Traton Se · XETR:8TRA
Traton — Baader Investment Conference 2019
47 slides from Traton's conference presentation, Sep 26, 2019
Slide 1: TRATON GROUP – Creating a Global Champion
Munich, 26 September 2019 Baader Investment Conference TRATON GROUP – CREATING A GLOBAL CHAMPION ROLF WOLLER, HEAD OF INVESTOR RELATIONS ISIN: DE000TRAT0N7 WKN: TRAT0N Bloomberg Ticker: 8TRA GY / 8TRA SS http://ir.traton.com
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared for information purposes only. It does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Volkswagen AG, TRATON SE or any company of TRATON GROUP in a
Slide 3: TRATON GROUP has continuously delivered on its strategic goal
TRATON GROUP HAS CONTINUOUSLY DELIVERED ON ITS STRATEGIC GOAL SINCE THE INCEPTION OF VOLKSWAGEN TRUCK & BUS Successful creation and implementation of New corporate identity Collaboration among strategic alliance partnerships brands in Volkswagen T&B fully on track 7.8% 6.0% 6.4% Significant 5.4% Adj
Slide 4: Leading global brands and strategic alliance partners
LEADING GLOBAL BRANDS AND STRATEGIC ALLIANCE PARTNERS FULLY CONSOLIDATED ASSOCIATES STRATEGIC PARTNER 16.8%1 25% + 1 share2 Leader in core markets Powerful strategic alliance partners enabling leading global scale with differentiated brands 1 As of June 30, 2019 2 Held by MAN SE as of June 2019 4
Slide 5: Snapshot TRATON GROUP 2018
SNAPSHOT TRATON GROUP 2018 UNIT SALES1 BY GEOGRAPHY SALES REVENUE BY BRAND ADJ. OPERATING PROFIT5 BY BRAND % of total €bn / % of total €bn VWCO VWCO Germany Other 1.4 MAN T&B6 15% (5%) 0.0 23% 0.5 S. America EU28+22 10.8 Scania 13.4 (ex. Brazil) 4% Scania 56% (42%) MAN T&B 1.3 Group4 (52%) Group4 16
Slide 6: Key company highlights
KEY COMPANY HIGHLIGHTS 1 • Scale and global reach through leading brands and GLOBAL strategic alliance partners CHAMPION • Unique platform enabling growth and positioning us for best-in-class profitability 2 • Customer value focused product and service offering GROWTH • New product generations • Fur
Slide 7: #1 truck market position in Europe and South America
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES TRATON GROUP WITH #1 TRUCK MARKET POSITION IN EUROPE AND SOUTH AMERICA Core markets of TRATON GROUP brands TRATON GROUP truck market share in 2018 (>15t) Europe1 33% Market leader with 33% market share Market leader in Germany with 38% mar
Slide 8: Expanding global reach through alliance partners
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES EXPANDING GLOBAL REACH THROUGH ALLIANCE PARTNERS TO ADDRESS ALL MAJOR PROFIT POOLS Core markets of TRATON GROUP brands Truck market share in 2018 (>15t) Alliance partners North America – Partnership since 2016 13%1 • Technology cooperation
Slide 9: Leading heavy duty platform as basis for expansion and synergies
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES LEADING HEAVY DUTY PLATFORM AS BASIS FOR FURTHER EXPANSION AND SYNERGY REALIZATION Potential heavy duty platform reach of top OEMs incl. associates and strategic partner Leverage technologies and expertise through global brands Sales volum
Slide 10: Multiple strategic levers for growth
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES TRATON GROUP WITH MULTIPLE STRATEGIC LEVERS FOR GROWTH TRATON GROUP SALES REVENUE • Market leadership in Europe and South America SUSTAIN CORE • Aftermarket and service growth on existing rolling fleet • Mutually beneficial / smart partner
Slide 11: Sustain core, go global
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES SUSTAIN CORE, GO GLOBAL – STRONG CORE MARKETS AND INCREASING EXPOSURE TO GLOBAL MARKETS FORM THE BASIS FOR FUTURE TOPLINE GROWTH SUSTAIN CORE GO GLOBAL Market volume truck sales >6t Mid-term market outlook Market volume truck sales >6t Mid
Slide 12: Grow share – highly attractive product pipeline
