Deutz AG · XETR:DEZ
Deutz — H1 2005 Earnings Presentation
38 slides from Deutz's earnings presentation, Jul 28, 2005
Slide 1: Press Conference / Conference Call 1st Half Year 2005
PRESS CONFERENCE / CONFERENCE CALL 1st H A L F Y E A R 2 0 0 5 Cologne, 28 July 2005
Slide 2: Agenda
Overview 1st half year 2005 Gordon Riske, Chief Executive Officer Financials 1st half year 2005 Helmut Meyer, Chief Financial Officer Outlook 2005 and future challenges Gordon Riske, Chief Executive Officer Appendix 2
Slide 3: Overview 1st half year 2005
Overview 1st half year 2005 Second quarter of 2005 without marine services business for the first time DEUTZ Power Systems performs better than expected Continuing strong demand in North America Increased expenditure in preparation for new generation of engines (research and development, sta
Slide 4: Highlights 1st half year 2005
Highlights 1st half year 2005 Sales up by 10 %, EBIT up by 19 % on comparable basis of calculation with previous year (i.e. excluding marine services business) Net profit of € 60 million after tax Net financial debt down to below € 60 million Equity ratio more than 20 % 4
Slide 5: Shareholder structure (as of 30 June 2005)
Shareholder structure (as of 30 June, 2005) 29.9 % SAME DEUTZ-FAHR 7.1 % AB Volvo 5.2 % FMR Corp. 4.5 % DB Value 53.3 % Free float Shareholders 5
Slide 6: Sales by application
1st half year 2005: Sales by application Compact Engines DEUTZ Power Systems (previous year‘s figure) (previous year‘s figure) Service 18 % (18 %) Mobile Stationary Miscellaneous Machinery Equipment 2 % (2 %) 39 % (36 %) 37 % (31 %) Marine 1 % (2 %) Automotive 6 % (6 %) Service 52 % (60 %) Agricultu
Slide 7: Sales by region
1st half year 2005: Sales by region Sales H1 2005 by region (previous year‘s figure) Germany 28 % (27 %) Other European 38 % (41 %) America 16 % (14 %) Asia / Pacific Africa 15 % (15 %) 3 % (3 %) 7
Slide 8: New orders and unit sales increased
1st half year 2005: New orders and unit sales increased New orders, in € million Unit sales, in units +3.1 % +9.9 % 704.2 96,510 682.8 176.6 336 195.0 87,843 527.6 96,174 331 487.8 87,512 H1 2004 H1 2005 H1 2004 H1 2005 Compact engines DEUTZ Power Systems 8
Slide 9: Comparable sales and EBIT both risen
1st half year 2005: Comparable sales and EBIT (adjusted for marine service contributions) both risen Sales in € million EBIT in € million +10.4 % +18.9 % 25.0 623.0 583.3 19.5 564.5 154.5 With 116.4 marine 16.4 With 468.5 marine 448.1 services services H1 2004 H1 2004 H1 2005 H1 2004 H1 2004 H1 2005
Slide 10: Net profit not comparable due to extraordinary effects
1st half year 2005: Net profit not comparable due to extraordinary effects Profit / loss für the year in € million Including profit of € 67 Million for sale of marine service business Including € 40 million 60.7 for restructuring medium-sized and large engines -32.2 H1 2005 H1 2004 10
Slide 11: Overview Financials
1st half year 2005: Overview Financials H1 H1 * Delta in € million 2005 2004 in % New orders 704.2 682.8 3.1 Unit sales (units) 96,510 87,843 9.9 Sales 623.0 583.3 6.8 EBITDA 45.5 51.6 -11.8 EBIT 19.5 25.0 -22.0 EBIT adjusted (** excl. Marine-Service for Q2) 19.5 16.4** 18.9 Cash flow from normal op
Slide 12: Agenda
Overview 1st half year 2005 Gordon Riske, Chief Executive Officer Financials 1st half year 2005 Helmut Meyer, Chief Financial Officer Outlook 2005 and future challenges Gordon Riske, Chief Executive Officer Appendix 12
Slide 13: Key Financials
