general meeting 2019 Utrecht, 17 April 2019
agenda 1. Aalberts 2. strategy & objectives 3. business review 4. business development 5. financial review 6. outlook 2019 7. questions & answers
1. Aalberts
our essence we engineer mission-critical technologies for ground-breaking industries and everyday life we are a company of mission- critical people who can’t resist going beyond the line of duty - good is never good enough sharing and discussing ‘bad’ gets us to brilliant – greatness is made of shared knowledge we are relentless in our pursuit of excellence 17 April 2019 Aalberts | general meeting 2019 4
our way of value creation our essence shareholder value o leading niche technology positions mission-critical o high entry barriers, pricing power technologies o high added-value margins, sustainable growth o operational excellence good is never o improve EBITA margins, strong cash conversion good enough o disciplined capital allocation o technology exchange greatness is made of o innovation speed shared knowledge o fast learning & adaptation 17 April 2019 Aalberts | general meeting 2019 5
our track record – over 40 years of sustainable profitable growth multi-industry focus portfolio growth focus niche technology focus 3000 2,759 420 2500 370 revenue (in EUR million) 366 2,025 EBITA (in EUR million) 320 2000 270 1,440 1500 220 219 170 168 1000 120 474 500 70 130 59 0 20 1975-1981 1987 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 IPO promoted to foundation promoted to AEX index company AMX index focused technology leader, strongly positioned for accelerated future growth 17 April 2019 Aalberts | general meeting 2019 6
our track record - shareholder value creation share price development earnings per share dividend per share (in EUR) (in EUR) (in EUR) 0.75 2.49 29.05 0.41 1.38 23.18 1.02 0.28 5.06 2008 2013 2018 2008 2013 2018 2008 2013 2018 CAGR 19% CAGR 9% CAGR 10% our relentless pursuit of excellence drives true shareholder value 17 April 2019 Aalberts | general meeting 2019 7
our key strength - mission-critical people the Aalberts way greatness is made of shared knowledge winning with people our unique advantage be an entrepreneur take ownership go for excellence share and learn act with integrity 17 April 2019 Aalberts | general meeting 2019 8
our global leading niche technology positions installation technology material technology climate technology industrial technology we are where technology matters and real progress can be made 17 April 2019 Aalberts | general meeting 2019 9
our way of sustainable entrepreneurship Since our inception in 1975, Aalberts has always been where technology matters and real progress can be made. Humanly, environmentally and financially. impacting eco-friendly buildings, sustainable transportation, lifetime extension of materials, clean water and sanitation and producing and consuming responsibly 17 April 2019 Aalberts | general meeting 2019 10
2. strategy & objectives
our strategy & objectives 2018-2022 strategy ‘focused acceleration' non-financial objectives financial objectives average organic remain improve worldwide leading niche focused technology positions revenue growth > 3% technology positions EBITA margin > 14% creating sustainable profitable growth ROCE > 18% free cash flow generating high conversion ratio > 70% added-value margins leverage ratio < 2.5 converting strong improve profitability use Aalberts operational execution continuously strengths solvability > 40% into free cash flow driven by entrepreneurship and a relentless pursuit of excellence 17 April 2019 Aalberts | general meeting 2019 12
our lean and effective structure digital Aalberts leadership team finance & IT business structure Aalberts networks stimulates business focus, entrepreneurship, fast learning and decision making 17 April 2019 Aalberts | general meeting 2019 13
innovation driving sustainable profitable growth continuous investments in R&D innovate portfolio & business leverage mega trends climate change manufacturing automation 2.0 urbanisation > 100 EUR mio master data management raw material scarcity > 400 FTE internet of things connected technologies and digital services globalisation co-development R&D investments increased leadership networks and exchange fresh thinking and to 4% of total revenue focused investments embrace new technologies our pragmatic culture and lean structure keep us ahead of the game 17 April 2019 Aalberts | general meeting 2019 14