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES GROW SHARE – BENEFIT FROM HIGHLY ATTRACTIVE PRODUCT PIPELINE % of truck units of respective brand affected post full production ramp-up NTG NEW TRUCK GENERATION NEW DELIVERY TRUCK Current / upcoming launch 100% 100% ~60% New generation for
Slide 13: Drive innovation – transforming transportation
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES DRIVE INNOVATION – TRATON GROUP IS TRANSFORMING TRANSPORTATION Hybrid Autonomous transport Among the broadest Natural Gas system in customer Large connected fleet 450k+2 range of alternative fuel HVO BEV operation1 technologies3 Ethanol Bi
Slide 14: Track record of performance improvement across brands
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES TRATON GROUP WITH STRONG TRACK RECORD OF PERFORMANCE IMPROVEMENT ACROSS BRANDS. FURTHER POTENTIAL TO BE REALIZED BRAND PERFORMANCE IMPROVEMENTS SYNERGIES TRATON GROUP PROFITABILITY Adj. Return on 2016 9.4% 3 Adj. Return on Sales1 Sales 201
Slide 15: Operational performance improvements across all three brands
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES OPERATIONAL PERFORMANCE IMPROVEMENTS IN PLACE ACROSS ALL THREE BRANDS Group Elimination of inefficiencies from Ramp-up/“dual costs” for new Leverage recovering parallel production truck generation Brazilian market Current Focus Focus and A
Slide 16: Synergies ramping up across five categories
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES TRATON GROUP SYNERGIES RAMPING UP ON THE BACK OF FIVE INDIVIDUAL CATEGORIES Production footprint and logistics 5th Category Optimized global footprint and logistics 4th Category New technologies ~€0.7 bn Common electric powertrain, and Aut
Slide 17: Deep dive joint powertrain synergies – CBE
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES DEEP DIVE JOINT POWERTRAIN SYNERGIES – CBE: LEVERAGING ENGINE ACROSS BRANDS ENSURES SIGNIFICANT SYNERGY RAMP-UP OVER YEARS TO COME Start of production TRATON GROUP brands Leverage CBE engine across brands (illustrative CBE volumes) CBE eng
Slide 18: Executive management team
GLOBAL PROFITABILITY GROWTH EXECUTION CHAMPION AND SYNERGIES TRATON EXECUTIVE MANAGEMENT TEAM WITH STRONG TRACK RECORD AND LONGSTANDING INDUSTRY EXPERIENCE Andreas Christian Christian Dr. Carsten Renschler Schulz Levin Intra CEO CFO COO CHRO 31 20 25 18 Henrik Joachim Antonio Roberto Henriksson Dree
Slide 19: Outlook – truck market
OUTLOOK – TRUCK MARKET TRUCK MARKET DEVELOPMENT (˃ 6t, k units) EU28+21 SOUTH AMERICA 372 126 2009 2011 2013 2015 2017 2019E 2009 2011 2013 2015 2017 2019E GERMANY BRAZIL 84 72 2009 2011 2013 2015 2017 2019E 2009 2011 2013 2015 2017 2019E Source: Own calculation and estimates based on publicly avail
Slide 20: TRATON GROUP outlook – track record, 2019 outlook and target
TRATON GROUP OUTLOOK – RECENT TRACK RECORD, OUTLOOK 2019 AND OVER-THE-CYCLE TARGET Over-the-cycle RoS FY 2018 H1 2019 2019 Outlook target Slight increase Deliveries 233.0 k 123.3 k compared with (Units; Growth in %) 13.7% 10.0% previous year Group sales revenue €25.9 bn €13.5 bn Slightly above (in €
Slide 21: Unique profitable growth profile
TRATON GROUP – UNIQUE PROFITABLE GROWTH PROFILE Three strong brands… • Scania: Enters harvesting period on New Truck Generation, profits from short- term improvement of cost base and attractive aftermarket and service growth • MAN T&B: Achieved profit stabilization, enters new era of profitability p
Slide 22: Appendix
TRATON o Rou eP APPENDIX ta/2./28/ 0
Slide 23: Trucks are capital goods: total cost of ownership
TRUCKS ARE CAPITAL GOODS: PURCHASE DECISIONS ARE BASED ON RATIONAL FACTORS – TOTAL COST OF OWNERSHIP (TCO) TRUCKS PASSENGER CARS Sector Capital goods Consumer goods Customer focus Total cost of ownership Costs | Emotion | Prestige Customer expectations Annual mileage (km) ~130,000 ~14,0001 Fuel cons
Slide 24: Truck industry driven by total cost of ownership
