corporate investor relations intranet relaunch

Bank am Bellevue Conference 2013

Flims, January 11, 2013

Jürg Fedier (CFO)

Andreas Schwarzwälder (Head of Investor Relations)

Oerlikon’s Transformation

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3 pillars as basis for Oerlikon’s transformation

January 2013_Investor Presentation

PORTFOLIO REFINANCING OPERATIONAL EXCELLENCE

OERLIKON TRANSFORMATION

UNDERLYING PERFOMANCE

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4.00

6.00

8.00

10.00

12.00

Oerlikon Portfolio – Streamlined portfolio with reduced volatility

Apr 16, 2012 – Divestment of Pilatus stake

Mar 23, 2012 – Sale of Arbon

property

Oerlikon

Textile

Drive Systems

Vacuum

Coating

Advanced Technologies

Jun 29, 2012 & Oct 29, 2012 – Streamlining of

manufacturing footprint of Drive Systems Dec 3, 2012 –

Announcement to divest Natural

Fibers and Textile Components BUs

Nov 27, 2012 – Closing Solar divestment

Mar 2, 2012 – Announcement

Solar divestment

Jul 2, 2012 – Divestment of

Melco in Textile Segment


http://www.melco.ch/default.cfm

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Oerlikon divests Natural Fibers and Textile Components Business Units – Summary

TRANSACTION

Oerlikon to divest Natural Fibers and Textile Components Business Units

(including certain real estate) to Jinsheng Group of China

Enterprise Value of around CHF 650 million

Subject to merger control approval in a number of countries

Closing expected for Q3 2013

RATIONALE

Manmade and natural fiber markets different in terms of industry dynamics,

technologies, customers and regions – limited overlap and synergies incl.

manufacturing footprint

Focus on manmade fibers – fastest growing area in the global fiber industry

Reduces complexity / cyclicality and overall textile exposure of Group portfolio

Focus on technological leadership and value creation of Oerlikon Group

TRANSFORMATION PROCESS 2012

Disciplined execution of Operational Excellence

Disposal of non-operating assets (Pilatus Flugzeugwerke AG, Arbon property)

Divestment of Solar Segment and announced reduction of textile exposure

Repositioning of Balance Sheet (net cash positive, unsecured CHF 700m

credit facility and CHF 300m Swiss Bond)


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Group Sales Group Order Intake Group EBIT

20

11

excl. S

ola

r

FY 2011 Group EBIT Margin excluding Solar Segment at 11.1 %

20

11

p

relim

inary

resta

ted

Divestment will be accretive on restated FY 2011 EBIT margin by 50 to 60 bps dependent on cost allocation and deconsolidation impacts

Oerlikon Portfolio – Segment split more balanced

53%

21%

13%

11% 3%

CHF 3.9 bn 53%

24%

11%

11% 2%

CHF 3.8 bn

33%

30%

18%

15% 4%

CHF 2.7 bn

36%

32%

15%

14% 3%

CHF 2.9 bn

Textile Drive Systems Coating Vacuum Advanced Technologies


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Oerlikon Portfolio – Textile Segment Focus on manmade fiber business

HIGH- PERFORMING

BUSINESS

Profitability and growth of manmade fiber

business twice as high as of natural

fiber business

Order books already filled until

beginning of 2015

Manmade fiber business with less cyclicality

STRONG CUSTOMER

BASE

Strong and concentrated customer base with 15 customers to account for 50 % of

Segment sales

Long-term investment horizon of customers

Strong balance sheets and access to financing

Customers also invest in upstream capacities

COMPETITIVE ADVANTAGE

Technological leadership

Focus on energy efficiency/e-save (e.g. Wings FDY energy

consumption reduced by up to 25 %)

Provider of process equipment

* 2011 figures

Clothing

Home Automotive

Sports

Geo/agro text.

