2009 - Saft

Saft Groupe SA
Accelerating the Growth in New Applications
November 2009
2
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3
1. Saft Today
4
Saft in 2009 - Key Figures
Joint-Ventures with EADS:
ASB Group
(Thermal batteries)
Equity accounted
Space
Joint-Ventures with JCI:
Johnson Controls-Saft
(HEV and EV batteries)
Equity accounted
Oil and gas
Defence
Power generation
and distribution
Specialty
Battery Group
€178.1m
43.4 %
High performance primary
and Rechargeable
lithium and
silver batteries for the
electronics, defence and
space industries.
Professional
Electronics
and Security
Systems
Industrial
Battery Group
and Rechargeable
Battery Systems
€232.5m
56.6 %
Sales 9M 2009
€410.6m
Rechargeable nickel and
lithium-based batteries
for demanding industrial
and professional
applications.
Telecommunication
Aviation
Rail and Mass Transit
Emergency Lighting
5
Unique Combination of Resilient Characteristics
and New Growth Opportunities
In high-end niche markets
>75%
of sales in segments where Saft is leader
N° 1
Industrial nickel-based batteries for aircraft,
rail, standby power, emergency lighting
N° 1
Primary lithium batteries for electronics and
defence industries
N° 1 Satellite batteries
*
39%*
Sales replacement batteries
4.9%
Average growth 2005-08 at constant FX
11%
Li-ion sales over first 9M 2009
Management 2009 estimates
percentages are not additive
6
Diversified Applications and Technologies Portfolio
2009 YTD Sales by Application
2009 YTD Sales by Technology
6%
4%
11%
25%
19%
53%
30%
25%
22%
5%
Stationary
Transportation
Emergency lighting
Professional Electronics
Defence
Space
Others
Lithium-ion
Primary Lithium
Nickel
7
Strong Relationships With Blue-Chip Customers
Segment
Key Partners
Stationary
Transportation
Electronics
Defence
Lighting
Space
ITRON
8
Strong Financial Track Record Since 2005
EBITDA (€m)
Sales – At Actual FX Rates (€m)
566
2005
560
2006
601
609
2008
16.3%
19.7%
111.4
2007
18.1%
18.1%
CAGR 2005-08: +2.5%
2005
Cash Flow from Operating Activities (€m)
110.1
101.6
98.0
2006
EBITDA
2007
Margin
2008
Net Debt / EBITDA (x)
CAGR 2005-08: +3.0%
107.1
98.0
3.0x
83.0
3.0x
3.0x
97.3%
2.6x
2.5x
2008
H1 09
53.2
88.0%
81.7%
54.3%
2005
2006
2007
Cash Flow from Op. Activities (€m)
2008
2005
2006
As % of EBITDA
Note: Sales at actual exchange rates; EBITDA restated including Research Tax Credit. 2005 EBITDA restated for IPO costs.
2007
9
Key Events in 2009
CONTRACTS
Johnson Controls-Saft
FINANCE AND
CORPORATE
„
Contracts totalling $13m from Raytheon for Improved Target Acquisition
System.
„
Selected to equip China’s new regional jet ARJ21
„
Multi-million dollar contract to develop next generation Li-ion technology
for NASA
„
5-year master agreement with Boeing for Li-ion satellite batteries.