TRUCK INDUSTRY DRIVEN BY TOTAL COST OF OWNERSHIP (TCO) ADMIN AND KEY ELEMENTS2 SERVICES VEHICLE FUEL Annual mileage, driving behavior, powertrain efficiency REPAIR AND DRIVER MAINTENANCE Driver salary, related costs TCO breakdown1 FUEL REPAIR AND MAINTENANCE Usage pattern, cost/frequency of repair &
Slide 25: Connectivity at Scania
CONNECTIVITY AT SCANIA Connected vehicles on the road What data does Scania have? How can Scania monetize the data? >350 k • Customers pay for reduced TCO... and Scania benefits… • Scania knows… …when a truck needs service …where a truck can be serviced …what service a truck needs Selected Win/Win e
Slide 26: H1 2019 Results
TRATON o Rou eP H1 2019 RESULTS Gay en, 2
Slide 27: TRATON GROUP highlights H1 2019
TRATON GROUP HIGHLIGHTS H1 2019 • Deliveries up by +10.0% to a first half record of 123,336 units • Sales revenue increased by +10.4%1 to €13,541 mn; all brands contributed • Operating profit improved significantly by +24.5% to €1,075 mn2 • RoS 7.9% (+110bpt)2 • Earnings after tax excluding minoriti
Slide 28: Group – segment highlights Q2 / H1 2019
GROUP – SEGMENT HIGHLIGHTS Q2 / H1 2019 Industrial Business (IB) Financial Services (FS) Q2 19 Y-o-Y H1 19 Y-o-Y Q2 19 Y-o-Y H1 19 Y-o-Y Order intake (units) 56,134 -6.7% 120,491 -5.5% Net portfolio2 (€bn) 9.5 +9.0% Deliveries (units) 66,173 +12.3% 123,336 +10.0% Penetration rate (%) 42.5 +7bpt 41.5
Slide 29: Group – sales revenue and return on sales
GROUP – SALES REVENUE AND RETURN ON SALES SALES REVENUE (€mn) Return on sales1 (%) Growth Y-o-Y (%) +8.7% +6.0% +7.4% 7,128 6,5582 6,413 6,0512 8.2 7.3 7.6 13,541 6.4 6,413 7.6 7.9 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 19 9M 19 FY 19 1 Calculated as the ratio of operating profit t
Slide 30: Group – operating profit and return on sales
GROUP – OPERATING PROFIT AND RETURN ON SALES OPERATING PROFIT (€mn) Return on sales1 (%) Growth Y-o-Y (%) +26.8% +24.5% +22.7% 585 477 490 386 8.2 7.3 7.6 1,075 6.4 490 7.6 7.9 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 19 9M 19 FY 19 1 Calculated as the ratio of operating profit to sa
Slide 31: Group – deliveries development
GROUP – DELIVERIES DEVELOPMENT DELIVERIES (units) +12.3% Growth Y-o-Y (%) 66,173 +7.4% +10.0% 58,913 57,163 6,014 53,221 6,139 4,210 Buses 5,112 123,336 60,159 10,224 Trucks 1 48,109 52,774 52,953 57,163 Buses 4,210 113,112 1 Trucks 52,953 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 19
Slide 32: Group – strong sales growth in core markets
GROUP – STRONG SALES GROWTH IN CORE MARKETS Truck Deliveries in core markets1; 2019 (units) Growth H1 (Y-o-Y) Market growth3 Q1 31,948 2 H1 66,430 +16.6% +15.3% 9M FY Q1 8,938 H1 18,822 +18.8% +19.3% 9M FY Q1 10,398 H1 23,068 +20.0% ~+10% 9M FY Q1 9,226 H1 20,732 +44.0% +46.1% 9M FY 1 Excluding MAN
Slide 33: Industrial Business – order intake
INDUSTRIAL BUSINESS – ORDER INTAKE ORDER INTAKE (units) Book-to-bill1 (ratio in units) Growth Y-o-Y (%) 1.27 1.02 1.13 0.85 -4.5% -5.5% -6.7% 67,359 64,357 60,184 56,134 120,491 64,357 1.13 0.98 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 18 9M 19 FY 19 • Noticeable decrease of order in
Slide 34: Industrial Business – deliveries
INDUSTRIAL BUSINESS – DELIVERIES DELIVERIES (units) Growth Y-o-Y (%) +12.3% +7.4% +10.0% 66,173 58,913 57,163 53,221 123,336 57,163 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 19 9M 19 FY 19 • Strong growth in core truck markets • All three brands showed positive development 34
Slide 35: Industrial Business – regional truck deliveries development
INDUSTRIAL BUSINESS – REGIONAL TRUCK DELIVERIES DEVELOPMENT1 EU28+22 (units) Germany (units) South America (units) Brazil (units) +16.0% 34,482 31,948 29,728 27,264 +30.1% +56.3% +12.8% 12,670 11,506 9,884 10,398 8,763 8,938 9,487 9,736 9,226 7,087 7,034 7,360 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q1
Slide 36: Industrial Business – sales revenue and return on sales
