Oerlikon FY 2007 Presentation

8/13/2019 Oerlikon FY 2007 Presentation

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Managing for profitability

Zurich, March 27, 2008


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Page 2 2007 annual presentation

Disclaimer

This presentation is based on information currently available to

management. The forward-looking statements contained herein

could be substantially impacted by risks and influences that are not

foreseeable at present, so that actual results may vary materially

from those anticipated, expected or projected.


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Executive summary of fiscal year 2007

Fiscal year 2007 results

Business strategy and outlook

Agenda


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Strong Sales improvement since 2005

20072004 2005 2006

Annual Sales development

Further substantial top-line growth expected

(in CHF m)

1,8501,605

2,206

5,629


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Sustainable EBIT improvement since 2004

20072004

496

2005

-329

2006

Annual EBIT development

Three consecutive years with strong EBIT improvement

(in CHF m)

329

34


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Key financials(1) in 2007 with massive growth - (YoY)

(1) Oerlikon incl. former Saurer Group for the months of November and December 2006

2,491

2006

6,041

2007

+3,550

Orders received Sales EBITOrders on hand

(in CHF m)

1748

2006

1,841

2007

+93

2,206

2006

5,629

2007

+3,423

325

2006

496

2007

+171

+ 143% + 5% + 155% + 53%


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Pro forma(1) key financials with double digit growth

5,220

2006(1)

6,041

2007

+821

Orders received Sales EBITOrders on hand

(in CHF m)

1,748

20072006(1)

1,841

+93

4,684

20072006(1)

5,629

+945

510

+ 15.7% + 5.3% + 20.2% + 15.3%

430

2007

496

2006(1)

+66

(1) Pro forma presentation assuming an initial consolidation of the Saurer Group as per January 1, 2006


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Strong cash conversion adds to financial leeway

Operative CF improved from CHF 382 m (2006) to CHF 682 m (2007)

Total available liquidity at CHF 1.7 bn as of Dec. 31, 2007

Financial measures provide flexibility for the future

-35

credit

facilit

y

shortterm

fin.

liabilitie

s

longterm

fin.

liabilitie

s

a

vaila

ble

debt

cash

mark.

sec.

incl

.

treas

urys

hares

totalav

ailabl

e

liquidity

2,500

-1,748

717

484

504 1,705

(in CHF m)


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Oerlikon profitability indicators*

20

30

-10

-20

-30

2004 2005 2006

RONA

0

10

-70

ROE

Profitability indicators

(in %)

Return on Equity (ROE) improved

by more than 20% in 2007

Return on Net Assets (RONA)

surged by almost 50% in 2007

* 2006 2007 Continued operations

2007

ROE: EBIT / Equity attributable to shareholders of the parent

RONA: EBIT / Net assets


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80

90

100

110

120

130

140

150

01/07 02/07 03/07 04/07 05/07 06/07 07/07 08/07 09/07 10/07 11/07 12/07

Index[Dec.0

6=100]

Institutional Retail

Significant expansion of our shareholder base(1)

51%Others

28%Victory

14%Renova

7%

Oerlikon

Oerlikon treasury shares and 2 keyshareholders hold around 49%

Free float increased to 29% from 25%

(1) As per Dec. 31, 2007

Currently > 9,000 investors in our share register

Total shareholder base rose by20% or ~1,300 shareholders (2)

Institutional shareholder base

increased by 42%(2)

Retail investor base plus 18% (2)

(2) Change in number of registered shareholders, Dec. 31 2006 vs. Dec. 31 2007

Shareholder base development


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Enhancement / stabilization / realignment of overall company- Efficiency increase, customer proximity and profitability enhancement

- Refocusing of R&D activities, horizon expansion, installation of Scientific Advisory Board

Refined mid term strategy- Smooth migration to industrial conglomerate of related technologies with common base:

high-tech components & machinery, engineering solutions and related services

- Strong focus on high margin niche markets - differentiating through technology & services

