ANDRITZ Annual Report 2005 Customer Projects 004 Pulp and Paper Business Area Brazil
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GLOBAL DESTINATIONS Annual Report 2005 KEY FIGURES 2001-2005 OF THE ANDRITZ GROUP (IFRS) Financial Figures in MEUR 2005 2004 2003 2002 2001 Order Intake 1,975 1,837 1,394 1,300 1,121 Order Backlog as of 31.12. 1,696 1,439 1,054 904 740 Sales 1,744 1,481 1,225 1,110 1,319 EBITDA1) 131 115 84 81 95 EBITA2) 107 93 63 59 68 Operating Result (EBIT) 107 76 49 45 55 Earnings before Taxes (EBT) 110 77 49 46 60 Net Income 80 54 31 28 37 Cash flow from Operating Activities 237 208 5 76 72 Capital Expenditure3) 27 29 21 23 24 Employees as of 31.12. (excluding apprentices) 5,943 5,314 4,771 4,601 4,545 Fixed assets 308 276 279 293 317 Current assets 1,083 877 688 617 625 Equity4) 329 277 239 229 240 Provisions 190 160 150 145 159 Liabilities 873 717 577 536 544 Balance sheet total 1,391 1,153 967 910 942 EBITDA margin (%) 7.5 7.8 6.9 7.3 7.2 EBITA margin (%) 6.1 6.3 5.1 5.3 5.2 EBIT margin (%) 6.1 5.1 4.0 4.1 4.2 Net Income/Sales (%) 4.6 3.6 2.5 2.5 2.8 ROE (%)5) 24.3 19.5 13.0 12.2 15.4 Equity Ratio (%) 23.6 24.0 24.7 25.2 25.5 EV6)/EBITDA 6.3 4.4 5.2 2.4 2.1 Depreciation/Sales (%) 1.4 1.5 1.7 2.0 2.0 Amortization/Sales (%) 0.0 1.1 1.2 1.2 1.0 Stock Exchange related Figures 2005 2004 2003 2002 2001 Earnings per share (EUR) 6.13 4.13 2.26 2.04 2.82 Dividend per share (EUR) 2.07) 1.4 1.0 0.9 0.9 Payout ratio (%) 32.6 34.3 44.2 44.1 31.9 Equity attributable to shareholders per share (EUR) 25.0 20.7 18.0 17.2 19.3 Market Capitalization as of end of period (MEUR) 1,207.1 729.3 493.4 298.9 276.9 Share price at year-end (EUR) 92.85 56.10 37.95 22.99 21.30 Highest closing price (EUR) 92.85 56.50 37.95 28.00 23.50 Lowest closing price (EUR) 56.59 35.00 21.00 19.40 20.52 Notes [4] Equity: Total shareholders‘ equity incl. minority interests [1] EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization of goodwill [5] ROE (Return On Equity): Net Income/Equity [2] EBITA: Earnings Before Interest, Taxes, and Amortization of goodwill [6] Enterprise Value: Market capitalization based on year-end closing price minus net liquidity [3] Additions to tangible and intangible assets [7] Proposal to the Annual General Meeting Financial Calendar 2006 02.03.2006 Results for 2005 05.05.2006 First Quarter of 2006 29.03.2006 Annual General Meeting 04.08.2006 First Half of 2006 03.04.2006 Ex-dividend 07.11.2006 First Three Quarters of 2006 07.04.2006 Dividend payment Europe Austria Graz (Headquarters of the Andritz Group) Vienna Czech Republic Hradec Králové Denmark Esbjerg Finland Helsinki Hollola Kotka Savonlinna Tampere Varkaus France Châteauroux Gennevilliers Haguenau Saint Martin Le Beau Scorbé-Clairvaux Vélizy-Villacoublay Germany Bretten-Gölshausen Cologne Hemer-Sundwig Kirchheim/Teck Krefeld Mettmann Ravensburg Regensburg Selb Senden Great Britain Belper Hull Staffordshire Netherlands Den Helder Geldrop Rotterdam Poland Warsaw Romania Bukarest Cisnadie Russia Moscow St. Petersburg Slovakia Humenné Spišská Nová Ves Spain Barcelona Madrid Sweden Hedemora Karlstad Örnsköldsvik Stockholm Vallentuna Växjö Switzerland Wohlen Sales office Production site Americas Brazil Curitiba Eunápolis Pomerode Porto Alegre São Paulo Serra Canada Brantford Edmonton Lachine Nanaimo Prince George Richmond Saskatoon Terrace Chile Concepcion Santiago USA Alpharetta Arlington Bellingham Canonsburg Decatur Glens Falls Houston Janesville Lakeland Lakewood Lenexa Muncy Pell City Roswell Scott Depot Spartanburg Springfield Tualatin Walpole Venezuela Valencia Asia China Beijing Foshan Shanghai India Bangalore New Delhi Chennai Indonesia Jakarta Japan Tokyo Malaysia Selangor Singapore Singapore Taiwan Taipei ANDRITZ – Thailand Bangkok Australia GLOBAL PRESENCE Dandenong Africa South Africa Durban Edenvale Vision and Company Profile 003 GLOBAL DESTINATIONS Vision Andritz - World market leader for high-tech production systems and services for pulp, paper, steel, and other specialized industries. Company profile The Andritz Group is a global market leader in the supply of customized plants, systems, and services for the pulp and paper industry, the steel industry, solid/liquid separation, and animal feed production. Headquar- tered in Graz, Austria, the Group has about 5,900 employees worldwide. It manufactures and sells its products and services globally. The Group is regarded as a technology leader in each of its Business Areas, with full-line capabilities in critical process areas. In addition, Andritz of- fers comprehensive services including the supply of replacement parts, the manufacture of engineered wear products, and the provision of technical support services, which help customers optimize production and reduce overall costs. ANDRITZ Annual Report 2005 Customer Projects 004 Pulp and Paper Business Area Brazil Growing economy and an emerging force in the global pulp and paper industry Area 8,511,965 km2 Population 186,112,794 Most populated city São Paulo, approx. 