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Strategy of the Apator Group
Warsaw 2018
APATOR GROUP - LEADERS
Mirosław Klepacki President of the Management Board of the Apator SA
Małgorzata Mazurek Finance Director Apator SA
Arkadiusz Chmielewski President of the Management Board Apator Metrix SA
Jacek Kryszkiewicz President of the Management Board Apator Powogaz SA
Tomasz Łątka President of the Management Board Apator Elkomtech SA
Artur Bratkowski Director of the Department for Metering Equipment & Systems
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APATOR - closer
Closter to client Closer to innovation
Closer to technology Closer to employee
We follow the trends Maintenance of smart grid infrastructure as a service
Automation of grid infrastructure as a service
Metering as a service
Solutions, applications, implementations, maintenance (SLA) 2025
Solutions, applications, implementations 2020
Devices and systems 2015
Devices 2010
*Cleanetech Group,Green, Navigant, Strategy Analytics, IHS
Growing markets
IT – OT predictive analytics 50%
Smart City, energy/media networks
15%
40% 10%
13% 13% 5%
30% 0%
49% MDM Local micronetworks
20% Smart metering & sensors
10% 26%
10% 5%
0%
1% 1%
9%
0% IoT devices Predictive
analytics
-5% Traditional meters of
electric energy
Smart meter of electric energy
Gasometer mechanical EMEA
Watermeters electronic
Source: Cleanetech Group,Green, Navigant, Strategy Analytics, IHS
Enabling environment
CLEAN ENERGY AND ENERGY EFFICIENCY
Infrastructure for e‐mobility Energy clusters Industry 4.0
Renewable energy sources
LEGAL REGULATIONS
Energy market (PL)
Environment protection
The Paris Agreement (CO2)
The EU winter package
INFRASTRUCTURE
Demand management Energy adaptability
Systems for operational control of
Networks Cyber security
Network automation Metering as a service
Intelligent grid as a service
TECHNOLOGY
Smart Gas Smart Metering Smart W&H Smart Home Smart Grid
MARKETS AND RESOURCES
New markets/ opportunities
Limited availability of specialists (distribution networks)
Limited availability of electronic components
End of SMART roll‐outs in Western Europe
Instability of Eastern markets (Russia)
Geographical range
Product distribution in over 70 countries all over the world
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Strong competitive position
LEADER ON THE POLISH MARKET
Poland energy meters electric energy
Poland switchgear
Poland
watermeters
STRONG POSITION ON EMEA MARKET
Poland
gasometer
Poland automatization of networks
EMEA energy meters electric energy
EMEA switchgear
EMEA
gasometer
1 1 1 EMEA watermeters
2 2 4 4 4
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POSITION ON POLISH MARKET POSITION ON EMEA MARKET
Source: Own estimates, IHS, industry reports 2016‐18
The largest entity on the WSE in the electrical engineering sector
Apator 35.0%
Electro‐construction 9.2%
TIM 7.2%
ZPUE 6.5%
Others 22.3%
Aplisens 6.1%
ES‐System 4.1%
Introl 4.2%
Grodno 5.4%
Source: Share of the value of companies in the total capitalization of the industry (electrical engineering) on the WSE (Elektrosystemy 09.2018)
Background to the Strategy
PROFITABLE INCREAS EBITDA 220 mln PLN
in 2023
• More than 100 year experience in the production sector of metering and connecting devices in the Group • Dynamic growth of sales scale supported by successful acquisitions in years after 2003
• Decrease in the Group's profitability after 2014
HISTORY
• Benefits of the cooperation in the Group
• Product management structures
• Best sales teams on strategic markets;
• Automated mass production
• Optimized production capacity
• Honouring commitments (credibility)
ORGANISATION IMPORTANT ISSUES
• Ability to offer and deliver products to markets during technological changes