INDUSTRIAL BUSINESS – SALES REVENUE AND RETURN ON SALES SALES REVENUE (€mn) Return on sales1 (%) Growth Y-o-Y (%) +11.3% +9.4% +10.4% 7,015 6,303 6,305 5,765 7.9 6.9 7.3 13,320 6.1 6,305 7.3 7.6 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 19 9M 19 FY 19 • All brands with significant inc
Slide 37: Industrial Business – sales revenue by brand
INDUSTRIAL BUSINESS – SALES REVENUE BY BRAND AND RETURN ON SALES SALES REVENUES Q2 2019 (€mn) SALES REVENUES H1 2019 (€mn) Growth rate (%) Return on sales1 (%) Growth rate (%) Return on sales1 (%) 4.5% 12.2% 2.2% 7.9% 4.6% 11.6% 2.1% 7.6% 860 13,320 7,115 (178) +27.7% +12.5% 3,765 444 7,015 +10.4% (
Slide 38: Industrial Business – indebtedness
INDUSTRIAL BUSINESS – INDEBTEDNESS NET FINANCIAL INDEBTEDNESS / NET LIQUIDITY BRIDGE (€mn) Net Debt 578 (Net Cash) (227) (764) 1,072 (1,973) (689) 625 Net financial Capital Acquisitions Change in working IFRS 16 Other Net financial indebtedness expenditure 1 / disposals 2 capital (excl. Lease New fi
Slide 39: Financial Services – sales revenue and return on sales
FINANCIAL SERVICES – SALES REVENUE AND RETURN ON SALES SALES REVENUE (€mn) Return on sales1 (%) Growth Y-o-Y (%) +13.3% +10.3% +7.6% 216 201 203 179 16.5 17.5 17.1 16.2 419 203 16.2 16.6 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 H1 19 9M 19 FY 19 • Operating profit in Q2 2019 increased b
Slide 40: Financial Services – net portfolio and penetration rate
FINANCIAL SERVICES – NET PORTFOLIO AND PENETRATION RATE NET PORTFOLIO1 (€bn) PENETRATION RATE2 (%) COMMENTARY Growth Y-o-Y (%) Growth Y-o-Y (%) • By the end of H1 2019 the +14.4% +17.4% -37bpt -7bpt customer finance portfolio amounted to €9.5 bn; this +9.0% -136bpt represents an increase of 9% compa
Slide 41: Group – consolidated income statement (IFRS)
GROUP – CONSOLIDATED INCOME STATEMENT (IFRS) in EUR million H1 2019 H1 2018 Sales revenue 13,541 12,609 Cost of sales -10,762 -10,094 Gross profit 2,778 2,515 Distribution expenses -1,214 -1,165 Administrative expenses -502 -511 Net impairment losses on financial and contract assets -26 -18 Other op
Slide 42: Group – consolidated balance sheet (IFRS)
GROUP – CONSOLIDATED BALANCE SHEET: ASSETS / EQUITY AND LIABILITIES (IFRS) in EUR million 30.06.2019 31.12.2018 in EUR million 30.06.2019 31.12.2018 Equity and Liabilities Equity Assets Subscribed capital 500 10 Noncurrent assets Capital reserves 20,841 21,331 Intangible assets 6,602 6,597 Retained
Slide 43: Group – consolidated statement of cash-flows (IFRS)
GROUP – CONSOLIDATED STATEMENT OF CASH-FLOWS (IFRS) in EUR million H1 2019 H1 2018 in EUR million H1 2019 H1 2018 Cash and cash equivalents at beginning of period 2,997 4,593 Change in investments in marketable securities -1,381 -62 Earnings before tax 1,044 579 Changes in loans and time deposits 68
Slide 44: Group – adjustments
GROUP – ADJUSTMENTS Adjustments (in € mn - costs) 2016 2017 2018 1H 2019 Expense for antitrust proceedings (Scania) 403 Release of restructuring provisions at MAN Truck & Bus -50 Expenses in relation to India market exit at MAN Truck & Bus 137 Restructuring expenses at Volkswagen Caminhões e Ônibus
Slide 45: Contacts Investor Relations
CONTACTS INVESTOR RELATIONS Rolf Woller Helga Würtele Thomas Paschen + 49 89 360 98 335 + 49 89 360 98 334 + 49 89 360 98 474 rolf.woller@traton.com helga.wuertele@traton.com thomas.paschen@traton.com TRATON SE Dachauer Str. 641 80995 Munich www.traton.com 45
Slide 46: Financial calendar
FINANCIAL CALENDAR DATE EVENT / PUBLICATION OF May 7, 2019 Q1 2019 July 29, 2019 Half-year 2019 November 4, 2019 9-month 2019 46
Slide 47: Share data
SHARE DATA SHARE DATA ISIN (International Securities Identification Number) DE000TRAT0N7 WKN (German Security Identification number) TRAT0N Common code 196390065 Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) Stock exchange & Nasdaq Stockholm (börsen) Regulated market (Prime Standard) of Fra