Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (November 2017)
36 slides from Deutz's investor presentation, November 2017
Slide 1: DEUTZ Investor Presentation November 2017
DEUTZ Investor Presentation November 2017
Slide 2: DEUTZ at a glance
DEUTZ at a glance DEUTZ is one of the world’s leading manufacturers of innovative drive systems Company profile Broad spectrum of diesel and gas engines in the 19 to 620 kW range Focus on off-highway with strong market position in construction equipment, agricultural machinery and material handling
Slide 3: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 3
Slide 4: Customer base
Customer base Long standing customer relationships (not exhaustive) Long standing customer relationships Customer base extended and diversified New clients & greater share of wallet (not exhaustive) Compact design and smart EAT solutions attractive to new customers Successful extension of customer b
Slide 5: Revenue by region
Revenue by region Q1-Q3 2017 (Q1-Q3 2016) Africa/Middle East 3 % Europe (excl. Germany) 49 % €36.4 million €530.0 million (€47.2 million) (€442.0 million) Asia-Pacific 10 % €109.3 million €1,093.2 million (€109.3 million) (€945.5 million) Americas 19 % Germany 19 % €206.1 million €211.4 million (€18
Slide 6: Revenue by application
Revenue by application Q1-Q3 2017 (Q1-Q3 2016) Other 2 % Construction equipment 30 % €18.6 million €322.2 million (€27.1 million) (€257.3 million) Automotive 4 % €42.1 million (€60.9 million) Stationary equipment 10 % €1,093.2 million Service 21 % €113.3 million (€945.5 million) €233.9 million (€112
Slide 7: Strong application expertise
Strong application expertise DEUTZ engines meet technical requirements of different applications and customers(1) Same base engine applied for a wide range of equipment classes (1) Pictures show 2.9 litre engine DEUTZ application expertise serving different customer needs 7
Slide 8: Service business
Service business € million 311.9 Resilience of profitable service 287.3 business through different 278.4 economic cycles 259.3 Expansion of service business with new products, digitalization and down-stream integration Investments in own service center and acquisition of selected dealers (1) 2014 20
Slide 9: Fast – Forward looking – Sustainable
Fast – Forward looking – Sustainable Innovative drive systems Diesel Alternative fuels E-DEUTZ Hybrid Liquid gas (LPG) Partial Compressed natural gas (CNG) electrification Synthetic fuels Full electrification Additional market opportunities Strong growth opportunities in the diesel segment with low
Slide 10: Current engine portfolio
Current engine portfolio Competitive product features: compact size, low fuel consumption, smart exhaust after-treatment DEUTZ is the 1st engine manufacturer which received an EU Stage V emissions standard certification Delivering on the promise that the current engine portfolio will meet the standa
Slide 11: Product expansion & Liebherr cooperation
Product expansion & Liebherr cooperation Enlarged product offering at the lower output range expansion Product New 3-cylinder TCD 2.2 on the same platform with 4-cylinder TCD 2.9 Both engines also offered as a gas version (LPG) Start of series production in 2019 Expanding product portfolio in the up
Slide 12: E-DEUTZ Strategy
E-DEUTZ Strategy Application examples E-DEUTZ Strategy Key selling points Electrification of off-highway applications Commercially and technically feasible - Expansion of expertise in hybrid ecologically worthwhile and e-technology TCO reduction Best-fit technology depending on application and power
Slide 13: Torqeedo acquisition
Torqeedo acquisition Torqeedo DEUTZ acquired the global market leader in electric drive systems for boats and a specialist in integrated electric drive systems Torqeedo is an innovative catalyst for the E-DEUTZ strategy Bringing hybrid and full-electric drive systems to market more quickly than Stra
Slide 14: Torqeedo – global market leader in electric motors for boats
Torqeedo – global market leader in electric motors for boats ■ No. 1 for market share: More than 70,000 electric drive systems sold ■ No. 1 for performance: Highest efficiency, best power to weight ratio, superior performance ■ No. 1 in technology: Superior electric and hybrid drive systems for boat
Slide 15: Investment in sales & service network
Investment in sales & service network Strategy to invest in the service network in selected locations Acquisition of Italian dealer IML Motori including its Romanian subsidiary Italian sales and service network will trade under the name DEUTZ Italy The experienced team continues to serve the custome
Slide 16: Site optimisation completed
Site optimisation completed Efficiency gains of approx. €10 million p.a. (higher with better capacity utilisation) Cologne-Porz Cologne-Deutz Cologne-Porz I Ulm Übersee (Chiemsee) Ulm I Substantial proceeds from property sale of former Cologne-Deutz site: • Purchase price of around €125 million in 2
Slide 17: Cash deployment & dividend policy