Construction


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Oerlikon Portfolio – Textile Segment Overview

STRATEGIC POSITION &

PROFITABILITY

Focus on high-performing manmade fiber business with less cyclicality and higher growth

potential (exit of natural fiber business)

Focus on high-end textile machines as demand for low-end products will shrink over time

due to targets of the Chinese 5-Year-Plan

Focus on growing end markets as construction, automotive, home textiles, clothing, geo/

agro textiles and sports

EBIT-Margin of 14-16 % over the cycle

PRODUCT OFFERING &

MARKET SEGMENTS

Spinning plants, engineering services and

line equipment for filaments, carpet yarn,

staple fibers and nonwovens

OERLIKON’S STRENGTH

Solution provider (full range of products)

Market leader in manmade fiber industry

Strong R&D, playing to the strength of German Technology and precision engineering

Global footprint with strategic production sites in Asia and Europe

5%

12% 2% 6%

4%

71%

CHF 893m* Carpet Yarn (BCF)

Nonwoven

Staple Fiber

Industrial Filament

Plastic Processing (BSZ)

Textile Filaments

* 2011 figures

Process equip.


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Market growth (CAGR): >5 % vs. 2-3 % in cotton

Main drivers:

– Population and GDP growth and increasing spending on textile per capita in emerging countries

– Growth in technical textiles for new applications

– Political encouragement in China and India

Competitive landscape: Concentrated competitor base, only a few big players in the market (i.e. TMT, CTAMP, HongYuan)

Customer base: Dedicated customer base with long-term investment horizon and strong balance sheets, predominantly based in China

Oerlikon Portfolio – Textile Segment Manmade Fiber Business

2030

138.0

2020

108.8

2014

93.4

2012

86.5

2011

83.7

2010

81.7

2009

78.5

2008

75.6

2000

57.0

[‘000 tons]

Global textile mill consumption by technology

Cotton

Manmade Filament

Manmade Staple Fiber

Nonwovens

Market characteristics

Served market volume and regional split

Source: PCI Redbook 2011, Pira Study

>5 %

2-3 %

7%

9%

RoW

5% Americas

Europe

Asia

79%

2012: CHF 2 805m

Market leader in the respective fields

Market shares ranging from ~25-80 % in all covered market segments


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Oerlikon Portfolio – Drive Systems Segment Overview


PROFITABILITY

Focus on high growth segments of energy and on/off highway market while maintaining a

strong presence in other served areas

Niche applications with limited exposure to more commoditized gear component market

Focus on difficult-to-produce, high performance products in high-end segments

Adjustment to global production network (streamline in I and expansion in IN and CN)

Access to local markets in China and India

EBIT-Margin of 10 % as initial milestone, targeting for current Group average

PRODUCT OFFERING &

MARKET SEGMENTS


Solution provider of true drive systems (joint development and engineering)

Most comprehensive support to customers in terms of product range, solutions and

geographical coverage

Highly advanced engineering and application expertise in gear and power transmission

Global footprint and network as increased technology demands will threaten smaller

independent firms

15%

8%

40%

20%

17%

Energy/Mining/Specialty Industrial

High-end Automotive

Agriculture

Construction

Off-Highway / Transportation

Gear components Clutches

Axles Transmissions

CHF 821m*

* 2011 figures


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Oerlikon Portfolio – Drive Systems Segment Agriculture and Construction as drivers

Construction & Agricultural Equipment Market 2008-2014E* Market characteristics


Source: IHS Global Insight, CNH, BaB estimates

Market growth (CAGR): GDP correlated

Main drivers:

– Population growth, rising middle class and increased mobility

– Migration towards higher technology/systems in agriculture in emerging markets

– Construction and infrastructure build-up in developing countries

Competitive landscape: Many competitors worldwide competing in the niche gear and drives market. Competitors include both global players as well as smaller regional producers

Customer base: Concentrated customer base of global OEMs and producers (CNH, John Deere, Caterpillar)

