Saft Groupe SA Full year results 2014

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Saft Groupe SA

Full year results 2014

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Saft proprietary information – confidential Saft Groupe SA – Full year results 2014

Disclaimer

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 This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements, including assumptions, opinions and views of the Company or cited from third-party sources, contained in this presentation are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated development. Neither the Company nor any of its parent or subsidiary undertakings or any such person’s officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments.

 No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the Company or any of its parent or subsidiary undertakings or any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

 This presentation is directed, in the United Kingdom, only at investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), high net worth entities, or persons falling within Article 49(2) of the Order or, in the United States, only at "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended.

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Agenda

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1. Group performance 2014

2. Divisional performance

3. Detailed financial review

4. Fostering profitable growth for Saft

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Saft proprietary information – confidential

1.

Group performance 2014

Saft Groupe SA – Full year results 2014

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2014 highlights

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

Full year performance in line with targets



€678.4m sales, up 8.7%



Growing sales in all main technologies and regions



EBITDA of €104.0m, margin increase of 50bps at 15.3% of sales



Li-ion sales confirm growth trend in new markets and applications



> 27% overall sales increase in Stationary + Transportation



Space & Defense Li-ion sales down by 7%



Overall Li-ion sales up 11%

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Solid business growth and financial performance

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€m

2014

2013

YoY growth

Sales

(1)

_678.4

_624.2

_8.7%

EBITDA

104.0

92.5 12.4%

EBIT

64.4

54.5 18.2%

Net income from continuing

operations

48.1

41.7 15.3%

Net profit/(loss) from discontinued

operations

-

(5.2)

n.s

Net income

48.1

36.5 31.8%

EPS (€ per share)

1.83

1.44 27.1%

(1) At current exchange rates except for YoY sales growth which is at constant exchange rates.

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Operational highlights

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 Major breakthroughs in Asia(1)

 YoY sales growth of 18%

 Numerous commercial successes on railway market  Market share gains in metering vs. low cost local suppliers  New gas and water markets

 Zhuhai plant passed 100 million cells produced  1st ESS container for Japan

 Continued commercial Li-ion successes for ESS around the world

 Hybrid power plant in Bolivia

 9 ESS containers for 9 MWp PV plant in La Reunion Island  Intensium Max containers for Kauai Island 12 MW solar farm

 Container for extreme temperature capability for Arctic Circle in Canada

 Robust performance of traditional technologies

 Large industrial standby wins for Middle East oil & gas customers  Strong growth and market share gains in nickel telecom batteries

 Success for the Philae lander mission highlighting technological leadership in primary lithium

A well balanced activity per technology and application,

positioned on growing markets

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2.

Divisional performance

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Industrial Battery Group

Strong growth in both nickel and Li-ion

batteries

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

Strong growth in ESS: - grid scale projects

- Slow emergence of residential



Robust industrial standby sales growth: - Gain of market share

- Strong growth in Middle East and India



Telecom sales down:

- End of large Reliance contract

- High growth in sales of nickel batteries in the US



Strong sales growth on all markets.



Li-ion drove sales growth in aviation and vehicles.



Railway sales increase driven by Asian markets. (1) Excluding €14.1m of sales of electrodes to Arts Energy (2) Growth by segment: Constant exchange rates / Actual rates

+ 16.0% /

15.4%

(2)

€415.9m

+13.3%

Stationary

(1)

_{+ 10.4 % /}

_10,2%

₍₂₎

€243.3m

2014 sales

58%

of IBG sales

€158.5m

2014 sales

38%

of IBG sales

Transportation

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Specialty Battery Group

A return to growth driven by civil electronics markets



Strong sales growth driven by metering.



Asian & European metering markets growing.



Increased market share in China.



Reduced defence sales in all segments.



Slight decrease in space sales due to timing of deliveries.

(1) Growth by segment: Constant exchange rates / Actual rates

+ 13.0% / 13.1%

(1)

(15.1)% / (15.1)%

(1)

10

€262.5m

+2.1%

€179.3m

2014 sales

68%

of SBG sales

€83.2m

2014 sales

32%

of SBG sales

Civil Electronics

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EBITDA : Increased profitability in both divisions

11 €38.8m €47.2m

2013

2014

10.5% 11.3%

2013

2014

23.1% 23.8%

Industrial Battery Group

Specialty Battery Group

€62.6m €59.1m



Strong positive impact from volumes



Continued improvement in performance of

Li-ion operations



P&L impacted by YoY increase in product

development costs



Good increase in profitability despite limited

sales growth

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3.

