Deutz Ag · XETR:DEZ

Deutz — FY2017 Earnings Presentation

39 slides from Deutz's earnings presentation, Mar 14, 2018

  1. Slide 1: FY 2017 results

    FY 2017 results 14 March 2018 Dr Frank Hiller, CEO Dr Margarete Haase, CFO Dr Andreas Strecker

  2. Slide 2: Agenda

    AGENDA Strategy & operational highlights Financials Dividend proposal & outlook Annex © DEUTZ AG 2

  3. Slide 3: Highlights

    Highlights ■ Significantly improved financial KPIs in 2017 - financial guidance fully achieved ■ Site optimisation completed and former Cologne-Deutz property successfully sold ■ Extended range of products in the lower and upper output range ■ Expansion of service business organically and by acquisi

  4. Slide 4: Our strategy – a new dynamic

    Our strategy – a new dynamic INNOVATIVE DRIVE SYSTEMS High-tech Diesel Engines Alternative Fuels  Long term future for many off-  Liquid gas (LPG)  Hybrid systems highway applications  Compressed natural gas  Electric systems  Pioneering role in reducing (CNG) emissions  Fully integrated solu

  5. Slide 5: Extended range of products

    Extended range of products  Enlarged product offering in the lower output range  New gas and bi-fuel engines  Extended product range in the upper output range (200 to 620 kW) Start of series production in 2019 Start of serial supply in 2019 © DEUTZ AG 5

  6. Slide 6: Electrification: example applications and DEUTZ position

    P Example applications Electrification DEUTZ position  Electric and hybrid solutions have not  Competitive solutions for yet made inroads into off-highway selected applications markets − Reduced TCO  DEUTZ has established expertise in all relevant technological fields (e-motors, − Lower noise emi

  7. Slide 7: Agenda

    AGENDA Strategy & operational highlights Financials Dividend proposal & outlook Annex © DEUTZ AG 7

  8. Slide 8: Key figures

    Key figures 2017 yoy Q4 2017 yoy € million New orders 1,556.5 +23.4% 382.7 +17.4% Revenue 1,479.1 +17.4% 385.9 +22.6% EBITDA (before exceptional items) 135.9 +19.0% 45.4 +72.6% EBIT (before exceptional items) 42.4 +81.2% 14.6 +€10.9 million Net income 121.2 +€105.2 million 99.9 +€102.7 million Free

  9. Slide 9: Sales figures

    Sales figures New orders Unit sales Revenue € million Units € million +23.4% +22.0% +17.4% 1,556.5 161,646 1,479.1 1,261.4 132,539 1,260.2 2016 2017 2016 2017 2016 2017 © DEUTZ AG 9

  10. Slide 10: Revenue by quarter

    Revenue by quarter € million +17.4 % 1,479.1 1,260.2 +17.4 % +11.0 % +19.1 % +22.6 % 344.2 382.0 385.9 300.2 352.5 301.1 358.7 314.7 Q1 Q2 Q3 Q4 FY  Dynamic growth in 2017  Revenue in each quarter clearly above the previous year’s level 2016 2017 © DEUTZ AG 10

  11. Slide 11: Revenue by region

    Revenue by region 2017 (2016) Africa/Middle East 4 % Europe (excl. Germany) 49 % €53.7 million €725.5 million (€62.3 million) (€588.6 million) Asia-Pacific 10 % €147.5 million €1,479.1 million (€147.9 million) (€1,260.2 million) Americas 18 % Germany 19 % €268.1 million €284.3 million (€239.6 millio

  12. Slide 12: Revenue by application

    Revenue by application 2017 (2016) Other 2 % Construction Equipment 30 % €28.3 million €437.4 million (€32.9 million) (€350.0 million) Automotive 4 % €56.1 million (€77.2 million) Stationary Equipment 10 % €1,479.1 million Service 21 % €152.0 million (€1,260.2 million) €309.2 million (€147.3 million

  13. Slide 13: Service business

    Service business € million 309.2 278.4 287.3  Profitable service business 259.3 showing resilience throughout the economic cycle  Expansion of service business − New products − Digitalization − Investment in own service centers & acquisition of selected dealers 2014 2015 2016 2017  Continuous gro

  14. Slide 14: EBIT

    EBIT € million 146.5 99.5 42.4 24.5 24.5 23.4 32.7 22.5 22.5 -6.1 -4.6 -3.2 2016 2017 2017 before before after exceptional items exceptional items exceptional items EBIT margin 1.9 % 2.9% 9.9 %  Significantly improved EBIT for DEUTZ Compact Engines  Prior-year result for DEUTZ Customised Solutions

