Traton Se · XETR:8TRA
Traton — FY2018 Earnings Presentation
39 slides from Traton's earnings presentation, Feb 25, 2019
Slide 1: Update FY 2018
UPDATE FY 2018 25TH FEBRUARY 2019
Slide 2: Disclaimer
DISCLAIMER The following presentation contains forward-looking statements and information on the business development of TRATON GROUP. These statements and information may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “
Slide 3: Update on Core KPIs 2018A
UPDATE ON CORE KPIS 2018A Industrial Business Financial GROUP 2018A Scania V&S MAN T&B VWCO Other1 Services Sales Revenue €13.0bn €10.8bn €1.4bn (€0.3bn) €25.0bn €0.8bn7 €25.9bn6 Adj. Operating Profit2 €1.2bn €0.5bn €0.0bn (€0.3bn) €1.5bn5 €0.1bn €1.7bn5 5.9%9 19.2% 6.4%10 Adj. RoS2 9.3% 5.0% 2.0% n
Slide 4: Limited Amount of Adjustments to Historical Operating Profit for TRATON Group
LIMITED AMOUNT OF ADJUSTMENTS TO HISTORICAL OPERATING PROFIT FOR TRATON GROUP Operating Profit to Adj. Operating Profit table (€m) Commentary in €m 2016A 2017A 2018A • Scania provisioned €403m in relation to the European Commission’s antitrust fine in 2016A Operating Profit 727 1,512 1,513 • Lower t
Slide 5: Industrial Business: Increasing Volumes and Strong Order Intake
INDUSTRIAL BUSINESS: INCREASING VOLUMES AND STRONG ORDER INTAKE Volume delivered1 (k units and % of total) Order intake1 (k units and % of total) Growth 11.6% 13.7% Book-to-bill3 1.04 1.12 1.05 233.0 243.7 229.1 204.9 23.9 9.8% 22.6 9.7% 20.5 9.0% 183.6 19.2 9.4% 190.6 Bus 17.8 9.7% Bus 17.7 9.3% 21
Slide 6: Industrial Business: Global Network Contributing Positively
INDUSTRIAL BUSINESS: GLOBAL NETWORK CONTRIBUTING POSITIVELY Sales revenue1 by region (€m and % of total1) Sales revenue1 (€m) Aftersales1 sales revenue share as % of total sales revenue Growth 11.3% 6.7% 20.1% 19.3% 19.0% 24,963 24,963 23,403 23,403 21,023 +21.4% 5,861 (3.3%) 21,023 4,017 Other2 6,0
Slide 7: Industrial Business: Income Statement Overview
INDUSTRIAL BUSINESS: INCOME STATEMENT OVERVIEW in €m 2016A 2017A 2018A Commentary Sales revenue1 21,023 23,403 24,963 Cost of sales (17,026) (18,985) (20,298) Financial result in 2018A of €98m mainly includes: Gross Profit 3,997 4,418 4,665 • €209m resulting from share of earnings from minority SG&A
Slide 8: Industrial Business: New Product Development and Product Launches Driving R&D Costs and Capex
INDUSTRIAL BUSINESS: NEW PRODUCT DEVELOPMENT AND PRODUCT LAUNCHES DRIVING R&D COSTS AND CAPEX Total R&D costs1 (€m; % of sales revenue) Capex spending2 (€m, % of sales revenue) Total R&D costs as % of sales revenue As % of sales revenue 6.2% 6.1% 5.7% 5.1% 4.7% 3.8% 1,420 1,411 1,310 Other3 1,107 Ca
Slide 9: Industrial Business: Trade Net Working Capital Development Illustration Lease Asset Accounting
INDUSTRIAL BUSINESS: TRADE NET WORKING CAPITAL DEVELOPMENT ILLUSTRATION LEASE ASSET ACCOUNTING Trade working capital (TWC)1 development (€m) Vehicle Sales with Buy-Back Obligation – IFRS 15 As % of sales revenue Vehicle sale to customer with buy-back obligation 17.3% 16.9% 16.9% - TRATON receives a
Slide 10: Industrial Business: Net Cash Flow Evolution
INDUSTRIAL BUSINESS: NET CASH FLOW EVOLUTION in €m 2016A 2017A 2018A 440 1,172 1,444 Commentary Earnings before tax Income taxes paid (81) (217) (403) D&A of, and impairm. losses on, int. assets, PP&E, and inv. property4 552 585 634 a. IFRS 15 relevant lease assets incl. in the Amortization of and i
