Knorr-bremse Ag · XETR:KBX
Knorr-bremse — Q3 2019 Earnings Presentation
25 slides from Knorr-bremse's earnings presentation, Nov 27, 2019
Slide 1: Quarterly Release Financial Results
Quarterly Release Financial Results BERND EULITZ I CEO RALPH HEUWING I CFO NOVEMBER 27, 2019 Knorr-Bremse Group
Slide 2: Bernd Eulitz – new CEO of Knorr-Bremse
Bernd Eulitz – new CEO of Knorr-Bremse Business experience ▪ Member of the Management Committee of Linde plc, Executive Vice President Americas P&L responsibility for USD 9bn revenue & 20,000 FTE ▪ 15 years of senior management positions in EMEA, Asia Pacific & Americas ▪ Management consultant at A.
Slide 3: Financial highlights 9M/19 – well on track towards FY targets
Financial highlights 9M/19 – well on track towards FY targets Order intake Operating € 5.15bn € 2.79bn € 2.52bn EBITDA +6.0% yoy +6.8% yoy -2.1% yoy margin EPS1 18.8% € 2.69 PY: 17.9% -6.9% yoy Revenue € 5.31bn Order book +6.4% yoy € 4.40bn 21.7% 16.3% Op. EBITDA Op. EBITDA -1.0% yoy margin margin K
Slide 4: Knorr-Bremse Q3 market highlights
Knorr-Bremse Q3 market highlights Supply contract for Partner in braking and HVAC electrification systems for Alstom of bus fleets in high speed trains Milan & Modena Turning assistant 50 braking extends CVS systems for product portfolio regional trains in Italy awarded Knorr-Bremse Group 4
Slide 5: Knorr-Bremse Q3 operational highlights
Knorr-Bremse Q3 operational highlights Successful test of ADB capacity self-operating expansion in freight train the U.S. Disposal of Platooning Powertech to demonstrator Radial Capital completed with Partners Continental Knorr-Bremse Group 5
Slide 6: Continued strong order book despite slowdown in CVS order intake
Continued strong order book despite slowdown in CVS order intake Order intake Order book €m By type €m 1.05 0.92 8.0 7.6 -1.0% -10.1% 4,448.5 4,402.9 1,748.5 +23 +30 1,571.8 -229 M&A net disposals • Hitachi € +23m -13.1% • Snyder € +4m • BP/Sydac € -4m Org. growth Q3/18 Organic M&A net FX Q3/19 30.0
Slide 7: Revenue growth continues in Q3 – strong support from NA and AP regions
Revenue growth continues in Q3 – strong support from NA and AP regions Revenue €m By type By region +2.4% +21 1,711.1 1,671.8 1,711.1 -2.5% 27.4 SA +6 M&A net disposals 28.1 +12 1,671.8 Asia/ • Hitachi € +22m 477.4 444.8 Pacific • Snyder € +4m +7.3% +0.7% • BP/Sydac € -20m Org. growth 384.6 +9.4% NA
Slide 8: Margin expansion continues in Q3 – despite challenging business environment
Margin expansion continues in Q3 – despite challenging business environment EBITDA €m Margin EBITDA increased by 6.7% yoy (vs. revenue growth of 2.4%) 17.8% 18.3% ▪ Continued EBITDA margin expansion, helped by growing 17.6% AM share (up to 37.7% from 34.3%) IFRS16 ▪ CVS: Cost measures starting to pa
Slide 9: Strong cash performance driven by EBITDA and NWC improvements
Strong cash performance driven by EBITDA and NWC improvements FCF & OCF CapEx1 NWC Op. ROCE2 (annualized) €m FCF OCF €m % of sales €m Scope of days % 58.3 4.7% 55.1 34.3% 34.0% incl. Munich 1,078.5 1,084.5 243.9 3.6% real estate € +21m 156.9 80.3 60.6 74.9 -13.0 Q3/18 Q3/19 Q3/18 Q3/19 30.9.18 30.9.
