Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (November 2014)
31 slides from Deutz's investor presentation, November 2014
Slide 1: Investor presentation November 2014
The Origin of HighTech. Investor presentation November 2014
Slide 2: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 2
Slide 3: DEUTZ at a glance
DEUTZ at a glance 150 years DEUTZ – a tradition of achievement Independent manufacturer of diesel engines with product range from 25 to 520 kw Engineering and manufacturing company with strong expertise as system integrator Profile Worldwide sales channels and service network Strong brand – synonym
Slide 4: Corporate structure
Corporate structure DEUTZ Group Revenue 2013 €1.45 billion DEUTZ Compact Engines DEUTZ Customised Solutions Revenue 2013 €1.19 billion Revenue 2013 €0.26 billion Liquid-cooled engines of up to 8 Air-cooled engines for on-road, off- litres cubic capacity for on- and off- road and marine applications
Slide 5: Site optimisation
Site optimisation FY 2013 FY 2015/16 Cologne-Porz Cologne-Porz Cologne-Deutz Ulm Ulm Übersee (Chiemsee) Restructuring costs up to €20 million in FY 2014 (thereof €13.9 million booked in Q2) Capex (total amount ~€20 million in FY 2014 -16) overcompensated by proceeds from property sales in subsequent
Slide 6: DEUTZ engines for Tier 4 emission standard
DEUTZ engines for Tier 4 emission standard Competitive product features: compact size, low fuel consumption, smart exhaust after-treatment Successful combination of platform strategy with DEUTZ application expertise Full range offering with focus on engines for Mobile Machinery and Agricultural Mach
Slide 7: DEUTZ customer base
DEUTZ customer base Long standing customer relationships (not exhaustive) DEUTZ has a lot of long standing relationships with key customers Implementation of new emission standards is a window of opportunity to extend and diversify the customer base The compact design and smart New clients (not exha
Slide 8: Successful business development
Successful business development Examples of new applications New customers gained in all regions, in particular with new engines 2.9 and 3.6 Greater share of wallet at existing clients New business related to different applications, e.g. tractors, fork lifts, telehandler, dumpers, rollers, wheel loa
Slide 9: Key applications
Key applications Typical Markets benefit from Competitors application macro trends Construction Cummins Material handling Kubota Mobile Machinery Ground support Perkins Mining equipment Yanmar Tractors Deere Agricultural Kubota Agricultural Machinery Perkins equipment Yanmar Gensets Deere Pumps Kubo
Slide 10: Revenue split by application
Revenue split by application FY 2013 (FY 2012) Other 2% Mobile Machinery 33% €30.1 million €481.6 million (€15.3 million) (€477.5 million) Stationary Equipment 12% €173.7 million (€204.2 million) €1,453.2 million (€1,291.9 million) Automotive 13%(1) €188.5 million (€192.1 million) Service 18% Agricu
Slide 11: Revenue split by region
Revenue split by region FY 2013(1) Pro-forma incl. Joint Ventures, FY 2013(2) (FY 2012) (FY 2012) Africa/Middle East 5% Europe (excl. Germany) 57% Africa/Middle East 4% Europe (excl. Germany) 43% €70.4 million €824.6 million €70.4 million €824.6 million (€83.9 million) (€668.3 million) (€83.9 millio
Slide 12: Emission standards drive DEUTZ revenue growth
Emission standards drive DEUTZ revenue growth Average sales price per engine (indexed; FY 2011 = 100) Tier 4 systems require exhaust 117 aftertreatment devices 100 104 Growing share of new emission engines drives revenue growth Positive price mix effects are expected to continue in the next years. E
Slide 13: Service business
Service business € million 253.7 Strong resilience of profitable 241.6 250.3 service business through 215.8 different economic cycles 175.0 Higher complexity of new emission engines provides opportunity to increase penetration of service business 20% 18% 16% 20% 18% Active management of service netw
Slide 14: DEUTZ activities in China
DEUTZ activities in China Joint Venture with FAW Group (50-50 JV, at-equity consolidation) Production of 3-8 litre diesel engines DEUTZ Dalian (DDE) Automotive and other applications Strong revenue development in FY 2013 €319 million (+30% yoy) and Q1-Q3 2014 €277 million (+17% yoy) despite very cha
Slide 15: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 15
Slide 16: Key figures
