Knorr-bremse Ag · XETR:KBX
Knorr-bremse — Q2 2021 Earnings Presentation
37 slides from Knorr-bremse's earnings presentation, Aug 13, 2021
Slide 1: Financial Results Q2/21
Quarterly Statement April 1 to June 30, 2021 FINANCIAL RESULTS Q2/21 DR. JAN MROSIK I CEO FRANK WEBER I CFO AUGUST 13, 2021
Slide 2: Highlights in Q2/21
Highlights in Q2/21 Recovery confirmed by solid financials Revenues up 21%yoy and EBIT margin at 14.1% (+200bps) in Q2/21, strong FCF development Strong performance in CVS Revenues +52%yoy and EBIT margin significantly improved by 820bps (11.2%) Impact from Corona continues - slow recovery of global
Slide 3: Further recovery of markets strongly depends on Corona and supply status
Further recovery of markets strongly depends on Corona and supply status Current market situation Market and business outlook Continuously no cancellations General market fundamentals unchanged and intact (e.g. efforts of CO2 reduction) No major supply issues in rail industry experienced Market grow
Slide 4: Operating highlights in Q2/21
Operating highlights in Q2/21 Market leadership as supplier of Climate Strategy 2030: sanitary systems through Knorr-Bremse drives forward acquisition of EVAC extensive climate action measures Knorr-Bremse to equip Alstom’s CubeControl family reached new Citadis tramway platform incl. milestone with
Slide 5: KB closed acquisition of EVAC
KB closed acquisition of EVAC EVAC fits well with RVS Robust business model KB expanding in an attractive rail segment with high profitability and asset light Global market leader EVAC is global market and quality leader with attractive product portfolio High aftermarket share ~40% of revenues from
Slide 6: Financial highlights H1/21: overall excellent financial performance
Financial highlights H1/21: overall excellent financial performance REVENUES OF € 3.42bn 14.5% EBIT MARGIN (11.9% yoy) (PY: 13.0%) € 1.65bn € 1.76bn 18.2% 12.1% € 108m FREE CASHFLOW (PY: € -13m) 31% Cash Conversion Rate ORDER INTAKE € 3.60bn ORDER BOOK € 5.16bn (32.1% yoy) (18.3% yoy) 6
Slide 7: Financial highlights Q2/21: strong recovery with very solid financial KPIs
Financial highlights Q2/21: strong recovery with very solid financial KPIs REVENUES OF € 1.73bn 14.1% EBIT MARGIN (ROS) (20.9% yoy) (PY: 12.1%) € 849m € 879m 18.4% 11.2% € 131m FREE CASHFLOW (PY: € 48m) 77% Cash Conversion Rate ORDER INTAKE € 1.80bn ORDER BOOK € 5.16bn (58.4% yoy) (18.3% yoy) 7
Slide 8: Book-to-Bill again above 1 and order book on new record level
Book-to-Bill again above 1 and order book on new record level Order intake Order book €m €m 0.80 Book-to-bill 1.04 +18.3% +58.4% 5,161 739 5 4,363 1,804 -79 RVS RVS 3,517 737 RVS 1,139 3,496 64.9% RVS 790 EVAC CVS € 5m (Q2/21) 1,068 CVS CVS CVS 1,657 346 880 Q2/20 Organic M&A FX Q2/21 30.06.20 30.06
Slide 9: Strong revenue increase mirrors ongoing recovery and high order book
Strong revenue increase mirrors ongoing recovery and high order book provides good visibility until YE21 Revenue €m By business By region +20.9% 360 4 1,727 1,727 30 SA -65 1,428 1,428 174.7% Asia/ 11 528 Pacific RVS 25.2% 849 558 -5.4% RVS 849 359 NA 260 38.3% EVAC CVS CVS € 4m (Q2/21) 879 810 EU 5
Slide 10: Strong earnings increases show good conversion of revenues into profit
Strong earnings increases show good conversion of revenues into profit EBITDA/ E. Margin EBIT/ ROS EPS1 €m € EBIT margin (ROS) increased by 200bps in 18.1% +59.4% Q2/21yoy 17.2% ▪ Operating leverage benefits from cost measures 14.1% 1.02 and fix cost discipline supported margin +27.2% increases 12.1
Slide 11: Focused capex spending and stringent NWC management support ROCE