Americas 40%

Europe

25%

Asia 35%

2012: CHF 9 200m

Drive Systems Segment No. 2 or 3 in addressable markets


2012 2014E

2 000

2013E

1 900 2 000

2011

1 900

2010

1 600

2009

1 600

2008

1 700

Tractors Light Equipment Heavy Equipment Combines

[‘000 units]


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PROFITABILITY

Focus on vacuum solutions for process industry, solar/coating and R&D/analytics

with limited exposure to semiconductor market

Potential expansion of product offer into unserved markets (i.e. food and packaging)

Modularization of product offering and streamlining of production process

(i.e. new logistic center in Cologne and expansion of production facility in China)

Mid-teen EBIT-Margin over the cycle

PRODUCT OFFERING &

MARKET SEGMENTS


Engineering expertise in optimizing customer specific vacuum requirements

Solution provider with broad range of pumps and systems

Covering full value chain from rough vacuum to extreme high vacuum

Strong position in process industry

Collaboration with highly accredited research labs (CERN in Geneva)

Limited exposure to high-cyclical semiconductor industry

Oerlikon Portfolio – Vacuum Segment Overview

20%

23%

40%

17%

R&D/Analytics

Solar/Coating

Process Industry

Others

CHF 409m*

Vacuum Systems Pump Systems Coating Systems

Calibration Syst. Leak Detectors Control Systems

* 2011 figures


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Oerlikon Portfolio – Vacuum Segment Process industry and China

Cyclicality and growth in the vacuum business Market characteristics


Europe

Americas

25% Asia 54%

21%

2012: CHF 3 450m

Oerlikon Leybold No. 3 in addressable markets


Market growth (CAGR): GDP correlated

Main drivers:

– Aging population with growing demand for health care and pharma

– Demographics and middle class development driving process industry growth

– Construction and infrastructure with coating of glass and solar panels

Competitive landscape: Big global competitors (Edwards, Pfeiffer, Busch) as well as regional competitors

Customer base: Reliable partner for more than 18 000 customers

Cyclicity

CAGR

Chemical F&P / PP

SEMI

Coating

Solar

R&D

Analytics Process Industry

Stable Highly cyclical

Oerlikon involved


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Oerlikon Portfolio – Coating Segment Overview


PROFITABILITY

Undisputed technology and market leader in Physical Vapor Deposition (PVD)

Continues expansion of Components business

Automotive industry represents around 40 % (direct and indirect), but Coating to benefit

from efforts to further reduce weight and fuel consumption (structural growth)

Extension of product offer to new coatings and services

Sustainable profitability level with EBIT-Margin of around 20 %

PRODUCT OFFERING &

MARKET SEGMENTS


Market leader in PVD coating

Global presence with ~90 coating centers worldwide

Organic growth by implementing 3-5 new coating centers every year

Coating systems to be implemented in the client’s production process

Potential to expand in adjacent technologies and applications

9%

20%

51%

8%

12%

Forming Tools

Cutting Tools

Precision Components

Automotive Components

Equipment

CHF 484m*

ePD interior PVD/PECVD

Equipment

* 2011 figures

ePD exterior


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Oerlikon Portfolio – Coating Segment Automotive and Components Business

Oerlikon’s global network Market characteristics


* Source: OICA 2012

Americas

21%

Europe

41%

Asia 38%

2012: CHF 1 400m

Market leader in the respective fields


Market growth (CAGR): ~7-8 % organic growth (incl. build-up of new coating centers)

Main drivers:

– High increase in automotive sales in emerging markets

– Usage of adv. surface solutions in various sub-segments for functional and decorative enhancements (watches, medical, aerospace etc.)

