Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (November 2015)
34 slides from Deutz's investor presentation, November 2015
Slide 1: DEUTZ Investor Presentation November 2015
DEUTZ Investor Presentation November 2015
Slide 2: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 2
Slide 3: DEUTZ at a glance
DEUTZ at a glance More than 150 years DEUTZ – a tradition of achievement Independent manufacturer of diesel engines with power range from 25 to 520 kw Engineering and manufacturing company with strong expertise as system integrator Profile Worldwide sales channels and service network Strong brand –
Slide 4: Corporate structure
Corporate structure DEUTZ Group Revenue 2014 €1,530.2 million DEUTZ Compact Engines DEUTZ Customised Solutions Revenue 2014 €1,279.9 million Revenue 2014 €250.3 million Liquid-cooled engines of up to 8 Air-cooled engines for on-road, off- litres cubic capacity for on- and off- road and marine applic
Slide 5: Site optimisation
Site optimisation Cologne-Porz 2016 Cologne-Porz Cologne-Deutz Ulm 2015/17 Ulm Übersee (Chiemsee) Site optimisation measures fully on schedule; first relocation stage to Ulm completed Annual cost savings > €10 million (considerable effects already in 2016; full effects from 2017 onwards) Restructuri
Slide 6: DEUTZ activities in China
DEUTZ activities in China JV DEUTZ Dalian Challenging capital goods market conditions in China 359.8 357.1 Strategic decision to focus our 319.1 production in China on our 273.5 successful JV DEUTZ Dalian 245.7 (DDE) which has sufficient capacities DDE is a 50:50 JV with FAW 100 107 106 producing di
Slide 7: Emission standards drive DEUTZ revenue growth
Emission standards drive DEUTZ revenue growth Average sales price per engine (indexed; FY 2011 = 100) Tier 4 engines require exhaust after-treatment devices 117 122 116 Growing share of new emission 100 104 engines drives revenue growth Effect was diluted by strong demand for smaller engine series i
Slide 8: DEUTZ engines for Tier 4 emission standard
DEUTZ engines for Tier 4 emission standard Competitive product features: compact size, low fuel consumption, smart exhaust after-treatment Successful combination of platform strategy with DEUTZ application expertise Full range offering with focus on engines for Mobile Machinery and Agricultural Mach
Slide 9: Stage V ready
Stage V ready 240 – 520 kW 160 – 291 kW 130 – 206 kW 85 – 115 kW 56 – 100 kW 37 – 56 kW TCD 2.9 to 7.8 litre engines with DPF already meet the next EU emission standard announced for 2019 DEUTZ technology platform offers our customers long-term planning certainty as they do not have to invest in ada
Slide 10: R&D expenditure
R&D expenditure € million 84.6 Spending on R&D has been scaled back due to successful market launch of new engine 62.1 generation 52.6 53.1 R&D expenditure will remain on 39.7 a moderate level in the coming 5.5 years because DEUTZ compact 4.8 engines are “Stage V ready” 3.6 3.5 3.2 Continuous produc
Slide 11: DEUTZ customer base
DEUTZ customer base Long standing customer relationships (not exhaustive) DEUTZ has a lot of long standing relationships with key customers Customer base extended and diversified with new emission engines New customers attracted by the compact design and smart exhaust aftertreatment of the New clien
Slide 12: Successful business development
Successful business development Examples of new applications New customers gained in all regions, in particular with new engines 2.9 and 3.6 Greater share of wallet at existing clients New business related to different applications, e.g. tractors, fork lifts, telehandler, dumpers, rollers, wheel loa
Slide 13: Key applications
Key applications Typical Markets benefit from application macro trends Construction equipment Material handling Mobile Machinery Ground support Mining equipment Tractors Agricultural Machinery Agricultural equipment Gensets Stationary Equipment Pumps Compressors Trucks Automotive Buses Rail vehicles
Slide 14: Revenue split by application
Revenue split by application Q1-Q3 2015 (Q1-Q3 2014) Other 2 % Mobile Machinery 43 % €15.7 million €400.9 million (€15.4 million) (€582.2 million) Automotive 7 % €64.6 million (€56.8 million) Agricultural Machinery 12 % €938.8 million (€1,177.9 million) €113.1 million (€207.5 million) Stationary Equ
Slide 15: Revenue split by region
Revenue split by region Q1-Q3 2015 (Q1-Q3 2014) Africa/Middle East 7 % Europe (excl. Germany) 47 % €68.5 million €438.2 million (€45.3 million) (€586.4 million) Asia-Pacific 10 % €91.3 million (€74.8 million) €938.8 million (€1,177.9 million) Americas 24 % Germany 12 % €223.5 million €117.3 million
Slide 16: Service business
Service business € million 276.0 Strong resilience of profitable 250.3 253.7 259.3 service business through 241.6 different economic cycles Higher complexity of new emission engines provides opportunity to increase penetration of service business Active management of service network with training an
Slide 17: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 17
Slide 18: Key figures
