Deutz Ag · XETR:DEZ
Deutz — Q3 2017 Earnings Presentation
38 slides from Deutz's earnings presentation, Nov 7, 2017
Slide 1: Q1-Q3 2017 results
Q1-Q3 2017 results 7 November 2017 Dr Frank Hiller, CEO Dr Margarete Haase, CFO
Slide 2: Agenda
Agenda Operational and strategic highlights Financials Outlook Annex Q1-Q3 2017 results 7 November 2017 2
Slide 3: EU Stage V
EU Stage V DEUTZ is the 1st engine manufacturer in the world to receive EU Stage V emissions standard certification (2 years ahead of regulatory implementation in 2019) Customers avoid expensive modifications to their equipment because changing from the current EU Stage IV to Stage V requires no add
Slide 4: Liebherr cooperation
Liebherr cooperation Expanding product portfolio in the upper output range (200 to 620 kW) Marketing of four engine series as DEUTZ TCD 9.0 to TCD 18.0 Global distribution & service rights in various applications Customers benefit from DEUTZ application skills and aftersales expertise Start of seria
Slide 5: Investment in sales and service network
Investment in sales and service network Strategy to invest in the service network in selected locations Acquisition of Italian dealer IML Motori including its Romanian subsidiary Italian sales and service network will trade under the name DEUTZ Italy The experienced team continues to serve the custo
Slide 6: Torqeedo acquisition
Torqeedo acquisition Torqeedo DEUTZ acquired the global market leader in electric drive systems for boats and a specialist in integrated electric drive systems Torqeedo is an innovative catalyst for the E-DEUTZ strategy Bringing hybrid and full-electric drive systems to market more quickly than Stra
Slide 7: Fast – Forward looking – Sustainable
Fast – Forward looking – Sustainable Innovative drive systems Diesel Alternative fuels E-DEUTZ Hybrid Liquid gas (LPG) Partial Compressed natural gas (CNG) electrification Synthetic fuels Full electrification Additional market opportunities Strong growth opportunities in the diesel segment with low
Slide 8: Agenda
Agenda Operational and strategic highlights Financials Outlook Annex Q1-Q3 2017 results 7 November 2017 8
Slide 9: Key figures
Key figures Q1-Q3 2017 yoy Q3 2017 yoy € million New orders 1,173.8 +25.5% 370.8 +43.7% Revenue 1,093.2 +15.6% 358.7 +19.1% EBITDA (before exceptional items) 90.5 +3.0% 25.8 +22.9% EBIT (before exceptional items) 27.8 +€8.1 million 5.0 +€6.0 million Net income 21.3 +€2.5 million 1.5 +€2.7 million Fr
Slide 10: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million +25.5% +17.8% +15.6% 1,173.8 118,279 6,332 1,093.2 204.5 100,439 945.5 935.3 7,129 185.6 191.6 195.8 111,947 969.3 93,310 907.6 743.7 749.7 Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Q1-Q3 2017 DEUTZ Compact Engines DE
Slide 11: Revenue by quarter
Revenue by quarter € million 382.0 344.2 352.5 358.7 308.6 300.2 301.1 314.7 268.6 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q3 2017 revenue increased 19.1% yoy; seasonally weaker in Q3 Strong Q4 revenue level expected based on good order intake Q1-Q3 2017 results 7 November 2017 11
Slide 12: Revenue by region
Revenue by region Q1-Q3 2017 (Q1-Q3 2016) Africa/Middle East 3 % Europe (excl. Germany) 49 % €36.4 million €530.0 million (€47.2 million) (€442.0 million) Asia-Pacific 10 % €109.3 million €1,093.2 million (€109.3 million) (€945.5 million) Americas 19 % Germany 19 % €206.1 million €211.4 million (€18
Slide 13: Revenue by application
Revenue by application Q1-Q3 2017 (Q1-Q3 2016) Other 2 % Construction equipment 30 % €18.6 million €322.2 million (€27.1 million) (€257.3 million) Automotive 4 % €42.1 million (€60.9 million) Stationary equipment 10 % €1,093.2 million Service 21 % €113.3 million (€945.5 million) €233.9 million (€112
