Deutz Ag · XETR:DEZ
Deutz — H1 2014 Earnings Presentation
31 slides from Deutz's earnings presentation, Aug 7, 2014
Slide 1: H1 2014 results
The Origin of HighTech. H1 2014 results 7 August 2014 Dr Helmut Leube, CEO Dr Margarete Haase, CFO
Slide 2: Agenda
Agenda Review H1 2014 Outlook Annex 2
Slide 3: Key figures
Key figures H1 2014 yoy Q2 2014 qoq € million Order intake 746.8 -11.5% 332.6 -19.7% Revenue 753.4 +13.8% 410.7 +19.8% EBITDA (before one-offs) 67.5 +21.0% 42.1 +65.7% EBIT (before one-offs) 20.1 +99.0% 18.2 >100% Net financial debt 31.8 -29.2% 31.8 -10.4% Strong revenue growth and improvement of op
Slide 4: Highlights
Highlights ■ Successful new business development - superior product features of Tier 4 engines TCD 2.9 & 3.6 continue to attract new customers, e.g. Hitachi (Japan) and TYM (Korea) ■ Sales expanded significantly in Q2 due to strong demand for smaller engines (< 130 kW) before the upcoming emission l
Slide 5: Site optimisation
Site optimisation FY 2013 FY 2015/16 Cologne-Porz Cologne-Porz Cologne-Deutz Ulm Ulm Übersee (Chiemsee) Restructuring costs up to €20 million in FY 2014 (thereof €13.9 million booked in Q2) Capex (total amount ~€20 million in FY 2014 -16) overcompensated by proceeds from property sales in subsequent
Slide 6: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million -11.5% 15.3% 13.8% 843.5 746.8 99,079 753.4 143.0 6,144 134.7 85,907 662.1 118.8 6,775 115.8 700.5 92,935 634.6 612.1 79,132 546.3 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 Double-digit growth in unit sales and revenue Ord
Slide 7: Revenue development
Revenue development € million 410.1 410.7 372.2 381.0 344.1 342.7 322.5 288.4 289.9 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q2 revenue significantly above previous years H1 2014 7 August 2014 7
Slide 8: Revenue split
Revenue split Revenue split by application, H1 2014 Revenue split by region, H1 2014(1) (H1 2013) (H1 2013) Other 1% Mobile Machinery 47% Africa / Middle East 4% Europe (excl. Germany) 49% €8.4 million €352.2 million €33.8 million €368.8 million (€26.0 million) (€227.8 million) (€31.6 million) (€380
Slide 9: EBIT (before one-offs)
EBIT (before one-offs) € million 20.1 18.2 10.1 7.2 14.3 16.2 1.9 0.2 10.5 0.5 5.6 7.1 -5.5 -4.9 -0.6 -0.3 H1 2013 H1 2014 Q1 2014 Q2 2014 EBIT margin 1.5% 2.7% 0.6% 4.4% Operating profit nearly doubled due to higher production level Substantial improvement of profitability at DEUTZ Compact Engines
Slide 10: Operating profit & net income
Operating profit & net income H1 2013 H1 2014 € million 67.5 47.4 55.8 45.7 20.1 13.9 10.1 0.0 10.1 2.6 2.1 5.4 6.2 3.3 0.2 2.7 EBITDA D&A EBIT Restruc- EBIT Interest Income Net EBITDA D&A EBIT Restruc- EBIT Interest Income Net before before turing after expenses taxes income before before turing af
Slide 11: R&D & capital expenditure
R&D & capital expenditure R&D Capital expenditure (excl. R&D) € million 34.6 36.2 Gross expenditure Reimbursements 7.9 10.5 20.1 19.9 Net expenditure 1.7 0.9 26.7 25.7 18.4 19.0 H1 2013 H1 2014 H1 2013 H1 2014 Net R&D expenditure 4.0% 3.4% ratio(1) Improvement of R&D ratio in line with budget Capita
Slide 12: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 204.0 169.3 49.0 40.9 H1 2013 H1 2014 H1 2013 H1 2014 Working capital ratio 13.3% 13.2% (30 June) Working capital increase driven by higher Operating cash flow decreased by €8.1 million due business volume to higher
Slide 13: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow Net financial position € million H1 2013 H1 2014 19.3 13.8 -31.8 -44.9 2013 H1 2014 (LTM) Free cash flow improved despite higher working Cash flow used to pay dividend of €8.5 million and to capital reduce net debt by €13.1 million yo
Slide 14: Equity ratio & funding
Equity ratio & funding € million 1,121.0 1,183.5 45.0% 41.4% 504.7 489.6 204 15 14 19 FY 2013 H1 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 Duration of credit lines Sound balance sheet with strong equity ratio Medium- to lon
Slide 15: Segments: DEUTZ Compact Engines
Segments: DEUTZ Compact Engines H1 H1 Change Q2 Q1 Change € million 2014 2013 in % € million 2014 2014 in % New orders 612.1 700.5 -12.6 New orders 267.5 344.6 -22.4 Unit sales 92,935 79,132 17.4 Unit sales 51,279 41,656 23.1 Revenue 634.6 546.3 16.2 Revenue 347.8 286.8 21.3 EBIT (before one-offs) 5
