Investors Day October 19 th,

Transcription

1 Investors Day October 19 th,

2 Investors Day October 19 th,

3 Altran is an international engineering & innovation consulting group. Altran assists companies on a worldwide basis in their process of creating and developing new products / services with high technological content. Altran is the European leader. KEY FIGURES M revenue in Employees in % revenue at international level 21 Countries Investors Day October 19 th,

4 2010 AS % OF SALES France 46% Northern zone 24% Southern zone 20% ROW zone 2% ADL 8% Investors Day October 19 th,

5 Solution practices INNOVATION Management MECHANICAL Engineering Embedded & Critical SYSTEMS INFORMATION Systems ENTERPRISE Performance Industry practices Automotive, Infrastructure & Transportation AeroSpace, Defense & Railways Energy, Industry & Life Science Financial Services & Government Telecoms & Media 16% 22% 25% 15% 22% Investors Day October 19 th,

6 Analyze Validate Specify Integrate ALTRAN POSITIONING Realize Investors Day October 19 th,

7 C o m m i t m e n t Project Commitment on deliverables Outsourced Services Commitment on services (KPI) Time & Material Commitment on expertise Investors Day October 19 th,

8 AUTOMOTIVE, INFRASTRUCTURE & AEROSPACE, DEFENSE & ENERGY, INDUSTRY, FINANCIAL SERVICES & GOVERNMENT TELECOMS & MEDIA TRANSPORTATION RAILWAYS LIFE SCIENCE PSA EADS EDF BNP PARIBAS VODAFONE RENAULT-NISSAN THALES AREVA AXA FRANCE TELECOM BMW FINMECCANICA GENERAL ELECTRIC SOCIETE GENERALE ALCATEL-LUCENT CONTINENTAL ALSTOM GLAXOSMITHKLINE BPCE ERICSSON FIAT SAFRAN SANOFI-AVENTIS CREDIT AGRICOLE TELEFONICA Investors Day October 19 th,

9 GEN-X (INNOVATION) An inhalator for chronic pneumopathy and asthma SOLAR IMPULSE (CO-INNOVATION) The Solar Impulse project aims to have an airplane take off and fly autonomously, day and night, propelled uniquely by solar energy, round the world without fuel or pollution. OPEN TRADE (CO-CREATION) A new generation of Trading Workstation. Co-designed with Orange Labs and winner of the Janus de l Industrie trophy PRISM 200 (INNOVATION) By placing the device against the outside wall of a room or building, the user is provided with intelligence on the location and movement of any people who might be inside that particular room. SPLITPACK (INNOVATION) A 100% recyclable packaging AEGT (INNOVATION) From 0 to 100 kph in 3.5 seconds and a top speed of 300 kph: this is the most powerful electric car ever, able to raise deeper awareness for e-cars. Investors Day October 19 th,

10 Investors Day October 19 th,

11 Americas 16bn +3-4% Europe 22bn +3% Asia 25bn % RoW 7bn +6-7% R&D Market in bn CAGR Source: OECD, World Bank, International Monetary Fund, PAC, BCG analysis Investors Day October 19 th,

12 TOP 10, REVENUES 2010, M Altran* 1325 Alten 917 Assystem 637 EDAG HCL (ERS) Bertrandt Segula** ALTRAN IS THE LEADER IN A MARKET DOMINATED BY EUROPEAN PLAYERS Akka 400 IAV 390 Ferchau 300 *Without ADL **Estimate Source: Companies' financial communication, Altran data, BCG interviews and estimates Investors Day October 19 th,

13 OUTSOURCING RATE EVOLUTION FRANCE OUTSOURCING RATE EVOLUTION AEROSPACE 20% 28% 29% 29% 30% 31% 32% 14% Source: INSEE, BIPE, PAC, OCDE, BCG analysis Investors Day October 19 th,

14 ALTRAN RECRUITING 70% 40% 30% 60% Higher expertise needed Experienced New Graduate Search for global partners Investors Day October 19 th,

15 Purchasing policies to fewer and bigger prime vendors Evolution in the contracting modes towards more projects Strategic Partner for Engineering Services WORLWIDE R&D MARKET BY TYPE OF CONTRACT T&M Fixed Price Outcome-based Source: Forrester Research, Inc. Investors Day October 19 th,

16 A market growing 5/7% per annum on average % of outsourced R&D bound to increase Still fragmented market Further opportunities with customer internal trends THERE IS AN OPPORTUNITY FOR ALTRAN TO REINFORCE ITS LEADERSHIP Investors Day October 19 th,

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18 Investors Day October 19 th,

19 EBITDA Revenues Free Cash Flow - CapEx Tax Direct costs Gross Margin SG&A - Δ Working capital + Depreciation Investors Day October 19 th,

20 EBITDA - Revenues - Free Cash Flow CapEx Direct costs - - Tax SG&A - Δ Working capital + Depreciation Investors Day October 19 th,

21 ALTRAN COUNTRY EBITA VS MARKET SHARE EBITA Germany / Austria Portugal Scandinavia UK Switzerland Italy Spain Belux France THE HIGHER THE MARKET SHARE THE HIGHER THE PROFITABILITY Netherlands USA Asia India 2 ALTRAN ESTIMATED MARKET SHARE Source: Internal data, BCG analysis Investors Day October 19 th,

22 ALTRAN COUNTRY EBITA VOLATILITY VS MARKET SHARE EBITA volatility USA Switzerland India 2 Asia Brazil UK THE HIGHER THE MARKET SHARE Netherlands Portugal Germany / Austria Scandinavia Italy Spain Belux France THE LOWER THE EARNINGS VOLATILITY ALTRAN ESTIMATED MARKET SHARE Source: Internal data, BCG analysis Investors Day October 19 th,

