Deutz Ag · XETR:DEZ
Deutz — Investor Day (September 2023)
89 slides from Deutz's investor day presentation, Sep 12, 2023
Slide 1: Update on our strategy and transformation
Update on our strategy and transformation September 12, 2023 | Cologne DEUTZ | Capital Markets Day 2023
Slide 2: Today’s agenda
Today’s agenda from 09:30 Registration & welcome coffee 10:00 Official welcome Christian Ludwig 10:05 Our DUAL+ strategy Sebastian Schulte | CEO 10:50 Coffee break 11:10 Deep dive CLASSIC: Driving performance Petra Mayer | COO 11:30 Deep dive SERVICE & GREEN Markus Müller | CSO/CTO 11:50 CFO Perspec
Slide 3: Our DUAL+ strategy
Our DUAL+ strategy Sebastian C. Schulte | CEO 3
Slide 4: Track record: Top and bottom-line performance strongly improved
Track record: Top and bottom-line performance strongly improved Top & bottom-line development in EUR million CAGR 23% FYe ~2,100 Strong recovery from 1,953 “double dip” (Covid & Ukraine) 1,617 Doubling of margins 2021 to 1,295 2022 despite inflation pressures Kept our performance promises Gu
Slide 5: Welcome to our Innovation Center in Porz
Welcome to our Innovation Center in Porz 5 STRICTLY CONFIDENTIAL © DEUTZ AG INTERNAL
Slide 6: Stable order intake outlook for H2 2023
Stable order intake outlook for H2 2023 Order intake development by region & segment Order intake outlook H2 2023 in EUR million in EUR million Agricultural Construction Material Stationary machinery equipment handling equipment EMEA 470 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 H2 22 H2 23 22
Slide 7: Order backlog on healthy level – considering order behaviour changes
Order backlog on healthy level – considering order behaviour changes Development of order backlog – pre and post Covid in EUR million 204,518 Units sold 190,725 181,275 ~195,000 Units (Guidance ) Units sold Units sold 800 01 02 01 160,882 700 Units sold Customers increased 600 orders in order to sec
Slide 8: Our value proposition going forward
Our value proposition going forward Ambition Become top 3 independent engine producer by 2030 with comprehensive on-highway and off-highway offering and adjacent markets Investment for climate neutrality by 2050 Transform portfolio and help customers to achieve their climate goals for a CO2-neutral
Slide 9: We ensure the world keeps moving
We ensure the world keeps moving Construction Material Agricultural Stationary Boats/ equipment handling equipment equipment Others 30% 18% 14% 9% 6% 6% Diesel eFuels/HVO CNG/LNG Electrical Hydrogen 9 Note: Revenue share based on Group revenue 2022, excl. service business (23%). DEUTZ | Capital Mark
Slide 10: We will strengthen our right to play in our markets
We will strengthen our right to play in our markets Key developments Opportunities for DEUTZ Increasing need for efficient farming – using agricultural equipment Urbanization World population Continued construction demand (developing & developed world, & population peaking at 10bn e.g., changing
Slide 11: Technology paths yield significant potential for DEUTZ
Technology paths yield significant potential for DEUTZ Current portfolio: focus on lower power ranges Technology trajectories (illustrative, scenario) Higher uncertainty in prediction Current customer power range requirements Battery electric >250 kW H2 FC 130 – 250 kW H2 ICE 19 – 130 kW reFuel ICE
Slide 12: We will transform our portfolio significantly over the next years
We will transform our portfolio significantly over the next years Technology trajectories in DEUTZ portfolio (illustrative, scenario) Active consolidation with combustion Other 1 engine technology – relevant for the next 10 – 20 years at least Electri- fication Relevant role for decarbonization of 3
Slide 13: Our DUAL+ strategy
Our DUAL+ strategy I II Grow CLASSIC Build a GREEN market based on ecosystem with strong performance relevant products and consolidation and technologies margin uptake investment, growth & inorganic growth and long-term viability + Expand profitable SERVICE business around the world profitabil
