Deutz Ag · XETR:DEZ
Deutz — Investor Presentation (November 2013)
29 slides from Deutz's investor presentation, November 2013
Slide 1: DEUTZ AG Investor presentation – power in motion
DEUTZ AG Investor presentation – power in motion November 2013
Slide 2: Agenda
Agenda DEUTZ at a glance Strategy & investment rationale Financials Outlook
Slide 3: DEUTZ at a glance
DEUTZ at a glance Founded in 1864 by Nicolaus August Otto - the inventor of the four-stroke engine Independent manufacturer of diesel engines with product range from 25 to 520 kw Profile Production capacity of 300,000 engines p.a. (additional capacity of Joint Ventures 250,000 engines p.a.) Engineer
Slide 4: Corporate structure
Corporate structure DEUTZ Group Revenue 2012 €1.3bn DEUTZ Compact Engines DEUTZ Customised Solutions Revenue 2012 €1.0bn Revenue 2012 €0.3bn Liquid-cooled engines of up to 8 Air-cooled engines for on-road, off- litres cubic capacity for on- and off- road and marine applications road applications Liq
Slide 5: Product portfolio: ready for the next emission levels
Product portfolio: ready for the next emission levels Engines for Tier 4 emissions standards Focus on Mobile Machinery and Agriculture Award winning new engine Mobile Agricultural Stationary Auto- (TC)D 2.9 Very compact engine minimizes Machinery Machinery Equipment motive 25 – 56 kW installation ef
Slide 6: Key applications
Key applications Typical Markets benefit from Competitors(1) application macro trends Construction Cummins Material handling Kubota Mobile Machinery Ground support Perkins Mining equipment Yanmar Tractors Deere Agricultural Kubota Agricultural Machinery Perkins equipment Yanmar Gensets Deere Pumps K
Slide 7: Revenue split
Revenue split Revenue split by application, 2012 Revenue split by region, 2012(1) (2011) (2011) Other 1% Mobile Machinery 37% Africa/Middle East 6% Europe (excl. Germany) 52% €15.3 million €477.5 million €83.9 million €668.3 million (€76.0 million) (€529.4 million) (€87.8 million) (€860.6 million) S
Slide 8: Pro-forma revenue split
Pro-forma revenue split Revenue split by region (incl. Joint Ventures), 2012(1) (figures in brackets: reported IFRS revenue) Approx. €350 million revenue Africa/Middle East 5% (6%) Rest of Europe (ex. Germany) 40% (52%) generated by 50-50 Joint Ventures, mainly in China (at equity consolidated; reve
Slide 9: Agenda
Agenda DEUTZ at a glance Strategy & investment rationale Financials Outlook
Slide 10: Structural growth drivers
Structural growth drivers Product and new business development generating business opportunities New emission standards require more complex engines with a higher value New production facilities in China will lead to significant growth in Asia in the coming years Industry Emission Emerging Total rev
Slide 11: Successful new business development projects
Successful new business development projects Examples of new applications New customers gained in all regions, in particular with new engines 2.9 and 3.6 Greater share of wallet at existing clients New business related to different applications, e.g. tractors, fork lifts, telehandlers, dumpers, roll
Slide 12: Service business
Service business € million 241.6 250.3 Growth of service revenue 212.0 215.8 supported by ongoing projects and 203.5 network extension (e.g. Madrid 179.7 175.0 and Moscow) Active management of service network with improved training and tools Increased engine complexity beneficial for service busines
Slide 13: Emissions standards
Emissions standards Tier 4 systems require exhaust aftertreatment devices SCR-CAT DEUTZ product portfolio ready for emission level Tier 4 final Higher value of new emission engines DEUTZ owns the certification for the whole system (i.e. electroni- cally governed diesel engine with exhaust aftertreat
Slide 14: Growth activities in China
Growth activities in China Planned DEUTZ Engine DEUTZ Dalian WEIFANG WEICHAI- JV with AB Volvo Shandong (DES) Engine (DDE) DEUTZ Engine City (Province) Linyi (Shandong) Linyi (Shandong) Dalian (Liaoning) Weifang (Shandong) JV Partner AB Volvo Shandong Changlin FAW Group Weichai Holding DEUTZ shareho
Slide 15: Agenda