11 million inhabitants Key economic data GDP (purchasing power parity) $ 1.6 trillion GDP (official exchange rate) $ 605.6 billion GDP real growth rate 2.6% GDP per capita (purchasing power parity) $ 8,500 Inflation (consumer prices) 6.8% Unemployment rate 9.9% Source: CIA World Factbook 2005 Avenida Atlantica and Copacabana, Rio de Janeiro ANDRITZ Annual Report 2005 Customer Projects Pulp and Paper Business Area 005 Renato Guéron President of Veracel Celulose S.A., Brazil “Andritz’s EPC approach makes our job of managing projects considerably easier and reduces our risk exposure.“ ANDRITZ Annual Report 2005 Customer Projects 006 Pulp and Paper Business Area In May 2005, the Veracel, Brazil, pulp mill started up very successfully and ahead of schedule. Andritz provided the complete fiberline from the digester to the finished market pulp bales and the white liquor plant. Photo: The Andritz-Downflow Lo-Solids® system at the Veracel mill represents the latest continuous cooking technology from Andritz. ANDRITZ Annual Report 2005 Customer Projects Pulp and Paper Business Area 007 “WE DEPEND UPON ANDRITZ TECHNOLOGY.“ Interview with Renato Guéron President of Veracel Celulose S.A., Brazil Through a series of strategic acquisitions, Andritz first to take the “risk” of doing an EPC project (an Andritz of operation. Veracel construction was completed in 17 has transformed itself from a vendor of special- recovery boiler). Now, I think the risk would be in not months and six months later we are consistently achiev- ized equipment to a full-line supplier of pulping doing it EPC. We are improving upon the EPC concept ing design capacity. It’s very important to start the return and chemical recovery solutions. Andritz delivered every time we do a project. Suppliers are much more in- on investment quickly. Every day is important. the complete fiberline (including the drying plant) terested in EPC and behaving as partners. Andritz guar- for Veracel Celulose’s greenfield mill in Brazil. We antees schedule, cost, and performance for an entire Perfect partner spoke with Renato Guéron, President of Veracel, process area. It makes our job of managing the project We gave out awards after the start-up and selected two about the role of technology and the relationship considerably easier and reduces our risk exposure. perfect partners for this project. One was the Andritz with Andritz. consortium for the drying machine. The team had out- Single line advantages and risks standing performance in meeting our schedules and Experience There was a time when no mill would take the risk of always maintained a proactive attitude if a potential prob- I’ve been involved in the pulp and paper industry since having one large piece of equipment – there was built-in lem developed. We’ve had very good cooperation. graduating with a degree in Pulp & Paper Technology redundancy with at least two of everything. The thinking from the University of Maine, USA in 1968. I’ve worked was, “If we have only one, we have nothing.” Times have in engineering, project management, operations, and I changed. Suppliers like Andritz now have the technology am now Chief Executive of Veracel. and competence to make complete lines. Since we want to save money by making lower cost investments, we Process improvements chose the single-line concept. If we now have only one, Throughout my career, the technology has continued to we have everything we want. This mill depends upon evolve. Brazil has continuously followed the best avail- Andritz technology to make pulp. There is no backup able technologies. Perhaps that is why the industry in position. Brazil is so effective. The most notable improvements have been in the environmental performance of the mills. The Veracel start-up Yet, we have not had to sacrifice yield (more usable fiber Our start-up was excellent. Our production is ahead of out of a tree and into the pulp) or quality (higher bright- plan – we’re producing more pulp than we thought we ness and strength). would at this point. More importantly, the quality of the pulp has been exceptional. One of the very important Project management improvements start-up tools was the Andritz dynamic simulator. I don’t The advent of EPC (engineer-procure-construct) in this see any possibility for a new, big mill to be installed in industry has been a tremendous boom. Before coming to the future without the use of a simulator.