Deutz Ag · XETR:DEZ
Deutz — Q3 2020 Earnings Presentation
29 slides from Deutz's earnings presentation, Nov 10, 2020
Slide 1: Q1–Q3 2020 results
Q1–Q3 2020 results November 10, 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 ▪ Positive business performance overall and significant improvement in operating profit (EBIT before exceptional items) compared with Q2 2020 ▪ Further quarter-on-quarter improvement in business performance expected in the fourth quarter of 2020 – signs of an upward trend in the market, but
Slide 5: Transform for Growth efficiency program
Transform for Growth efficiency program ▪ As well as a decrease in operating costs, the bulk of the savings are to be achieved by reducing staff costs Our target: ▪ Reduction of up to 1,000 positions worldwide by the end of 2022: − A total of around 490 positions already cut in the first three appro
Slide 6: China strategy
China strategy ▪ Successful integration of the existing SANY engine factory in Kunshan into DEUTZ’s network of production sites ▪ SANY joint venture profitable – production volume expected to increase Our target for China: from around 7,000 engines in 2019 to approx. 20,000 engines in 2020 ▪ Factory
Slide 7: DEUTZ in China
DEUTZ in China Tianjin, China Factory for local contract manufacturing under strategic alliance with BEINEI Changsha, China Kunshan, China Assembly plant for high-performance SANY engine factory engines as part of the joint venture with SANY 7
Slide 8: Sales figures for Q1–Q3 2020, yoy
Sales figures for Q1–Q3 2020, yoy New orders Unit sales Revenue € million Units € million -29.0% -30.3% -32.7% 155,780 1,379.9 1,315.2 108,559 928,2 933.6 Q1–Q3 2019 Q1–Q3 2020 Q1–Q3 2019 Q1–Q3 2020 Q1–Q3 2019 Q1–Q3 2020 ▪ Sharp falls in new orders due to the coronavirus crisis and resulting relucta
Slide 9: Sales figures for Q3 2020, qoq
Sales figures for Q3 2020, qoq New orders Unit sales Revenue € million Units € million +16.1% +2.7% +10.0% 34,700 33,790 310.0 308.2 280.2 266.9 Q2 2020 Q3 2020 Q2 2020 Q3 2020 Q2 2020 Q3 2020 ▪ Positive trend for sales figures overall compared with the previous quarter ▪ Significant 16.1% increase
Slide 10: Revenue down in all key regions
Revenue down in all key regions Q1–Q3 2020 (Q1–Q3 2019) Africa and Middle East 4% (3%) Europe (excl. Germany) 41% (41%) €37.4 million €381.3 million +0.5% -32.1% Asia-Pacific 18% (16%) €928.2 million (€1,379.9 million) €169.9 million -23.7% Americas 18% (23%) Germany 19% (17%) €163.5 million €176.1
Slide 11: Revenue down in all application segments
Revenue down in all application segments Q1–Q3 2020 (Q1–Q3 2019) Miscellaneous 8% (6%) Construction Equipment 29% (29%) €78.5 million €267.7 million -5.2% -34.1% Stationary Equipment 9% (9%) Material Handling 12% (22%) €928.2 million €81.7 million (€1,379.9 million) €117.0 million -33.3% -60.5% Agri
Slide 12: Agenda: Key financials in detail
Agenda Agenda Key financials in detail Dr. Andreas Strecker | CFO 12
Slide 13: Significant improvement in operating profit in the third quarter
Significant improvement in operating profit in the third quarter Operating profit (€ million) ▪ Operating loss (EBIT before exceptional items) in Q1–Q3 2020 EBIT margin before exceptional items attributable to: − Sharp fall in revenue, with related diseconomies of scale, due +58.8% <-100% to the cor
Slide 14: Business performance in the segments 1/2
Business performance in the segments 1/2 DEUTZ Compact Engines (DCE) DEUTZ Customized Solutions (DCS) € million Q1-Q3 2020 Q1-Q3 2019 YoY change (%) € million Q1-Q3 2020 Q1-Q3 2019 YoY change (%) New orders 660.4 1,019.5 -35.2 New orders 241.3 267.2 -9.7 Unit sales (units) 70,826 122,638 -42.2 Unit
Slide 15: Business performance in the segments 2/2
Business performance in the segments 2/2 Other € million Q1–Q3 2020 Q1–Q3 2019 YoY change (%) New orders 34.0 31.3 +8.6 Unit sales (units) 24,057 12,990 +85.2 Revenue 35.9 26.5 +35.5 EBIT before exceptional items -8.9 -14.2 +37.3 EBIT margin before exceptional items (%) -24.8 -53.6 - ▪ Positive tren
