160311 Applus Presentation March 2016 In... · Economic growth in Spain Key risks: decline in capex...

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INVESTOR PRESENTATION MARCH 2016

Transcript of 160311 Applus Presentation March 2016 In... · Economic growth in Spain Key risks: decline in capex...

Page 1: 160311 Applus Presentation March 2016 In... · Economic growth in Spain Key risks: decline in capex and opex spend in Oil & Gas Resilience to economic downturn Developing countries

INVESTOR PRESENTATION

MARCH 2016

Page 2: 160311 Applus Presentation March 2016 In... · Economic growth in Spain Key risks: decline in capex and opex spend in Oil & Gas Resilience to economic downturn Developing countries

One of the world's leading testing, inspection & certification companies.

Provide solutions for customers in all types of industries to ensure that their assets and products meet quality, health & safety and environmental standards and regulations.

20,000employees

Listed on the

Stock Exchange since May 2014

€1,702million revenue in 2015

+70countries across all continents

Applus+ at a glance

Page 3: 160311 Applus Presentation March 2016 In... · Economic growth in Spain Key risks: decline in capex and opex spend in Oil & Gas Resilience to economic downturn Developing countries

A GLOBAL LEADER OF TESTING, INSPECTION AND CERTIFICATION

• No. 1 in Non Destructive Testing (NDT) for the Oil & Gas industry

• No. 2 Operator of Statutory Vehicle Inspections

• Leading independent Auto Proving Ground

Leadership in chosen markets and technology

• 20,000 employees

• 70 countries

• Over 48,000 customers

• Organised through 4 divisions

Global platform with local presence

• Revenue of €1,702 million, up 5.1% on 2014

• Adj. Op. Profit of €162.2 million, 9.5% margin

• Adj. Net Profit €97.9 million, up 11.6% on 2014

2015 results

End markets

Oil & Gas48%

Statutory VehicleInspection

17%

Auto OEM

10%

Power

8%

Other

13%

Diversified geographic footprint

Rest of Europe

28%

North America

22%

Latin America

9%

Asia Pacific13%

Middle East, Africa

12%Spain16%

Construction

4%

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INVESTMENT CASE

• A “TIC” company benefiting from Quality, Safety & Environmental structural growthdrivers:

• Regulations, Risk, Outsourcing, Product Variety, Complexity, Ageing

• Leading market positions in key markets

• Good balance of developed (2/3) and emerging market (1/3) exposure

• High barriers to entry eg: accreditations, reputation, relationships, global network and

innovation

• Resilient earnings profile due to critical nature of work, differentiated offerings, blue-chip customer relationships, diversified revenue streams and flexible cost base

• Longer term margin potential

• Management experience of TIC industry and managing challenging markets

• Strong cash flow with low capital intensity that can comfortably manage highergearing levels

• Fragmented industry

With 48% O&G exposed end markets, Applus+ is demonstrating its resiliencein the current environment and recover when energy capex spending resumes 4

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GROUP HISTORY

Milestones

€200M €675M €1,581M €1,702M

17 36 60 70

3,300 9,900 19,000 20,000

1996 - 2003 2004 - 2007 2008 - 2013 2014 - 2015

100% 53%

25%

22%

Acquisition of RTD (est 1937)

Acquisition of 20 businesses

Acquisition of Velosi(est 1982)

Acquisition of Norcontrol(est 1981)

The IPO of LaboratoriesContract awarded(est 1907)

IDIADAContractawarded(est 1971)

Establishmentof AgbarAutomotive

Financial Institutions and

other connected shareholders

Revenue

Employees

Countries

Shareholding

New Energy & Industry division formed

17%

7%Financial Institutions and

other connected shareholders

76%Free Float

70%

30%

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REVENUE HISTORY

Revenue for 2011, 2012 and 2013 are proforma for acquisitions within the relevant acquisition year

2011 2012 2013 2014 2015

Spain Rest of Europe US and Canada Latin America Asia Pacific Middle East and Africa

1,180

Reve

nue

(€bn)

1,460

1,5841,619

1,702

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Statutory vehicle

inspection services for

safety and emissions

Industrial and environmental

inspection, technical

assistance, non-destructive

testing and technical staffing

Product testing and

system certification

services from

multidisciplinary

laboratories

Vehicle proving

ground, engineering,

design, testing and

homologation services

employees

14,200

revenue

€1,187m

(70%)employees

700

revenue

€55m

(3%)employees

3,300

revenue

€297m

(17%)employees

2,000

revenue

€162m

(10%)

Energy & Industry Laboratories Automotive IDIADA

DIVISIONS

2015 Revenue(% Group) and employees

MainActivities

Margin

2015 Adj Operating

Profit(% Group)

€103m

(55%)

€5m

(2%)

€61m

(32%)

€21m

(11%)

8.7% 8.3% 20.4% 12.9%

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STRUCTURAL GROWTH DRIVERS

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Growth Drivers and Key Risks

Energy & IndustryIDIADA

(Automotive Engineering & Testing)

Automotive(Statutory

Vehicle Inspections)