- Clean Technologies further developed, Solar ramp-up accelerated, introduction of micromorph tandem line

- Clear prioritization of portfolio activities, smooth integration of recent acquisitions- First successes in portfolio streamlining with divestment Blu-ray and Optics

Operative initiatives well on track- Purchasing program exceeds expectations

- Cross-segment R&D projects filling pipeline for tomorrow

- Joint expansion of global footprint accelerated, successful regional initiatives

Solidified financial performance and position- Organic growth accelerated, strong improvement of cash conversion through working capital initiative

- CHF 2.5 bn credit facility secured, attractive conditions and re-affirmation of investment grade status


Oerlikon achieved or even exceeded major 2007 targets


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Oerlikon priorities 2008 and beyond

Realize potential of Solar business- Further establish micromorph tandem cell as industry leader- Delivergrid parity by 2010 with today's technology- Drive global thin-film ramp-up (incl. expansion of offering)

Focused growth strategies value generation in key businesses- Coating Services: drive global/offering scale technology leadership- Drive Systems: full potential niche strategy- Vacuum: strategic growth production and sales in Asia

- Space: increase scale and scope in attractive niche Manage cyclical businesses and improve profitability

- Textile: completion of value chain - product portfolio and market segment expansion- Esec: leverage product innovations and improve sales and pricing

Portfolio: selected acquisitions in focus BUs consequent portfolio streamlining- Coating: continue selected expansion- Blu-ray / DVD: Divestment completed, Optics divestment in progress

Center: Efficient center, wave 2 purchasing (i.e. LCC), R&D / innovations

Leadership: further strengthen strong leadership systematic approach tocontinuously upgrade our talent pipeline, continued communication

Target 2008: Sales > CHF 6 bn, further EBIT increase


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Agenda


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Orders received and on hand by Segment

(in CHF m)

2006(1)

2007 Delta 2006 2007 Delta

Group

continuing operations5,220 6,041 +16% 1,748 1,841 +5%

Coating 1,195 1,346 +13% 478 510 +7%

Vacuum 444 477 +7% 59 78 +32%

Components 297 376 +27% 169 200 +19%

Textile 2,329 2,655 +14% 867 821 -5%

Drive Systems 952 1,185 +24% 175 231 +32%Other 3 3 -7% 0 0

Discontinued operations 140 96 -31% 26 19 -27%

Orders received Orders on hand



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Double digit sales growth driven by all Segments

Textile

8

2006(1) Coating

28

0

DriveSystems

2007othersVacuumCompo-nents

(1) Oerlikon incl. former Saurer Group 2006 and restatement

Note: Discontinued operations with CHF 103 m Sales not included

+22% +6% +2% +27% +17%Growthrate

4,684

5,629

570

178

161

+20%

Asia

Regional Sales 2007

CHF 5.6 bn

Others

EMEA

18%

Americas38%

41%

3%

Sales by Segments

Sales well balanced worldwide

(in CHF m) (in %)


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140

80

Others/Consol

12

Coating

8

Vacuum

22

Components Textile

7

DriveSystems

430(1)

496

Keydrivers


Note: Continued operations

Double digit EBIT growth mainly driven by an extraordinarily

successful year for Textile

20072006(1)

EBIT margin

430

496

Improvedvolume (+14%)

and marginof Balzers

Volume(+6%);enhancedproductportfolio

Excellent yearfor Space(volume +16%);US$-impact on

Esec margin

Significantlyimprovedvolume of

Schlafhorstand Barmag

Improvementin volume(+17%);

clean technew market

Non-recurringfinancial

gains in 2006

+15%(in CHF m)

+9% + 17% -39% +205% +10%

+15% +12% +10% +8% +7%

Growthrates

79


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Cash flow strong operating cash flow embedded in

measurement matrix

(1) Before change in net current assets and tax

678

479

2006(2) 2007

+199

Operating cash flow(1)

Measurement matrix

Implementation for FY 2007

Sales, EBIT and cash flowtargets for incentive system

Incentive system harmonized,

simplified and broadened:

