Knorr-bremse Ag · XETR:KBX
Knorr-bremse — FY2020 Earnings Presentation
43 slides from Knorr-bremse's earnings presentation, Mar 4, 2021
Slide 1: Preliminary Financial Results FY20
PRELIMINARY FINANCIAL RESULTS FY20 DR. JAN MICHAEL MROSIK I CEO FRANK MARKUS WEBER I CFO MARCH 4, 2021
Slide 2: Heinz Hermann Thiele 1941-2021
Mrosik Heinz Hermann Thiele 1941-2021 2
Slide 3: Dr. Jan Michael Mrosik – new CEO of Knorr-Bremse
Dr. Jan Michael Mrosik – new CEO of Knorr-Bremse Business experience at Siemens COO of Digital Industries CEO of Digital Factory Division CEO of Energy Management Division CEO of Business Unit Energy Automation CEO of Siemens Telecommunications Ltd. in South Africa Education: PhD in Elec
Slide 4: KB Group Highlights FY20
KB Group Highlights FY20 Strengthen Corporate Governance Completion of Management Team Earlier Reporting implemented Supervisory Board strengthened Business Expansion 4
Slide 5: Highlights in FY20 – win of major orders
Highlights in FY20 – win of major orders Largest entrance system contract KB and TMH International sign ever for London contract for 1,300 passenger underground cars for Egypt KB becomes a strategic Expansion of partner for a new high- leadership in our speed train generation in core business Russia
Slide 6: Operational highlights in FY20
Operational highlights in FY20 – securing market leading position Major contract with Schmitz Cargobull for trailer air disk Retrofittable turning assistant brakes extended to improve traffic safety KB expands Chinese truck capacities and Strong continues cooperation development in with Dongfeng cha
Slide 7: We delivered what we have promised for FY20
We delivered what we have promised for FY20 Promised Delivered Outperformance in major markets Knorr-Bremse gained market shares during crisis Guidance achieved in FY20 Resilient profitability EBITDA margin of 18.0% Countermeasures against COVID-19 Strong cost savings implemented Strong cash preserv
Slide 8: COVID-19 pandemic still impacting our business
COVID-19 pandemic still impacting our business Market Business development Rail Supplies Most OEMs back to operation level, operators underutilized, Supply chain fully stabilized and increasing demand secured stimulus programs put in place Only very few critical suppliers still impacted China mo
Slide 9: Rail and truck market should continue to recover in FY21
Rail and truck market should continue to recover in FY21 Near future Until YE21 No cancellations of contracts by rail operators, Further recovery of demand from but postponements postponements in FY20 expected Recovery demand leads to growth Recovery of OE demand in passenger and of OEMs’ order in
Slide 10: Innovations secure tomorrow's profitable growth of KB
Innovations secure tomorrow's profitable growth of KB Autonomous Driving Global Scalable Brake Control Torque overlay steering Well positioned for future E-mobility trends HVAC: efficient and effective Reproducible Braking clean[air] technology Distance ~3,800 engineers supporting our innovation lea
Slide 11: FY20: excellent performance in an extraordinary year
FY20: excellent performance in an extraordinary year REVENUES OF € 6.16bn 18.0% EBITDA MARGIN (-11.2% yoy) (PY: rep.19.2% / op. 18.8%) € 3.34bn € 2.82bn 22.9% 13.5% € 687m FREE CASHFLOW (yoy: -20.2% incl. SLB / +2.8% excl. SLB)1 129% CCR2 ORDER INTAKE € 6.44bn ORDER BOOK € 4.98bn (-8.8% yoy) (+6.1%