(TIME TO MARKET) • Strenthening / forming of
product teams and R&D • Capital and management
readiness for aquisitions on strategic markets
SMART METERING
ULTRASOUND WATERMETERS
SLAT DISCONNECTORS
SIGNIFICANTLY INCREAS SCALE OF ACTIVITY
OF THE GROUP
MAINTAIN DOMINANT POSITION ON PL MARKET
• High product and technological competencies (the highest in the sector)
• In-depth knowledge of the needs of clients of the utilities distribution sector
• Organisational efficiency (effective and efficient)
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CORE
ACHIEV SIGNIFICANT POSITION ON STRATEGIC MARKETS DE, CEE
SOLUTIONS SMART GRID
INTERNET OF THINGS
GASOMETER METERING ELECTRONIC GASOMETER SMART
Elements of the strategy
LOCAL SMART GRID (CLUSTERS, EE COMMUNITIES)
ENERGY EFFICIENCY
SYSTEMS AND SOLUTIONS
DEVELOPMENT PROJECTS (LTE, CAT.-M1, NB-IOT, G3)
BUILDING STRONG SALES STRUCTURES ON STRATEGIC MARKETS
SMART METERING, POMIAR ELEKTRONICZNY- GAS
SMART METERING, ELECTRONIC METERING- , BILLING - W&H
ACTIVE MANAGEMENT OF ENERGY UTILITIES NETWORKS
SMART METERING – EE
PROFITABLE INCREAS EBITDA 220 mln PLN
SMART METERING
ULTRASOUND WATERMETERS
GASOMETER METERING ELECTRONIC
GASOMETER SMART
SOLUTIONS SMART GRID
INTERNET OF THINGS
SLAT DISCONNECTORS
SIGNIFICANTLY INCREAS SCALE OF ACTIVITY
OF THE GROUP
ACHIEV SIGNIFICANT POSITION ON STRATEGIC MARKETS DE, CEE
MAINTAIN DOMINANT POSITION ON PL MARKET
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Mission, vision MISSION
The mission of the Apator Group is to provide customers with easy to use and intuitive solutions in the scope of effective management of all kinds of energy media.
VISION The Visionof the Apator Group in long-term is to maintain position of the industry leader and expert in Poland, to beat the forefront of suppliers in Germany and Central and Eastern Europe and to buildrecognition of Apator brand on selected, other markets.
F1. SIGNIFICANT INCREAS OF BUISNESS SCALE (EBITDA 220 mln PLN)
F2. BUILD PROFITABILITY OF THE COMPANY THROUGH A GROWING SHARE OF NEW, MORE PROFITABLE PRODUCTS
P1. PRODUCT MANAGEMENT
P2. RESEARCH AND
DEVELOPMENT
P4. SALES P3. PRODUCTION IMPLEMENTATION
SERVICES, LOGISTICS AND PURCHASING
P5. AFTER SALE SERVICES
FINA
NCES
CL
IEN
T IN
TERN
AL P
ROCE
SSES
LE
ARN
ING
AND
DEVE
LOPM
ENT
OUR SYSTEMS ARE EASY
TO IMPLEMENT AND USE
WE HELP TO SAVE AND MANAGE UTILITIES
AND ENERGY
WE ARE ALWAYS CLOSE TO CLIENT
WE’RE EXPERTS IN WHAT
WE DO
WE’RE RELIABLE PARTNER
Strategies map | four perspectives
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L1. PEOPLE AND COMPETENCIES L2. CULTURE AND COMUNICATION L3. IT SYSTEMS IN THE GROUP
Strategies map | financial perspective
F1. SIGNIFICANT INCREAS OF BUISNESS SCALE
EBITDA PLN 220 mln F2. BUILD PROFITABILITY OF THE COMPANY THROUGH
SHARES OF NEW, MORE PROFITABLE PRODUCTS
F3. Strengthening the position of market leader in EE and W&H on the Polish market
F4. To achieve a significant position on the DE and CEE markets (especially EE and W&H)
F5. Exploit the potential of other European markets for sales development at GAS and W&H
F6. Focus development on SMART solutions
F7. Develop sales of systems for reading and management of measurement data (including IoT)
F8. Focus development on customer segments with high sales or profitability potential F9. Optimise costs by exploiting synergies within the Group
FIN
ANCE
S
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We are always close to our clients Our systems are easy to implement and use
We help to save and manage utilities and energy
We are an expert in our industry
We are a reliable partner
Strategies map | clients perspective
CLIE
NT
15
INTE
RNAL
PRO
CESS
ES