Slide 16: R&D: spending and capital expenditure
R&D: spending and capital expenditure R&D spending (after deducting grants) Capital expenditure2 € million € million 7.1% 5.1% -7.9% 71.0 65.8 60.6 55.8 Q1–Q3 2019 Q1–Q3 2020 Q1–Q3 2019 Q1–Q3 2020 R&D ratio1 ▪ Disproportionately strong rise in the R&D ratio caused by sharp fall in revenue ▪ Reductio
Slide 17: Cash flow from operating activities & working capital
Cash flow from operating activities & working capital Cash flow from operating activities Working capital € million € million 21.4% 52.7 16.9% 328.5 279.7 -19.4 Q1–Q3 2019 Q1–Q3 2020 Sep. 30, 2019 Sep. 30, 2020 Working capital ratio (average)1 ▪ Decrease in cash flow from operating activities caused
Slide 18: Free cash flow and net financial position
Free cash flow and net financial position Free cash flow1 Net financial position € million € million -7.1 -32.9 -78.8 -111.6 Q1–Q3 2019 Q1–Q3 2020 Sep. 30, 2019 Sep. 30, 2020 ▪ Significant decline in free cash flow as a result of lower level of cash flow from operating activities ▪ Decline in the ne
Slide 19: Equity ratio and funding
Equity ratio and funding Equity ratio Funding € million € million Long-term bank loans Lease liabilities 1,301.2 1,186.0 50.1% 45.7% 652.4 541.8 310.0 13.0 25.8 10.4 8.1 16.1 Dec. 31, 2019 Sep. 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 20: Annex
DEUTZ Annex
Slide 21: Overview of segments, Q1–Q3
Overview of segments, Q1–Q3 YoY change Revenue Q1–Q3 Q1–Q3 YoY change New orders Q1–Q3 Q1–Q3 (%) (%) € million € million 2020 2019 2020 2019 DEUTZ Compact Engines 660.4 1,019.5 -35.2 DEUTZ Compact Engines 668.6 1,079.7 -38.1 DEUTZ Customized Solutions 241.3 267.2 -9.7 DEUTZ Customized Solutions 225.
Slide 22: Overview of segments, Q3
Overview of segments, Q3 New orders Q3 2020 Q3 2019 YoY change Revenue Q3 2020 Q3 2019 YoY change (%) (%) € million € million DEUTZ Compact Engines 220.5 263.3 -16.3 DEUTZ Compact Engines 214.9 349.9 -38.6 DEUTZ Customized Solutions 75.9 86.7 -12.5 DEUTZ Customized Solutions 80.8 91.5 -11.7 Other 14
Slide 23: Income statement
Income statement € million Q3 2020 Q3 2019 Q1–Q3 2020 Q1–Q3 2019 Revenue 308.2 450.1 928.2 1,379.9 Cost of sales -263.3 -369.3 -798.1 -1,126.3 Research and development costs -23.7 -24.2 -73.3 -68.2 Selling and administrative expenses -34.8 -36.4 -110.4 -114.9 Other operating income 3.2 7.6 9.4 25.8
Slide 24: Balance sheet: assets
Balance sheet: assets € million Sep. 30, 2020 Dec. 31, 2019 Property, plant and equipment 353.3 347.2 Intangible assets 205.6 216.2 Equity-accounted investments 51.5 51.1 Other financial assets 4.7 5.0 Non-current assets (before deferred tax assets) 615.1 619.5 Deferred tax assets 74.0 68.6 Non-curr
Slide 25: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities € million Sep. 30, 2020 Dec. 31, 2019 Issued capital 309.0 309.0 Additional paid-in capital 28.8 28.8 Other reserves -2.7 0.1 Retained earnings and accumulated income 206.5 314.3 Equity attributable to shareholders of DEUTZ AG 541.6 652.2 Non-controlling interes
Slide 26: Cash flow statement (condensed)
Cash flow statement (condensed) € million Q1–Q3 2020 Q1–Q3 2019 EBIT -103.4 78.5 Cash flow from operating activities -19.4 52.7 Capital expenditure on intangible assets, property, plant and equipment and investments -56.2 -87.5 Proceeds from the sale of non-current assets 0.2 4.1 Cash flow from inve
Slide 27: Thank you for your attention!
Thank you for your attention! 27
Slide 28: Questions & answers
Questions & answers 28
Slide 29: Financial calendar and contact details
Financial calendar and contact details Financial calendar 2020 annual report March 18, 2021 Annual General Meeting April 29, 2021 Quarterly statement May 6, 2021 for the first quarter of 2021 Interim report August 12, 2021 for the first half of 2021 Contact Leslie Isabelle Iltgen SVP Communications