Deutz Ag · XETR:DEZ
Deutz — FY2014 Earnings Presentation
37 slides from Deutz's earnings presentation, Mar 19, 2015
Slide 1: Financial year 2014
Financial year 2014 19 March 2015 Dr Helmut Leube, CEO Dr Margarete Haase, CFO
Slide 2: Agenda
Agenda Review FY 2014 Outlook Annex Financial year 2014 19 March 2015 2
Slide 3: Key figures
Key figures FY 2014 yoy € million Order intake 1,379.0 -16.4% Revenue 1,530.2 +5.3% EBIT (before one-offs) 31.7 -33.3% Adjusted EBIT(1) 51.6 +8.6% Free cash flow 52.0 +€38.2 million Net financial position 13.7 +€45.4 million (1) EBIT (before one-offs) adjusted by exceptional items (net effect €19.9
Slide 4: Highlights
Highlights DCE Tier 4 series with DPF already compliant with next emission standard (EU Stage V ready) New customers attracted by DEUTZ Tier 4 engines, for example: Site optimisation in Germany Consolidation of Chinese operations; focussing on DEUTZ Dalian to serve local customer demand St
Slide 5: Stage V ready
Stage V ready 240 – 520 kW 160 – 291 kW 130 – 206 kW 85 – 115 kW 56 – 100 kW 37 – 56 kW TCD 2.9 to 7.8 litre engines with DPF already meet the next EU emission standard announced for 2019 DEUTZ technology platform offers our customers long-term planning certainty as they do not have to invest in
Slide 6: Site optimisation
Site optimisation Cologne-Porz 2016 Cologne-Porz Cologne-Deutz Ulm 2015/17 Ulm Übersee (Chiemsee) Annual cost savings > €10 million (considerable effects already in 2016; full effects from 2017 onwards) Restructuring costs for site optimisation (€17.1 million) digested in FY 2014 result Capex
Slide 7: Consolidation of activities in China
Consolidation of activities in China JV DEUTZ Dalian Consolidation of our Chinese activities and focus on € million Revenue (1) our successful JV DEUTZ Dalian, which has sufficient capacities DEUTZ Dalian (at-equity consolidated) increased its 359.8 revenue by 12.8% yoy and outperformed the 319.
Slide 8: Sales figures
Sales figures Order intake Unit sales Revenue € million Units € million -16.4% 6.7% 5.3% 196,403 1,649.7 184,028 13,278 1,530.2 16,064 1,453.2 264.2 1,379.0 250.3 264.4 264.0 167,964 183,125 1,385.5 1,188.8 1,279.9 1,115.0 2013 2014 2013 2014 2013 2014 Pre-buy effects related to changes of Europea
Slide 9: Revenue development
Revenue development € million 410.1 410.7 424.5 372.2 381.0 342.7 352.3 322.5 289.9 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q4-2014 revenue below Q2 and Q3 level after emission level change in October 2014 Financial year 2014 19 March 2015 9
Slide 10: Revenue split by region
Revenue split by region FY 2014 (FY 2013) Africa/Middle East 5% Europe (excl. Germany) 49% €84.7 million €744.7 million (€70.4 million) (€824.6 million) Asia-Pacific 7% €107.4 million (€107.2 million) €1,530.2 million (€1,453.2 million) Americas 17% €256.6 million (€190.6 million) Germany 22% €336.8
Slide 11: Revenue split by application
Revenue split by application FY 2014 (FY 2013) Other 2% Mobile Machinery 47% €36.9 million €715.3 million Automotive 5% (€30.1 million) (€481.6 million) €82.0 million (€188.5 million) Stationary Equipment 12% €1,530.2 million €179.2 million (€1,453.2 million) (€173.7 million) Agricultural Machinery
Slide 12: EBIT (before one-offs)
EBIT (before one-offs) € million 51.6 47.5 31.7 30.9 39.0 18.8 21.5 15.2 8.7 -0.2 -2.3 -0.8 2013 2014 adj. 2014 EBIT margin 3.3% 2.1% 3.4% EBIT (before one-offs) impacted by several exceptional items: unexpected provision for warranty costs (-€20.4 million)(1), impairments (-€13.8 million) and lic
Slide 13: Operating profit & net income