Slide 11: Financial Services: Income Statement Overview
FINANCIAL SERVICES: INCOME STATEMENT OVERVIEW in €m 2016A 2017A 2018A Financing income (Lease income and interest income)1 709 721 760 Cost of sales (482) (469) (489) Gross Profit 228 252 271 SG&A2 (102) (106) (110) Other operating income/expenses3 (21) (36) (22) Operating Profit 105 111 138 Financi
Slide 12: Financial Services: Net Cash Flow Evolution
FINANCIAL SERVICES: NET CASH FLOW EVOLUTION in €m 2016A 2017A 2018A Earnings before tax 106 112 148 Income taxes paid (57) (52) (41) D&A of, and impairm. losses on, int. assets, PP&E, and inv. property 2 3 4 Change in pensions 1 0 0 Gain/loss on disposal of noncurrent assets and equity investments (
Slide 13: TRATON Group: Detailed KPI (1/3)
TRATON GROUP: DETAILED KPI (1/3) 2016A 2017A 2018A 90.8k 96.5k Scania V&S 81.3k 11.6% 6.3% Volume 90.0k 102.6k MAN T&B 83.2k (Units ; Growth in %) 1 8.2% 14.0% 25.9k 36.4k VWCO 20.4k 27.1% 40.5% €23.4bn €25.0bn Industrial Business €21.0bn 11.3% 6.7% €12.4bn €13.0bn Scania V&S €11.0bn 13.1% 4.5% Sale
Slide 14: TRATON Group: Detailed KPI (2/3)
TRATON GROUP: DETAILED KPI (2/3) 2016A 2017A 2018A Over-the-cycle RoS target Industrial Business 5.0% 5.6% 5.9% €1.1bn €1.3bn €1.5bn Scania V&S 8.7% 9.4% 9.3% 12% RoS target Adj. return on sales €1.0bn €1.2bn €1.2bn (Scania Group) (in %, Adj. operating profit in €bn) 4.4% 4.8% 5.0% MAN T&B 8% RoS ta
Slide 15: TRATON Group: Detailed KPI (3/3)
TRATON GROUP: DETAILED KPI (3/3) 2016A 2017A 2018A Total R&D costs1 €1.3bn €1.4bn €1.4bn Depreciation2 €0.8bn €0.8bn €0.8bn (% of Sales Revenue) (3.8%) (3.5%) (3.2%) Other Industrial Business Capex3 €1.1bn €1.1bn €1.0bn KPIs Trade WC 17.3% 16.9% 16.9% (% of Sales Revenue) Net Cash Flow II4 €0.7bn €(
Slide 16: TRATON Group: KPI and Outlook on Group Level
TRATON GROUP: KPI AND OUTLOOK ON GROUP LEVEL TRATON Group 2016A 2017A 2018A 2019E Over-the-cycle RoS target Volume 204.9k 233.0k 183.6k (Units; Growth in %) 11.6% 13.7% Sales revenue €24.4bn €25.9bn slightly above (in €bn; €21.9bn 11.2% 6.4% previous year Growth in %) Adj. return on Sales 5.4% 6.0%
Slide 17: TRATON
TRATON
Slide 18: TRATON Group: Funding Structure
TRATON GROUP: FUNDING STRUCTURE 1 Financial liabilities in €m 2018A Traton Group maturity profile (€bn) Bonds 4,820 5.4 5.4 Liabilities to bank 2,770 0.1 Funding Loans and other liabilities 3,224 Overview 2019 2020-2023 >2023 Total TRATON Group 10,814 2019 maturities mainly relate to Financial Servi
Slide 19: Appendix
TRATON GR ou P APPENDIX
Slide 20: Scania V&S: Still Strong Truck Volume Growth
SCANIA V&S: STILL STRONG TRUCK VOLUME GROWTH Volume delivered (k units and % of total) Volume delivered by region in 2018A (% of total) Truck Bus Growth 11.6% 6.3% 96.5 90.8 8.5 8.8% 81.3 8.3 9.1% 27% 23% Bus 8.3 10.1% 51% 50% 3% 11% 88.0 15% 82.5 90.9% 91.2% 4% 73.1 89.9% 8% 9% Trucks EU 28+2 (ex-G
Slide 21: Scania V&S: Sales Revenue Growth on the Back of Strong Truck Sales
SCANIA V&S: SALES REVENUE GROWTH ON THE BACK OF STRONG TRUCK SALES Sales revenue (€m) Commentary • Sales revenue in 2018A driven by: Growth 13.1% 4.5% – Growth across main product lines 12,427 12,981 – Increased favorable truck positioning as well as 2,064 positive product mix (higher NTG share) 10,
Slide 22: Scania V&S: Increase in Volumes Enhancing Adj. Operating Profit
