Trelleborg Sealing Solutions - Trelleborg Sealing Solutions ist ein ...
Trelleborg Group to acquire Smiths Polymer Sealing...
Transcript of Trelleborg Group to acquire Smiths Polymer Sealing...
G R O U P
1
Trelleborg Group to acquire Smiths Polymer Sealing Solutions
Press conference - July 21, 2003
G R O U P
2
Key messagesKey messagesMain topics for today’s presentation
Transaction &Deal RationaleTransaction &Deal Rationale
PSS - a leader in the polymer seals industry
Significant value creation
Adding a strong platform for further growth
G R O U P
3
The transactionThe transactionTrelleborg to acquire Smiths PSS
Trelleborg has signed an agreement with Smiths Group plc to acquire its Polymer Sealings Solutions (PSS) division for £ 495 M or approx. 6,500 MSEK on a net debt free basis
PSS is a world leader in design, manufacture and supply of high-quality, high-specification polymer seals and sealing solutions to a diverse range of end-user markets
For the last 12 months ending June 2003 PSS had (according to Trelleborg estimates)-Sales of approx. 5,500 MSEK- EBITDA of approx. 880 MSEK- EBIT of approx. 680 MSEK- Approx. 6,000 employees
G R O U P
4
Deal rationaleDeal rationalePSS – a leader in the polymer precision seals industry
PSS has leading market positions across a number of segments
Extensive product range focused on high-value applications and world-class engineering and proprietary materials technology
Industry leading financial performance
Adding a new strong growth platform based on polymer technology
Positive annual cost synergies estimated approx. 100 MSEK with full efftect after 3 years
Earnings enhancing already 2004
G R O U P
5
Transaction &Deal Rationale
Key messagesKey messagesMain topics for today’s presentation
PSS PSS -- a leader in the a leader in the polymer seals polymer seals industryindustry
Significant value creation
Adding a strong platform for further growth
G R O U P
6
A SEK 53 billion market with high entry barriersA SEK 53 billion market with high entry barriersGlobal polymer seals overview
Polymer seals market, Europe and North AmericaSEK 41 billion
Market drivers• More demanding applications• Tougher environmental legislation• Customer demands for improved
reliability• Extended product life• Whole-life cost• Zero-defect supply
Automotive
AerospacePipe
45%
42%
8%5%
Industrial
G R O U P
7
Precision seal products ...Precision seal products ...
Hydraulic seals
Gaskets
Diaphragms
Rotary seals
Linear & rotary bearings
Airframe seals
O-rings
Pipe seals
V-rings
In three polymer areas – Rubber, Polyurethan and PTFE
G R O U P
8
... in safety-critical environments well-known to Trelleborg... in safety-critical environments well-known to TrelleborgPSS sales by end user, 2003P, SEK 5.1 billion
Industrial60%
Automotive
AerospacePipe
26%
9%5%
G R O U P
9
Leader in European Industrial polymer sealsLeader in European Industrial polymer sealsNiche player in North America
Industrial seals market, EuropeSEK 9.3 billion
20%
Freudenberg-NOK
42%Other
4%
20%
PSS
Parker HannifinSKFFederal Mogul
6% 8%
Market drivers• Environmental legislation• Capital goods market• Reliability of OEM equipment• Extended product life• Reducing supplier base
Industrial seals market, North AmericaSEK 9.3 billion
24%Other
25%Freudenberg-NOK
11%PSS Parker Hannifin
25%5%
Federal Mogul
SKF
5%5%
Greene Tweed
PSS Industrial
G R O U P
10
Leading-edge in premium Automotive sealsLeading-edge in premium Automotive sealsSpecialized niche player in Europe and North America
Automotive seals market, EuropeSEK 8.0 billion
22%Freudenberg-NOK
43%Other
PSS4%
6%
10% Hutchinson
BrussParker HannifinSKFFederal
Mogul
4%5%6%
Market drivers• Environmental legislation• Car and light truck production volumes• Reliability of OEM equipment• Extended product life• New applications• Material development and processing