– Substitution of chrome-plating technology on automotive

Competitive landscape: Undisputed market and technology leader

Customer base: Broad customer base worldwide

Americas: 21 Centres

Asia: 30 Centres

Europe: 38 Centres


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Oerlikon Portfolio – Advanced Technologies Overview


PROFITABILITY

Focus on high growth and high value added applications in cleantech, semiconductors

and mobile device markets

Incubator for new technologies and applications predominantly in deposition technology

EBIT-Margin mid-term in the range of up to 10 %

PRODUCT OFFERING &

MARKET SEGMENTS


Core competence in industrializing thin film coating applications for Advanced Packaging,

and Energy Management

Highest productivity PVD tools for semi, mobile and clean tech applications

Excellent reputation confirmed by independent market surveys

Strong customer base in Asia

Investments in R&D – Incubator function

77%

3%

18%

2%

Photovoltaic

Others

Touch Panel

Semi

CHF 108m*

Thin-film Deposit.

Thin-film Coating

* 2011 figures


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Balanced Oerlikon Portfolio

BALANCED GEOGRAPHIC

SALES

Balanced geographic portfolio

Asia to account for 43 % of total sales

(preliminary HY 2012 figures)

CURRENCY EXPOSURE

No major currency mismatch between sales, COGS and

overhead costs – natural hedge in place

Limited Swiss Franc exposure

Limited transaction risk

SERVICE Service & spare parts to account for 21 % of total sales

Further strengthening of service business to increase

proportion of recurring revenue

7%

Other

RMB 12%

USD

60%

4%

17%

CHF

EURO

6%

RoW

43% Asia/

Pacific

20%

North America

32%

Europe

79%

Service & Spare Parts

21%

Goods, Equipment & Components


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Refinancing – Cash position and credit facility create financial flexibility

REFINANCING

New unsecured, syndicated credit facility of CHF 700m

Swiss Bond of CHF 300m

Proceeds from divestments (Solar, Pilatus, Arbon)

Significant net cash position as of December 2012 expected

FINANCIAL CONSIDERATIONS

Dividend policy in place (up to 40 % of net profit)

Net cash position creates flexibility but no long-term target

Target leverage considered at ~1.5-1.6x net debt/EBITDA

Potential debt capacity of CHF ~1.2bn

Investment criteria:

- Growth markets

- Technological affinity and synergies

- Valuation to meet Oerlikon’s financial targets

300

-61-86-271

Dec 2012E Jun 2012 Dec 2011 Dec 2010


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Operational Excellence – Basis for improvement of underlying performance

MANAGEMENT

Changes in management to acquire and ensure necessary know how and

capabilities for growth strategy and transformation process

New Segment CEOs in Textile, Vacuum and Drive Systems

Introduction of Country Representatives for China, India, Russia

and the Americas to identify growth potential across all Segments

STRATEGIC INITIATIVES

Significant improvement of On-Time Delivery (OTD)

Platform strategies (i.e. in Textile and Vacuum)

Manufacturing footprint alignment

Production process improvement

Cross Segment procurement

INNOVATION

Sustained Innovation is crucial to meet and exceed customer expectation

Continued invest in R&D to deliver groundbreaking innovations

Innovations to decrease operating costs, increase production efficiency,

reduce environmental impact and increase performance

GROWTH

Focus on accelerating growth of the portfolio

Continued CapEx in the magnitude of depreciation level

Addressing growth regions in emerging markets

Expansion in growth applications and technologies


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Summary

PORTFOLIO

Balanced portfolio with reduced complexity,

volatility and cyclicality

Strengthening of portfolio in consideration

(similar industrial processes)

REFINANCING

Strong balance sheet

Debt capacity in place

Dividend policy

OPERATIONAL EXCELLENCE

Changes in management to acquire and ensure

necessary know how

Strategic initiatives, i.e. footprint alignment

Continued invest in R&D to deliver

groundbreaking innovations

Focus on accelerating growth of the portfolio

Oerlikon

Textile

Drive Systems

Vacuum

Coating

Advanced Technologies


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Outlook update Oerlikon Group 2012

Natural Fibers and Textile Components Business Units reported as «discontinued operations»

Based on the current assessment of the effects from Natural Fibers and Textile Components Business Units reported as discontinued, we update our guidance:

- sales growth of more than 5 % (prior: to be at 2011 levels)

- order intake to be close to previous year’s level (prior: up to minus 5 %)

