Knorr-bremse Ag · XETR:KBX
Knorr-bremse — Q3 2018 Earnings Presentation
30 slides from Knorr-bremse's earnings presentation, Nov 28, 2018
Slide 1: Interim Report Q3 2018
Interim Report Q3 2018 Klaus Deller, CEO I Ralph Heuwing, CFO Munich, 28 November 2018 Knorr-Bremse Group
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This presentation has been prepared for information and background purposes only. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, an
Slide 3: 9M 2018 highlights
9M 2018 highlights Knorr-Bremse continues dynamic revenue growth in 3rd quarter ➢ Successful IPO and listing on the Frankfurt stock exchange on October 12th 2018 ➢ Innovation: Successful tradeshows Innotrans, IAA and Automechanika setting new standards ➢ Strong growth: Group revenue 4,994 mEUR (+9.5
Slide 4: Successful IPO on 12 October 2018
Successful IPO on 12 October 2018 3.85bn EUR 2nd largest ➢ Investor base (% of free float): ~30% free total issue IPO 2018 in • >80% institutional long only float investors volume GER • 15% hedge funds • Remainder SWF and retail ➢ Geographical split: • 11% from Germany, • 45% from UK • 19% from the
Slide 5: Successful tradeshows setting new standards in our industries
Successful tradeshows setting new standards in our industries Innotrans – Systems. People. xConnected. IAA – Shaping tomorrow‘s transportation. Together Knorr-Bremse Group 5
Slide 6: Strong 9M and Q3 2018 key figures
Strong 9M and Q3 2018 key figures mEUR H1 2018 9M 2018 9M 2017 ∆ Q3 2018 Q3 2017 ∆ Revenue 3,322 4,994 4,563 9.5% 1,672 1,587 5.4% EBITDA 582 876 778 12.6% 294 260 13.1% EBITDA margin 17.5% 17.5% 17.1% 40 bps 17.6% 16.4% 120 bps Order book 3,514 4,449 3,977 11,9% ▪ Continued growth in both divisions
Slide 7: All regions contributed to strong revenue growth
All regions contributed to strong revenue growth Revenue Europe APAC mEUR North America South America x.x% y-o-y growth ▪ Revenue +432 mEUR (+9.5%) vs. PY ▪ Further increase of order intake +8.2% vs. PY in 6.154 9,5% both segments 93 1.294 ▪ Order book +11.9% vs. PY 4.994 4.563 80 11,5% ▪ Book-to-bi
Slide 8: Growth and margin expansion led to increase in EBITDA
Growth and margin expansion led to increase in EBITDA EBITDA mEUR ▪ EBITDA +98 mEUR (+12.6%) vs. PY EBITDA Margin ▪ EBITDA margin +40bps 18.1% 17.5% ▪ Increase volume & margin related; 17.1% both segments contributed 1,116 ▪ Material expenses at 50.5% of sales 12.6% (+140bps vs. PY) 876 ▪ Personnel
Slide 9: EBIT margin improved by 90 bps vs. PY
EBIT margin improved by 90 bps vs. PY EBIT mEUR ▪ EBIT +102 mEUR (+16.5%) vs. PY EBIT Margin ▪ EBIT margin +90bps 14.7% 14.4% ▪ RVS: Impairment of assets held for sale of rail vehicle maintenance business in UK (“Blueprint 13.5% West”) in 2017 904 16.5% ▪ CVS: EBIT 2017 predominantly impacted by 718
Slide 10: Net income grew by 28% vs. PY
Net income grew by 28% vs. PY Net income mEUR ▪ Net income +108 mEUR (+27.6%) vs. PY Net Income Margin 10.0% ▪ Net income margin +150bps, reaching 10.0% 9.5% ▪ Moderately lower financial result 8.5% ▪ Improved tax rate at 26.0% for 9M 2018 due to 587 27.6% tax refund in North America and improved ta