Operating profit & net income 2013 2014 € million 142.0 94.5 137.4 105.7 47.5 6.0 5.5 36.0 31.7 18.9 +12.8 19.5 12.8 6.1 EBITDA D&A EBIT Interest Income Net EBITDA D&A EBIT One- EBIT Interest Income Net before before expenses taxes income before before offs after expenses taxes income one-offs one-o
Slide 14: Earnings & dividend per share
Earnings & dividend per share € per share 0.30 0.18 Earnings 0.07 0.07 Dividend 2013 2014 Stable dividend payout of €0.07 per share (1) Dividend tax exempt for domestic investors and without German withholding tax (1) Proposal to the AGM Financial year 2014 19 March 2015 14
Slide 15: R&D & capital expenditure
R&D & capital expenditure R&D Capital expenditure (excl. R&D) € million Gross expenditure 71.1 68.7 Reimbursements 18.5 15.6 45.0 42.7 Net expenditure 2.5 2.4 52.6 53.1 42.5 40.3 2013 2014 2013 2014 Net R&D expenditure 3.6% 3.5% ratio (1) Net R&D ratio declined slightly in line with our Capital
Slide 16: Working capital & operating cash flow
Working capital & operating cash flow Working capital Operating cash flow € million 196.2 172.3 105.0 114.1 2013 2014 2013 2014 Working capital ratio 11.9% 12.8% (31 Dec) Working capital increased by €23.9 million mainly Operating cash flow increased by 8.7% due to higher inventories Working C
Slide 17: Free cash flow generation & net financial position
Free cash flow generation & net financial position Free cash flow Net financial position € million 52.0 13.7 13.8 -31.7 2013 2014 2013 2014 Free cash flow virtually quadrupled Net financial position improved by €45.4 million After all T4 engines have been launched, capital Free cash flow use
Slide 18: Equity ratio & funding
Equity ratio & funding € million 1,121.0 1,149.2 45.0% 44.5% 504.7 511.0 208 15 15 12 2013 2014 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 Strong balance sheet; equity ratio >40% Medium- to long-term
Slide 19: Segments: DEUTZ Compact Engines
Segments: DEUTZ Compact Engines Change Q4 Q3 Change € million 2014 2013 in % € million 2014 2014 in % New orders 1,115.0 1,385.5 -19.5 New orders 232.5 270.4 -14.0 Unit sales 183,125 167,964 9.0 Unit sales 36,601 53,589 -31.7 Revenue 1,279.9 1,188.8 7.7 Revenue 277.1 368.2 -24.7 EBIT (before one-off
Slide 20: Segments: DEUTZ Customised Solutions
Segments: DEUTZ Customised Solutions Change Q4 Q3 Change € million 2014 2013 in % € million 2014 2014 in % New orders 264.0 264.2 -0.1 New orders 69.7 59.6 16.9 Unit sales 13,278 16,064 -17.3 Unit sales 4,703 2,431 93.5 Revenue 250.3 264.4 -5.3 Revenue 75.2 56.3 33.6 EBIT (before one-offs) 18.8 39.0
Slide 21: Summary
Summary DEUTZ Tier 4 engines attract new customers EBIT burdened by exceptional items Site optimisation measures implemented Improvement of underlying operating profit in DCE Strong free cash flow generation and balance sheet Stable dividend payment Financial year 2014 19 March 2015 21
Slide 22: Agenda
Agenda Review FY 2014 Outlook Annex Financial year 2014 19 March 2015 22
Slide 23: Unit sales assumptions for DEUTZ key markets
Unit sales assumptions for DEUTZ key markets 2015 Construction equipment Europe sidewards North America 0 – 10% China sidewards Agricultural Machinery Europe -10 – 0% Automotive China sidewards Pre-buys in 2014 will lead to lower demand of European customers in the current year New clients partl
Slide 24: Financial outlook
Financial outlook FY 2014 reported Guidance FY 2015 € million Revenue 1,530.2 approx. -10 % EBIT margin (before one-offs) 2.1 % approx. 3 % Net R&D expenditure(1) 53.1 slight decline Capex (excl. R&D)(1) 40.3 ~ 50 (1) Net of reimbursements Group revenue expected to decline in FY 2015; slight reven
Slide 25: Agenda
Agenda Review FY 2014 Outlook Annex Financial year 2014 19 March 2015 25
Slide 26: Summary of key financials (I)