„
Partnership with Schneider Electric for off-grid solar energy storage in
Madagascar
„
Johnson Controls-Saft contract with Ford
„
Johnson Controls-Saft industrial project selected for grant of $299m from DoE
and up to $148.5m tax incentives from Michigan State for Li-ion hybrid and
electric vehicle battery plant in Michigan
„
Mercedes S400 first Li-ion hybrid car on the road, using Johnson Controls-Saft
technology
„
Development agreement with Jaguar / Land-Rover
„
Agreement for Volkswagen EV fleet program
„
EV contract with Ford / Azure for commercial vehicles
„
Successful €150m and $240m refinancing
„
Merger of IBG and RBS
„
Saft selected for grant of $95.5m from DoE and up to $20.8m tax incentives
from Florida State and Jacksonville for Li-ion battery factory in Jacksonville
10
Q3 2009 Sales Highlights
€m
3 Months ended 30-Sep
2009
2008
Growth
at Actual
Rates
70.1
84.9
(17.4)%
(18.4)%
IBG excl RBS
55.7
67.0
(16.9)%
(18.2)%
Former RBS
14.4
17.9
(19.5)%
(19.5)%
SBG
53.1
55.0
(3.4)%
(5.0)%
Total
123.2
139.9
(11.9)%
(13.2)%
IBG
Q3 rate of decline stable vs. Q2
Negative impact of de-stocking starting to decrease
Growth
at Constant
FX
11
9M 2009 Sales Highlights
€m
9 Months ended 30-Sep
2009
2008
Growth
at Actual
Rates
232.5
273.7
(15.1)%
(17.7)%
IBG excl RBS
189.2
216.2
(12.5)%
(15.4)%
Former RBS
43.3
57.5
(24.6)%
(26.4)%
SBG
178.1
172.6
3.2%
(0.1)%
Total
410.6
446.3
(8.0)%
(10.9)%
IBG
Growth
at Constant
FX
12
Q3 2009 – Focus on IBG
Comments
Q3 2009 (€m)
84.9
(18.4
%)*
(17.4
)%**
70.1
„ Sales of new Telecom product line
(Tel.X) slowly developing
„ Unfavorable project phasing
impacted rail battery deliveries
during the quarter
Q3 2008
Q3 2009
„ Stronger quarterly sales for the
former RBS activities
9M 2009 (€m)
273.7
(17.7
%)*
(15.1
)%**
9m 2008
* At constant exchange rates.
** At actual exchange rates.
232.5
9m 2009
„ Ongoing merger between RBS and
IBG progressing in line with schedule
ƒ
€5m p.a. of synergies with full
impact in 2011
ƒ
Initial savings in H2 2009
13
Q3 2009 – Focus on SBG
Comments
Q3 2009 (€m)
55.0
(5.0%
53.1
)*
(3.4)%
**
Q3 2008
Q3 2009
9M 2009 (€m)
172.6
(0.1%)*
178.1
3.2%**
9m 2008
* At constant exchange rates.
** At actual exchange rates.
9m 2009
„ No change in demand from the
metering and electronics markets
for civil lithium product compared
with Q2
„ Continued good YoY growth in the
military markets
„ Strong quarterly sales in the space
market
14
FY 2009 Guidance
FY 2008
Actual
FY 2009
Outlook
Sales
609.4
(7)% to (10)%*
EBITDA margin %
18.1%
≥ 18 %**
€ v $ rate
1.47
€m
„ Full year sales expected towards the bottom of the guidance
„ EBITDA margin before impact from Jacksonville project ≥ 18%
„ Approximate impact of a 10% US$ movement/€
ƒ Sales 4%
ƒ EBITDA 6 - 7%
* At constant exchange rates
** Before impact from Jacksonville project estimated at $1.5m in Q4 2009
15
2. The Li-ion Opportunity
16
Saft: An acknowledged Li-ion expertise
„ A strong R&D commitment
ƒ
ƒ
ƒ
R&D investment : 5.6% of annual
sales in 2008 from 3.7% in 2004
R&D staff: from 303 in 2004 to 355
in 2008
Regular relationship / partnership
with several universities (ICMCB,
Ecole Polytechnique)
„ A long standing experience in
Li-ion
„ NCA technology as the best answer to
market requirements
ƒ Energy density: VERY HIGH
ƒ Peak/continuous power: HIGH
ƒ Cycle/calendar life: LONG
„ Saft has also expertise on alternative
technologies
ƒ Iron Phosphate / SuperphosphateTM
ƒ Nickel Cobalt Manganese
ƒ
15 years of experience in R&D
ƒ
Longest large format Li-ion
experience in the world
ƒ Will have similar cost for high volume
production
ƒ
10 years of experience in
production
ƒ Require safety management through
system integration
„ All technology options:
17
Breakout Growth Opportunities
