Khd Humboldt Wedag International Ag · XETR:KWG

Khd Humboldt Wedag International — Shareholder Meeting (May 2023)

42 slides from Khd Humboldt Wedag International's shareholder meeting presentation, May 12, 2023

  1. Slide 1: Annual General Meeting May 12, 2023

    Annual General Meeting May 12, 2023 KHD Humboldt Wedag International AG Shen, CEO | Luckas, CFO | Xing, EVP | Dr. Jochem, COO | Mersmann, CTO

  2. Slide 2: Address from KHD's Chief Financial Officer (1)

    Address from KHD‘s Chief Financial Officer (1) • Global conflicts, especially Russian war • Price increases of aggression against and inflation Ukraine • Aftermath of the • Massive disruptions in COVID-19 the supply chains pandemic  KHD achieved consolidated net income for the first time since the

  3. Slide 3: Address from KHD's Chief Financial Officer (2)

    Address from KHD‘s Chief Financial Officer (2)  The most important key figures from corporate planning were exceeded!  KHD achieved improvements in all operational areas.  KHD defines itself through process engineering know-how and innovative strength.  Our “Go China” initiative remains a key co

  4. Slide 4: Management Board

    Management Board CEO CFO EVP COO CTO Jianlong Shen Jürgen Luckas Tao Xing Dr. Matthias Jochem Matthias Mersmann  CEO since October 2020  Since 2006 with KHD  Member of KHD’s MB  Since June 2019  Since February 2020  Since 2018 in executive  CFO since April 2015 in 2016 and since back at KHD a

  5. Slide 5: Agenda

    Agenda Business Performance 2022 First four months (January – April) of the Financial Year 2023 Further Development Project Status and Market Outlook Market Requirements & Product Development Questions 5 Annual General Meeting – May 2023

  6. Slide 6: Order Intake and Order Backlog

    Order Intake and Order Backlog Order intake and order backlog in € million  The strong order intake was above our 350 301,1 307,8 outlook. Measured in terms of order 300 intake, the financial year was fully 252,1 254,6 250 240,4 231,7 satisfactory. 218,6 200  The sales region of HW India made a 15

  7. Slide 7: Key Figures at a Glance

    Key Figures at a Glance (in € million) 2022 2021 Deviation Order intake 218,6 231,7 -13,1 Revenue 210,4 226,3 -15,9 Gross profit 27,6 19,3 8,3 * Adjustments: Gross profit margin 13,1% 8,5% 2022: € 1.6 million impairment of Adjusted EBIT* -0,9 -5,2 4,3 goodwill 2021: none Adjusted EBIT margin -0,4% -

  8. Slide 8: Revenue

    Revenue  Slight decline in revenues due to delays Group revenue in € million in the execution of individual projects. 250 226,3  Of the sales, 49% were generated in India 200 210,4 and neighboring countries. 151,8 151,2 146,3 150  At € 163.6 million, revenues in the Capex 100 segment in the 2022

  9. Slide 9: Group Earnings

    Group Earnings  The gross profit of € 27.6 million is significantly above the previous year's figure of € 19.3 million.  Planned increase in structural costs from € 48.4 million to € 57.2 million, in particular due to € 5.1 million increase in personnel costs.  Increased structural costs are full

  10. Slide 10: Group Earnings – Sales Expenses and G&A Expenses

    Group Earnings – Sales Expenses and G&A Expenses  Sales Expenses KHD continues to invest actively in market development and intensification of customer relationships. Increase in sales expenses due to intensified market development  higher personnel expenses and increased tendering costs. KHD cont

  11. Slide 11: Segment Earnings

    Segment Earnings Segment Capex Segment Plant Services  As expected, revenue of € 163.6 million was  Revenues of € 46.8 million were significantly higher below that of the previous year (€ 194.1 million). than in the previous year (€ 32.1 million).  Despite increased cost of internal capacity, KHD

  12. Slide 12: Key Figures at a Glance

    Key Figures at a Glance Dec. 31, 2022 (in € million) Dec. 31, 2021 Deviation Equity 92.4 90.7 1.7 Equity ratio 36.4% 29.9% Cash and Short Term Deposits 52.0 65.3 -13.3 Intercompany loans 85.0 95.0 -10.0 Net working capital * -16.6 -37.5 20.9 Order backlog 254.6 252.1 2.5 Employees 791 737 54 * Balan