Slide 12: FY20: guidance achieved and good forecast quality despite Covid-19
FY20: guidance achieved and good forecast quality despite Covid-19 Other KPIs Revenue EBITDA margin €m Order backlog +6.1% 5,900-6,200 6,157 upper end 16.5-17.5% 18.0% narrowed confirmed EBIT margin at 13.2% 1 2 3 July September November Net Income of € 532m 2020 2020 2020 EPS of € 3.07 FY20
Slide 13: FY20: strong balance sheet in challenging business environment
FY20: strong balance sheet in challenging business environment Liquidity1 Equity + Equity Ratio Gross Debt2 Rating €m +24.6% €m €m +1.1% +23.0% A2 2,345 1,902 1,922 750 2,242 A 1,881 … 1,823 -250 -150 -350 confirmed 27% 38% of revenues 28% 26% Drawn credit lines due to within 2020 COVID-19 Repayment
Slide 14: FY20: KB pushes future technologies and capacity to drive profitable growth
FY20: KB pushes future technologies and capacity to drive profitable growth CapEx1 NWC ROCE €m % of sales €m Scope of days % 42.0 43.6 5.6% 34.1% 4.8% 809 25.6% 746 332 342 FY19 FY20 YE19 YE20 YE19 YE20 Portfolio prioritization and critical CUSTOMER FIRST – higher stock levels at ROCE impacted
Slide 15: FY20: Extremely strong FCF due to strict countermeasures
FY20: Extremely strong FCF due to strict countermeasures and strong management focus Free Cashflow1 Cash Conversion Rate Development in FY20 €€mm €m Good earnings quality Strict and disciplined cash management, e.g. -20.2% − CapEx/ R&D prioritization 861 136% − NWC, e.g. lowered accounts receiva
Slide 16: FY20: Continued technology investments and headcount strictly managed
FY20: Continued technology investments and headcount strictly managed R&D Employees1 €m % of sales FTEs Other RVS 6.4% 5.7% 3% 55% 397 396 CVS 42% Average headcount reduced to mitigate COVID-19 impact, however increased again to manage upswing towards YE20 FY19 FY20 M&A: R.H. Sheppard added sinc
Slide 17: FY20: KB improved ESG status and on track to carbon neutrality
FY20: KB improved ESG status and is fully on track to carbon neutrality in 2021 Environment 50% CO emission reduction by 2030 and carbon neutrality by FY21 2 Circular Economy improvements − Remanufactured and overhauled products1 as well as EcoDesign Society & Various Gender Equality and Diver
Slide 18: Q4/20 results underpin rock solid business performance
Q4/20 results underpin rock solid business performance REVENUES OF € 1.57bn 19.3% EBITDA MARGIN (-3.5% yoy) (PY: rep. 21.3% / op. 18.7% ) € 774m € 793m 25.3% 15.3% € 519 FREE CASHFLOW (yoy: -1.4% incl. SLB / +55.8% excl. SLB)1 385% CCR2 ORDER INTAKE € 2.09bn ORDER BOOK € 4.98bn (+9.1% yoy) (+6.1% yo
Slide 19: Q4/20: Book-to-bill well above 1 and record order book
Q4/20: Book-to-bill well above 1 and record order book being strong tailwind for FY21 Order intake Order book €m €m 1.18 Book-to-bill 1.33 6.1% +9.1% 4,977 220 23 4,692 2,087 1,913 -69 +11.5% R.H. Sheppard € +23m (Q4/20) Q4/19 Organic M&A net FX Q4/20 YE19 YE20 disposals 19
Slide 20: Q4/20: Only slight revenue decrease despite COVID-19
