Thyssenkrupp Ag · XETR:TKA
Thyssenkrupp — Q3 2019/20 Earnings Presentation
61 slides from Thyssenkrupp's earnings presentation, October 2020
Slide 1: Charts on Q3 2019/20 Facts & Figures
Charts on Q3 2019/20 Facts & Figures Ticker: TKA (Share) TKAMY (ADR) October 2020
Slide 2: Content
Content • Quarterly Update (August 13, 2020) – Q3 FY 2019/20 slides 02-13 • Steel Strategy 20-30 slides 14-20 • Group Overview slides 21-26 • Facts & Figures slides 27-61 2 | thyssenkrupp AG l Investor Relations l October 2020
Slide 3: Next strategic milestones achieved – however, pandemic with sig. effects on operations
Next strategic milestones achieved – however, pandemic with sig. effects on operations • Transformation of balance sheet (effective in Q4) ET Sale − Net Cash position from Net Debt effect of €15.4 bn; equity uplift by >€14 bn; pension liabilities reduction of €0.4 bn • Group of Companies: more focus
Slide 4: Target portfolio set to support turnaround and true performance culture
Target portfolio set to support turnaround and true performance culture “Group of Companies“1 (as of October 01, 2020) Materials Industrial Automotive Steel Marine Services Components Technology Europe Systems “Multi Tracks”2 AST SP FT PTS (SY) BTS (SY) MX AT SE MS CPT HP MIN TSE BG CEM • Strong mar
Slide 5: Order intake hit by pandemic effects on customers
Order intake hit by pandemic effects on customers in particular at Components and Materials [€ mn] 2018/19 2019/20 Δ AT: Demand decline in Europe and NAFTA; China with slight Q3 Q2 Q3 yoy yoy (ex FX)1 recovery since end of April 2,3 Automotive Technology (AT) 1,308 1,182 815 (38%) (38%) IC: Cyclical
Slide 6: Sales
Sales [€ mn] 2018/19 2019/20 Δ AT: Sales mirror order intake; mainly pandemic-induced Q3 Q2 Q3 yoy yoy (ex FX)1 demand decline in Europe and NAFTA 2,3 Automotive Technology (AT) 1,365 1,267 842 (38%) (38%) IC: Ongoing cyclical downturn as well as pandemic-driven Industrial Components (IC) 2,3 660 57
Slide 7: EBIT adj. – Materials and components businesses sig. hit by pandemic
EBIT adj. – Materials and components businesses (particularly auto related) sig. hit by pandemic [€ mn] 2018/19 2019/20 1 Δ Q3 Q2 Q3 yoy AT: Pandemic-induced demand decline in Europe and NAFTA; 2,3 SP and SY still sig. negative Automotive Technology (AT) (5) (49) (129) -- Springs & Stabilizers 3 (27
Slide 8: Overview – Business cash flow (BCF) and Free cash flow before M&A
Overview – Business cash flow (BCF) and Free cash flow before M&A [€ mn] 2018/19 2019/20 1 Δ Q3 Q2 Q3 yoy 2,3 AT: Lower earnings offset lower investments BCF Automotive Technology (AT) (75) (169) (215) -- Springs & Stabilizers 3 (34) (35) (46) (36%) System Engineering 3 (34) (81) (65) (93%) IC: Decr
Slide 9: Special Items - continued focus on restructuring
Special Items - continued focus on restructuring [€ mn] 2018/19 2019/20 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Comments on Q3 Disposal effect Impairment (1) (2) (2) (85) (90) (5) (81) (7) • Impairments at Camshafts and Springs & Stabilizers AT Restructuring (6) (6) (94) 5 (14) • Restructuring mainly at System Engi
Slide 10: Closing of Elevator transaction will transform tk's balance sheet in Q4
Closing of Elevator transaction will transform tk’s balance sheet in Q4 Keep high flexibility for use of proceeds until higher visibility Proceeds First decisions for use of proceeds €15.4 bn effect on Net Financial Position - net of re-investment Repay debt along maturity profile: redemption €7
Slide 11: Almost all businesses stable or with slight improvement in Q4; FY sig. impacted by loss at SE
Almost all businesses stable or with slight improvement in Q4; FY sig. impacted by loss at SE [Continuing Operations; € mn, bn] 41 • Q4 stable or slightly up qoq at almost all 13 businesses (possible exception at SE), (13) although still stressed by pandemic EBIT adj. (177) (152) (1.7) to (1.9) (266
Slide 12: Q4 stable or slightly up qoq at almost all businesses
Q4 stable or slightly up qoq at almost all businesses; although still stressed by pandemic impacts [Continuing operations, € mn] Q3 Q4E Q4 vs Q3 Sales recovery by ~1/3; higher volumes as well as cost and efficiency measures AT (129) mid 2-digit -ve expected to cut loss by half Sales recovery at Forg
Slide 13: Wrapping up and looking ahead