Focused capex spending and stringent NWC management in place to support high return on capital employed (ROCE) CapEx NWC ROCE (annualized) €m % of sales €m Scope of days % 4.7% 70.5 26.7% 3.9% 59.3 1,197 22.2% 67 68 1,126 450 bps Q2/20 Q2/21 30.06.20 30.06.21 30.06.20 30.06.21 ▪ Disciplined and focu
Slide 12: Continuously rock-solid balance sheet after significant deleveraging
Continuously rock-solid balance sheet after significant deleveraging Equity + Equity Ratio Gross Debt1 / Net Debt Liquidity2 Rating €m €m €m -33.5% A2 -29.3% 2,741 +20.0% -918 809 -750 A 2,089 2,293 1,823 FCF -290 1,741 -245 Dividend -197 1,620 Leverage3 -535 payments4 Other5 Gross Debt/ EBITDA Dele
Slide 13: FCF and CCR improved significantly
FCF and CCR improved significantly driven by higher income and WC improvements Free Cashflow1 Cash Conversion Rate €m +175.9% 77% ▪ Free Cashflow increased by ~€ 84m yoy 35 131 ▪ Improvement of CCR by ~36%p ▪ Business development and stringent measures taken to secure strong 48 improvement of Free C
Slide 14: RVS: OI still challenging, while strong order book provides solid visibility
RVS: OI still challenging, while strong order book provides solid visibility Order intake Order book €m Order book increased by 0.6 %yoy +0.6% ▪ Order book well supported by resilient and 0.93 Book-to-bill 0.87 3,517 stable rail industry despite Corona; no 3,496 cancellations of contracts -6.8% Chal
Slide 15: RVS: organic revenues up yoy and qoq, but Corona impact still visible
RVS: organic revenues up yoy and qoq, but Corona impact still visible Revenue EBIT / EBITDA €m 19.9% Revenue development as expected in Q2/21 18.4% ▪ AM: Stable yoy, but still impacted by lower rail -7.8% traffic +0.1% 169 0.1 156 ▪ EU: Overall higher yoy, driven by both OE and 19 4 AM 849 849 -8 -5
Slide 16: CVS: OI benefits from very strong underlying demand
CVS: OI benefits from very strong underlying demand Order intake Order book €m Strong OI continues in Q2/21, but supply chain challenges remained +88.3% 0.60 Book-to-bill 1.22 ▪ EU/ NA: High market demand paired with 1,657 +208.7% semiconductor and other raw material shortages leads to postponements
Slide 17: CVS: underlying profitability high, but impacted by Corona related costs
CVS: underlying profitability high, but impacted by Corona related costs Revenue EBIT / EBITDA €m 11.2% Revenue close to record level supported by 3.0% significant efforts to keep supply chain filled ▪ EU & NA: revenue up qoq, gap from lower +463.5% semiconductor allocation covered by parts from +51
Slide 18: Group Guidance 2021 confirmed
Group Guidance 2021 confirmed Revenue EBITDA margin EBIT margin (ROS) Assumptions €m ▪ Stable economic environment in 6,500-6,900 important markets 6,157 17.5-19.0% 18.0% ▪ Current FX rates 13.0-14.5% 13.2% ▪ No further setbacks occur as a result of Corona ▪ We assume it will be possible to largely
Slide 19: Invitation to Knorr-Bremse's Capital Markets Day 2021
Invitation to Knorr-Bremse’s Capital Markets Day 2021 November 29, 2021 19
Slide 20: Key take aways
Key take aways Solid Q2/21 KPIs overall in still turbulent times Impact of Corona and supply shortages will continue Strong momentum of CVS compensates slower recovery of RVS Positive megatrends in both divisions unchanged and strong Fully on track to fulfill guidance FY21 20
Slide 21: Q&A / Backup
Q&A / Backup 21
Slide 22: Financial calendar: upcoming events
Financial calendar: upcoming events Date Event September 1, 2021 Commerzbank Corporate Conference September 7/14, 2021 Post Q2/21 Roadshow September 9, 2021 Cowen’s sustainable mobility, transportation and industrials conference September 10, 2021 Morgan Stanley CEO Conference September 15, 2021 UBS
Slide 23: Backup
a) KNORR-BREMSE Backup
Slide 24: H1/21 – Group