1st half year 2005: Key Financials Unit sales H1 H1* Delta Operating profit (EBIT) H1 H1* Delta 2005 2004 in % in € million 2005 2004 in % Compact Engines 96,174 87,512 9.9 Compact Engines 20.4 35.4 -42.4 DEUTZ Power Systems 336 331 1.5 DEUTZ Power Systems 1.6 -2.9 155.2 Total 96,510 87,843 9.9 Othe
Slide 14: Profit and loss account
1st half year 2005: Profit and loss account Delta in € million H1 2005 H1 2004* in % Sales 623.0 583.3 6.8 Increase/decrease (-) in finished goods and work in process -1.2 19.3 - Total output 621.8 602.6 3.2 Cost of materials -371.2 -338.5 -9.7 Personnel expenses -149.1 -152.2 2.0 Depreciation -26.0
Slide 15: Cash flow (simplified)
1st half year 2005: Cash flow (simplified) Delta in € million H1 2005 H1 2004* in % Cash flow 29.8 33.3 -10.5 Business expansion expenses -1.8 -2.8 35,7 Change in working capital -39.7 -20.2 -96.5 Change in other receivables, short-term provisions and other payables -26.0 -0.4 - Cash flow from norma
Slide 16: Balance sheet – assets
1st half year 2005: Balance sheet – assets 6/30 12/31 Delta in € million 2005 2004* in % Business expansion expenses 37.5 35.7 5.0 Intangible and tangible assets 371.8 383.8 -3.1 Financial assets 60.4 59.4 1.7 Inventories 237.1 230.7 2.8 Trade receivables 204.2 190.3 7.3 Liquid assets 12.8 7.9 62.0
Slide 17: Balance sheet – stockholders' equity and liabilities
1st half year 2005: Balance sheet – stockholders‘ equity and liabilities 6/30 12/31 Delta in € million 2005 2004* in % Subscribed capital 221.0 155.6 42.0 Convertible profit-participation certificates 25.6 25.6 - Provisions 437.7 418.9 4.5 -of which pension provisions 269.3 270.4 -0.4 Convertible bo
Slide 18: Net financial debt significantly reduced
1st half year 2005: Net financial debt significantely reduced Net financial debt in € million Cash flow from normal operating activities in € million -74.5 % 230.7 58.8 9.9 -37.7 H1 2004 H1 2005 H1 2004 H1 2005 18
Slide 19: Balance sheet total nearly stable, working capital reduced
1st half year 2005: Balance sheet total nearly stable, working capital reduced Balance sheet total in € million Working Capital in € million +3.2 % -10.8 % 377.7 990.7 336.8 960.2 12/31/2004 6/30/2005 6/30/2004 6/30/2005 16.2% 22.3% 32.4% 27.0% Equity ratio Proportion in % sales 19
Slide 20: Employees
1st half year 2005: Employees H1 2004* H1 2005 1,332 Foreign 1,158 Foreign Foreign 24 % Foreign 22 % 486 Other locations 407 Other locations 354 Ulm 354 Ulm 866 Mannheim 676 Mannheim Germany Germany 76 % 78 % 2,532 2,589 Cologne Cologne Total: 5,570 Total: 5,184 * Including marine service business 2
Slide 21: Agenda
Overview 1st half year 2005 Gordon Riske, Chief Executive Officer Financials 1st half year 2005 Helmut Meyer, Chief Financial Officer Outlook 2005 and future challenges Gordon Riske, Chief Executive Officer Appendix 21
Slide 22: Outlook 2005
Outlook 2005 Significant sales growth in core segments Negative influences on EBIT largely compensated Significant net profit influenced by sale of marine services business Important step towards being able to issue dividends 22
Slide 23: Organisational measures in place to facilitate concentration on core areas
Organisational measures in place to facilitate concentration on core areas DEUTZ Compact DEUTZ Engines Power Systems High volume Systems business We set standards and shape the future. 23
Slide 24: Medium-term strategic goals