Slide 10: Sale & lease back transaction of Munich property supporting asset light strategy
Sale & lease back transaction of Munich property supporting asset light strategy Asset light strategy of Knorr-Bremse ▪ Important cornerstone for strong ROCE performance ▪ Capital allocation prioritizes higher ROCE projects Transaction details ▪ Sale of real estate and predominantly office space in
Slide 11: RVS: Good book-to-bill provides healthy visibility
RVS: Good book-to-bill provides healthy visibility Order intake Order book €m By type 10.7 10.8 Book-to-bill ratio improved sequentially from 0.92 in 1.09 1.04 Q2/19 to 1.04 in Q3/19 +6.4% ▪ Asia main driver: China Metro and AM, India -1.6% 3,296.9 3,099.0 passenger coaches 966.6 +12 951.2 ▪ EU stab
Slide 12: RVS: Solid margin performance in Q3/19
… RVS: Solid margin performance in Q3/19 Revenue EBITDA €m By type Revenue growth by € +26.9m yoy ▪ EU: growth driven by OE in commuter, freight & LRV rep. 20.6% business rep. 19.9% op. 20.6% op.1 20.4% ▪ Asia: Solid support from passenger and service +3.0% ▪ China: Metro and AM strong, locomotives
Slide 13: CVS: Post-summer order correction led to weak order intake in Q3/19
CVS: Post-summer order correction led to weak order intake in Q3/19 Order intake Order book €m By type 5.2 4.2 Organic order intake Q3/19 down significantly 1.00 0.78 ▪ Low order intake of truck OEMs led to correction in order intake in CVS across regions -20.8% 784.1 -18.1% ▪ EU & NA order intake d
Slide 14: CVS: Our take – magnitude of order correction in Q3 seems exaggerated
CVS: Our take – magnitude of order correction in Q3 seems exaggerated Order intake 2017-2019 €m 2017 2018 2019 350 300 +48% +2.7% Sep-Oct ’19: -27% Bounce back 250 200 150 Aug-Sep ’19: Sharp post-summer 100 correction by OEMs due to weakened demand 50 0 2017 2018 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 15: CVS: solid margin performance despite organic revenue decline
… CVS: solid margin performance despite organic revenue decline Revenue EBITDA €m By type Global truck production development still holding up rep. 16.3% ▪ EU: Moderate OE growth vs. decreasing AM rep. 16.2% op. 16.3% ▪ Asia: OE growth +1.6% op.1 16.2% ▪ NA / SA: Growth predominantly in OE +15 797.1
Slide 16: CVS leadership fully prepared to protect margins during slowdown
CVS leadership fully prepared to protect margins during slowdown Truck production rate1 In 1.000 trucks Cost measures already implemented ▪ Premium freight & overtime reductions 150 ▪ Hiring freeze, reduction of lease personnel, EU 100 replacements partly not filled ▪ Localization of manufacturing a
Slide 17: Guidance confirmed for 2019
Guidance confirmed for 2019 Market developments and KB response Revenue op. EBITDA margin1 €m Confirmed Confirmed RVS ▪ Rail industry providing resilience in challenging economic environment 6,875 - 7,075 18.5 – 19.5% 18.8% ▪ Customers with continued strong demand ▪ Further measures to support m
Slide 18: First thoughts on 2020 – robust group performance through CVS slowdown
First thoughts on 2020 – robust group performance through CVS slowdown Market outlook Strategic focus KB First financial indications ▪ Solid growth continues, ▪ Build on strong market ▪ Revenue: primarily in passenger rail positions in high-growth Slightly higher1 ▪ Further maturing installed countr
Slide 19: Q&A
KNORR-BREMSE [{c) Q&A Q3 January 1 to September 30, 2019 | (((Y)) Knorr-Bremse Group
Slide 20: Financial calendar
… Financial calendar Upcoming events Event Date Location Roadshow 28.11.19 Paris Goldman Sachs 2. & 3.12.19 London 11th Industrials Confernece Berenberg 4. & 5.12.19 London European Conference Knorr-Bremse Group 20
Slide 21: Investor relations contact
… Investor relations contact Andreas Spitzauer Phone: +49 89 3547 182310 Mobile: +49 175 5281320 Email: Andreas.Spitzauer@knorr-bremse.com Justinian Späth Phone: +49 89 3547 181085 Mobile: +49 160 6149309 Email: Justinian.Spaeth@knorr-bremse.com Knorr-Bremse Group 21
Slide 22: Order Intake for Group, RVS & CVS 9M/19
Order Intake for Group, RVS & CVS 9M/19 Group RVS CVS €m €m €m -2.1% +0.7% -5.5% Organic-Growth Organic-Growth Organic-Growth 5,265.5 5,153.0 2,855.4 2.875.9 2,412.5 -198 95 -3.8% 43 -54 32 +1.5% 2,279.6 -10 -240 64 44 -9.9% - 64 BP + 44 Hitachi + 10 Snyder + 44 Hitachi - 64 BP + 10 Snyder 9M/19 Org
Slide 23: Revenue for Group, RVS & CVS 9M/19
Revenue for Group, RVS & CVS 9M/19 Group RVS CVS €m €m €m +6.4% +6.0% +6.9% 5,312.7 2,791.4 2,523.8 4,994.0 236 -13 96 +4.7% 2,632.8 184 -57 31 +7.0% 2,362.2 44 64 54 Organic-Growth Organic-Growth +2.3% - 65 BP Organic-Growth + 44 Hitachi + 44 Hitachi + 8 Snyder - 65 BP + 8 Snyder 9M/19 Organic M&A
Slide 24: EBITDA for Group, RVS & CVS 9M/19
EBITDA for Group, RVS & CVS 9M/19 Group RVS CVS €m €m €m 21.7% 18.8% 18.5% 16.4% 16.3% 17.5% 17.9% 19.8% 15.6% 19.0% IFRS16 € +40m IFRS16 € +23m IFRS16 € +14m Conversion from Wülfrath € -16m Conversion from growth1 € +74m growth € +75m Conversion from growth2 € +9m Wülfrath € -16m BP Sydac € -8m 998
Slide 25: 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