17 January 2020 Baader Helvea Swiss Equities Conference · Selective Catalytic Reduction (SCR) is the leading technology and the most effective. Datwyler is the preferred partner

Datwyler GroupFocus on high-growth, high-margin sealing business

17 January 2020Baader HelveaSwiss Equities Conference

Datwyler GroupKey figures first half 2019

2

Revenue growth of 1.8% to CHF 706.3 million

Increase in EBIT to record CHF 91.2 million

Adjusted EBIT margin of 13.9% before start-up costs for growth projects of CHF 4.5 million and negative currency effects of CHF 2.3 million

Net result up 5.9% to CHF 66.2 million

Net earnings per bearer share increased by 5.7% to CHF 3.89

706.3 million

net revenuein CHF

91.2 million

EBITin CHF

12.9%EBIT

margin

66.2millionnet resultin CHF

Focus on sealing business | 17.01.2020 | © Datwyler | www.datwyler.com

Sealing SolutionsSystem-critical sealing solutions for global market segments such as health care, automotive and general industriesRevenue 2018: CHF 891.1 millionEBIT 2018: CHF 155.5 millionEBIT-margin 2018: 17.5%

Technical ComponentsHigh-service distribution of maintenance, auto-mation, electronic and ICT components and accessoriesRevenue 2018: CHF 470.5 millionEBIT 2018: 14.5 millionEBIT-margin 2018: 3.1%

Focused industrial supplier with global presenceCHF 1’362 million revenue and 12.5% EBIT-margin

3 Focus on sealing business | 17.01.2020 | © Datwyler | www.datwyler.com

Decision to divest the Technical Components divisionSale of Distrelec and Nedis / sales options for Reichelt evaluated

4

ONLINE / WHOLESALE DISTRIBUTION revenue CHF 300 million (2018)

ONLINE DISTRIBUTIONrevenue CHF 170 million (2018)

Focus on sealing business | 17.01.2020 | © Datwyler | www.datwyler.comFocus on sealing business | 17.01.2020 | © Datwyler | www.datwyler.com

5

Liquidity and assets largely unaffected by the divestment loss of CHF 670 million

Assets Liabilitiesand equity

Cash and cashequivalents

Trade and otheraccounts receivable

Inventories

Non-currentassets

Current liabilities

Equity

Equity ratio

Long-termliabilities

683.8

229.5

252.0

180.3

839.5

183.1

323.0

62.4%

30. Jun 2019 Divestment loss comprises goodwill, the realisation of the cumulative currency translation adjustment of the foreign companies disposed of, the impairment on assets and the one-off costs for the restructuring.

Divestment loss has no impact on cash.

Very solid equity ratio of over 50% after conclusion of the transaction.

1’345.6 CHF million


6

Focus on the fast-growing, high-margin Sealing Solutions division

0100200300400500600700800900

2011 2012 2013 2014 2015 2016 2017 2018

Revenue in million CHF CAGR of 11.1%

020406080

100120140160

2011 2012 2013 2014 2015 2016 2017 2018

EBIT in million CHFCAGR of 17.3%


Global footprint with more than 7’000 employees

Americas 17.5%1’226 employees

Europe 45.2%3’170 employees

Asia 37.3%2’612 employees

Health Care Automotive Civil EngineeringConsumer Goods

PennsaukenUSA

MiddletownUSA (2018)

AlkenBelgium

Pregnana, Montegaldella, Italy

Viadanica,Italy

SchattdorfSwitzerland

WaltershausenGermany

KesurdiIndia

CleebronnGermany

Karlsbad-IttersbachGermany Daegu

Korea

< General Industry

Wuxi, NingguoChina

SilaoMexico

VandaliaUSA

Novy Bydzov, Czech Republic

MalynUkraine

Sao LeopoldoMexico

OntarioUSA


New organisation to improve market focus, strengthen core competencies and increase agility