Strategies map | internal processes perspective P1. PRODUCT MANAGEMENT • Product Management as a centre for managing the profitability of the offer • Creating benefits for the customer and user at product level P2. RESEARCH AND DEVELOPMENT • Electronic measurement
• Multienergy solutions • R&D Synergy • Joint competence centres • New approach to innovation P3. PRODUCTION, SERVICES IMPLEMENTATION, LOGISTICS AND PURCHASING • Quality and on-time delivery • Radical automation of production processes • Synergies in production, purchasing and logistics P4. SALES • Best sales teams and relations with clients in the sector • Strong sales structures in strategic markets • Cross-selling in the Group P5. AFTER SALES SERVICE • Quick and efficient warranty and post-warranty service • Professional technical support for customers and distributors
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UCZE
NIE
SIĘ
I RO
ZWÓJ
Strategies map| learning and development perspective
L 1. PEOPLE AND COMPETENCIES
• Develop key competences for the implementation of the strategy
• Attract and retain key personnel effectively
L 2. CULTURE AND COMUNICATION
• Develop a customer-oriented organisational culture
• Build responsibility for internal and external declarations
• Efficiently exchange information within the Group
L 3. IT IN THE GROUP
• Develop IT tools and systems to support changes of business processes
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LEAR
NIN
G AN
D DE
VELO
PMEN
T
F1. SIGNIFICANTLY INCREASE THE SCALE OF BUSINESS (EBITDA 220 MILLION PLN) F2. BUILD PROFITABILITYOF THE COMPANY THROUGH GROWING SHARE OF NEW MORE PROFITABLE PRODUCTS
F3. Strengthen the position of market leader in EE and W&H on the Polish market
F4. Achieve significant position on the DE CEE markets (especially EE and W&H)
F5. Exploit the potential of other European markets for sales development at GAS and W&H
F7. Develop sales of systems for reading and management of measurement data (including IoT)
F9. Optimizing costs through use of synergy effect in the Group
F8. Focus development on customer segments with high sales and profitability potential
F6. Focus development on SMART solutions.
P1. PRODUCT MANAGEMENT P2. RESEARCH AND DEVELOPMENT
P4. SALES P3. PRODUCTION, IMPLEMENTATION, SERVICES, LOGISTICS AND PURCHASING
P5. AFTER SALE SERVICE
FINA
NCES
CL
IEN
T IN
TERN
AL P
ROCE
SSES
LE
ARN
ING
AND
DEVE
LOPM
ENT
OUR SYSTEMS ARE EASY TO IMPLEMENT AND USE
WE HELP TO SAVE AND MANAGE UTILITIES AND ENERGY
WE ARE ALWAYS CLOSE TO CLIENT
WE’RE EXPERTS AT WHAT WE DO
WE’RE RELIABLE PARTNER
Map of the Streategy
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L1. PEOPLE AND COMPETENCIES 1. Develop key competences for the
implementation of the strategy 2. Attract and retain effectively key personnel
L2. CULTURE AND COMUNICATION 1. Develop a customer-oriented organisational culture 2. Build responsibility for internal and external
declarations 3. Efficiently exchange information within the Group
L3. IT SYSTEMS IN THE GROUP 1. Develop IT tools and systems to support
changes of business processes
• PM as a centre of management of profitability of an offer • Creating benefits for the customer and user at product level
• Quality and on-time delivery • Radical automation of production processes. • Synergies in production, purchasing and logistics
• Quick and efficient warranty and post-warranty service • Professional, technical support of clients and distributors
• Best sales teams and relations with customers in the Sector • Strong sales structures in strategic markets • Cross-selling in the Group
• Electronic measurement • Multienergy solutions • R&D Synergy • Joint competence centres • New approach to innovation
Business optimization and integration
• 3 segments ‐ Electricity, Water and heat and Gas
• functional support from the Group level (HR, IT, Finance, etc.)