SCANIA V&S: INCREASE IN VOLUMES ENHANCING ADJ. OPERATING PROFIT Adj. Operating Profit (€m) Commentary • Adj. Return on Sales kept stable in 2018A compared to Growth 21.8% 3.5% previous year 1,207 • Positive volume and exchange rate effects in 2018A 1,167 partially offset by unfavorable market mix an
Slide 23: MAN T&B: Volumes Driven by Positive Economic Development and Further Growth in European Core Markets
MAN T&B: VOLUMES DRIVEN BY POSITIVE ECONOMIC DEVELOPMENT AND FURTHER GROWTH IN EUROPEAN CORE MARKETS Volume delivered (k units and % of total) Volume delivered by region in 2018A (% of total) Truck1 Bus Growth 8.2% 14.0% 102.6 90.0 7.2 7.0% 24% Bus 83.2 6.3 7.0% 38% 6.1 7.4% 42% 48% 95.4 93.0% 29% 8
Slide 24: MAN T&B: Sales Revenue Development Reflects Strong Participation in Increasing EU Market
MAN T&B: SALES REVENUE DEVELOPMENT REFLECTS STRONG PARTICIPATION IN INCREASING EU MARKET Sales revenue (€m) Commentary • Market share position for both truck and bus in core Growth 8.4% 7.9% markets further strengthened in 2018A 10,815 • Aftersales business for the first time above €2bn in 10,022 20
Slide 25: MAN T&B: Strong Sales Increase Driving Adj. Operating Profit in 2018
MAN T&B: STRONG SALES INCREASE DRIVING ADJ. OPERATING PROFIT IN 2018 Adj. Operating Profit (€m) Commentary • Adj. Operating profit increases by €63m (+13.3%) to Growth 17.5% 13.3% €540m leading to an adjusted RoS of 5.0% • Exit of MAN T&B (2018A: €137m restructuring 2 expenses) in accordance with Fu
Slide 26: VWCO: In 2018A 40% Increase in Volumes on the Back of Economic Recovery
VWCO: IN 2018A 40% INCREASE IN VOLUMES ON THE BACK OF ECONOMIC RECOVERY Volume delivered (k units and % of total) Volume delivered by region in 2018A (% of total) Truck Bus Growth 27.1% 40.5% 36.4 4% 15% 13% 20.2% 7.3 29% Bus 25.9 18.5% 20.4 4.8 3.9 19.1% 29.0 79.8% 59% 81% 21.1 81.5% Trucks 16.5 80
Slide 27: VWCO: Substantial Sales Revenue Growth on the Back of Volume and Price Recovery
VWCO: SUBSTANTIAL SALES REVENUE GROWTH ON THE BACK OF VOLUME AND PRICE RECOVERY Sales revenue (€m) Commentary • In line with positive volume development, sales Growth 34.5% 22.2% revenue sustained its upward trend in 2018A 1,421 • Improvement in revenues was also aided by successful 35 product posit
Slide 28: VWCO: Strong Recovery Brings VWCO Operating Profit Back to Break Even
VWCO: STRONG RECOVERY BRINGS VWCO OPERATING PROFIT BACK TO BREAK EVEN Adj. Operating Profit (€m) Commentary • VWCO continued its strong recovery in 2018A Growth 28 • Adj. Operating Profit development mainly driven by: – Strong sales volume output, favorable product 1 positioning – Successful turnaro
Slide 29: TRATON Group: Detailed Income Statement 2016A, 2017A & 2018A
TRATON GROUP: DETAILED INCOME STATEMENT 2016A, 2017A & 2018A in €m 2016A 2017A 2018A Sales revenue 21,915 24,366 25,927 Cost of sales (17,649) (19,653) (20,946) Gross Profit 4,266 4,713 4,981 Distribution expenses (2,316) (2,354) (2,391) Administrative expenses (789) (872) (1,011) Net impairment los
Slide 30: TRATON Group: Detailed Balance Sheet 2016A, 2017A & 2018A (1/2)
TRATON GROUP: DETAILED BALANCE SHEET 2016A, 2017A & 2018A (1/2) in €m 2016A 2017A 2018A Assets Noncurrent assets 24,344 25,337 25,851 Intangible assets 7,055 7,019 6,597 Property, plant and equipment 5,940 6,003 5,469 Lease assets 5,840 6,103 6,599 Equity-accounted investments 491 836 1,223 Other eq