Summary of key financials (I) € million 2014 2013 Change (%) Revenue 1,530.2 1,453.2 5.3 EBITDA (before one-offs) 137.4 142.0 -3.2 EBIT (before one-offs) 31.7 47.5 -33.3 EBIT margin (before one-offs) (%) 2.1 3.3 -- Net income 19.5 36.0 -45.8 Basic earnings per share (€) 0.18 0.30 -40.0 Dividend per
Slide 27: Summary of key financials (II)
Summary of key financials (II) € million 2014 2013 Change (%) Total assets 1,149.2 1,121.0 2.5 Equity 511.0 504.7 1.2 Equity ratio (%) 44.5 45.0 -- Cash flow from operating activities 114.1 105.0 8.7 Free cash flow 52.0 13.8 >100 Net financial position 13.7 -31.7 -- Working capital 196.2 172.3 13.9
Slide 28: Income statement
Income statement € million 2014 2013 Change (%) Revenue 1,530.2 1,453.2 5.3 Cost of goods sold -1.327.6 -1.257.4 5.6 Research and development costs -74.3 -58.7 26.6 Selling expenses -65.7 -62.6 5.0 Administrative expenses -34.3 -33.5 2.4 Other operating income 22.9 17.0 34.7 Other operating expenses
Slide 29: EBIT analysis
EBIT analysis € million 2014 2013 Change (%) EBIT 12.8 47.5 -73.1 Site optimisation -17.1 Impairment fixed assets JV DEUTZ Engine Shandong (DES) -1.8 Reported one-off effects -18.9 EBIT (before one-offs) 31.7 47.5 -33.3 Unexpected provision for warranty costs (net of insurance claims) -20.4 Impairme
Slide 30: Balance sheet: assets
Balance sheet: assets 31 Dec 31 Dec Change € million 2014 2013 (%) Non-current assets (excluding deferred tax assets) 563.6 596.6 -5.5 Deferred tax assets 62.2 30.8 >100 Inventories 245.2 224.6 9.2 Trade receivables 122.0 149.1 -18.2 Other receivables and assets 54.1 60.6 -10.7 Cash and cash equival
Slide 31: Balance sheet: equity and liabilities
Balance sheet: equity and liabilities 31 Dec 31 Dec Change € million 2014 2013 (%) Equity 511.0 504.7 1.2 Provisions for pensions and other post-retirement benefits 187.1 168.6 11.0 Other provisions 58.4 37.2 57.0 Financial liabilities 73.3 83.0 -11.7 Other liabilities 3.9 3.7 5.4 Non-current liabil
Slide 32: Cash flow statement (condensed)
Cash flow statement (condensed) € million 2014 2013 EBIT 12.8 47.5 Cash flow from operating activities (total) 114.1 105.0 Capital expenditure on intangible assets, property, plant and equipment and investments -61.3 -85.2 Proceeds from the sale of non-current assets 5.4 0.6 Cash flow from investing
Slide 33: Overview of segments, 2014
Overview of segments, 2014 Change Change New orders (€ million) 2014 2013 (%) Unit sales 2014 2013 (%) DEUTZ Compact Engines 1,115.0 1,385.5 -19.5 DEUTZ Compact Engines 183,125 167,964 9.0 DEUTZ Customised Solutions 264.0 264.2 -0.1 DEUTZ Customised Solutions 13,278 16,064 -17.3 Total for operating
Slide 34: Overview of segments, Q4 2014
Overview of segments, Q4 2014 Q4 Q4 Change Q4 Q4 Change New orders (€ million) 2014 2013 (%) Unit sales 2014 2013 (%) DEUTZ Compact Engines 232.5 381.9 -39.1 DEUTZ Compact Engines 36,601 43,962 -16.7 DEUTZ Customised Solutions 69.7 64.2 8.6 DEUTZ Customised Solutions 4,703 5,367 -12.4 Total for oper
Slide 35: Employees
Employees 31 Dec 31 Dec Change 2014 2013 (%) Cologne 2,422 2,403 0.8 Ulm 387 408 -5.1 Other German operations 284 284 0.0 Germany 3,093 3,095 -0.1 Foreign operations 823 857 -4.0 DEUTZ Group 3,916 3,952 -0.9 Financial year 2014 19 March 2015 35
Slide 36: Financial calendar & contact details
Financial calendar & contact details Annual general meeting 29 April 2015 Interim report 1st quarter 2015 5 May 2015 Interim report 1st half 2015 6 August 2015 Interim report 1st to 3rd quarter 2015 5 November 2015 Contact details Christian Krupp Tel:+49 (0) 221 822 5400 Ottostrasse 1
Slide 37: 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.