„ Saft is ready to seize growth opportunities with new Li-ion-based
products for its existing markets (Telecom, Military, Aviation):
ƒ Ability to leverage on longstanding relationship with clients
ƒ First successes: prototypes, cooperation agreements, contracts
„ Very significant potential on two new markets: Clean vehicles and
Renewable Energy Storage
ƒ Sustainable development as a growth driver
ƒ First mover advantage on Li-ion applications and first Li-ion
automotive battery plant in the world
ƒ Benefits from the JV Johnson Controls-Saft
ƒ Selected to receive substantial US subsidies
18
2. The Li-ion Opportunity
a. Growth Within Existing Markets
19
Growth opportunities for new products in existing
markets: Telecom networks
„ Advanced battery technologies for evolving Telecom networks
architecture:
ƒ
Today: options are lead or nickel batteries (challenging environments)
ƒ
Tomorrow: architecture changes with more remote terminals and
small wireless sites, benefiting from Li-ion technology:
ƒ Small/light batteries
ƒ Long life technology
ƒ Resistance to adverse environments
„ Li-ion business today: Batteries for micro base stations (Intensium
product range)
„ Additional products under development
„ Proportion of market addressed by advanced technologies will
increase in the coming years
20
Growth opportunities for new products in existing
markets: Military
„ The military business will also benefit from the Li-ion technology:
ƒ
Land systems: HEV vehicles
ƒ
Weapons systems
ƒ
Naval systems: surface ships and underwater systems
„ New niche markets for Saft in the military business
„ Prototypes delivered and cooperation agreements established:
ƒ
Raytheon: Li-ion battery systems for the Improved Target Acquisition
System
ƒ
DCNS: alliance in innovative technologies
ƒ
BAE Systems: military vehicle demonstrators
21
Growth opportunities for new products in existing
markets: Aviation
„ Reduced fuel consumption is a top priority for aircraft
manufacturers by reducing weight:
ƒ More electric systems, more energy needed
ƒ Higher performance and lighter batteries
„ Li-ion is the answer:
ƒ Weight reduced by 50%
ƒ High energy density
ƒ Average battery value / plane: three / four times higher than Nickel
batteries
„ Saft already positioned on this new opportunity with two landmark
contracts:
ƒ F35 Joint Strike Fighter
ƒ A 350 XWB
22
2. The Li-ion Opportunity
b. Li-ion for New Markets
23
New markets: sustainable development
as a growth driver for Saft
Political support
and pressure
„
„
EU: Renewable energy
directive - 20 %
renewable energy target
in 2020
EU: max 130g CO2/km
car emissions target in
2012
„
US: Corporate Average
Fuel Economy (CAFE)
„
US: Energy storage tax
incentive in bill S.1091
recently proposed in the
US Congress
„
EU / US: incentive
packages including green
technology proposed
„
US: $3.4bn funding to
support upgrade and
development of US
electricity grid
Oil prices outlook
„
Consumer awareness
An increasing trend in oil
prices in the coming
years due to:
„
Eco-friendly attitude
„
Incentive packages
ƒ
Growing demand
„
ƒ
Exhaustion of fossil
resources
90% of Americans are
open to buying a hybrid
for their next vehicle*
ƒ
Steady growth of
extraction costs
*Source: “Powering the United States Hybrid
Vehicle Industry,” May 2009, survey conducted by
Harris Interactive and Johnson Controls
24
Johnson Controls–Saft is ready to capture part of the very
significant potential on HEV / PHEV / EV markets
„ Several figures available on the market size of clean vehicles
batteries all showing very significant potential in the coming years
ƒ Between €3.3bn – €5.6bn in 2014 according to Roland Berger*
ƒ More than $10bn in 2015 according to other studies
„ HEV / PHEV / EV is a top priority for Governments, auto OEMs,
