Knorr-bremse Ag · XETR:KBX
Knorr-bremse — Investor Presentation (November 2019)
35 slides from Knorr-bremse's investor presentation, November 2019
Slide 1: Investor Presentation Knorr-Bremse Group
INVESTOR PRESENTATION Knorr-Bremse Group
Slide 2: The Knorr-Bremse leadership team
The Knorr-Bremse leadership team Bernd Eulitz Ralph Heuwing Dr. Peter Laier Dr. Jürgen Wilder CEO CFO Head of CVS Head of RVS 2019-today: Knorr-Bremse CEO 2017-today: Knorr-Bremse CFO 2016-today: Knorr-Bremse 2018-today: Knorr-Bremse Head of CVS Head of RVS 2004-2019: Linde AG Exec. Vice
Slide 3: Knorr-Bremse – One of Germany's most successful industrial companies
Knorr-Bremse – One of Germany’s most successful industrial companies Family-Ownership, Shared pneumatics 114 #1 Global market leader YEARS heritage and unique experience between Technology leadership for braking systems RVS and CVS DNA 2018 key financials Sales EBITDA EBIT R&D €6.6bn Aftermarket (>1
Slide 4: Resilient outperformance thanks to high-quality business model
Resilient outperformance thanks to high-quality business model Number one supplier for braking systems and a leading supplier of other safety 1 Global #1 critical rail and commercial vehicle systems protected by high barriers to entry 2 Synergistic business Technology and scale benefits between rail
Slide 5: Superior financial profile – strong track record of growth and profitability improvement
Superior financial profile – strong track record of growth and profitability improvement Performance Performance 30% pre-global post-global HGB IFRS Normalisation EBITDA margin and sales economic crisis economic crisis Chinese HS boom 25% CAGR 8% sales 2003-2018 Chinese HS accident 20% Global crisis
Slide 6: Financial highlights H1/19 – once again, we delivered on our IPO promise
Financial highlights H1/19 – once again, we delivered on our IPO promise Order intake Operating € 3.58bn EBITDA margin1 € 1.88bn 19.0% +1.8% yoy +7.6% yoy PY: 18.0% Revenue € 3.60bn Operating EBITDA1 € 685m +8.4% yoy PY: € 590m EPS Order book € 2.13 € 4.54bn +21.1% yoy € 1.73bn +3.9% yoy +9.5% yoy K
Slide 7: RVS sees continued growth with increasing profitability
RVS sees continued growth with increasing profitability Car builders confirm a positive market trend and report a strong order backlog RVS revenue & EBITDA margin [€m, IFRS] At € 40.0bn on June Transportation’s backlog of EBITDA margin 30th, 2019, the current USD 33.6bn […] positive Revenue CAGR Rev
Slide 8: Underlying global rail market with steady and robust growth
Underlying global rail market with steady and robust growth Development of markets Market volume Brakes, Doors, HVAC, incl. labour [€bn, CAGR in %] AM OE World +2.4% 9.7 8.8 North & South America 8.0 8.4 +2.5% Asia Pacific 1.7 +1.8% 1.5 1.5 1.5 3.9 4.1 3.5 3.7 ’17 ’18 ’19 ’24 ’17 ’18 ’19 ’24 Europe
Slide 9: RVS is #1 in almost all strong growth markets
RVS is #1 in almost all strong growth markets OE market development Market volume Brakes, Doors, HVAC [€m, CAGR in %] 2) CAGR ‘18-’24 #1 China1) Selected biggest growth markets North America & Mexico MT ~6% #2 France ~11% 0.0% #1 8.6% Italy ~13% ~1,300 ~1,300 ~1,620 #1 Russia & CIS (High Grade) ~6%
Slide 10: Aftermarket (RailServices) strategy targeting significant growth
Aftermarket (RailServices) strategy targeting significant growth: ~45% of RVS’ revenue by 2024, coming from ~40% in 2018 Servicing New service models & the installed base Modernization digital solutions Efficient spare part solutions Modernization of Knorr-Bremse as Digitization Service of K
Slide 11: Aftermarket (RailServices) business expected to grow beyond € 2bn by 2024
Aftermarket (RailServices) business expected to grow beyond € 2bn by 2024 Characteristics aftermarket Development aftermarket Long customer relationships & loyalty of >30 years Higher focus on lifecycle costs and availability commitments (contractually binding) Through tear & wear very attract
