Financing Monitor Presentation
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Orchard Finance Monitor Presentation December 2011 Index . Introduction . Financial performance . Balance sheet and capital structure development . Trends in equity / share capital . Interest-bearing debt composition . Financing and dividend policy . Outlook . About Orchard Finance and Carnegie Consult . Contact details 2 Introduction . Last year Orchard Finance Consultants (OFC) developed a AEX* AMX Top 20 non-listed database to monitor the financing and financing policies of the major Dutch publicly listed firms (excluding financial institutions and real Ahold Aalberts Industries Blokker estate investment trusts) on the basis of the annual reports AirFrance-KLM AMG Cosun AkzoNobel Arcadis Damen Shipyards ASML ASMI De Vierschaar (De Heus Voeders) Boskalis BAM Delta . Available databases are normally based on public financing DSM Brunel Dura Vermeer Groep transactions (e.g. listed bonds) or data from financial statements. In Fugro CSM Eneco our database, we have included relevant statements from the Heineken Heijmans FrieslandCampina executive board and disclosures on the financial statements KPN Imtech Handelsveem Beheer (Steinw eg) Philips Logica Luchthaven Schiphol Randstad Mediq Nederlandse Gasunie . This enables us to follow not only the trends and developments of Reed Elsevier Nutreco Nederlandse Spoorw egen capital structures and corporate funding, but also the transparency of SBM Offshore Ordina Pon Holdings TNT Pharming Sperw er disclosure and the stated financing policies TomTom Ten Cate TBI Beheer Unilever UNIT4 The Greenery WoltersKluw er USG People Van Oord . This year we expanded our database by including the top 20 non- Vopak VDL Groep listed firms based on their sales performance of 2010 (for so far Wavin VION Holding 2010 figures are available). This presentation discusses the Wessanen VolkerWessels financing and financing policies of 37 publicly-traded non-financial firms of the AEX* (17 firms) and AMX (20 firms) indices compared to 17 companies 20 companies 20 companies non-listed (top 20)1 firms over the period 2007 – 2010 *: excl. ArcelorMittal and Shell Note: average sales for these groups in 2010 was EUR 12.9bn (AEX*), EUR 2.6bn (AMX) and EUR 3.5bn (Top 20 non-listed) . We end with an outlook 1: Excluding pure (commodity) traders and PE owned firms 3 Index . Introduction . Financial performance . Balance sheet and capital structure development . Trends in equity / share capital . Interest-bearing debt composition . Financing and dividend policy . Outlook . About Orchard Finance and Carnegie Consult . Contact details 4 Revenues fueled by economic recovery and favorable currency effects, organic growth limited for both listed and non-listed firms AEX* AMX Top 20 non-listed (x EUR bn) 700 70 70 600 60 60 500 50 50 413.8 400 336.6 40 40 313.0 239.5 61.2 300 30 30 56.8 58.1 59.4 44.5 46.5 44.0 200 20 42.3 20 100 204.6 215.6 203.8 218.5 10 10 0 0 0 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 Sales AEX* Sales ArcelorMittal & Shell Sales AMX Sales Non-listed . Sales growth of 7.2% in 2010 . Sales growth of 4.2% in 2010 . Sales growth of 2.4% in 2010 . Economic recovery one of key drivers for . Cyclical industries strongly benefited from . Netherlands primary market of non-listed growth in sales (e.g. ASML +182%) economic recovery (e.g. Aalberts , ASMI) firms, no impact of positive currency effects . Favorable currency effects increased . Difference in growth with AEX caused by late . Overall organic growth of non-listed firms revenues of AEX* firms (e.g. Philips) cyclical companies (e.g. BAM, Heijmans) also limited like AEX* and AMX firms 5 Operating profit at near record levels due to heavy cost cutting during the crisis AEX* AMX Top 20 non-listed (x EUR bn) 50 10 10 15.9% 8.0% 8.0% 10.2% 14.8% 7.3% 14.4% 9.6% 40 12.9% 8 8 9.4% 6.1% 8.9% 30 6 6 20 4 4 34.8 30.3 31.0 5.8 26.4 5.7 5.2 5.7 10 2 2 3.5 3.4 3.5 2.6 0 0 0 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 EBITDA EBITDA