Wacker Neuson Se · XETR:WAC
Wacker Neuson — Q1 2017 Earnings Presentation
41 slides from Wacker Neuson's earnings presentation, May 2017
Slide 1: Wacker Neuson Group, Wacker Neuson SE, May 2017
Wacker Neuson Group Wacker Neuson SE May, 2017
Slide 2: Agenda
Agenda The Company Outlook Highlights Q1/17 Financials 2
Slide 3: Product range covers customer needs
Product range covers customer needs Light Equipment Compact Equipment Services Concrete technology Compaction Excavation Used machines1 Academy Material handling Repair1 & Maintenance1 Financing Worksite technology Rental service1 Telematics Store1 Concrete Solutions Over 250 product groups Over 40
Slide 4: Our brands and target groups
Our brands and target groups Construction industry, gardening and landscaping firms, municipal services, recycling, railroad/track construction, rescue services, Agriculture, horse farming, tree nurseries etc. energy sector, etc. 4
Slide 5: Changes to Executive Board
Changes to Executive Board Executive Board Cem Peksaglam Wilfried Trepels Alexander Greschner Martin Lehner CEO CFO CSO CTO Strategy/M&A, HR, legal Finance, audit, IT Sales, logistics, service, Procurement, production, matters, compliance, real marketing technology, quality estate, investor relation
Slide 6: 5 years comparison
5 years comparison Revenue and EBIT margin 2012–2016 (in EUR m) (in %) 6
Slide 7: Global footprint
Global footprint Sales by region 2016 (as %) Europe 75% Americas 21% Asia-Pacific 4% More than 50 affiliates and 5,200 dealers in over 12,400 sites worldwide 7
Slide 8: Beside construction, more industries are gaining of importance
Beside construction, more industries are gaining of importance Target group oriented sales: Business segments Markets Light equipment Compact machines Revenue split (2016, as %) Agriculture Renovation/rehabilitation Development Infrastructure (road and highway construction, bridge construction) Gard
Slide 9: Agenda
Agenda The Company Outlook Highlights Q1/17 Financials 9
Slide 10: Review of Q1/17
Review of Q1/17 Record revenue in Q1: +7 % yoy (€ 339m, currency adjusted +6%) Revenue in Asia/Pacific -45% yoy, due to one-off effect in China in Solid revenue growth in Europe (+9% yoy) Q1/16 (dealers stocking up compact equipment) High demand from construction and ag industry Challengin
Slide 11: Group revenue (Q1 year comparison 2013-2017)
Group revenue (Q1 year comparison 2013-2017) Revenue and EBIT margin Q1/13-Q1/17 (in Mio. €) (in %) +7% 338.5 324.3 316.4 291.6 257.1 7.8 6.4 5.5 4.8 4.3 4.0 4.2 Revenue EBIT margin in % EBIT margin in % adjusted for one-off effects Record revenue in Q1/17, profit impacted by one-off effects Note: C
Slide 12: Latest News (2017)
Latest News (2017) Real estate Wacker Neuson SE sounding out market interest in a real estate company held by the Group (possible one-off profit in mid double-digit million euro range by end of FY 2017) in February 2017 Financing Successful placement of new promissory note (Schuldscheindarlehen)
Slide 13: Relocation of R&D center from Munich to factory in Reichertshofen
Relocation of R&D center from Munich to factory in Reichertshofen 2016 Marriage of all technical areas for light equipment Europe at existing production location in Reichertshofen Advantages: process improvements, increase of productivity and time-to-market Investment of € 10m in 2016 (9 month
Slide 14: Conexpo, Las Vegas, US – March 2017
Conexpo, Las Vegas, US – March 2017 Most important construction show for contractors, dealers and key accounts in North America, every 3 years No. of total visitors: 128,000 (+8%) Participants excavator challenge: 8,000 Participants Press conference: approx. 40 The economy seems to recover
Slide 15: Cooperation between Randon and Wacker Neuson in Latin America