Slide 12: RVS' R&D agenda is focused on customers' needs – staying ahead of competition
RVS’ R&D agenda is focused on customers’ needs – staying ahead of competition Technology and market trends Data Driven Connected Business Systems Lifecycle costs & Airless Eco friendly Train Deep Dive Knorr-Bremse solutions for specific customer needs 7 R&D fields Automatic Frictionless Optimized
Slide 13: New smart products keep us ahead of the competition
New smart products keep us ahead of the competition Unique Selling Proposition Standardized solution across train types reduces complexity at operators & car builders New brake control system EP2002 3.0 Reduced life cycle costs & increased reliability Lighter and requiring a smaller installati
Slide 14: Revenue of CVS mainly supported by three growth drivers
Revenue of CVS mainly supported by three growth drivers Organic growth Non-organic growth TPR Content per Vehicle Market Share M&A Number of trucks produced Number of products and Relative performance and Long track record by OEMs value sold per truck share of wallet of successful M&A Short term Ong
Slide 15: Forecasts indicate TPR slowdown in 2020 from high levels
Forecasts indicate TPR slowdown in 2020 from high levels North America Europe Asia / Pacific 1,950 Truck 575 1,350 Production 525 450 Rate 350 1) 2012 – 2018 in ‘000 units 2012 2015 2018 2012 2015 2018 2012 2015 2018 Share of CVS 34% 48% 16% Revenue 2018 Best Best Best Estimated Scenario +6.0% -15.0
Slide 16: North America 2016: proof point of CVS' resilient business model
North America 2016: proof point of CVS‘ resilient business model Development 2015 – 2016 Reasons for resilience ▪ Strong BENDIX brand, market leading position and long-standing customer relationships TPR NA CVS NA CVS NA ▪ Product portfolio met market demands exactly at right time, e.g. ADAS 1) reve
Slide 17: Content per vehicle increase through market share increase – North America
Content per vehicle increase through market share increase Overall outperformance of TPR in North America 1) CVS NA Revenue Development Key messages CAGR 2012 – 2018 TPR NA [% change] 2) +4.0% ▪ Strong BENDIX brand, market leading position and long- Revenue [mUSD] standing customer relationships dro
Slide 18: Content per vehicle increase through market share increase – China
Content per vehicle increase through market share increase CVS with sustained growth in a volatile China market 1) CVS China Revenue Development Key messages CAGR 2012 – 2018 2) TPR China [% change] +6.5% Revenue [mRMB] ▪ Significant market share gain since 2012 through building up +31.4% strong pos
Slide 19: CVS bottomline is backed by operational excellence
CVS bottomline is backed by operational excellence Permanent programs Special programs Continued cost focus KB 2020 Margin stability Market down-swing ▪ Continuous site improvement ▪ Program set up in each region in ▪ Different measures designed for program order to ensure expected each region profi
Slide 20: Continued strong growth, clearly outperforming underlying markets and peers
Continued strong growth, clearly outperforming underlying markets and peers Revenue €m By type By region +8.4% 75 3,602 3,602 225 SA M&A net disposals 3,322 +5.7% 55 3,322 -20 52 Asia/ • Hitachi € +21m 1,013 Pacific +8.1% • Snyder € +4m 937 +6.8% • BP/Sydac € -45m Org. growth NA 681 +23.5% 841 +2.4%
Slide 21: Healthy order book and continued good visibility
Healthy order book and continued good visibility Order intake Order book €m By type €m 1.06 0.99 7.9 7.8 3.9% +1.8% 4,372 4,542 65 3,581 34 3,517 M&A net disposals -35 • Hitachi € +21m +1.0% • Snyder € +4m • BP/Sydac € -60m Org. growth H1/18 Organic M&A net FX H1/19 30.06.18 30.06.19 disposals…
Slide 22: Strong EBITDA margin development in H1/19, particularly in Q2/19
Strong EBITDA margin development in H1/19, particularly in Q2/19 EBITDA €m Margin 19.0% 18.6% 17.5% 18.0% Q2/19 with strongest quarterly operating EBITDA (€ 352m) since 2017 Conversion from growth ▪ Operating EBITDA margin increased by 210bps € +69.9m 685 to 19.1% in Q2/19, despite lower AM share (d