Wrapping up and looking ahead • Elevator sale with transformational effect on balance sheet to Net Cash position; tailwind for restructuring and development of Group of Companies • M&A for Plant Technology progressing, revised indicative offers expected in late summer Portfolio • Leverage tk’s leadi
Slide 14: Content
Content • Quarterly Update (August 13, 2020) – Q3 FY 2019/20 slides 02-13 • Steel Strategy 20-30 slides 14-20 • Group Overview slides 21-26 • Facts & Figures slides 27-61 14 | thyssenkrupp AG l Investor Relations l October 2020
Slide 15: Strategy 20-30 designed to tackle the challenges and capitalize on opportunities in the steel market
Strategy 20-30 designed to tackle the challenges and capitalize on opportunities in the steel market Challenges Opportunities # Market environment – Steel índustry at cyclical low-point # Steel Europe with strong USPs • Increased raw material costs • Premium flat steel producer with (one of) the mos
Slide 16: Steel Europe is (one of) the biggest, most efficient, integrated steel assets in Europe
Steel Europe is (one of) the biggest, most efficient, integrated steel assets in Europe Steel Europe operations in the Center of Europe and close to its main (auto) customers 500 km Premium flat steel producer Technology leader and full-service provider for high-quality flat carbon steel products 41
Slide 17: Steel Europe with fundamental value through premium grade flat carbon steel
Steel Europe with fundamental value through premium grade flat carbon steel Reliable returns by benchmark position in products and processes EBIT adj. [€mn] • Strategy 20-30 • Normalized market environment Steel Strategy 20-30 687 492 547 • Performance and cost-reduction with effects in 315 247 221
Slide 18: Strategy 20-30: strengthen competitiveness and downcycle resilience
Strategy 20-30: strengthen competitiveness and downcycle resilience Performance • Headcount (FTE) reduction: 1,000 administration (SG&A); 800 production; 200 logistics and maintenance • Better cost base, higher av. revenues/t, • Optimization of processes and product quality in downstream network by
Slide 19: Portfolio: Holistic approach across entire downstream network
Portfolio: Holistic approach across entire downstream network Target ~ 11.5 mt Concentration and higher utilization of integrated production: FY 11.3 mt Duisburg 17/18 - Steel mill operations - Hot rolling operations Coated, - Coating processes for auto sheets superior surface quality Closure of Boc
Slide 20: Strategy 20-30: foster fundamental value of Steel Europe
Strategy 20-30: foster fundamental value of Steel Europe +~€600 mn EBIT/BCF o Build on Steel Europe‘s strong USPs short-term ~€200 mn from cost reduction; mid-term ~€400 mn from production network technology leader in premium flat carbon steel optimization preferred supplier of German auto OEMs
Slide 21: Content
Content • Quarterly Update (August 13, 2020) – Q3 FY 2019/20 slides 02-13 • Steel Strategy 20-30 slides 14-20 • Group Overview slides 21-26 • Facts & Figures slides 27-61 21 | thyssenkrupp AG l Investor Relations l October 2020
Slide 22: thyssenkrupp Group
thyssenkrupp Group1 [Continuing Operations – Sales €34.0 bn; EBIT adj. €(110) mn] Automotive €5.4 bn Industrial €2.5 bn Plant €2.9 bn Technology (AT) €(22) mn Components (IC) €230 mn Technology (PT) €(145) mn • Chassis/ powertrain • Bearings • Chemical plants components • Undercarriages • Cement pla
Slide 23: Sales by region FY 2018/19
Sales by region FY 2018/19 [Continuing Operations, %] Automotive Industrial Plant Marine Materials Steel thyssenkrupp Technology Components Technology Systems Services Europe Continuing Operations Worldwide (€mn) 5,407 2,522 2,943 1,800 13,881 9,065 34,036 1 DACHLI 35.7 20.1 5.7 28.7 34.4 54.5 34.9
Slide 24: Sales by customer group FY 2018/19
Sales by customer group FY 2018/19 [Continuing Operations, %] Automotive Industrial Plant Marine Materials Steel thyssenkrupp Technology Components Technology Systems Services Europe Continuing Operations Worldwide (€mn) 5,407 2,522 2,943 1,800 13,881 9,065 34,036 Automotive 93.3 39.2 0.0 0.0 15.8 2
Slide 25: At thyssenkrupp we systematically create sustainable value
At thyssenkrupp we systematically create sustainable value How we manage sustainability External recognition 1 Board-level responsibility Definition of sustainability strategy & targets Leader Monitoring of sustainability performance Outperformer ranked 3 Average Performer out of Underperformer