- Top management:

60% fix, 40% variable

- Senior management:

70% fix, 30% variable

(in CHF m)



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1,071

Cash flow highly improved working capital intensity

20072006

1,160(3)

-89

Working capital(1)

7177

2006 2007

5054

20072006

4941

20072006

Working capital needsreduced by CHF 230 m

DIO(2) DSO(2) DPO(2)

(1) receivables gross payables + inventory gross(2) DIO: Days Inventory Outstanding; DSO: Days Sales Outstanding; DPO: Days Payables Outstanding(3) Excluding CHF 277 m accounts payable for Saurer squeeze out

(in CHF m)


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347349 235

202

(1) Pro forma presentation assuming an initial consolidation of the Saurer Group as per January 1, 2006; (2) w/o impairment

Cash flow - stable capex in growing business environment

Depreciation & amortizationCapex

+0%

2006(1) 2007 2006(1) 2007

+16%

1.7

1.5

2006(1) 2007

Capex / Depreciationratio

(in CHF m) (in CHF m)


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Group financing

Total CHF 2.5 bn: CHF 600 m term loan for 3 years, CHF 1,900 m revolving facility for 5 years

Very attractive margins: 40/45 BP indicate clear investment grade rating

One financial covenant (net debt/EBITDA)

No assets pledged

Successful syndication of credit facility

Successful tender offer for Saurer Bond

More than 95% of the outstanding nominal amount have been tendered

Benefits from interest and credit market developments

Financing based on floating interest rates interest rate levels have decreased

Risk on increasing interest rates limited through interest rate cap

Oerlikon not affected by recently increased credit spreads: Oerlikons credit margins were fixed

at very attractive levels before credit crisis

Net debt / EBITDA ratio 1.8 (py 2.2) strongly supports investment grade rating of Oerlikon


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Financial result

20072006

-24

1

-19

-7

-4

-73

-20

-31

-49

-128

(in CHF m)

(1) Pro forma presentation assuming an initial consolidation of the Saurer Group as per January 1, 2006; (2) w/o impairment

(1)

Interest on provisions for post-employment benefit plans

FX result

Interest result 2007 increase: interest

expense for loans for

Saurer acquisition Normalization: favourable

refinancing terms andconditions

2007normalized

-4

-20

-5

-68

Other financial result 2007 increase: one-time

financing fees for bridgeloan Saurer acquisition

-97


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Active tax management

Increase currentincome taxes

Following the acquisition of Saurer AG the current income taxes increased

During the year 2007 activities were implemented to mitigate the increase of tax rate

Full benefit in future years

Increase deferredtax income

Improved performance of Oerlikon allowed recognition and utilization of unrecognisedtax loss carry forwards from previous periods, resulting in a high deferred tax income

Total income taxrate

Total income tax rate of 0,33% (2006) and 5.10% (2007) of Earnings Before Taxes(EBT)

Outlook Expected total income tax rate for the upcoming years will step-by-step

increase to 10-15%


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Net profit and Earnings per Share

2006 2007

(1) Net profit less minority interests (2007: CHF 4 m; 2006: CHF 2 m)

(2) Based on the average weighted number of shares entitled to vote and receive dividends amounted in 2007 to 13 093 428 and in 2006 to 12 773 290

Net profit attributable to shareholders(1) Earnings per share (EPS)(2)

24.023.8

20072006

304 314

+ 3%

(in CHF m) (in CHF)


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Balance sheet shows strong equity basis

effective equity ratio of 35%

Equity

1,887

1,512

2006 2007

2,229

2007TreasuryShares(1)

(in CHF m)

342

Equity ratio

2007 2007 incl.Treasuryshares

24% 30%35%

2006

(in %)

(1) Calculated with share price of 326 CHF; number of treasury shares as of 31.12.2007: 1 048 146

Note: Share buyback program started: Oerlikon repurchased 2 660 shares in total at an average price of CHF 395. As of December 31, 2007, the company held a total 1 048 146shares (7.40 percent of the shares issued).

