Kion Group Ag · XETR:KGX
Kion — Investor Presentation (October 2017)
58 slides from Kion's investor presentation, Oct 26, 2017
Slide 1: We Keep the World Moving – Investor Relations Presentation
We Keep the World Moving Investor Relations Presentation October 2017
Slide 2: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q3 2017 4. Appendix 2 KION GROUP AG | Investor Relations Presentation | October 2017 © 2017 KION GROUP AG. All rights reserved
Slide 3: KION Group at a Glance
KION Group at a Glance A world leader in industrial trucks and supply chain solutions World-leading positions Strong global presence Asia-Pacific 11% Americas 20% European No. 1 and Global No. 2 No. 1 Present in more than in industrial trucks and services 100 countries Global No. 3 in supp
Slide 4: Market-Leading Positions Globally
Market-Leading Positions Globally A unique player in Intralogistics 4.0 Industrial trucks1 Automation systems1 Top 20 suppliers 2016 Top 20 suppliers 2016 1 Toyota 1 Daifuku 2 KION 2 SSI Schäfer2 3 Mitsubishi Nichiyu + 3 Dematic 4 Jungheinrich 4 Murata Machinery 5 Crown 5 Vanderlande 6 Hyster-Yale 6
Slide 5: Dematic Acquisition
Dematic Acquisition Creating a unique and complete material handling offering Material handling solutions for every part of the warehouse Dematic adds best-in-class automation WH- Fleet data Supply solutions Storage1 Sortation IC-trucks trucks mgmt. chain SW 2 − Dematic offers comprehensive range of
Slide 6: Segmentation
Segmentation KION divides its business into trucks and solutions Industrial Trucks & Services Supply Chain Solutions Corporate Services − Industrial truck business including − Supply chain and warehouse − Internal service entities financial services activities automation − Logistics − Regional Opera
Slide 7: Industrial Trucks and Services
Industrial Trucks and Services A world leader in industrial trucks KION Group is European No. 1 Key financials Revenue by product No.1 and Global No. 2 (in €m) 2016 2015 Order intake 5,383 5,146 A well positioned global Services 6 player with six unique brands Revenue 5,203 5,045 45% New business Ad
Slide 8: Industrial Trucks and Services Integrated business model
Industrial Trucks and Services Integrated business model New truck sales – Technology and innovation Financial services – Sales support vehicle with leadership benefit for aftermarket and – Tailor-made solutions and ~45% of new truck sales service activities customer options carry financing contract
Slide 9: Supply Chain Solutions
Supply Chain Solutions Leading in material handling automation solutions Dematic is global No. 3 with Key financials Revenue by product1 Top 3 leading position in US and Europe (in €m) 2016 2015 Services Order intake 431 49 25% Automation systems market 10% expected to grow at 10% p.a. Revenue 366 3
Slide 10: Comprehensive range of high-end automation solutions
Supply Chain Solutions Comprehensive range of high-end automation solutions Warehouse control and management software − Advanced real-time, knowledge-based logistics software beyond warehouse management & control software Conveyor Sortation Storage Picking Palletising − All conveyor types − Focus on
Slide 11: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q3 2017 4. Appendix 11 KION GROUP AG | Investor Relations Presentation | October 2017 © 2017 KION GROUP AG. All rights reserved
Slide 12: Investment Highlights
Investment Highlights Industrial Supply Trucks and Chain Services Solutions 1 Attractive market with growth profile above GDP 2 Global leader – strong home base and well positioned in growth markets 3 Technology leadership with strong position in Intralogistics 4.0 4 Robust integrated bu
Slide 13: Attractive market with growth profile above GDP
1 Attractive market with growth profile above GDP benefiting from global mega trends Industrial trucks: Global new truck sales1 Automation systems: Global new sales Top 20 suppliers’ revenue 2010-2016 (in $bn) approx. 1.5x World GDP2 CAGR ~7% 6.8% 4.1% 3.3% 4.2% 2.8% 14.3 14.9 15.6 15.7 16.6 17.4 3.