Slide 14: Our DUAL+ strategy reflects our value play
Our DUAL+ strategy reflects our value play SERVICE expansion leading to P&L uplift with quick return on investment for service M&A Growing SERVICE business helps to finance Consolidation in CLASSIC business Investments in GREEN (organic & inorganic) Profitable, consolidated business contri
Slide 15: CLASSIC: Objectives and approach
CLASSIC: Objectives and approach Consolidate Improve & grow performance Actively exploit the opportunities Boost our performance significantly, presented by a consolidating market: by making more efficient use of as some players leave the market, existing capacities, simplifying our we will focus on
Slide 16: We expect consolidation in the CLASSIC engine market
We expect consolidation in the CLASSIC engine market Consolidation already visible in on-highway market Decreasing engine platforms1 OEMs/OESs divest to re-focus Similar but slightly delayed More & more OEMs/suppliers outsourcing trend in off-highway, first ICE engines as volumes decrease to focus
Slide 17: How we approach consolidation options
How we approach consolidation options Applications in line with DEUTZ markets M&A criteria for consolidation and portfolio options DEUTZ activity Fit to DEUTZ portfolio and markets Synergies to improve output and performance Alignment with DEUTZ culture and values Construction Material Agricul
Slide 18: Integration of Daimler Truck business
Integration of Daimler Truck business: Initial example of how take part in consolidating the market Closing completed Comprehensive integration efforts started, e.g., R&D, production, supply chain, procurement + Production start of medium-duty (MDEG) and heavy- duty (HDEP) engines expected end
Slide 19: Performance: Top-line improvement based on market-oriented pricing
Performance: Top-line improvement based on market-oriented pricing Environment 2022 Early reaction by management in February 2022 to systematically tackle challenging environment Energy prices Raw material prices Target of 8 – 12% price increase achieved by end of 2022 Outlook: for engines <4l
Slide 20: Operative performance indicators showing bottom-line improvement
Operative performance indicators showing bottom-line improvement >85% +10% 12%+ supplier delivery customer delivery efficiency performance performance p.a. growth p.a. Stable, despite global Continuous improvement since Since installation of line 5 supply chain disruptions 2021, but starting from lo
Slide 21: GREEN: Objectives and approach
GREEN: Objectives and approach Build on existing Explore market capabilities opportunities We build on our existing capabilities We will develop market-oriented (e.g., Futavis, E-DEUTZ, H2 engine, opportunities by systematic market Torqeedo) and explore how we can screening as well as pursuing M&A i
Slide 22: We will push our GREEN transformation with a new organization
We will push our GREEN transformation with a new organization Rationale for GREEN focus organization Set-up of GREEN within DEUTZ, starting 2024 Strategic focus within dedicated organization – Executive Board no distraction from operational issues Customer-centric green solution development Green un
Slide 23: We have a broad technology base to capture opportunities in GREEN
We have a broad technology base to capture opportunities in GREEN DEUTZ G DEUTZ TCG 7.8 2.9 H2 DEUTZ TCD E-DEUTZ 3.9 Reference DEUTZ TCD DEUTZ 5.2 PowerTree Current focus: Shift from pilot to serial production 23 DEUTZ | Capital Markets Day 2023
Slide 24: We are ramping up production of our hydrogen engine
We are ramping up production of our hydrogen engine, which offers a wide range of applications Stationary Generators (GenSets) Focus power Block heat and power plants today generation Rail Regional trains applications Special vehicles Excavators Off-highway Tractors & agricultural machin
Slide 25: First serial order for H2 engines for GenSets in Yulin, China