Slide 26: thyssenkrupp with strong commitment and strategy to tackle future climate challenges
thyssenkrupp with strong commitment and strategy to tackle future climate challenges tk actions correspond to TCFD1 framework tk ranked as a leader in climate protection for 4 years in a row Governance Oversight of climate strategy by CEO and Sustainability Committee Supervisory Board informed t
Slide 27: Content
Content • Quarterly Update (August 13, 2020) – Q3 FY 2019/20 slides 02-13 • Steel Strategy 20-30 slides 14-20 • Group Overview slides 21-26 • Facts & Figures slides 27-61 27 | thyssenkrupp AG l Investor Relations l October 2020
Slide 28: Share and ADR Data
Share and ADR Data • Shares outstanding 622,531,741 • Type of share No-par-value bearer shares • Voting One share, one vote Share Data • Ticker Symbol TKA • German Security Identification Number (WKN) 750 000 • ISIN Number DE0007500001 • Exchange Frankfurt, Dusseldorf ADR Data • Ratio (ordinary shar
Slide 29: thyssenkrupp shareholder structure
thyssenkrupp shareholder structure Investors Regional split AKBH Undisclosed Foundation Rest of the World 5.0% 6.6% Europe ~21% 20.6% incl. Cevian Capital Free Float Private ~10% 7.3% UK/Ireland Investors ~79% 42.9% ~69% Germany 17.6% International Mutual Funds incl. AKBH North America Foundation in
Slide 30: Key financials Full Group
Key financials Full Group [€ mn] 1) 2018/19 2019/20 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 10,111 10,360 10,219 11,303 41,994 9,660 9,542 6,693 Sales 9,736 10,638 10,779 10,843 41,996 9,674 10,108 7,710 EBITDA 465 321 483 256 1,525 237 (6) (176) EBITDA adjusted 500 526 519 413 1,958 398 258 (111) EBIT
Slide 31: Key financials Continuing operations
Key financials Continuing operations [€ mn] 2018/19 2019/201) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 7,968 8,366 8,221 9,270 33,825 7,429 7,559 4,793 Sales 7,813 8,768 8,738 8,717 34,036 7,629 8,247 5,765 EBITDA 245 129 239 39 652 9 (136) (417) EBITDA adjusted 296 327 281 141 1,046 129 40 (374) EBIT (
Slide 32: Pensions: patient long-term financial debt with gradual amortization
Pensions: “patient” long-term financial debt with gradual amortization [Group, € mn] Accrued pension and similar obligations Development at unchanged discount rate (schematic) 8,512 8,947 8,600 7,654 8,245 50 209 57 56 44 202 202 257 54 256 638 553 519 619 627 8,341 8,319 100-200 p.a. amortization 8
Slide 33: Germany accounts for majority of pension plans
Germany accounts for majority of pension plans [Group, FY 18/19; € mn] Funded status of defined benefit obligation Reconciliation of accrued pension liabilities by region Germany Outside Germany (181) 2,448 7,122 11,067 8,232 8,050 8,688 2,836 (2,267) 638 1,566 54 Partly Unfunded Accrued Plan assets
Slide 34: Net periodic payments exceed Service costs by >€200 mn
Net periodic payments exceed Service costs (incl. in EBITDA) by >€200 mn (long-term ~€300 mn) and amortize pension liability by Δ of Net periodic payment vs. Net periodic pension cost [Group, € mn] Non-cash employees earning Cash to pensioners future pension payments 8,688 Net periodic pension cost
Slide 35: Capex increase due to IFRS 16 adoption amongst others
Capex increase due to IFRS 16 adoption amongst others Continuing Operations up yoy (incl. IFRS 16) €1,210 mn Non-cash IFRS 16 effect: 33% • Considering present value of new leased items 9% • ~€100-150 mn impact 3% 5% 11% 40% 2018/19 2019/20E AT IC PT MS MX SE Group 35 | thyssenkrupp AG l Investor Re
Slide 36: Liquidity analysis and maturity profile of gross financial debt
Liquidity analysis and maturity profile of gross financial debt as of June 30, 2020 [€ mn] Cash-in from Elevator transaction significantly increasing thyssenkrupp’s 35% 18% 15% 10% 15% 7% liquidity in Q4 2019/20 3,941 Repayment of drawings under credit lines 3,525 (€3.3 bn) in connection with cash-i
Slide 37: Systematic benchmarking aiming at best-in-class operations
Systematic benchmarking aiming at best-in-class operations Selected peers / relevant peer segments thyssenkrupp group Automotive Technology Industrial Components Plant Technology • Steering: • Slewing bearings and seamless rings: • Chemical Plant Engineering: Bosch Automotive Steering, ZF/TRW, IMO,
Slide 38: Automotive Technology - Overview