Slide 14: Industrial trucks: Stability from mature markets' replacement cycle
1 Industrial trucks: Stability from mature markets’ replacement cycle Stability from replacement cycle – Truck replacement demand from Western Europe market order intake (in ‘000 units) assumed 10-year average usage1 – Simplified replacement model 360 305 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 15: Automation systems: Attractive market development and growth
1 Automation systems: Attractive market development and growth Consumer expectations … … drive changes in retail … focused on supply chain and e-commerce … Selected customers − Digitalisation drives growth in − E-commerce players shorten − Move towards decentralised online sales order cycles and inc
Slide 16: Strong position in core markets based on multi-brand strategy
2 Strong position in core markets based on successful multi-brand strategy Industrial Trucks and Services Supply Chain Solutions Market positions Market positions 1 top #1 #3 #1 3 North Europe China Europe America Global and regional brands Global brands – No. 2 worldwide – A leading manufacturer of
Slide 17: Well positioned to capture momentum in growth markets
2 Well positioned to capture momentum in growth markets Strong position in growth markets Development potential in growth markets KION revenue FY 2016 by customer location (in %) Forklift penetration2 per 1 million inhabitants 2016 690 720 640 Growth markets Mature markets1 23% 77% 470 200 50 10 Ind
Slide 18: Customers benefit from cost-efficient material handling
3 Customers benefit from cost-efficient material handling Acceleration of product Prevention of accidents Optimisation of operation times handling & shipment & damages & energy consumption 18 KION GROUP AG | Investor Relations Presentation | October 2017 © 2017 KION GROUP AG. All rights reserved
Slide 19: Technology leadership drives premium positioning and pricing
3 Technology leadership drives premium positioning and pricing Industrial truck efficiency supports Industrial truck purchase price Commitment to R&D premium pricing² only ~7% of total costs R&D spend¹ (in €m and % of revenue) Cost per lorry load cycle Purchase Competitive price ~7% pricing 2.9% 2.8
Slide 20: Strong E- and WH-offering benefits from growth in E-commerce
3 Strong E- and WH-offering benefits from growth in E-commerce KION product mix by truck type E-commerce drives demand Order intake 2016 (in units) – E-commerce growth drives required logistics fulfilment space IC-trucks – Additional logistics space needs E- and 17% E-trucks WH-trucks 26% Ongoing tr
Slide 21: Intralogistics 4.0 – How KION integrates supply chains
3 Intralogistics 4.0 – How KION integrates supply chains Automated systems Automated trucks Fleet data management − Customised integrated Intelligent trucks − Full range of automated intralogistics solutions − Fleet data services series trucks − Automated trucks − Trucks equipped with connect trucks
Slide 22: Recent additions to KION's Intralogistics 4.0 solutions
3 Recent additions to KION’s Intralogistics 4.0 solutions Intelligent trucks Fleet data management Automated trucks Automated systems Speed control with Speed New fleet manage- Extended range of Acquisition of Dematic Assist ment feature robotic trucks – Creates an unparalleled – Safety system limi-
Slide 23: Strong global sales and service network
4 Strong global sales and service network provides unique access to a global customer base Americas EMEA Asia Pacific (APAC) ~350 sales and/or ~720 sales and/or ~450 sales and/or service locations service locations service locations More than 1,500 sales and/or service locations in over 100 countrie
Slide 24: History of change as a basis for future value creation