Q4/20: Only slight revenue decrease despite ongoing impact from COVID-19 Revenue by region €m y-o-y growth -3.5% 1,624 24 1,567 1,624 1,567 -25 22 -1% 22 SA -55 -1.5% 501 Asia/ CVS CVS +2% 510 Pacific 756 793 381 -14% 326 NA R.H. Sheppard € +24m (Q4/20) RVS RVS 720 -1% 710 EU 865 774 Q4/19 Organic M
Slide 21: Q4/20: Reduced but quite strong profitability
Q4/20: Reduced but quite strong profitability due to strict COVID-19 management EBITDA/ E. Margin EBIT/ E. Margin Development in Q4/20 Operating leverage burdened by lower €m revenue and mitigation costs 21.3% Cost measures taken to mitigate COVID-19 impact on KB environment 19.3% Revenue shar
Slide 22: RVS: Book-to-bill and order book are a solid foundation for FY21
RVS: Book-to-bill and order book are a solid foundation for FY21 Order intake Order book Order book increased by 4.2 %yoy Order book well supported by resilient and €m stable rail industry despite COVID-19. No Book-to-bill Book-to-bill cancellations of contracts. 1.32 Quarter 1.41 1.10 FY 1.04 Dev
Slide 23: RVS: Better quarter-over-quarter profitability despite lower revenues
RVS: Better quarter-over-quarter profitability despite lower revenues €m Revenue EBITDA / EBIT Revenue decreased 10.5% yoy in Q4/20 AM: Pull-in effects into H1/20 and lower €m EBITDA EBIT ridership in trains burdened development in EBITDA margin Q4/20 EBIT margin EU: Decrease of OE driven by COV
Slide 24: CVS: Significant increase of OI will support good start into 2021
CVS: Significant increase of OI will support good start into 2021 Order intake Order book Very favorable book-to-bill ratio, still affected by COVID-19 pandemic €m EU/ NA: Market recovery continued in Q4/20. 1.02 Book-to-bill 1.25 1.32 Book-to-bill 1.41 Q4/19 was impacted by slower demand after Qu
Slide 25: CVS: profitability back at Q4/19 levels
CVS: profitability back at Q4/19 levels Revenue EBITDA1 / EBIT1 Q4/20 highest quarterly revenue in 2020 EU & NA: Strong improvement vs. previous €m EBITDA EBIT quarter driven by strong market demand EBITDA margin APAC: Recovery of markets in Japan and EBIT margin India, China stable, increased c
Slide 26: Group Guidance 2021
Group Guidance 2021 Revenue EBITDA margin EBIT margin Assumptions €m Stable economic environment in 6,500-6,900 important markets 6,157 17.5-19.0% 18.0% 13.0-14.5% Current FX rates 13.2% No further setbacks occur as a result of COVID-19 Although bottlenecks in the semiconductor industry migh
Slide 27: KB runs a unique business – entrepreneurial, innovative and successful
KB runs a unique business – entrepreneurial, innovative and successful Business model intact – proof in 2020 − Growing faster than the markets − High resilience of profitability Long-term growth opportunities in Rail and Truck Focus on attractive segments Emphasis on ESG KB promised and de
Slide 28: RVS – opportunities and challenges
RVS – opportunities and challenges Opportunities Global stimulus programs Global target: CO2 reduction Green Deal in Europe Attractive segments within rail Challenges Impact from COVID-19 pandemic Autonomous policy in China 28
Slide 29: CVS – opportunities and challenges
CVS – opportunities and challenges Opportunities Growth in Content per Vehicle E-mobility of trucks Combination of braking and steering Automated driving trucks Challenges Impact from COVID-19 pandemic Shortage of components Intensifying competitive environment 29