consumers
„ Johnson Controls–Saft is ready to seize this breakout growth
opportunity:
ƒ First mover advantage on Li-ion applications
ƒ Strategic advance through customer relationship and agreements
ƒ Big winner of the recent US subsidies grants
ƒ High volume manufacturing facilities ready by 2011
*in « Powertrain 2020, China’s ambition to become market leader in E-Vehicles » released by Roland Berger in April 2009
25
HEV / PHEV / EV characteristics
Technology
Battery size (KWh)
Blended MPG
EV range (miles)
*Application will
migrate to Li-ion
HEV
PHEV
EV
Mainly Ni-MH today*
Li-ion
Li-ion
0.6-2.4
10-22
9-53
19-50
-
-
-
12-62
55-250
Combustion
Engine
Combustion
Engine
Regenerative Breaks
Regenerative Breaks
Regenerative Breaks
Electric
Motor
Electric Motor
Electric Motor
Batteries
Batteries
Batteries
Gas Tank
Gas Tank
26
Renewable Energy market potential:
A strong rationale supporting growth
Grid level
Centralized
Distributed
Demand side
„ High power Energy Storage
„ Commercial Storage
ƒ Smoothing / Ramping support
ƒ Peak Shaving to avoid
Demand charges
ƒ Grid stabilization/Power
Quality
ABB
ABB
ƒ Ancillary services
„ Bulk energy storage
ƒ Energy dispatching
ƒ Avoid disturbances
ƒ Defer grid upgrades
„ Smart Grids
ƒ Controlled (upon demand)
injection in peak periods
Guadeloupe
Guadeloupe
„
Smart Houses
ƒ Self-consumption
ƒ Zero-energy houses
ƒ Safe against outages
ƒ High efficiency
Sol-ion
Sol-ion
Apollo
Apollo
27
Renewable Energy Storage outlook
„ Power-oriented energy storage at grid level. Experts forecasts:
ƒ GTM: $2.5bn market in 2015
ƒ Pike Research: $4.1bn market in 2018
ƒ Nano Markets: $8.3bn market in 2016
„ GTM estimates that 20% of the overall grid level energy storage
market will be captured by Li-ion
„ Distributed storage will bring additional opportunities
ƒ Today: Governments are supporting demonstrator projects
„ Several RfP under discussions
28
3. Saft Positioning on the
Li-ion Opportunity
29
Saft: Recognized as a Very Credible Player
Johnson Controls-Saft and Saft are together the leading beneficiaries of the US grants
Johnson Controls-Saft*
299
Michigan project
249
A123 Systems
KD ABG MI
161
LG Chem
151
119
EnerDel
106
GM Corp**
Jacksonville project
96
Saft America
Exide Tech.**
34
East Penn**
33
0
100 200 300 400
Focused solely on non
automotive renewable energy
project
USD m
* Johnson Controls-Saft industrial project submitted by Johnson Controls Inc. to the Department of Energy
** non Li-ion manufacturing projects
Source: US DoE
30
Focus on Jacksonville Project
„ Construction of a high-volume manufacturing plant to build advanced Lithium-Ion
cells and batteries for military, aviation, telecom and renewable energy storage
ƒ
Investment project costs estimated c. $ 200m (including capex, opex and project costs)
„ US Department of Energy funding details
ƒ
50% funding of the project cost from the DoE - up to $95.5m - subject to successful
contract negotiation
ƒ
Expected to be signed before year end
„ The plant is planned for Jacksonville, Florida
ƒ
City and State to contribute up to $ 20.8m to the funding
„ Expected timeline
ƒ
Facility to start production for existing customers as early as 2011 and to be fully
completed by 2012
Objectives: Production capacity full by 2015: c. $ 200m worth of sales per year
Estimated EBITDA margin of c. 15% by 2015
31
Focus on Michigan Project
„
„
„
„
Construction of a high-volume manufacturing plant to build advanced Lithium-Ion batteries for
hybrid and electric vehicles
ƒ
To be built in Holland, Michigan, to serve existing and future North-American and other global customers
ƒ
Investment in this facility estimated at c. $ 300m, on a total program cost of c. $ 600m agreed by the DoE
