: 1,420

South Africa: 256,9

Underground (Longwall)

Underground (Room & Pillar)

Above ground

Global coal production, in mt

Source: International Energy Agency, Coal information overview 2017, company estimate

Great potential in underground coal production


November 2017 | 30

USA: 826

China: 400

Australia: 387

Indonesia: 210

Russia: 215

Ukraine: 100

South Africa: 236

Canada: 189

Mexico: 137

Peru: 201

Chile: 498

Brazil 196

Global ore production (e.g. gold, platinum, copper, nickel), in mt

Source: Raw Materials Group, Stockholm

Hard Rock brings new regions into focus


November 2017 | 31

Consolidated Statement of Comprehensive Income

in EUR thousand Q3/2017 Q3/2016 9M/2017 9M/2016

Revenue 12,035 7,593 35,192 26,680

Changes in inventories 464 628 2,076 792

Total operating performance 12,499 8,221 37,268 27,472

Other operating income 1,306 686 3,114 2,291

Cost of materials 6,431 4,208 19,855 13,073

Personnel expenses 2,297 2,681 8,693 8,384

Depreciation, amortization and impairment losses 293 297 908 1,075

Other operating income 2,012 1,699 6,994 5,680

Profit from operating activities (EBIT) 2,772 22 3,932 1,551

Income from participating interests 219 -13 205 461

Interest income 60 37 155 87

Interest expenses 35 45 84 119

Financial result 244 -21 276 429

Profit before tax 3,016 1 4,208 1,980


November 2017 | 32

Consolidated Statement of Comprehensive Income

in EUR thousand Q3/2017 Q3/2016 9M/2017 9M/2016

Income taxes 137 403 510 776

Group net profit 2,879 -402 3,698 1,204

Other comprehensive income items

recycled later to profit or loss

Currency difference from translation

of foreign financial statements-358 -116 -945 118

Share of other comprehensive income attributable

to equity accounted investments-26 279 -270 -202

Other comprehensive income -384 163 -1.215 -84

Total comprehensive income -2,495 -239 2,483 1,120

Earnings per share (in EUR)

Basic 0.69 -0.10 0.89 0.29

Diluted 0.69 -0.10 0.89 0.29

Average number of shares 4,150,523 4,143,675 4,150,523 4,141,581


November 2017 | 33

Consolidated Balance Sheet

in EUR thousand 30/09/2017 31/12/2016

Assets

Intangible assets 1,938 1.,73

Property, plant and equipment 4,836 4,656

Participating interests 3,690 3,743

Deferred tax assets 3,236 3,259

Other non-current receivables / assets 828 733

Non-current assets 14,528 13,764

Inventories 17,175 13,009

Trade receivables 20,194 23,374

Other current receivables / assets 3,528 2,627

Cash and cash equivalents 5,543 6,638

Current assets 46,440 45,648

Total assets 60,968 59,412


November 2017 | 34


in EUR thousand 30/09/017 31/12/2016

Equity and liabilities

Subscribed share capital 4,151 4,151

Share premium 11,642 11,642

Profit brought forward 30,449 26,751

Currency translation difference -4,462 -3,247

Equity 41,780 39,297

Provisions for pensions 3,602 3,590

Other non-current provisions 309 349

Deferred tax liabilities -22 96

Non-current financial liabilities 1,103 1,313

Other non-current liabilities 0 0

Non-current provisions and liabilities 4,992 5,348


November 2017 | 35


in EUR thousand 30/09/2017 31/12/2016

Current income tax 1,336 1,441

Other current provisions 3,903 5,107

Advance payments received 582 477

Trade payables 4,288 4,058

Current financial liabilities 3,104 2,183

Other current liabilities 983 1,501

Current provisions and liabilities 14,196 14,767

Total equity and liabilities 60,968 59,412


smt scharf ag dieselgetriebene lok · dieselgetriebene lok ... smt scharf polska sp.z.o.o 100 %...

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