Deutz Ag · XETR:DEZ
Deutz — Q3 2019 Earnings Presentation
31 slides from Deutz's earnings presentation, Nov 7, 2019
Slide 1: DEUTZ Q1–Q3 2019 results
DEUTZ Q1–Q3 2019 results November 7, 2019
Slide 2: 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 3: Agenda: Strategy and operational highlights
Agenda Agenda Strategy and operational highlights Dr. Frank Hiller | Chairman of the Board of Management 3
Slide 4: Key figures for Q1–Q3 2019 at a glance
Key figures for Q1–Q3 2019 at a glance Growth in revenue and earnings ▪ Revenue rises in all regions and major application segments: Consolidated revenue advances by 6.4%; revenue from the high-margin service business climbs by 7.3%. Particularly strong growth in the Americas (+14.8%) and Asia-Pacif
Slide 5: DEUTZ’s growth strategy in China
DEUTZ’s growth strategy in China Joint venture agreement1) with China’s largest construction equipment Introduction of stricter emissions manufacturer, SANY2) regulations opens up additional ▪ At the end of September 2019, the foundation stone was laid for the new high-performance engine opportuniti
Slide 6: DEUTZ acquires battery specialist Futavis
DEUTZ acquires battery specialist Futavis ▪ Acquisition of the battery specialist Futavis, which has extensive 2022 technical expertise in electronics, software, battery technology, and 5–10% of revenue battery testing and in matters of functional safety. generated by electrified drive systems 2021
Slide 7: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million −15.1% −0.5% +6.4% 156,504 155,780 1,379.9 1,548.7 1,297.3 1,315.2 Q1–Q3 2018 Q1–Q3 2019 Q1–Q3 2018 Q1–Q3 2019 Q1–Q3 2018 Q1–Q3 2019 ▪ Since the end of Q2 2019, new orders have reflected a weakening of demand as a result of the ec
Slide 8: Revenue by region
Revenue by region1) Q1–Q3 2019 (Q1–Q3 2018) Africa and Middle East 3% Europe (excl. Germany) 41% €37.2 million €561.6 million −1.6% +3.6% Asia-Pacific 16% €1,379.9 million (€1,297.3 million) €222.8 million +16.3% Americas 23% Germany 17% €322.8 million €238.3 million +14.8% −2.9% Strong growth in th
Slide 9: Revenue by application segment
Revenue by application segment1) Q1–Q3 2019 (Q1–Q3 2018) Miscellaneous 6% Construction Equipment 30% €85.6 million €406.5 million +13.5% +2.8% Stationary Equipment 9% €1,379.9 million Material Handling 21% €122.4 million (€1,297.3 million) €296.3 million −2.2% +11.3% Agricultural Machinery 15% Servi
Slide 10: Agenda: Key financials in detail
Agenda Agenda Key financials in detail Dr. Andreas Strecker | Chief Financial Officer 10
Slide 11: EBIT
EBIT EBIT and EBIT margin EBIT and EBIT margin ▪ Significant year-on-year increase in EBIT and € million EBIT margin, even before exceptional items. before exceptional items € million ▪ Excluding non-recurring effects (deconsolidation of Argentinian joint venture, provision at Torqeedo, reversal of
Slide 12: Operating profit and net income
Operating profit and net income Q1–Q3 2018 Q1–Q3 2019 € million € million 128.8 59.6 104.9 59.0 9.3 78.5 11.1 69.2 12.7 45.9 1.7 54.7 8.6 35.6 EBIT Net financial Net income EBITDA D&A EBIT Except. EBIT Net financial Income Net income EBITDA D&A EBIT Income income taxes before before items income tax
Slide 13: DEUTZ Compact Engines (DCE)
DEUTZ Compact Engines (DCE) € million Q1–Q3 Q1–Q3 YoY change € million Q3 Q3 YoY change 2019 2018 (%) 2019 2018 (%) New orders 1,019.5 1,312.2 −22.3 New orders 263.3 381.8 −31.0 Unit sales (units) 122,638 141,034 −13.0 Unit sales (units) 40,714 46,571 −12.6 Revenue 1,079.7 1,085.2 −0.5 Revenue 349.9
Slide 14: DEUTZ Customised Solutions (DCS)
DEUTZ Customised Solutions (DCS) € million Q1–Q3 Q1–Q3 YoY change € million Q3 Q3 YoY change 2019 2018 (%) 2019 2018 (%) New orders 267.2 215.3 +24.1 New orders 86.7 63.9 +35.7 Unit sales (units) 20,152 6,493 > +100 Unit sales (units) 6,643 2,100 > +100 Revenue 276.5 191.8 +44.2 Revenue 91.5 66.0 +3
Slide 15: R&D spending and capital expenditure
R&D spending and capital expenditure R&D expenditure Capital expenditure2) € million € million 5.1% 4.6% 71.0 60.6 59.1 40.3 Q1–Q3 2018 Q1–Q3 2019 Q1–Q3 2018 Q1–Q3 2019 R&D ratio1) ▪ R&D expenditure and capital expenditure increase as expected due to new engine projects and the implementation of the
Slide 16: Working capital and cash flow from operating activities
