Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (March 2015)
34 slides from Deutz's investor presentation, March 2015
Slide 1: Investor presentation March 2015
Investor presentation March 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: Consolidation of activities in China
Consolidation of activities in China JV DEUTZ Dalian Consolidation of our Chinese activities and focus on € million Revenue (1) our successful JV DEUTZ Dalian, which has sufficient capacities DEUTZ Dalian (at-equity consolidated) increased its 359.8 revenue by 12.8% yoy and outperformed the 319.1 Ch
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 117 116 aftertreatment devices 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 250.3 253.7 259.3 241.6 Strong resilience of profitable 215.8 service business through 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 FY 2014 yoy € million Order intake 1,379.0 -16.4% Revenue 1,530.2 +5.3% EBIT (before one-offs) 31.7 -33.3% Adjusted EBIT(1) 51.6 +8.6% Free cash flow 52.0 +€38.2 million Net financial position 13.7 +€45.4 million (1) EBIT (before one-offs) adjusted by exceptional items (net effect €19.9
Slide 18: Revenue development
Revenue development € million 410.1 410.7 424.5 372.2 381.0 342.7 352.3 322.5 289.9 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q4-2014 revenue below Q2 and Q3 level after emission level change in October 2014 18
Slide 19: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million -16.4% 6.7% 5.3% 196,403 1,649.7 184,028 13,278 1,530.2 16,064 1,453.2 264.2 1,379.0 250.3 264.4 264.0 167,964 183,125 1,385.5 1,188.8 1,279.9 1,115.0 2013 2014 2013 2014 2013 2014 Pre-buy effects related to changes of European
Slide 20: EBIT (before one-offs)
EBIT (before one-offs) € million 51.6 47.5 31.7 30.9 39.0 18.8 21.5 15.2 8.7 -0.2 -2.3 -0.8 2013 2014 adj. 2014 EBIT margin 3.3% 2.1% 3.4% EBIT (before one-offs) impacted by several exceptional items: unexpected provision for warranty costs (-€20.4 million)(1), impairments (-€13.8 million) and licen
Slide 21: Operating profit & net income
Operating profit & net income 2013 2014 € million 142.0 94.5 137.4 105.7 47.5 6.0 5.5 36.0 31.7 18.9 +12.8 19.5 12.8 6.1 EBITDA D&A EBIT Interest Income Net EBITDA D&A EBIT One- EBIT Interest Income Net before before expenses taxes income before before offs after expenses taxes income one-offs one-o
Slide 22: Earnings & dividend per share
Earnings & dividend per share € per share 0.30 0.18 Earnings 0.07 0.07 Dividend 2013 2014 Stable dividend payout of €0.07 per share (1) Dividend tax exempt for domestic investors and without German withholding tax (1) Proposal to the AGM 22
Slide 23: R&D spending & capital expenditure
R&D spending & capital expenditure R&D Capital expenditure (excl. R&D) € million Gross expenditure 71.1 68.7 Reimbursements 18.5 15.6 45.0 42.7 Net expenditure 2.5 2.4 52.6 53.1 42.5 40.3 2013 2014 2013 2014 Net R&D expenditure 3.6% 3.5% ratio (1) Net R&D ratio declined slightly in line with our Cap
Slide 24: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 196.2 172.3 105.0 114.1 2013 2014 2013 2014 Working capital ratio 11.9% 12.8% (31 Dec) Working capital increased by €23.9 million mainly Operating cash flow increased by 8.7% due to higher inventories Working Capital
Slide 25: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow Net financial position € million 52.0 13.7 13.8 -31.7 2013 2014 2013 2014 Free cash flow virtually quadrupled Net financial position improved by €45.4 million After all T4 engines have been launched, capital Free cash flow used to pay
Slide 26: Equity ratio & funding
Equity ratio & funding € million 1,121.0 1,149.2 45.0% 44.5% 504.7 511.0 208 15 15 12 2013 2014 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 Strong balance sheet; equity ratio >40% Medium- to long-term fina
Slide 27: Segments: DEUTZ Compact Engines
Segments: DEUTZ Compact Engines Change Q4 Q3 Change € million 2014 2013 in % € million 2014 2014 in % New orders 1,115.0 1,385.5 -19.5 New orders 232.5 270.4 -14.0 Unit sales 183,125 167,964 9.0 Unit sales 36,601 53,589 -31.7 Revenue 1,279.9 1,188.8 7.7 Revenue 277.1 368.2 -24.7 EBIT (before one-off
Slide 28: Segments: DEUTZ Customised Solutions
Segments: DEUTZ Customised Solutions Change Q4 Q3 Change € million 2014 2013 in % € million 2014 2014 in % New orders 264.0 264.2 -0.1 New orders 69.7 59.6 16.9 Unit sales 13,278 16,064 -17.3 Unit sales 4,703 2,431 93.5 Revenue 250.3 264.4 -5.3 Revenue 75.2 56.3 33.6 EBIT (before one-offs) 18.8 39.0
Slide 29: Summary: key financial development
Summary: key financial development DEUTZ Tier 4 engines attract new customers EBIT burdened by exceptional items Site optimisation measures implemented Improvement of underlying operating profit in DCE Strong free cash flow generation and balance sheet Stable dividend payment 29
Slide 30: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 30
Slide 31: Unit sales assumptions for DEUTZ key markets
Unit sales assumptions for DEUTZ key markets 2015 Construction equipment Europe sidewards North America 0 – 10% China sidewards Agricultural Machinery Europe -10 – 0% Automotive China sidewards Pre-buys in 2014 will lead to lower demand of European customers in the current year New clients partly co
Slide 32: Financial outlook
Financial outlook FY 2014 reported Guidance FY 2015 € million Revenue 1,530.2 approx. -10 % EBIT margin (before one-offs) 2.1 % approx. 3 % Net R&D expenditure(1) 53.1 slight decline Capex (excl. R&D)(1) 40.3 ~ 50 (1) Net of reimbursements Group revenue expected to decline in FY 2015; slight revenue
Slide 33: Financial calendar & contact details
Financial calendar & contact details Annual general meeting 29 April 2015 Interim report 1st quarter 2015 5 May 2015 Interim report 1st half 2015 6 August 2015 Interim report 1st to 3rd quarter 2015 5 November 2015 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 Ottostrasse 1 Fax:+49 (0) 22
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.