Cooperation between Randon and Wacker Neuson in Latin America Wacker Neuson launched two backhoe loader models (both 6 to 7 tons operating weight) Specifically developed to fit the needs of the Latin American market Manufacturing of backhoe loaders in Randon’s factory located in Caxias do Sul,
Slide 16: Impact on cost: New emission regulations for diesel engines
Impact on cost: New emission regulations for diesel engines * Non-harmonized engine emission regulations – a cost driver and resource consumer * from 2019/2020 onwards 16
Slide 17: Leading alternative drive technologies
Leading alternative drive technologies 2016 17
Slide 18: Agenda
Agenda The Company Outlook Highlights Q1/17 Financials 18
Slide 19: Business performance – sales split by region Q1/17
Business performance – sales split by region Q1/17 Revenue by region1,2 Europe Revenue + 9% to € 248m (in € m) Strong growth especially in German speaking countries, Scandinavia and France 339 316 -45% (-48%) 10 3% EBIT3 of € 31.7m → EBIT margin of 12.8% (Q1/16: 9.0%) 5% 17 Americas 81 24% +13
Slide 20: Business performance – sales split by business segments Q1/17
Business performance – sales split by business segments Q1/17 Revenue by business segment1, 2 (in € m) Light equipment Revenue increase by 7% to € 98m Double-digit growth with compaction equipment 20% +8% (+7%) 69 20% Difficult market environment in oil & gas and emerging markets 64 Compact eq
Slide 21: Development of revenue and profitability Q1/17
Development of revenue and profitability Q1/17 Income statement (extract) and number of employees Comparison of EBIT vs. Q1/16: Gross profit: (in € m) Change Q1/17 in % Q1/16 in % in % Volume effect: € +6.1m Margin effect: € -1.1m Revenue 338.5 100.0 316.4 100.0 7.0 Gross profit 91.9 27.1 87.0 2
Slide 22: Key figures from balance sheet – excellent credit standing
Key figures from balance sheet – excellent credit standing Net financial debt and Gearing Net financial debt/EBITDA (in € m) (as %) (x) 300 50% 12,0 257 10,3 250 226 235 237 40% 10,0 200 28% 185 7,5 30% 8,0 6,9 21% 22% 22% 6,2 150 19% 6,0 5,0 20% 100 4,0 50 10% 2,0 0 0% 0,0 Q1/13 Q1/14 Q1/15 Q1/16 Q
Slide 23: Business performance: Increase of free cash flow in Q1/17 yoy
Business performance: Increase of free cash flow in Q1/17 yoy Free cash flow (qoq 2015-2017) Inventories (qoq 2015-2017) (in € m) (in € m) (DIO2) 46 495 495 514 50 475 464 35 500 445 448 443 462 240 211 30 400 220 15 19 11 189 188 200 180 10 3 300 168 170 172 161 180 149 160 -10 Q1/15 Q2/15 Q3/15 Q4
Slide 24: Share price
Share price Share price performance last 12 months 23.31€ Market Cap: 1.635 bn € 14.55€ in € Q1/16 Q1/17 Earnings per share 0.16 0.13 Share price end of period 13.98 21.02 Market capitalization (in € m) 980.6 1,474.3 IPO of Wacker Construction Equipment AG May 15, 2007 24
Slide 25: Agenda
Agenda The Company Outlook Highlights Q1/17 Financials 25
Slide 26: Global construction machinery sales back on growth path: +7% for 2017
Global construction machinery sales back on growth path: +7% for 2017 2016–2020 machinery sales CAGR: 5,7% Wacker Neuson’s expectations -30% +25% Europe main growth driver, esp. Central Europe Market recovery in North America stronger +7% revenues from SSL, no more one-off effects expected L
Slide 27: Positive signs of recovery in agricultural business after 3 difficult years
Positive signs of recovery in agricultural business after 3 difficult years Opinion barometer for economic outlook concerning agriculture business in Germany Source: German Farmers’ Association, March 2017 27
Slide 28: Alliance with HAMM AG – expansion of product line/international roll-out
