Krones Ag · XETR:KRN
Krones — Q3 2016 Earnings Presentation
37 slides from Krones's earnings presentation, Oct 26, 2016
Slide 1: Conference Call January – September 2016
Conference Call January – September 2016 Conference Call October 26, 2016
Slide 2: KRONES Highlights Q1 – Q3 2016
2 ｜KRONES Conference Call October 26, 2016 KRONES Highlights Q1 – Q3 2016 + 6.1% 2,452.5 € Mio. 2,380.1 € Mio. Revenue (+5%) New orders 6.9% 163.6 € Mio. EBT (+5%) EBT margin -164.7 € Mio. Operating free cash flow
Slide 3: Order intake, revenue, EBT
3 ｜KRONES Conference Call October 26, 2016 Order intake, revenue, EBT New orders by quarter (€ million) Revenue development by quarter (€ million) EBT in Q1 – Q3 (€ million) +4.9% +7.5% +16.4% 3,189 3,174 223.3 878 2,452 903 +6.1% 2,380 +4.8% 2,311 +4 % +14 % 163.6 +4.8% 2,270 67.2 156.1 850 820 787
Slide 4: KRONES' revenue is well balanced
4 ｜KRONES Conference Call October 26, 2016 KRONES' revenue is well balanced Share of revenue in Q1 - Q3 CIS/Central Asia 2015 2016 North America Europe 2.9% 2.3% 2015 2016 2015 2016 China 12.9% 13.3% 37.1% 34.6% 2015 2016 8.0% 10.5% Africa/Middle East 2015 2016 15.4% 16.6% Asia/Pacific 2015 2016 14.0
Slide 5: Personnel and material cost
5 ｜KRONES Conference Call October 26, 2016 Personnel and material cost Personnel cost in Q1 – Q3 (€ million) 695.2 727.2 608.9 647.0 29.9 30.3 30.1 31.5 2013 2014 2015 2016 Personnel cost to total performance (%) Material cost in Q1 – Q3 (€ million) 1,046.1 1,107.7 1,109.9 1,011.5 49.6 49.0 48.0 48,
Slide 6: Growth: Product filling and decoration
6 ｜KRONES Conference Call October 26, 2016 Product filling and decoraNon: margin increased slightly MEDIUM-TERM TARGETS: 4 - 6% Revenue development EBT development in Q1 – Q3 (€ million) in Q1 – Q3 (€ million) 2,039.1 158.4 1,865.9 1,905.5 145.6 +7% 141.0 +9% +2% Growth +12% +21% +3% 8% EBT margin 7.
Slide 7: Growth: Beverage production/process technology
7 ｜KRONES Conference Call October 26, 2016 Beverage producNon/process technology: expecNng strong Q4 MEDIUM-TERM TARGETS: 8 - 10% Revenue development EBT development in Q1 – Q3 (€ million) in Q1 – Q3 (€ million) 286.9 +33% 251.6 6.4 Growth 4% 216.5 -12% -25% 1.2 EBT margin 2.2 0.6 0.6 0.2 2014 2015
Slide 8: Growth: Compact class
8 ｜KRONES Conference Call October 26, 2016 Compact class: profitable growth MEDIUM-TERM TARGETS: 4 - 6% Revenue development EBT development in Q1 – Q3 (€ million) in Q1 – Q3 (€ million) 89.4 82.0 +14% 78.3 +7% 2014 2015 2016 -5% 4.6 Growth 4.1 5% 5.2 5.1 -6.7 EBT margin -5.5 2014 2015 2016 EBT margin
Slide 9: Working capital target missed
9 ｜KRONES Conference Call October 26, 2016 Working capital target missed Working capital* in % ROCE* in % (Q1 – Q3 ) of revenue (Q1 – Q3 ) 17.0 26.3 15.5 24.5 2015 2016 2015 2016 *LTM (Last Twelve Months) *LTM (Last Twelve Months)
Slide 10: High working capital caused negative free cash flow
10 ｜KRONES Conference Call October 26, 2016 High working capital caused negaNve free cash flow (€ million) Q1 - Q3 Q1 - Q3 2016 2015 Earnings before taxes 163.6 156.1 +/– Non-cash expenses and income +120.0 +83.4 +/– Change in Working Capital -340.2 -189.0 +/– Other (mainly tax payments) -52.8 -29.5
Slide 11: KRONES targets 2016
11 ｜KRONES Conference Call October 26, 2016 KRONES targets 2016 Revenue growth EBT margin ROCE Target: Target: Target: + 3% 7.0% 18%
Slide 12: Medium-term targets through 2020
12 ｜KRONES Conference Call October 26, 2016 Medium-term targets Medium-term targets through through 2020 2020
Slide 13: Our targets through 2020
13 ｜KRONES Conference Call October 26, 2016 Our targets through 2020 Annual EBT margin ROCE revenue growth 7% 8% 20%
Slide 14: These megatrends support our growth
