Deutz Ag · XETR:DEZ
Deutz — H1 2020 Earnings Presentation
28 slides from Deutz's earnings presentation, Aug 11, 2020
Slide 1: Results for the first half of 2020
Results for the first half of 2020 August 11, 2020
Slide 2: 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.
Slide 3: Agenda: Overview and strategy
Agenda Agenda Overview and strategy Dr. Frank Hiller | CEO 3
Slide 4: Overview
Overview ▪ Overall sharp decline in sales figures as a result of the coronavirus crisis − Double-digit percentage decreases in new orders, unit sales, and revenue ▪ Significant contraction of the EBIT margin to minus 8.0%, mainly due to diseconomies of scale ▪ China strategy continues to be implemen
Slide 5: Transform for Growth
Transform for Growth ▪ Main areas of action: Target − Optimization of the global production network for our efficiency program: − Automation/digitalization of operating and administrative processes − Groupwide streamlining of the organizational structure approx. €100 million ▪ As well as a decrease
Slide 6: Continued successful implementation of China strategy
Continued successful implementation of China strategy ▪ First few months of joint venture with SANY were profitable; unit sales for 2020 as a whole expected to double Our new target for China: ~ €800 million ▪ Revenue target raised significantly from €500 million to around €800 million: − Planned vo
Slide 7: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million -34.6% -27.3% -33.3% 101.591 929.8 953.3 73.859 623.6 620.0 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 ▪ Marked fall in new orders due to the impact of the coronavirus crisis on the global economy ▪ Larger decrease in revenue
Slide 8: Revenue by region
Revenue by region H1 2020 (H1 2019) Africa and Middle East 4% (2%) Europe (excl. Germany) 41% (41%) €24.6 million €255.5 million -2.9% -32.8% Asia-Pacific 18% (17%) €620.0 million (€929.8 million) €107.9 million -30.6% Americas 18% (23%) Germany 19% (17%) €112.5 million €119.5 million -47.3% -23.6%
Slide 9: Revenue by application segment
Revenue by application segment H1 2020 (H1 2019) Miscellaneous 8% (7%) Construction Equipment 30% (30%) €47.8 million €184.9 million -22.5% -32.8% Stationary Equipment 9% (8%) Material Handling 13% (21%) €620.0 million €55.7 million (€929.8 million) €79.4 million -29.4% -59.1% Agricultural Machinery
Slide 10: Agenda: Key financials in detail
Agenda Agenda Key financials in detail Dr. Andreas Strecker | CFO 10
Slide 11: Operating profit and net income
Operating profit and net income EBIT and EBIT margin Net income ▪ Operating loss (EBIT before exceptional items) mainly before exceptional items1 attributable to: − Sharp fall in revenue, with related diseconomies of scale, <-100% <-100% due to the coronavirus crisis − Payments made under continuati
Slide 12: Business performance in the segments 1/2
Business performance in the segments 1/2 DEUTZ Compact Engines (DCE) DEUTZ Customized Solutions (DCS) € million H1 2020 H1 2019 Change € million H1 2020 H1 2019 Change (%) (%) New orders 439.9 756.2 -41.8 New orders 165.4 180.5 -8.4 Unit sales (units) 48,173 81,924 -41.2 Unit sales (units) 9,442 13,
Slide 13: Business performance in the segments 2/2
Business performance in the segments 2/2 Other € million H1 2020 H1 2019 Change (%) New orders 19.5 18.6 +4.8 Unit sales (units) 16,244 6,158 >+100 Revenue 22.5 17.0 +32.4 EBIT -6.7 -11.3 +40.7 EBIT margin (%) -29.8 -66.5 - ▪ Positive trend for the Other segment's sales figures; unit sales more than
Slide 14: R&D: spending and capital expenditure
R&D: spending and capital expenditure R&D spending (after deducting grants) Capital expenditure2 € million € million 7.5% -7.8% 4.8% 46.2 42.2 44.7 38.9 H1 2019 H1 2020 H1 2019 H1 2020 R&D ratio1 ▪ Disproportionately strong rise in the R&D ratio caused by sharp fall in revenue ▪ Reduction in capital
