Deutz Ag · XETR:DEZ
Deutz — FY2016 Earnings Presentation
34 slides from Deutz's earnings presentation, Mar 16, 2017
Slide 1: Financial year 2016
Financial year 2016 16 March 2017 Dr Frank Hiller, CEO Dr Margarete Haase, CFO
Slide 2: Agenda
Agenda Review FY 2016 Outlook Annex Financial year 2016 16 March 2017 2
Slide 3: Key figures
Key figures FY 2016 yoy Q4 2016 yoy € million New orders 1,261.4 +2.9 % 326.1 +11.3 % Revenue 1,260.2 +1.0 % 314.7 +2.0 % EBITDA 114.2 +1.8 % 26.3 -1.1 % EBIT 23.4 +€18.5 million 3.7 +€9.4 million Net income 16.0 +€12.5 million -2.8 +€1.0 million Free cash flow 4.7 -€30.3 million 32.7 -€11.8 million
Slide 4: Highlights
Highlights ■ FY 2016 financial guidance accomplished • Revenue increased slightly in a challenging capital goods market environment • EBIT margin uplift supported by lower production cost, reduced depreciation and licence proceeds ■ Site optimisation far advanced • Measures in Cologne completed; rel
Slide 5: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million +2.9 % -3.8 % +1.0 % 1,225.9 1,261.4 137,781 1,247.4 1,260.2 132,539 249.8 12,567 9,360 259.4 267.5 280.2 125,214 123,179 958.4 1,011.6 967.2 1,000.8 2015 2016 2015 2016 2015 2016 Positive price mix effects due to new emission eng
Slide 6: Revenue development
Revenue development € million +1.0 % 1,247.4 1,260.2 -5.6 % -2.2 % +12.1 % +2.0 % 318.1 300.2 352.1 344.2 308.6 314.7 268.6 301.1 Q1 Q2 Q3 Q4 FY Revenue improved over previous year in H2 2016 Q4 2016 revenue advanced 2.0 % yoy and 4.5 % qoq 2015 2016 Financial year 2016 16 March 2017 6
Slide 7: Revenue split by region
Revenue split by region 2016 (2015) Africa/Middle East 5 % Europe (excl. Germany) 47 % €62.3 million €588.6 million (€95.5 million) (€585.5 million) Asia-Pacific 12 % €147.9 million (€127.6 million) €1,260.2 million (€1,247.4 million) Americas 19 % Germany 17 % €239.6 million €221.8 million (€257.3
Slide 8: Revenue split by application
Revenue split by application 2016 (2015) Other 3 % Construction Equipment 28 % €32.9 million €350.0 million Automotive 6 % (€20.5 million) (€334.7 million) €77.2 million (€87.9 million) Stationary Equipment 11 % €1,260.2 million Service 23 % (€1,247.4 million) €147.3 million €287.3 million (€178.1 m
Slide 9: Service business
Service business € million 278.4 287.3 253.7 259.3 Strong resilience of profitable 241.6 250.3 service business through economic cycles Future growth driven by investments in the service network and multiple service initiatives 2011 2012 2013 2014 2015 2016 Continuous growth of service revenue Finan
Slide 10: Operating profit & net income
Operating profit & net income 2015 2016 € million 112.2 107.3 114.2 90.8 9.0 % 9.1 % 23.4 3.5 3.9 16.0 4.9 4.0 +2.6 3.5 EBITDA D&A EBIT Net Tax Net EBITDA D&A EBIT Net Income Net interest income income interest tax income expense expense Slight increase of EBITDA margin despite lower unit sales EBIT
Slide 11: EBIT
EBIT € million +1.4 -8.7 23.4 +25.8 4.9 2015 2016 EBIT margin 0.4 % 1.9 % Operating profit increase driven by segment DEUTZ Compact Engines EBIT at DEUTZ Customised Solutions improved slightly despite lower business volume Prior year result at segment Other was inflated by a positive Joint Venture v
Slide 12: Segment: DEUTZ Compact Engines