Slide 11: Capex & NWC grew in line with expectations – somewhat ahead of 9M 2017
Capex & NWC grew in line with expectations – somewhat ahead of 9M 2017 Investments1 Net Working Capital2 mEUR 4.6% mEUR % of sales Net working capital days 3.8% 58 55 3.2% 63 mEUR 46 55.3% from Federal 16.4% Mogul deal 235 230 1,078 927 148 782 FY 2017 9M 2017 9M 2018 FY 2017 9M 2017 9M 2018 ▪ Inves
Slide 12: Strong ROCE, temporarily weaker cashflow
Strong ROCE, temporarily weaker cashflow ROCE (annualised)1 Operating/Free cash flow2 mEUR OCF 680 FCF 37.1% 32.2% 34.3% 450 -1,8% 330 324 190 137 FY 2017 9M 2017 9M 2018 FY 2017 9M 2017 9M 2018 ▪ Annualised 9M 2018 ROCE at an attractive level, ▪ Growth related NWC increase 210 bps above 9M 2017 ▪ G
Slide 13: Healthy balance sheet metrics
Healthy balance sheet metrics Assets & Equity Net financial debt / cash mEUR mEUR Total assets Equity Equity ratio Net financial status 35% 32% 836 24% 22% 502 5,727 5,673 6,065 6,124 1,996 1,829 1,465 1,308 -19 -4 FY 2017 9M 2017 1HJ 2018 9M 2018 FY 2017 9M 2017 1HJ 2018 9M 2018 ▪ Strong equity bas
Slide 14: RVS: Increasing sales due to robust order situation and mix-effects
RVS: Increasing sales due to robust order situation and mix-effects Revenue & EBITDA margin mEUR EBITDA Margin ▪ Revenue increase +220 mEUR (+9.1%) vs. PY 19.6% 19.0% 18.2% ▪ EBITDA margin +80bps ▪ Europe: General brake business growth in OE & AM 3,260 9.1% ▪ China: Positive development in mass tran
Slide 15: RVS: Good order book and order intake
RVS: Good order book and order intake Order book & order intake mEUR Order intake ▪ Order intake increase +287 mEUR (+11.2%) vs. Order book PY ▪ Growth drivers: 12.4% ➢ Asia: India, China, Australia 11.2% 3,021 3,099 2,855 ➢ Europe: Brakes & Kiepe 2,756 2,568 ▪ Order book increase +343 mEUR (+12.4%)
Slide 16: CVS: Increasing global truck production rate driving OE revenue growth
CVS: Increasing global truck production rate driving OE revenue growth Revenue & EBITDA margin mEUR ▪ Sales growth +211 mEUR (+9.8%) vs. PY EBITDA Margin ▪ EBITDA margin +10bps 17.4% 16.3% 16.4% ▪ Especially higher truck production in North America responsible for sales growth ▪ Moderate truck produ
Slide 17: CVS: Growing truck production rate leads to order intake & order book increase
CVS: Growing truck production rate leads to order intake & order book increase Order book & order intake mEUR ▪ Order intake increase +114 mEUR (+5,0%) vs. Order intake PY Order book ▪ Truck production rate growth by 1.0%; therefore 10.9% outperformance relatively to market, mainly due 5.0% to marke
Slide 18: Strong OE sales in both divisions led to smaller aftermarket share
Strong OE sales in both divisions led to smaller aftermarket share Aftermarket (German GAAP) RVS Aftermarket ▪ Stronger OE growth continues to dilute aftermarket contribution AM AM ▪ Aftermarket continues to grow 42% 40% 58% OE 60% • RVS: +3% vs. PY – impacted by shrinking OE revenues of disposed en
Slide 19: 2018 guidance
2018 guidance 2018 guidance ▪ 6,600 – 6,700 mEUR Revenue ▪ Assuming constant currencies, organic growth only P&L EBITDA ▪ 17.5 – 18.5% Margin ▪ Assuming no structural changes ▪ Capex ratio in line with 2014–2017 average Capex ➢ RVS: c. 4% of revenue Cash flow ➢ CVS: c. 4% of revenue Working ▪ DWC re
