OC Oerlikon : Earnings Presentation Q2/HY 2023

Q2 2023 Financial Results

3 August 2023

Page 1

Overview Q2

8% organic sales growth in Surface Solutions despite challenging environment; Filament market with limited activity for Polymer Processing Solutions

Orders

• Order intake -8.3% YoY at constant FX, including +5.7% from M&A 1)
• Driven by filament customers delaying investment decisions; Surface Solutions book-to-bill slightly above 1

FX with significant headwind:

Vs CHF	Since Jan 2023 2)	Since Jan 2020 2)
EUR	-2%	-10%
USD	-7%	-11%
CNY	-11%	-15%

				-15.0%
				FX adj.: -8.3%
	773
		657

Q2'22

Q2'23

Sales

• Sales +3.6% at constant FX, including +5.9% from M&A 1)
• Surface Solutions with +7.8 organic constant FX sales growth despite contracting PMIs
• Polymer Processing Solutions impacted by postponements and Turkey earthquake

				-4.4%
				FX adj.: +3.6%
	734
		702

Profit

	Q2'22		Q2'23
	Operational EBITDA
▪ Operational EBITDA impacted by FX, negative mix and higher input costs				-13.8%
▪ Continued focus on pass-on of wage inflation and energy costs	128	111

• Previously announced cost actions to positively impact H2'23

17.5%	Margin	15.8%
Q2'22		Q2'23

1) Riri consolidated as of March 1, 2023; 2) Compares FX as per 18 Jul 2023 with 1 January 2023/20; * Numbers in financial charts of this presentation are in CHF m except when stated otherwise; discontinued inline ePD is excluded in 2022 operational figures

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End markets impacted by increasingly challenging macro conditions

Polymer Processing Solutions		Surface Solutions

Filament	Non-Filament
31% of 2022 Group sales	19%
	Customers delay	Flow Control
	investments	supports
▪	Difficult market environment	▪ Flow Control benefiting from
	leading to customers	lightweight trend in cars and
	postponing orders (started	market share gains in non-
	in H2'22), impacting	automotive
	2023/24 sales	▪ Offset by some customers
▪	Underlying need for	delaying investments in
	filament equipment intact;	nonwoven applications
	equipment market CAGR
	01-22 of +4%

General Ind. & Tooling

25%

Softening industrial activity

• Euro Area and US manufacturing PMIs remained in contraction and lost momentum throughout Q2
• China PMI around neutral
  (~50) in Q2 … slow post- COVID recovery

Automotive

13%

Mixed picture

• Receiving mixed signals from market with limited de-stocking at some customers in Q2
• Mid single-digit light vehicles production forecast for 2023 2) YoY driven by NA and Europe
• Successfully pioneering e- mobility applications, e.g. e-gearing and thermal insulation solutions

Luxury

7% 1)

Growth

• Solid Luxury market, e.g. +7%/14% Swiss watch exports in Apr/May
• Oerlikon experienced limited destocking in Mar / Apr; solid demand since May
• Expect high single-digit growth rates in mid-term

Aviation

6%

Continued recovery

• Recovery driven by MRO with increased flying hours
• New plane production supported by passenger growth and energy efficiency
• +46% / +39% passenger growth in Apr/May YoY 3)

Filament order recovery expected in 2024		PMIs remained in contraction and lost momentum throughout Q2;
	aviation and luxury strong

1) For comparability reasons, includes annualized sales of Riri which was acquired on 28 Feb 2023; in 2022 reporting Luxury was counted as part of General Industry end market; 2) Source LMC: 6% growth for 2023 as per July 2023; 3) Source IATA

Page 3

Surface Solutions with sales growth in Q2, pricing and cost actions to support margins in H2

Markets	Orders		Sales		Operational EBITDA

• Cautious customer purchasing behavior continued in Q2 due to macro environment
• Continued softening industrial activity across China, US and Europe
• Support from robust luxury and recovery in aviation

Q2'23 sales split by markets

	Energy		Tooling	Americas	APAC
Luxury 2)
						21%				22%
		14%					28%
				5%
General	24%					22%
Industry	14%		Auto-		50%
		Aviation	motive	Europe

• Increased +21.9% FX adjusted; including +12.7% from Riri acquisition and +9.2% organic
• Orders sequentially up with book-to-bill ratio slightly above 1
• Order growth despite contracting manufacturing PMIs

Order intake

+13.3%

FX adj.: +21.9%

	395
348
Q2'22	Q2'23

• Increased +20.1% FX adjusted; including +12.3% from Riri acquisition and +7.8% organic
• Supported by aviation, general industry (incl. larger equipment and materials sales), luxury and energy; despite contracting PMI's
• +9.9% growth in H1 (FX adjusted organic)

Sales

(3rd party)

+11.6%

FX adj.: +20.1%

	392
352
Q2'22	Q2'23

• Impacted by FX, negative sales mix and higher input costs (labor, energy (as hedging needs continual renewals)); furthermore, delay in Chinese industrial production recovery impacting margin
• Pricing (Jan, Jun) and cost actions, announced at Q4 results, started to phase in and will further unfold in H2, supporting margin

Operational EBITDA 1)

	+0.8%
63	63
17.8%	16.1%
	Margin
Q2'22	Q2'23

1. Margin based on unrounded figures and total sales, including intercompany sales; discontinued inline ePD is excluded in 2022 operational EBITDA; 2) Luxury includes sales of Riri (consolidated as of 1 March 2023) and Coeurdor; Luxury was counted as part of General Industry end market in 2022 and is separately reported as of 2023

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Polymer Processing Solutions impacted by order postponements; non-filament and execution on cost measures on-track

Markets	Orders		Sales		Operational EBITDA

• Filament market impacted by customers postponing orders; no sign of recovery yet
• Non-Filament with lower demand for carpet yarns and nonwoven as some customers are preserving cash; industrial yarn, staple fibers and Flow Control with solid demand

• Impacted by order postponements in Filament
• YoY comparison also influenced by strong order intake in Q2'22

• Supported by continued deliveries from last year's strong order intake, partly offset by impacts from earthquake in Turkey, which led to postponements from Q2 into H2'23
• Stable Non-Filament sales in H1 YoY

• Margin impacted by FX, sales mix, operating leverage and limited pass- through of higher input costs (e.g. labor, energy) to maintain volume
• Previously announced cost-out measures will start to phase during H2

Q2'23 sales split by markets

Order intake

						-38.1%
						FX adj.: -33.0%
Flow Control		Americas	425
			Europe	9%
		16%
Nonwoven &
			16%		263
Plant	12%
Engineering
		56%
Industrial &	17%		76%
Interiors		Filament	APAC	Q2'22	Q2'23

Sales

(3rd party)

-19.0%

FX adj.: -11.6%

383
	310
Q2'22	Q2'23

Operational EBITDA 1)

	-32.6%
65
		44
17.1%		14.2%
	Margin
Q2'22		Q2'23

1) Margin based on unrounded figures and total sales, including intercompany sales

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