Knorr-bremse Ag · XETR:KBX
Knorr-bremse — FY2019 Earnings Presentation
36 slides from Knorr-bremse's earnings presentation, Mar 11, 2020
Slide 1: Preliminary Financial Results FY 2019
PRELIMINARY FINANCIAL RESULTS FY 2019 BERND EULITZ I CEO RALPH HEUWING I CFO MARCH 11, 2020 1
Slide 2: Agenda
AGENDA 1 HIGHLIGHTS 2019 BERND EULITZ 2 FINANCIAL PERFORMANCE Q4/19 RALPH HEUWING 3 GUIDANCE 2020 AND STRATEGY UPDATE BERND EULITZ Knorr-Bremse AG 2
Slide 3: Highlights 2019
HIGHLIGHTS 2019 Knorr-Bremse AG 3
Slide 4: We delivered what we promised for 2019
WE DELIVERED WHAT WE PROMISED FOR 2019 1 | Both RVS and CVS outperformed their respective markets and gained market share vs. main competitors 2 | Both RVS and CVS delivered on their guidance • RVS revenue +5.6%yoy (market: +2.6%1) @ 22.3% op. EBITDA margin • CVS revenue +3.8%yoy (market: -4.5%2) @
Slide 5: 2019 – a year full of highlights
2019 – A YEAR FULL OF HIGHLIGHTS Contract for braking and Heinz Hermann Thiele ADB capacity expansion in Bernd Eulitz new CEO of KB and Alstom signed a 25- HVAC systems for Alstom celebrates 50th anniversary the U.S. Knorr-Bremse AG year service agreement for HS trains at Knorr-Bremse AG locomotives
Slide 6: Strong financial performance in FY19
STRONG FINANCIAL PERFORMANCE IN FY19 ORDER INTAKE € 3.7bn +5.6% yoy € 3.3bn EBITDA MARGIN1 € 7.1bn +3.8% yoy +0.9% yoy 19.2% PY: 17.8% REVENUE ORDER BOOK € 6.9bn +4.8% yoy 16.0% € 4.7bn 22.3% OP. EBITDA +2.8% yoy MARGIN OP. EBITDA MARGIN 1) FY19: including IFRS16, restructuring cost for Wülfrath and
Slide 7: We delivered on our FY19 guidance
WE DELIVERED ON OUR FY19 GUIDANCE Divisions Revenue op. EBITDA margin1 €m RVS • Guidance achieved: Revenue of € 3.66bn (€ 3.615- 3.715bn) and op. EBITDA margin at 22.3% (20.8-21.8%) 6,875-7,075 18.5-19.5% • Rail industry provided resilience in challenging macro- 6,937 18.8% economic environment • Cu
Slide 8: Financial Performance Q4/19
FINANCIAL PERFORMANCE Q4/19 Knorr-Bremse AG 8
Slide 9: Strong order intake in Q4/19 provides solid basis for FY20
STRONG ORDER INTAKE IN Q4/19 PROVIDES SOLID BASIS FOR FY20 Order intake Order book €m By type €m 1.07 1.18 8.3 8.1 +2.8% +10.2% 4,562.6 4,692.0 +149 +5 +23 1,913.0 M&A impact 1,735.9 BP/Sydac € -1m (Q4/18) 8.6% Hitachi € +21m (Q4/19) Snyder € +4m (Q4/19) Org. growth Powertech € - 18m (Q4/19) Q4/18 O
Slide 10: Stable revenue in Q4/19 due to strong support from APAC
STABLE REVENUE IN Q4/19 DUE TO STRONG SUPPORT FROM APAC Revenue €m By type By region +0.1% 1,621.8 +25 1,623.9 22.8 -3.1% 22.1 SA +1 Asia/ M&A impact 400.9 -24 -1.5% 500.8 Pacific +24.9% BP/Sydac € - 4m (Q4/18) Org. growth Hitachi € +22m (Q4/19) 403.5 -5.7% NA Snyder € + 4m (Q4/19) 380.5 Powertech €
Slide 11: Operating EBITDA margin in Q4/19 within FY guidance range
OPERATING EBITDA MARGIN IN Q4/19 WITHIN FY GUIDANCE RANGE EBITDA €m Margin 21.3% Strong increase in reported EBITDA by € 44.3m 19.8% ▪ Reflecting completion of SLB transaction in Munich 18.6% 18.7% Operating EBITDA margin at 18.7% CVS market SLB1 € +45.1m ▪ RVS: strong quarterly margin driven by str
Slide 12: RVS: Strong order intake in Q4/19
RVS: STRONG ORDER INTAKE IN Q4/19 Order intake Order book €m By type 11.1 11.7 Book-to-bill ratio improved sequentially from 1.04 in 1.14 1.32 Q3/19 to 1.32 in Q4/19 +11.2% ▪ EU: positive momentum across all segments +21.0% 3,573.0 (high speed, regional, metro, passenger coach) +203 +11 1,140.7 3,21
Slide 13: RVS: Strong margin in Q4/19 balances Q3/19