+ 25%


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All Segments contributed to double digit sales growth

Extraordinarily successful year for Textile

Strong EBIT growth in Coating, Vacuum and Drive Systems

Significantly increased cash flow from operating businessand working capital as well as investment management

Solid group financing with very attractive margins

Strong equity basis and equity ratio

Executive summary - Fiscal year 2007 results

Oerlikon continues with strong profitable growth in 2007

IncomeStatement

Cash flow

Balance sheet


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Agenda


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Six areas of high tech competencies

serving customers around the globeOerlikonVacuum

OerlikonTextile

OerlikonCoating

Oerlikon

Solar

OerlikonDrive Systems

Oerlikon

Components

Suzhou(China)

Cordob(Argentina)

Mnchengladb.(Germany)

Employees Asia5,000

Employees Europe11,900

Employees Americas2,100

Lafayette, IN(USA)

Balzers / Trbbach(Switzerland)

Oerlikon locations

Rivoli(Italy)

Greater Noida

(India)

erven Kostelec(Czech Republic)


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Focus 2007: Build platform for profitable growth and

seize opportunities for future expansionInnovation + Cross Segment R&D

Closeto coreand beyond

Regional Expansion

Global competencewithcustomerproximity

Our Employees

Traininganddevelopment

1

3 4

Operational Excellence

Customerfocusand competitiveness

2

Compliance Controlled

Processes

ContinousImprovement

OperationalExcellence

Integrated Supply Chain

& Lean Manufacturing

Safety &Certifications

Business ProcessManagement

Quality Circles

Innovation + Cross Segment R&D


Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



2


Processes







Quality Circles


Processes




Processes







Quality Circles

Leveraging joint scaleand scope

Positioning individual businessesfor sustainable profitable growth

Focusing and strengtheningportfolio

2008 priorities and outlook2007


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Oerlikon Group - strong platform for key business levers


Close to core and beyond

Regional Expansion

Global competence withcustomer proximity

Our Employees

Training anddevelopment

1

3 4


Customer focus and competitiveness

2

ComplianceControlledProcesses



Integrated Supply Chain& Lean Manufacturing



Quality Circles


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2007 - another year full of great innovations

InnovationIntroductions1

Oerlikon Balzers: New high performance coating BALINITALDURAallows for treatment of ultra durable steels and increases

productivity by up to 50 percent.

Oerlikon Solar: Introduction of the micromorph tandemtechnology, which increases the productivity of thin-film solarmodules by 50 percent and allows for efficiencies in excessof 10 percent.

Oerlikon Barmag: POY1-solution WINGS2 initiates paradigm shiftthrough completely new plant concept. Fastercommissioning and improved ergonomics will be achievedwhile space requirements are reduced.

Oerlikon Space: New laser system for data communicationtransmits information at a rate exceeding 10 Mbit/s over adistance of up to 1.5 million kilometres.

1 Partly Oriented Yarn

2 Winder Integrated Godet System


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Cross-segment R&D projects are gaining traction

InnovationCross Segment1

Nanotechnologyapplications for textiles

Vacuum pumps for Racetrack,Clusterline and Solar MFG

Magnetic bearings for turbomolecular vacuum pumpsGraphical control software

Advanced coatingapplications for automotiveindustry

Textile & Coating

Drive Systems & Coating

Cross-segment R&D projects every day we are discovering more

Coating, Solar & Vacuum

Vacuum & Textile

Example: joint software platform for Textile,Coating and Solar machines

Applications:

Oerlikon Coating application INNOVA

Oerlikon Solar application TCO 1200

Oerlikon Solar application Sun Simulator


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Scientific Advisory Board (SAB) to support Oerlikon in

reaching the next level of innovative power

InnovationRealignment1

1. 2. 3. 4. 5.

