Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (September 2015)
33 slides from Deutz's investor presentation, September 2015
Slide 1: DEUTZ Investor Presentation
DEUTZ Investor Presentation September 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 product 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) Annual cost savings > €10 million (considerable effects already in 2016; full effects from 2017 onwards) Restructuring costs for site optimisation (€17.1 million) digested in FY 2014 result Capex overco
Slide 6: DEUTZ activities in China
DEUTZ activities in China Revenue JV DEUTZ Dalian(1) € million Challenging capital goods market conditions in China 359.8 Countrywide dealer network 319.1 Strategic decision to focus our production in China on our successful JV DEUTZ Dalian (DDE) which has sufficient capacities Joint decision with o
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 systems require exhaust aftertreatment devices 117 116 100 104 Growing share of new emission engines drives revenue growth Effect was diluted by strong demand for smaller engine series in 201
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: 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 New clients (not exhaustive) exhaust af
Slide 11: 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 12: Key applications
Key applications Typical Markets benefit from application macro trends Construction Material handling Mobile Machinery Ground support Mining equipment Tractors Agricultural Machinery Agricultural equipment Gensets Stationary Equipment Pumps Compressors Trucks Automotive Buses Rail vehicles Wide appl
Slide 13: Revenue split by application
Revenue split by application FY 2014 (FY 2013) Other 2% Mobile Machinery 47% €36.9 million €715.3 million Automotive 5% (€30.1 million) (€481.6 million) €82.0 million (€188.5 million) Stationary Equipment 12% €1,530.2 million €179.2 million (€1,453.2 million) (€173.7 million) Agricultural Machinery
Slide 14: Revenue split by region
Revenue split by region FY 2014 (FY 2013) Africa/Middle East 5% Europe (excl. Germany) 49% €84.7 million €744.7 million (€70.4 million) (€824.6 million) Asia-Pacific 7% €107.4 million (€107.2 million) €1,530.2 million (€1,453.2 million) Americas 17% €256.6 million (€190.6 million) Germany 22% €336.8
Slide 15: Service business
Service business € million 259.3 Strong resilience of profitable 250.3 253.7 241.6 service business through 215.8 different economic cycles 175.0 Higher complexity of new emission engines provides opportunity to increase penetration of service business Active management of service network with train
Slide 16: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 16
Slide 17: Key figures
Key figures H1 2015 yoy Q2 2015 qoq € million Order intake 670.7 -10.2% 349.7 +8.9% Revenue 670.2 -11.0% 352.1 +10.7% EBITDA (before one-offs) 70.4 +4.3% 36.5 +7.7% EBIT (before one-offs) 20.3 +1.0% 10.2 +1.0% Net income 16.7 > 100% 9.0 +16.9% Free cash flow 26.2 +€17.3 million 27.3 +€28.4 million P
Slide 18: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million -10.2% -21.2% -11.0% 746.8 99,079 753.4 670.7 6,144 118.8 670.2 134.7 78,120 140.7 141.9 6,767 92,935 634.6 612.1 530.0 71,353 528.3 H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 H1 2015 Sales figures decline due to previous year’s pr
Slide 19: Revenue development
Revenue development € million 410.1 410.7 424.5 372.2 381.0 342.7 352.3 352.1 318.1 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Current business impacted by emission level change on 1 October 2014 in Europe Sequential revenue increase in Q2 but 3 weeks plant holidays in Cologne in Q3 19
Slide 20: Revenue split
Revenue split Revenue split by application, H1 2015 Revenue split by region, H1 2015 (H1 2014) (H1 2014) Other 1 % Mobile Machinery 44 % Africa / Middle East 6 % Europe (excl. Germany) 47 % €9.8 million €291.4 million €43.1 million €314.5 million (€8.4 million) (€352.2 million) (€33.8 million) (€368
Slide 21: EBIT (before one-offs)
EBIT (before one-offs) € million 20.1 20.3 14.3 17.3 10.1 10.2 11.0 6.3 0.2 5.6 6.5 2.5 1.4 4.0 -3.5 -4.9 H1 2014 H1 2015 Q1 2015 Q2 2015 EBIT margin 2.7% 3.0% 3.2% 2.9% EBIT on the previous year level; margin in-line with full year outlook EBIT improved at both operating segments in H1 Segment “Oth
Slide 22: Operating profit & net income
Operating profit & net income H1 2014 H1 2015 € million 67.5 70.4 50.1 47.4 20.1 13.9 20.3 0.0 20.3 2.1 1.5 16.7 6.2 3.3 0.2 2.7 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 before turing a
Slide 23: R&D spending & capital expenditure
R&D spending & capital expenditure R&D Capital expenditure (excl. R&D) € million Gross expenditure 36.2 10.5 Reimbursements 23.3 25.5 0.2 Net expenditure 3.5 19.9 0.9 25.7 25.3 19.8 19.0 Net R&D H1 2014 H1 2015 H1 2014 H1 2015 expenditure ratio(1) 3.4% 3.0% R&D scaled back significantly after all en
Slide 24: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 216.4 204.0 53.9 40.9 Working H1 2014 H1 2015 H1 2014 H1 2015 capital ratio (30 June) 13.2% 15.0% Working capital increase (+6.1%) related to Significant increase of operating cash flow temporarily higher inventories
Slide 25: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 33.2 69.3 52.0 -31.8 2014 H1 2015 (LTM) H1 2014 H1 2015 Strong free cash flow performance continued Marked improvement of net financial position Free cash flow in H1 2015 amounted to €26.2 (+€65.0 m
Slide 26: Equity ratio & funding
Equity ratio & funding € million 1,149.2 1,179.8 44.5% 45.4% 511.0 535.1 208 15 15 5 2014 H1 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 Sound balance sheet; equity ratio increased to 45.4% Medium- to
Slide 27: Segments: DEUTZ Compact Engines
Segments: DEUTZ Compact Engines H1 H1 Change Q2 Q1 Change € million 2015 2014 in % € million 2015 2015 in % New orders 530.0 612.1 -13.4 New orders 281.1 248.9 12.9 Unit sales 71,353 92,935 -23.2 Unit sales 37,758 33,595 12.4 Revenue 528.3 634.6 -16.8 Revenue 277.3 251.0 10.5 EBIT (before one-offs)
Slide 28: Segments: DEUTZ Customised Solutions
Segments: DEUTZ Customised Solutions H1 H1 Change Q2 Q1 Change € million 2015 2014 in % € million 2015 2015 in % New orders 140.7 134.7 4.5 New orders 68.6 72.1 -4.9 Unit sales 6,767 6,144 10.1 Unit sales 3,455 3,312 4.3 Revenue 141.9 118.8 19.4 Revenue 74.8 67.1 11.5 EBIT (before one-offs) 17.3 14.
Slide 29: Summary: key development
Summary: key development Sales figures impacted by prior year’s pre-buys EBIT improvement despite negative scale effects Focus Chinese production activities on DEUTZ Dalian Site optimisation in Germany on schedule Strong cash flow generation 29
Slide 30: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 30
Slide 31: Financial outlook
Financial outlook Previous Guidance New Guidance FY 2014 reported € million FY 2015 FY 2015 Revenue 1,530.2 approx. -10 % approx. -20 % EBIT margin (before one-offs) 2.1 % approx. 3 % approx. 0 % Net R&D expenditure(1) 53.1 significant decline significant decline Capex (excl. R&D)(1) 40.3 ~ 50 ~ 50
Slide 32: Financial calendar & contact details
Financial calendar & contact details Interim report 1st to 3rd quarter 2015 5 November 2015 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 5
Slide 33: 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.