Kion Group Ag · XETR:KGX
Kion — Investor Presentation (May 2017)
55 slides from Kion's investor presentation, May 2017
Slide 1: We Keep the World Moving – Investor Relations Presentation
We Keep the World Moving Investor Relations Presentation May 2017
Slide 2: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q1 2017 4. Appendix 2 KION GROUP AG | Investor Relations Presentation | May 2017 © 2017 KION GROUP AG. All rights reserved
Slide 3: KION Group at a Glance
KION Group at a Glance A world leader in industrial trucks and supply chain solutions World-leading positions Strong global presence Asia-Pacific 11% Americas 20% − European No. 1 and Global No. 2 No. 1 − Present in more than in industrial trucks and services 100 countries − Global No. 3 in supp
Slide 4: KION Group: Market-Leading Positions Globally
KION Group: Market-Leading Positions Globally A unique player in Intralogistics 4.0 Industrial trucks1 Automation systems1 Top 20 suppliers 2015 Top 20 suppliers 2015 1 Toyota 1 Daifuku 2 KION 2 SSI Schäfer3 3 Jungheinrich + 3 Dematic 4 Crown 4 Murata Machinery 5 Hyster-Yale 5 Vanderlande 6 Mitsubis
Slide 5: Dematic Acquisition
Dematic Acquisition Creating a unique and complete material handling offering Material handling solutions for every part of the warehouse Dematic adds best-in-class automation WH- Fleet data Supply solutions Storage1 Sortation IC-trucks trucks mgmt. chain SW 2 − Dematic offers comprehensive range of
Slide 6: FY 2016 Segmentation
FY 2016 Segmentation New segmentation around trucks and solutions Industrial Trucks & Services Supply Chain Solutions Corporate Services − Industrial truck business including − Supply chain and warehouse − Internal service entities financial services activities automation − Logistics − Regional Oper
Slide 7: Industrial Trucks and Services: Segment Overview
Industrial Trucks and Services: Segment Overview A world leader in industrial trucks KION Group is European No. 1 Key financials Revenue by product No.1 and Global No. 2 (in €m) 2016 2015 Order intake 5,383 5,146 A well positioned global Services 6 player with six unique brands Revenue 5,203 5,045 4
Slide 8: Industrial Trucks and Services: Integrated Business Model
Industrial Trucks and Services: Integrated Business Model Global capital goods ecosystem of products and services New truck sales – Technology and innovation Financial services – Sales support vehicle with leadership benefit for aftermarket and – Tailor-made solutions and ~45% of new truck sales ser
Slide 9: Supply Chain Solutions: Segment Overview
Supply Chain Solutions: Segment Overview Leading in material handling automation solutions Dematic is global No. 3 with Key financials Revenue by product1 Top 3 leading position in US and Europe (in €m) 2016 2015 Services Order intake 431 49 25% ~12% annual revenue growth 12% since 2013 Revenue 366
Slide 10: Supply Chain Solutions: Broad Solutions Offering
Supply Chain Solutions: Broad Solutions Offering Comprehensive range of high-end automation technology Warehouse control and management software − Advanced real-time, knowledge-based logistics software beyond warehouse management & control software Conveyor Sortation Storage Picking Palletising − Al
Slide 11: Dematic Key Financials
Dematic Key Financials FY 2016 margin impacted by Monterrey ramp-up Dematic financials1 Relevant explanations Q1-Q3 Q1-Q3 Nov-Dec Nov-Dec (in €m) 2015 2016 2015 2016 − Q4 seasonally weaker due to Christmas peak season at Dematic’s customers Order intake 1,330 1,468 317 280 Revenue 1,233 1,337 251 26
Slide 12: Dematic Acquisition: Monterrey ramp-up measures
Dematic Acquisition Monterrey ramp-up measures in place and effective Dematic’s main production locations in the Americas Monterrey production is ramping up Grand Rapids, USA − Focus on process optimisation for kitting and assembly − Close integration of local suppliers Close management attention as
Slide 13: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q1 2017 4. Appendix 13 KION GROUP AG | Investor Relations Presentation | May 2017 © 2017 KION GROUP AG. All rights reserved
Slide 14: KION Group: Investment Highlights
KION Group: Investment Highlights Industrial Supply Trucks and Chain Services Solutions 1 Attractive market with growth profile above GDP 2 Global leader – strong home base and well positioned in growth markets 3 Technology leadership with strong position in Intralogistics 4.0 4 Robust i
Slide 15: Attractive market with growth profile above GDP
1 Attractive market with growth profile above GDP benefiting from global mega trends Industrial trucks: Global new truck sales1 Automation systems: Global new sales Top 20 suppliers’ revenue 2010-2015 (in $bn) approx. 1.5x World GDP2 CAGR ~8% 6.8% 4.1% 3.3% 4.2% 2.8% 11.4 14.3 14.9 15.6 15.7 16.6 3.
