Saft Groupe SA Full year results 2013 Paris, February 18 th, 2014
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3 Agenda 1. Group performance 2013 2. Divisional performance 3. Financial review 4. Market potential for Li-ion batteries 5. Outlook
1. Group performance 2013 4
5 2013 Highlights Full year results in line with targets 624,2m sales, up 7.5% Strong recovery in sales and profitability in H2 Li-ion sales confirm growth trend Sales increased by > 30% Significant success in Indian telecom market Increased visibility on future sales Strong commercial successes in nickel batteries during the year
6 Summary 2013 performance m 2013 2012 (1) YoY growth Sales (2) 624.2 592.8 7.5% EBITDA 92.5 102.3 (9.6)% Net income from continuing operations Net profit/(loss) from discontinued operations 41.7 42.0 (0.7)% (5.2) (7.3) 28.2% Net Income 36.5 34.7 5.2% EPS ( per share) 1.44 1.38 4.3% (1) Restated to apply revised IAS 19 accounting standard on pensions and excluding 5.2m non recurring sales to JCI. (2) At current exchange rates except for YoY sales growth which is at constant exchange rates.
H2 2013: return to strong sales growth m H1 2013 Growth (1) H2 2013 Growth (1) FY sales 2013 Growth (1) IBG 159.9 6.4% 208.0 31.3% 367.9 19.2% SBG 125.0 (9.1)% 131.4 (2.4)% 256.3 (5.8)% Total 284.9 (1.0)% 339.3 15.8% 624.2 7.5% Solid Q4 2013, sales up 12.3% 28.1% growth in industrial battery sales SBG sales down 7.3% (1) All sales growth at constant exchange rates. 7
8 Strong sales growth in Asia 2012 2013 2% 2% 14% 18% 14% 33% 32% 20% 33% 32% Europe North America Asia/Oceania Middle East and Africa South America
9 Growing Li-ion and nickel sales Sales 14 % +31% 18% 18% -7,7% 34% 30% 4% 4% 4% +7% 48% 48% 2012 2013 Lithium-ion Primary lithium Others Nickel
More diversified lithium-ion sales Total sales: 112m (1) Sales growth 2013: > 30% +1% 6% 13% 9% 16% 15% +8% +232% 39% 60% -8% 42% 2012 2013 Civil Electronics Transportation Stationary Space and Defence (1) At actual exchange rates. 10
11 EBITDA : Strong recovery in profitability in H2 Industrial Battery Group Specialty Battery Group 70.4m 33.7m 38.8m 59.1m 2012 2013 2012 2013 Strong positive impact from H2 volumes Improved performance of Li-ion operations Higher development costs to P&L Profitability in line with historical trend despite lower sales FX impacted profitability
12 2. Divisional performance
13 Industrial Battery Group Strong market share gains for industrial batteries + 20.6% / 17.7% (2) Stationary (1) 220.6m Growth driver was the telecom market Nickel batteries in US Evolion Li-ion batteries in India Follow-on order received for Q1/Q2 2014 deliveries Industrial standby sales growth in line with market ESS sales down due to contract delays > 10m contracts booked during last three months 60% 367.9M + 19.2% 37% + 10.7% / 8.9% (2) Transportation (1) 137.3m Excellent growth in the rail market in Asia and North America Strong H2 sales growth in the aviation market in the US Strong OEM and US military sales (1) Excluding 9.9m of sales of electrodes to Arts Energy (2) Growth by segment: Constant exchange rates / Actual rates
14 Specialty Battery Group A challenging year with lower volumes + 0.3% / (1.7)% (1) Civil Electronics 158.5m Sales growth in H2 Chinese metering demand remains high Weakness in 2013 was in North America Expanded client base New applications - Ecall 63% 256.3M -5,8% - 5.8% 37% (14.3)% / (15.8)% (1) Space and Defence 97.9m Reduced demand for radio and torpedo batteries Continuing to win projects for Li-ion systems Strong space sales in H2 with project pipeline remaining solid (1) Growth by segment: Constant exchange rates / Actual rates
3. Detailed financial review 15