Working capital and cash flow from operating activities Working capital Cash flow from operating activities € million € million 16.9% 15.9% 328.5 296.3 55.5 52.7 Sep. 30, 2018 Sep. 30, 2019 Q1–Q3 2018 Q1–Q3 2019 Working capital ratio (average) ▪ Increase in working capital mainly due to the rise in
Slide 17: Free cash flow and net financial position
Free cash flow and net financial position Free cash flow1) Net financial position € million € million 78.8 14.5 -7.1 −17.6 2018 Q3 2019 (LTM) Sep. 30, 2018 Sep. 30, 2019 ▪ Deterioration in free cash flow attributable to the rise in net cash used for investing activities, which was driven partly by t
Slide 18: Equity ratio and funding
Equity ratio and funding Equity ratio Funding € million € million 1,249.3 1,290.8 49.6% 50.4% 619.1 650.4 160 20 7 Dec. 31, 2018 Sep. 30, 2019 up to 1 year 2 to 5 years Total assets Equity Equity ratio Repayment profile Term of credit lines ▪ Stable financial position – equity ratio of 50.4%. ▪ Medi
Slide 19: Agenda: Outlook
Agenda Agenda Outlook Dr. Frank Hiller | Chairman of the Board of Management 19
Slide 20: Group forecast for 2019
Group forecast for 2019 € million 2018 Forecast for 2019 Revenue 1,778.8 > 1,800 EBIT margin (before exceptional items) 4.6% 4–5%1) R&D expenditure2) 85.0 85–90 Capex (excl. R&D)3) 59.1 85–952) ▪ The positive exceptional item from payment of the final installment of the purchase price for the sale o
Slide 21: Forecast for key end customer markets in 2019
Forecast for key end customer markets in 2019 Unit sales (units) Europe North America China Construction Equipment −5 to 0% 0 to +5% 0 to +5% Material Handling 0 to +5% 0 to +5% +5 to +10% Agricultural Machinery 0 to +5% 0 to +5% −5 to −10% ▪ Forecast for the Construction Equipment application segme
Slide 22: Annex
DEUTZ Annex
Slide 23: Summary of key financials
Summary of key financials € million Q1–Q3 Q1–Q3 YoY change 2019 2018 (%) EBITDA 138.1 104.9 +31.6 EBITDA margin (%) 10.0 8.1 +190 bps EBIT 78.5 45.9 +71.0 EBIT margin (%) 5.7 3.5 +220 bps Equity ratio (%) 50.4 49.5 - Free cash flow1) −32.9 −0.8 > −100 Net financial position −7.1 78.8 > −100 Working
Slide 24: Overview of segments
Overview of segments New orders Q1–Q3 Q1–Q3 YoY change Revenue Q1–Q3 Q1–Q3 YoY change (€ million) 2019 2018 (%) € million 2019 2018 (%) DEUTZ Compact Engines 1,019.5 1,312.2 −22.3 DEUTZ Compact Engines 1,079.7 1,085.2 −0.5 DEUTZ Customised Solutions 267.2 215.3 +24.1 DEUTZ Customised Solutions 276.5
Slide 25: Income statement
Income statement € million Q1–Q3 2019 Q1–Q3 2018 YoY change (%) Revenue 1,379.9 1,297.3 +6.4 Cost of sales −1,126.3 −1,057.3 +6.5 Research and development costs −68.2 −71.5 −4.6 Selling and administrative expenses −114.9 −108.2 +6.2 Other operating income 25.8 16.5 +56.4 Other operating expenses −17
Slide 26: Balance sheet: assets
Balance sheet: assets € million Sep. 30, 2019 Dec. 31, 2018 Change (%) Non-current assets (before deferred tax assets) 554.4 506.2 +9.5 Deferred tax assets 81.6 75.9 +7.5 Inventories 387.6 333.5 +16.2 Trade receivables 152.2 157.3 −3.2 Other receivables and assets 53.5 43.2 +23.8 Cash and cash equiv
Slide 27: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities € million Sep. 30, 2019 Dec. 31, 2018 Change (%) Equity 650.4 619.1 +5.1 Provisions for pensions and other post-retirement benefits 159.5 152.8 +4.4 Deferred tax liabilities 0.2 0.5 −60.0 Other provisions 36.6 36.2 +1.1 Financial debt 35.4 19.3 +83.4 Other liabi
Slide 28: Cash flow statement (condensed)
Cash flow statement (condensed) € million Q1–Q3 2019 Q1–Q3 2018 EBIT 78.5 45.9 Cash flow from operating activities (total) 52.7 55.5 Capital expenditure on intangible assets, property, plant and equipment and investments −87.5 −54.1 Proceeds from the sale of non-current assets 4.1 0.1 Cash flow from
Slide 29: Financial calendar and contact details
Financial calendar and contact details Financial calendar Results for 2019 March 18, 2020 Q1/2020 results May 7, 2020 2020 Annual General Meeting May 14, 2020 H1/2020 results August 11, 2020 Q1–Q3/2020 results November 10, 2020 Contact Leslie Isabelle Iltgen SVP Communications & Investor Relations +
Slide 30: Questions & answers
DEUTZ Questions & answers
Slide 31: Thank you for your attention!
Thank you for your attention!