Slide 16: Industrial trucks: Stability from mature markets' replacement cycle
1 Industrial trucks: Stability from mature markets’ replacement cycle Stability from replacement cycle – Truck replacement demand from Western Europe market order intake (in ‘000 units) assumed 10-year average usage1 – Simplified replacement model 360 305 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 17: Automation systems: Attractive market development and growth
1 Automation systems: Attractive market development and growth Consumer expectations … … drive changes in retail … focused on supply chain and e-commerce… Selected customers − Digitalisation drives growth in − E-commerce players shorten − Move towards decentralised online sales order cycles and incr
Slide 18: Strong position in core markets based on multi-brand strategy
2 Strong position in core markets based on successful multi-brand strategy Industrial Trucks and Services Supply Chain Solutions Market positions Market positions 1 top #1 #3 #1 3 North Europe China Europe America Global and regional brands Global brands – No. 2 worldwide – A leading manufacturer of
Slide 19: Well positioned to capture momentum in growth markets
2 Well positioned to capture momentum in growth markets Strong position in growth markets Development potential in growth markets KION revenue FY 2016 by customer location (in %) Forklift penetration2 per 1 million inhabitants 2016 690 720 640 Growth markets Mature markets1 23% 77% 470 200 50 10 Ind
Slide 20: Customer benefits from cost-efficient material handling
3 Customer benefits from cost-efficient material handling Acceleration of product Prevention of accidents Optimisation of operation times handling & shipment & damages & energy consumption 20 KION GROUP AG | Investor Relations Presentation | May 2017 © 2017 KION GROUP AG. All rights reserved
Slide 21: Technology leadership drives premium positioning and pricing
3 Technology leadership drives premium positioning and pricing Industrial truck efficiency supports Industrial truck purchase price Commitment to R&D premium pricing² only ~7% of total costs R&D spend¹ (in €m and % of revenue) Cost per lorry load cycle Purchase Competitive price ~7% pricing 2.9% 2.8
Slide 22: Strong E- and WH-offering benefits from growth in E-commerce
3 Strong E- and WH-offering benefits from growth in E-commerce KION product mix by truck type E-commerce drives demand Order intake 2016 (in units) – E-commerce growth drives required logistics fulfilment space IC-trucks – Additional logistics space needs E- and 17% E-trucks WH-trucks 26% Ongoing tr
Slide 23: Intralogistics 4.0 – How KION integrates supply chains
3 Intralogistics 4.0 – How KION integrates supply chains Automated systems Automated trucks Fleet data management − Customised integrated Intelligent trucks − Full range of automated intralogistics solutions − Fleet data services series trucks − Automated trucks − Trucks equipped with connect trucks
Slide 24: Recent additions to KION's Intralogistics 4.0 solutions
3 Recent additions to KION’s Intralogistics 4.0 solutions Intelligent trucks Fleet data management Automated trucks Automated systems Speed control with Speed New fleet manage- Extended range of Acquisition of Dematic Assist ment feature robotic trucks – Creates an unparalleled – Safety system limi-
Slide 25: Strong global sales and service network
4 Strong global sales and service network provides unique access to a global customer base Americas EMEA Asia Pacific (APAC) ~350 sales and/or ~720 sales and/or ~450 sales and/or service locations service locations service locations More than 1,500 sales and/or service locations in over 100 countrie
Slide 26: History of change as a basis for future value creation
5 History of change as a basis for future value creation Structural efficiency and Growth and resilience Margin expansion consolidation in financial crisis Adj. EBIT margin (in %) 7.9% 3.9% 8.3% 9.0% 9.3% 9.5% 9.5% 9.9% -0.9% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Reduced fixed costs and incre
Slide 27: Strategic focus on margin expansion
5 Strategic focus on margin expansion EBIT benchmark KION generates best-in-class EBIT EBIT margin1 2016 (in %) margin1 25 − Scale and synergy benefits vs. Actuals Median Range competitors 20 − Strong service business with attractive margins 15 − Local sourcing and production in 12.9 emerging market
Slide 28: Margin upside in Industrial Trucks & Services
