Deutz Ag · XETR:DEZ
Deutz — H1 2016 Earnings Presentation
32 slides from Deutz's earnings presentation, Aug 4, 2016
Slide 1: H1 2016 results
H1 2016 results 4 August 2016 Dr Helmut Leube, CEO Dr Margarete Haase, CFO
Slide 2: Agenda
Agenda Review H1 2016 Outlook Annex H1 2016 results 4 August 2016 2
Slide 3: Key figures
Key figures H1 2016 yoy Q2 2016 qoq € million New orders 677.2 +1.0% 349.9 +6.9% Revenue 644.4 -3.8% 344.2 +14.7% EBITDA 66.9 -5.0% 35.6 +13.7% EBIT 20.7 +2.0% 13.4 +83.6% Net income 20.0 +19.8% 11.3 +29.9% Free cash flow -17.2 -€43.4 million 11.7 +€40.6 million Significant operating profit improvem
Slide 4: Highlights
Highlights ■ Positive scale effects in Q2 • EBIT increase of 83.6% outperforming revenue growth of 14.7% quarter-on-quarter • Profit improvement due to operating leverage and cost improvements • Seasonally, H2 2016 expected to be weaker than H1 2016 (e.g. holiday shutdowns) ■ Further efficiency gain
Slide 5: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million 1.0% -10.8% -3.8% 78,120 670.7 677.2 6,767 69,706 670.2 644.4 132.7 4,899 140.7 141.9 131.9 71,353 64,807 530.0 544.5 528.3 512.5 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 Revenue decreased to a lesser extent than unit sales
Slide 6: Revenue by quarter
Revenue by quarter € million 410.7 424.5 352.3 352.1 344.2 318.1 308.6 300.2 268.6 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Advance production of engines ahead of changes to European emissions standards for engines < 130 kW in October 2014 with significant influence on revenue Q2 2016 r
Slide 7: Revenue split by region
Revenue split by region H1 2016 (H1 2015) Africa/Middle East 5 % Europe (excl. Germany) 47 % €29.5 million €304.6 million (€43.1 million) (€314.5 million) Asia-Pacific 11 % €71.8 million (€65.1 million) €644.4 million (€670.2 million) Americas 20 % Germany 17 % €127.6 million €110.9 million (€164.4
Slide 8: Revenue split by application
Revenue split by application H1 2016 (H1 2015) Other 3 % Mobile Machinery 42 % €19.8 million €272.7 million Automotive 7 % (€9.8 million) (€291.4 million) €41.6 million (€46.6 million) Stationary Equipment 12 % €644.4 million (€670.2 million) €77.7 million (€99.7 million) Agricultural Machinery 14 %
Slide 9: Operating profit & net income
Operating profit & net income H1 2015 H1 2016 € million 70.4 50.1 66.9 46.2 10.5% 20.3 2.1 1.5 10.4% 20.7 2.0 +1.3 20.0 16.7 EBITDA D&A EBIT Net Income Net EBITDA D&A EBIT Net Tax Net interest taxes income interest income income expense expense Operating profit benefitted from licence proceeds of €5
Slide 10: EBIT
EBIT € million 20.3 20.7 +0.9 -4.6 +4.1 H1 2015 H1 2016 EBIT margin 3.0% 3.2% Slight EBIT margin increase attributable to cost improvements and lower depreciation Operating profit decline at DEUTZ Compact Engines due to lower unit sales and higher R&D costs Licence proceeds at DEUTZ Customised Solut
Slide 11: Segment: DEUTZ Compact Engines
Segment: DEUTZ Compact Engines H1 H1 Change Q2 Q1 Change € million 2016 2015 in % € million 2016 2016 in % New orders 544.5 530.0 2.7 New orders 285.1 259.4 9.9 Unit sales 64,807 71,353 -9.2 Unit sales 35,037 29,770 17.7 Revenue 512.5 528.3 -3.0 Revenue 277.0 235.5 17.6 EBIT 1.9 6.5 -70.8 EBIT 4.2 -
Slide 12: Segment: DEUTZ Customised Solutions
Segment: DEUTZ Customised Solutions H1 H1 Change Q2 Q1 Change € million 2016 2015 in % € million 2016 2016 in % New orders 132.7 140.7 -5.7 New orders 64.8 67.9 -4.6 Unit sales 4,899 6,767 -27.6 Unit sales 2,557 2,342 9.2 Revenue 131.9 141.9 -7.0 Revenue 67.2 64.7 3.9 EBIT 21.4 17.3 23.7 EBIT 11.2 1
Slide 13: R&D & capital expenditure
R&D & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 30.0 24.1 25.5 Gross expenditure 23.3 0.2 1.4 3.5 Reimbursements Net expenditure 22.7 25.3 19.8 Net R&D H1 2015 H1 2016 H1 2015 H1 2016 expenditure ratio(1) 3.0% 3.5% R&D expenditure remains at moderate level in line
Slide 14: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 216.4 227.1 53.9 15.4 Working H1 2015 H1 2016 H1 2015 H1 2016 capital ratio (30 June) 15.0% 18.6% Working capital increased by €10.7 million due to Operating cash flow decline attributable to working higher inventori
Slide 15: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 35.0 33.2 13.1 -8.4 2015 H1 2016 (LTM) H1 2015 H1 2016 Free cash flow in Q2 2016 amounted to +€11.7 Net financial position remains in positive territory million (1) Free cash flow: cash flow from op
Slide 16: Equity ratio & funding