14 ｜KRONES Conference Call October 26, 2016 These megatrends support our growth TARGETS URBANISATION 2020 Revenue growth RAPIDLY GROWING MIDDLE CLASS 7% EBT margin WORLD POPULATION GROWTH 8% ROCE DIGITALISATION 20%
Slide 15: How KRONES will achieve its growth targets
15 ｜KRONES Conference Call October 26, 2016 How KRONES will achieve its growth targets TARGETS 5%5% Market growth MARKTWACHSTUM 2020 2% 3% 2% 2% Revenue growth Not relevant Relevant for KRONES Product diversity M&A and new solutions 7% EBT margin 8% ROCE 7% KRONES revenue growth 20%
Slide 16: KRONES will further increase its EBT margin and ROCE by ...
16 ｜KRONES Conference Call October 26, 2016 KRONES will further increase its EBT margin and ROCE by ... TARGETS Improving working capital 2020 8% 20 Local sourcing Revenue growth Streamlining production 7% Local production EBT margin EBT margin 8% % ROCE ROCE 20%
Slide 17: These measures will take us to our goal
17 ｜KRONES Conference Call October 26, 2016 These measures will take us to our goal TARGETS 2020 Revenue growth 7% GROWTH Growth in Growth driven M&A and new DRIVERS the regions by product diversity solutions EBT margin 8% PORTFOLIO ROCE PROFITABILITY 20%
Slide 18: We are building our footprint in regions where beverage consumption is growing
18 ｜KRONES Conference Call October 26, 2016 We are building our footprint in regions where beverage consumpNon is growing rapidly TARGETS 138.7 billion litres 2020 Western Europe Revenue growth 190.8 billion litres North America/ Central America 83.6 billion litres Russia/CIS/Eastern Europe 7% Centr
Slide 19: Investing in infrastructure and broadening our base
19 ｜KRONES Conference Call October 26, 2016 That is why we are invesNng in infrastructure and broadening our base REVENUE BREAKDOWN 2015 Emerging markets 53% Mature markets 47% Strengthening our local service network, establishing a training Establishing offices in Asia Expanding production capaciti
Slide 20: Krones delivers advanced solutions for new beverages
20 ｜KRONES Conference Call October 26, 2016 Krones delivers advanced soluNons for new beverages TARGETS 2020 Revenue growth 7% EBT margin 8% Aseptic filling and complex bottle design ROCE – Contiform Asept Bloc 20%
Slide 21: Product diversity continues to increase
21 ｜KRONES Conference Call October 26, 2016 Product diversity conNnues to increase – and that is good for KRONES TARGETS 2020 Revenue growth 7% EBT margin Secondary and tertiary 8% packaging are Varioline’s expertise. No other system ROCE is as versatile. 20%
Slide 22: Growing product range and regional presence through acquisitions
22 ｜KRONES Conference Call October 26, 2016 KRONES is growing its product range and regional presence through acquisiNons Process technology Compact class Intralogistics TARGETS 2020 Revenue growth 7% EBT margin 8% Criteria for acquisitions: - Profitable Krones wants ~2% acquisition- ROCE - Revenue
Slide 23: These measures will take us to our goal
23 ｜KRONES Conference Call October 26, 2016 These measures will take us to our goal TARGETS 2020 Revenue growth 7% GROWTH Growth in Growth driven M&A and new DRIVERS the regions by product diversity solutions EBT margin 8% PORTFOLIO Process technology Bottling and Intralogistics Digitalisation and c
Slide 24: Our business model is precisely tailored to our customers' needs
24 ｜KRONES Conference Call October 26, 2016 Our business model is precisely tailored to our customers’ needs IT solutions TARGETS Beverage production Bottling and Intralogistics 2020 packaging equipment Revenue growth 7% EBT margin 8% ROCE 20% Service Service Service
Slide 25: Expanding PT business by growing local presence
25 ｜KRONES Conference Call October 26, 2016 Expanding PT business by growing local presence PT USA Example of a completed transaction: Trans-Market • > 50 people (approx. 20 H engineering, automation) • Locations: Florida, Texas $30 million 2016 revenue SELECTED CUSTOMERS Headquarters (Neutraubling