1. Prof. Dr. Albert Pisano

2. Prof. Dr. Peter Chen3. Prof. Dr.-Ing. Georg Frber

4. Prof. Dr. Dr. h.c. Werner Martienssen

5. Prof. Dr.-Ing. Christian Brecher

Strong commitment to R&D, CHF 274 m in 2007

Innovative brain force, informal CTO network Large list of research project proposals

Professional utilization of external funding

Improved coordination of R&D within the company

EXECUTION DISCIPLINE

CREATIVITY

Media

Academia PilotDevelopment Product

Development

Trend andTechnologyMonitoring

Advisor

s

Competitors

CTOs

> 5 Years < 2 Years2-5 Years

Time 2 Market

SAB Segment /BUR&D

Corp.R&D-

Customers


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Clean Technologies offer huge potential for profitable growth

Oerlikon Balzers: High-tech coatings for engine partsincrease lifetime 10-fold and reduce fuel consumption

Oerlikon Fairfield: Successful entrance into the fast growingmarket for wind turbines with signing of a multi-yearcontract for Winergy (Siemens).

Oerlikon Vacuum: Establishment as the preferred supplierof vacuum systems for the solar industry,both in crystalline wafer and thin-film technology

Market growth Solar

Market growth Wind

Market growth Hybrids

Oerlikon Solar: Turn-key mass manufacturing solutions andrelated services for thin-film silicon based solar modules,both amorphous or micromorph technology

Oerlikon offerings today

Oerlikon Graziano: Zero-emission vehicles made byNorwegian manufacturer TH!NK Technology will beequipped with customized gears from Oerlikon Graziano

>30%

>15%

>20%

2007 2010

2007 2010

2007 2010

InnovationClean Tech1


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E ll


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*Savings calculated based on Last Price method, include all ~500 initiatives, do not necessarily include all other factors which change material or overhead cost

Extended group purchasingprogram 2007

~100 initiatives, 100% implemented

Significant cross-BU synergies:

12 direct cross-BU areas 10 indirect spend areas

Aggressive implementation

within each BU Organization being adapted with

clear responsibilities by businessand dedicated commodity managers

Next wave complex sourcing 2008 and beyond

2008 target more aggressive

based on complex levers esp. enforced low cost country sourcing

value engineering/design-to-cost

structural improvements

Next wave global sourcing initiated

executed

0

100

200

300

400

2007

~120

2008

Carry over

>150

2008

>100

2009

Carry over

>180

Purchasing savings potential(in CHF m)

Implemented in 2007:Extended group

purchasing program

In preparation for 2008:Next wave

complex sourcing

2007 20092008

ExcellenceSourcing2

E ll


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ExcellenceStreamlining2

Optimization of cost position reliably like a Swiss watch

Dissolution of matrix organization and regional headquarters

Redirecting research & development organization

Streamlining of corporate functions,

downsizing of central headquarter

Real Estate consolidation

Review of central MIS/IT Approach

Push for shared services organization

Outsourcing of non-core functions, e.g. facility management

R i


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Strong footprint in Asia and expanding in China

China China - Suzhou Expansion Phase II

India

Localization 1985, 2,500 employees CHF 1 bn sales (+40%) in 2007 Textile: Staple yarn, chem. fiber Coating: market growth >50% Vacuum: Mechanical TMP Esec: Wire / die bonder

Solar: Thin-film techn.

RegionsFocus Countries3

Russia

Sales initiative (2007: CHF 50 m)- Local Sales & Marketing

- Coating Services & Systems- Textile (filament & nonwoven)- Drive Systems (synchro & axles)

Co-operation with Renova

First Coating Center SOP Q1 2009 Establishment of legal entity in Moscow

1500 employees 5 production sites, 5 coating centers Textile, Drive Syst., Coating, Vacuum Sourcing initiatives Prod. expansion Drive Systems (>30% growth)

Sales initiative target 2007 of CHF 400 moverachieved

30,000 sqm expansion on schedule CHF 15-20m investment ~17 months construction time > CHF 40 m p. a. EBIT impact Business Units engaged:

Textile (Schlafhorst, Components)Graziano Drive Systems

Coating (new center, 2,000 sqm., 11.07)

Regions


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Regional cross-segment cooperation

RegionsCooperation3

Czech Republic (Textile & Drive Systems): Textile transferred production to China Drive System took advantage of existing infrastructure and qualified work force

- Oerlikon Graziano phased in the production of automotive components forAWD cars (GM and FIAT)

- Oerlikon Fairfield launched the production of Torque HUB CR family.