  15. Slide 15: Operating profit & net income

    Operating profit & net income 2016 2017 € million 104.1 146.5 2.4 22.9 135.9 93.5 114.2 90.8 121.2 42.4 23.4 3.5 3.9 16.0 EBITDA D&A EBIT Net Tax Net EBITDA D&A EBIT Excep- EBIT Net Income Net interest income income before before tional after interest taxes income expense except. except. items excep

  16. Slide 16: DEUTZ Compact Engines

    DEUTZ Compact Engines Change Q4 Q4 Change € million 2017 2016 in % € million 2017 2016 in % New orders 1,290.4 1,011.6 27.6 New orders 321.1 267.9 19.9 Unit sales (units) 151,671 123,179 23.1 Unit sales (units) 39,724 29,869 33.0 Revenue 1,227.5 1,000.8 22.7 Revenue 319.9 251.1 27.4 EBIT (before exc

  17. Slide 17: DEUTZ Customised Solutions

    DEUTZ Customised Solutions Change Q4 Q4 Change € million 2017 2016 in % € million 2017 2016 in % New orders 261.3 249.8 4.6 New orders 56.8 58.2 -2.4 Unit sales (units) 8,740 9,360 -6.6 Unit sales (units) 2,408 2,231 7.9 Revenue 247.9 259.4 -4.4 Revenue 62.3 63.6 -2.0 EBIT (before except. items) 24.

  18. Slide 18: R&D & capital expenditure

    R&D & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 70.9 3.9 57.8 53.5 52.9 3.1 Gross expenditure 3.1 Reimbursements 67.0 54.7 Net expenditure 50.4 Net R&D 2016 2017 2016 2017 expenditure ratio(1) 4.0% 4.5%  R&D increase in line with guidance due to  Capex below ini

  19. Slide 19: Working capital & operating cash flow

    Working capital & operating cash flow Working capital Operating cash flow € million 222.2 204.3 112.7 63.8 31 Dec 2016 31 Dec 2017 2016 2017 Working capital ratio 16.2% 15.0%  Improvement of working capital ratio due  Higher operating cash flow largely attributable to to strong working capital man

  20. Slide 20: Free cash flow generation & net financial position

    Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 98.2 82.5 31.6 4.7 2016 2017 31 Dec 2016 31 Dec 2017  Significant increase (+€77.8 million) in free cash  Strong free cash flow leads to improvement of net flow due to higher operating cash flow f

  21. Slide 21: Equity ratio & funding

    Equity ratio & funding € million 1,213.1 1,059.7 49.4% 46.3% 599.2 491.1 160 18 16 12 1 31 Dec 2016 31 Dec 2017 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 line  Equity ratio increased to 49.4%  Medium- to lon

  22. Slide 22: Financial summary

    Financial summary Strong order momentum Double-digit sales growth Significant operating profit increase Net income boosted by substantial property sale proceeds High free cash flow despite acquisitions Strong equity ratio © DEUTZ AG 22

  23. Slide 23: Agenda

    AGENDA Strategy & operational highlights Financials Dividend proposal & outlook Annex © DEUTZ AG 23

  24. Slide 24: Dividend proposal

    Dividend proposal € 1.00 Earnings per share (1) 0.14 0.15 Dividend per share 0.07 (1) Proposal to the AGM 2016 2017  Dividend proposal reflects positive exceptional items  Participate shareholders in successful property sale  Dividend tax exempt for domestic investors and without German withholdi

  25. Slide 25: Forecast for key end-customer markets, 2018

    Forecast for key end-customer markets, 2018 Europe North America China Unit sales (equipment) Construction Equipment +5% to +10% +5% to +10% +10% to +20% Material Handling +5% to +10% +5% to +10% +10% to +20% Agricultural Machinery 0% to +5% 0% to +5% -5% to 0% Medium & Light-Duty Trucks 0% to +5% ©

  26. Slide 26: Financial outlook

    Financial outlook FY 2017 FY 2018 reported guidance € million Revenue 1,479.1 marked increase EBIT margin (before exceptional items) 2.9 % moderate increase R&D expenditure(1) 67.0 70 - 75 Capex (excl. R&D)(1) 54.7 60 - 70 (1) Net of reimbursements © DEUTZ AG 26

  27. Slide 27: Agenda

    AGENDA Strategy & operational highlights Financials Dividend proposal & outlook Annex © DEUTZ AG 27

  28. Slide 28: Summary of key financials (I)

    Summary of key financials (I) € million 2017 2016 Change (%) Revenue 1,479.1 1,260.2 17.4 EBITDA 240.0 114.2 >100 EBITDA (before exceptional items) 135.9 114.2 19.0 EBIT 146.5 23.4 >100 EBIT (before exceptional items) 42.4 23.4 81.2 EBIT margin 9.9 1.9 -- EBIT margin (before exceptional items), % 2.

