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