Slide 26: Bottling and packaging equipment: expanding our mid-range business
26 ｜KRONES Conference Call October 26, 2016 Bo^ling and packaging equipment: expanding our mid-range business High speed High speed CONTAINERS/HOUR TARGETS Low complexity High complexity 2020 Revenue growth 7% EBT margin Low speed Low speed 8% Low complexity High complexity ROCE 20% COMPLEXITY
Slide 27: Krones is utilising market potential for intralogistics solutions
27 ｜KRONES Conference Call October 26, 2016 Krones is uNlising market potenNal for intralogisNcs soluNons Market potential for TARGETS intralogistics solutions: Customer benefit Our expertise across the entire 2020 €100 billion value chain makes us the best Revenue growth 7% partner for intralogisti
Slide 28: Digitalisation holds great potential for the medium and long term
28 ｜KRONES Conference Call October 26, 2016 DigitalisaNon holds great potenNal for the medium and long term TARGETS 2020 Management of all information SAP integration by TRIACOS App as information platform Revenue growth 7% EBT margin 8% ROCE 20%
Slide 29: These measures will take us to our goal
29 ｜KRONES Conference Call October 26, 2016 These measures will take us to our goal TARGETS 2020 Revenue growth 7% GROWTH Growth in Growth driven M&A and new DRIVERS the regions by product diversity solutions EBT margin 8% PORTFOLIO Process technology Bottling and Intralogistics Digitalisation and c
Slide 30: Cost-optimised procurement worldwide – including engineering
30 ｜KRONES Conference Call October 26, 2016 Cost-opNmised procurement worldwide – including engineering TARGETS 2020 Revenue growth H 7% EBT margin 8% ROCE 20% Global engineering network Relocating production Local sourcing
Slide 31: Next step in modularisation will yield considerable cost advantages
31 ｜KRONES Conference Call October 26, 2016 Next step in modularisaNon will yield considerable cost advantages TARGETS 2020 Revenue growth Hardware-oriented System-oriented 7% PHASE 1 PHASE 2 PHASE 3 EBT margin Technologically Cost-optimised Cost-optimised 8% modularised modules systems assemblies R
Slide 32: Expanding our profitable service business
32 ｜KRONES Conference Call October 26, 2016 Expanding our profitable service business SERVICE REVENUE SHARE 2016 Service engineers 2012 1,650 2016 1,949 as per end of September
Slide 33: Optimising working capital – increasing ROCE
33 ｜KRONES Conference Call October 26, 2016 OpNmising working capital – increasing ROCE TARGETS Daily focus Strategic measures Results 2020 Revenue growth Contracting Global footprint Consolidated international preferred 7% supplier base EBT margin Project management Local sourcing Shortening projec
Slide 34: Milestones Profitability
34 ｜KRONES Conference Call October 26, 2016 Milestones Profitability TARGETS p.a. 10 - 20 € million > 20 € million LCS business 2020 Revenue growth p.a. 10 - 15 € million > 20 € million 7% Modularisation EBT margin p.a. 5 - 20 € million > 20 € million Global footprint 8% 30% ROCE 20% 26% 22% Working
Slide 35: Thank you for your attention!
Thank you for your adenbon!
Slide 36: Financial calendar 2017
36 ｜KRONES Conference Call October 26, 2016 Financial calender 2017 March 2, 2017 Preliminary figures 2016 March 23, 2017 Annual Report 2016 April 27, 2017 Conference Call Group Q1 2017 and Interim Report as per March 31 June 20, 2017 Annual General Meebng Olaf Scholz July 20, 2017 Conference Call Gr
Slide 37: Disclaimer
37 ｜KRONES Conference Call October 26, 2016 Disclaimer This investor presentabon contains forward-looking statements that are based on current esbmates, forecasts and assumpbons made by KRONES AG management to the best of its knowledge and other informabon currently available to KRONES AG. The forwa