Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (March 2018)
37 slides from Deutz's investor presentation, March 2018
Slide 1: DEUTZ Investor Presentation
DEUTZ Investor Presentation March 2018
Slide 2: Agenda
AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 2
Slide 3: Our roots and our future – pioneers in engineering
Our roots and our future – pioneers in engineering ■ Founded in 1864 in Cologne, DEUTZ is the world's oldest engine company and one of the world's leading independent engine manufacturers ■ Otto, Langen, Daimler, Bugatti, Maybach – these pioneers of engine technology all worked for DEUTZ ■ DEUTZ is
Slide 4: What we do – our markets
What we do – our markets DEUTZ is the leading independent manufacturer of diesel and gas engines in the power range from 19 to 620 kW for off-highway applications – we are developing the technologies today for the demands of tomorrow. © DEUTZ AG 4
Slide 5: New trends – paradigm shift
New trends – paradigm shift ■ Public perception of diesel engines is undergoing a paradigm shift: There is a need, and demand, for energy savings and cleaner motorisation ■ There are calls from the media and politicians for diesel engines to be taken off the market and replaced with electrified driv
Slide 6: Our vision – leading in innovative drive systems
Our vision – leading in innovative drive systems ■ DEUTZ is on track to become a leading provider of INNOVATIVE DRIVE SYSTEMS, playing its part in reducing emissions such as pollution, noise and CO2. The DEUTZ road map for achieving this vision: § DIESEL is here to stay, its future secured by its hi
Slide 7: Agenda
AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 7
Slide 8: Our strategy – a new dynamic
Our strategy – a new dynamic INNOVATIVE DRIVE SYSTEMS High-tech Diesel Engines Alternative Fuels n Long term future for many off- n Liquid gas (LPG) n Hybrid systems highway applications n Compressed natural gas n Electric systems n Pioneering role of DEUTZ in (CNG) reducing emissions n Fully integr
Slide 9: High-tech diesel engines – current engine portfolio
High-tech diesel engines – current engine portfolio n Competitive product features: compact size, low fuel consumption, smart exhaust after-treatment n DEUTZ is the 1st engine manufacturer to obtain certification for the EU Stage V emissions standard n This delivers on the promise that the current e
Slide 10: Extended range of products
Extended range of products n Enlarged product offering in the lower output range n New gas and bi-fuel engines n Extended product range in the upper output range (200 to 620 kW) Start of series production in 2019 Start of serial supply in 2019 © DEUTZ AG 10
Slide 11: Electrification: example applications and DEUTZ position
O Example applications Electrification DEUTZ position n Electric and hybrid solutions have not n Competitive solutions for yet made inroads into off-highway selected applications markets - Reduced TCO n DEUTZ has established expertise in all relevant technological fields (e-motors, - Lower noise emi
Slide 12: Torqeedo acquisition
Torqeedo acquisition Torqeedo n DEUTZ acquired the global market leader in electric drive systems for boats and a specialist in integrated electric drive systems n Torqeedo is an innovative catalyst for the E-DEUTZ strategy n Bringing hybrid and full-electric drive systems to market more quickly tha
Slide 13: Revenue by region
Revenue by region 2017 (2016) Africa/Middle East 4 % Europe (excl. Germany) 49 % €53.7 million €725.5 million (€62.3 million) (€588.6 million) Asia-Pacific 10 % €147.5 million €1,479.1 million (€147.9 million) (€1,260.2 million) Americas 18 % Germany 19 % €268.1 million €284.3 million (€239.6 millio
Slide 14: Revenue by application
Revenue by application 2017 (2016) Other 2 % Construction Equipment 30 % €28.3 million €437.4 million (€32.9 million) (€350.0 million) Automotive 4 % €56.1 million (€77.2 million) Stationary Equipment 10 % €1,479.1 million Service 21 % €152.0 million (€1,260.2 million) €309.2 million (€147.3 million
Slide 15: Customer base extended successfully
Customer base extended successfully Long-standing customer relationships New clients & greater share of wallet (not exhaustive) (not exhaustive) © DEUTZ AG 15
Slide 16: Service business
Service business € million 309.2 278.4 287.3 n Profitable service business 259.3 showing resilience throughout the economic cycle n Expansion of service business - New products - Digitalization - Investment in own service centers & acquisition of selected dealers 2014 2015 2016 2017 è Continuous gro
Slide 17: Investment in sales & service network
Investment in sales & service network n Acquisition of Italian dealer IML Motori including its Romanian subsidiary n Italian sales and service network now trading under the name DEUTZ Italy n The acquisition strengthens our profitable service business è Investing in service network © DEUTZ AG 17
Slide 18: Site optimisation completed
