Andritz Ag Graz Akt

Good morning. A warm welcome from our side, Matthias from IR. Thank you for joining our Q3 earnings call. The call today will be held by our CEO, Dr. Joachim Schoenbeck, and our CFO, Norbert Nettesheim. Please also look at the disclaimer for a second. As you can see in the agenda, we will start with the key CEO messages and the Q3 highlights, followed by the more detailed financial performance. and an update on the business areas followed again by the outlook for 2024 and the Q&A session. And it's my pleasure now to hand over to our CEO, Dr. Joachim Schoenbeck.

Good morning to everybody. Thank you very much for joining us in this call early morning in your time. And we have the next slide, please. I think we had another... would say challenging quarter behind us economically challenging believe interest rates are however moving in the right direction for us none of the global crisis have been solved so they are still ongoing some upside potential from solving those and what you probably have not realized In Austria, we managed the election in the last quarter with the expected outcome. But I believe the much more important election will be next week. And we are looking forward to these results. If we look to hundreds, We could see an increasing order intake in Q3 compared to the previous year. However, market conditions are still difficult. We see a solid growth in the service business. And we see high interest in the solutions industry needs for the green transition, but actually purchase order and bookings remain slow. On the revenue, we see a slight decrease in the revenue year on year, about 3%. On the earnings side, we have a stable EBITDA and stable margin. Project execution has been very solid, no new surprises from from external sources. So I think we managed to execute as planned. We had an improved mix with increased share of the service and we could establish some price increases which definitely also helped our earnings. The margin remains stable and we had to put out some additional provisions for capacity adjustments as we do not believe that there will be a quick recovery across all regions and industries. Lead income is slightly lower but the lead income margin is rather stable. Go to the So I think we don't need to repeat the project activities picking up high interest for the green technologies, and we couldn't continue the growth service. And we definitely still work a lot out of a large existing order order backlog. we are adjusting our guidance for the year 2024. We see a slightly decreasing revenue. It was stable guided previously. However, the profitability remains stable as previously guided. So if we look to the third quarter, we had an order intake 1.9 billion. This was 6% up from Q3 23. However, still 5% below the revenue. Revenue is down 3%. At 2 billion, order backlog also decreased slightly here and here by 9%. EBITDA, as I said, 174 million stable with here and here. Same is true for the EBITDA margin with 8.5% and 180 million euro net income, 5.8%. That's a stable margin and slight decrease in net income compared to the previous quarter. Quick look at year-to-date nine, the first three quarters, order intake 5.7 billion Euro. That's down 12% from previous year. However, it's 5% below the revenue at 6 billion, which is down 3%. compared with the previous year. EBITDA here today at 507 million euro. Basically flat compared to last year. EBITDA margin slightly up to 8.4% compared with the 8.2% in the three quarters of last year. Net income fled at 342 million euro, 5.7% margin, slightly up compared with last year. So looking a bit more detailed into the order intake Q3, definitely what stands out is a strong increase in metals with 634 million euro order intake and also hydropower with 474. Pipe and paper significantly down almost 20% to 483 million and also environment and energy is down at 340 million almost. That's a rough hundred million down and that's the large green hydrogen order that we booked in Q3 last year that is missing if you look for environment and energy for the Q1 to Q3, we are still 13% up. So we can see solid growth, but that's the only business area at the moment where we see that growth compared to last year. All other pulp and paper, metals, hydro are significantly down compared with the previous year. And that's what brings our intake in total to 5.7 billion, 12% down from last year. The ratio by region shifted a bit from emerging market to Europe and North America, which now constitute for almost 60% of the total order intake. Revenue. We see a slight decline and the decline is clearly driven by pulp and paper. You can see in Q3 as well as in the first three quarters significantly down in pulp and paper, 10% and 9% respectively. Environment and energy is nicely growing in Q3 as well as in the first three quarters. Metals remains flat and hydropower is slightly declining in revenue, but that is more project related revenue distribution rather than a weakness in the market. because we still see in hydropower we see quite a good market. Service is 40% capital at 60% and from the circumstance I described it's clear that service share slightly grew from 38% to 40%. So backlog quarter on quarter decreased by 3%. That's clear if you look on the long run, it's still on a rather high level. Also here, the total picture is clearly driven by pulp and paper where the backlog significantly dropped. stayed stable in metals and it increased in hydropower and environment and energy. So I believe these are for sure the two areas that will keep the volumes up also in the next quarters to come. As I told before, earnings development is quite stable. We are at 507 million euro EBITDA, 8.4% margin on a reported basis and basically the same 510 million on a comparable basis. It's stable, I think we are quite happy that in these difficult market conditions we can keep the margin stable and take also the necessary activities to adjust our capacities to the lower demand we see in the market. On the ESG, I would say we are on track with our targets and in some majority of our KPIs we already achieved or overachieved our 2025 targets. What stands out on the negative side is our excellent frequency rate. where we could see where we have targeted 30% improvement for every year. We only basically here today nine we only have a very very small improvement there. We understood by beginning of this year that our programs were probably not not strong and not effective enough we started several new initiatives and now we see over the year we see um we already can see a good trend so we are we are quite positive that we can get back on track also in our health and safety activities everything else i think is going on Normal and then I would like to hand over to Norbert who will guide you through the financial performance in more detail.

