Knorr-bremse Ag · XETR:KBX
Knorr-bremse — Q1 2022 Earnings Presentation
27 slides from Knorr-bremse's earnings presentation, May 12, 2022
Slide 1: Financial Results Q1/22
FINANCIAL RESULTS Q1/22 FRANK WEBER I CFO AND EXECUTIVE BOARD SPOKESMAN BERND SPIES I HEAD OF CVS MAY 12, 2022
Slide 2: Key take-aways for today
Key take-aways for today Strong underlying demand in rail and truck continues Clear strategy: pricing power and cost measures will mitigate inflation Knorr-Bremse well prepared to fight challenging global economic environment M&A: doing the right things to strengthen strategy and performance FY22: o
Slide 3: New Head of CVS and Member of the Executive Board – Bernd Spies
New Head of CVS and Member of the Executive Board – Bernd Spies 2022-present: Knorr-Bremse | Head of CVS 2013-2022: Knorr-Bremse | Member (2013-2015) and Chairman (since 2014) of the European Management Board, CVS 2008-2013: Hella KGaA Hueck & Co | Member of the Management Board, Global Sales
Slide 4: Robust demand in challenging global environment
Robust demand in challenging global environment Current situation Throughout 2022 No cancellations of contracts by rail operators, but Order intake improving postponements ongoing Increasing global rail traffic expected should benefit AM Europe as strongest rail market driver BtB FY22e: >1 Despite i
Slide 5: Financial highlights Q1/22: Strong demand, but pressure on profitability
Financial highlights Q1/22: Strong demand, but pressure on profitability REVENUES OF € 1.67bn 10.9% op. EBIT MARGIN (-1.3% yoy) (PY: 14.9%) € 775m € 895m 15.7% 8.5% € -231m FREE CASHFLOW (PY: € -73m1) -183% Cash Conversion Rate ORDER INTAKE € 2.11bn ORDER BOOK € 6.00bn (+17.3% yoy) (+18.0% yoy) 1) e
Slide 6: Clear invest into ability to deliver while focused spending
Clear invest into ability to deliver (“Customer First”) while focused spending and stringent NWC management in place CapEx NWC ROCE (annualized) €m % of sales €m Scope of days % 67.4 3.7% 3.9% 57.2 28.2% 1.250 62 64 1.076 17.9% Q1/21 Q1/22 31.03.21 31.03.22 31.03.21 31.03.22 ▪ Rather slow CapEx star
Slide 7: FCF development weaker due to higher NWC while FY22 expectations unchanged
FCF development weaker due to higher NWC while FY22 expectations remain unchanged Free Cashflow1 Cash Conversion Rate €m ▪ Built-up of inventory due to ongoing supply constraints, uncertain market environment and safeguarding revenue increase in the coming quarters resulting in higher NWC -41% ▪ Fre
Slide 8: RVS: OI well supported by important tender awards, strong order book
RVS: OI well supported by important tender awards, strong order book secures high visibility until YE22 Order intake Order book €m +15.2% Order book increased by 15.2 %yoy 0.89 Book-to-bill 1.39 ▪ Order book well supported by resilient and stable rail 4,181 industry despite Covid; no cancellations o
Slide 9: RVS: Q1/22 development as planned with expected improvement
RVS: Q1/22 development as planned with expected improvement in the coming quarters Revenue op. EBIT €m Revenue development as expected in Q1/22 ▪ AM: Lower rail traffic / maintenance burdened 18.0% the development in Q1/22 yoy -3.8% 15.7% ▪ EU: OE almost flat and AM revenue slightly 805 22 775 lower
Slide 10: The Chinese rail market is massively burdened by Covid
The Chinese rail market is massively burdened by Covid Current situation Until YE22 Influencing factors Strong impact by Covid on Chinese rail market expected ▪ Olympics and Paralympics impacted travel activity ▪ Investments vs. pre-Covid (FY19) ▪ Extended furloughs related to Chinese New Year ▪ FY2
Slide 11: CVS: OI on high level and order book still very strong
CVS: OI on high level and order book still very strong Order intake Order book €m Order intake reduction yoy from record levels in Q1/21 mainly driven by weak market and production 1.22 Book-to-bill 1.15 +24.8% restrictions in China, BtB well above 1 1,832 ▪ EU/ NA: Stable market demand on high leve
Slide 12: CVS: Slight increase in revenues, recovery of profitability vs. Q4/21
CVS: Slight increase in revenues, recovery of profitability vs. Q4/21 Revenue op. EBIT €m Stable revenue considering supply shortages & lock-downs in CN 13.1% ▪ EU & NA: Increased revenues driven by historic +1.0% material surcharge agreements with customers 886 35 895 ▪ APAC: Current zero-Covid str
Slide 13: We strongly condemn the attacks by Russia in Ukraine and took action