5 History of change as a basis for future value creation Structural efficiency and Growth and resilience Margin expansion consolidation in financial crisis Adj. EBIT margin (in %) 7.9% 3.9% 8.3% 9.0% 9.3% 9.5% 9.5% 9.9% -0.9% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Reduced fixed costs and incre
Slide 25: Strategic focus on margin expansion
5 Strategic focus on margin expansion EBIT benchmark KION generates best-in-class EBIT EBIT margin1 2016 (in %) margin1 25 − Scale and synergy benefits vs. Actuals Median Range competitors 20 − Strong service business with attractive margins 15 − Local sourcing and production in 12.9 emerging market
Slide 26: Margin upside in Industrial Trucks & Services
5 Margin upside in Industrial Trucks & Services is driven by structural changes Efficient manufacturing setup Global module and platform Improvement in support functions strategy − New plant opened in Stribro, CZ − Common modules in WEU − Continuous review and − Efficiency programs in core − Clear i
Slide 27: Margin upside in Supply Chain Solutions
5 Margin upside in Supply Chain Solutions is driven by structural changes Manufacturing productivity Strengthened software and Synergies in purchasing / G&A improvement services business − Ramp-up of Monterrey production − Expansion of Dematic iQ − Joint purchasing − Focus on process optimisation so
Slide 28: KION Strategy 2020
6 KION Strategy 2020: Our aspiration for profitable growth Close the gap towards global market leadership Growth Being on par with the peer group regarding capital efficiency Capital Profitability efficiency Expand margin as the most profitable player in the industry Resilience Remain resilient enou
Slide 29: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q3 2017 4. Appendix 29 KION GROUP AG | Investor Relations Presentation | October 2017 © 2017 KION GROUP AG. All rights reserved
Slide 30: Q3 2017 Strategic Highlights
Q3 2017 Strategic Highlights Continuous expansion of KION’s offering Dematic agreement with AutoStore Lithium-ion technology continues to advance − Agreement will enable Dematic to expand omni- − Market launch of lithium-ion trucks with two to three channel integrated solution offering tons load
Slide 31: Q3 2017 Financial Highlights
Q3 2017 Financial Highlights KION remains on course for profitable Q3 despite headwinds − Outlook FY2017 for Group slightly lowered Outlook − IT&S1 segment outlook increased to reflect continued strong momentum − SCS2 segment outlook adjusted downwards to reflect lower than anticipated run-rate in F
Slide 32: Market Development: Industrial truck market maintains dynamic growth
Market Development Industrial truck market maintains dynamic growth Order intake unit growth y-o-y (in %) North America China Q4/16 Q1/17 Q2/17 Q3/17 Western Europe Q4/16 Q1/17 Q2/17 Q3/17 0.9% 6.6% 8.1% -0.9% Q4/16 Q1/17 Q2/17 Q3/17 33.9% 46.3% 36.5% 39.0% 9.7% 10.6% 7.3% 8.9% Eastern Europe Q4/16
Slide 33: KION Development
KION Development KION continues to benefit from strong global market Industrial trucks: Regional development Western Europe Order intake (in ‘000 units) and growth y-o-y (in %) – Market: Persisting growth momentum Q1-Q3 2017 Q3 2017 – KION: Above market in Q3 Market KION Market KION Eastern Europe –
Slide 34: Q1-Q3 Key Financials
Q1-Q3 Key Financials Continued strong profitable growth Order intake Revenue Adj. EBIT and margin Net Income (in €m) (in €m) (in €m and %) (in €m) +40.7% +47.5% 9.5% 9.9% 5,699 5,675 4,050 3,848 +53.4% 562 +40.2% 366 230 164 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 2016 2017 2016 2017 2016 20
Slide 35: Q3 2017 Key Financials
Q3 2017 Key Financials Margin improvement despite headwinds Order intake Revenue Adj. EBIT and margin Net Income (in €m) (in €m) (in €m and %) (in €m) +39.2% +44.0% 9.9% 10.5% 1,847 1,847 1,327 1,283 +53.6% +19.0% 127 195 80 67 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 − Negati
