Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (May 2014)
29 slides from Deutz's investor presentation, May 2014
Slide 1: Investor presentation May 2014
The Origin of HighTech. Investor presentation May 2014
Slide 2: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 2
Slide 3: DEUTZ at a glance
DEUTZ at a glance 150 years DEUTZ – a tradition of achievement Independent manufacturer of diesel engines with product range from 25 to 520 kw Profile Engineering and manufacturing company with strong expertise as system integrator Worldwide sales channels and service network Strong brand – synonym
Slide 4: Corporate structure
Corporate structure DEUTZ Group Revenue 2013 €1.45 billion DEUTZ Compact Engines DEUTZ Customised Solutions Revenue 2013 €1.19 billion Revenue 2013 €0.26 billion Liquid-cooled engines of up to 8 Air-cooled engines for on-road, off- litres cubic capacity for on- and off- road and marine applications
Slide 5: Site optimisation
Site optimisation FY 2013 FY 2015/16 Cologne Porz decided Cologne Porz Cologne Deutz Ulm investigation Ulm Übersee Restructuring costs of €15-20 million in FY 2014, total capex ~€20 million in 2014 – 2016 Capex overcompensated by proceeds from sale of property in subsequent years Annual cost savings
Slide 6: 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 7: 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 8: Key applications
Key applications Typical Markets benefit from Competitors application macro trends Construction Cummins Material handling Kubota Mobile Machinery Ground support Perkins Mining equipment Yanmar Tractors Deere Agricultural Kubota Agricultural Machinery Perkins equipment Yanmar Gensets Deere Pumps Kubo
Slide 9: Revenue split by application
Revenue split by application FY 2013 (FY 2012) Other 2% Mobile Machinery 33% €30.1 million €481.6 million (€15.3 million) (€477.5 million) Stationary Equipment 12% €173.7 million (€204.2 million) €1,453.2 million (€1,291.9 million) Automotive 13%(1) €188.5 million (€192.1 million) Service 18% Agricu
Slide 10: Revenue split by region
Revenue split by region FY 2013(1) Pro-forma incl. Joint Ventures, FY 2013(2) (FY 2012) (FY 2012) Africa/Middle East 5% Europe (excl. Germany) 57% Africa/Middle East 4% Europe (excl. Germany) 43% €70.4 million €824.6 million €70.4 million €824.6 million (€83.9 million) (€668.3 million) (€83.9 millio
Slide 11: Emission standards drive DEUTZ revenue growth
Emission standards drive DEUTZ revenue growth Average sales price per engine (indexed; FY 2011 = 100) 117 100 104 Tier 4 systems require exhaust aftertreatment devices Growing share of new emission engines drives revenue growth Positive price mix effects are expected to continue 2011 2012 2013 Struc
Slide 12: Service business
Service business € million 250.3 253.7 Strong resilience of profitable 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 20% 18% 16% 20% 18% Active management of service netw
Slide 13: Major joint venture activities in China
Major joint venture activities in China(1) Joint venture with FAW Group 50-50 JV (at-equity consolidation) DEUTZ Dalian (DDE) Revenue FY 2013: €319m (+30% yoy) Production of 3-8 litres diesel engines Automotive and other applications New joint venture with AB Volvo DEUTZ stake 65% (full consolidatio
Slide 14: Summary: structural growth drivers
Summary: structural growth drivers Product and business development leading to growth New emission standards require more complex engines with a higher value New Chinese production facilities with significant mid-term growth potential Trend growth of revenue >10% p.a. in the mid-term Market share &
Slide 15: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 15
Slide 16: Key figures Q1 2014