DEUTZ is negotiationg the first serial order for 100 H2 engines to be applied in GenSets in an industrial park in China in Yulin H2 as by-product in semi-coke production Rationale for H2 GenSet application H2 Abundant H2 as by-product Yulin accounts for 60% of semi-coke production in China with a
Slide 26: Using our capabilities to realize new opportunities from GREEN transformation
Understanding our customer needs, we will use our capabilities to realize new opportunities arising from the GREEN transformation + = Customer needs Opportunity for DEUTZ's in evolving GREEN DEUTZ’s business model capabilities applications innovation Electrification Wide range of products Exte
Slide 27: We are scouting adjacent opportunities where we have a right to play
We are scouting adjacent opportunities where we have a right to play Overview of technology opportunities (Illustrative) Market attractiveness Exploration: - Smart recycling Clear view on where we - Carbon Extended core: Adjacencies: have a “right to play” & offsetting - Battery / - H2 infrastruct
Slide 28: SERVICE: Objectives and approach
SERVICE: Objectives and approach Service growth targets in EUR million, CAGR Approach ~600 Further push service M&A FY 2025 Continue to expand via M&A Broaden geographical reach 10% Take over service activities (billable hours) ~450 FY 2022 Continue organic expansion 9% Ramp-up DEUTZ SERVICE
Slide 29: Significant growth potential for the DEUTZ service business
There is significant growth potential for the DEUTZ service business Spare parts in EUR billion Opportunity 16.0 14.9 for DEUTZ 1.1 0.7 0.4 36% / 3% High confidence to be able to Billable service / maintenance hours capture additional in EUR billion Opportunity market share for DEUTZ given low 10.7
Slide 30: Clear view how we will reach our target in FY25
We have a clear view how we will reach our target in FY25 Service sales growth Focus inorganic: Investment criteria in EUR million Organic Inorganic Sizable – aiming for 4 to 5 Revenue acquisitions till 2025 CAGR 10% 600 High as required to # of technicians achieve differentiation 450 % EBIT margin
Slide 31: Our two recent acquisitions are in line with our criteria
Our two recent acquisitions are in line with our criteria M. Hochschild S.A., Chile Diesel Motor Nordic Group Closing end of July 2023 Signing end of July 2023 Revenue Expected revenue of approx. Expected revenue of approx. EUR 15 million p.a.1 EUR 10 million p.a.1 # of technicians 17 technicians in
Slide 32: FUSIONHUB strengthening our digital business model competence
With FUSIONHUB we are strengthening our digital business model competence AI platform to … 5% of heavy Decrease downtime industry Maximize asset uptime and production is optimize asset performance lost each year due to Minimize customer disruption Maximize operational output and unplanned minimize o
Slide 33: FUSIONHUB traction and new business models
FUSIONHUB already has great traction in the market and opens up new business models for DEUTZ and its partners Market participants OEM Dealer Fleet owner Attachment Tire manufacturer Insurances parts supplier (3rd Parties) Recurring revenue stream Revenue share (per month per partner) (per machine p
Slide 34: Dedicated regional strategies: EMEA
Dedicated regional strategies EMEA Leveraging EMEA as strong homebase with strong production footprint and good profitability Fortifying stronghold in classic segments (construction, agriculture, material handling) Extending profitable service business Share of sales FY2022 Moving from green
Slide 35: Dedicated regional strategies: AMERICAS
Dedicated regional strategies AMERICAS Stronghold in rental business/material handling Extending customer base in classic segments into additional applications Leveraging green tech and retrofitting opportunities Building on strong service footprint and expanding Xchange business I II Curren
Slide 36: Dedicated regional strategies: ASIA-PACIFIC
Dedicated regional strategies ASIA-PACIFIC Expanding limited presence in China and APAC leveraging high quality of DEUTZ engines for export applications Ramp-up localization of products for local markets Exploring growth opportunities related to green technologies I II Current Share of sales C