Slide 36: Industrial Trucks & Services
Industrial Trucks & Services Normalised growth and stable margin in Q3 2017 Key financials Revenue by category Based on FY 2016 financials Order intake +9.2% +5.2% (in €m) 3,919 4,280 1,284 1,352 Services New business Q1-Q3 2016 Q1-Q3 2017 Q3 2016 Q3 2017 45% 55% +8.2% +6.2% Revenue 3,761 4,070 1,25
Slide 37: Industrial Trucks & Services Outlook
Industrial Trucks & Services Outlook increased to reflect continued strong momentum Order intake Explanations (in €m) Outlook Adjusted outlook − Order intake in Q3 2017 shows FY 2017: FY 2017: continued growth but at a more Q1-Q3 2017: 4,280 5,450-5,600 5,650-5,800 normalised level − Performance yea
Slide 38: Supply Chain Solutions
Supply Chain Solutions Topline lower than anticipated but strong margin step-up Key financials Revenue by category Based on FY 2016 financials Order intake (in €m) 1,406 493 Business 118 38 Services solutions 72% Q1-Q3 2016 Q1-Q3 2017 Q3 2016 Q3 2017 28% Revenue 1,593 514 (in €m) 75 27 Q1-Q3 2016 Q1
Slide 39: Supply Chain Solutions Outlook adjusted downwards
Supply Chain Solutions Outlook adjusted downwards to reflect lower than anticipated run-rate Order intake Explanations (in €m) Outlook Adjusted outlook − Order intake in Q3 2017 was above level FY 2017: FY 2017: of first and second quarter, but lower Q1-Q3 2017: 1,406 2,350-2,650 1,900-2,100 than an
Slide 40: Pipeline review of outlook adjustment
Supply Chain Solutions Pipeline review has identified key reasons for outlook adjustment Order intake Explanations Illustrative (in €m) 1− Hesitation to invest despite growth in 2,350-2,650 US retail, esp. General Merchandise 1,900-2,100 and Apparel 2− Delayed projects: Longer than expected negotiat
Slide 41: Adjusted EBITDA to Net Income
Adjusted EBITDA to Net Income Strong net income increase despite Dematic PPA Q1-Q3 Q1-Q3 Q3 Q3 (in €m) 2017 2016 Change 2017 2016 Change Explanations Adjusted EBITDA 898 654 37.4% 310 224 38.1% − Non-recurring items result D&A 337 288 16.9% 115 97 18.0% mainly from expenses relating Adjusted EBIT 56
Slide 42: Free Cash Flow Statement
Free Cash Flow Statement Free cash flow supported by operating performance Q1-Q3 Q1-Q3 (in €m) 2017 2016 Change Explanations EBITDA 870 631 37.9% − Operating performance drives Change in Net Working Capital (NWC) -252 -141 -78.9% strong free cash flow Taxes paid -70 -77 9.0% Pension payments -22 -15
Slide 43: Net Debt
Net Debt Stable net debt and leverage Net debt as at 30 Sep 2017 Net debt development (in €m and leverage as multiple of LTM adjusted EBITDA) − Group net financial debt remained unchanged compared to June 2017 2.0x1 2.6x2 3.4x2 − Leverage on industrial net operating debt 940 3,629 remained unchanged
Slide 44: Pension Liabilities
Pension Liabilities Decrease driven by increased interest rate Net pension liabilities as at 30 Sept 2017 Net pension liabilities mostly driven by Net pension liabilities Discount rate German plans (in €m) (in %) − Large UK plans are fully funded, with offsetting pension assets 1,200 7 994 1,051 979
Slide 45: Financing Structure
Financing Structure Capital increase further improves maturity profile Post capital increase as at 30 Sept 2017 (in €m) 1,000 931 185 270 746 237 27 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 SFA tranche Drawing under RCF Bridge loan Acquisition term loan Promissory note 45 KION GROUP AG
Slide 46: FY 2017 Outlook
FY 2017 Outlook Guidance adjusted slightly based on Q1-Q3 preliminaries KION Group Industrial Trucks & Services Supply Chain Solutions Adjusted Adjusted Adjusted (in €m) Outlook outlook Outlook outlook Outlook outlook Order intake 7,800 – 8,250 7,550 – 7,900 5,450 – 5,600 5,650 – 5,800 2,350 – 2,650
Slide 47: FY 2017 Outlook: Group outlook lowered