AT Automotive Technology - Overview1 Mission critical and high-performance components and systems for leading automotive customers Snapshot FY 2018/19 Product offering Steering Damper Automotive Systems €5,407 mn sales ~25,800 employees Well-known brands with strong reputation and International pres
Slide 39: Automotive Technology – Business Modell
AT Automotive Technology – Business Modell Well positioned for automotive megatrends Steering Proximity to • Global production footprint Damper Springs & Stabilizers • “Glocalisation” in growth markets to strengthen competitiveness Automotive Systems customers Camshafts • New plant ramp-ups fosterin
Slide 40: Automotive Technology
AT Automotive Technology1 [€ mn] 2018/192) 2019/203) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 1,283 1,306 1,308 1,354 5,251 1,353 1,182 815 Sales 1,231 1,358 1,365 1,453 5,407 1,367 1,267 842 EBITDA 67 61 65 16 210 (2) 17 (62) EBITDA adjusted 70 68 57 29 224 94 27 (56) EBIT 9 0 2 (136) (126) (78) (130)
Slide 41: Industrial Components - Overview
IC Industrial Components - Overview1 Mission critical components for the wind energy, truck and construction machinery industry Snapshot FY 2018/19 Product offering Market leader rothe erde® rothe erde® rings psl® rolling bearings €2,522 mn sales for large slewing bearings slewing bearings ~14,000 e
Slide 42: Industrial Components – Business Modell
IC Industrial Components – Business Modell Maximum quality and functionality products tailored specifically to the needs of our customers Bearings Forged Technologies Engine components: • Crankshafts and conrods • For both diesel and gasoline engines • Translate engine speed into driving speed Slewi
Slide 43: Industrial Components
IC Industrial Components1 [€ mn] 2018/192) 2019/203) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 643 702 661 631 2,636 558 589 432 Order backlog 938 1,014 1,010 1,005 1,005 1,013 1,011 980 Sales 573 650 660 639 2,522 544 573 452 EBITDA 72 86 84 83 325 72 81 50 EBITDA adjusted 73 87 99 94 353 73 82 53 EBIT
Slide 44: Plant Technology – Overview
PT Plant Technology – Overview FY 2018/19 Global plant builder and technology leader What makes tk Plant Technology unique > 30 countries (own presence) € 2.8 bn order intake Strong global footprint > 90 branches € 2.9 bn sales Reputation as reliable partner First positive EBIT 12,000 employees
Slide 45: Plant Technology – Business Modell
PT Plant Technology – Business Modell Supporting our customers along the complete plant lifecycle Engineering (E) Procurement (P) Construction1 (C) Services (S) ~70% engineers and technicians 12.000 employees worldwide ~30% andere Leading technologies and Global network and Local presence and Reliab
Slide 46: Plant Technology
PT Plant Technology1 [€ mn] 2018/192) 2019/203) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 668 513 1,048 614 2,844 568 457 360 Order backlog 5,021 4,881 5,189 4,847 4,847 4,615 4,252 3,971 Sales 615 669 725 935 2,943 755 737 644 EBITDA (29) (17) (50) (31) (127) (8) (16) (91) EBITDA adjusted (22) (21) (43)
Slide 47: Marine Systems – Overview
MS Marine Systems – Overview Leading supplier of non-nuclear submarines and high-end naval vessels Business unit overview Product offering €1.8 bn sales More than 160 submarines and 160 naval surface vessels Submarines 1 Surface vessels €6.3 bn order backlog contracted since 1960 with 27 navies worl
Slide 48: Marine Systems – Business Modell
MS Marine Systems – Business Modell Industry leading portfolio of submarines and surface vessels ~47% ~22% ~24% ~7% Naval electronic systems Submarines Surface vessels Services (ATLAS ELEKTRONIK) • Prime contractors with design and • Prime contractors incl. design of • Supplier to prime contractors
Slide 49: Marine Systems
MS Marine Systems [€ mn] 2018/19 2019/201) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 107 133 145 1,807 2,192 103 132 123 Order backlog 5,300 4,944 4,571 5,887 5,887 5,610 5,313 5,045 Sales 298 497 510 496 1,800 381 423 385 EBITDA 12 12 12 16 52 13 13 18 EBITDA adjusted 12 12 13 16 53 13 16 19 EBIT 0 (0)
Slide 50: Materials Services – Overview
Materials Services – Overview Leading market and customer positions plus unrivalled materials and services portfolio #1 Germany 40 countries ~250,000 customers Digitalization #2 Europe 150,000 multi-material products Leadership 480 branches #4 North America 3-year average1 Ø 10.6 mt Shipments Ø €14.