Key figures Q1-Q3 2014 yoy Q3 2014 qoq € million Order intake 1,076.8 -10.5% 330.0 -0.8% Revenue 1,177.9 +12.9% 424.5 +3.4% EBIT (before one-offs) 22.8 -16.2% 2.7 -85.2% Adjusted EBIT(1) 43.2 +58.8% 23.1 +26.9% Net financial position 1.0 +€54.2 million 1.0 +€32.8 million Result burdened by extraordi
Slide 17: Highlights
Highlights ■ Double digit revenue growth due to strong demand for smaller engine series ahead of emission regulation change ■ Order intake impacted by softer end markets, in particular in agricultural machinery ■ Operating profit burdened with extraordinary provision for warranty costs in Q3 but goo
Slide 18: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million -10.5% 15.1% 12.9% 1,203.6 155,099 1,177.9 200.0 1,076.8 8,575 1,043.1 134,699 175.1 194.3 10,697 181.7 146,524 1,003.6 124,002 1,002.8 882.5 861.4 Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2013 Q1-Q3 2014 Double-digit g
Slide 19: EBIT (before one-offs)
EBIT (before one-offs) € million 43.2 18.5 27.2 22.8 23.1 18.2 4.2 26.0 18.5 25.3 7.2 19.7 10.5 2.7 1.7 4.9 0.5 4.2-0.7 -0.5 -0.6 -0.6 -0.8 -0.8 Q1-Q3 Q1-Q3 adjusted Q2 Q3 adjusted (1) 2013 2014 Q1-Q3 2014 2014 2014 Q3 2014 (1) EBIT margin 2.6% 1.9% 3.7% 4.4% 0.6% 5.4% Q3 2014 operating profit burde
Slide 20: Operating profit & net income
Operating profit & net income Q1-Q3 2013 Q1-Q3 2014 € million 96.8 69.6 94.5 71.7 27.2 4.4 1.9 20.9 22.8 13.9 8.9 5.0 0.5 3.4 EBITDA D&A EBIT Interest Income Net EBITDA D&A EBIT Restruc- EBIT Interest Income Net before before expenses taxes income before before turing after expenses taxes income one
Slide 21: R&D spending & capital expenditure
R&D spending & capital expenditure R&D Capital expenditure (excl. R&D) € million Gross expenditure 54.3 53.6 Reimbursements 13.8 13.8 29.4 30.4 Net expenditure 2.1 1.9 40.5 39.8 27.3 28.5 Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2013 Q1-Q3 2014 Net R&D expenditure 3.9% 3.4% ratio(1) R&D expenditure decreased sli
Slide 22: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 214.5 189.0 86.9 61.7 Q1-Q3 2013 Q1-Q3 2014 Q1-Q3 2013 Q1-Q3 2014 Working capital ratio 13.8% 13.5% (30 Sep) Working capital increase attributable to higher Substantial cash flow improvement (+40.8%) due to unit sale
Slide 23: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow Net financial position € million 1.0 57.5 13.8 -53.2 2013 Q3 2014 (LTM) Q1-Q3 2013 Q1-Q3 2014 Strong free cash flow generation on the back of Cash flow used to pay dividend of €8.5 million and to strong operating cash flow reduce net
Slide 24: Equity ratio & funding
Equity ratio & funding € million 1,180.3 1,105.8 42.8% 42.2% 473.0 497.6 204 15 14 16 Q1-Q3 2013 Q1-Q3 2014 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 lines Sound balance sheet; equity ratio >40% Medium- to lon
Slide 25: Segments: DEUTZ Compact Engines
Segments: DEUTZ Compact Engines Q1-Q3 Q1-Q3 Change Q3 Q2 Change € million 2014 2013 in % € million 2014 2014 in % New orders 882.5 1,003.6 -12.1 New orders 270.4 267.5 1.1 Unit sales 146,524 124,002 18.2 Unit sales 53,589 51,279 4.5 Revenue 1,002.8 861.4 16.4 Revenue 368.2 347.8 5.9 EBIT (before one
Slide 26: Segments: DEUTZ Customised Solutions
Segments: DEUTZ Customised Solutions Q1-Q3 Q1-Q3 Change Q3 Q2 Change € million 2014 2013 in % € million 2014 2014 in % New orders 194.3 200.0 -2.8 New orders 59.6 65.1 -8.4 Unit sales 8,575 10,697 -19.8 Unit sales 2,431 3,343 -27.3 Revenue 175.1 181.7 -3.6 Revenue 56.3 62.9 -10.5 EBIT (before one-of
Slide 27: Summary: key financial development
Summary: key financial development Double digit growth in revenue and unit sales Operating profit burdened by extraordinary charges Substantial improvement of underlying operating profit Strong free cash flow generation and positive net financial position Site optimisation measures well on track 27
Slide 28: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 28
Slide 29: Financial outlook
Financial outlook FY 2013 Previous New € million reported FY 2014 Guidance FY 2014 Guidance Revenue low double 1,453.2 ~ 1,500 digit %-growth EBIT margin (before one-offs) 3.3 % > 4.0 % ~2% Net R&D spending ratio(1) 3.6 % slight decline slight decline Net capex (excl. R&D)(1) 42.5 50 - 60 < 50 (1) N
Slide 30: Financial calendar & contact details
Financial calendar & contact details Annual report 2014 19 March 2015 Annual general meeting 29 April 2015 Interim report 1st quarter 2015 5 May 2015 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 Ottostrasse 1 Fax:+49 (0) 221 822 15 5400 51149 Cologne (Porz-Eil) Email: krupp.c@deutz.com G
Slide 31: 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.