Slide 30: Top priorities of KB management team
Top priorities of KB management team Secure Growing faster Strengthen Strengthen Drive profitable innovation than the markets Corporate ESG growth and Free leadership in Rail Governance Cashflow and Truck further 30
Slide 31: KB is well prepared for the future
KB is well prepared for the future Future Strong positioning - setup, technology and markets Resiliency Increased market share and solid profitability during pandemic Corporate Governance Good corporate governance today and further improvement ahead Strong foundation Stability and continuity proven
Slide 32: KNORR-BREMSE
32 KNORR-BREMSE
Slide 33: Investor relations contact
Investor relations contact Andreas Sophia Spitzauer Kursawe +49 89 3547 182310 +49 89 3547 187311 +49 175 5281320 +49 151 62330709 Andreas.Spitzauer@knorr-bremse.com Sophia.Kursawe@knorr-bremse.com 33
Slide 34: 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 35: Backup
(97 KNORR-BREMSE Backup
Slide 36: FY/20 – Group
FY/20 – Group Order intake Order book €m €m 1.02 Book-to-bill 1.05 6.1% -8.8% 4,977 7,066 4,692 18 6,442 -514 -128 -7.3% M&A net disposals R.H. Sheppard € +52m (FY/20) Hitachi € +20m (Q1/20) Powertech € -54m (9M/19) FY19 Organic M&A net FX FY20 YE19 YE20 disposals 36
Slide 37: FY/20 – Group
FY/20 – Group Revenue Revenue by region €m €m y-o-y growth -11.2% 6,937 6,937 16 105 6,157 6,157 -28% 76 SA -679 -116 1,991 CVS Asia/ CVS +2% 2,027 3,280 Pacific -9.8% 2,819 1,642 -23% 1,261 NA RVS M&A net disposals RVS 3,656 3,198 -13% 3,337 R.H. Sheppard € +53m (FY/20) 2,792 EU Hitachi € +22m
Slide 38: FY/20 – Group
FY/20 – Group EBITDA/ EBITDA Margin EBIT/ EBIT Margin €m €m 18.8% 18.0% 15.1% 13.2% 1,303 1,107 1,048 CVS 16.0% 523 CVS 13.5% CVS 814 381 12.3% 404 CVS 8.3% 235 RVS RVS 22.3% 22.9% 19.1% RVS RVS 815 764 19.1% 697 637 FY191 FY20 FY192 FY20 1) Operating | rep.: EBITDA: EUR 1,329m (19.2%) 2) Operating
Slide 39: FY/20 – Group
FY/20 – Group OCF & FCF1 CapEx2 NWC ROCE €m OCF FCF €m % of sales €m Scope of days % 43.6 42.0 -15.3% 5.6% +8.8% 34.1% 4.8% 809 1,073 746 986 25.6% 861 342 332 729 FY19 FY20 FY19 FY20 YE19 YE20 YE19 YE20 1) Incl. Sale & Lease back 2) FY19 adjusted for Sale and Lease Back EUR -33m 39
Slide 40: FY/20 – RVS
FY/20 – RVS Order intake Order book €m 1.10 Book-to-bill 1.04 4.2% -13.2% 3,721 4,017 3,573 3,485 -417 -54 -61 -10.4% Powertech € -54m (9M/19) FY19 Organic M&A net FX FY20 YE19 YE20 disposals 40
Slide 41: FY/20 – RVS
FY/20 – RVS Revenue EBITDA / EBITDA margin EBIT / EBIT margin €m -8.7% 22.3% 22.9% 3,656 19.1% 19.1% -199 3,337 -59 -62 -6.2% -5.4% 815 -8.6% 764 697 637 Powertech € -59m (9M/19) FY19 Organic M&A net FX FY20 FY19 FY20 FY19 FY20 disposals 41
Slide 42: FY/20 – CVS
FY/20 – CVS Order intake Order book €m 0.93 Book-to-bill 1.05 -3.2% 3,051 72 +11.9% 2,954 1,269 -92 -68 1,134 -3.0% R.H. Sheppard € +52m (FY/20) Hitachi € +20m (9M/20) FY19 Organic M&A net FX FY20 YE19 YE20 disposals 42
Slide 43: FY/20 – CVS
FY/20 – CVS Revenue EBITDA / EBITDA margin EBIT / EBIT margin €m -12.8% 16.0% 3,280 13.5% 12.3% 8.3% 75 -27.1% 2,859 -55 523 -41.7% -441 -13.4% 381 404 R.H. Sheppard 235 € +53m (FY/20) Hitachi € +22m (9M/19) FY19 Organic M&A net FX FY20 FY191 FY20 FY192 FY20 disposals 1) Operating | rep.: EBITDA: EU