… RVS: STRONG MARGIN IN Q4/19 BALANCES Q3/19 Revenue op. EBITDA €m By type Organic revenue growth of 5.4% over Q4/18 ▪ EU: generally lower, driven by timing of projects in high speed and metro, positive AM development 24.2% ▪ APAC: overall stronger due to passenger, metro and +4.3% 22.5% regional as
Slide 14: CVS: Recovery from strong order correction in Q3/19
CVS: RECOVERY FROM STRONG ORDER CORRECTION IN Q3/19 Order intake Order book €m By type 5.2 4.1 Book-to-bill ratio improved sequentially from 0.78 in 1.00 1.02 Q3/19 to 1.02 in Q4/19 ▪ EU: normalization of market demand after many years -3.0% of very strong growth 795.2 -16.8% +11 771.1 ▪ NA: deceler
Slide 15: CVS: Q4/19 margin reflecting expected revenue decline
CVS: Q4/19 MARGIN REFLECTING EXPECTED REVENUE DECLINE Revenue op. EBITDA €m By type CVS outperformed TPRs across all regions rep. 16.3% ▪ EU: Pre-buy in H1/19 and market normalization impacting rep. 14.5% op. 16.3% Q4/19, FY19 TPR still 5% above long-term average op. 14.9% -5.2% ▪ NA: Market downswi
Slide 16: Guidance 2020
GUIDANCE 2020 Knorr-Bremse AG 16
Slide 17: Impact by Covid-19 on Knorr-Bremse
IMPACT BY COVID-19 ON KNORR-BREMSE EMPLOYEE SAFETY OPERATION IN CHINA • We protect our employees worldwide from Covid-19 • KB has 5,000 employees in China • Strict travel and precautionary guidelines implemented • Chinese New Year break extended by one week • Only one remote field service employee o
Slide 18: Guidance 2020 – Market environment and focus
GUIDANCE 2020 – MARKET ENVIRONMENT AND FOCUS Market environment Management focus ▪ Political and macro uncertainty elevated ▪ Building a strong management team ▪ World economy still growing, but slowing ▪ Turning KB into a visible champion ▪ Uncertain Covid-19 impact on economy and KB ▪ Combining st
Slide 19: Guidance 2020 – Financials
GUIDANCE 2020 – FINANCIALS Divisions Group Revenue2 op. EBITDA margin2 Assumptions ▪ Stable economic environment and limited FY impact €m by Covid-19 18.0-19.0% ▪ Current FX rates 6,937 6,500-6,900 18.8% ~6,8001 RVS ▪ Revenue: € 3,600-3,800m (FY191: € 3,526m) ▪ Op. EBITDA margin: 21.0-22.5% (FY19: 2
Slide 20: Strategy Update
STRATEGY UPDATE Knorr-Bremse AG 20
Slide 21: Our value proposition for Knorr-Bremse Group
OUR VALUE PROPOSITION FOR KNORR-BREMSE GROUP Make transport safer, Shape the future of rail Outgrow market and Increase value for more reliable and more and commercial vehicle maintain best in class customers, employees efficient transportation margin & shareholders We address society’s challenges w
Slide 22: We confirm and continue our successful strategy
WE CONFIRM AND CONTINUE OUR SUCCESSFUL STRATEGY Expand Technology Leadership Capture Megatrend Leverage Opportunities Global Presence Strategy Continuous Efficiency & Excellence Grow Profitable Aftermarket Targets until 20221: organic revenue growth of 4.5-5.5% p.a. and EBITDA margin expansion by +1
Slide 23: Strong R&D secures our technology leadership
STRONG R&D SECURES OUR TECHNOLOGY LEADERSHIP addressing industry trends with superior technological solutions ~12,000 single Targeted patents granted and R&D ratio: applied INDUSTRY TRENDS 5-6% of revenue Targeted R&D ratio: 6-7% of revenue ~3,600 R&D employees1 1) FTE at YE19 Knorr-Bremse AG 23
Slide 24: Commercial Vehicle Systems: example steering business
COMMERCIAL VEHICLE SYSTEMS: EXAMPLE STEERING BUSINESS KB CORE ROADMAP ADAS1 AND HIGHLY AUTOMATED DRIVING Driver Assistance Driver Assistance Stability Longitudinal Automated Braking Lateral Control Control Driving Functions Control Brake Combined System Steering and Braking → Successful M&A strategy
Slide 25: Rail Vehicle Systems: example aftermarket business