margin EBITDA EBITDA margin EBITDA EBITDA margin . EBITDA of AEX* increased by 31.9% . EBITDA of AMX increased by 37.5% . EBITDA of non-listed increased by 10.9% . EBITDA margins at record levels . EBITDA margin back to 2007 pre-crisis . EBITDA margin almost back to 2007 pre- levels crisis levels 6 Index . Introduction . Financial performance . Balance sheet and capital structure development . Trends in equity / share capital . Interest-bearing debt composition . Financing and dividend policy . Outlook . About Orchard Finance and Carnegie Consult . Contact details 7 Growth in assets regained momentum through large acquisitions (Inv. cap x EUR bn) AEX* AMX Top 20 non-listed 200 25 50 25.6 2.7 21.1 25.2 2.3 3.1 3.3 2.4 2.8 2.7 3.7 1.0 160 38.0 25.3 20 40 4.5 1.1 25.3 25.6 3.5 2.3 2.9 2.4 6.8 3.4 5.3 7.0 7.1 2.2 2.4 120 28.7 15 2.0 30 57.4 56.7 59.8 6.4 5.7 5.2 5.6 5.7 80 54.1 10 20 26.9 28.2 30.1 22.6 40 76.9 76.5 81.7 5 8.6 9.0 9.0 10.0 10 52.7 0 0 0 2.3 3.4 3.4 3.2 -0.3 -5.5 -8.1 -4.0 -40 -5 -10 2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010 Intangible fixed assets Intangible fixed assets IC 173.1 Tangible 175.3 fixed assets 175.8 188.4 IC 21.6 Tangible 22.6 fixed assets 22.2 24.7 IC 38.4 45.0 43.4 44.3 Other fixed assets Other fixed assets Intangible fixed assets Tangible fixed assets BS 224.3 NWC 232.3 (excl. cash) 230.4 251.8 BS 33.1 NWC 34.5 (excl. cash) 33.5 36.7 BS Other50.2 fixed assets58.2 NWC56.7 (excl. cash) 58.3 Cash and cash equivalents . Several companies used their strong balance sheet for further expansion in wake of the economic recovery, which resulted in a large number of acquisitions in 2010 (e.g. Boskalis, CSM, Heineken, Imtech and Unilever) . Net working capital increased for AEX* and AMX after record lows in 2009, slight decrease for non-listed in 2010 . Cash and cash equivalents fairly stable, except for small decrease for non-listed firms Intangible fixed assets NWC (excl. cash) *: Net working capital increase for AEX* companies largely attributable to TNT, Tangible fixed assets Cash and cash equivalents which re-classed all their Express assets (EUR 2.0 bn), including fixed assets, as 8 Other fixed assets other current assets in anticipation of the demerger plan. Equity at record levels in 2010 (Inv. cap x EUR bn) AEX* AMX Top 20 non-listed 200 25 50 1.6 11.3 1.5 3.8 17.6 14.3 10.0 1.5 1.8 2.0 3.1 160 20 6.8 40 57.2 3.1 11.1 12.4 10.9 37.8 58.9 59.1 5.9 7.7 6.3 120 15 2.4 30 7.2 27.4 0.6 2.9 3.8 4.1 4.2 27.2 2.1 2.3 2.2 0.9 0.9 0.7 0.7 2.0 29.1 2.5 1.2 0.7 80 30.8 10 0.8 20 1.9 2.5 13.2 25.3 25.4 88.6 90.0 10.9 11.2 24.2 24.2 40 69.3 75.2 5 10.4 10 0 0 0 -40 -5 -10 2007 2008 2009 2010 2007 2007 2009 2010 2007 2007 2009 2010 Group equity Group equity IC 173.1 Mezzanine 175.3 175.8 188.4 IC 21.6 Mezzanine 22.6 22.2 24.7 IC 38.4 45.0 43.4 44.3 Other non-current liabilities Other non-current liabilities Group equity Mezzanine Long term debt Long term debt Other non-current liabilities Long term debt BS 224.3 Short 232.3 term debt 230.4 251.8 BS 33.1 Short 34.5 term debt 33.5 36.7 BS 50.2 58.2 56.7 58.3 . No significant changes in the amounts of interest-bearing debt outstanding, slight reduction for non-listed firms . Mezzanine (or hybrid capital) remains limited in size, slight decrease for AMX firms, fairly stable for AEX* and non-listed . Growth in assets, particularly fixed assets, is mainly financed by equity Group equity Long-term debt Mezzanine Short-term debt 9 Other non-current liabilities Further improvement in capital structure Net debt / EBITDA Solvency 3.0 50% 48.2% 2.5 2.35x 45% 43.6% 43.6% 2.26x 42.7% 2.00x 39.5% 2.0 2.21x 2.19x 40% 1.74x 1.81x 36.1% 1.74x 1.76x 1.5 35% 32.9% 33.5% 1.52x 35.7% 30.1% 1.31x 32.6% 1.0 30% 29.8% 0.64x 0.5 25% 2007 2008 2009 2010 2007 2008 2009 2010 AEX* AMX Non-listed AEX* AMX Non-listed . Strong growth in EBITDA and fairly stable net debt . Listed firms: since 2008 continued improvements in resulted in a strong decrease in leverage for AEX* solvency due to strong increase in equity (1.31x) and AMX (1.81x) in 2010 .