China (Textile & Drive Systems): Oerlikon Drive systems to leverage Suzhou infrastructure and services

for the localization of Fairfield Torque Hub and Graziano Synchronizers in 2008- further enjoying the successful share of infrastructure and services

Singapore (Solar and Textile & Components):

Oerlikon Solar receives support from existing Texparts and Esec infrastructure for itsendeavour to build up the next solar manufacturing site. This includes- infrastructure support (legal entity registration, tax, trade control, IT, HR etc.)- attraction, selection and hiring of qualified management and staff- identification, selection and qualification of suppliers

Employees


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More than 600 employees joined in 2007

EmployeesTalents4

Employee development activities on all levels- Training centers all over the world (> 2,000 participants)

- Middle Management Program Oerlikon Leadership Challenge- Expert development Program Oerlikon Project Management

In-house vocational educationThe Apprenticeship Career Ladder

- > 450 apprentices / 20 different professional fields / 18 locations- > CHF 5 m invest p. a.

Talent management- Internal talents identified / developed and Oerlikon Talent Pool established- External talents recruited in close co-operation with universities- Best-in-class Global Trainee Program


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Focus 2007: Build platform for profitable growth andseize opportunities for future expansion



Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



2


Processes







Quality Circles


Processes




Processes







Quality Circles






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MarketDynamics /GrowthDrivers

Business

Priorities

Competitive situation

Sales

994+22% 816

2006 2007

Margin: 17% 15%

Coating: Very strong business momentum evenaccelerated by globalization and technology leadership

Oerlikon with strong marketleadership in coating services

Differentiated engineering nicheoffering in Semiconductor

Continued double digit growth of CoatingServices market, driven by increasedpenetration of high-end coatings and strongdemand in emerging economies

Strong demand for high-tech coating equipment,innovations key to enter new application fields

Difficult market outlook for BU Systems with

Semiconductor capex expectations reduced for1HY 2008 - stronger replacement needsexpected as of 2HY 2008

Further regional expansion through opening ofnew coating centers focus on Asia (esp.China, Japan, India)

Additional acquisitions in adjacent markets

Further improvement of gross profit margin injob coating, optimized asset utilization

Downscaling of front end semiconductorbusiness and data storage activities

(in CHF m)


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Coating centers strong growth worldwide esp. strongpresence in industrializing regions in Asia and CEE

Coating centersAsia 17 (21%)

Coating centersEurope 41 (50%)

Coating centersAmericas 24 (29%)

8 new coating centers added in 2007 (2 through VST Keller)

Further 6-8 centers planned for 2008 (focus Asia)

2831

35

42 44

47 47

56

61

82

7772

96 97 98 99 00 01 02 03 04 05 06 07

Number of coating centers


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Business

Priorities


Sales

2006 2007

Margin: 11% 12%

Vacuum: Further strengthened position in process industry,additional growth opportunity from Solar

458430+6%

Steady market growth well above GDP expectedmainly driven by process industry and solarapplications (thin-film and crystalline)

Above average growth expected in Asia and Europe

Gradual market shift from mechanical to magneticturbomolecular pumps as well as from oil to dry infore-vacuum

Oerlikon with confirmedleadership position

Strongholds in processindustries and in Europe,increasingly in Solar

applications

Further ramp up of Solar-related business as fullvacuum solution provider

Shift of Solutions business to Asia

Provision of innovative solutions for our customers with

new products and technologies Extension of China factory providing the basis for

significant and sustainable sales growth in China andthe rest of Asia

(in CHF m)


