Traton Se · XETR:8TRA
Traton — Investor Presentation (November 2018)
26 slides from Traton's investor presentation, November 2018
Slide 1: Creating a Global Champion
CREATING A GLOBAL CHAMPION COMPANY PRESENTATION | NOVEMBER 2018
Slide 2: Disclaimer
DISCLAIMER The following presentation contains forward-looking statements and information on the business development of TRATON. These statements and information may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estima
Slide 3: Today's Presenters
TODAY’S PRESENTERS Andreas Renschler Christian Schulz CEO of TRATON and Board Member of Volkswagen AG CFO of TRATON Appointed CEO of Appointed CFO of Volkswagen Truck & Bus in 2015 Volkswagen Truck & Bus in 2018 30 years of experience in 20 years of experience in automotive and truck industry automo
Slide 4: TRATON has delivered on its strategic goals since inception of Volkswagen Truck & Bus
TRATON HAS DELIVERED ON ITS STRATEGIC GOALS SINCE THE INCEPTION OF VOLKSWAGEN TRUCK & BUS New legal entity On the way to become Collaboration Capital Market Ready among brands in VW T&B fully on track New corporate identity Return on Sales1 6.9% 6.7% 6.1% 5.0% Successful creation and implementation
Slide 5: TRATON at a glance – leading global brands and partnerships
TRATON AT A GLANCE – LEADING GLOBAL BRANDS AND PARTNERSHIPS Fully consolidated Associates Strategic partner 25% + 1 share c. 17% Leader in core markets with differentiated brands Powerful partnerships to create leading global scale and access and successful collaboration model 5
Slide 6: TRATON at a glance – snapshot 2017
TRATON AT A GLANCE – SNAPSHOT 2017 TRATON unit sales1 by geography TRATON revenues by brand TRATON operating profit by brand (% of total) (€bn / % of total) (€bn / RoS %) Russia, VW Caminhões e Ônibus VWCO3 Germany Middle East, 1.1 Asia/Pacific 16% (5%) MAN and other 0.5 33% 5.3% 12.8 10.0 1.3 MAN S
Slide 7: TRATON at a glance – unique positioning of brands
TRATON AT A GLANCE – UNIQUE POSITIONING OF BRANDS Creating a global champion Driving the shift towards a Simplifying business by being the Less you don’t want sustainable transport system most reliable business partner more you don’t need Premium customer-focused innovation Reliable business partner
Slide 8: TRATON – Creating a global champion
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION TRATON – CREATING A GLOBAL CHAMPION 1 Our leading brands and alliances provide scale GLOBAL for our unique platform, enabling global reach and CHAMPION positioning us for best in class profitability 2 GROWTH Customer value focused
Slide 9: Truck OEM profit pools are spread globally with growth potential
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION Share of global profit pool 20171 TRUCK OEM PROFIT POOLS ARE SPREAD GLOBALLY WITH GROWTH POTENTIAL In €bn Attractive market Europe/ 3.8 with positive Attractive market Russia3 momentum from NAFTA2 3.8 with high margins 30-40% servi
Slide 10: TRATON with #1 truck market positions in Europe and LatAm
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION : TRATON truck market share in 2017 (>15t) Core markets of TRATON brands TRATON WITH #1 TRUCK MARKET POSITIONS IN EUROPE AND LATAM Europe1 32% Market leader with 32% market share Market leader in Germany with 37% market share LatAm
Slide 11: Expanding globally through alliance partners to address all major profit pools
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION Truck market share in 2017 (>15t) Core markets of TRATON brands Core markets of alliances EXPANDING GLOBALLY THROUGH ALLIANCE PARTNERS TO ADDRESS ALL MAJOR PROFIT POOLS North America – Partnership since 2016 12%1 • Technology coope
Slide 12: Unique global truck and bus platform with focus on heavy duty trucks
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION Relates to % of total TRATON sales volume in 2017 (excl. associates and strategic partners) UNIQUE GLOBAL TRUCK AND BUS PLATFORM WITH FOCUS ON HEAVY DUTY TRUCKS TRATON Associates Strategic partner Home base Europe and Brazil Europe
Slide 13: Leading alliance of heavy duty brands as basis for expansion and synergy realization
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION LEADING ALLIANCE OF HEAVY DUTY BRANDS AS BASIS FOR EXPANSION AND SYNERGY REALIZATION Potential heavy duty platform reach of top OEMs incl. associates and strategic partners Leverage technologies and expertise through global brands
Slide 14: TRATON with multiple strategic levers for growth