1
• a progressively defined common area of systems and solutions for all kinds of utilities
APATOR GROUP
APATOR GROUP
APATOR GROUP
COMMON FUNCTIONS
AND SYSTEMS
BU GAS
BU EE
BU W&H
BU GAS
BU EE
BU W&H
BU GAS
BU EE
BU W&H
"business is in BU"
(we respect business independence of business units)
“functional support is an advantage for everyone”
(more effective and efficient)
"systems should be made TOGETHER"
(competences and priorities)
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Financial results forecast.
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Increase in revenues by PLN 500 million
1400
Revenue 2017‐2023 SMART METERING, ELECTRONIC METERING‐ GAS
SMART METERING, ELECTRONIC METERING, BILLING ‐ W&H
1200
500 SMART METERING – EE 1000
800
600
ACTIVE MANAGEMENT OF ENERGY UTILITIES NETWORKS
400
200
683 725 769 869 907 900 DEVELOPMENT PROJECTS (LTE,
CAT.‐M1, NB‐IOT, G3)
SYSTEMS AND SOLUTIONS 0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Continued and discontinued operations New products and markets ENERGY EFFICIENCY
CAGR revenue ca. 8% LOCAL SMART GRID (CLUSTERS,
EE COMMUNITIES)
The indicated values are the objective of the Management Board and do not constitute a forecast of financial results
BUILDING STRONG SALES STRUCTURES ON STRATEGIC MARKETS
Doubling EBITDA
EBITDA 2023 [PLN 220 mn] EBITDA 2017 [PLN 108 mn]
Discontinued operations
PLN 3 million BU GAS 30 mn PLN
BU EE 26 mn
BU GAS
BU EE PLN
PLN 30 mn 100 mn PLN
BU W&H PLN 90 mn
BU W&H 49 mn PL NCAGR EBITDA ca. 13%
*EBITDA figures do not include costs not allocated to operating segments.
**The indicated values are the objective of the Management Board and do not constitute a forecast of financial results
• New products and markets • Growth of production capacity
(construction of an electronics centre and automation of mechanical production) • IT systems • Others
• Appropriations released from unused assets
• Financial loans • Developed resources
CAPEX total - PLN 380 mln
Inve
stm
ents
Fi
nanc
ing
sour
ce
23
Investment increase
MAINTAINING THE DIVIDEND POLICY
Strategy management
The strategy will be reviewed and adapted annually.
STARTING 1st of
JANUARY 2019
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APATOR STRATEGY
Revenue 1.4 bn PLN
EBITDA PLN 220 mn
CAPEX PLN 380 mn
Dividend policy without any changes
Leader in Polish market
Main supplier in DE and CEE
Electronic metering
Smart metering
Automation, robotization
Systems and solutions
ASSET OPTIMISATION, MERGERS
Legal Disclaimer
This publication has been prepared for information purposes only and is not intended to encourage
to induce the purchase or sale of any financial instruments. The publication does not constitute an advertisement,
offer or proposal to purchase financial instruments. It uses sources of information,
which APATOR S.A. considers reliable and accurate, but there is no guarantee that they are exhaustive and fully reflect
the actual state of affairs. The publication may include forward‐looking statements that represent an investment
risk or source of uncertainty and may differ materially from actual results.
APATOR S.A. is not responsible for the effects of the decisions taken on the basis of this
publication. The publication should not be treated as a sufficient source of knowledge to make an
investment decision. The responsibility for the use of the information contained in the publication
lies solely with the user of the publication.
The publication is subject to protection under the Act on Copyright and Related Rights.
Duplication, publication or its distribution requires written consent of APATOR S.A.
Contact for investors and financial analysts
APATOR S.A. [email protected]
Katarzyna Mucha [email protected] +48 697 613 712 +48 22440 1440
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