Deutz Ag · XETR:DEZ

Deutz — Investor Presentation (November 2018)

39 slides from Deutz's investor presentation, November 2018

  1. Slide 1: DEUTZ Investor Presentation

    DEUTZ Investor Presentation November 2018

  2. Slide 2: Agenda

    AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 2

  3. Slide 3: Our roots and our future – pioneers in engineering

    Our roots and our future – pioneers in engineering ■ Founded in 1864 in Cologne, DEUTZ is the world's oldest engine company and one of the world's leading independent engine manufacturers ■ Otto, Langen, Daimler, Bugatti, Maybach – these pioneers of engine technology all worked for DEUTZ ■ DEUTZ is

  4. Slide 4: What we do – our markets

    What we do – our markets DEUTZ is the leading independent manufacturer of diesel and gas engines in the power range from 19 to 620 kW for off-highway applications – we are developing the technologies today for the demands of tomorrow. © DEUTZ AG 4

  5. Slide 5: DEUTZ is present in more than 130 countries

    DEUTZ is present in more than 130 countries Cologne Herschbach Ulm Zafra Atlanta Pendergrass Buenos Aires (JV) Production and service network 13 Sales companies 2 Xchange centers 9 Sales offices, 16 Service centers, 800 Sales- and Servicepartners © DEUTZ AG 5

  6. Slide 6: Agenda

    AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 6

  7. Slide 7: Mega trends in our industry

    Mega trends in our industry Sustainability Disruption Gas Downsizing Clean Paradigm Electric shift DIESEL Discussion Evolution Revolution NOx Corporate Responsibility Hydrogen Energy saving Low local Drive System Pollution Hybrid emission Noise Optimisation Reduction © DEUTZ AG 7

  8. Slide 8: DEUTZ takes action

    DEUTZ takes action DEUTZ is completing its clean diesel technology to the full range of advanced drive systems for professionals DEUTZ is driving the next revolution, delivering higher efficiency, performance & sustainability DEUTZ has a clear electrification strategy to expand its product offering

  9. Slide 9: DEUTZ is well on track to become a leading provider of Innovative Drive Systems

    DEUTZ is well on track to become a leading provider of Innovative Drive Systems ■ DEUTZ is playing its part in reducing emissions such as pollution, noise and CO2. The DEUTZ road map for achieving this vision:  DIESEL is here to stay, its future secured by its high energy density that allows for au

  10. Slide 10: DEUTZ offers full product range of engines

    DEUTZ offers full product range of engines  Enlarged product offering in the lower output range  New gas and bi-fuel engines  Extended product range in the upper output range (200 to 620 kW) Start of series production in 2019 Start of serial supply in 2019 © DEUTZ AG 10

  11. Slide 11: Electric and hybrid markets / DEUTZ position

    O Markets / segments / applications DEUTZ position  Electric and hybrid solutions have not yet made inroads into off-highway markets  DEUTZ has established expertise in all relevant technological fields (e-motors, power electronics, battery technology, system integration etc.)  Marketable hybrid

  12. Slide 12: Torqeedo system competence for electrification

    TTTTTTTTTTT system competence for Lithium battery technology Electric motor Power electronics Mechanical design ■ Electrification of off-highway applications requires deep know-how in respect of battery management, electric motors, power electronics, software, and system integration ■ Torqeedo speed

  13. Slide 13: Torqeedo growth potential in electric boating

    TTTTTTTTTTT growth potential in electric boating world market leader in electric boating has more then 80’000 E-drive systems based on Li – Ionic Batteries in the field growth opportunities ahead speeds up the electrification of DEUTZ engine portfolio by know-how transfer will build up clean concept

  14. Slide 14: DEUTZ successfully expanding customer base worldwide

    DEUTZ successfully expanding customer base worldwide Long-standing customer relationships New clients & greater share of wallet (not exhaustive) (not exhaustive) © DEUTZ AG 14

  15. Slide 15: Regional growth strategy

    Regional growth strategy Off-Highway Market 2017  China biggest market worldwide => growth in Tsd. units 1,738 potential due to upcoming implementation of emissions standard China 4  ASIA Japan / Korea: improvement of OEM penetration with innovative diesel & full electric drive systems 422 300  E