Detailed financial review

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Improved operational profitability

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2014

Reported

2013

Reported

€m

Sales

678.4

624.2 Gross profit

193.3

170.8 Operating costs

(128.9)

(116.3)

EBIT

64.4

54.5 Depreciation/amortization

39.6

38.0 EBITDA

104.0

92.5

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

Saft to propose a 5.1% increase in dividend of €0.82 per share.

(1) Saft’s 50% share in ASB net income.

Strong increase in EPS of 27.1%

2014

Reported

2013

Reported

€m

EBIT

64.4

54.5 Other operating income / (expenses)

(0.6)

6.6 Operating profit/(loss)

63.8

61.1 Net finance costs

(2.1)

(10.5)

Share of profit / (loss) of associates

(1)

_1.9

_1.5

Income tax expense from continuing operations

(15.5)

(10.4)

Net profit/(loss) from continuing operations

48.1

41.7 Net profit/(loss) from discontinued operations

-

(5.2)

Net income

48.1

36.5 EPS (€ per share)

1.83

1.44

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Saft proprietary information – confidential (1) Before capital transactions, i.e. acquisition for €8.5m of Nersac Li-ion production unit.

Solid cash flow generation

€m

2014

2013

Net cash provided by operating activities

78.9

54.2 Net cash used in investing activities

(32.8)

(56.9)

Net cash generated by/(used in) financing activities

(4.0)

1.8 Net cash generated by/(used in) continuing

operations

42.1 (0.9)

Net cash generated by/(used in) discontinued

operations

-

(8.4)

Net increase/ (decrease) in cash

42.1 (9.3)

Cash at end of period

150.2

101.4 Free cash flow

46.2

16.6

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A strong balance sheet

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€m

2014

2013

Gross financial debt

227.6

213.0 Net financial debt

77.4

111.6 Net debt to EBITDA ratio

(1)

_0.65

_1.18

(1) Calculated as per contractual terms.

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4. Fostering profitable growth for Saft

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Improving efficiency

Continuously streamlining our operations

18 Saft Groupe SA – Full year results 2014

Closure of Precious

Plate Florida

Expanding battery assembly

capacity in lower cost countries

Cost optimization project in

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Fostering future growth

Increasing our production capacity to meet growing demand

Closure of Precious

Plate Florida

Expanding battery assembly

capacity in lower cost countries

Cost optimization project in

Lithium-ion production facilities

Factory expansion in

China (SOP H1 2016)

New MnO2 production

line in Valdese (SOP

H2 2015)

Additional production line in

Tadiran (SOP end of 2016)

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Fostering future growth

Expanding our presence in emerging economies

Closure of Precious

Plate Florida

Expanding battery assembly

capacity in lower cost countries

Cost optimization project in

Lithium-ion production facilities

Factory expansion in

China (SOP H1 2016)

Increased production capacity

in rail and stationary in France

New MnO2 production

line in Valdese (SOP

H2 2015)

Additional production line in

Tadiran (SOP end of 2016)

Reinforcing our sales &

service teams in India

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Saft’s short and mid-term perspectives for Li-ion

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What we know:

production launches



First deliveries of Airbus A350 batteries

from H2 2015.



Launch by Kion of its new electric forklift

truck range with Saft batteries.



Saft batteries in electric and hybrid buses

in scale test in Stockholm and Hamburg

for major European manufacturer - SOP

H1 2016.



6T military starting battery launch in 2015.

What we see:

market trends



Storage of renewable and grid

management: pipe of ESS commercial

projects remains good.



Slow adoption of residential storage but

promising medium-term prospects.



Telecom: strong potential in emerging

markets.



New stationary applications: large UPS,

data centers.



Growth opportunities in marine and

medical markets.

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5.

Outlook

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2015 and mid-term objectives

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

2015



Sales growth ˃ 5%

at constant exchange rates.



EBITDA margin ≥ 15.8%

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Appendices

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2013 & 2014 quarterly sales

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Q1

Q2

Q3

Q4

In €m at actual

exchange rates

2013

2014

2013

2014

2013

2014

2013

2014

IBG

74.6 93.2 85.3 112.3

90.5 92.5 117.5

117.9 SBG

58.9 61.0 66.1 63.6

62.7 64.3 68.6 73.6

Total

133.5 154.2 151.4 175.9 153.2 156.8 186.1 191.5

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2015-2018 Ambitions

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Positive

market

trends

Focused

growth

strategy

Our

mid-term

targets



8 to 10 % CAGR in sales at constant exchange rates through organic

expansion* over 2015-2018 period



EBITDA margin above 17 % *



Improved cash generation from improved WC discipline and lower capex



Balance value creation allocation between investment for growth and

returns to shareholders

* Excluding effect of major economic downturn and excluding impact of potential acquisitions