Andritz Ag Graz Akt

Good morning, ladies and gentlemen. Welcome to Andris' quarter three results webcast. I'm Susan Trust, head of group communications and marketing, and I will be moderating today's webcast. I would like to introduce our president and CEO, Joachim Schoenbeck, and our CFO, Norbert Nettesheim. After the presentations, you will have the possibility to ask questions. Now, without further ado, I would like to hand it over to our CEO, Joachim, please.

Ladies and gentlemen, good morning also from my side. Thank you very much for attending our call. Yeah, we have to recognize that our biggest wish for this year did not materialize. We were looking for the first year since a while without a global impact and a global new crisis, which unfortunately did not happen. We faced the war against Hamas in Israel and Gaza, and we are a bit uncertain what will result from that for the months to come. On the other side, we also had some good news. The constant increase of interest rates came to a halt. So in Europe as well as in the US, interest rates did not increase further. Also, inflation came down, which we believe is a good sign for what is to come. And then for the first time since more than a year, the Korean export has risen over its year-to-year comparison figure for the first time since 13 months in October, which we also believe is a good sign that the global economy might improve. might improve from what is to come. Looking to the impacts from the war on Hamas in Israel, on hundreds, we can heavily report that the impacts are low. We had only four orders in total, with a total order volume. of around 50 million euro with an order backlog of 20 million euro so we expect this is going to be suspended a bit we had we had cleared all our construction construction sites there and can report that all hundreds personnel returned safely to their homes our own operations in israel our daughter company otorio focusing on cybersecurity. Operations have been a bit impacted by the services the employees had to do. They were called in to the army partially, but we can report that all services for our international contracts could be fully performed as promised to the customers. So if we go to the hundreds, numbers for the third quarter. We could continue the strong growth in revenue and earnings. And out of the still high backlog, order booking was significantly down compared to third quarter of 2022. We had two large pulp and paper orders booked in the third quarter of last year. with roughly 1 billion in total, and that is for sure what we are missing out. So, therefore, the order intake is down, but we are not greatly concerned about that. Revenue is up by 11% to 2.1 billion. The backlog is still healthy with above 10 billion. The EBITDA went up by 16% on a quarter-to-quarter basis to 176 million euro and the EBITDA margin in the third quarter increased from 8.1 to 8.4%. The net income rose by 27% to 125 million euro in the third quarter. Quick look on the year to date, on the first three quarters of the year. So we still can report a book to bill ratio of still above one with order intake of 6.5 billion euro and revenue of 6.2 billion euro, even though the order intake was down from last year's. 7.5 billion. On a backlog, I reported EBITDA year-to-date 9 is 509 million euro. The EBITDA margin remains stable compared to last year at 8.2% and the net income of 346 million was up more than 30%. So we made an, we believe, important acquisition. We acquired a data international. It's a leading engineering company offering complementary technologies in growing markets with a very good fit on the technical side as well as on the regional side. We have with our combined portfolio, we can enable complete solutions now for dewatering and drying. for starch, biofuel, and food industry. All three markets, we believe, will significantly grow over the next years. Founded already in 1968, DEDAT has already a significant installed base, so sustaining a very stable service business on that. and we further improve our readiness for new markets we believe to develop that is on plant-based proteins as well as lithium processing. The data will be reported in our business area separation. Revenue is about 90 million and we have roughly 100 employees. Further on, we acquired the company Nuff. It's a manufacturer of manual automated control valves, safety process control, mainly for the pulp and paper industry. It's a strong legacy company, more than 100 years history in pulp and paper with an, I would say, appropriately installed base. It's based in Linköping in Sweden. Very good technical products, a bit neglected over the past years and we believe that within our pulp and paper will be an important acquisition for us to further improve our automation, digitalization business as well as providing full solutions to our customers. This will be reported in our pulp and paper business area. This year's revenue will be about 15 million 50 employees and we believe that from there we can generate a strong growth. Look to the performance in the third quarter in more detail. We can say that the service and mid-size projects are well on track. For sure, we're missing the large orders in pulp and paper, the one, as I said, the one billion from last year in quarter three that made a significant gap. However, as you can see, we could grow all other business areas in order intake also in the third quarter of this year, especially hydro. Hydro is up by 7%, metals up by 1% in separation by 4%. That is quite good considering the circumstances we in general have. Here you can see the order intake split up in service, smaller capital orders and these large capital orders and you can see that it's quite stable even growing in the service and it's stable in the smaller capital order business on the Of course, the very large orders were not on the market, so we could say that we did not lose significantly, but circumstances at the moment are for sure not for the very high investments. We have a significant increase of revenue based on the execution of our healthy backlog. So all business areas could increase their revenue substantially. Pulp and paper up 13%, metals up 14%, hydro up 6%, separation was up 7%. First of all, it's good that we could roast the revenue, that we could diligently execute the large orders, that we could overcome the supply chain bottlenecks, that we are well on track in executing the orders on time and budget. We are very happy that the service business is continuously growing. We have over a five-year period compound annual growth rate of 9%, which is well above the general trend. And you could see that from the $3 billion in 2022, if we now... Compared with the last four quarters, it's significantly up. And it shows that we are on the right track in growing this business stronger and further than the capital business. You could see in the third quarter, revenue is nicely up. for the entire group from 763 million in last year to 829 million and all business areas contributed to that. If we look this at a larger scale on the year-to-date nine, increases is even larger we could grew from 2.1 billion to 2.4 billion the total service revenue in pulp and paper we are up to by more than 130 million to 1.3 billion metals nicely grew from 286 million to 330 million hydro went up from 352 to 450 million and also separation even though they already have a 41 percent share they could grow to 464 million euro the service business so we are very happy that we can even in a more challenging market environment, increase the service revenues and that for sure has also a lot to do with the good capital business, with the good market shares we could develop in the projects over the past years when the big projects were on the market. The order backlog is still favorably high, €10.4 billion. The majority comes from pulp and paper and from hydro, and of course the majority comes from the large capital orders. Only €2.3 billion out of that is related to service business. We have a significant increase in earnings and it shows that we, despite the challenges we had, that profitability remains very good. So the EBITDA went up from 426 million to 509 million at a constant profitability of 8.2. If we adjust that for extraordinary items, we went up from the 423 million to 513 million. That's even up 21%, as we had a positive impact last year with the sale of a property. And we had this year some smaller restructuring barriers in the order of 4 million euro. In total, I think it's a stable profitability we can report. And the same applies if we look to the various business areas. stable in pulp and paper, hydro and separation, and very nice development in metals, significantly up in the profitability from 2.3% to 4.5%, showing that we are on the right track there. So the details to the financials will be reported to you by our CFO, Norbert Nettersheim. Norbert, if you please continue.