Agenda DEUTZ at a glance Strategy & investment rationale Financials Outlook
Slide 16: Key figures
Key figures Q1-Q3 2013 yoy Q3 2013 qoq € million Order intake 1,203.6 +25.3% 360.1 -20.9% Revenue 1,043.1 +7.6% 381.0 +2.4% EBITDA 96.8 +20.5% 41.0 +1.7% EBIT 27.2 +16.2% 17.1 +3.6% Net financial debt -53.2 -56.1% -53.2 +18.5% All key figures improved compared to the previous year 16
Slide 17: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million 25.3% 1.9% 7.6% 1,203.6 200.0 132,221 134,669 1,043.1 960.5 13,204 10,697 969.4 181.7 213.9 216.9 1,003.6 119,017 124,002 861.4 746.6 752.5 Q1-Q3 2012 Q1-Q3 2013 Q1-Q3 2012 Q1-Q3 2013 Q1-Q3 2012 Q1-Q3 2013 Q1-Q3 record order int
Slide 18: Book to bill ratio
Book to bill ratio Q3 Q2 Q1 Q4 Q3 € million 2013 2013 2013 2012 2012 Order intake 360.1 455.0 388.5 276.6 259.5 Revenue 381.0 372.2 289.9 322.5 288.4 Book-to-bill ratio 0.95x 1.22x 1.34x 0.86x 0.90x Orders on hand 329.5 352.9 272.1 173.0 219.6 Q3 book-to-bill ratio at 0.95x after two quarters with e
Slide 19: EBIT
EBIT € million 23.4 27.2 16.5 17.1 39.6 11.1 9.8 26.0 1.7 5.7 7.2 0.1 -10.2 -0.5 -0.3 -6.0 Q1-Q3 2012(1) Q1-Q3 2013 Q2 2013 Q3 2013 EBIT margin 2.4% 2.6% 4.4% 4.5% Q1-Q3 operating profit (EBIT) of €27.2 million increased by €3.8 million (+16.2%) yoy EBIT burdened by higher scheduled amortisation of
Slide 20: Operating profit and net income
Operating profit and net income Q1-Q3 2012(1) Q1-Q3 2013 € million 96.8 69.6 80.3 56.9 23.4 8.8 27.2 4.4 1.9 20.9 2.4 12.2 EBITDA D&A EBIT Net Income Net EBITDA D&A EBIT Net Income Net interest taxes income interest taxes income expenses expenses EBITDA of €96.8 million increased by €16.5 million (+
Slide 21: R&D spending and capital expenditure
R&D spending and capital expenditure R&D Capital expenditure (excl. R&D) € million Gross spending 64.4 Reimbursements 15.3 54.3 13.8 44.2 Net spending 2.3 29.4 2.1 49.1 40.5 41.9 27.3 Q1-Q3 2012 Q1-Q3 2013 Q1-Q3 2012 Q1-Q3 2013 Net R&D spending 5.1% 3.9% ratio(1) R&D spending decreased in line with
Slide 22: Working capital and operating cash flow
Working capital and operating cash flow Working capital Operating cash flow € million 215.6 189.0 61.7 34.5 Q1-Q3 2012 Q1-Q3 2013 Q1-Q3 2012 Q1-Q3 2013 Working capital ratio 15.7% 13.8% (30 Sep) Working capital decreased by €26.6 million Operating cash flow increased by €27.2 million due to Effectiv
Slide 23: Free cash flow generation and net financial position
Free cash flow generation and net financial position Free cash flow € million Net financial position (Last twelve months) 68.7 Q1-Q3 2012 Q1-Q3 2013 -32.0 -53.2 Q3 2012 (LTM) Q3 2013 (LTM) -121.3 Free cash flow of €68.7 million generated in last Free cash flow used to reduce net financial position t
Slide 24: Equity ratio and funding
Equity ratio and funding € million 1,081.9 1,105.8 41.4% 42.8% 448.2 473.0 204 4 14 30 Q1-Q3 Q1-Q3 up to up to up to up to 2012 (1) 2013 1 year 2 years 5 years 10 years Total assets Equity xx.x% Equity ratio Repayment schedule (residual term) Sound balance sheet with strong equity ratio of 42.8% Med
Slide 25: Summary: key financial development
Summary: key financial development All key figures improved Strong order intake and demand for new engines Lower R&D spending; scheduled amortisation increased Significant improvement of net income and free cash flow Sound balance sheet and lower net debt 25
Slide 26: Agenda
Agenda DEUTZ at a glance Strategy & investment rationale Financials Outlook
Slide 27: Financial outlook
Financial outlook FY 2012 reported Guidance FY 2013 € million Revenue 1,291.9 > 1,400 EBIT margin (%) 2.9(2) > 3.0 Net R&D spending(1) 62.1 ~ 55 Net capex (excl. R&D)(1) 66.4 < 50 (1) Net of reimbursements (2) Restated For FY 2014 we expect low double digit revenue growth and moderate EBIT margin im
Slide 28: Financial calendar & contact details
Financial calendar & contact details Annual report 2013 20 March 2014 Interim Report 1st quarter 2014 5 May 2014 Annual general meeting 7 May 2014 Interim Report 1st half 2014 7 August 2014 Interim Report 1st to 3rd quarter 2014 6 November 2014 Contact details Christian Krupp Tel:+49 (0) 221 822 540
Slide 29: 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.