Deutz Ag · XETR:DEZ
Deutz — FY2015 Earnings Presentation
35 slides from Deutz's earnings presentation, Mar 17, 2016
Slide 1: Financial year 2015
Financial year 2015 17 March 2016 Dr Helmut Leube, CEO Dr Margarete Haase, CFO
Slide 2: Agenda
Agenda Review FY 2015 Outlook Annex Financial year 2015 17 March 2016 2
Slide 3: Key figures
Key figures FY 2015 yoy Q4 2015 qoq € million New orders 1,225.9 -11.1% 293.0 +11.7% Revenue 1,247.4 -18.5% 308.6 +14.9% EBITDA (before one-off items) 112.2 -18.3% 26.6 +75.0% EBIT (before one-off items) 4.9 -€26.8 million -5.7 +€4.0 million Net income 3.5 -€16.0 million -3.8 +€5.6 million Free cash
Slide 4: Highlights
Highlights ■ Challenging capital goods markets • Profit margins and free cash flow remain positive despite very low capacity utilisation ■ Competitive engine portfolio • Stage V Ready: DEUTZ engines already meet the next EU emission standard announced for 2019(1) • Expanding product offering: KION f
Slide 5: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million -11.1% -29.8% -18.5% 196,403 1,530.2 1,379.0 13,278 250.3 1,225.9 1,247.4 264.0 137,781 267.5 280.2 12,567 183,125 1,279.9 1,115.0 125,214 967.2 958.4 2014 2015 2014 2015 2014 2015 Sales figures dampened by advance production of e
Slide 6: Revenue development
Revenue development € million 410.1 410.7 424.5 342.7 352.3 352.1 318.1 308.6 268.6 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Advance production of engines ahead of changes to European emissions standards for engines < 130 kW in October 2014 with significant influence on revenue Higher c
Slide 7: Revenue split by region
Revenue split by region FY 2015 (FY 2014) Africa/Middle East 8 % Europe (excl. Germany) 47 % €95.5 million €585.5 million (€84.7 million) (€744.7 million) Asia-Pacific 10 % €127.6 million €1,247.4 million (€107.4 million) (€1,530.2 million) Americas 22 % Germany 13 % €275.3 million €163.5 million (€
Slide 8: Revenue split by application
Revenue split by application FY 2015 (FY 2014) Other 2 % Mobile Machinery 42 % €20.5 million €523.2 million (€36.9 million) (€715.3 million) Automotive 7 % €87.9 million (€82.0 million) Agricultural Machinery 13 % €1,247.4 million (€1,530.2 million) €159.3 million (€257.5 million) Stationary Equipme
Slide 9: Service business
Service business € million 278.4 250.3 253.7 259.3 241.6 Further solid service revenue growth Strong resilience of profitable service business through different economic cycles 2011 2012 2013 2014 2015 Continued growth of service revenue Financial year 2015 17 March 2016 9
Slide 10: Emissions standards drive revenue growth
Emissions standards drive revenue growth Average sales price per engine (indexed; FY 2011 = 100) EU Stage IV / US Tier 4 engines 126 require exhaust after-treatment 117 116 devices 100 104 Growing share of new emission engines drives revenue growth Positive structural price mix effects are expected
Slide 11: Operating profit & net income
Operating profit & net income 2014 2015 € million 137.4 105.7 112.2 107.3 9.0% 9.0% 31.7 18.9 +12.8 19.5 12.8 6.1 4.9 0.0 4.9 4.0 +2.6 3.5 EBITDA D&A EBIT One-off EBIT Interest Income Net EBITDA D&A EBIT One-off EBIT Interest Income Net before before items after expenses taxes income before before i
Slide 12: EBIT (before one-off items)
EBIT (before one-off items) € million +7.8 31.7 +12.5 -47.1 4.9 2014 2015 EBIT margin 2.1% 0.4% Operating profit at DEUTZ Compact Engines adversely affected by lower business volume and low capacity utilisation of Chinese Joint Venture DEUTZ Dalian EBIT improvement at DEUTZ Customised Solutions main
Slide 13: Segment: DEUTZ Compact Engines
Segment: DEUTZ Compact Engines Change Q4 Q3 Change € million 2015 2014 in % € million 2015 2015 in % New orders 958.4 1,115.0 -14.0 New orders 234.4 194.0 20.8 Unit sales 125,214 183,125 -31.6 Unit sales 27,618 26,243 5.2 Revenue 967.2 1,279.9 -24.4 Revenue 237.1 201.8 17.5 EBIT (before one-off item
Slide 14: Segment: DEUTZ Customised Solutions
Segment: DEUTZ Customised Solutions Change Q4 Q3 Change € million 2015 2014 in % € million 2015 2015 in % New orders 267.5 264.0 1.3 New orders 58.6 68.2 -14.1 Unit sales 12,567 13,278 -5.4 Unit sales 2,927 2,873 1.9 Revenue 280.2 250.3 11.9 Revenue 71.5 66.8 7.0 EBIT (before one-off items) 31.3 18.