We strongly condemn the attacks by Russia in Ukraine and took action Ukraine Russia Humanitarian aid Actions • Donations: >€ 1.3m • We fulfill our existing Russian contracts (OE and AM), if • Housing of Ukrainian refugees in KB facilities in line with all relevant sanctions (i.e. EU/U.S./ UK/ CH) •
Slide 14: Inflationary pressure increased BUT clear action plan defined for mitigation
Inflationary pressure increased BUT clear action plan defined for mitigation Countermeasures to fight inflation KB positioning (incl. raw material, salary, transport etc. ) ▪ RVS and CVS: Global market leadership €m ~250 ▪ High level of resilience proven globally in challenging times before ▪ Rock s
Slide 15: Group Guidance 2022 confirmed despite extremely challenging environment
Group Guidance 2022 given on February 24, 2022 – confirmed despite extremely challenging environment Revenue Operating EBIT margin Free Cashflow Assumptions €m ▪ No significant further deterioration in 6,800-7,200 geopolitical and economic conditions 6,706 compared with current situation 600 500-600
Slide 16: Knorr-Bremse well-positioned and already fighting challenging market environment
Knorr-Bremse well-positioned and already fighting challenging market environment Counteractive measures with Challenging environment currently profit and cash optimization program in place Fight inflation Global supply chain shortages ▪ Price increases in AM being implemented ▪ Promising negotiation
Slide 17: Kiepe Electric – Divestment to strengthen KB's portfolio
Kiepe Electric – Divestment to strengthen KB‘s portfolio Strategic rationale ▪ Decision of divestment follows clear M&A strategy ▪ Kiepe Electric is often general contractor of Divestment of Kiepe projects → no focus of KB strategy anymore Electric will support ▪ Limited opportunities to expand with
Slide 18: Q&A / Backup
Q&A / Backup
Slide 19: Financial calendar: upcoming events
Financial calendar: upcoming events Date Event May 13, 2022 Post-Q1/22 Roadshow, London – J.P. Morgan May 19, 2022 Best of Europe Conference – UBS (virtually) May 24, 2022 Annual General Meeting May 25, 2022 dbAccess German Corporate Conference 2022, Frankfurt – Deutsche Bank June 7/8, 2022 Global I
Slide 20: Strong order intake in Q1/22 yoy and strong order book
Strong order intake in Q1/22 yoy and strong order book underline strong ongoing demand in both industries Order intake Order book €m €m 1.06 Book-to-bill 1.26 +18.0% +17.3% 5,998 236 9 64 2,109 5,084 1,799 RVS RVS RVS RVS RVS 737 3,517 1,081 RVS 4,181 714 13.1% RVS 3,630 3,496 CVS Evac CVS 1,085 € 9
Slide 21: Slight revenue decrease driven by APAC
Slight revenue decrease driven by APAC Revenue €m By type By region -1.3% 1,692 56 1,669 1,692 SA 11 39.7% 1,669 25 34 -90 Asia/ 521 400 -5.3% -23.2% Pacific RVS RVS 805 775 11.7% 388 NA 347 CVS Evac CVS € 11m (Q1/22) 799 6.0% 847 EU 886 895 Q1/21 Organic M&A FX Q1/22 Q1/21 Q1/22 y-o-y growth 21
Slide 22: Q1/22: income statement
Q1/22: income statement INCOME STATEMENT 2021 2022 EUR million Q1/21 Q2/21 Q3/21 Q4/21 FY21 Q1/22 Revenues 1,691.5 1,727.4 1,589.2 1,697.5 6,705.6 1,669.4 Change in inventory of unfinished/finished products 30.0 22.2 17.9 -31.1 39.1 54.0 Own work capitalized 19.2 20.0 20.7 23.2 83.1 24.6 Total opera
Slide 23: Q1/22: cashflow
Q1/22: cashflow CASHFLOW STATEMENT (shortened) 2021 2022 EUR million Q1/21 Q2/21 Q3/21 Q4/21 FY 2021 Q1/22 Net cash flows from/used in operating activities 27.6 196.1 265.1 486.8 975.5 -189.6 Net cash flows from/used in investing activities -78.8 -186.9 -71.0 -197.6 -534.4 -35.3 Net cash flows from/
Slide 24: Q1/22: balance sheet / assets
Q1/22: balance sheet / assets 2021 2022 €m 31.03.2021 30.06.2021 30.09.2021 31.12.2021 31.03.2022 Assets Intangible assets and goodwill 899.2 967.5 986.9 1,005.8 1,016.5 Property, plant and equipment 1,589.1 1,611.6 1,618.1 1,790.4 1,798.8 Investments accounted for using the equity method 24.2 23.0
Slide 25: Q1/22: balance sheet / liabilities
Q1/22: balance sheet / liabilities 2021 €m 31.03.2021 30.06.2021 30.09.2021 31.12.2021 31.03.2022 Equity Subscribed capital 161.2 161.2 161.2 161.2 161.2 Capital reserves 13.9 13.9 13.9 13.9 13.9 Retained earnings 13.3 13.3 13.3 13.3 10.3 Other components of equity -241.4 -247.2 -250.9 -196.2 -157.9
Slide 26: Investor relations contact
Investor relations contact Andreas Sophia Spitzauer Kursawe +49 89 3547 182310 +49 89 3547 187311 +49 175 5281320 +49 151 62330709 Andreas.Spitzauer@knorr-bremse.com Sophia.Kursawe@knorr-bremse.com 26
Slide 27: Disclaimer
Disclaimer IMPORTANT NOTICE This presentation has been prepared for information and background purposes only. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, an