Site optimisation completed n Efficiency gains of approx. €10 million p.a. (will be higher with improved capacity utilisation) Cologne-Porz Cologne-Deutz Cologne-Porz üI Ulm Übersee (Chiemsee) Ulm üI n Substantial proceeds from property sale of former Cologne-Deutz site: • Purchase price of around €
Slide 19: Cash deployment & dividend policy
Cash deployment & dividend policy n Investment focus on innovation, service and internationalization Internal n Electrification strategy – E-DEUTZ funding n Service – acquisition of selected dealers Financial n Keep equity ratio above 40 % strength n Robust financial framework in volatile markets Di
Slide 20: Key investment highlights
Key investment highlights Leading manufacturer of drive-systems for off-highway applications E-DEUTZ – electrification strategy with M&A accelerator Diesel engines with growing potential for outsourcing Resilient and expanding service business Financial strength for organic and inorganic growth Furt
Slide 21: Agenda
AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 21
Slide 22: Key figures
Key figures 2017 yoy Q4 2017 yoy € million New orders 1,556.5 +23.4% 382.7 +17.4% Revenue 1,479.1 +17.4% 385.9 +22.6% EBITDA (before exceptional items) 135.9 +19.0% 45.4 +72.6% EBIT (before exceptional items) 42.4 +81.2% 14.6 +€10.9 million Net income 121.2 +€105.2 million 99.9 +€102.7 million Free
Slide 23: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million +23.4% +22.0% +17.4% 1,556.5 161,646 1,479.1 1,261.4 132,539 1,260.2 2016 2017 2016 2017 2016 2017 © DEUTZ AG 23
Slide 24: Operating profit & net income
Operating profit & net income 2016 2017 € million 104.1 146.5 2.4 22.9 135.9 93.5 114.2 90.8 121.2 42.4 23.4 3.5 3.9 16.0 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 excep
Slide 25: EBIT
EBIT € million 146.5 99.5 42.4 24.5 24.5 23.4 32.7 22.5 22.5 -6.1 -4.6 -3.2 2016 2017 2017 before before after exceptional items exceptional items exceptional items EBIT margin 1.9 % 2.9% 9.9 % n Significantly improved EBIT for DEUTZ Compact Engines n Prior-year result for DEUTZ Customised Solutions
Slide 26: DEUTZ Compact Engines
DEUTZ Compact Engines Change Q4 Q4 Change € million 2017 2016 in % € million 2017 2016 in % New orders 1,290.4 1,011.6 27.6 New orders 321.1 267.9 19.9 Unit sales (units) 151,671 123,179 23.1 Unit sales (units) 39,724 29,869 33.0 Revenue 1,227.5 1,000.8 22.7 Revenue 319.9 251.1 27.4 EBIT (before exc
Slide 27: DEUTZ Customised Solutions
DEUTZ Customised Solutions Change Q4 Q4 Change € million 2017 2016 in % € million 2017 2016 in % New orders 261.3 249.8 4.6 New orders 56.8 58.2 -2.4 Unit sales (units) 8,740 9,360 -6.6 Unit sales (units) 2,408 2,231 7.9 Revenue 247.9 259.4 -4.4 Revenue 62.3 63.6 -2.0 EBIT (before except. items) 24.
Slide 28: R&D spending & capital expenditure
R&D spending & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 70.9 3.9 57.8 53.5 52.9 3.1 Gross expenditure 3.1 Reimbursements 67.0 54.7 Net expenditure 50.4 Net R&D 2016 2017 2016 2017 expenditure ratio(1) 4.0% 4.5% n R&D increase in line with guidance due to n Capex
Slide 29: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 222.2 204.3 112.7 63.8 31 Dec 2016 31 Dec 2017 2016 2017 Working capital ratio 16.2% 15.0% n Improvement of working capital ratio due n Higher operating cash flow largely attributable to to strong working capital man
Slide 30: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 98.2 82.5 31.6 4.7 2016 2017 31 Dec 2016 31 Dec 2017 n Significant increase (+€77.8 million) in free cash n Strong free cash flow leads to improvement of net flow due to higher operating cash flow f
Slide 31: Equity ratio & funding
Equity ratio & funding € million 1,213.1 1,059.7 49.4% 46.3% 599.2 491.1 160 18 16 12 1 31 Dec 2016 31 Dec 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 line n Equity ratio increased to 49.4% n Medium- to lon
Slide 32: Agenda
AGENDA About DEUTZ Strategy & market positioning Financials Outlook © DEUTZ AG 32
Slide 33: Forecast for key end-customer markets, 2018
Forecast for key end-customer markets, 2018 Europe North America China Unit sales (equipment) Construction Equipment +5% to +10% +5% to +10% +10% to +20% Material Handling +5% to +10% +5% to +10% +10% to +20% Agricultural Machinery 0% to +5% 0% to +5% -5% to 0% Medium & Light-Duty Trucks 0% to +5% ©
Slide 34: Financial outlook
Financial outlook FY 2017 FY 2018 reported guidance € million Revenue 1,479.1 marked increase EBIT margin (before exceptional items) 2.9 % moderate increase R&D expenditure(1) 67.0 70 - 75 Capex (excl. R&D)(1) 54.7 60 - 70 (1) Net of reimbursements © DEUTZ AG 34
Slide 35: Financial calendar & contact details
Financial calendar & contact details n Annual general meeting 26 April 2018 n Q1 2018 results 3 May 2018 n H1 2018 results 2 August 2018 n Q1-Q3 2018 results 8 November 2018 ► Contact details n Christian Krupp Tel:+49 (0) 221 822 5400 n SVP Finance, Public and Investor Relations Fax:+49 (0) 221 822
Slide 36: 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 37: Thank you for your attention
THANK YOU FOR YOUR ATTENTION © DEUTZ AG 37