RAIL VEHICLE SYSTEMS: EXAMPLE AFTERMARKET BUSINESS Aftermarket Growth Levers Ambition Use installed fleet & utilize global footprint Grow business beyond € 2bn 1 Efficient spare part solutions | Service of Knorr-Bremse products | Obsolescence management >2 1.5 Additional growth from modernization Mo
Slide 26: Knorr-Bremse to become climate neutral from 2021
KNORR-BREMSE TO BECOME CLIMATE NEUTRAL FROM 2021 CLIMATE • KB renews its climate strategy with even more NEUTRALITY ambitious targets Rating: 93% FROM 2021 • 50% CO2 emission reduction by 2030 • Additionally: Increasing purchase of renewable energy and carbon offsetting • Starting point of CO2 emiss
Slide 27: Ecodesign for reduced carbon footprint
ECODESIGN FOR REDUCED CARBON FOOTPRINT Brake valve Active Caliper Release ACR -52%1 Rail -1% fuel savings Truck New Disk Brake Generation Light Weight Caliper -10%2 -24%1 Truck Rail 1) CO2-savings during operation, manufacturing process and end-of life recycling or disposal. Acc. to ISO 14040 for Li
Slide 28: Mid term guidance confirmed
MID TERM GUIDANCE CONFIRMED Assumptions Organic revenue growth Operating EBITDA margin ▪ Stable political and macro environment ▪ Stable FX, based on current rates CAGR 4.5-5.5% RVS +150bps ▪ Successful execution of AM strategy 7.5% 20.3% 18.8% 19.1% 18.8% 18.0-19.0% ▪ Continued solid growth of pass
Slide 29: Q&A / Backup
Q&A / BACKUP Strong We confirm and Knorr-Bremse preliminary Guidance 2019 Strong R&D for continue our to become CO2 FY19 results achieved our technology successful neutral from leadership strategy 2021 Knorr-Bremse AG 29
Slide 30: Financial calendar
FINANCIAL CALENDAR Upcoming events Event Date Location Investor meetings (conference calls) 13.03.20 Frankfurt BofA conference (conference calls) 17./18.03.20 London Kepler Cheuvreux conference (conference calls) 19.03.20 New York Release annual report 23.04.20 Munich … Knorr-Bremse AG 30
Slide 31: Investor relations contact
INVESTOR RELATIONS CONTACT Andreas Spitzauer Phone: +49 89 3547 182310 Mobile: +49 175 5281320 Email: Andreas.Spitzauer@knorr-bremse.com … Knorr-Bremse AG 31
Slide 32: Knorr-Bremse climate strategy 2030
KNORR-BREMSE CLIMATE STRATEGY 2030 G O AL : H AL V E C O 2 E M I S SI O N S B Y 2 0 3 0 Average Scope 1 & 2 emission reduction of 4.2% p.a. compared to baseline 2018 Three reduction levers: R E N E W AB L E S O W N G E N E R ATI O N Gradually increasing the share of self-generated renewable energy E
Slide 33: Order intake for Group, RVS & CVS FY/19
ORDER INTAKE FOR GROUP, RVS & CVS FY/19 Group RVS CVS €m €m €m 0.9% Organic +5.8% Organic -4.9% Organic Decrease Growth Decrease 7,001.4 7,065.9 4,016.7 3,207.7 -49 -5 118 -0.7% 3,798.0 246 -70 43 3,050.7 +6.5% -297 75 65 -9.3% Hitachi € +65m Snyder € +13m BP/Sydac € - 65m Hitachi € +65m Snyder € +1
Slide 34: Revenue for Group, RVS & CVS FY/19
REVENUE FOR GROUP, RVS & CVS FY/19 Group RVS CVS €m €m €m +4.8% +3.8% Organic Organic +5.6% Organic Growth Decrease Growth 6,936.5 3,656.1 3,280.2 6,615.8 212 121 3,461.9 229 -78 43 3,160.1 78 -12 +3.2% +6.6% -23 66 -0.7% Hitachi € +66m Snyder € +12m Hitachi € +66m Snyder € +12m BP/Sydac € - 68m BP/
Slide 35: EBITDA for Group, RVS & CVS FY/19
EBITDA FOR GROUP, RVS & CVS FY/19 Group RVS CVS €m 18.8% 19.2% €m €m 18.4% 22.3% 17.8% 16.3% 20.8% 16.0% 20.0% 15.4% BP/Sydac € -11m Conversion from Conversion from growth € +41m SLB € +45m growth € +77m IFRS16 € +18m IFRS16 Wülfrath € +58m € -19.5m IFRS16 € +34m IPO Wülfrath € -19.5m € -15m CVS mar
Slide 36: Disclaimer
DISCLAIMER IMPORTANT NOTICE This presentation has been prepared for information and background purposes only. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, an