Cash deployment & dividend policy Investment focus on innovation, service and internationalization Electrification strategy – E-DEUTZ Internal funding Service – acquisition of selected dealers Committed to diesel – enlarged product portfolio, intelligent cooperations and outsourcing opportunities Fi
Slide 18: Key investment highlights
Key investment highlights Leading manufacturer of engines for off-highway applications E-DEUTZ – clear electrification strategy with M&A accelerator Diesel engines with growing outsourcing chances Resilient and growing service business Stable or growing dividend Financial strength for organic and in
Slide 19: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 19
Slide 20: Key figures
Key figures Q1-Q3 2017 yoy Q3 2017 yoy € million New orders 1,173.8 +25.5% 370.8 +43.7% Revenue 1,093.2 +15.6% 358.7 +19.1% EBITDA (before exceptional items) 90.5 +3.0% 25.8 +22.9% EBIT (before exceptional items) 27.8 +€8.1 million 5.0 +€6.0 million Net income 21.3 +€2.5 million 1.5 +€2.7 million Fr
Slide 21: Sales figures
Sales figures New orders Unit sales Revenue € million Units € million +25.5% +17.8% +15.6% 1,173.8 118,279 6,332 1,093.2 204.5 100,439 945.5 935.3 7,129 185.6 191.6 195.8 111,947 969.3 93,310 907.6 743.7 749.7 Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Q1-Q3 2017 DEUTZ Compact Engines DE
Slide 22: Revenue by quarter
Revenue by quarter € million 382.0 344.2 352.5 358.7 308.6 300.2 301.1 314.7 268.6 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q3 2017 revenue increased 19.1% yoy; seasonally weaker in Q3 Strong Q4 revenue level expected based on good order intake 22
Slide 23: Operating profit & net income
Operating profit & net income Q1-Q3 2016 Q1-Q3 2017 € million 87.9 68.2 90.5 62.7 27.8 0.1 27.9 2.0 4.6 19.7 2.8 +1.9 18.8 21.3 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
Slide 24: EBIT
EBIT € million 27.8 27.9 -5.7 +0.1 +12.6 +1.2 19.7 Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2017 before before after exceptional items exceptional items exceptional items EBIT margin 2.1 % 2.5 % 2.6 % EBIT improvement at DEUTZ Compact Engines mainly driven by higher business volume Prior year result at DEUTZ Cus
Slide 25: Segment: DEUTZ Compact Engines
Segment: DEUTZ Compact Engines Q1-Q3 Q1-Q3 Change Q3 Q3 Change € million 2017 2016 in % € million 2017 2016 in % New orders 969.3 743.7 30.3 New orders 307.7 199.2 54.5 Unit sales (units) 111,947 93,310 20.0 Unit sales (units) 36,465 28,503 27.9 Revenue 907.6 749.7 21.1 Revenue 294.0 237.2 23.9 EBIT
Slide 26: Segment: DEUTZ Customised Solutions
Segment: DEUTZ Customised Solutions Q1-Q3 Q1-Q3 Change Q3 Q3 Change € million 2017 2016 in % € million 2017 2016 in % New orders 204.5 191.6 6.7 New orders 63.1 58.9 7.1 Unit sales (units) 6,332 7,129 -11.2 Unit sales (units) 2,215 2,230 -0.7 Revenue 185.6 195.8 -5.2 Revenue 64.7 63.9 1.3 EBIT 21.9
Slide 27: R&D spending & capital expenditure
R&D spending & capital expenditure R&D expenditure Capital expenditure (excl. R&D) € million 47.7 1.4 43.7 38.5 40.4 2.2 Gross expenditure 2.0 Reimbursements 46.3 41.5 Net expenditure 36.5 Net R&D Q1-Q3 2016 Q1-Q3 2017 Q1-Q3 2016 Q1-Q3 2017 expenditure ratio(1) 3.9% 4.2% R&D increase in line with gu
Slide 28: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 239.4 190.7 96.4 22.3 30 Sep 2016 30 Sep 2017 Q1-Q3 2016 Q1-Q3 2017 Working capital ratio 19.1% 13.5% Working capital decrease mainly due to higher Operating cash flow increase largely attributable to trade payables
Slide 29: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow(1) Net financial position € million 107.1 95.0 4.7 2.1 2016 Q3 2017 (LTM) 30 Sep 2016 30 Sep 2017 Substantial increase of free cash flow Strong cash flow led to improvement of net financial Free cash flow in Q3 2017 amounted to +€20.6
Slide 30: Equity ratio & funding
Equity ratio & funding € million 1,059.7 1,113.6 46.3% 44.8% 491.1 499.1 160 16 16 15 1 31 Dec 2016 30 Sep 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 lines Equity ratio remains strong at 44.8% Medium- to l
Slide 31: Agenda
Agenda DEUTZ strategy & positioning Financials Outlook 31
Slide 32: Assessment for key end-customer markets, 2017
Assessment for key end-customer markets, 2017 Europe North America China Unit sales (equipment) Construction equipment +5 % to +10 % 0 % to +5 % +20 % to +30 % Material handling +5 % to +10 % +5 % to +10 % +20 % to +30 % Agricultural machinery 0 % to +5 % Medium & light-duty trucks 0 % to +5 % 32
Slide 33: Financial outlook
Financial outlook FY 2016 FY 2017 reported guidance € million Revenue 1,260.2 marked increase EBIT margin (before exceptional items) 1.9 % moderate increase Positive exceptional items: • Property sale in Cologne-Deutz with positive contribution to earnings in FY 2017 in the high double-digit million
Slide 34: Financial calendar & contact details
Financial calendar & contact details Annual report 2017 14 March 2018 Annual general meeting 26 April 2018 Q1 2018 results 3 May 2018 ► Contact details Christian Krupp Tel:+49 (0) 221 822 5400 SVP Finance, Public and Investor Relations Fax:+49 (0) 221 822 15 5400 Ottostrasse 1 Email: christian.krupp
Slide 35: 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 36: Thank you very much
MA @ The engine company. DEUTZ Thank you very wlan) 36