Slide 23: Strong improvements in operating and free cash flow in H1/19
Strong improvements in operating and free cash flow in H1/19 FCF & OCF CapEx1 NWC op. ROCE2 (annualized) €m FCF OCF €m % of sales €m Scope of days % 55.0 57.1 3.7% +24.6% 3.2% 35.4% 35.5% 1,142 +18.6% 1,015 311 249 134 178 106 150 H1/18 H1/19 H1/18 H1/19 30.6.18 30.6.19 H1/18 H1/19 Strong increase i
Slide 24: Guidance confirmed for 2019
Guidance confirmed for 2019 Market developments and KB response Revenue op. EBITDA margin 1 €m Confirmed Confirmed Market developments ▪ Political uncertainties, but supportive interest rate outlook 6,875 - 7,075 19.0% 18.5 – 19.5% ▪ CVS: slowing order momentum ▪ RVS: continued strong demand KB
Slide 25: Backup
BACKUP Knorr-Bremse Group
Slide 26: Investor relations contact
… Investor relations contact Andreas Spitzauer Phone: +49 89 3547 182310 Mobile: +49 175 5281320 Email: Andreas.Spitzauer@knorr-bremse.com Justinian Späth Phone: +49 89 3547 181085 Mobile: +49 160 6149309 Email: Justinian.Spaeth@knorr-bremse.com Knorr-Bremse Group 26
Slide 27: Revenue Group, RVS & CVS (H1/19)
Revenue Group, RVS & CVS (H1/19) Group – Revenue RVS – Revenue CVS – Revenue €m €m €m +8.4% +7.6% +9.5% Organic Organic Organic 3,602 Growth 1,876 Growth 1,727 Growth 3,322 225 -20 75 1,744 147 -41 26 1,577 21 49 +6.8% +8.4% 80 +5.1% - 45 BP/Sydac - 45 BP/Sydac + 21 Hitachi + 4 Snyder + 4 Snyder +21
Slide 28: Revenue Group, RVS & CVS (Q2/19)
Revenue Group, RVS & CVS (Q2/19) Group – Revenue RVS – Revenue CVS – Revenue €m €m €m +8.1% +5.9% +10.6% Organic Organic Organic 1,846 Growth 965 Growth 881 Growth 1,708 -1 43 911 61 -22 15 +6.7% 796 21 28 96 +5.6% 36 +4.5% - 25 BP/Sydac - 25 BP/Sydac + 21 Hitachi + 3 Snyder + 3 Snyder +21 Hitachi Q
Slide 29: Order Intake Group, RVS & CVS (H1/19)
Order Intake Group, RVS & CVS (H1/19) Group – Order intake RVS – Order intake CVS – Order intake €m €m €m +1.8% +1.9% +1.8% Organic Organic Organic Growth Growth Growth 3,517 3,581 1,925 1,629 1,659 34 -35 65 +1.0% 1,889 45 72 -56 20 +3.8% -36 21 -2.2% - 60 BP/Sydac - 60 BP/Sydac + 21 Hitachi + 4 Sn
Slide 30: Order Intake Group, RVS & CVS (Q2/19)
Order Intake Group, RVS & CVS (Q2/19) Group – Order intake RVS – Order intake CVS – Order intake €m €m €m -1.8% +3.3% Organic Growth -5.9% Organic Growth Organic Growth 1,719 1,688 946 774 799 -31 -24 24 -1.8% -16 -45 890 -1.7% -15 21 19 -1.9% 5 - 48 BP/Sydac - 48 BP/Sydac + 21 Hitachi + 3 Snyder +
Slide 31: EBITDA Group (Q2/19)
EBITDA Group (Q2/19) EBITDA Q2/19 €m Margin 19.1% 18.2% 16.8% 17.0% Conversion from growth € +53.9m 352 335 BP/Sydac IFRS 16 Wülfrath € -0.3m € +11.2m € -16.4m 287 287 rep. op. op. rep. Q2/18 Q2/18 Q2/19 Q2/19 Knorr-Bremse Group 31
Slide 32: EBIT Group (Q2/19)
EBIT Group (Q2/19) EBIT Q2/19 €m Margin 15.5% 14.2% 14.5% 14.0% Conversion 285 from growth € +40.6m IFRS 16 BP/Sydac € +1.4m 259 € +0.6m 243 244 Wülfrath € -26.8m rep. op. op. rep. Q2/18 Q2/18 Q2/19 Q2/19 Knorr-Bremse Group 32
Slide 33: Revenue and EBITDA RVS (Q2/19)
… Revenue and EBITDA RVS (Q2/19) Revenue EBITDA €m rep. 22.5% +5.9% op. 22.5% Organic rep. 18.2% Growth op.1 18.6% 965 911 61 -22 15 +6.7% IFRS 16 € +5.8m - 25 BP/Sydac +31.4% + 3 Snyder 218 165 Q2/18 Organic M&A net FX Q2/19 Q2/18 Q2/19 Disposals Knorr-Bremse Group EBITDA margin 1) 2018 operating E
Slide 34: Revenue and EBITDA CVS (Q2/19)
… Revenue and EBITDA CVS (Q2/19) Revenue EBITDA €m +10.6% rep. 16.0% rep. 14.0% Organic op. 16.0% op.1 15.9% 881 Growth 796 21 28 36 +4.5% +9.8% IFRS 16 + 21 Hitachi € +6.1m 140 127 Wülfrath € -16.4m Q2/18 Organic M&A FX Q2/19 Q2/18 Q2/19 Knorr-Bremse Group EBITDA margin 1) 2019 operating EBITDA exc
Slide 35: Disclaimer
Disclaimer IMPORTANT NOTICE This presentation has been prepared for information and background purposes only. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, an