5 Margin upside in Industrial Trucks & Services is driven by structural changes Efficient manufacturing setup Global module and platform Improvement in support functions strategy − New plant opened in Stribro, CZ − Common modules in WEU − Continuous review and − Efficiency programs in core − Clear i
Slide 29: Margin upside in Supply Chain Solutions
5 Margin upside in Supply Chain Solutions is driven by structural changes Manufacturing productivity Strengthened software and Synergies in purchasing / G&A improvement services business − Ramp-up of Monterrey production − Expansion of Dematic iQ − Joint purchasing − Focus on process optimisation so
Slide 30: KION Strategy 2020: Our aspiration for profitable growth
6 KION Strategy 2020: Our aspiration for profitable growth Close the gap towards global market leadership Growth Being on par with the peer group regarding capital efficiency Capital Profitability efficiency Expand margin as the most profitable player in the industry Resilience Remain resilient enou
Slide 31: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q1 2017 4. Appendix 31 KION GROUP AG | Investor Relations Presentation | May 2017 © 2017 KION GROUP AG. All rights reserved
Slide 32: Q1 2017 Strategic Highlights
Q1 2017 Strategic Highlights Progress in refinancing Dematic and preparing for growth January February March Promissory 5-year 7-year 10-year note tranche tranche tranche KION awarded first investment Promissory note of ~€1bn Expansion of Dematic production grade rating issued (Schuldschein) with ne
Slide 33: Q1 2017 Financial Highlights
Q1 2017 Financial Highlights Dynamic start into 2017 − Outlook for FY 2017 confirmed Outlook − Order intake and revenue grew to €1.9bn resp. €1.8bn in Q1 2017 Growth − IT&S segment with double-digit growth − SCS segment growth mainly driven by Dematic acquisition − Adj. EBIT1 of €153m results in mar
Slide 34: Industrial Trucks & Services: Market Development
Industrial Trucks & Services: Market Development Dynamic start led by emerging market growth Order intake unit growth y-o-y (in %) North America China Q2/16 Q3/16 Q4/16 Q1/17 Western Europe Q2/16 Q3/16 Q4/16 Q1/17 -0.6% 12.3% 0.9% 6.6% Q2/16 Q3/16 Q4/16 Q1/17 -1.2% 22.4% 33.9% 46.3% 11.3% 13.9% 9.7%
Slide 35: Industrial Trucks & Services: KION Development
Industrial Trucks & Services: KION Development Strong growth across all regions in Q1 Industrial trucks: Regional development Western Europe Order intake (in ‘000 units) and growth y-o-y (in %) – Market: Persisting growth momentum Q1 2017 – KION: Good start into the year Market KION Eastern Europe –
Slide 36: Q1 2017 Key Financials
Q1 2017 Key Financials Dynamic start into 2017 Order intake Revenue Adj. EBIT and margin Net Income (in €m) (in €m) (in €m and %) (in €m) +45.1% +48.4% 8.1% 8.4% 1,882 1,811 1,297 1,221 +55.1% +27.2% 99 153 33 42 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 − No FX-impact − No FX-
Slide 37: Segment Financials: Industrial Trucks & Services
Segment Financials: Industrial Trucks & Services Margin improvement to 9.8% in Q1 2017 Key financials Revenue by category Based on FY 2016 financials Order intake +12.5% (in €m) 1,257 1,415 Q1 2016 Q1 2017 Services New business 45% 55% Revenue +10.5% (in €m) 1,197 1,323 Q1 2016 Q1 2017 Adj. EBIT and
Slide 38: Segment Financials: Supply Chain Solutions
Segment Financials: Supply Chain Solutions Solid margin at 7.1% in Q1 2017 Key financials Revenue by category Based on FY 2016 financials Order intake (in €m) 461 35 Q1 2016 Q1 2017 Services Business solutions 28% 72% Revenue (in €m) 483 20 Q1 2016 Q1 2017 Adj. EBIT and Segment composition margin -4
Slide 39: Adjusted EBITDA to Net Income
Adjusted EBITDA to Net Income Strong net income increase despite Dematic PPA Q1 Q1 (in €m) 2017 2016 Change Explanations Adjusted EBITDA 263 192 37.2% − Non-recurring items result mainly D&A 110 93 18.2% from expenses relating to Adjusted EBIT 153 99 55.1% integration costs and the Monterrey Non-rec
Slide 40: Free Cash Flow Statement
Free Cash Flow Statement Strong free cash flow Q1 Q1 (in €m) 2017 2016 Change Explanations EBITDA 253 190 33.3% − Operating performance and stable Change in Net Working Capital (NWC) 11 -92 >100% NWC drive strong free cash flow Taxes paid -26 -18 -49.8% − NWC includes inventories, trade Pension paym
Slide 41: Net Debt
Net Debt Improvement in net debt and leverage post capital increase Net debt pro forma post capital increase1 Net debt development (in €m and leverage as multiple of LTM adjusted EBITDA) − Leverage on industrial net operating debt reduced from 3.2x as at Mar 2017 to 2.6x 2.1x2 2.6x3 3.6x3 post capit
Slide 42: Financing Structure