Slide 37: Confidence in our EBIT growth until 2025
Confidence in our EBIT growth until 2025 EBIT margin1 bridge to mid-term guidance in % EBIT 2022 4.6 Market-oriented pricing (compensating Performance 1 – 1.5pp inflation) & operational efficiencies Mainly driven by growth in profitable Growth 0.5 –1pp SERVICE business, some contribution due to new
Slide 38: We are well on track in achieving our mid-term guidance
We are well on track in achieving our mid-term guidance Guidance FY2025 I II Sales >EUR 2.5 billion Service sales ~EUR 600 million Adjusted EBIT margin 6 to 7% + FCF margin 4 to 5% Working capital ratio 16% Dividend Stable pay-out ratio 38 DEUTZ | Capital Markets Day 2023
Slide 39: Progressing on our sustainability strategy, improving ESG ratings
We are also progressing on our sustainability strategy, leading to improving ESG ratings DEUTZ's sustainability strategy 40 20 0 01/20 07/21 01/23 25.8 (March 2023) AA (Sept. 2022) 60 40 20 0 44 (May 2023) 05/19 02/21 04/23 Our goal: To offer a fully carbon-neutral product and technology portfolio b
Slide 40: Moving our portfolio towards CO2-neutrality across scope 1, 2 and 3
With our technology mix, we are moving our portfolio towards CO2-neutrality across scope 1, 2 and 3 Emission trajectory (illustrative, scenario) Use-phase emissions, in Mt CO2 Scenario: 100% HVO by 2050 We did our homework: all new engines are “reFuel ready” (biofuels, 30 HVO) today B7 B20 25 ~23
Slide 41: Focus areas and next steps in our transformation
Focus areas and next steps in our transformation SHORT-TERM until 2025 MID-TERM: 2026 – 2030 2030+++ Ahead of schedule in reaching mid-term Starting to ensure GREEN ramp-up & Full impact of DUAL+ strategy targets & tripling profitability vs FY 21 becoming top 3 independent engine producer CLASSIC Co
Slide 42: Coffee break
Coffee break 42 DEUTZ | Capital Markets Day 2023
Slide 43: Deep-dive CLASSIC Driving performance
Deep-dive CLASSIC Driving performance Petra Mayer | COO 43 DEUTZ | Capital Markets Day 2023
Slide 44: DUAL+ strategy: Operations focus areas for driving performance
DUAL+ strategy: Operations focus areas for driving performance I II Improving production performance/output to achieve >200,000 engines p.a. Improved sales & operations planning Optimized inventory management + Increasing supply chain resilience, incl. procurement levers 44 DEUTZ | Capital M
Slide 45: How we want to move ahead: Operations roadmap
How we want to move ahead: Operations roadmap Aligned Improved Future-ready organization processes production & supplier footprint Production efficiency & scale-up (>200,000 engines) Supply chain focus Resilient supply base (incl. make-or-buy) Industrialization new products S&OP Functional excellenc
Slide 46: Our production set-up today
Our production set-up today Tjanjin, China Serial production, 2.9L& 6.1L [~5,000 engines 2022] Changsha, China JV Sany Group, Sany engines [~11,000 engines 2022, 5.7L in ramp-up] Cologne Serial production assembly, <4L, 4-8L Pendergrass, USA Zafra, Spain [~160,000 engines 2022] Small serial producti
Slide 47: Leveraging automation and digitalization opportunities
Leveraging automation and digitalization opportunities to realize efficiencies Impact of automation – example “Wellenzentrum” Productivity increases BEFORE (video at 11x speed) AFTER (video at 2.5x speed) of 20 – 40% Typical ROI of <2.5 years Step-by-step automation of lines in Porz Addition
Slide 48: Strategic production project pipeline
Strategic production project pipeline Short-term Mid-term Ramp-up of GenSet/H2 production 3.9L engine coop with John New line 6 for 4.1L & 6.1L Integration of Daimler Truck Deere, SOP 2025 engines, SOP 2024 engines Integration of E-DEUTZ Ramp-up 7.8L H2 engines, Make-or-buy analysis of selecte
Slide 49: Significant improvement of delivery performance