Segment: DEUTZ Compact Engines Change Q4 Q4 Change € million 2016 2015 in % € million 2016 2015 in % New orders 1,011.6 958.4 5.6 New orders 267.9 234.4 14.3 Unit sales 123,179 125,214 -1.6 Unit sales 29,869 27,618 8.2 Revenue 1,000.8 967.2 3.5 Revenue 251.1 237.1 5.9 EBIT -6.1 -31.9 80.9 EBIT -0.2
Slide 13: Segment: DEUTZ Customised Solutions
Segment: DEUTZ Customised Solutions Change Q4 Q4 Change € million 2016 2015 in % € million 2016 2015 in % New orders 249.8 267.5 -6.6 New orders 58.2 58.6 -0.7 Unit sales 9,360 12,567 -25.5 Unit sales 2,231 2,927 -23.8 Revenue 259.4 280.2 -7.4 Revenue 63.6 71.5 -11.0 EBIT 32.7 31.3 4.5 EBIT 5.1 5.3
Slide 14: R&D & capital expenditure
R&D & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 56.8 53.5 0.6 52.9 Gross expenditure 49.5 3.1 8.7 Reimbursements Net expenditure 50.4 56.2 40.8 Net R&D 2015 2016 2015 2016 expenditure ratio(1) 3.3 % 4.0 % Net R&D expenditure in line with our guidance Capital expen
Slide 15: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 204.3 183.6 103.3 63.8 31 Dec 2015 31 Dec 2016 2015 2016 Working capital ratio 14.7 % 16.2 % Increase of working capital ratio mainly Operating cash flow decline largely due to change in attributable to higher trade
Slide 16: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 39.0 35.0 31.6 4.7 2015 2016 31 Dec 2015 31 Dec 2016 Free cash flow below prior year level as a result of Net financial position remained positive lower operating cash flow (1) Free cash flow: cash
Slide 17: Equity ratio & funding
Equity ratio & funding € million 1,088.1 1,059.7 45.5 % 46.3 % 495.6 491.1 160 16 16 27 2 31 Dec 2015 31 Dec 2016 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 Healthy balance sheet; equity ratio increased
Slide 18: Cash deployment & dividend policy
Cash deployment & dividend policy Keep equity ratio above 40 % Financial strength Robust financial framework in volatile markets Invest in profitable growth projects and service Internal funding Continuous product innovation Stable or growing dividend per share Shareholder return Dividend payout ~30
Slide 19: Summary
Summary Well positioned for market recovery Significant improvement of profitability Site optimisation measures far advanced Expansion of product range in 2019 Substantial proceeds from property sales ahead Sound balance sheet Stable dividend payment Financial year 2016 16 March 2017 19
Slide 20: Agenda
Agenda Review FY 2016 Outlook Annex Financial year 2016 16 March 2017 20
Slide 21: Assessment for key end markets, 2017
Assessment for key end markets, 2017 Europe North America China Unit sales (equipment) Construction equipment 0 % to +5 % -5 % to +5 % +5 % to +10 % Material handling 0 % to +10 % -5 % to +5 % -5 % to +5 % Agricultural machinery -5 % to +5 % Medium & light duty trucks 0 % to +5 % Demand for construc
Slide 22: Financial outlook
Financial outlook FY 2016 FY 2017 € million reported guidance Revenue 1,260.2 marked increase EBIT margin (before exceptional items) 1.9 % moderate increase R&D expenditure(1) 50.4 60 - 70 Capex (excl. R&D)(1) 52.9 approx. 70 (1) Net of reimbursements R&D expenditure and capex increase due to growth
Slide 23: Agenda
Agenda Review FY 2016 Outlook Annex Financial year 2016 16 March 2017 23
Slide 24: Summary of key financials (I)