Slide 14: Operating profit & net income
Operating profit & net income Q1-Q3 2016 Q1-Q3 2017 € million 87.9 68.2 90.5 62.7 27.8 0.1 27.9 2.0 4.6 19.7 2.8 +1.9 18.8 21.3 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
Slide 15: EBIT
EBIT € million 27.8 27.9 -5.7 +0.1 +12.6 +1.2 19.7 Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2017 before before after exceptional items exceptional items exceptional items EBIT margin 2.1 % 2.5 % 2.6 % EBIT improvement at DEUTZ Compact Engines mainly driven by higher business volume Prior year result at DEUTZ Cus
Slide 16: Segment: DEUTZ Compact Engines
Segment: DEUTZ Compact Engines Q1-Q3 Q1-Q3 Change Q3 Q3 Change € million 2017 2016 in % € million 2017 2016 in % New orders 969.3 743.7 30.3 New orders 307.7 199.2 54.5 Unit sales (units) 111,947 93,310 20.0 Unit sales (units) 36,465 28,503 27.9 Revenue 907.6 749.7 21.1 Revenue 294.0 237.2 23.9 EBIT
Slide 17: Segment: DEUTZ Customised Solutions
Segment: DEUTZ Customised Solutions Q1-Q3 Q1-Q3 Change Q3 Q3 Change € million 2017 2016 in % € million 2017 2016 in % New orders 204.5 191.6 6.7 New orders 63.1 58.9 7.1 Unit sales (units) 6,332 7,129 -11.2 Unit sales (units) 2,215 2,230 -0.7 Revenue 185.6 195.8 -5.2 Revenue 64.7 63.9 1.3 EBIT 21.9
Slide 18: R&D & capital expenditure
R&D & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 47.7 1.4 43.7 38.5 40.4 2.2 Gross expenditure 2.0 Reimbursements 46.3 41.5 Net expenditure 36.5 Net R&D Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Q1-Q3 2017 expenditure ratio(1) 3.9% 4.2% R&D increase in line with guidance du
Slide 19: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 239.4 190.7 96.4 22.3 30 Sep 2016 30 Sep 2017 Q1-Q3 2016 Q1-Q3 2017 Working capital ratio 19.1% 13.5% Working capital decrease mainly due to higher Operating cash flow increase largely attributable to trade payables
Slide 20: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 107.1 95.0 4.7 2.1 2016 Q3 2017 (LTM) 30 Sep 2016 30 Sep 2017 Substantial increase of free cash flow Strong cash flow led to improvement of net financial Free cash flow in Q3 2017 amounted to +€20.6
Slide 21: Equity ratio & funding
Equity ratio & funding € million 1,059.7 1,113.6 46.3% 44.8% 491.1 499.1 160 16 16 15 1 31 Dec 2016 30 Sep 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 lines Equity ratio remains strong at 44.8% Medium- to l
Slide 22: Agenda
Agenda Operational and strategic highlights Financials Outlook Annex Q1-Q3 2017 results 7 November 2017 22
Slide 23: Assessment for key end-customer markets, 2017
Assessment for key end-customer markets, 2017 Europe North America China Unit sales (equipment) Construction equipment +5 % to +10 % 0 % to +5 % +20 % to +30 % Material handling +5 % to +10 % +5 % to +10 % +20 % to +30 % Agricultural machinery 0 % to +5 % Medium & light-duty trucks 0 % to +5 % Q1-Q3
Slide 24: Financial outlook
Financial outlook FY 2016 FY 2017 reported guidance € million Revenue 1,260.2 marked increase EBIT margin (before exceptional items) 1.9 % moderate increase Positive exceptional items: • Property sale in Cologne-Deutz with positive contribution to earnings in FY 2017 in the high double-digit million
Slide 25: Summary
Summary 1st engine manufacturer to receive EU Stage V certification Expansion of product portfolio in the 200 to 620 kW range E-DEUTZ – clear electrification strategy with M&A accelerator Integration of sales and service partner in Italy Double-digit top line growth Revenue and EBIT guidance confirm