Slide 15: R&D & capital expenditure
R&D & capital expenditure R&D Capital expenditure (excl. R&D) € million Gross expenditure 68.7 15.6 56.8 Reimbursements 49.5 0.6 8.7 42.7 Net expenditure 2.4 53.1 56.2 40.8 40.3 Net R&D 2014 2015 2014 2015 expenditure ratio(1) 3.5% 3.3% R&D decline in line with our guidance after all Net capital exp
Slide 16: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 196.2 183.6 114.1 103.3 Working 2014 2015 2014 2015 capital ratio (31 Dec) 12.8% 14.7% Increase of working capital ratio related to lower revenue and higher inventories Financial year 2015 17 March 2016 16
Slide 17: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 52.0 35.0 39.0 13.7 2014 2015 2014 2015 Significant positive free cash flow despite lower Positive net financial position (+€25.3 million yoy) business volume (1) Free cash flow: cash flow from oper
Slide 18: Equity ratio & funding
Equity ratio & funding € million 1,149.2 1,088.1 44.5% 45.5% 511.0 495.6 160 15 16 43 1 2014 2015 up to up to up to up to 1 year 2 years 5 years 10 years Total assets Equity xx.x% Equity ratio Repayment schedule Duration of credit lines Equity ratio improved to 45.5% (+1.0%-points) Medium- to long-t
Slide 19: Cash deployment & dividend policy
Cash deployment & dividend policy Keep equity ratio above 40% Financial strength Robust financial framework in volatile markets Invest in profitable organic growth projects Internal funding Continuous product innovation Stable or growing dividend per share Shareholder return Dividend payout ~30% of
Slide 20: Summary
Summary Business impacted by pre-buys and challenging end markets Profit margins remain positive despite low capacity utilisation Continued growth of service business Site optimisation in Germany well on track Consolidation of Chinese production activities at DEUTZ Dalian Strong balance sheet and fr
Slide 21: Agenda
Agenda Review FY 2015 Outlook Annex Financial year 2015 17 March 2016 21
Slide 22: Market assessment
Market assessment 2016 Unit sales (equipment)(1) Construction equipment Europe -5% to +5% Construction equipment North America -5% to +5% Construction equipment China -20% to -10% Agricultural Machinery Europe -5% to 0% Automotive China -5% to +5% Recovery of key application markets not yet visible
Slide 23: Financial outlook
Financial outlook FY 2015 FY 2016 € million reported guidance Revenue 1,247.4 stagnant or slight increase EBIT margin (before one-off items) 0.4% moderate increase R&D expenditure(1) 40.8 slightly above 50 Capex (excl. R&D)(1) 56.2 approx. 55 (1) Net of reimbursements EBIT margin uplift supported by
Slide 24: Agenda
Agenda Review FY 2015 Outlook Annex Financial year 2015 17 March 2016 24
Slide 25: Summary of key financials (I)
Summary of key financials (I) € million 2015 2014 Change (%) Revenue 1,247.4 1,530.2 -18.5 EBITDA (before one-off items) 112.2 137.4 -18.3 EBIT (before one-off items) 4.9 31.7 -84.5 EBIT margin (%) 0.4 2.1 -- Net income 3.5 19.5 -82.1 Basic earnings per share (€) 0.04 0.18 -77.8 Dividend per share (
Slide 26: Summary of key financials (II)
