Elringklinger Ag · XETR:ZIL2
Elringklinger — KeplerCheuvreux 13th German Corporate Conference (January 2014)
30 slides from Elringklinger's conference presentation, Jan 21, 2014
Slide 1: ElringKlinger Group
ElringKlinger Group ElringKlinger Group KeplerCheuvreux 13th German Corporate Conference January 21, 2014 1
Slide 2: It's all about emissions – Focus on green technologies
It’s all about emissions – Focus on green technologies Optimized combustion engine Minus CO2 remains dominant mid-term Structural growth in core business: turbo charging, heat shielding, Downsizing/ Lightweight lightweight Minus particulates Almost every engine will require exhaust abatement: off- r
Slide 3: ElringKlinger Group: Major divisions (share of sales 2012)
ElringKlinger Group: Major divisions (share of sales 2012) Cylinder-Head Specialty Housing Shielding Gaskets (15%) Gaskets (16%) Modules (20%) Technology (25%) After- Engineered Exhaust E-Mobility (1%) market (10%) Plastics (8%) abatement (3%) 3
Slide 4: It's all about cutting CO2 – Legislation driving business
It’s all about cutting CO2 – Legislation driving business EU US China 2012: ~136 g/km 2012: ~232 g/km 2008: 185 g/km CO2 limit in g/km 200 ~178 ~160 160 130 120 112 102 80 75 40 0 2015 2025 2015 2025 2015 2025 Source: A.T. Kearney Powertrain Study May 2012; EK research 4
Slide 5: Growth prospects: Emerging markets following Euro emission standards
Growth prospects: Emerging markets following Euro emission standards (CO, HC, NOx, particulate matter) US TII, B8 TII, B5 (LEV) TII, B4 TII, B2 Mexico (Gas) Tier 1 Euro 4 Euro 5 Brazil (FF) Tier 1 LEV ULEV Brazil (Diesel) Euro 3 Euro 4 Euro 5 Argentina Euro 2 Euro 3 Euro 4 Euro 5 (Diesel) Europe Eur
Slide 6: ElringKlinger enabling efficiency
ElringKlinger enabling efficiency Cutting fuel consumption by: Powertrain 47 mpg improvements/ Downsizing Body and accessories advancements Lightweight construction Hybridization 27 mpg 2011 2020 2030 2040 Source: www.plugincars.com 6
Slide 7: ElringKlinger enabling Downsizing – Going small in CO2
ElringKlinger enabling Downsizing – Going small in CO2 Trend towards smaller engines: Same output from lower displacement up to 30% lower fuel consumption Direct injection, soaring injection pressure Gasketing becomes even more demanding Rising temperatures Number of thermal shielding parts increase
Slide 8: Turbocharged: Gaskets, V-rings and heat shields for turbochargers
Turbocharged: Gaskets, V-rings and heat shields for turbochargers Turbocharging market growing by 75% from 2011-2017 to 39 mn units; Penetration plus units per car increase (CAGR > 10%) EK provides inlet/outlet gaskets for cold side (compression) and hot side (turbine) V-ring coupling and sealing co
Slide 9: Lightweight design: Substituting metal by plastic
Lightweight design: Substituting metal by plastic Weight reduction at a lower cost = lower fuel consumption = less CO2 output EK designs and produces polyamide housing modules incl. sealing system: cam cover modules, oil pans, gearbox casings, TC air ducts, oil suction pipes Ramp-up of truck parts l
Slide 10: Total shielding
Total shielding Shielding package all in one: Engine + underbody + exhaust system Increasingly complex heat management in downsized engines Structural growth: Number of heat shields in and around the engine and exhaust system goes up Trend: Combining thermal shielding with acoustical functions Added
Slide 11: Exhaust abatement technology – Every engine needs a Hug
Exhaust abatement technology – Every engine needs a Hug US retrofit business on the rise CARB (California Air Resources Board) certification for DPF-retrofit business Mandatory for on-road vehicles above 6.3 tons in California Hug market leader in core market California: Market share ~35% USP: Hug c
Slide 12: Every engine needs a Hug – low emissions on the high seas
Every engine needs a Hug – low emissions on the high seas Increasing retrofit business for inland water vessels and yachts with nauticlean diesel soot particulate filters (DPF/DeNOx/HC) Public awareness and expected emission legislation opens up new opportunities also in ocean ships Emissions caused
Slide 13: Every engine needs a Hug – shale gas on the rise
Every engine needs a Hug – shale gas on the rise Hug offers filter technology for natural gas engine-based power plants First contracts for complete exhaust abatement systems to be used in power plants in North America Currently under development: Recuperation catalytic converter for large- scale na
Slide 14: E-Mobility: Battery Technology for Hybrids/BEVs and Fuel Cells
E-Mobility: Battery Technology for Hybrids/ BEVs and Fuel Cells High pre-expenses: almost 100 engineers and specialists plus prototyping and general cost In-series production contracts for 3 European OEMs: EUR 6.6 (4.5) mn sales in 2012 Several development projects with car manufacturers as well as
Slide 15: Hybrids: Combination of combustion engine & electric drivetrain