Key figures Q1-Q3 2015 yoy Q3 2015 qoq € million Order intake 932.9 -13.4% 262.2 -25.0% Revenue 938.8 -20.3% 268.6 -23.7% EBITDA (before one-offs) 85.6 -9.4% 15.2 -58.4% EBIT (before one-offs) 10.6 -53.5% -9.7 -€19.9 million Net income 7.3 +€3.9 million -9.4 -€18.4 million Q3 2015 result depressed b
Slide 19: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million -13.4% -30.9% -20.3% 155,099 1,177.9 1.076.8 8,575 175.1 194.3 932.9 938.8 107,236 208.9 9,640 208.7 146,524 882.5 1,002.8 724.0 97,596 730.1 Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2014 Q1-Q3 2015 Order intake decreas
Slide 20: Revenue development
Revenue development € million 410.1 410.7 424.5 381.0 342.7 352.3 352.1 318.1 268.6 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q3 2015 revenue decreased 36.7% yoy and 23.7% sequentially Previous year figures benefitted from engine pre-buys Quarter-on-quarter decline caused by noticeable s
Slide 21: EBIT (before one-offs)
EBIT (before one-offs) € million 22.8 +7.5 -21.8 10.6 +2.1 Q1-Q3 2014 Q1-Q3 2015 EBIT margin 1.9% 1.1% Operating profit at DEUTZ Compact Engines burdened by negative scale effects in Q3 EBIT improvement at DEUTZ Customised Solutions driven by better capacity utilisation Segment Other benefitted from
Slide 22: Operating profit & net income
Operating profit & net income Q1-Q3 2014 Q1-Q3 2015 € million 94.5 71.7 85.6 75.0 8.0% 9.1% 22.8 13.9 8.9 5.0 10.6 0.0 10.6 3.1 0.2 7.3 0.5 3.4 EBITDA D&A EBIT Restruc- EBIT Interest Income Net EBITDA D&A EBIT Restruc- EBIT Interest Income Net before before turing after expenses taxes income before
Slide 23: R&D spending & capital expenditure
R&D spending & capital expenditure R&D Capital expenditure (excl. R&D) € million Gross expenditure 53.6 13.8 41.6 Reimbursements 36.3 0.4 Net expenditure 6.5 30.4 1.9 39.8 41.2 29.8 28.5 Net R&D Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2014 Q1-Q3 2015 expenditure ratio(1) 3.4% 3.2% R&D scaled back significantly
Slide 24: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 231.1 214.5 86.9 43.6 Working Q1-Q3 2014 Q1-Q3 2015 Q1-Q3 2014 Q1-Q3 2015 capital ratio (30 Sep) 13.5% 17.9% Working capital increase (+7.7%) mainly due to Operating cash flow decrease driven by lower higher inventor
Slide 25: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 52.0 1.0 2.9 -3.1 2014 Q3 2015 (LTM) Q1-Q3 2014 Q1-Q3 2015 Last twelve months free cash flow decreased to Almost debt free €2.9 million due to lower operating cash flow (1) Free cash flow: cash flow
Slide 26: Equity ratio & funding
Equity ratio & funding € million 1,149.2 1,087.2 44.5% 46.1% 511.0 500.9 207 15 16 1 2014 Q1-Q3 2015 up to up to up to up to 1 year 2 years 5 years 10 years Total assets Equity xx.x% Equity ratio Repayment schedule Duration of credit lines Equity ratio increased by 1.6%-points to 46.1% Medium- to lo
Slide 27: Segments: DEUTZ Compact Engines
Segments: DEUTZ Compact Engines Q1-Q3 Q1-Q3 Change Q3 Q2 Change € million 2015 2014 in % € million 2015 2015 in % New orders 724.0 882.5 -18.0 New orders 194.0 281.1 -31.0 Unit sales 97,596 146,524 -33.4 Unit sales 26,243 37,758 -30.5 Revenue 730.1 1,002.8 -27.2 Revenue 201.8 277.3 -27.2 EBIT (befor
Slide 28: Segments: DEUTZ Customised Solutions
Segments: DEUTZ Customised Solutions Q1-Q3 Q1-Q3 Change Q3 Q2 Change € million 2015 2014 in % € million 2015 2015 in % New orders 208.9 194.3 7.5 New orders 68.2 68.6 -0.6 Unit sales 9,640 8,575 12.4 Unit sales 2,873 3,455 -16.8 Revenue 208.7 175.1 19.2 Revenue 66.8 74.8 -10.7 EBIT (before one-offs)
Slide 29: Summary: key development
Summary: key development Pronounced market slowdown in Q3 EBIT decrease due to scale effects at DEUTZ Compact Engines Focus Chinese production activities on DEUTZ Dalian Site optimisation in Germany well on track Strong balance sheet and solid net financial position 29
Slide 30: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 30
Slide 31: Financial outlook
Financial outlook 2014 Previous Revised € million reported 2015 guidance 2015 guidance Revenue 1,530.2 approx. -10 % approx. -20% EBIT margin (before one-offs) 2.1 % approx. 3 % approx. 0 % significant significant Net R&D expenditure(1) 53.1 decline decline Capex (excl. R&D)(1) 40.3 ~ 50 ~ 50 (1) Ne
Slide 32: Market assessment
Market assessment 2015 Unit sales (equipment) Construction equipment Europe sideways 0% to -5% Construction equipment North America (previous: sideways) more than -40% Construction equipment China (previous: more than -30%) Agricultural Machinery Europe approx. -10% (previous: -5% to -10%) more than
Slide 33: Financial calendar & contact details
Financial calendar & contact details Annual Report 2015 17 March 2016 Annual General Meeting 28 April 2016 Interim report 1st quarter 2016 3 May 2016 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 Ottostrasse 1 Fax:+49 (0) 221 822 15 5400 51149 Cologne (Porz-Eil) Email: krupp.c@deutz.com G
Slide 34: Disclaimer
Disclaimer Unless stated otherwise, all the figures given in this presentation refer to continuing operations. The details given in this document are based on the information available at the time it was prepared. This presents the risk that actual figures may differ from forward-looking statements.