GROUP FUNCTION

Finance & Shared ServicesGROUP FUNCTION

Technology & Innovation

BUSINESS AREA

Health Care Solutionsrevenue of CHF 390 million

BUSINESS AREA

Industrial Solutionsrevenue of CHF 500 million


Renewal of Executive ManagementStrong industry and Datwyler experience

99

CFO

Walter Scherz Finance & Shared Services

GROUP CEO

Dirk LambrechtCOO

Torsten MaschkeIndustrial Solutions

COO

Dirk BorghsHealth Care Solutions

CTO

Dr. Frank SchönTechnology & Innovation


Strategic priorities

10

Opening of the HealthCare plant in the USA

Access new markets

Promotion of new techno-logies and skills

Expansion into new geographical markets

Innovative new products and applications

Expansion of Health Care capacity in India

DRIVEPROFITABLEGROWTH

INCREASEAGILITY

ACCELERATEDIGITALISATION

Modernization and expansion of the ERP software package

Robotic process automation (RPA)

Digitalisation of all HR processes

Automated guided vehicles (AGV) Use of big data

Empowerment of employees

Employee survey underlines highlevels of commitment and motivation

Vision of a self-learning organisation

Culture change

Reduction of resource consumption Increase of sustainability


Unique core competencies as recognised value for our customers

• Development of high performance materials for various applications

• Leading surface treatments

• Experts in simulation

• In-house mixing plants

• More than 100 years of experience

• Tailor-made sealing solutions with fast prototyping

• In-house mould shop using latest technologies

• Interdisciplinary teams

• Co-engineer with customers

• Capability to set industry stan-dards and apply them worldwide

• Zero-defect-philosophy

• Highly automated to minimise interaction of people and products

Material expertiseSolution design Operational excellence


Significant investment program near completion

12

Expansion Health Care plant Kesudi, India

New mixing plantNovy Bydzov, Czech Republic

New mixing plantNingguo, China

New First Line mixing plantAlken, Belgium

First Line upgrade Health Care plantKesurdi, India

2015CHF 60 million

2016CHF 78 million

2017CHF 118 million

2018CHF 138 million

2019 2020

Acquisition OttCleebronn, Germany

Acquisition OrigomViadanica, Italy Digitalisation projects

Acquisition ParcoOntario, USA

Acquisition BinsSão Leopoldo, Brazil

Lean & Clean upgrade automotiveSchattdorf, Switzerland

Modernization and expansion of the ERP software package

Investment figures excluding acquisitions

New Health Care plantMiddletown, USA


Successful track record of acquisitions in the Sealing Solutions division

2012 China/KoreaZhongding/Hankook

2014 USAColumbia Enginee-red Rubber

2015 ItalyOrigom

2016 GermanyOtt

2018 BrazilBins

2018 USAParco

CHF 80 million

2’000 employees

Automotive

annualrevenue CHF 25 million

70 employees

Automotive

CHF 25 million

115 employees

O-rings Automotive General Industry

CHF 33 million

200 employees

Automotive

CHF 20 million

350 employees

Automotive

CHF 60 million

275 employees

O-ringsGeneral Industry


Sustainability highlights

14

Carbon-neutral production at Swiss plant since 2012

Combined heat and power unit at Italian plant

State-of-the-art exhaust air purification system at Chinese plant

Corporate Social Responsibility activities in India

Closed water circuits in Indian health care plant

Proactive chemical compliance management


Sealing Solutions first half 2019Profitable growth course in a challenging environment

15

5.8% increase in revenue to CHF 479.3 million

Unchanged growth in high-quality health care components -declining demand in the automotive market

Maintained EBIT of CHF 83.7 million despite start-up costs of CHF 3.9 million for growth projects and negative currency effects of CHF 1.5 Mio.

Adjusted EBIT margin of 18.6%

Integration of Parco and Bins on track

479.3 million

net revenuein CHF

83.7million

EBITin CHF

17.5%

EBITmargin


HealthCare

System criticalHealth Care components

High quality compo-nents and closures for injectable drugs (container closures, injection systems, diagnostic and disposables)


MarketStructural growth trendsAttractive marginsHigh entry barriersGrowth 4% to 7%

StatusExtended product portfolioExpansion of Firstline produc-tion capacities (USA and India)Strengthen the global presence in marketing and engineering

StrategyLeading technological supplier of high-quality components for delivery systems for injectable drugs; growth significantly above market average

Health CareTechnology leader in a fast-growing market


High-quality components for fast growing markets of pre-filled syringes and injection devices

19

Source: VisionGain Source: VisionGain

0

2

4

6

8

10

12

14

2017 2018 2019 2020 2021 2022 2023 2024 20250.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2017 2018 2019 2020 2021 2022 2023 2024 2025

CAGR 10% CAGR 15%

Injection devicesGlobal market potential

in USD billions

Pre-filled syringesGlobal market potential

in USD billions


Very high interest of health care customers

First commercial sales in August 2019

First Line standard represents the highest level of innovation, quality and safety

Show case of Industry 4.0 with state of the art digital systems and infrastructure

New health care plant in the USA

21

Thanks to decades of working together with the leading pharmaceutical companies, Datwyler anticipated market trends.