Slide 20: Medium-term guidance unchanged
Medium-term guidance unchanged Medium-term guidance ▪ Group organic CAGR of c. 4.5%–5.5% ➢ RVS c. 5–6% Revenue ➢ CVS c. 4–5% P&L ▪ Assuming constant currencies ▪ Margin expansion c. 150 bps compared to 2017 EBITDA ➢ Driven by both divisions Margin ➢ RVS division slightly ahead vis-à-vis CVS division
Slide 21: Summary: 9M 2018 highlights
Summary: 9M 2018 highlights Knorr-Bremse continues dynamic revenue growth in 3rd quarter ➢ Successful IPO on October 12th 2018 ➢ Innovation: Successful tradeshows Innotrans, IAA and Automechanika setting new standards ➢ Strong growth: Group revenue 4,994 mEUR (+9.5% vs. PY) fuelled by both divisions
Slide 22: Q&A
C’CQ]) | Knorr-Bremse Group y
Slide 23: Financial calendar
Financial calendar Upcoming investor relations events Event Date [mm/dd/yyyy] Location Investor Roadshow 11/29/2018 London Berenberg – Pennyhill Park 12/05/2018 European Conference (near London) Commerzbank – German Investment 01/14-16/2019 New York Seminar Kepler Cheuvreux – German Corporate 01/21/
Slide 24: Contact
Contact Investor relations contact persons Harald Kinzler Phone: +49 89 3547 1498 Email: investor.relations@knorr-bremse.com Justinian Späth Phone: +49 89 3547 181085 Email: investor.relations@knorr-bremse.com Knorr-Bremse Group 24
Slide 25: Appendix
Appendix Knorr-Bremse Group 25
Slide 26: Group income statement
Group income statement Consolidated statem ent of profit or loss Nine Months 3rd quarter 2018 2017 2018 2017 TEUR TEUR TEUR TEUR Revenues 4.994.045 4.562.514 1.671.805 1.586.521 Changes in inventories of unfinished/finished products 29.098 46.516 (177) (12.610) Other ow n w ork capitalized 40.851 23
Slide 27: Group balance sheet (1/2)
Group balance sheet (1/2) Consolidated statem ent of financial position 30.09.2018 31.12.2017 TEUR TEUR Assets Intangible assets and goodw ill 610.190 540.495 Property, plant and equipment 1.101.799 1.116.398 Investments accounted for using the equity method 1.703 1.950 Other assets 80.742 93.102 Co
Slide 28: Group balance sheet (2/2)
Group balance sheet (2/2) Consolidated statem ent of financial position 30.09.2018 31.12.2017 TEUR TEUR Equity Subscribed capital 161.200 67.600 Capital reserves 12.252 1.310 Retained earnings 20.724 106.956 Other components of equity -185.885 -166.407 Profit carried forw ard 888.498 1.302.834 Profi
Slide 29: Group cashflow statement
Group cashflow statement Working Capital 9 Months 30.09.2018 30.09.2017 31.12.2017 TEUR TEUR TEUR Inventory 850.788 785.716 748.823 Trade accounts receivables 1.416.996 1.284.560 1.147.879 Contract Assets 125.296 Receivables from construction contracts 133.735 116.171 Trade accounts payable -1.013.9
Slide 30: P&L per Division
P&L per Division Consolidatet statem ent of profit or loss Septem ber 2018 YTD June 2018 YTD July - Septem ber 2018 RAIL TRUCK RAIL TRUCK RAIL TRUCK TEUR TEUR TEUR TEUR TEUR TEUR Revenue 2.632.769 2.362.167 1.744.226 1.577.288 888.542 784.879 Changes in inventories of unfinished /finished products 3