Medium-term strategic goals To reach top 3 position in world market for engines between 4 to 7 litres To secure global market leadership for air-cooled engines To become No.1 for gas engines for power generation For services to achieve a 25 % share of overall sales 24
Slide 25: Main tasks for the period 2005 to 2008
Main tasks for the period 2005 to 2008 Introduction and modification of products Securing profitability in the growth area of 4 – 7 litre engines Market launch of the new 2008/2009/2010 series of models below 56 kW Introducing the new generation of DEUTZ engines (TIER III, EURO IV/V) Impleme
Slide 26: Summary
Summary Significant EBIT improvement in core business Shareholders´ equity strengthened DEUTZ Power Systems successful Start-up of new products 26
Slide 27: Agenda
Overview 1st half year 2005 Gordon Riske, Chief Executive Officer Financials 1st half year 2005 Helmut Meyer, Chief Financial Officer Outlook 2005 and future challenges Gordon Riske, Chief Executive Officer Appendix 27
Slide 28: Project status: new assembly hall
Project status: new assembly hall 1992 New factory The most modern engine factory in the world New factory Hall 40 2005 Assembly of commercial vehicle engine (TCD 2013 4V) solidly competitive in changed H 41 Hall 40 conditions, with low break-even point and high standard of quality Assembly Hall 41
Slide 29: Project status: new assembly hall
Project status: new assembly hall Basic data: Hall 41 Amount Notes Assembly area 6,000 sq.m TCD 2013 4V commercial Total investment approx. € 50 million vehicle engine 7.6 min Level 1: 30,000 engines p.a. Cycle time 5.1 min Level 2: 50,000 engines p.a. Employees per shift: approx. 50 Level 1: 30,000
Slide 30: Project status: new assembly hall
Project status: new assembly hall 30
Slide 31: Project status: new assembly hall
Project status: new assembly hall 31
Slide 32: Project status: new assembly hall – body assembly
Project status: new assembly hall – body assembly 32
Slide 33: Project status: new assembly hall – final assembly
Project status: new assembly hall – final assembly 33
Slide 34: 2nd quarter 2005: Key Financials
2nd quarter 2005: Key Financials Sales in units Q2 Q2* Delta Operating profit (EBIT) Q2 Q2* Delta 2005 2004 in % in € million 2005 2004 in % Compact Engines 51,262 47,507 7.9 Compact Engines 15.6 22.5 -30.7 DEUTZ Power Systems -1.4 2.3 - DEUTZ Power Systems 210 227 -7.5 Other -0.7 -5.5 87.3 Total 51
Slide 35: Sales by segments
1st half year 2005: Sales by segments Compact Engines DEUTZ Power Systems Total H1 H1 Delta H1 H1 Delta H1 H1 Delta in € million 2005 2004 in % 2005 2004 in % 2005 2004 in % Mobile Machinery 181.1 161.5 12.1 - - - 181.1 161.5 12.1 Stationary Equipment 93.4 93.0 0.4 57.8 42.0 37.6 151.2 135.0 12.0 Ag
Slide 36: Financial Calendar 2005
Financial Calendar 2005 Press conference on 1st half year 2005 28 July 2005 Conference Call (Analysts) on 1st half year 2005 28 July 2005 Interim report on Q1-Q3 2005 27 October 2005 Conference Call (Analysts) on Q1-Q3 2005 27 October 2005 36
Slide 37: Contact
Contact DEUTZ AG Investor & Public Relations Deutz-Mülheimer Strasse 147-149 51063 Cologne Phone: +49 (0)221 822 2492 Fax: +49 (0)221 822 2116 www.deutz.com 37
Slide 38: Disclaimer
Disclaimer The data in this document is based on the information available at the time it was produced. To this extent, there is a risk and a possibility that actual results may differ from anticipatory statements. Such differences can be caused by changes in general political, financial or business