  13. Slide 13: Financial Position

    Financial Position  Total assets as of Dec. 31, 2022 amounted to € 254.0 million (previous year: € 303.7 million), of which:  Cash and cash equivalents and term deposits amounting to € 52.0 million (previous year: € 65.3 million).  Loans to AVIC totaling € 85.0 million (previous year: € 95.0 mill

  14. Slide 14: Employees

    Employees  791 employees at the end of 2022 (end of 2021: 737 employees) – targeted increase of capacities shall continue  The workforce in Germany is particularly important for securing and expanding our technological core competencies. 14 Annual General Meeting – May 2023

  15. Slide 15: Agenda

    Agenda Business Performance 2022 First four months (January – April) of the 2023 Financial Year Further Development Project Status and Market Outlook Market Requirements & Product Development Questions 15 Annual General Meeting – May 2023

  16. Slide 16: Order Intake until April 2023

    Order Intake until April 2023 Order intake of € 40 million in the first four months is below previous year’s level:  € 26 million in the Capex segment.  Letters of intent with significant volume have been signed.  Several promising projects are due to be awarded already in the 2nd quarter of 2023

  17. Slide 17: Key Figures January to April 2023 (1)

    Key Figures January to April 2023 (1) Jan. - Apr. Jan. - Apr. (in € million) Deviation 2023 2022 Order intake 40.3 55.1 -14.8 Revenue 69.9 63.2 6.7 Adjusted gross profit * 10.6 7.7 2.9 * Adjustments: Adjusted gross profit margin 15.2% 12.2% 2023: none 2022: none Adjusted EBIT * 0.0 -0.8 0.8 Adjusted

  18. Slide 18: Key Figures January to April 2023 (2)

    Key Figures January to April 2023 (2) (in € million) Apr. 30, 2023 Dec. 31, 2022 Deviation Equity 92.4 92.4 0.0 Equity ratio 37.0% 36.4% Cash and Short Term Deposits 45.0 52.0 -7.0 Intercompany loans 85.0 85.0 0.0 Net working capital -10.5 -16.6 6.1 Order backlog 220.7 254.6 -33.9 Employees 804 791

  19. Slide 19: Agenda

    Agenda Business Performance 2022 First four months (January – April) of the Financial Year 2023 Further Development Project Status and Market Outlook Market Requirements & Product Development Questions 19 Annual General Meeting – May 2023

  20. Slide 20: War in Ukraine

    War in Ukraine  All KHD companies strictly comply with existing sanctions and restrictions with regard to Russia.  KHD makes a very clear distinction between Russian customers and employees in Russia on the one hand and the Russian government, military, and sanctioned persons on the other.  Key d

  21. Slide 21: Impacts on KHD's Business in Russia

    Impacts on KHD’s Business in Russia  In general, KHD assesses the market for cement plants (including modernizations and expansions) in Russia as important and promising.  KHD traditionally has a strong market position in Russia. However, investments by cement producers have been at a very low lev

  22. Slide 22: Framework Conditions for further Development (1)

    Framework Conditions for further Development (1) • Geopolitical uncertainties • (Significant) supply chain disruptions incl. price increases • Low Capex margins and margins under pressure in PS segment • Significant increase in personnel costs (incl. increase in hourly rates) • Uneven distribution o

  23. Slide 23: Framework Conditions for further Development (2)

    Framework Conditions for further Development (2) But: • Successful implementation of reorganization creates potential for higher productivity and improved efficiency • No “legacy issues” in the order backlog • Improved cooperation within the KHD Group • Use of resources for more research & developme

  24. Slide 24: Key Topics for further Development

    Key Topics for further Development Benefit from green Go China and EPC transition improvement of • Capabilities • Solutions for market presence • Model decarbonization • Strategic partnerships • Energy efficiency • Reduction of emissions Expansion of service Cost competitiveness Modernization / port

  25. Slide 25: KHD's Potential

    KHD‘s Potential  The 2022 financial year closed with a Group net profit – despite adverse circumstances.  KHD has realized significant improvements in recent years:  Improved performance and competitiveness  No projects with an unbalanced risk/reward ratio  KHD's technological expertise is reco

  26. Slide 26: Agenda

    Agenda Business Performance 2022 First four months (January – April) of the Financial Year 2023 Further Development Project Status and Market Outlook Market Requirements & Product Development Questions 26 Annual General Meeting – May 2023