Energy and other infrastructure investment

Maintenance of ageing Oil & Gas assets

Growth in Latin America infrastructure

Increase in regulations

Economic growth in Spain

Key risks: decline in capex and opex spend in Oil & Gas

Resilience to economic downturn

Developing countries adopting statutory inspection programmes

Incease in car volume

Key risks: changes in regulation and contract renewals

Regulations of vehicle safety and emissions

Increased number of vehicle models / shorter product life cycle

Increased outsourcing in developed markets

OEMs in Emerging Markets need to import technical know-how

Key risks: reduced R&D spend and model variants in Auto OEM and contract renewal

See Annual Financial Statements for all risks and further detail

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Applus+ ENERGY & INDUSTRY

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Revenue by GeographyOverview

Revenue by End Market

Oil & Gas68%

Mining3%

Asia Pacific14%

North America25%

Europe34%

Latin America10%

Africa & Middle East17%

Construction5%

Power11%

Telecom2%

Aerospace2%

Other9%

• Integration of 3 previously separate divisions:Norcontrol – Founded Spain in 1981 - Joined 2004RTD – Founded in Holland in 1937 - Joined 2007Velosi – Founded in Malaysia in 1982 - Joined 2011

• Assesses the quality, safety, environmental and other efficiency of the design, construction and operation of industrial facilities and civil infrastructure

• Services include Non Destructive Testing, Technical Staffing, Vendor Surveillance, Construction & Site Supervision, Environmental, Health & Safety

• Active in 60 countries with 14,000 employees

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ROW2%

LatAm5%

USA8%

Applus+ LABORATORIES

Revenue by Geography

Spain50%

Rest ofEurope

25%

Overview

• Product testing and certification services

• Multi-technology state-of-the-art laboratories serving the Aerospace, Auto, Construction, Energy, IT industries

• Presence in Europe, Latin America, North America, Asia and Saudi Arabia with 700 employees

Asia10%

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Applus+ AUTOMOTIVE

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Revenue by GeographyOverview

Revenue by Regulatory Regime

Concession/authorisation

based (regulated)77%

Liberalised23%

North America13%

• Established in Spain in 1996

• 2nd largest statutory vehicle inspection operator globally1 with leading market positions in Europe and Americas: 11 million inspections pa

• Vehicle safety and emissions inspection

• Active in both regulated and deregulated markets

• Presence in Europe and Americas with 3,300 employees

1. Based on number of inspections carried out

Rest of Europe45%

Spain31%

Latin America12%

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Applus+ IDIADA

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Revenue by GeographyOverview

Revenue by Service

Body & Passive Safety34%

Homologation15%

Asia Pacific25%

Rest of Europe50%

Spain21%

Rest of World3%

• Founded in 1971. HQ in Tarragona, Spain

• Owned 80% by Applus+ and 20% local government and since 1999 Applus+ operates the assets owned by the local government under a long term contract1

• Engineering, testing, homologation and R&D services provider to the leading vehicle manufacturers (OEMs)

• Specialised facilities, people and proving ground with knowledge of global technical requirements

• Global network in 23 countries across Europe, Asia and Latin America with 2,000 employees

Proving Ground20%

Chassis & Powertrain

31%

1. Contract runs until 2019 and the Government has committed

a first extension to 2024

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Fernando BasabeCEO2011 /19

LEGEND

NamePositionJoined Applus+ /Years of industry experience

Joan AmigóCFO2007 /9

Jorge LluchSENIOR VP CORPORATEDEVELOPMENT2007 /9

Phillip Morrison

EXECUTIVE VP

2015/ 34

North America Latin America Northern Europe Southern Europe, Africa,

Middle East, Asia & Pacific

Pablo San Juan

EXECUTIVE VP

1988 / 27

Sytze Voulon

EXECUTIVE VP

2014/ 25

Ramón F. Armas

EXECUTIVE VP

1988 / 27

Jordi Brufau

EXECUTIVE VP

2007 / 9

Aitor Retes

EXECUTIVE VP

2009 / 7

Carles Grasas

EXECUTIVE VP

1987 / 29

Eva ArgilésGENERAL COUNSEL2013 /3

Anna DíazCHIEF COMPLIANCE2009 /7

José DelfínSENIOR VP HUMANRESOURCES2006 /10

M. Teresa SanfeliuHSQE VP1996 /28

Energy & Industry division Laboratories division IDIADA division Automotive division

Applus+ EXECUTIVE TEAM

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CALENDAR AND FURTHER INFORMATION

Year end 31 December

Q1 2016 9 May 2016

Q2 2016 26 July 2016

Q3 2016 3 Nov 2016

Q4 2016 28 Feb 2017

Ticker: APPS-MC

Aston Swift, Vice President Investor Relations

Barcelona +34 935 533 111

[email protected]

[email protected]

www.applus.com

CALENDAR AND CONTACT

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DISCLAIMERThis document may contain statements that constitute forward looking statements about Applus Services, SA (“Applus+” or “the Company”). These statements are based on financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations, which refer to estimates regarding, among others, future growth in the different business lines and the global business, market share, financial results and other aspects of the activity and situation relating to the Company.

Such forward looking statements, by its nature, are not guarantees of future performance and involve risks and uncertainties, and other important factors that could cause actual developments or results to differ from those expressed in these forward looking statements.

These risks and uncertainties include those discussed or identified in fuller disclosure documents filed by Applus+ with the relevant Securities Markets Regulators, and in particular, with the Spanish Market Regulator.

Applus+ does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realised.

This document may contain summarized information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information, including if it is necessary, any fuller disclosure document published by Applus+.

Nothing in this presentation should be construed as a profit forecast.15