Alliance with HAMM AG – expansion of product line/international roll-out Tandem rollers (1.8 – 4.5 t) and compactors (weighing up to 12 t) 28
Slide 29: North America biggest market for skid steer loaders (SSL)
North America biggest market for skid steer loaders (SSL) Units-Split 2016e Forecast 2016e – 2020e (Global market 2016: 105.700) (Units) Globally, the North American markets accounts roughly for ~70% of the global units sold 140000 +23% (2016e: 74,000 units) 130.000 120000 The global market will
Slide 30: New production of mobile generators in Brazil
New production of mobile generators in Brazil Located in Itatiba, São Paulo, Brazil Building on local/regional presence, target market: Latin America Products tailored to local market’s need, engineering and production “in the region – for the region” Generator production (models: 50-70 kilo
Slide 31: New plant in China
New plant in China Located in Pinghu, 30 km from Shanghai city border Building on local/regional presence demand for repair and maintenance work on infrastructure is growing, especially in megacities Starting with the production of compact excavators for local market, more products might fol
Slide 32: Actual view on construction site of new plant in Pinghu
Actual view on construction site of new plant in Pinghu May 2017 32
Slide 33: Confirmation of forecast for 2017
Confirmation of forecast for 2017 Financials Forecast 2017e 2016 FYe 20171 Mid term Revenue EUR bn 1.36 1.40 – 1.45 >2.0 EBIT margin % 6.5 7.5 – 8.52 >9.0 (operational) Working Capital 42 <40 <40 ratio % Depending on CapEx EUR 107 m 120 m growth Free cash flow 29 m better better 1 Assumed there is n
Slide 34: Dividend proposal to AGM (May 30, 2017)
Dividend proposal to AGM (May 30, 2017) Dividend payouts 2014 2015 20161 € 0.50 per share Total payout (€ million) 35.07 35.07 35.07 (payout of € 35.07m on May 31,2017) Payout ratio (as a %) 38.3 53.0 61.7 Keeping level of last two years, ensuring dividend Eligible shares (in m) 70.14 70.14 70.1
Slide 35: Financial calendar and IR contact
Financial calendar and IR contact Financial Calendar May 30, 2017 AGM, Munich June 13, 2017 Roadshow, Frankfurt June 29, 2017 Roadshow, Paris August 8, 2017 Publication of half-year report 2017; Analyst Conference Call November 9, 2017 Publication of nine-month report 2017; Analyst Conference Call N
Slide 36: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements The information contained in this document has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctn
Slide 37: Appendix
Wacker Neuson Group Appendix
Slide 38: Competitive landscape for Wacker Neuson Group
Competitive landscape for Wacker Neuson Group Market structures and dynamics Competitors Fragmented market Ammann Multiquip/Mikasa Dominated by niche/specialized manufacturers Atlas Copco/Dynapac Light equipment/ Not targeted by heavy equipment manufacturers Bomag construction Qualit
Slide 39: Global construction equipment sales 2016 vs. 2015
Global construction equipment sales 2016 vs. 2015 Challenging market environment 39 Absatz von Erdbaumaschinen, Quelle: ISC-Statistiken, VDMA, Februar 2017
Slide 40: Our vision
Our vision Growth – Internationalization – Professionalization – Integration Growth Internationalization We aim for profitable growth and We want to establish our company as a healthy return on capital global player with a strong position in employed. We do not believe in our target markets. To achi
Slide 41: Great reasons for choosing Wacker Neuson Group
Great reasons for choosing Wacker Neuson Group Long-term Strong financial position independence growth strategies, family culture Technology leader Highest product and service quality Flexible production, sophisticated logistics Balanced revenue structure Cross-industry focus Global footprint custom