  16. Slide 16: Service business

    Service business € million >400  Service business showing resilience throughout the 309.2 economic cycle 278.4 287.3  Expansion of service business 259.3  New products  Digitalization  Investment in own service centers & acquisition of selected dealers 2014 2015 2016 2017 2022  Further expansi

  17. Slide 17: DEUTZ initiatives to further improve financial performance

    DEUTZ initiatives to further improve financial performance New Asia Torqeedo Americas Quality & 9 - 18 L Processes Engines Complexity & Product Stage V & Cost Product-/ China IV Market E-DEUTZ Strategy Service >400 m€ Footprint & in 2022 Cultural Production Transfor- REVENUE (€ bn) mation EBIT MARGI

  18. Slide 18: Key investment highlights

    Key investment highlights Well on track to become a leading provider of Innovative Drive Systems Torqeedo serves as catalyst for E-DEUTZ electrification strategy Successful extension of customer base worldwide Resilient and expanding service business Further improvement of financial performance © DE

  19. Slide 19: Agenda

    AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 19

  20. Slide 20: Highlights

    Highlights ■ Strong Q1-Q3 2018 performance • Sharp order growth (+31.9% yoy) • Double-digit revenue increase (+18.7% yoy) • Ongoing growth in all regions and segments • Substantial improvement of operating profit: EBIT (before exceptional items) +71.9% yoy • Good Q3 result despite strike at supplier

  21. Slide 21: Key figures

    Key figures(1) Q1-Q3 2018 yoy Q3 2018 yoy € million New orders 1,548.7 +31.9% 452.2 +22.0% Revenue 1,297.3 +18.7% 419.7 +17.0% Adjusted EBIT(2) 60.3 +115.4% 12.8 +146.2% EBIT (before exceptional items) 45.9 +71.9% 12.5 +150.0% Net income 35.6 +76.2% 10.3 +586.7% (1) 2017 figures restated (2) EBIT (b

  22. Slide 22: Sales figures

    Sales figures New Orders Unit Sales Revenue € million Units € million +31.9% +32.3% +18.7% 1,548.7 156,504 1,297.3 1,173.8 118,279 1,093.2 Q1-Q3 2017 Q1-Q32018 Q1-Q3 2017 Q1-Q3 2018 Q1-Q3 2017 Q1-Q3 2018  Torqeedo sold 8,977 electric drive systems in Q1-Q3 2018  Unit sales grew faster than revenue

  23. Slide 23: Revenue by quarter

    Revenue by quarter € million 463.1 414.5 419.7 382.0 385.9 352.5 358.7 301.1 314.7 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18  Double-digit revenue growth in Q3 yoy despite strike at a supplier © DEUTZ AG 23

  24. Slide 24: Revenue by region

    Revenue by region Q1-Q3 2018 (Q1-Q3 2017) Africa/Middle East 3 % Europe (excl. Germany) 49 % €37.7 million €641.9 million (€36.4 million) (€530.0 million) Asia-Pacific 9 % €113.7 million (€109.3 million) €1,297.3 million (€1,093.2 million) Americas 20 % Germany 19 % €259.5 million €244.5 million (€2

  25. Slide 25: Revenue by application

    Revenue by application Q1-Q3 2018 (Q1-Q3 2017) Other 3 % Construction Equipment 30 % €37.6 million €395.3 million (€18.6 million) (€322.2 million) Automotive 3 % €36.8 million (€42.1 million) Stationary Equipment 10 % €1,297.3 million Material Handling 21 % €125.2 million (€1,093.2 million) €266.3 m

  26. Slide 26: Operating profit & net income

    Operating profit & net income Q1-Q3 2017(1) Q1-Q3 2018 € million 119.3 59.0 89.4 62.7 60.3 14.4 45.9 1.7 8.6 35.6 26.7 0.1 26.8 2.0 4.6 20.2 EBITDA D&A EBIT Excep- EBIT Net Income Net Adj. D&A Adj. DDE EBIT Net Income Net before before tional after interest taxes income EBITDA (2) EBIT (2) effects b

  27. Slide 27: EBIT (before exceptional items)

    EBIT (before exceptional items) € million 60.3 45.9 26.3 26.3 26.7 21.9 42.6 28.2 5.6 -0.8 -8.6 -8.6 Q1-Q3 2017 Q1-Q3 2018 Q1-Q3 2018 restated adjusted by reported DDE effects EBIT margin 2.4% 4.6% 3.5%  Operating profit increase driven by DEUTZ Compact Engines  Adjusted EBIT-margin improved by 2.