First Line today represents the highest level of innovation, quality and safety in the production of elastomeric components on a global level.

First Line standardWe set the bar!

Auto-motive

System criticalAutomotive components

Precision compo-nents for applica-tions in vehicles(Brakes, fuel and engine manage-ment, comfort and safety applications, electro mobility)


MarketHigh-quality system-critical sealing components in the automotive industry

StatusBins acquisition in South AmericaExtended product portfolio for electric mobilityNew production standard "Lean and Clean" with cleanroom technology for highest requirements

StrategyLeading global supplier of system-critical and customer-specific applications in various vehicle types

AutomotiveGlobal presence with our own production plants


25

Megatrend environmental friendliness makes SCR-technology a growth segment

Diesel emissions require additional treatment due to worldwide stricter emission regulations.Selective Catalytic Reduction (SCR) is the leading technology and the most effective.Datwyler is the preferred partner for sealing components from both leading SCR providers.Trend towards SUVs with higher fuel consumption. OEMs can only achieve CO2 fleet limits with lower-consumption diesel models.0

2468

101214161820

2016 2017 2018 2019 2020 2021 2022 2023

Number of diesel vehicles with SCR-systems

in millions worldwide

Source: PwC AutoFacts 01/2019, Frost und Sullivan


Innovative production concept as a good example of customer proximity

Meets highest customer requirements for purity and precision

Unique combination of clean room technology, highly automated production cells and lean processes

Benefits of synergies from heath care production

Lean and Clean –Fit for the future!


Acquisition of German company Ott 2016

Specialized in tools and injection mouldedproducts in liquid silicone rubber (LSR) and thermoplastic materials

Thermoplastics and LSR open up new possibilities for the sealing requirements in electric vehicles

Ideal technology and materials for complex part geometries, as well as for megatrends weight reduction and improved connectivity

Thermoplastic and liquid silicone rubber (LSR) competence as ideal base for new opportunities


General Industry

System criticalGeneral Industrycomponents

High-quality compo-nents based on elastomers, multi-k, liquid silicone and copolymers


MarketProducts, systems and equip-ment with demand for specific and demanding sealing components and solutions

StatusAcquisition of Parco in the USA: Significant expansion of O-ring business and development of new industries, in particular oil and gasThe O-ring business has potential for organic and acquisitive growth

StrategyDevelopment of new attractive markets on the basis of existing core competencies for system-critical components and acquisitions. Further growth in Consumer Goods.

General IndustriesExpansion into new attractive markets


O-rings as an ideal additionto the existing product portfolio

31

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2018 2019 2020 2021 2022 2023 2024 2025

Global market potential for O-rings in Euro billion

CAGR 3.2%

Highly fragmented market offers opportunities for further acquisition-based growthOrganic growth with existing customers and by gaining market shareContinuously growing marketSystem-critical functions of O-rings in various systems and plantsIncreasing demands placed on elasto-mer compounds and functionality

Source: Schlegel and Partner


32

Attractive markets for high-quality sealing solutions

Oil & Gas

Consumer Goods

Civil Engineering

Power Tools


Questionsand answers

DisclaimerThis presentation contains forward-looking statements that reflect the Group’scurrent expectations regarding market conditions and future events and aretherefore subject to a number of risks, uncertainties and assumptions. Unanticipated events could cause actual results to differ from those predictedand from the information contained in this presentation. All forward-lookingstatements in this presentation are qualified in their entirety by the foregoing.

Dätwyler Holding Inc.Gotthardstrasse 31, 6460 AltdorfT +41 41 875 11 00, F + 41 41 875 12 [email protected], www.datwyler.com

Documents

17 January 2020 Baader Helvea Swiss Equities Conference · Selective Catalytic Reduction (SCR) is the leading technology and the most effective. Datwyler is the preferred partner