Yes, thank you Joachim. Good morning to all on the call. As always, I quickly go through the group financials, P&L, cash flow, liquidity and the new KPI, internal capital, invested capital, what we have included in the slide deck. You see here the normal picture. I would say there's nothing really spectacular to report. 507, I have mentioned a little bit up, 8.4% after 8.2 last year. The Q3, end of Q3, depreciation still also unspectacular. Normal depreciation out of our investments leads to 10.5%. EBITDA on the left. Also 0.3 better than end of Q3 last year. The IFRS amortization is also unchanged. The regular investments on our regular depreciations on the things we have leads to an EBIT of 7.8, also 0.2 better. And now comes the only maybe mentionable element of this logic, the financial result down compared to last year. This is not driven by the interest and the investment situation. It's due to the fact that we have this interest result alone, which we had to one of our companies internally, which we deconsolidated. And this loan then came back to the balance sheet and we had to devaluate it. It's an effect of about 22 million, which is included in the financial results. If you take that out, the favorable development in the other part of the financial result is continuing. But you have to consider this 22 current year as a special effect in the financial result. Leads then to 7.6%. same as last year. And the taxes are a little bit better this year than last year, because we had last year some one-time effects from tax audits in USA and Austria, which brought this tax ratio last year a little bit up. And now we are at 25.6%. That helps us a little bit in maintaining the net income margin. which is at 5.7% after 5.6% last year. Absolute numbers as already mentioned a little bit lower due to the fact that sales is a little bit lower. What you're not seeing on this slide is a negative OCI coming from foreign exchange rate effects. Brazilian we are up, the women we are up and up. This all leads to devaluation of our foreign equity. and to a negative effect in OCI. But in total, this is the normal fluctuation, which comes like it comes. With this effect, total equity is then maintained. You see it in the papers we distributed, and total equity portion is 27.4. So all numbers, which I have not on the slides, but I regularly mention them, you see them in the send-outs and the handouts, from my point of view very very stable equity and result situation and that's further on so that's it on p and l and on total income and on equity here you see the cash side of our operations also nothing special compared to the previous quarters working capital effect is now after nine months, minus 140. So there was another increase in networking capital in Q3, which stole us a little bit of cash, but as I always say, normal cycle of doing businesses. Overall, 404 million cashflow from operating activities significantly increased compared to last year, where we had this high burden from the very steep increase in working capital, which isn't this year, not that dramatic anymore. So, 404 operating cash flow, and when you deduct the capex, it's 247 free cash flow, below the cash conversion of one, which is our target, but It's driven by this normal cycle in working capital. On the next page, you see the quarterly numbers for cash flow 96 in Q3. And in total, this fluctuation you are known of now since several quarters. In the average view, we are pretty stable, continuing to develop. above 500 million cash flow per year so that's it on cash flow cash flow results and on the bank account next page please to a net liquidity of 815 and the gross liquidity of 1.347 if you see the um the differences to end of last year 450 million less gross liquidity which is let's say driven by the net liquidity change plus the repayments of the loans, which I mentioned also several times in total this year, 335 million paid back. Yeah. And then this, in addition to the 105 million decrease in net liquidity out of dividend payment, CapEx operating cashflow overall still very stable and for the third quarter we for the fourth quarter we also expect no major changes in this picture so that's it on the cash situation next page please here we have added now a new metric we introduced it introduced it now in q3 to um so that you get used to it in advance to the end reporting um we report in future return on invested capital The calculation is described in the footnote below. And this is a common definition as you all use it in the capital market and in the analysis of what you are doing. It's more or less the total assets plus working capital plus minimum cash of five percent of sales plus intangibles and goodwill and then we put this in relation to our return after so operating return after taxes and as you if you see here's let's say after the increase steady increase from 19 to 23 we are now let's say stable above the 22 with the back of of nine means 30 value creation with our invested capital and uh quick one word to the capital employed you see that uh we are paying back our loans um and that we are going to invest organically also you will hear certainly something in future on an external growth and feedback payback we buy back some of our shares so we are also working on this uh the better utilization of the of the capital we have available so that's it more or less on the on the big numbers here you see the summary um i also don't want to steal times going through all this once again i simply want to point out first time a quarter is increased all the intake six percent more than q3 last year it's 1.9 we are on a good quarter level um story as in the previous quarters you haven't mentioned it big orders are still missing um that's driving the backlog a little bit down, sales pretty stable, service portion increasing, and this leads to a comparable ABA of 8.9%, which is in these times certainly something which we don't need to hide and where we are still doing a positive and a good job. We also started to concentrate more on cost management, seeing that the volume is where it is, so our commitment to stable margin has been given. And I'm sure that we can deliver this also for the full year. So that's it from my side. Thank you for listening. And I pass back to Joachim.