skills
Automotive seals market, North AmericaSEK 9.3 billion
20%Other
25%Freudenberg-NOK
15%
5%PSS
Parker Hannifin
20%15%Federal Mogul
SKF
PSS Automotive
G R O U P
11
Global supplier of Aerospace polymer sealsGlobal supplier of Aerospace polymer sealsEuropean leader and a runner-up in North America
Aerospace seals market, EuropeSEK 1.3 billion
23%
Hutchinson
46%Other
20%
PSS
Parker HannifinGreene Tweed4% 7%
Market drivers• Commercial and military aircraft
production volumes• Reducing supplier base• Passenger air miles• Military activity• Weight reduction
Aerospace seals market, North AmericaSEK 2.0 billion
50%Other
31%
7%PSS
Parker Hannifin
9%
Hutchinson3%
Greene Tweed
PSS Aerospace
G R O U P
12
Leading-edge in European Pipe polymer sealsLeading-edge in European Pipe polymer sealsIn a growing market
Pipe seals market, EuropeSEK 1.3 billion
Market drivers• Construction activity• Infrastructure improvements• Economic development in Eastern
Europe• Switch from concrete to plastic pipes• Ease of installation• Extended product life
18%
Bode20%
PSS
Denso & SteinMOL
Hultec
Other
16%10%
6%
30%
PSS Pipe
G R O U P
13
Strong presence in Europe and North AmericaStrong presence in Europe and North AmericaPSS sales by region, 2003P, SEK 5.1 billion
EuropeEurope74%
North North AmericaAmerica
Asia Asia PacificPacific
Latin Latin AmericaAmerica
22%
3%1%
Showing strong growth in Asia Pacific
G R O U P
G R O U P
14
Global manufacturingGlobal manufacturingOverview of production locations
SwedenErsmarkForshedaMörbylångaDenmark
Helsingør
PolandKrakow (x2)
JapanTokyo
IndiaBangalore
Malta
UKAshchurchSwadlincoteRotherhamBridgewaterMilford HavenNewtownRoss-on-Wye
ItalyLivornoModenaTurin
FranceConde-sur-Noireau
MexicoTijuana
OregonEugene
ColoradoBroomfield
IndianaFort Wayne
OntarioGuelph
New HampshireSomersworth
BrazilSao Paulo ~4,300 manufacturing personnel in
27 facilities worldwide– 3,300 Europe/Asia/Pacific– 900 North America– 100 latin America
G R O U P
15
A complete sealing solution providerA complete sealing solution providerPSS Industrial marketing key markets, Europe/Asia/Pacific, % of sales
Machine tools/presses
16%
15%
15%
9%8%
5%3%2%2%2%
23%
Fluid power
Construction/agricultural equipmentChemical
ProcessIndustry
Electronics
Sanitation
MarineOil & gas
Chemical/pharmaRaw material processing
Miscellaneous
Close to end-users• 70% manufactured
in-house• 30% outsourced
G R O U P
16
Strong R&D and testing capabilitiesStrong R&D and testing capabilitiesProduct development overview - safety critical products
• Closely aligned with business lines and coordinated globally
• Research primarily driven by customer requests, but also generic
• 6 main development centers in Europe and North America
• 310 employees engaged in engineering and technical support roles
• New proprietary materials -cooperation with polymer raw material suppliers
• Full 3D modeling reduces cost• 71 product design patents (existing
or pending)
G R O U P
17
Transaction &Deal Rationale
Key messagesKey messagesMain topics for today’s presentation
PSS - a leader in the polymer seals industry
Significant Significant value creationvalue creation
Adding a strong platform for further growth
G R O U P
18
Positive contribution from the outsetPositive contribution from the outsetKey financials, Roll 12 M per June 2003
SalesMSEK
Trelleborg PSS*** Trelleborgpro forma
16,931
•Approximate figures according to Trelleborg estimates•**Excluding non-comparable items*** At average rate GBP/SEK
5,500*
22,431+32%
Trelleborg PSS*** Trelleborgpro forma
Trelleborg PSS Trelleborgpro forma
1878+57%
680*
1,198
12.30+38%
3.40*
8.90
Operating Profitexcl gw amort, MSEK
EPS, excl. goodwill amort.**SEK