- EBIT margin to increase by 1 percentage point on prior guidance (prior: around 12.5 % reported)

Guidance FY 2012 based on current currency exchange rates

Major step towards balanced business portfolio and continued focus on Operational Excellence to further increases value creation of Oerlikon


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Appendix


Consistent high level of profitability in Q3 2012 Group EBIT margin at 11.6 %

With an EBIT margin of 11.6 %, Oerlikon operates on a continued high level

Strong margin improvements in the Textile and Drive Systems Segment

Positive currency impact

Growth in Europe +13 % and Asia +9% (whereof China +12 %)

Execution of Operational Excellence programs and portfolio adjustments

Consistent high level of profitability

in 2012

Oerlikon net cash positive after strong operational and financial performance

and based on completion of comprehensive refinancing in July 2012

Order intake Sales*

898

Q3 2011 restated

Q3 2012 cont. op.

837 +7%

939 957

Q3 2011 restated

+2%

Q3 2012 cont. op.

EBIT

123

Q3 2012 cont. op.

111

Q3 2011 restated

-10%

Order backlog

Q3 2012 cont. op.

1,485

-16%

1,240

Q3 2011 restated

EBIT margin

Q3 2011 restated

13.1

-1.5% pts.

Q3 2012 cont. op.

11.6

* Sales to third parties

in CHF million in CHF million in CHF million in CHF million in %


Key figures by Segment Q3 2012

Order intake Δ to Q3 2011

Order backlog Δ to Q3 2011

Sales* Δ to Q3 2011

EBIT % of sales

in CHF m Vacuum

93 +9.4 %

74 -1.3 %

92 -8.9 %

8 8.3 %

Textile

486 +17.1 %

970 -20.0 %

524 +3.6 %

57 10.9 %

Coating

126 +5.0 %

n/a

126 +5.0 %

25 20.0 %

Adv.Tech.

28 +40.0 %

33 +50.0 %

20 -13.0 %

-1 n.a.

Drive

165 -16.2 %

163 -7.4 %

195 +3.2 %

18 9.3 %

Group**

898 +7.3 %

1 240 -16.5 %

957 +1.9 %

111 11.6 %

** restated



FX impact on Sales, EBIT and EBIT margin

+68+2

+887

+8%

Q3 2012 reported

+957

Translation effects

Transaction effect

Q3 2012 FX impact adj.

+10+4

+97

+14%

Q3 2012 reported

+111

Translation Effects

Transaction Effects

Q3 2012 FX impact adj.

11.6 10.9

Currency impact driven by strong development of USD and CNY

EBIT margin disproportionate affected due to currency mix in global network

EBIT margin in %


in CHF m

Oerlikon Group Sales* Q3 2012

in CHF m

Oerlikon Group EBIT Q3 2012


Return On Capital Employed (ROCE) ROCE = NOPAT / Capital Employed

17.3%17.5%17.6%

Q2 2012 continuing operations


FY 2011 restated


16.5%

FY 2011 reported

14.9%

in %

ROCE

9M 2012: improvement in 12-month rolling NOPAT and disproportionate increase in Capital Employed

Oerlikon Group creates value by earning premium over cost of capital


Successful closing of Solar divestment will allow to further reduce debt (drawing of Facility A)

Oerlikon net cash positive by end of Q3 2012

483 486

345

196

298*

66*

-56%

Others

Bond

Facility C (old)

Facility B (old)

Facility A (new)

9M 2012

368

4 5

FY 2011

832

4

HY 2012

687

Development of debt position FY 2011 – 9M 2012

* Including capitalized financing costs (Bond CHF 2 million, Facility A CHF 14 million)