Strategic priority: Significant improvement of delivery performance >85% Supply Chain focus: Supply Chain Management function with direct reporting line to COO stable supplier delivery performance Sales & Operations Planning process streamlined and strengthened e.g., balancing out demand and sup
Slide 50: Improving S&OP and supply chain will positively impact inventories
Improving sales & operations planning and supply chain processes will have a positive impact on inventories Inventory target FY 2023 Potential for inventory reduction based on better sales forecasting and S&OP processes Targets specific to engines ~15% and components Measures and responsibilit
Slide 51: Significantly improved logistics at our main production site
We have significantly improved logistics at our main production site Reduction from 4 logistics locations to 1 location until 2024 More efficient supply of assembly lines, e.g., to support 3rd shift Supports inventory reduction targets Better transparency on availability of materials and fin
Slide 52: Making our supply base more resilient
Given our changing environment, we need to make our supply base more resilient Market risk Single High number in supply base source share of variances ICE to BEV transition drives strategic High concentration of spend in High variance with low reorientation in industry, with increasing Germany and t
Slide 53: How we will increase supply chain resilience
How we will increase supply chain resilience Doubling of dual source share in the next two years Leverage of the best cost country sourcing potentials Proactive mitigation strategies for all critical F materials, e.g., re-engineering, customer-facing Objective: Secure supply availability and ensure
Slide 54: Operations enabling the DUAL+ strategy
Operations enabling the DUAL+ strategy Flexible, scalable production set-up with increasing automation; preparing for GREEN ramp-up Focus on improving customer delivery performance for Structured response to fast P&L impact disrupted supplier landscape to ensure mid- and long-term robustness 54 DEUT
Slide 55: Deep-dive GREEN and SERVICE
Deep-dive GREEN and SERVICE Markus Müller | CSO/CTO 55 DEUTZ | Capital Markets Day 2023
Slide 56: DUAL+ strategy: How we contribute in DEUTZ GREEN
DUAL+ strategy: How we contribute in DEUTZ GREEN I II Continuous build up and development of technology portfolio Update on hydrogen and E-DEUTZ ramp-up + 56 DEUTZ | Capital Markets Day 2023
Slide 57: Our technology portfolio has sufficient breadth
Our technology portfolio has the sufficient breadth to capture opportunities Good breadth leveraging existing engineering know-how and partnerships Shift from pilot production to serial production 57 DEUTZ | Capital Markets Day 2023
Slide 58: ReFuels: CO2-neutral future for combustion engines is possible
ReFuels: CO2-neutral future for combustion engines is possible HVO Hydrotreated Vegetable Oil is a diesel-like fuel made by processing renewable waste lipids CO2 reduction Pollutant reduction Proven and of up to 92%2 (NOx, CO, particles) widespread availability at public filling stations in Germany
Slide 59: On track to starting hydrogen serial production in 2024
We are on track to starting hydrogen serial production in 2024 CO2-FREE TECHNLOLOGY ECONOMICAL ALTERNATIVE Attractive overall cost perspective, upgrade of Meets current emission limits for zero emission existing fleets and quick industrialization possible heavy-duty vehicles (<1g CO2/kWh ) HIGH PERF
Slide 60: Customer projects across applications are on track
Customer projects across applications are on track H2-GenSet Stationary H2-ICE GenSet for RheinEnergie power generation Next milestone: First serial order from China Train Rail Train with H2 combustion engine applications Next milestone: Innotrans 2024 HyCET H2-ICE Distribution Truck Delivery truck
Slide 61: In E-DEUTZ we have achieved serial readiness
In E-DEUTZ we have achieved serial readiness 2018 2020 2022 2023+ Start of E360 electric Built up of first Fully functional series-ready Extension of electric drive system project prototype vehicles systems (GATE F) product kit 2017 2021 2023+ Launch of First field testing Increase of customer E-DEU