  27. Slide 27: Business Environment

    Business Environment  The slowdown of the cement consumption and stop of capacity addition in China created a strong price pressure from Chinese competitors in EPC new build projects in many regions, including Western Europe.  The “Net Zero” strategies of cement producers result in shrinking produ

  28. Slide 28: Project Status

    Project Status  Our starting point is the avoidance of an unbalanced risk vs. margin status in projects.  For further improving operational excellence, KHD is conducting two important internal projects:  Transparent registration and follow-up on all deviations in projects (NCR).  Removing media

  29. Slide 29: Outlook – Cement Consumption 2023

    Outlook – Cement Consumption 2023  Forecasted cement consumption in 2023 according to World Cement – IA Cement Ltd. (status January 2023) 29 Annual General Meeting – May 2023

  30. Slide 30: Outlook - Net Zero Strategies of Multinational Clients

    Outlook - Net Zero Strategies of Multinational Clients  CO2 emission allowance prices under the EU and UK trading system ETS are a major driver for the strategies of cement producers. • At current values of € 90 per ton CO2 (up from € 20 per ton CO2 three years ago) and an average emission of 600 k

  31. Slide 31: Outlook – Markets 2023 (1)

    Outlook – Markets 2023 (1)  According to IA Cement, growth in 2023 cement consumption is limited to few regions, while there is stagnation on the Northern hemisphere.  Customers’ investment projects in China and Europe are focused on projects with environmental aspects (emission reduction, CO2 red

  32. Slide 32: Outlook – Markets 2023 (2)

    Outlook – Markets 2023 (2)  The high inflation has not led to major disruptions in our markets. After erratic spikes in 2022, energy prices and purchasing costs have stabilized, though at a higher base level.  The invasion of Russia into Ukraine has developed into a stalemate for an unpredictable

  33. Slide 33: Agenda

    Agenda Business Performance 2022 First four months (January – April) of the Financial Year 2023 Further Development Project Status and Market Outlook Market Requirements & Product Development Questions 33 Annual General Meeting – May 2023

  34. Slide 34: Product Portfolio

    Product Portfolio  Over 160 years of experience in the cement industry.  We offer the full line of equipment and engineered solutions for cement plants, including individual machines, spare parts, and associated plant services.

  35. Slide 35: Market Requirements – Confirmed and Intensifying Trends

    Market Requirements – Confirmed and Intensifying Trends Alternative Fuels » All markets seek to increase the co-processing of waste-derived fuels in cement kilns. » KHD’s Pyrorotor ® technology fulfills those demands perfectly. Digitization » Mega-trend in the cement industry – Real-Time Optimizers

  36. Slide 36: Alternative Fuels

    Alternative Fuels » 11 Pyrorotor® sold in Austria, Korea, China, Turkey and Portugal. » Pyrorotor® is especially interesting for markets with still insufficient RDF-infrastructure, which often coincides with big cement demand and agile investment activities in cement. » Other AF products of KHD incl

  37. Slide 37: Digitization

    Digitization » KHD ProMax® -suite successfully launched » Digital twin of a cement plant » Full access to all relevant operation data from everywhere remote » Self-learning and self- adapting RTO (AI) for continuous optimization of the production process » Autonomous machine and plant monitoring » F

  38. Slide 38: Chinese Efficiency Increase Program

    Chinese Efficiency Increase Program » Chinese government forces cement producers to comply with very tough emission and energy consumption values. » China’s complete cement plant population (estimated > 1,700 plants) is under consideration for modernization: » Reduction of fuel demand: need for preh

  39. Slide 39: Decarbonization

    Decarbonization » From 2030 onwards, the cement industry needs to be fully decarbonized. » UN campaign „race to zero“ (run by EU high-level climate champions, >11,000 members of all sectors) calls for € 125 trillion investment needed by 2050 – for cement estimated @ 7% this equals > € 8 trillion. »

  40. Slide 40: Agenda

    Agenda Business Performance 2022 First four months (January – April) of the Financial Year 2023 Further Development Project Status and Market Outlook Market Requirements & Product Development Questions 40 Annual General Meeting – May 2022

  41. Slide 41: Questions

    Questions 41 Annual General Meeting – May 2023

  42. Slide 42: Disclaimer for Forward-Looking Information

    Disclaimer for Forward-Looking Information This document contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature. Forward- looking statements are not based on historical facts, but rather on current expectations and projections about future

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