G R O U P
19
Substantial synergiesSubstantial synergiesSynergy overview
Annual synergies –excl synergies from sales -expected to be MSEK 100 -full effect after 3 years
Costs associated with synergy extraction estimated to MSEK 60
Stronger sales growth through medium/long term cross selling
Purchasing/sourcing materials
Rationalization of certain activities (e.g., mixing)
Site consolidation
Sales and distribution
G R O U P
20
Obtaining targeted “normalized” gearingObtaining targeted “normalized” gearingDebt/equity ratio, Trelleborg, Proforma as per June 2003
0
50
100
150
40
129
TrelleborgJune 2003
Trelleborg June 2003 pro forma
Group target 75-125%
G R O U P
21
Transaction &Deal Rationale
Key messagesKey messagesMain topics for today’s presentation
PSS - a leader in the polymer seals industry
Significant value creation
Adding a strong Adding a strong platform for further platform for further growthgrowth
G R O U P
22
Adding leading industry positions to our GroupAdding leading industry positions to our Group
Automotive AVSIndustrial AVSBrake shimsBootsAgricultural tiresSolid industrial tiresIndustrial hoseIndustrial hose/distributionMarine fender systemsIndustrial profilesRubber membranesPSS Aerospace sealsPSS Automotive sealsPSS Industrial sealsPSS Pipe seals
1111321-1111312
1222-1-3---2---
1211-1--1--2---
Share of core business
2002
~80%2002~90%2002 pro forma incl. PSS
With excellent opportunities to grow
G R O U P
23
A balanced organization structureA balanced organization structureWith maintained synergies
Share of pro forma 2002 core operations sales (MSEK 22,500)
Trelleborg AutomotiveTrelleborg
AutomotiveTrelleborg Engineered
Systems
Trelleborg Engineered
Systems
Trelleborg BuildingSystems
Trelleborg BuildingSystems
PSSPSS
Purchasing
Material
Mixing
40%
13%15%
8%
24%
Trelleborg Wheel
Systems
Trelleborg Wheel
Systems
G R O U P
24
Entering a phase of Profitable GrowthEntering a phase of Profitable GrowthIllustrative milestones
2003
Achieved goals
Conglomerate
1999
Clear directionEnthusiasm & commitment
1.New strategic
direction
• Broad anchoring• Polymer focus
2.Portfolio
optimization
• Divestment of Distribution 51%
• Divestment of sector Other
Strategic & operational focusReleased capital
3.
Strengthened market positionsCritical massTechnology & service capabilitiesFinancial balance
Focused industry group
Turnover increase by >110%, from SEK 8 to 23 billion
4.Efficiency &
macro adjustment
• Staff reductions • Plant shut-downs
Stable operational platformCredibilityTransparencyVisible leadership
Company & ownshare purchases
• Strategic acquis-itions, primarily within Automotive
• Active share re-purchase program
2003
5.Profitable
growth
• Product- & market-driven organic growth
• Acquisition-driven growth
• Leading positions
• Leading technologies
Pending AcquisitionPSSNormalized gearing
G R O U P
25
To sum up ...To sum up ...Main topics for today’s presentation
• GBP 495 million acquisition of Smiths PSS• Perfect fit within focused polymer track
Transaction &Deal rationaleTransaction &Deal rationale
PSS - a leader in the polymer seals industry
PSS - a leader in the polymer seals industry
Significant value creationSignificant value creation
Adding a strong platform for further growth
Adding a strong platform for further growth
• Leading positions, leading technologies• Improved balance in business portfolio• Combining profitability and growth
• Solid strategic and commercial rationale• Positive contribution from the outset• Substantial synergies• Obtaining targeted “normalized” gearing
• Attractive SEK 53 billion polymer seals market• Precision seals in safety-critical environments• Leading industry positions• Global manufacturing and strong R&D
G R O U P
26Q & AQ & A