EBITDA in line with guidance m 2013 Reported 2012 Restated (1) Sales 624.2 592.8 Gross profit 170.8 175.4 Operating costs (116.3) (105.6) EBIT 54.5 69.8 Depreciation/amortisation 38.0 32.5 EBITDA 92.5 102.3 (1) Restated to apply revised IAS 19 accounting standard on pensions and excluding 5.2m non recurring sales to JCI. 16
17 H1 to H2 2013 EBITDA bridge 70,0 60,0 50,0 8.9 4.4 6.7 (0.6) (0.3) (1.2) (5.4) 52.5 40,0 40.0 30,0 20,0 10,0 - H1 2013 IBG nickel volumes & mix SBG volumes & mix Li-ion Sales operations & marketing R&D costs FX impacts Other costs H2 2013
Increase in net income and EPS m 2013 2012 Restated (1) EBIT 54.5 69.8 Other operating income / (expense) 6.6 (0.5) Operating profit 61.1 69.3 Net finance costs (10.5) (12.6) Share of profit / (loss) of associates (2) 1.5 0.8 Income tax expense from continuing operations (10.4) (15.5) Net profit/(loss) from continuing operations 41.7 42.0 Net profit/(loss) from discontinued operations (5.2) (7.3) Net income 36.5 34.7 EPS ( per share) 1.44 1.38 Saft to propose a 4% increase in dividend at 0.78 per share. (1) Restated to apply revised IAS 19 accounting standard on pensions and excluding 5.2m non recurring sales to JCI. (2) Saft s 50% share in ASB net income. 18
Solid operational cash flow m 2013 2012 Net cash provided by operating activities 54.2 55.5 Net cash used in investing activities (56.9) (53.5) Net cash generated by/(used in) financing activities 1.8 (152.3) Net cash generated by/(used in) continuing operations Net cash generated by/(used in) by discontinued operations (0.9) (150.3) (8.4) 0.0 Net increase/ (decrease) in cash (9.3) (150.3) Cash at end of period 101.4 114.5 Free cash flow 16.6 (1) 11.9 (1) Before capital transactions, i.e. acquisition for 8.5m of Nersac Li-ion production unit. 19
20 A strong financial situation m 2013 2012 Gross financial debt 213.0 217.5 Net financial debt 111.6 103.0 Net debt to EBITDA ratio 1.18 (1) 0.98 (1) (1) Calculated as per contractual terms Two years extension of bank debt maturity agreed. Credit margin on bank debt reduced by 15 bps.
21 4. Market potential for Li-ion batteries Industrial market Renewable energy storage Industrial and commercial vehicles
22 Vision of the industrial market potential Total LIB ESS Market (1) Global Li-ion battery market, GWh Li-ion, industrial / others, GWh Li-ion, automotive, GWh Li-ion, consumer, GWh 35 9 15 40 15 30 60 50 80 2015 2020 2025 Source : Avicenne (1) Excludes vehicles/consumer
23 Composite view on Li-ion potential in Renewable Energy Storage Market ESS - Li-ion battery market, GWh 15 10 2 1 3 6 2015 2020 2025 Source: Roland Berger, Avicenne, Boston Consulting Group Short term 75% market in North America
24 Legislative and political support US FERC 755 ruling on frequency regulation California Storage Law AB 2514 :1.3GW by 2020 Europe Focus on Energy Storage in EU position papers 200m for ESS - Horizon 2020 Germany Italy Japan Korea 50m /yr subsidies for PV self consumption storage 2014/15 75MW Terna projects US$ 210m subsidy program launched Overall storage plan targets 2 GW by 2020 US$ 280m project funding 2013-17
Industrial and commercial EV and HEV vehicle market (1) (by volume) 1 765K 2% 22% 740K 1 000K 10% 24% 17% 33% 76% 66% 51% 2012 2015 2020 Source Frost&Sullivan Roland Berger Id Tech Ex Forklift trucks Off-road industrial vehicles incl. GSE Buses & trucks (1) Excludes passenger cars and car derived vans. 25
5. Outlook 26
27 Strong growth trend to continue in 2014 2014 m FY 2013 Guidance (1) Sales 624.2 660-700 EBITDA 92.5 102-108 Growth expected in both divisions in 2014 H1 sales growth will be stronger than H2 Li-ion to represent >20% of sales in 2014 (1) Guidance at constant exchange rates.