H1/21 – Group Order intake Order book €m €m 0.89 Book-to-bill 1.05 +18.3% +32.1% 5,161 987 32 3,603 4,363 -143 RVS 2,727 1,451 RVS 36.2% RVS 3,517 RVS 3,496 1,664 EVAC € 5m (Q2/21) CVS R.H. Sheppard 2,153 € 27m (Q1/21) CVS CVS 1,657 CVS 1,061 880 H1/20 Organic M&A FX H1/21 H1/20 H1/21 24
Slide 25: H1/21 – Group
H1/21 – Group Revenue €m By business €m By region y-o-y growth +11.9% 456 32 3,419 3,419 SA 3,056 54 3,056 -125 35 55.3% 1,049 Asia/ 14.9% RVS Pacific 1,035 1.3% 1,655 RVS 1,741 706 15.3% NA EVAC 613 € 4m (Q2/21) R.H. Sheppard € 28m (Q1/21) CVS CVS 1,765 17.2% 1,609 EU 1,373 1,315 H1/20 Organic M&A
Slide 26: H1/21 – Group
H1/21 – Group EBITDA/ EBITDA Margin EBIT/ EBIT Margin (ROS) €m 18.5% 17.5% 14.5% +18.1% 13.0% 118 1 632 +24.6% 535 -23 117 495 RVS 398 -2 -17 22.1% RVS RVS 361 361 RVS 390 RVS RVS 301 RVS 29.4% 390 RVS 301 326 EVAC 326 EVAC € 0.1m1 (Q2/21) CVS € 0.1m1 (Q2/21) 280 CVS CVS R.H. Sheppard R.H. Sheppard
Slide 27: H1/21 – Group
H1/21 – Group OCF & FCF CapEx NWC ROCE (annualized) €m OCF FCF €m % of sales €m Scope of days % 70.5 4.8% nm 59.3 +88.6% 26.7% 3.8% 1,197 224 22.2% 1,126 148 130 119 108 -13 H1/20 H1/21 30.06.20 30.06.21 H1/20 H1/21 H1/20 H1/21 27
Slide 28: H1/21 – RVS
H1/21 – RVS Order intake Order book €m +0.6% 0.96 Book-to-bill 0.88 3,517 -12.8% 3,496 1,664 5 1,451 -179 -39 -10.8% EVAC € 5m (Q2/21) H1/20 Organic M&A FX H1/21 H1/20 H1/21 28
Slide 29: H1/21 – RVS
H1/21 – RVS Revenue EBITDA / EBITDA margin EBIT / EBIT margin (ROS) €m -4.9% 22.4% 21.8% 1,741 18.7% 18.2% 4 -48 1,655 -7.6% -42 -2.8% 390 0.1 -7.6% 361 -19 -11 326 0.1 301 -4.9% -16 -9 EVAC -4.9% € 4m (Q2/21) EVAC EVAC € 0.1m1 (Q2/21) € 0.1m1 (Q2/21) H1/20 Organic M&A FX H1/21 H1/20 Organic M&A FX
Slide 30: H1/21 – CVS
H1/21 – CVS Order intake Order book €m 0.81 Book-to-bill 1.22 +103.0% 1,170 27 +88.3% 2,153 -104 1,657 1,061 880 110.3% R.H. Sheppard € 27m (Q1/21) H1/20 Organic M&A FX H1/21 30.06.20 30.06.21 30
Slide 31: H1/21 – CVS
H1/21 – CVS Revenue EBITDA / EBITDA margin EBIT / EBIT margin (ROS) €m 15.9% +34.2% 12.1% 12.0% 28 7.2% 505 1,765 +77.2% -83 +127.1% 133 1 280 1,315 131 214 -13 -2 -9 38.4% 158 84.3% 94 R.H. Sheppard 138.8% € 28m (Q1/21) R.H. Sheppard R.H. Sheppard € 1m (Q1/21) € -2m (Q1/21) H1/20 Organic M&A FX H1/
Slide 32: Income statement
Income statement 2020 2021 2020 2021 €m Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 H1/20 H1/21 Revenues 1,428.3 1,533.5 1,567.4 6,156.7 1,691.5 1,727.4 3,055.8 3,418.9 Change in inventory of unfinished/finished products 15.1 -6.7 -18.9 -11.3 30.0 22.2 14.3 52.2 Own work capitalized 18.5 19.6 19.2 76.1 19.2
Slide 33: Cashflow
Cashflow 2020 2021 2020 2021 €m Q2/20 Q3/20 Q4/20 2020 Q1/21 Q2/21 H1/20 H1/21 Net cash flows from/used in operating activities 115.1 250.8 666.6 1,036.0 27.6 196.1 118.6 223.6 Net cash flows from/used in investing activities -195.5 -69.2 -253.9 -576.4 -78.8 -186.9 -253.3 -265.7 Net cash flows from/
Slide 34: Balance sheet / assets
Balance sheet / assets 2020 2021 €m 31.03.2020 30.06.2020 30.09.2020 31.12.2020 31.03.2021 30.06.2021 Assets Intangible assets and goodwill 858.8 896.2 888.5 887.8 899.2 967.5 Property, plant and equipment 1,437.2 1,490.0 1,479.5 1,544.7 1,589.1 1,611.6 Investments accounted for using the equity met
Slide 35: Balance sheet / liabilities
Balance sheet / liabilities 2020 2021 €m 31.03.2020 30.06.2020 30.09.2020 31.12.2020 31.03.2021 30.06.2021 Equity Subscribed capital 161.2 161.2 161.2 161.2 161.2 161.2 Capital reserves 13.9 13.9 13.9 13.9 13.9 13.9 Retained earnings 34.2 34.2 34.2 13.3 13.3 13.3 Other components of equity -233.5 -2
Slide 36: 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 36
Slide 37: 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