Slide 26: Agenda
Agenda Operational and strategic highlights Financials Outlook Annex Q1-Q3 2017 results 7 November 2017 26
Slide 27: Summary of key financials (I)
Summary of key financials (I) € million Q1-Q3 2017 Q1-Q3 2016 Change (%) Revenue 1,093.2 945.5 15.6 EBITDA (before exceptional items) 90.5 87.9 3.0 EBIT (before exceptional items) 27.8 19.7 41.1 EBIT margin (before exceptional items), % 2.5 2.1 -- Net income 21.3 18.8 13.3 Basic earnings per share (
Slide 28: Summary of key financials (II)
Summary of key financials (II) € million Q1-Q3 2017 Q1-Q3 2016 Change (%) Total assets 1,113.6 1,063.8 4.7 Equity 499.1 491.5 1.5 Equity ratio (%) 44.8 46.2 -- Cash flow from operating activities 96.4 22.3 >100 Free cash flow(1) 74.4 -28.0 >100 Net financial position 95.0 2.1 >100 Working capital 19
Slide 29: Income statement
Income statement € million Q1-Q3 2017 Q1-Q3 2016 Change (%) Revenue 1,093.2 945.5 15.6 Cost of sales -909.9 -775.6 17.3 Research and development costs -67.1 -58.8 14.1 Selling expenses -56.1 -51.9 8.1 General and administrative expenses -28.4 -26.2 8.4 Other operating income 22.9 10.6 >100 Other ope
Slide 30: Balance sheet: assets
Balance sheet: assets 30 Sep 31 Dec Change € million 2017 2016 (%) Non-current assets (before deferred tax assets) 464.4 483.7 -4.0 Deferred tax assets 77.2 79.9 -3.4 Inventories 257.8 253.1 1.9 Trade receivables 131.0 113.5 15.4 Other receivables and assets 35.3 37.3 -5.4 Cash and cash equivalents
Slide 31: Balance sheet: equity & liabilities
Balance sheet: equity & liabilities 30 Sep 31 Dec Change € million 2017 2016 (%) Equity 499.1 491.1 1.6 Provisions for pensions and other post-retirement benefits 164.6 175.9 -6.4 Deferred tax liabilities 0.1 0.4 -75.0 Other provisions 36.5 38.4 -4.9 Financial liabilities 32.3 44.0 -26.6 Other liabi
Slide 32: Cash flow statement (condensed)
Cash flow statement (condensed) € million Q1-Q3 2017 Q1-Q3 2016 EBIT 27.9 19.7 Cash flow from operating activities (total) 96.4 22.3 Capital expenditure on intangible assets, property, plant and equipment and investments -40.9 -47.6 Proceeds from the sale of non-current assets 21.2 0.1 Cash flow fro
Slide 33: Overview of segments, Q1-Q3 2017
Overview of segments, Q1-Q3 2017 Q1-Q3 Q1-Q3 Change Q1-Q3 Q1-Q3 Change New orders (€ million) 2017 2016 (%) Unit sales 2017 2016 (%) DEUTZ Compact Engines 969.3 743.7 30.3 DEUTZ Compact Engines 111,947 93,310 20.0 DEUTZ Customised Solutions 204.5 191.6 6.7 DEUTZ Customised Solutions 6,332 7,129 -11.
Slide 34: Overview of segments, Q3 2017
Overview of segments, Q3 2017 Q3 Q3 Change Q3 Q3 Change New orders (€ million) 2017 2016 (%) Unit sales 2017 2016 (%) DEUTZ Compact Engines 307.7 199.2 54.5 DEUTZ Compact Engines 36,465 28,503 27.9 DEUTZ Customised Solutions 63.1 58.9 7.1 DEUTZ Customised Solutions 2,215 2,230 -0.7 Total for operati
Slide 35: Employees
Employees 30 Sep 30 Sep Change 2017 2016 (%) Cologne 2,257 2,212 2.0 Ulm 449 414 8.5 Other German operations 138 219 -37.0 Germany 2,844 2,845 0.0 Foreign operations 991 850 16.6 DEUTZ Group 3,835 3,695 3.8 Q1-Q3 2017 results 7 November 2017 35
Slide 36: Financial calendar & contact details
Financial calendar & contact details Annual report 2017 14 March 2018 Annual general meeting 26 April 2018 Q1 2018 results 3 May 2018 ► Contact details Christian Krupp Tel:+49 (0) 221 822 5400 SVP Finance, Public and Investor Relations Fax:+49 (0) 221 822 15 5400 Ottostrasse 1 Email: christian.krupp
Slide 37: 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 38: Thank you very much
Thank you very much Q1-Q3 2017 results 7 November 2017 38