converting strong operational execution into free cash flow organic revenue growth added value margin EBITA EBITA margin (in %) (in %) (in EUR million) (in %) 366 13.3 62.6 4.6 11.0 10.4 60.0 225 182 58.0 1.2 -2.4 2008 2013 2018 2008 2013 2018 2008 2013 2018 2008 2013 2018 EPS free cash flow free cash flow conversion ratio cash flow from operations (in %) (in EUR) (in EUR million) (in EUR million) 2.49 427 312 67.6 287 1.38 61.6 265 175 155 1.02 57.6 2008 2013 2018 2008 2013 2018 2008 2013 2018 2008 2013 2018 generating high added value margins to invest in innovations and market opportunities 17 April 2019 Aalberts | general meeting 2019 15
disciplined capital allocation cash dividend policy 30% of net profit before amortisation organic growth CAPEX EUR 130-170 million p.a. acquisitions - bolt- on 'sweetspot’ deployment EUR 100-200 million p.a. size EUR 20-150 million annual revenue acquisitions - strategic footprint deployment EUR 100+ million (depending on opportunity) size EUR 150+ million annual revenue strengthening our worldwide leading niche technology positions 17 April 2019 Aalberts | general meeting 2019 16
return on incremental capital employed (ROICE) capital EBITA employed 2008 182 1,352 2018 366 2,262 Δ 184 910 20.2% ten-year ROICE demonstrating the sustainability of our long-term business model 17 April 2019 Aalberts | general meeting 2019 17
3. business review
Aalberts highlights 2018 revenue added-value revenue +2% to EUR 2,759 million (organic +5%) o (in EUR million) (% of revenue) 2,759 62.6 operating profit (EBITA) +9% to EUR 366 million; o +2% 2017: 62.3 EBITA-margin improved to 13.3% EBITA EBITA % net profit before amortisation +15% to EUR 275 million; o (in EUR million) (% of revenue) 366 13.3 earnings per share EUR 2.49 (+16%) +9% 2017: 12.5 free cash flow amounted to EUR 312 million; ROCE o improved to 16.6% net profit earnings per share (in EUR million) (in EUR) 275 2.49 continued investments in organic growth o and innovation initiatives +15% +16% bolt-on acquisitions: PEM, VAF, Co-Planar and RMF; o capital expenditure ROCE (in EUR million) (in %) annual revenue of EUR 82 million 134 16.6 annual revenue of EUR 97 million divested and optimised o +13% 2017: 16.2 organic revenue growth +5%; earnings per share +16% continued investments in growth and innovations 17 April 2019 Aalberts | general meeting 2019 19
installation technology realised a good organic growth o revenue (in EUR million) 1,119 acceleration of the implementation of the long-term global plans o -1% management and sales teams in North America, Asia and Europe strengthened o EBITA many optimisation and efficiency initiatives were taken, additional costs were made o (in EUR million) 134 started process to roll-out the Aalberts company passport worldwide o -3% new product lines launched, additional investments fast-growing product lines o EBITA % (in % of revenue) offered integrated piping systems portfolio successfully to several key accounts o 12.0 innovation roadmap extended with digital, engineering initiatives o 2017: 12.2 multilayer systems excellent year, good growth North America and Europe o capital expenditure (in EUR million) 38 many good initiatives to further optimise portfolio, grow the business o focus on integrated piping and multilayer systems works out well o -13% many investments in alignment, optimisation and efficiency; focus works out well 17 April 2019 Aalberts | general meeting 2019 20
material technology did well during the year, especially in Europe o revenue (in EUR million) 747 North America strong performance, power generation challenging circumstances o +2% surface treatment activities successfully aligned in Europe o EBITA investments heat treatment increased to exploit the many opportunities o (in EUR million) 102 automotive many opportunities to develop new, more complex, highly specified o parts on larger global scale for electrification of vehicles and autonomous driving +5% Aalberts’ worldwide presence, development and investment power real advantage EBITA % o (in % of revenue) 13.7 aerospace continued execution business and investment plan o 2017: 13.3 global operational excellence initiatives made good progress; several locations o further optimised, divested or integrated capital expenditure (in EUR million) 59 strengthened portfolio with three bolt-on acquisitions; corrosion protection o technology North America, reel-to-reel surface treatment technology Europe, expansion North American footprint precision stamping +15% good performance with many opportunities; portfolio strengthened 17 April 2019 Aalberts | general meeting 2019 21
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