Equity ratio & funding € million 1,088.1 1,103.8 45.5% 44.8% 495.6 494.5 160 16 15 35 1 2015 H1 2016 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 Strong balance sheet Medium- to long-term financing with und
Slide 17: Summary
Summary Significant improvement of profitability in Q2 Operating leverage and cost improvements Site optimisation measures on track New customer applications attracted R&D expenditure remains at moderate level Solid balance sheet and funding H1 2016 results 4 August 2016 17
Slide 18: Agenda
Agenda Review H1 2016 Outlook Annex H1 2016 results 4 August 2016 18
Slide 19: Market assessment
Market assessment 2016 Unit sales (equipment)(1) Construction equipment Europe -5% to +5% -5% to 0% Construction equipment North America (previous: -5% to +5%) Construction equipment China -20% to -10% Agricultural Machinery Europe -5% to 0% Automotive China -5% to +5% Recovery of key application ma
Slide 20: Financial outlook
Financial outlook FY 2015 FY 2016 € million reported guidance Revenue 1,247.4 stagnant or slight increase EBIT margin 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 Full year guidance confirmed Revenue and profitability
Slide 21: Agenda
Agenda Review H1 2016 Outlook Annex H1 2016 results 4 August 2016 21
Slide 22: Summary of key financials (I)
Summary of key financials (I) € million H1 2016 H1 2015 Change (%) Revenue 644.4 670.2 -3.8 EBITDA 66.9 70.4 -5.0 EBIT 20.7 20.3 2.0 EBIT margin (%) 3.2 3.0 -- Net income 20.0 16.7 19.8 Basic earnings per share (€) 0.17 0.14 21.4 Number of employees (30 June) 3,708 3,822 -3.0 H1 2016 results 4 Augus
Slide 23: Summary of key financials (II)
Summary of key financials (II) € million H1 2016 H1 2015 Change (%) Total assets 1,103.8 1,179.8 -6.4 Equity 494.5 535.1 -7.6 Equity ratio (%) 44.8 45.4 -- Cash flow from operating activities 15.4 53.9 -71.4 Free cash flow(1) -17.2 26.2 -- Net financial position 13.1 33.2 -60.5 Working capital 227.1
Slide 24: Income statement
Income statement € million H1 2016 H1 2015 Change (%) Revenue 644.4 670.2 -3.8 Cost of sales -522.5 -555.6 -6.0 Research and development costs -38.8 -36.1 7.5 Selling expenses -35.0 -35.0 0.0 General and administrative expenses -17.4 -18.6 -6.5 Other operating income 7.2 13.3 -45.9 Other operating e
Slide 25: Balance sheet: assets
Balance sheet: assets 30 June 31 Dec Change € million 2016 2015 (%) Non-current assets (before deferred tax assets) 499.6 520.5 -4.0 Deferred tax assets 82.0 69.1 18.7 Inventories 286.6 251.9 13.8 Trade receivables 121.1 101.2 19.7 Other receivables and assets 32.9 32.5 1.2 Cash and cash equivalents
Slide 26: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities 30 June 31 Dec Change € million 2016 2015 (%) Equity 494.5 495.6 -0.2 Provisions for pensions and other post-retirement benefits 182.5 172.3 5.9 Deferred tax liabilities 0.6 0.0 >100 Other provisions 42.4 46.7 -9.2 Financial liabilities 50.8 58.6 -13.3 Other lia
Slide 27: Cash flow statement (condensed)
Cash flow statement (condensed) € million H1 2016 H1 2015 EBIT 20.7 20.3 Cash flow from operating activities (total) 15.4 53.9 Capital expenditure on intangible assets, property, plant and equipment and investments -30.7 -26.3 Proceeds from the sale of non-current assets 0.1 0.7 Cash flow from inves
Slide 28: Overview of segments, H1 2016
Overview of segments, H1 2016 H1 H1 Change H1 H1 Change New orders (€ million) 2016 2015 (%) Unit sales 2016 2015 (%) DEUTZ Compact Engines 544.5 530.0 2.7 DEUTZ Compact Engines 64,807 71,353 -9.2 DEUTZ Customised Solutions 132.7 140.7 -5.7 DEUTZ Customised Solutions 4,899 6,767 -27.6 Total for oper
Slide 29: Overview of segments, Q2 2016
Overview of segments, Q2 2016 Q2 Q1 Change Q2 Q1 Change New orders (€ million) 2016 2016 (%) Unit sales 2016 2016 (%) DEUTZ Compact Engines 285.1 259.4 9.9 DEUTZ Compact Engines 35,037 29,770 17.7 DEUTZ Customised Solutions 64.8 67.9 -4.6 DEUTZ Customised Solutions 2,557 2,342 9.2 Total for operatin
Slide 30: Employees
Employees 30 June 30 June Change 2016 2015 (%) Cologne 2,203 2,348 -6.2 Ulm 407 384 6.0 Other German operations 218 276 -21.0 Germany 2,828 3,008 -6.0 Foreign operations 880 814 8.1 DEUTZ Group 3,708 3,822 -3.0 H1 2016 results 4 August 2016 30
Slide 31: Financial calendar & contact details
Financial calendar & contact details Interim management statement 1st to 3rd quarter 2016 8 November 2016 Annual report FY 2016 16 March 2017 Annual general meeting 4 May 2017 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 SVP Finance, Public and Investor Relations Fax:+49 (0) 221 822 15 5
Slide 32: 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.