US Department of Energy funding details
ƒ
50% funding from the DoE - up to $299m (including $13m for a supplier) - subject to successful contract
negotiation
ƒ
Expected to be signed before year end
Funding details from State of Michigan for the Holland facility
ƒ
Johnson Controls-Saft is also selected to receive a combination of tax credits and incentives up to
$148.5m
ƒ
Total includes a $100m battery manufacturing sales refundable tax credit ($25m per year from 2012)
Expected timeline
ƒ
Facility to start production for existing customers as early as 2011 and to be fully completed by 2012
ƒ
Expected full production capacity c. $450m worth of sales per year
Objectives: Company EBIT break-even expected by 2012-2013 with total sales of
c. $175m
32
Johnson Controls-Saft:
a Broad Portfolio of Clean Vehicle Projects
Johnson Controls-Saft has been selected as supplier to blue-chip partners
Vehicle
Type
Availability
Mercedes
HEV
Now
BMW
HEV
Early 2010
Ford
PHEV
2012E
Azure Dynamics
HEV
Q4 2010
Volkswagen
EV
N/A
Selected for an EV fleet
Jaguar / Land
Rover
HEV
N/A
Development as preliminary to production
Ford / Azure
EV
N/A
Commercial delivery vehicles
Carmaker
New
projects
Highlight
First ever Li-ion HEV batteries to supply the “S-Class 400”
“7-series”, to start production Q4 2009, available early
2010
First Ford plug-in hybrid vehicle on the market
Commercial vehicles for the North-American market
33
Summary of Investment Plans & Related Funding
$m
Estimated gross investment
500
Estimated Jacksonville total investment
200
Grant from DoE
(95.5 )
Funding by Saft
104.5
Estimated Michigan total investment
Grant from DoE
300
(150)
Funding by shareholders of Johnson Controls-Saft
150
Funding by Saft (49%)
73.5
Estimated total project cost for Saft
* Excludes all local grants.
178 *
34
Conclusion
35
Saft’s Key Strengths to Address Li-ion Opportunities
„ Li-ion technology mastership / R&D expertise
„ Unrivalled knowledge of industrial batteries markets and applications
„ An industrial expertise built over 90 years of activity
„ An existing industrial capacity: Already $92m / €63m of profitable sales from
Li-ion (FY 2008)
„ Contracts for both Saft and Johnson Controls–Saft
„ Highly skilled and motivated people and management
„ DoE grants demonstrate Saft’s credibility
„ High volume manufacturing facilities ready by 2011
36
Saft Ambitions
„ Maintain clear global leadership with attractive market positioning
„ Pursue high margin business and resilient cash flow generation to
invest in innovative Li-ion markets with leading-edge applications
„ Greenfield strategy in promising new activities backed by its
mastership of the Li-ion technology
ƒ
ƒ
Build-up on the already successful joint-venture with Johnson ControlsSaft, supported by prestigious customers
Duplicate this success story to be a pioneer in the energy storage
thanks to its worldwide leadership of the Li-ion technology
37
Additional Materials
38
Example of Saft Projects
Guadeloupe demonstration project
„
15 sites with 2.5 kWp PV and 11 kWh Li-ion batteries
„
Enhanced power quality, Displacement of fossil generation
„
Batteries all delivered. First systems installed and working well
Saft and ABB project with EDF Energy UK
„
Integration of Li-ion into SVC Light pilot system
„
200 kWh, 600 kW / 15 min. Operation to 5.8 kV
„
Grid stabilisation. Voltage and power control
Sol-ion project
„
Partnered with Conergy & Tenesol
„
75 systems 5 -15 kWh in residences in France & Germany in 2009 / 2010
Saft Solar smart grid inverter project
„
Partnered with Apollo Solar and funded by US DoE
„
The c. 10kwh batteries designed by Saft will provide energy storage enabling solar
energy to be effectively time shifted to match peak energy demand consumption