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Business

Priorities


Sales

2006* 2007

Margin: 3% 8%

Textile: Record year from boost in Staple Fiber

2,719

2,148+27%

* pro forma 12 months figures (sales net)

Oerlikon with confirmed globalleadership in 07: # 1 in all itsmajor segments: (Staple,Filament, Fibers)

Unique broad textile value

chain offering with intrinsic riskmitigation

2007 with record market conditions, especiallyfor Staple segments

Demand from major textile markets cooling in2008 in several regions including Turkey, Indiaand China - mainly for Staple equipment

Filament and Fibers and Nonwoven market

slightly more stable

New technologies like POY1-solution WINGS2

roll-out to customers

Differentiation strategy will be continued andnew market segments in mid-end approached

Footprint consolidation, further growth in Asiaand additional innovations

1 Partly Oriented Yarn

2 Winder Integrated Godet System

(in CHF m)


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Business

Priorities


Sales

2006* 2007

Margin: 8% 7%

Drive Systems: Strengthened in agriculture and construction

* pro forma 12 months figures (sales net)

1,113952+17%

Stable overall growth and strong growth of the

agricultural tractor and machinery market expected

Above average growth in specialty industries includingwind power generation

Stable to improved pricing in high-tech niche markets

Increasing market share in gear systems for oil & gasexploration and wind-power systems

Expansion in the Asian market, esp. China

Consolidation of low cost country supply chain

Integration of FAL (India) production with GrazianoIndia to meet demand and enhance profitability

Enhanced position in hybrid and zero emission vehiclemarkets

Oerlikon with stable marketleadership in component nichemarkets (e.g. agriculture)

(in CHF m)


46/56



Business

Priorities


Sales*

Components: Focus on expansion in high margin segments

2006 2007

Margin: 16% 10%

344336+2%

* continuing operations

Space with strong position(30%+ market share) withincurrently accessible markets

Leading position in DieBonding equipment

Space: Overall stable growth expected until2010, with high visibility in space programsOerlikon is participating (e.g. Ariane, ESA)

Esec: Slowdown in Semi market in 1HY 2008,however expected to return to positive growthin 2009 (possibly already in 1HY 2008)

Space: further organic growth, potential forexternal growth to overcome current marketbarriers

Esec: Introduction of new WB 3200 and DA

2100 platform and further cost reductions tocounter negative USD development; return topositive growth in 2HY 2008

Execute on Optics

(in CHF m)


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Business

Priorities


Sales*

Solar: Provider of cost-effective proven equipment, process andturnkey manufacturing solutions to the thin-film solar market

2006 2007

141+119%

309

Sustainable ramp-up of global operations andsupply chain to match substantial demand growth

Continuous improvement / innovation of keycomponents, further increase in module efficiency

Focused completion of offering along value chain

CHF 700 m sales in 2008, CHF 1 bn level in 2009,positive cash flow despite ramp-up phase

Implement Giga Campus concept

Solar equipment market growth in valueexpected in excess of 30% p. a.

Thin-film new equipment installation in MWexpected to grow by as much as 60% p. a.

Market will be characterized by cell efficiencyincreases, throughput gains and cost decreases

Market leader with largestinstalled customer base inthin-film

Only Oerlikon Solar customerswith thin-film SI factories in

production today

Employees: 359 510

* Pro forma total Sales of future Solar Segment

(in CHF m)


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Solar: Innovations and scale pave the way to grid parity

Cost of ownership

Capex per WattModule efficiency

Economies of scale through larger fabs

Grid parity

2010200920082006 2007

$/Wp

2012

2007

for 20 MWp fabs< 1.5 $/Wp (


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Installed solar cell manufacturing capacity

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GWp

Crystalline Silicon Thin-film

Solar will outpace the already fast growing PV market

0

200

400

600

800

1'000

1'200

2006 2007 2008p 2009p

(in CHF m)

