Krones Ag · XETR:KRN
Krones — 9M 2019 Earnings Presentation
26 slides from Krones's earnings presentation, Oct 30, 2019
Slide 1: Conference Call January – September 2019
KRONES January – September 2019 Conference Call October 30,2019
Slide 2: Q3 2019 Key takeaways
2 ｜KRONES Conference Call October 30,2019 30, 2019 Q3 2019 Key takeaways Confirming our FY2019 guidance Sales growth of 3% and EBT margin of 3% Business on track 9M sales growth up 7%, order intake slightly above last year Profit improvement measures in place First measures implemented, structural m
Slide 3: Strong top-line development in Q3 2019, reconfirming top-line guidance of 3% growth
3 ｜KRONES Conference Call October 30, 2019 Strong top-line development in Q3 2019, thus reconfirming top-line guidance of 3% growth – Consumer markets are fundamentally stable, 3,957 despite economic and political uncertainties 3,854 2,958 2,890 – Public discussions from early this year do not have
Slide 4: On track to reach EBT margin of around 3% for full year
4 ｜KRONES Conference Call October 30, 2019 On track to reach EBT margin of around 3% for full year – Public discussions about PET from early this year lead to partially low utilization as well as postponed 305.9 investment decisions 204.3 – Pricing development positive, but below expectations 99.8 1
Slide 5: Short-term measures successfully implemented
5 ｜KRONES Conference Call October 30, 2019 SHORT-TERM MEASURES successfully implemented PUBLIC DEBATE ON PET – Postponement of investment – Debate was de-emotionalized -> markets have stabilized decisions – Stronger focus on Glass and Can – Low utilization of blowmoulding and – For after sales busin
Slide 6: Mid-term measures with substantial EBT impact developed and under execution
6 ｜KRONES Conference Call October 30, 2019 MID-TERM MEASURES with substantial EBT impact developed and under execution Portfolio Structure Growth – Segments – Global Footprint – Pricing – Products – Headcount – After Sales – Procurement BASIS FOR ALL MEASURES: Financial stability and efficiency EBT
Slide 7: Basis for all measures: Stronger focus on Free Cash Flow
7 ｜KRONES Conference Call October 30, 2019 BASIS FOR ALL MEASURES: Stronger focus on Free Cash Flow Q1 – Q3 (EURm) 2019 2018 Working Capital We will further reduce our working capital by modifying Earnings before taxes 61.4 139.4 contractual governance to managing receivables +/– Changes in working
Slide 8: Structure – Massive reduction of German footprint in execution
8 ｜KRONES Conference Call October 30, 2019 STRUCTURE – Massive reduction of German footprint in execution, leading to lower costs – 600.000 production hours – or 15% of all production hours – will be shifted from Germany to BCC (Hungary and China) by end of 2020 – 200.000 engineering hours will be s
Slide 9: Structure – Hungary plant in full operation by end of Q2 2020
9 ｜KRONES Conference Call October 30, 2019 STRUCTURE – Hungary plant in full operation by end of Q2 2020, shows positive effects already – In full operation by end of Q2 2020 – Capacity of 36.000 hours per month (current utilization of 8.000 hours per month) – 450 employees hired, another 50 will be
Slide 10: Structure – Substantial headcount reduction in Germany
10 ｜KRONES Conference Call October 30, 2019 STRUCTURE – Substantial headcount reduction in Germany will lead to lower personnel cost Employee development – Personnel cost savings of 45 EURm for the 2019 2020 next two years due to further reduction of workforce by 600 FTE worldwide Own Germany -200 F
Slide 11: Portfolio – Portfolio optimization in KRONES House ongoing
11 ｜KRONES Conference Call October 30, 2019 PORTFOLIO – Portfolio optimization in KRONES House ongoing Processing Technology: Review ongoing – Initiated: unbundling and stand-alone ability – Priority: brewery activities – Halt on acquisitions: utilize current footprint, leverage China and India Digi
Slide 12: Portfolio – Procurement: Savings potential in total spend over next 3 years
12 ｜KRONES Conference Call October 30, 2019 PORTFOLIO – Procurement: Savings potential in total spend over next 3 years ADVANCED LEVERS BASIC LEVERS FAR REACHING LEVERS Category Management BCC & Make-or-Buy Current Ongoing Major categories Tangible To be Status optimization of addressed deliverables