Slide 31: TRATON Group: Detailed Balance Sheet 2016A, 2017A & 2018A (2/2)
TRATON GROUP: DETAILED BALANCE SHEET 2016A, 2017A & 2018A (2/2) in €m 2016A 2017A 2018A Equity and Liabilities Equity 10,931 11,810 16,801 Subscribed capital 10 10 10 Capital reserves 24,271 24,581 21,331 Retained earnings (11,817) (10,760) (2,064) Other comprehensive income (1,635) (2,130) (2,478)
Slide 32: TRATON Group: Detailed Cash Flow Statement 2016A, 2017A & 2018A (1/3)
TRATON GROUP: DETAILED CASH FLOW STATEMENT 2016A, 2017A & 2018A (1/3) in €m 2016A 2017A 2018A Cash and cash equivalents at beginning of period 6,575 4,907 4,594 Earnings before tax 493 1,379 1,566 Income taxes paid (199) (303) (420) Depreciation and amortization of, and impairment losses on, intangi
Slide 33: TRATON Group: Detailed Cash Flow Statement 2016A, 2017A & 2018A (2/3)
TRATON GROUP: DETAILED CASH FLOW STATEMENT 2016A, 2017A & 2018A (2/3) in €m 2016A 2017A 2018A Investments in intangible assets (excluding development costs), property, plant and equipment, and investment property (1,057) (849) (935) Additions to capitalized development costs (400) (416) (449) Acquis
Slide 34: TRATON Group: Detailed Cash Flow Statement 2016A, 2017A & 2018A (3/3)
TRATON GROUP: DETAILED CASH FLOW STATEMENT 2016A, 2017A & 2018A (3/3) in €m 2016A 2017A 2018A Capital contributions 0 311 (0) Profit transfer to/loss absorption by Volkswagen AG (2,365) 32 28 Dividends paid to minorities (0) - - Other changes (0) 0 - Proceeds from issuance of bonds 751 2,264 2,162 R
Slide 35: TRATON Group: Detailed Income Statement 2018A
TRATON GROUP: DETAILED INCOME STATEMENT 2018A in €m Industrial Business Financial Services TRATON Group1 Sales revenue 24,963 760 25,927 Cost of sales (20,298) (489) (20,946) Gross Profit 4,665 271 4,981 Distribution expenses (2,265) (110) (2,391) Administrative expenses (1,007) - (1,011) Net impair
Slide 36: TRATON Group: Detailed Balance Sheet 2018A (1/2)
TRATON GROUP: DETAILED BALANCE SHEET 2018A (1/2) in €m Industrial Business Financial Services TRATON Group1 Assets Noncurrent assets 22,894 5,428 25,851 Intangible assets 6,594 3 6,597 Property, plant and equipment 5,458 11 5,469 Lease assets 6,595 3 6,599 Equity-accounted investments 1,223 - 1,223
Slide 37: TRATON Group: Detailed Balance Sheet 2018A (2/2)
TRATON GROUP: DETAILED BALANCE SHEET 2018A (2/2) in €m Industrial Business Financial Services TRATON Group1 Equity and Liabilities Equity 16,219 815 16,801 Subscribed capital 10 Capital reserves 21,331 Retained earnings (2,064) Other comprehensive income (2,478) Equity attributable to TRATON SE (for
Slide 38: TRATON Group: Detailed Cash Flow from Operating Activities 2018A
TRATON GROUP: DETAILED CASH FLOW FROM OPERATING ACTIVITIES 2018A in €m Industrial Business Financial Services TRATON Group1 Earnings before tax 1,444 148 1,566 Income taxes paid (403) (41) (420) Depreciation and amortization of, and impairment losses on, intangible assets, property, plant and equipm
Slide 39: TRATON Group: Detailed Cash Flow from Investing Activities 2018A
TRATON GROUP: DETAILED CASH FLOW FROM INVESTING ACTIVITIES 2018A in €m Industrial Business Financial Services TRATON Group1 Investments in intangible assets (excluding development costs), property, plant and equipment, and investment property (931) (4) (935) Additions to capitalized development cost