Summary of key financials (I) € million 2016 2015 Change (%) Revenue 1,260.2 1,247.4 1.0 EBITDA 114.2 112.2 1.8 EBIT 23.4 4.9 >100 EBIT margin (%) 1.9 0.4 -- Net income 16.0 3.5 >100 Basic earnings per share (€) 0.14 0.04 >100 Dividend per share (€) 0.07 0.07 0.0 Number of employees (31 December) 3,
Slide 25: Summary of key financials (II)
Summary of key financials (II) € million 2016 2015 Change (%) Total assets 1,059.7 1,088.1 -2.6 Equity 491.1 495.6 -0.9 Equity ratio (%) 46.3 45.5 -- Cash flow from operating activities 63.8 103.3 -38.2 Free cash flow(1) 4.7 35.0 -86.6 Net financial position 31.6 39.0 -19.0 Working capital 204.3 183
Slide 26: Income statement
Income statement € million 2016 2015 Change (%) Revenue 1,260.2 1,247.4 1.0 Cost of sales -1,041.6 -1,054.8 -1.3 Research and development costs -77.5 -76.3 1.6 Selling expenses -68.0 -68.3 -0.4 General and administrative expenses -36.7 -36.5 0.5 Other operating income 17.7 29.3 -39.6 Other operating
Slide 27: Balance sheet: assets
Balance sheet: assets 31 Dec 31 Dec Change € million 2016 2015 (%) Non-current assets (before deferred tax assets) 483.7 520.5 -7.1 Deferred tax assets 79.9 69.1 15.6 Inventories 253.1 251.9 0.5 Trade receivables 113.5 101.2 12.2 Other receivables and assets 37.3 32.5 14.8 Cash and cash equivalents
Slide 28: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities 31 Dec 31 Dec Change € million 2016 2015 (%) Equity 491.1 495.6 -0.9 Provisions for pensions and other post-retirement benefits 175.9 172.3 -2.1 Deferred tax liabilities 0.4 0.0 >100 Other provisions 38.4 46.7 -17.8 Financial liabilities 44.0 58.6 -24.9 Other li
Slide 29: Cash flow statement (condensed)
Cash flow statement (condensed) € million 2016 2015 EBIT 23.4 4.9 Cash flow from operating activities (total) 63.8 103.3 Capital expenditure on intangible assets, property, plant and equipment and investments -58.0 -68.3 Proceeds from the sale of non-current assets 2.6 3.9 Cash flow from investing a
Slide 30: Overview of segments, 2016
Overview of segments, 2016 Change Change New orders (€ million) 2016 2015 (%) Unit sales 2016 2015 (%) DEUTZ Compact Engines 1,011.6 958.4 5.6 DEUTZ Compact Engines 123,179 125,214 -1.6 DEUTZ Customised Solutions 249.8 267.5 -6.6 DEUTZ Customised Solutions 9,360 12,567 -25.5 Total for operating acti
Slide 31: Overview of segments, Q4 2016
Overview of segments, Q4 2016 Q4 Q4 Change Q4 Q4 Change New orders (€ million) 2016 2015 (%) Unit sales 2016 2015 (%) DEUTZ Compact Engines 267.9 234.4 14.3 DEUTZ Compact Engines 28,869 27,618 8.2 DEUTZ Customised Solutions 58.2 58.6 -0.7 DEUTZ Customised Solutions 2,231 2,927 -23.8 Total for operat
Slide 32: Employees
Employees 31 Dec 31 Dec Change 2016 2015 (%) Cologne 2,202 2,269 -3.0 Ulm 411 410 0.2 Other German operations 214 231 -7.4 Germany 2,827 2,910 -2.9 Foreign operations 838 820 2.2 DEUTZ Group 3,665 3,730 -1.7 Financial year 2016 16 March 2017 32
Slide 33: Financial calendar & contact details
Financial calendar & contact details Annual general meeting 4 May 2017 Q1 2017 result 9 May 2017 H1 2017 result 3 August 2017 Q1-Q3 2017 result 7 November 2017 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 SVP Finance, Public and Investor Relations Fax:+49 (0) 221 822 15 5400 Ottostrasse
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.