Slide 13: Growth – Pricing turnaround supports basis for future business success
13 ｜KRONES Conference Call October 30, 2019 GROWTH – Pricing turnarnound supports the basis for future business success KRONES price development (Index BPE, quarterly average) Status today − Turnaround achieved − Positive Q3, but also challenging Q4 ahead − Price level 2019 still below target Outloo
Slide 14: Growth – Vast after sales potential through large installed machine base
14 ｜KRONES Conference Call October 30, 2019 GROWTH – Vast after sales potential through large installed machine base 1 2019 installed machinery base at our customers’ production facilities > 42.000 machines Current Capture Rate 2 Capture target Every installed machine ~ 60% → a 1% increase of Captur
Slide 15: KRONES targets 2019
15 ｜KRONES Conference Call October 30, 2019 KRONES targets 2019 Revenue growth EBT margin Working capital * 3% ~ 3% 26% *No restructuring costs and costs for portfolio optimization included
Slide 16: Q3 2019 Key takeaways
16 ｜KRONES Conference Call October 30, 2019 Q3 2019 Key takeaways Confirming our FY2019 guidance Sales growth of 3% and EBT margin of 3% Business on track 9M sales growth up 7%, order intake slightly above last year Profit improvement measures in place First measures implemented, structural measures
Slide 17: Financial Calendar 2020
17 ｜KRONES Conference Call October 30, 2019 Financial Calendar 2020 February 20, 2020 Conference Call Preliminary Figures 2019 March 19, 2020 Annual Report 2019 April 29, 2020 Conference Call Group Q1 2020 and Quarterly Statement as per March 31 May 18, 2020 Annual General Meeting Olaf Scholz Head o
Slide 18: Appendix
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Slide 19: KRONES' revenue split remains constant
19 ｜KRONES Conference Call October 30, 2019 KRONES' revenue split remains constant Share of revenue (Q1 – Q3) Europe 2017 2018 2019 CIS/Central Asia 36.4 % 36.6 % 39.2% 2017 2018 2019 2.0 % 2.3 % 1.7% China North America 39.2% 2017 2018 2019 2017 2018 2019 33.3% 3.7% 6.0 % 6.8 % 8.6% 15.0 % 14.6% 17
Slide 20: Material and personnel cost
20 ｜KRONES Conference Call October 30, 2019 Material and personnel cost Material cost Q1 – Q3 (EURm) 1,488.3 1,384.2 1,199.5 51.3 48.2 51.0 Material cost to total 2017 2018 2019 performance (%) Personnel cost Q1 – Q3 (EURm) 945.1 848.3 786.5 31.2 31.6 32.6 Personnel cost to total performance (%) 201
Slide 21: Development sales and EBT per segment Q1 – Q3
21 ｜KRONES Conference Call October 30, 2019 Development sales and EBT per segment Q1 – Q3 Segment Sales (EURm) Q1-Q3 EBT (EURm) Q1-Q3 Targets 2019 Product filling Growth EBT margin and decoration +1% +6% +6% 8.2% 6.2% 3.2% Growth 2,418 ~3% 2,140 2,271 174.8 140.9 76.7 EBT margin ~3% Beverage product
Slide 22: Basis for all measures: stronger focus on Free Cash Flow
22 ｜KRONES Conference Call October 30, 2019 BASIS FOR ALL MEASURES: stronger focus on Free Cash Flow Q1 – Q3 (EURm) 2019 2018 Working Capital Earnings before taxes 61.4 139.4 We will further reduce our working capital by modifying contractual governance to managing receivables +/– Other non-cash cha
Slide 23: Working capital ratio reduced
23 ｜KRONES Conference Call October 30, 2019 Working capital ratio reduced Working capital* in % ROCE* in % (Q1-Q3) of revenue (Q1-Q3) 16.3 15.5 28.8 26.3 25.7 4.8 2017 2018 2019 2017 2018 2019 *LTM (Last twelve months)
Slide 24: KRONES continues to grow its workforce in emerging markets
24 ｜KRONES Conference Call October 30, 2019 KRONES continues to grow its workforce in emerging markets KRONES employees worldwide KRONES employee development in emerging markets Year South Africa Asia CIS/East China Total 17,405 America Europe 16,545 31.12.2017 581 393 734 172 608 2,488 15,299 31.12
Slide 25: Disclaimer
25 ｜KRONES Conference Call October 30, 2019 Disclaimer This investor presentation contains forward-looking statements that are based on current estimates, forecasts and assumptions made by KRONES AG management to the best of its knowledge and other information currently available to KRONES AG. The f
Slide 26: We do more.
Digitalization Processing Bottling and Intralogistics Lifecycle Technology Packaging Technology Service We do more.