FY 2017 Outlook Group outlook for order intake, revenue and adj. EBIT lowered by 1%-4% Order intake Revenue Adj. EBIT (in €m) (in €m) (in €m) -4.2% -3.1% -4.4% -3.2% -1.3% -3.4% 7,800 8,250 800 7,550 7,900 7,500 7,950 7,400 7,700 740 715 765 Outlook Adjusted outlook Outlook Adjusted outlook Outlook
Slide 48: Agenda
Agenda 1. Company Overview 2. Investment Highlights 3. Update on Q3 2017 4. Appendix 48 KION GROUP AG | Investor Relations Presentation | October 2017 © 2017 KION GROUP AG. All rights reserved
Slide 49: Weichai Power is KION's strategic anchor shareholder
Weichai Power Weichai Power is KION’s strategic anchor shareholder Current ownership structure Weichai partnership Weichai − Total investment of €2.1bn in KION and for Free Treasury Linde Hydraulics GmbH & Co. KG Power Co., KION float shares Ltd. − Strategic anchor shareholder investment − Technical
Slide 50: Industrial Trucks: Unique range of products
Industrial Trucks Unique range of products serving customer needs worldwide Example Internal combustion (IC) counterbalance trucks Mainly used outside Electric (E) counterbalance trucks Mainly used inside Warehouse equipment: Rider trucks Faster transportation of loads Specially designed for
Slide 51: Global Manufacturing Network
Global Manufacturing Network Production facilities for Industrial Trucks and Supply Chain Solutions Frankfurt, KION Group Head Office Hamburg Holland Grand Rapids Jingjiang Bielefeld Suzhou Zwijndrecht Putian Stříbro Salt Lake City Pune Heusenstamm/ Offenbach Summerville Xiamen Monterrey Châtellerau
Slide 52: Long-Term Leasing Business
Long-Term Leasing Business Support function within integrated business model End customer sales by financing types Higher customer sales and retention KION end customer revenue 2016 Financing − Financing as support for new truck sales by financing type (in %) share − Typical financing contract durat
Slide 53: Key Financials: Group figures by year
Key Financials Group figures by year (in €m) 2011 20121 2013 2014 2015 20166 Order intake 4,682 4,590 4,489 4,7715 5,216 5,833 Revenue 4,368 4,560 4,495 4,678 5,098 5,587 Adjusted EBITDA2 665 701 722 780 850 932 Adjusted EBITDA margin2 15.2% 15.4% 16.1% 16.7% 16.7% 16.7% Adjusted EBIT2 365 408 417 4
Slide 54: Key Financials: Group figures by quarter
Key Financials Group figures by quarter (in €m) Q1 2016 Q2 2016 Q3 2016 Q4 20162 Q1 2017 Q2 2017 Q3 2017 Order intake 1,297 1,427 1,327 1,783 1,882 1,971 1,847 Revenue 1,221 1,344 1,283 1,740 1,811 2,016 1,847 Adjusted EBITDA1 192 238 224 278 263 326 310 Adjusted EBITDA margin1 15.7% 17.7% 17.5% 16.
Slide 55: Key Financials: Segment figures by quarter
Key Financials Segment figures by quarter Industrial Trucks & Services Supply Chain Solutions Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (in €m) 2016 2016 2016 2016 2017 2017 2017 (in €m) 2016 2016 2016 2016 2017 2017 2017 Order intake 1,257 1,378 1,284 1,464 1,415 1,514 1,352 Order intake 35 45 38 3
Slide 56: Financial Calendar
Financial Calendar Date Event Financial statements press conference and analyst call 1 March 2018 Publication of 2017 annual report (FY 2017) 26 April 2018 Quarterly statement for the period ended 31 Mar 2018 (Q1 2018) and analyst call 9 May 2018 Annual General Meeting Subject to change without noti
Slide 57: IR Contacts
IR Contacts Dr. Karoline Jung-Senssfelder Phone: +49 (0)69.20110-7450 Head of Investor Relations / M&A karoline.jung-senssfelder@kiongroup.com Marina König Phone: +49 (0)69.20110-7361 Assistant Investor Relations marina.koenig@kiongroup.com ir@kiongroup.com KION GROUP AG Thea-Rasche-Strasse 8 60549
Slide 58: Disclaimer
Disclaimer This document has been prepared by KION GROUP AG (the “Company”) solely for informational purposes. This disclaimer shall apply in all respects to the entire presentation (including all slides of this document), the oral presentation of the slides by representatives of the Company (or any