Yeah, thank you for passing on to me. Ladies and gentlemen who are on the call, also good morning from my side. I'm happy to have a pleasure to present you this time again an increase in interest Net income margin, start this time at the right side of this slide, 5.6% net income margin, a number which we didn't see for hundreds, at least as long as I can look back to the past. And this is the result of, let's say, the very good operational performance Joachim explained already, EBITDA. The rest from EBIT 8 down to net income is pretty much unchanged compared to previous periods, so I will not reflect too much on that. The only thing to mention here is that with the amortization we have a major impact now, which certainly creates a little bit of a tailwind for net income. This is simply due to the fact that the Schuler IFRS amortizations are over now after the acquisition in 2013. It helps a little bit technically, but let's say the major impact comes from the real operational results. And this we see then also in the net income. The next topic which also is now an issue which shows a little bit of an improvement compared to what we showed you in the first half here. You maybe remember that in the first half here I elaborated a little bit on this net working capital changes at Andretz. We had a huge impact on cash flow by the increase of the net working capital in the normal cycle of operating business. In the first two quarters, it was about 360 million. And I told you also in the last call that this trend of increasing working capital will not continue in the same way as it did in the first half here. So in Q3, we saw only another good 30 million cash relevant increase in working capital. So in total, we expect that this is now, let's say, mostly digested. Depends a little bit on all the income intake of the last quarter. on the down payments and prepayments from new orders but again I would say we will not see similar effects as we saw it in Q1 or Q2 means now with this let's say slowing down of this increase in working capital we show now also a positive cash flow of 75 million and for the quarter We have here more than 150 million cash flow. That means in Q3, we brought more or less our results also into the treasure box. Cash conversion rate was favorably back to nearly one in Q3. In the small box at the right upper side of the chart you see the explanations on working capital and I simply want to point out line 1, line 2 and the second line before the end. These exactly are the lines which increased due to the execution of the large orders, increase in contract assets, increase in inventories, and increase in advance payments to suppliers. This is simply the normal effect out of the execution of the major orders where we got the down payments in previous periods. Generally, prepayment situation is pretty stable. So what we consumed, we also got. So the last line contract liabilities is nearly stable, which means that, as I said before, we are coming now more in a steady state of working capital developments. That's it on cash flow. And because it's so important, I added two slides. additional slides on that. Here you see the average cash flow of the last full seven years was more than 300 million. So it means when you remember the operational results of the last seven years, we are more or less bringing everything down to the cash flow, what we report in profits. And you can trust that we are heavily working to continue this in the future. And with regard to the quarter-to-quarter, view on operating cash flow. I have added here, only as a one-time slide, just this month, this quarter, a quarterly view on the cash flow, and you see here how significantly it is fluctuating from quarter to quarter so these comparisons quarter three to quarter three of previous years is mostly very much influenced by the by the order intake situation and by the by the down payment situation for the large orders when you Go to the three years rolling average, which you see at the right side of this slide. It's a much more stable business and the numbers are much more favorable as we see them from one quarter maybe to the next quarter. So this is just a little bit of an education, but allow this please for my side to get a little bit clarity into this cash flow development topic. So that's about the cash flow. Cash flow ends at the end in the liquidity and the balance sheet. and also here you see that from the end of the second quarter to end of the third quarter we have improved the net liquidity went up by 125 million the gross liquidity didn't go up that much reason was very simply that we are still in the process of let's say optimizing our balance sheet a little bit so we paid back 100 million of debt in the Q3, which then, let's say, leaves us still a very comfortable cost liquidity of 1.6 million. And compared to the size of our company, I would say we are here in a very favorable position and we are ready to execute whatever has to be executed and where we need cash for. So that's about the liquidity situation. And last but not least here, this summary slide more for you to read in the papers. Most is set. Order intake, URFM has emphasized on, huge order is missing. Revenues significantly increased. Cash flow influenced by networking capital. topic at the last line I would quickly emphasize on employees increased but most of this increase is due to acquisitions and due to temporary effects in the staff on construction sites which as soon as construction site is done then also will be adjusted so it's not an increase in fixed cost capacities or in fixed capacities and will not be a burden for the future periods. So that's it from my side. Pass back to Joachim. Thank you very much.