Slide 62: System approach to offer easy customizable solutions
System approach to offer easy customizable solutions E-Motor + inverter HVB Cont. power: Power HV-Battery 310 – 400 V range 40 kW / 136 Nm Unit 42 kWh capacity Peak power: Up to 135 kW power 80 kW / 273 Nm PDU 3 HV-Batteries + Power Onboard- OBC 2 Power Units + Distribution Up to 22 kW charger DCDC
Slide 63: Good progress in customer projects
Good progress in customer projects Delivery of 39 kWh GEN2 battery for sweepers Start with 3 prototypes beginning of 2024 Current potential of >200 p.a. with option for additional delivery scope (e-system) Growing customer base and solid, global sales pipeline 63 DEUTZ | Capital Markets Day 20
Slide 64: Moving into adjacencies for additional business opportunities
We have started to move into adjacencies giving us additional business opportunities and strengthening our core business High Proximity to DEUTZ core Low Extended core Adjacencies Exploration Development of engines for reFuel for off-highway applications <640 kW Continue to evaluate organic Powertre
Slide 65: DUAL+ strategy: How we contribute in DEUTZ SERVICE
DUAL+ strategy: How we contribute in DEUTZ SERVICE I II Expansion of our successful business model to increase our share + 65 DEUTZ | Capital Markets Day 2023
Slide 66: Our service business in a nutshell
Our service business in a nutshell Service sales 2022 925 EUR 450 million DEUTZ service dealers globally Global presence 20,000,000 >130 spare parts p.a. countries Xchange >165,000 engines p.a. deliveries 8,000 66 DEUTZ | Capital Markets Day 2023
Slide 67: Majority of service business is in spare parts
Majority of service business is in spare parts DEUTZ service revenue by type FY 2022 Billable service/ Revenue currently mainly driven by spare maintenance parts business Share of profitable billable hours business 12% comparatively low but doubled share in last 5 years - additional upside expec
Slide 68: Technician in a van (TiV) service expansion in the US
New concept for service expansion in the US: Technician in a van (TiV) Construction equipment 37 vans across the USA (target 40 by YE) Quarterly visit to DEUTZ service center Initial invest ~ $200K for inventory replenishment & training ROI is less than two years Parts shipped to truck loc
Slide 69: Significant growth potential for the DEUTZ service business
There is significant growth potential for the DEUTZ service business Spare parts in EUR billion Opportunity for DEUTZ Opportunity 16.0 14.9 for DEUTZ 1.1 0.7 Every 1pp higher 0.4 penetration gain 36% | 3% of DEUTZ market is EUR 18 million Billable service / maintenance hours growth in EUR billion
Slide 70: Confident in achieving our €600M target and growing beyond
We are confident in achieving our €600M target and growing beyond SERVICE sales in EUR million 600 Organic: Network development (e.g. Fully capitalizing on service center), new sales channels, fleet M&A + starting second 450 services, digitalization, pricing, sales push wave Xchange and parts Ne
Slide 71: CFO perspective
CFO perspective Timo Krutoff | CFO 71 DEUTZ | Capital Markets Day 2023
Slide 72: We are on track to achieving our guidance
We are on track to achieving our guidance 2022 2023e Unit sales 181,268 DEUTZ engines1 ~195,000 DEUTZ engines1 Revenue EUR 1.95 billion ~EUR 2.1 billion Adjusted EBIT margin2 4.6% ~5.0% Free cash flow EUR 16.6 million Mid double-digit EUR million amount3 72 1 Excluding electric boat drives from DEUT
Slide 73: We have a strong track record in the last three years
We have a strong track record in the last three years Top & bottom-line development in EUR million CAGRe 8% FYe ~2,100 Strong recovery from CAGR 23% 1,953 “double dip” (Covid & Ukraine) 1,617 CAGR 2020-2023e around 17% 1,295 Doubling of margins 2021 to 2022 despite inflation pressures EBIT1
Slide 74: CLASSIC as growth driver