  28. Slide 28: DEUTZ Compact Engines

    DEUTZ Compact Engines(1) Q1-Q3 Q1-Q3 Change Q3 Q3 Change € million 2018 2017 in % € million 2018 2017 in % New orders 1,312.2 969.3 35.4 New orders 381.8 307.7 24.1 Unit sales (units) 141,034 111,947 26.0 Unit sales (units) 46,571 36,465 27.7 Revenue 1,085.2 907.6 19.6 Revenue 347.5 294.0 18.2 Adjus

  29. Slide 29: DEUTZ Customised Solutions

    DEUTZ Customised Solutions Q1-Q3 Q1-Q3 Change Q3 Q3 Change € million 2018 2017 in % € million 2018 2017 in % New orders 214.8 204.5 5.0 New orders 63.7 63.1 1.0 Unit sales (units) 6,493 6,332 2.5 Unit sales (units) 2,100 2,215 -5.2 Revenue 191.3 185.6 3.1 Revenue 65.8 64.7 1.7 EBIT (before except. i

  30. Slide 30: R&D spending & capital expenditure

    R&D spending & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 60.5 1.4 47.7 Gross expenditure 1.4 43.7 41.0 2.2 0.7 Reimbursements 59.1 Net expenditure 46.3 41.5 40.3 Net R&D Q1-Q3 2017 Q1-Q3 2018 Q1-Q3 2017 Q1-Q3 2018 expenditure ratio(1) 4.2% 4.6%  Increase of R&D d

  31. Slide 31: Working capital & operating cash flow

    Working capital & operating cash flow Working capital Operating cash flow € million 296.3 190.7 96.4 55.5 30 Sep 2017 30 Sep 2018 Q1-Q3 2017 Q1-Q3 2018 Working capital ratio 13.5% 17.6%  Working capital increase mainly due to higher business volume and higher inventory level  Higher working capita

  32. Slide 32: Free cash flow generation & net financial position

    Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 95.0 82.5 78.8 7.3 2017 Q3 2018 (LTM) 30 Sep 2017 30 Sep 2018  Decline of free cash flow due to working capital increase  Positive net financial position (1) Free cash flow: cash flow from operati

  33. Slide 33: Equity ratio & funding

    Equity ratio & funding € million 1,198.2 1,215.3 48.8% 49.5% 584.3 601.4 160 20 19 4 1 (1) 31 Dec 2017 30 Sep 2018 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 line  Equity ratio increased to 49.5%  Medium- to

  34. Slide 34: Agenda

    AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 34

  35. Slide 35: Forecast for key end-customer markets, 2018

    Forecast for key end-customer markets, 2018 Europe North America China Unit sales (equipment) Construction Equipment +5% to +10% +10% to +15% +20% to +25% (previous: +5% to 10%) (previous: +15% to 20%) Material Handling +5% to +10% +5% to +10% +10% to +20% Agricultural Machinery 0% to +5% 0% to +5%

  36. Slide 36: Financial outlook

    Financial outlook FY 2018 FY 2017 guidance(2) € million Revenue 1,479.1 > 1,600 EBIT margin (before exceptional items) 2.7 %(3) ≥ 4.5 % R&D expenditure(1) 67.0 70 - 80 Capex (excl. R&D)(1) 54.7 60 - 70 (1) Net of reimbursements (2) Assuming no further supply shortage (3) Restated  Guidance raised o

  37. Slide 37: Financial calendar & contact details

    Financial calendar & contact details  FY 2018 results 14 March 2019  Annual general meeting 30 April 2019  Q1 2019 results 7 May 2019 ► Contact details  Leslie Isabelle Iltgen Tel:+49 (0) 221 822 3600  SVP Communications & Investor Relations Fax:+49 (0) 221 822 15 3600  Ottostrasse 1 Email: le

  38. Slide 38: Disclaimer

    DISCLAIMER This presentation contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward- looking statements due to certain factors, e.g. changes in business, economic and competitive conditions

  39. Slide 39: Thank you for your attention

    THANK YOU FOR YOUR ATTENTION © DEUTZ AG 39

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