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION TRATON WITH MULTIPLE STRATEGIC LEVERS FOR GROWTH • Intelligent services by utilizing connected fleet of 450k+ vehicles of TRATON brands • Alternative fuel solutions incl. electric e.g. e-Delivery, e-Bus and gas trucks Drive • Auton
Slide 15: Sustain core and go global – strong core markets and increasing exposure to global markets
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION Addressable market volume Additional market volume SUSTAIN CORE AND GO GLOBAL – STRONG CORE MARKETS AND INCREASING EXPOSURE TO GLOBAL MARKETS FORM THE BASIS FOR FUTURE TOPLINE GROWTH Sustain core Go global Market volume truck sales
Slide 16: Grow share – benefit from highly attractive product pipeline
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION % of truck units of respective brand affected post full production ramp-up GROW SHARE – BENEFIT FROM HIGHLY ATTRACTIVE PRODUCT PIPELINE New truck generation New truck generation New delivery truck Current / upcoming launch 100% 100
Slide 17: Drive innovation – transforming transportation with new technology
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION DRIVE INNOVATION – TRATON IS TRANSFORMING TRANSPORTATION WITH NEW TECHNOLOGY Hybrid First autonomous trans- Among the broadest Natural Gas port system in operation Large connected fleet 450k+ ranges of alternative fuels BEV HVO Eth
Slide 18: Drive innovation – example: connectivity at Scania
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION DRIVE INNOVATION – EXAMPLE: CONNECTIVITY AT SCANIA Connected vehicles on the road What data does Scania have? How can Scania monetize the data? • Customers pay for reduced TCO... and Scania benefits… >350k • Scania knows… …when a t
Slide 19: Strong track record of performance improvement across brands and further potential
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION TRATON WITH STRONG TRACK RECORD OF PERFORMANCE IMPROVEMENT ACROSS BRANDS AND FURTHER POTENTIAL TO BE REALIZED A Brand performance improvements B Synergies TRATON: Attractive margin upside Return on Sales 2015 9.8% 1 Joint powertrai
Slide 20: Current track record
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION A OPERATIONAL PERFORMANCE IMPROVEMENTS IN PLACE ACROSS ALL THREE BRANDS • Phase-out of double • Ramp-up / “dual costs” for • Leverage recovering Brazilian production line new product generation market Current • Focus and Ambition p
Slide 21: Structured approach to synergy exploration and visible synergies ahead
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION B TRATON WITH STRUCTURED APPROACH TO SYNERGY EXPLORATION AND VISIBLE SYNERGIES AHEAD Description Pot. margin upside Timing on margin impact Selected examples of lever impact Lead buying of Purchasing (incl. Joint sourcing lead buyi
Slide 22: Joint powertrain platform and components as one key lever to realize synergies
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION B JOINT POWERTRAIN PLATFORM AND COMPONENTS AS ONE KEY LEVER TO REALIZE SYNERGIES Common ICE powertrain Common e-powertrain Deep dive on next page CBE – GZ new 13l engine transmission Common axles E-drives / batteries Common hypoid
Slide 23: CBE powertrain will be rolled out across brands
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION Start of production TRATON Associates B CBE POWERTRAIN WILL BE ROLLED OUT ACROSS BRANDS AND EXPECTED TO BE INSTALLED IN >50% OF TRATON HD TRUCKS1 BY 2025 Leverage CBE powertrain across brands (illustrative CBE volumes) CBE powertra
Slide 24: Stable profits from services/aftersales reduce cyclicality
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION STABLE PROFITS FROM SERVICES/ AFTERSALES REDUCE CYCLICALITY Truck OEMs: Stable industry profits from recurring, high- Large rolling fleet provides high degree of visibility on profitable margin services/ aftersales business growth
Slide 25: TRATON executive management team with strong track record
1 GLOBAL CHAMPION 2 GROWTH 3 PROFITABILITY AND SYNERGIES 4 EXECUTION TRATON EXECUTIVE MANAGEMENT TEAM WITH STRONG TRACK RECORD AND LONGSTANDING INDUSTRY EXPERIENCE Andreas Christian Henrik Joachim Drees Renschler Schulz Henriksson CEO MAN CEO CFO CEO Scania 30 20 21 23 Antonio Anders Nielsen Carsten
Slide 26: TRATON – Creating a global champion
TRATON – CREATING A GLOBAL CHAMPION • Sustain core • Go global GROWTH • Grow share • Drive innovation RoS 9.0% 6.9% · PROFITABILITY AND SYNERGIES 2017 Target1 • Strong track record EXECUTION • Longstanding industry experience 1 Strategic target TRATON wants to achieve over the cycle, incl. holding c