CLASSIC as growth driver CLASSIC revenue & EBIT1 margin development in EUR million CAGR 23% 1,889 1,563 Strong recovery of demand driven by all +10.8% yoy 1,254 regions and application segments 997 Engine unit sales increased by ~60k to 181k in 2022 Positive price/mix effects Expansion of se
Slide 75: CFO perspective on GREEN
CFO perspective on GREEN GREEN revenue & EBIT1 development in EUR million GREEN segment reflects mainly CAGR 24% Torqeedo performance 64 54 -12.5% yoy 42 EBIT includes R&D costs for hydrogen 27 and electrification activities 2020pf 2021pf 2022 2023 H1 Divestiture process for Torqeedo initiated
Slide 76: Revenue bridge to mid-term guidance
Where do we want to go: 3 building blocks are key for revenue Revenue bridge to mid-term guidance in EUR million Revenue 1,950 2022 Approx. 30k engines required CLASSIC Guidance for 2023 already growth 250 includes 15k CLASSIC 150 Performance driven by pricing performance and mix SERVICE growt
Slide 77: Two margin expansion areas for EBIT
Where do we want to go: Two margin expansion areas for EBIT EBIT margin1 bridge to mid-term guidance in % EBIT 2022 4.6 Market-oriented pricing Performance 1 – 1.5pp (compensating inflation) & operational efficiencies Mainly driven by growth in profitable SERVICE business, Growth 0.5 –1 pp some cont
Slide 78: How to further improve operating cash flow
How to further improve operating cash flow WCap development in EUR million Inventory build-up due to supply chain CAGR 21% 346 issues and top-line growth 235 253 Cash conversion cycle (CCC) at 68 days after H1/2023 To optimize CCC focus on: Active inventory management Consistent management
Slide 79: Goal: a sustainable free cash flow margin of 4 to 5%
Our goal: a sustainable free cash flow margin of 4 to 5% Free cash flow1 development in EUR million 28 Improvement until 2021 Cash flow in FY 2022 burdened by WCap build up Positive free cash flow -7 required for dividend payments Pay-out ratio of 30% -35 of EPS remains target 2020 2021 2022
Slide 80: Perspective on capital allocation
Perspective on capital allocation today R&D CLASSIC GREEN today Strategic insights Capex CLASSIC GREEN Multi-year average SERVICE M&A CLASSIC GREEN 80 DEUTZ | Capital Markets Day 2023
Slide 81: Sufficient firepower available for M&A to support DUAL+ strategy
Sufficient firepower available for M&A to support DUAL+ strategy Financing position in EUR million M&A criteria 600 Strategic direction Proof points for future 3x net debt/EBITDA 181 strategy considered realistic given strong ~400 balance sheet P&L uplift Revenue, EBITDA, EBIT, 200 FCF … EBIT 100 Va
Slide 82: CFO perspective in summary
CFO perspective in summary CLASSIC EBIT Return to solid margin approaching Sufficient funds performance peer level for transformation After 2020/2021 dip H1 2023 EBIT margin1 at 8.7% Ability to fund DUAL+ strategy for CLASSIC business based on strong financials and equity ratio 82 1 Before exception
Slide 83: Outlook
Outlook Sebastian C. Schulte | CEO 83 DEUTZ | Capital Markets Day 2023
Slide 84: Our DUAL+ strategy
Our DUAL+ strategy I II Grow CLASSIC Build a GREEN market based on ecosystem with strong performance relevant products and consolidation and technologies margin uptake investment, growth & inorganic growth and long-term viability + Expand profitable SERVICE business around the world profitabil
Slide 85: Transformation is all about people
Transformation is all about people Investment in leadership Development of our talent Complementing our team – new expertise Commitment to diversity 85 DEUTZ | Capital Markets Day 2023
Slide 86: Our right to win
Our right to win Strong brand Global footprint . Engineering expertise, Sales and operations innovation capability excellence and commitment to quality 86 DEUTZ | Capital Markets Day 2023
Slide 87: Our value proposition
Our value proposition Ambition Investment for climate neutrality by 2050 Cross-financing Profitable growth Value play 87 DEUTZ | Capital Markets Day 2023
Slide 88: 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.
Slide 89: Thank You! Time for Q&A
Thank You! - Time for Q&A 89 DEUTZ | Capital Markets Day 2023