Financing Structure Capital increase further improves maturity profile Pre capital increase as at 31 March 2017 Pro forma post capital increase1 (in €m) (in €m) 1,000 958 1,000 894 212 148 536 350 350 746 237 746 237 27 27 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017 2018 2019 2020 20
Slide 43: Pension Liabilities
Pension Liabilities Increase driven by reduced interest rate Net pension liabilities as at 31 Mar 2017 Net pension liabilities mostly driven by Net pension liabilities Discount rate German plans (in €m) (in %) − Large UK plans are fully funded, with offsetting pension assets 1,200 7 994 1,051 979 97
Slide 44: FY 2017 Outlook
FY 2017 Outlook Guidance detailed by segment KION Group Industrial Trucks & Services Supply Chain Solutions Outlook Outlook Outlook (in €m) FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 Order intake 5,833 7,800 – 8,250 5,383 5,450 – 5,600 431 2,350 – 2,650 Revenue 5,587 7,500 – 7,950 5,203 5,300 –
Slide 45: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q1 2017 4. Appendix 45 KION GROUP AG | Investor Relations Presentation | May 2017 © 2017 KION GROUP AG. All rights reserved
Slide 46: Weichai Partnership
Weichai Partnership Aim is to leverage cooperation and increase competitiveness Current ownership structure Weichai partnership Weichai − Total investment of €2.1bn in KION and for Free Treasury Linde Hydraulics GmbH & Co. KG Power Co., KION float shares Ltd. − Strategic anchor shareholder investmen
Slide 47: Industrial Trucks and Services: Products
Industrial Trucks and Services: Products Unique range of products serving customer needs worldwide Example Internal combustion (IC) counterbalance trucks − Mainly used outside Electric (E) counterbalance trucks − Mainly used inside Warehouse equipment: Rider trucks − Faster transportation of loads −
Slide 48: Global Manufacturing Network
Global Manufacturing Network Production facilities for Industrial Trucks and Supply Chain Solutions Wiesbaden, KION Group Head Office Hamburg Holland Grand Rapids Jingjiang Bielefeld Suzhou Zwijndrecht Putian Stříbro Salt Lake City Pune Heusenstamm/ Offenbach Summerville Xiamen Monterrey Châtellerau
Slide 49: Long-Term Leasing Business
Long-Term Leasing Business Support function within integrated business model End customer sales by financing types Higher customer sales and retention KION end customer revenue 2016 Financing − Financing as support for new truck sales by financing type (in %) share − Typical financing contract durat
Slide 50: Key Financials: Group figures by year
Key Financials Group figures by year (in €m) 2011 20121 2013 2014 2015 20166 Order intake 4,682 4,590 4,489 4,7715 5,216 5,833 Revenue 4,368 4,560 4,495 4,678 5,098 5,587 Adjusted EBITDA2 665 701 722 780 850 932 Adjusted EBITDA margin2 15.2% 15.4% 16.1% 16.7% 16.7% 16.7% Adjusted EBIT2 365 408 417 4
Slide 51: Key Financials: Group figures by quarter
Key Financials Group figures by quarter (in €m) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 20163 Q1 2017 Order intake1 1,248 1,317 1,253 1,397 1,297 1,427 1,327 1,783 1,882 Revenue 1,165 1,256 1,236 1,441 1,221 1,344 1,283 1,740 1,811 Adjusted EBITDA2 181 207 212 250 192 238 224 278
Slide 52: Key Financials: Segment figures by quarter
Key Financials Segment figures by quarter Industrial Trucks & Services Supply Chain Solutions Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 (in €m) 2016 2016 2016 2016 2017 (in €m) 2016 2016 2016 2016 2017 Order intake 1,257 1,378 1,284 1,464 1,415 Order intake 35 45 38 313 461 Revenue 1,197 1,312 1,252 1,442 1,323
Slide 53: Financial Calendar
Financial Calendar Date Event 26 July 2017 Interim report for the period ended 30 June 2017 (Q2 2017) and analyst call 26 Oct 2017 Quarterly statement for the period ended 30 Sep 2017 (Q3 2017) and analyst call Subject to change without notice 53 KION GROUP AG | Investor Relations Presentation | May
Slide 54: IR Contacts
IR Contacts Dr. Karoline Jung-Senssfelder Phone: +49 (0)611.770-450 Head of Investor Relations / M&A karoline.jung-senssfelder@kiongroup.com Silvia Sanchez Phone: +49 (0)611.770-622 Senior Manager Investor Relations, CIRO silvia.sanchez@kiongroup.com Tom Diedrich Phone: +49 (0)611.770-362 Junior Man
Slide 55: Disclaimer
Disclaimer This document has been prepared by KION GROUP AG (the “Company”) solely for informational purposes. This disclaimer shall apply in all respects to the entire presentation (including all slides of this document), the oral presentation of the slides by representatives of the Company (or any