Slide 16: Segments: DEUTZ Customised Solutions
Segments: DEUTZ Customised Solutions H1 H1 Change Q2 Q1 Change € million 2014 2013 in % € million 2014 2014 in % New orders 134.7 143.0 -5.8 New orders 65.1 69.6 -6.5 Unit sales 6,144 6,775 -9.3 Unit sales 3,343 2,801 19.4 Revenue 118.8 115.8 2.6 Revenue 62.9 55.9 12.5 EBIT (before one-offs) 14.3 16
Slide 17: Summary
Summary Successful new business development Double digit growth in revenue and unit sales Significant operating profit improvement at DCE Sound development of DEUTZ Dalian R&D and Capex well under control Sustainable efficiency improvement by site optimisation H1 2014 7 August 2014 17
Slide 18: Agenda
Agenda Review H1 2014 Outlook Annex 18
Slide 19: Financial outlook 2014
Financial outlook 2014 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 50 - 60 (1) Net of reimburs
Slide 20: Agenda
Agenda Review H1 2014 Outlook Annex 20
Slide 21: Summary of key financials (I)
Summary of key financials (I) € million H1 2014 H1 2013 Change (%) Revenue 753.4 662.1 13.8 EBITDA (before one-offs) 67.5 55.8 21.0 EBIT (before one-offs) 20.1 10.1 99.0 EBIT margin (before one-offs) (%) 2.7 1.5 -- Net income 2.7 5.4 -50.0 Basic earnings per share (€) 0.02 0.04 -50.0 Number of emplo
Slide 22: Summary of key financials (II)
Summary of key financials (II) € million H1 2014 H1 2013 Change (%) Total assets 1,183.5 1,070.7 10.5 Equity 583.4 610.6 -4.5 Equity ratio (%) 41.4 43.1 -- Cash flow from operating activities 40.9 49.0 -16.5 Free cash flow 8.9 3.4 >100 Net financial position -31.8 -44.9 29.2 Working capital 204.0 16
Slide 23: Income statement
Income statement € million H1 2014 H1 2013 Change (%) Revenue 753.4 662.1 13.8 Cost of goods sold -652.2 -570.0 14.4 Research and development costs -31.0 -29.8 4.0 Selling expenses -33.2 -31.4 5.7 Administrative expenses -17.6 -17.5 0.6 Other operating income 6.9 6.8 1.5 Other operating expenses -20
Slide 24: Balance sheet: assets
Balance sheet: assets 30 June 31 Dec Change € million 2014 2013 (%) Non-current assets (excluding deferred tax assets) 583.4 596.6 -2.2 Deferred tax assets 38.3 30.8 24.4 Inventories 278.8 224.6 24.1 Trade receivables 150.4 149.1 0.9 Other receivables and assets 58.2 60.6 -4.0 Cash and cash equivale
Slide 25: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities 30 June 31 Dec Change € million 2014 2013 (%) Equity 489.6 504.7 -3.0 Provisions for pensions and other post-retirement benefits 175.0 168.6 3.8 Other provisions 46.8 37.2 25.8 Financial liabilities 90.9 83.0 9.5 Other liabilities 14.2 3.7 >100 Non-current liabi
Slide 26: Cash flow statement (condensed)
Cash flow statement (condensed) € million H1 2014 H1 2013 EBIT 6.2 10.1 Cash flow from operating activities (total) 40.9 49.0 Capital expenditure on intangible assets, property, plant and equipment and investments -33.7 -43.1 Proceeds from the sale of non-current assets 5.1 0.3 Cash flow from invest
Slide 27: Overview of segments, H1 2014
Overview of segments, H1 2014 H1 H1 Change H1 H1 Change New orders (€ million) 2014 2013 (%) Unit sales 2014 2013 (%) DEUTZ Compact Engines 612.1 700.5 -12.6 DEUTZ Compact Engines 92,935 79,132 17.4 DEUTZ Customised Solutions 134.7 143.0 -5.8 DEUTZ Customised Solutions 6,144 6,775 -9.3 Total for ope
Slide 28: Overview of segments, Q2 2014
Overview of segments, Q2 2014 Q2 Q2 Change Q2 Q2 Change New orders (€ million) 2014 2013 (%) Unit sales 2014 2013 (%) DEUTZ Compact Engines 267.5 372.2 -28.1 DEUTZ Compact Engines 51,279 45,412 12.9 DEUTZ Customised Solutions 65.1 82.8 -21.4 DEUTZ Customised Solutions 3,343 4,257 -21.5 Total for ope
Slide 29: Employees
Employees 30 June 30 June Change 2014 2013 (%) Cologne 2,417 2,430 -0.5 Ulm 394 395 -0.3 Other German operations 285 283 0.7 Germany 3,096 3,108 -0.4 Foreign operations 918 922 -0.4 DEUTZ Group 4,014 4,030 -0.4 H1 2014 7 August 2014 29
Slide 30: Financial calendar & contact details
Financial calendar & contact details Interim report 1st to 3rd quarter 2014 6 November 2014 Annual report 2014 19 March 2015 Annual general meeting 29 April 2015 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
Slide 31: 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.