Slide 51: Materials Services – Business Model
Materials Services – Business Model Covering the entire materials value chain and gaining unique market insight Increasing customer integration and value-added services Raw Materials & Trading Production Distribution Supply Chain Services • Global trading business for • Production and distribution o
Slide 52: Materials Services
MX Materials Services [€ mn] 2018/19 2019/201) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 3,370 3,821 3,336 3,340 13,868 3,078 3,325 2,242 thereof Materials Production 401 489 401 431 1,721 427 545 225 Sales 3,388 3,696 3,505 3,291 13,881 3,046 3,389 2,245 thereof Materials Production 390 463 453 430 1,73
Slide 53: Steel Europe – Overview
SE Steel Europe – Overview Leading premium flat steel producer with a strong focus on Europe #1 Germany 15 countries ~ 1,400 customers Climate strategy & #2 Europe 19 production sites ~ 2,000 products digitalization 3-year average1 Ø 11.1 mt Shipments Ø €9.1 bn Sales Ø €422 mn EBIT adj. Ø €242 mn BC
Slide 54: Steel Europe – Business Model
SE Steel Europe – Business Model Steel Europe operates an integrated value chain Production-BUs (Cost Center) Market-BUs (Profit Center) Hot Metal Steel Hot Rolling Cold Rolling Coating Automotive Premium auto & truck OEMs & suppliers, mainly European brands Raw materials Electrical Steel 4 blast fu
Slide 55: Steel Europe
SE Steel Europe [€ mn] 2018/19 2019/201) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Order intake 2,341 2,451 2,177 1,814 8,784 2,115 2,259 943 Sales 2,131 2,350 2,347 2,237 9,065 1,851 2,154 1,455 EBITDA 147 (6) 121 58 321 (48) (218) (228) EBITDA adjusted 152 149 113 61 475 (46) (94) (218) EBIT 34 (118) 9 (48) (123) (
Slide 56: Volume KPI's of Materials Businesses
Volume KPI’s of Materials Businesses 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 FY FY FY FY FY FY FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Total shipments kt 10,868 10,669 13,615 13,421 12,605 10,966 11,096 2,376 2,672 2,388 2,413 9,849 2,254 2,410 1,977 MX Warehousing shipments1 kt 5
Slide 57: Corporate Headquarters
HQ Corporate Headquarters1) [€ mn] 2) 3) 2018/19 2019/20 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 EBITDA (69) (60) (52) (90) (271) (99) (154) (45) EBITDA adjusted (57) (51) (53) (71) (232) (61) (58) (36) EBIT (74) (64) (59) (95) (293) (103) (159) (49) EBIT adjusted (63) (55) (57) (76) (252) (66) (63) (40) BCF (73) (
Slide 58: Stringent alignment of management compensation with financial performance targets
Stringent alignment of management compensation with financial performance targets LTI: Share price, tkVA (target tkVA = 0); payout limited to 250% of initial value For every €20 mn Ø tkVA above target 1% increase in number of rights Long-Term For every €10 mn Ø tkVA below target 1% reduction in
Slide 59: thyssenkrupp rating
thyssenkrupp rating Long-term Short-term rating rating Outlook Standard & Poor’s BB- B stable Moody’s B1 not Prime developing Fitch BB- B stable 59 | thyssenkrupp AG l Investor Relations l October 2020
Slide 60: Reconciliation of EBIT Q3 2019/20 from Group P&L
Re-conciliation of EBIT Q3 2019/20 from Group P&L [Continuing Operations, € mn] P&L structure EBIT definition Net sales 5,765 Net sales 5,765 Cost of sales (5,660) Cost of sales (5,660) SG&A, R&D (894) SG&A, R&D (894) Other income/expense 50 Other income/expense 50 Other gains/losses 5 Other gains/l
Slide 61: Disclaimer thyssenkrupp AG
Disclaimer thyssenkrupp AG This presentation has been prepared by thyssenkrupp AG (“thyssenkrupp”) and comprises the written materials/slides for a presentation concerning thyssenkrupp. By attending this presentation and/or reviewing the slides you agree to be bound by the following conditions. The