  29. Slide 29: Summary of key financials (II)

    Summary of key financials (II) € million 2017 2016 Change (%) Total assets 1,213.1 1,059.7 14.5 Equity 599.2 491.1 22.0 Equity ratio (%) 49.4 46.3 -- Cash flow from operating activities 112.7 63.8 76.6 Free cash flow(1) 82.5 4.7 >100 Net financial position 98.2 31.6 >100 Working capital 222.2 204.3

  30. Slide 30: Income statement

    Income statement € million 2017 2016 Change (%) Revenue 1,479.1 1,260.2 17.4 Cost of sales -1,222.9 -1,041.6 17.4 Research and development costs -94.8 -77.5 22.3 Selling expenses -78.8 -68.0 15.9 General and administrative expenses -41.5 -36.7 13.1 Other operating income 144.1 17.7 >100 Other operat

  31. Slide 31: Balance sheet: assets

    Balance sheet: assets 31 Dec 31 Dec Change € million 2017 2016 (%) Non-current assets (before deferred tax assets) 534.2 483.7 10.4 Deferred tax assets 69.2 79.9 -13.4 Inventories 287.0 253.1 13.4 Trade receivables 142.7 113.5 25.7 Other receivables and assets 35.8 37.3 -4.0 Cash and cash equivalent

  32. Slide 32: Balance sheet: equity & liabilities

    Balance sheet: equity & liabilities 31 Dec 31 Dec Change € million 2017 2016 (%) Equity 599.2 491.1 22.0 Provisions for pensions and other post-retirement benefits 162.9 175.9 -7.4 Deferred tax liabilities 0.2 0.4 -50.0 Other provisions 36.2 38.4 -5.7 Financial liabilities 28.1 44.0 -36.1 Other liab

  33. Slide 33: Cash flow statement (condensed)

    Cash flow statement (condensed) € million 2017 2016 EBIT 146.5 23.4 Cash flow from operating activities (total) 112.7 63.8 Capital expenditure on intangible assets, property, plant and equipment and investments -152.3 -58.0 Proceeds from the sale of non-current assets 125.0 2.6 Cash flow from invest

  34. Slide 34: Overview of segments, 2017

    Overview of segments, 2017 Change Change New orders (€ million) 2017 2016 (%) Revenue (€ million) 2017 2016 (%) DEUTZ Compact Engines 1,290.4 1,011.6 27.6 DEUTZ Compact Engines 1,227.5 1,000.8 22.7 DEUTZ Customised Solutions 261.3 249.8 4.6 DEUTZ Customised Solutions 247.9 259.4 -4.4 Other 4.8 -- --

  35. Slide 35: Overview of segments, Q4 2017

    Overview of segments, Q4 2017 Q4 Q4 Change Q4 Q4 Change New orders (€ million) 2017 2016 (%) Revenue (€ million) 2017 2016 (%) DEUTZ Compact Engines 321.1 267.9 19.9 DEUTZ Compact Engines 319.9 251.1 27.4 DEUTZ Customised Solutions 56.8 58.2 -2.4 DEUTZ Customised Solutions 62.3 63.6 -2.0 Other 4.8 -

  36. Slide 36: Employees

    Employees 31 Dec 31 Dec Change 2017 2016 (%) Cologne 2,356 2,202 7.0 Ulm 450 411 9.5 Other German operations 254 214 18.7 Germany 3,060 2,827 8.2 Foreign operations 1,094 838 30.5 DEUTZ Group 4,154 3,665 13.3 © DEUTZ AG 36

  37. Slide 37: Financial calendar & contact details

    Financial calendar & contact details  Annual general meeting 26 April 2018  Q1 2018 results 3 May 2018  H1 2018 results 2 August 2018  Q1-Q3 2018 results 8 November 2018 ► Contact details  Christian Krupp Tel:+49 (0) 221 822 5400  SVP Finance, Public and Investor Relations Fax:+49 (0) 221 822

  38. Slide 38: 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.

  39. Slide 39: Thank you very much

    THANK YOU VERY MUCH © DEUTZ AG 39

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