Dividend policy and dividend for 2011 Dividend yield of 4 %

0.27

0.68

Up to 40 % of net profit Net profit per share 2011

0.20

0.27

Max. pay-out Dividend proposal

Dividend distributed from the reserve from capital contribution

Dividend yield of 4 % based on a share price of CHF 5.03 at year-end 2011

Dividend policy to pay out up to 40 % of net profit

AGM approved to pay out

CHF 0.20 per share for 2011


Oerlikon Shares

Listed on Swiss Exchange (SIX) since 1975

Securities symbol: OERL

Securities number 81 682

ISIN: CH0000816824

No. of shares outstanding: 325 547 970 shares*

Re-entry to Swiss SMIM on April 17, 2012

Addition to STOXX Europe 600 as of June 18, 2012

48,86% Free Float 51,14%

Treasury Shares (part of Free Float)

0,15%

Renova Group

* as of September 30, 2012

(as of June 14, 2012)

Oerlikon Shares Oerlikon Shareholder Structure

(as of December 31, 2012, Indexed; 100 percent = Closing price per December 31, 2011

Oerlikon Share Price Development

90.0

100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

180.0

190.0

200.0

210.0

220.0

30.1

2.1

1

06.0

1.1

2

13.0

1.1

2

20.0

1.1

2

27.0

1.1

2

03.0

2.1

2

10.0

2.1

2

17.0

2.1

2

24.0

2.1

2

02.0

3.1

2

09.0

3.1

2

16.0

3.1

2

23.0

3.1

2

30.0

3.1

2

06.0

4.1

2

13.0

4.1

2

20.0

4.1

2

27.0

4.1

2

04.0

5.1

2

11.0

5.1

2

18.0

5.1

2

25.0

5.1

2

01.0

6.1

2

08.0

6.1

2

15.0

6.1

2

22.0

6.1

2

29.0

6.1

2

06.0

7.1

2

13.0

7.1

2

20.0

7.1

2

27.0

7.1

2

03.0

8.1

2

10.0

8.1

2

17.0

8.1

2

24.0

8.1

2

31.0

8.1

2

07.0

9.1

2

14.0

9.1

2

21.0

9.1

2

28.0

9.1

2

05.1

0.1

2

12.1

0.1

2

19.1

0.1

2

26.1

0.1

2

02.1

1.1

2

09.1

1.1

2

16.1

1.1

2

23.1

1.1

2

30.1

1.1

2

07.1

2.1

2

14.1

2.1

2

21.1

2.1

2

28.1

2.1

2

OC OERLIKON CORP SWISS MARKET INDEX SMIM PRICE INDEX STXE 600 € Pr


Coverage 8 Buy/Accumulate – 2 Hold/Neutral

Broker (as of December 31, 2012)

Analyst Recommendation Date of last update

Target Price

AlphaValue Pierre-Yves Gauthier Buy 06.12.2012 12.50

Bank am Bellevue Michael Studer Hold 20.12.2012 10.50

Berenberg Bank Benjamin Glaeser Buy 03.12.2012 11.00

Credit Suisse Patrick Laager Outperform 04.12.2012 12.40

Helvea SA Reto Amstalden Accumulate 10.12.2012 11.20

Kepler CM Christoph Ladner Buy 04.12.2012 11.00

MainFirst Resumption of coverage planned for 2013

Société Générale Jean Baptiste Roussille Hold 04.12.2012 11.00

UBS Torsten Wyss Buy 05.12.2012 12.00

Vontobel Michael Foeth Buy 04.12.2012 12.50

Zürcher Kantonalbank Armin Rechberger Overweight 04.12.2012 -

Consensus 11.79


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Investor Relations Contact

OC Oerlikon Management AG Churerstrasse 120 CH-8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Investor Relations Phone: +41-58-360-9622 Mobile: +41-79-810-8211 E-mail: [email protected]


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Oerlikon has made great efforts to include accurate and up-to-date information in this document. However, we make no representation or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoever for the use of it.

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. Oerlikon is under no obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

All information provided in this document is not intended as, and may not be construed as, an offer or solicitation for the purchase or disposal, trading or any transaction in any Oerlikon securities. Investors must not rely on this information for investment decisions.

Disclaimer

December 2012_Investor Presentation

corporate investor relations intranet relaunch

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