23 1 ST STRATEGIC GOAL: 9 FOCUS ON 6 EUROPEAN CORE COUNTRIES To be in the Top 3 in each core country 2 3 ALTRAN ESTIMATED MARKET POSITION Investors Day October 19 th,

24 2 ND STRATEGIC GOAL: OPTIMISE NON-CORE COUNTRIES Investors Day October 19 th,

25 R&D MARKET SIZE VS GROWTH Projected growth 2011 (%) 10% 8% India China High growth markets 6% 4% Sweden 2% Belgium 0% Austria Spain 0 Russia South Korea Brazil Australia Israel Netherlands Canada United Kingdom Italy Switzerland France Germany Largest markets United States Japan 400 Altran core European countries 2010 R&D EXPENDITURES ( BN) Source: World Bank, PAC, R&D magazine, BCG analysis Investors Day October 19 th,

26 CHINESE R&D OUTSOURCING MARKET 3 RD STRATEGIC GOAL: DEVELOP CHINA THROUGH PARTNERSHIPS % Outsourced R&D Exp. (Bn ) Excluding CRO Market growth driven by 2 main factors: Sustained high GDP growth rate ~11% '10-'15 CAGR National R&D investment plan up to 2.5% of GDP Investors Day October 19 th,

27 Offshoring is not a threat in the mid term Offshoring is a lever to global delivery and lower pricing 4 TH STRATEGIC GOAL: TRIPLE OFFSHORING PRESENCE IN INDIA Offset needed for international clients (Aerospace and Defense mainly) Investors Day October 19 th,

28 Industry practices Automotive, Infrastructure & Transportation AeroSpace, Defense & Railways Energy, Industry & Life Science 5 TH STRATEGIC GOAL: BECOME A STRATEGIC PARTNER FOR MORE THAN 20 CLIENTS Financial Services & Government Local Global Telecoms & Media Investors Day October 19 th,

29 Solution practices PRODUCT LIFECYCLE Management MECHANICAL Engineering 6 TH STRATEGIC GOAL: SEEK EUROPEAN FOOTPRINT THROUGH PARTNERSHIPS Embedded & Critical SYSTEMS Local Global INFORMATION Systems Investors Day October 19 th,

30 EBITDA - Revenues - Free Cash Flow CapEx - Tax - Δ Working capital Direct costs - SG&A + Depreciation Investors Day October 19 th,

31 One of Altran s main KPI is «Cost Ratio» 1 ST FINANCIAL GOAL: Cost Ratio = SG&A / Gross Margin COST RATIO Cost Ratio is independant of size and level of Gross Margin AT 60% 75% AT BOTTOM OF CYCLE Investors Day October 19 th,

32 ALTRAN COST RATIO 100% 90% 80% 84,4% 80,8% 75,6% 91,3% 82,1% Down cycle target 70% 60% 50% Up cycle target 40% 30% 20% 10% 0% Investors Day October 19 th,

33 EBITDA 2 ND FINANCIAL GOAL: Free Cash Flow - CapEx - Tax - Δ Working capital CAPEX 1% OF SALES 2 types of CapEx: IT systems Real Estate and Equipments Investors Day October 19 th,

34 EBITDA 3 RD FINANCIAL GOAL: Free Cash Flow - CapEx - Tax - Δ Working capital DSO 80 DAYS Days Sales Outstanding 2010: Contractual: 64 days TBI: 10 days Past due: 13 days Investors Day October 19 th,

35 Free Cash Flow EBITDA - CapEx - Tax - Δ Working capital 25-40% of Gross Margin <2,5% of sales 4 TH FINANCIAL GOAL: FREE CASH FLOW AT 4% OF SALES 2% AT BOTTOM OF CYCLE Investors Day October 19 th,

36 FREE CASH FLOW DELEVERAGING + PARTNERSHIPS & ACQUISITIONS Priorities: - Germany and UK - Core Solutions - Core Industries Size: - Target sales between 1-10% of Altran s revenues Bolt-on possible in other core countries Investors Day October 19 th,

37 SEEK EUROPEAN FOOTPRINT & PARTNERSHIPS FOR CORE SOLUTIONS BECOME A STRATEGIC PARTNER FOR MORE THAN 20 CLIENTS FOCUS ON 6 EUROPEAN CORE COUNTRIES ALTRAN TRIPLE OFFSHORING PRESENCE IN INDIA OPTIMISE NON-CORE COUNTRIES DEVELOP CHINA Investors Day October 19 th,

38 COST RATIO AT 60% 75% AT BOTTOM OF CYCLE FREE CASH FLOW AT 4% OF SALES DSO 80 DAYS 2% AT BOTTOM OF CYCLE CAPEX 1% OF SALES Investors Day October 19 th,

39 Chairman & Chief Executive Communication IT Legal / Internal Audit Purchasing Technology Project Hercules South Europe Zone North Europe Zone Asia Zone Business & Marketing Development HR Finance Industries Solutions Investors Day October 19 th,

40 CLIENTS & SALES EMPLOYEES PROFITABILITY & CASH 1. Project organisation 2. T & M organisation 3. Client satisfaction 4. Key accounts 7. C.A.R.E. (Competencies to Acquire Responsibilities & Evolve) 8. Compensation and benefits 9. Cost 10. Days Sales Outstanding 11. Pricing 5. Offshoring 12.Tax 6. China Investors Day October 19 th,

41 Sales > 2 bn EBITA: 11% to 12% of sales (Top of the cycle ambition) Free Cash Flow: 4% of sales (Top of the cycle ambition) Investors Day October 19 th,

42 A focused strategy on core countries A growth platform on core industries / solutions A new organisation An execution plan: Hercules An ambition of best in class financial targets Investors Day October 19 th,

43 Investors Day October 19 th,