Sales* targets

>1000

>700

>300

>140

Order intake 2007 > CHF 650 m

*Sales 06-07 pro forma, 08- Solar will be reported as separate segment

2006-2015 CAGRThin-film 74.8%C-Si 49.4%Total market 54.0%


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Focus 2007: Build platform for profitable growth andseize opportunities for future expansion



Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



2


Processes







Quality Circles


Processes




Processes







Quality Circles






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Oerlikon leverages all portfolio enhancement measures

Optimizebusiness

performance

Determine strategicposition / options

Strengthen currentbusinesses

Divest / spin-offbusinesses

Add newbusinesses


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Focus 2008: Focused profitable growth and rapidportfolio optimization



Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



Regional Expansion


Our Employees


1

3 4



2


Processes







Quality Circles



2


Processes







Quality Circles


Processes




Processes







Quality Circles






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Oerlikon Textile

Oerlikon Coating

Oerlikon Solar

Oerlikon Vacuum

Oerlikon Drive Systems

Oerlikon Components

FY 2008 outlook flexibility is of the essence!

Oerlikon SegmentsMarketoutlook Outlook 2008

mixed

excellent

excellent

good

very good

mixed

Expected slowdown in textilestaple fibre market

Ongoing short termvisibility and

cyclicality insemicon industry

Strong demand insolar and coating

Solid growth inagriculture andconstruction

Uncertainty remainson FX and globalGDP development

mixed

excellent

excellent

very good

very good

mixed

Marketvisibility


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Oerlikon priorities 2008 and beyond

Portfolio Performance People

Focused growth strategiesvalue generation in key businesses

- Solar: focus on global ramp-up andtechnology lead

- Coating Services: drive global

expansion and offering scale (i.e.VST Keller

- Drive Systems: push selected marketstrategy and Asia expansion

- Vacuum: strategic growth productionand sales in Asia

- Textile: Completion of value chain -product portfolio and mid-marketsegment expansion

Center: Efficient center, wave 2purchasing (i.e. LCC), R&D / innovations

Selected acquisitionsin focus BUs:- Solar: Expand along

the value chain- Space: increase scale

and scope- Coating: Access to

new technologies ormarkets

- Vacuum: Consolidate

Portfoliostreamlining:- Optics- other non-core

assets

Targeted internationaltalent recruitment

Systematic leadershipdevelopment

Raising the performancebar

Continued communication

Integrity: New global Codeof Conduct and establish-ment of whistleblower line


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Key take away - Oerlikon set up for sustainable profitable growth

2007 a record year for Oerlikon with sales exceeding CHF 5.6 bn, +20% vs. 2006

Oerlikon well positioned in attractive high-margin segments leveraging joint scale as

one of the largest Swiss industrial groups

Special focus on booming clean technology

Portfolio streamlining and strengthening under way

Operative platforms strengthened, securing innovative power through optimized R&D

and reinstalling cost consciousness, bottom line and cash orientation

2008 Sales expected to exceed CHF 6 bn, mainly driven by Solar, Coating

2008 EBIT adversely impacted by exchange rates and raw material prices;

still expectation to further increase earnings

Mid to long term perspectives for all segments very positive;

10% EBIT margin targeted in 2009


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Calendar of events and contact details

April 23, 2008Key figures for the first quarter of 2008

May 13, 2008

Annual general meeting

August 26, 2008Semi-annual media and analyst conference

October 22, 2008Key figures for the third quarter of 2008

Calendar of events Contact details

Corporate Investor Relations

Frank HeffterT: +41 58 360 96 22

Roland BischofbergerT: +41 58 360 97 14

F: +41 58 360 91 93

[email protected]

www.oerlikon.com/ir
mailto:[email protected]://www.oerlikon.com/irhttp://www.oerlikon.com/irmailto:[email protected]

Oerlikon FY 2007 Presentation

Documents

Transcript of Oerlikon FY 2007 Presentation