Key figures Q1 2014 Q1 2014 yoy € million Order intake 414.2 +6.6% Revenue 342.7 +18.2% EBITDA 25.4 +63.9% EBIT 1.9 +€8.3 million Net financial debt 35.5 -48.8% All key figures improved 16
Slide 17: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million 6.6% 22.7% 18.2% 44,457 414.2 2,801 388.5 69.6 36,238 342.7 60.2 2,518 289.9 55.9 50.2 41,656 328.3 344.6 33,720 286.8 239.7 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Substantial revenue and unit sales growth in both segme
Slide 18: Book-to-bill-ratio
Book-to-bill-ratio Q1 Q4 Q3 Q2 Q1 € million 2014 2013 2013 2013 2013 Order intake 414.2 446.1 360.1 455.0 388.5 Revenue 342.7 410.1 381.0 372.2 289.9 Book-to-bill ratio 1.21x 1.09x 0.95x 1.22x 1.34x Orders on hand 424.9 366.1 329.5 352.9 272.1 Book-to-bill ratio at 1.21x High order backlog ensures g
Slide 19: EBIT
EBIT € million 1.9 5.1 7.1 -4.9 -0.3 -11.2 -0.3 -6.4 Q1 2013 Q1 2014 EBIT margin -2.2% 0.6% EBIT improved by €8.3 million yoy due to higher production level Margin still impacted by ramp-up phase of new engine series in DEUTZ Compact Engines segment Result from equity-accounted investments improved
Slide 20: Operating profit & net income
Operating profit & net income Q1 2013 Q1 2014 € million 25.4 23.5 15.5 21.9 1.9 1.7 0.8 -0.6 -6.4 1.3 -0.8 -6.9 EBITDA D&A EBIT Net Income Net EBITDA D&A EBIT Net Income Net interest taxes income interest taxes income expenses expenses EBITDA increased by €9.9 million (+63.9% yoy) Net income improve
Slide 21: R&D spending & capital expenditure
R&D spending & capital expenditure R&D Capital expenditure (excl. R&D) € million 19.1 Gross expenditure 15.2 4.7 Reimbursements 3.6 8.2 7.7 0.3 Net expenditure 0.7 14.4 11.6 7.0 7.9 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Net R&D expenditure 4.0% 4.2% ratio (1) R&D expenditure increased in Q1. As before, we
Slide 22: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 202.2 168.8 9.4 0.9 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Working capital ratio 13.6% 13.4% (31 March) Working capital increased due to higher business Operating cash flow increased by €8.5 million volume Slight improvemen
Slide 23: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow Net financial position € million Q1 2013 Q1 2014 31.5 13.8 -35.5 -69.3 2013 Q1 2014 (LTM) Free cash flow of last twelve months improved Net financial position improved by €33.8 million compared to the last quarter Free cash flow used
Slide 24: Equity ratio & funding
Equity ratio & funding € million 1,121.0 1,154.2 45.0% 43.1% 504.7 497.3 204 8 17 23 FY 2013 Q1 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 (residual term) & duration of credit lines Sound balance sheet with strong equity rat
Slide 25: Summary: key financial development
Summary: key financial development Solid start to the new financial year High order backlog ensures good workload Successful new business development Profitability expected to accelerate in the next quarters Sound balance sheet and low net debt Sustainable efficiency improvement by site optimisation
Slide 26: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 26
Slide 27: Financial outlook
Financial outlook FY 2013 reported Guidance FY 2014 € million low double Revenue 1,453.2 digit %-growth EBIT margin (before one-offs) 3.3 % > 4.0 % EBIT margin (after one-offs) 3.3 % > 3.0 % Net R&D spending ratio(1) 3.6 % slight decline Net capex (excl. R&D)(1) 42.5 60 - 70 (1) Net of reimbursement
Slide 28: Financial calendar & contact details
Financial calendar & contact details Interim report 1st half 2014 7 August 2014 Interim report 1st to 3rd quarter 2014 6 November 2014 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 Ottostrasse 1 Fax:+49 (0) 221 822 15 5400 51149 Cologne (Porz-Eil) Email: krupp.c@deutz.com Germany www.deut
Slide 29: 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.