Hybrids: Combination of combustion engine & electric drivetrain increasing value sold in Value sold in Value sold in max. Euro 40 to 60 Euro 100 to 150 Optimized Combustion Engine Electric Drivetrain Lithium-ion battery components Core business: Hybrid > Cell contact systems Turbocharger and engine
Slide 16: ElringKlinger Group – A global production network
ElringKlinger Group – A global production network Great Britain Germany Switzerland Italy France Spain Hungary Turkey Romania Canada USA China South Korea Mexico India Japan (JV) Indonesia (JV) Thailand (JV) Brazil South Africa 16
Slide 17: Employees ElringKlinger Group worldwide
Employees ElringKlinger Group worldwide – merger of Hummel-Formen has number of employees in the AG increase as of September 30, 2013 (py) Group Germany 6,556 (6,284) 3,022 (2,920) +4.3% AG 2,266 (2,060) International subsidiaries 3,534 (3,364) Domestic subsidiaries 756 (860) 17
Slide 18: Group Sales by region Q3 2013
Group Sales by region Q3 2013 (py) Almost 55% of OE sales in Asia and the Americas South America & Others 5.4% (6.4%) Asia and Australia 16.6% (16.8%) incl. exports: Rest of Europe ~24% of OE sales 29.4% (28.9%) NAFTA 17.1% (16.8%) incl. exports: ~25% of OE sales Germany 31.5% (31.1%) 18
Slide 19: Sales revenues driven by long-term organic growth
Sales revenues driven by long-term organic growth € mn 1200 1,127 1,033² 1000 796 800 6581 608 579 600 528 459 475 417 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 Incl. acquisitions of SEVEX (~EUR 46mn sales) and Marusan (~EUR 14 mn sales) ² Incl. acquisitions of Flat gaskets busin
Slide 20: Earnings before taxes
Earnings before taxes € mn 150 123.8 120 114.9 113.91 94.0 90 87.6 70.9 65.2 60.0 60 50.5 49.4 30 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 Excl. one-time gain of EUR 22.7 mn from sale of industrial park 20
Slide 21: Normalization of capex towards 8 to 10% of sales
Normalization of capex towards 8 to 10% of sales € mn 200 160 137.9 134.3 121.6 120 114.3 95.0 96.8 82.2 79.4 80 71.2 61.7 40 0 2008 2009 2010 2011 2012 Investments in plant, property and equipment, invest. prop. and intangible assets Depreciation and amortization 21
Slide 22: Balance sheet structure as at September 30, 2013
Balance sheet structure as at September 30, 2013 Solid Equity Ratio at 49.3%, shift to long-term debt Assets Liabilities and in % shareholder’s equity in % 50.4 49.3 59.1 57.1 23.7 28.1 40.9 42.9 25.9 22.6 September 30, September 30, September 30, September 30, 0 2012 2013 2012 2013 Non-current asse
Slide 23: A tough year 2013: Western Europe at 25-years low
A though year 2013: Western Europe at 25-years low – Russia, Brazil and India down significantly Car registrations 2013 (yoy change in %) Germany Western Europe Russia Brazil India -10% -8% -6% -4% -2% 0% In 2013 global car sales overall estimated to have grown by approx. 3% thanks to dynamic growth
Slide 24: Preliminary results 2013 marked by one-time effects
Preliminary results 2013 marked by one-time effects – negative FX effects burden Expected one-time gain related to the assumption of control of Japanese JV amounting to EUR 16 to 18 mn Sales 2013 growing 4.3%, organic growth at 6.1% EBIT expected in the range of EUR 160 to 162 mn, clean EBIT adjuste
Slide 25: Pushing growth in Asia: Assumption of control of JV ElringKlinger Marusan
Pushing growth in Asia: Assumption of control of JV ElringKlinger Marusan Corporation ElringKlinger concludes contract with JV partner assuming control of the 50:50 JV ElringKlinger Marusan, Tokyo, as of December 31, 2013 This results in an expected one-time gain in the range of EUR 16 to 18 mn, rec
Slide 26: Markets 2014
Markets 2014 ElringKlinger expects overall worldwide LV production in 2014 to grow by around 2 to 3% Signs of stabilization in Western European car sales, but no fast recovery: December car sales e.g. in France +9.4%, Spain +18.2%, Italy +1.4%, but ytd still -5.7% (France) and -7.5% (Italy) China/AS
Slide 27: Outlook 2014: Financial performance
Outlook 2014: Financial performance Based on the development of global vehicle production described, the ElringKlinger Group expects to see organic sales growth of 5 to 7% in 2014 Full consolidation of ElringKlinger Marusan will contribute additional EUR 25 mn in sales Group EBIT margin should conti
Slide 28: Outlook mid-term: margin drivers
Outlook mid-term: margin drivers Strong trend at exhaust system specialist Hug to continue Improving operating performance at Freudenberg France; Restructuring of Freudenberg France completed, signs of slight recovery in French car market (December 2013: +9.4%) E-Mobility: Sales ramping up against h
Slide 29: Thank you for your attention!
ElringKlinger Group Thank you for your attention! 29
Slide 30: Disclaimer – Forward-looking Statements and Predictions
Disclaimer – Forward-looking Statements and Predictions This presentation contains statements about the future. These statements are based on current expectations, market evaluations and predictions by the Management Board, and on information that is currently available to them. The statements about
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