Slide 15: Working capital and cash flow from operating activities
Working capital and cash flow from operating activities Working capital Cash flow from operating activities € million € million 20.2% 16.8% 0.9 336.7 308.9 -43.7 Jun. 30, 2019 Jun. 30, 2020 H1 2019 H1 2020 Working capital ratio (average)1 ▪ Main factor affecting the change in working capital was the
Slide 16: Free cash flow and net financial position
Free cash flow and net financial position Free cash flow1 Net financial position € million € million -17.8 -46.2 -85.7 -117.8 H1 2019 H1 2020 Jun. 30, 2019 Jun. 30, 2020 ▪ Deterioration in free cash flow attributable to the decrease in cash flow from operating activities ▪ Decline in the net financi
Slide 17: Equity ratio and funding
Equity ratio and funding Equity ratio Funding € million € million Long-term bank loans Lease liabilities 1,301.2 1,229.9 50.1% 48.5% 652.4 596.4 310.0 27.8 13.8 13.3 9.0 18.7 Dec. 31, 2019 Jun. 30, 2020 up to 1 year 1 to 5 years up to 1 year 1 to 5 years over 5 years Total assets Equity Equity ratio
Slide 18: Agenda: Guidance for 2020 and medium-term targets
Agenda Agenda Guidance for 2020 and medium- term targets Dr. Frank Hiller | CEO 18
Slide 19: Guidance for 2020 and medium-term targets
Guidance for 2020 and medium-term targets ▪ The progression and timeline of the coronavirus crisis going forward is very difficult to predict. Consequently, it is not possible to provide updated guidance for 2020. ▪ Fundamentally, it can be assumed that the remainder of the current year, particularl
Slide 20: Annex
DEUTZ Annex
Slide 21: Overview of segments
Overview of segments New orders H1 2020 H1 2019 Change Revenue H1 2020 H1 2019 Change € million (%) € million (%) DEUTZ Compact Engines 439.9 756.2 -41.8 DEUTZ Compact Engines 453.7 729.8 -37.8 DEUTZ Customized Solutions 165.4 180.5 -8.4 DEUTZ Customized Solutions 145.0 185.0 -21.6 Other 19.5 18.6 +
Slide 22: Income statement
Income statement € million H1 2020 H1 2019 Revenue 620.0 929.8 Cost of sales -534.8 -757.0 Research and development costs -49.6 -44.0 Selling expenses -51.3 -51.8 General and administrative expenses -24.3 -26.7 Other operating income 6.2 18.2 Other operating expenses -15.8 -12.2 Write-downs of finan
Slide 23: Balance sheet: assets
Balance sheet: assets € million Jun. 30, 2020 Dec. 31, 2019 Property, plant and equipment 353.1 347.2 Intangible assets 210.2 216.2 Equity-accounted investments 51.0 51.1 Other financial assets 4.8 5.0 Non-current assets (before deferred tax assets) 619.1 619.5 Deferred tax assets 70.6 68.6 Non-curr
Slide 24: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities € million Jun. 30, 2020 Dec. 31, 2019 Issued capital 309.0 309.0 Additional paid-in capital 28.8 28.8 Other reserves -1.3 0.1 Retained earnings and accumulated income 259.7 314.3 Equity attributable to shareholders of DEUTZ AG 596.2 652.2 Non-controlling interes
Slide 25: Cash flow statement (condensed)
Cash flow statement (condensed) € million H1 2020 H1 2019 EBIT -49.9 56.5 Cash flow from operating activities -43.7 0.9 Capital expenditure on intangible assets, property, plant and equipment and investments -39.8 -49.7 Proceeds from the sale of non-current assets 0.2 4.1 Cash flow from investing ac
Slide 26: Thank you for your attention!
Thank you for your attention! 26
Slide 27: Questions & answers
Questions & answers 27
Slide 28: Financial calendar and contact details
Financial calendar and contact details Financial calendar Quarterly statement for the first November 10, 2020 to third quarter of 2020 2020 annual report March 18, 2021 Annual General Meeting April 29, 2021 Quarterly statement for the first May 6, 2021 quarter of 2021 Contact Leslie Isabelle Iltgen