Summary of key financials (II) € million 2015 2014 Change (%) Total assets 1,088.1 1,149.2 -5.3 Equity 495.6 511.0 -3.0 Equity ratio (%) 45.5 44.5 -- Cash flow from operating activities 103.3 114.1 -9.5 Free cash flow(1) 35.0 52.0 -32.7 Net financial position 39.0 13.7 >100 Working capital 183.6 196
Slide 27: Income statement
Income statement € million 2015 2014 Change (%) Revenue 1,247.4 1,530.2 -18.5 Cost of sales -1,054.8 -1,327.6 -20.5 Research and development costs -76.3 -74.3 2.7 Selling expenses -68.3 -65.7 4.0 General and administrative expenses -36.5 -34.3 6.4 Other operating income 29.3 22.9 27.9 Other operatin
Slide 28: Balance sheet: assets
Balance sheet: assets 31 Dec 31 Dec Change € million 2015 2014 (%) Non-current assets (before deferred tax assets) 520.5 563.6 -7.6 Deferred tax assets 69.1 62.2 11.1 Inventories 251.9 245.2 2.7 Trade receivables 101.2 122.0 -17.0 Other receivables and assets 32.5 54.1 -39.9 Cash and cash equivalent
Slide 29: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities 31 Dec 31 Dec Change € million 2015 2014 (%) Equity 495.6 511.0 -3.0 Provisions for pensions and other post-retirement benefits 172.3 187.1 -7.9 Other provisions 46.7 58.4 -20.0 Financial liabilities 58.6 73.3 -20.1 Other liabilities 3.2 3.9 -17.9 Non-current li
Slide 30: Cash flow statement (condensed)
Cash flow statement (condensed) € million 2015 2014 EBIT 4.9 12.8 Cash flow from operating activities (total) 103.3 114.1 Capital expenditure on intangible assets, property, plant and equipment and investments -68.3 -61.3 Proceeds from the sale of non-current assets 3.9 5.4 Cash flow from investing
Slide 31: Overview of segments, 2015
Overview of segments, 2015 Change Change New orders (€ million) 2015 2014 (%) Unit sales 2015 2014 (%) DEUTZ Compact Engines 958.4 1,115.0 -14.0 DEUTZ Compact Engines 125,214 183,125 -31.6 DEUTZ Customised Solutions 267.5 264.0 1.3 DEUTZ Customised Solutions 12,567 13,278 -5.4 Total for operating ac
Slide 32: Overview of segments, Q4 2015
Overview of segments, Q4 2015 Q4 Q4 Change Q4 Q4 Change New orders (€ million) 2015 2014 (%) Unit sales 2015 2014 (%) DEUTZ Compact Engines 234.4 232.5 0.8 DEUTZ Compact Engines 27,618 36,601 -24.5 DEUTZ Customised Solutions 58.6 69.7 -15.9 DEUTZ Customised Solutions 2,927 4,703 -37.8 Total for oper
Slide 33: Employees
Employees 31 Dec 31 Dec Change 2015 2014 (%) Cologne 2,269 2,422 -6.3 Ulm 410 387 5.9 Other German operations 231 284 -18.7 Germany 2,910 3,093 -5.9 Foreign operations 820 823 -0.4 DEUTZ Group 3,730 3,916 -4.7 Financial year 2015 17 March 2016 33
Slide 34: Financial calendar & contact details
Financial calendar & contact details Annual General Meeting 28 April 2016 Interim management statement 1st quarter 2016 3 May 2016 Interim report 1st half 2016 4 August 2016 Interim management statement 1st to 3rd quarter 2016 8 November 2016 Contact details Christian Krupp Tel:+49 (0) 221 822 5400
Slide 35: Disclaimer
Disclaimer Unless stated otherwise, all the figures given in this presentation refer to continuing operations. The details given in this document are based on the information available at the time it was prepared. This presents the risk that actual figures may differ from forward-looking statements.