Wacker Neuson SE. May 2018

Transcription

1 Wacker Neuson SE May 2018

2 Agenda Overview Financials Q1/18 Outlook 2

3 Product range to meet the full spectrum of customer needs Light Equipment Compact Equipment Services Concrete technology Compaction Excavators Used machines 2 Academy Dumpers Backhoe-loaders Skid Steers Repair 2 & Maintenance 2 Spare parts Demolition Power & Lighting Pumps Telehandlers Wheel loaders Rental service 2 Telematics Heating e-store 2 Financing 27% of sales 1 52% of sales 1 21% of sales FY In selected countries.

4 Target industries besides construction Most industries demand both light an compact equipment Target group oriented sales: Markets Light equipment Compact equipment Business segments Revenue split (2017, as %) Agriculture Renovation/rehabilitation Development Infrastructure (road and highway construction, bridge construction) Gardening and landscaping Handling logistics/port logistics Residential construction Demolition Maintenance/repairs Industry & Recycling Underground construction Oil & gas/energy industry Events Municipalities Light equipment 27% Compact equipment 52% Services 21% 4

5 Our brands and target groups Construction, gardening/landscaping, energy sector etc. Agriculture, horse breeders, tree nurseries etc. 5

6 Global footprint Sales by region Core markets: EMENA & NAM, further internationalization ongoing Revenue split (2017) Europe 74% Americas 23% Asia-Pacific 3% 6

7 5 year comparison Revenue and EBIT margin [ m] [%] 7

8 Key Figures Revenue yoy +9.5% ( 370.5m) Op. CF -41m (Q1/17: -19m) Q1/18 EBIT yoy +60.8% (margin: 6.2%) FCF -45m (Q1/17: -26m) Adj. EBIT yoy +41.1% (margin: 6.2%) EPS yoy +61.5% ( 0.21) March 31, 2018 NWC 1 -ratio: 37.9% (-4.9PP yoy) DIO 2 : 150 days (-17 days yoy) Equity ratio: 65.8% (-1.2PP yoy) 8 1 Average net working capital for the quarter / annualized revenue for the quarter. 2 Days inventory outstanding: (average inventory for the quarter / annualized cost of sales for the quarter)*365.

9 Agenda Overview Financials Q1/18 Outlook 9

10 Revenue and earnings Revenue and earnings significantly higher than in Q1/17 Revenue [ m] % % % % 4.2% % 10.6% % % Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Income statement (excerpt) +9.5% EBIT margin [ m] Q1/18 Q1/17 Δ Revenue % Gross Profit % as a % of revenue 27.2% 27.1% 0.1PP SG&A incl. other income/expenses % as a % of revenue -20.9% -22.9% 2.0PP EBIT % as a % of revenue 6.2% 4.2% 2.0PP Adj. EBIT % as a % of revenue 6.2% 4.8% 1.4PP Profit for the period % EPS (in ) % 20% 15% 10% 5% 0% Comments on Q1 Revenue +9.5% Strong demand in core markets Europe and North America, deliveries delayed by bottlenecks on supplier side Currency-adjusted revenue increased 14.2% Gross profit margin at prior-year level (+0.1PP) Less favorable regional and product mix yoy Higher material prices, limited material availability EBIT +60.8% Operating cost at prior-year level, percentage of revenue down by 2.0PP Adjustments: In Q1/18, no adjustments were made. A negative one-off effect in the amount of 2.0m was reported in Q1/17. 1 Earnings per share +61.5% Financial result: Negative FX effects ( -1.6m), slight increase in interest income ( +0.3m) Tax rate stable at 29.1% (Q1/17: 29.0%) 10 1 Linked to changes to the Executive Board.

11 Business development by region and business segment Growth mainly driven by Europe and North America Revenue [ m] share yoy Europe % +8% Americas % +13% Asia-Pacific % +16% Total Q1/ % +9% Strongest growth in the compact equipment segment Revenue [ m] 2 share Light Equipment % Compact Equipment % Services % EBIT yoy +5% +13% +7% Comments on Q1 Revenue Europe +8% yoy (adj. for currency effects: +9%) Strong growth in particular in France, England, Poland, Austria and Benelux countries; recovery momentum continues in Southern Europe Revenue compact equipment for the agricultural sector +12%, alliance with John Deere developing as planned Revenue Americas +13% yoy (adj. for currency effects: +29%) Double-digit growth in both North and South America Region again makes positive contribution to earnings Strong growth in worksite technology and compact equipment Intensified competitive pressures due to imports from the Eurozone becoming more expensive Rental chains show high level of investment activity Revenue Asia-Pacific +16% yoy (adj. for currency effects: +26%) Strong growth reported for excavators in China Start of production at new plant in Pinghu (near Shanghai) Restructuring in Australia completed (provision for negative one-off effect from the sale of a building already recognized in Q4/17) Total Q1/ % +9% 11 1 EBIT for regions before consolidation. 2 Revenue by business segment before cash discounts.

12 Sound balance sheet structure Gearing 1 further reduced yoy Net financial debt [ m] % % % % % 23% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/ % % % Gearing 1 70% 60% 50% 40% 30% 20% 10% 0% Net financial debt/ebitda 2 at low level Net financial debt/ EBITDA 2 [x] Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/ Stable equity ratio Equity [ m] Equity ratio 1,200 1,067 1,057 1,067 1,093 1,102 1,083 1,103 1,115 1, % 1,000 80% % 66% 68% 69% 67% 65% 67% 69% 66% 60% % % 0 0% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Comments on Q1 At 17%, gearing 1 remains at a conservative level Net financial debt higher than at the close of the year due to seasonally higher net working capital Promissory note (Schuldschein) of USD 100m issued end of February 2018 Short-term credit lines replaced with three medium-term credit lines 12 1 Net financial debt / equity. 2 Net financial debt/annualized EBITDA for the quarter.

13 Management of net working capital proving effective Free cash flow negative due to seasonality Free cash flow [ m] Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/ Days inventory outstanding (DIO) 2 down 17 days yoy Ø Inventory [ m] Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/ DIO 2 in days Net working capital ratio 1 down 5PP yoy Ø Net working capital [ m] % 39% 46% 41% 43% 35% 38% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 35% Net working capital as a % of sales 1 38% 70% 60% 50% 40% 30% 20% 10% 0% 13 Comments on Q1 Cash flow from operating activities -41.4m (Q1/17: -19.1m) primarily due to an increase in net working capital +52.4m (Q1/17: +21.4m) Seasonal increase in inventory in Q1 Delayed deliveries (due to bottlenecks on supplier side) Increase in trade receivables due to higher business volume Drop in cash flow from investment activities (Q1/18: -3.7m; Q1/17: -6.9m) due to sale of building in Australia 1 Average net working capital for the quarter / annualized revenue for the quarter. 2 (Average inventory for the quarter / annualized cost of sales for the quarter)*365.

14 Share & Dividend proposal to AGM Our share in 2017 & 2018 % % -10% 1 Wacker Neuson SDAX DAX Peergroup 2 Stable dividend policy (40 50% payout ratio) % 62% 80% 53% 2 46% 48% 60% 38% 40% % 0% % % % -80% 0-100% EPS in Dividend per share in (paid out for respective year) Payout ratio Key figures per share in Q1/18 Q1/17 Earnings per share Share price end of period Book value per share Market capitalization ( m) 1, ,474.3 Coverage 1 Bank TP ( ) Recom. Date Hauck & Aufhäuser Buy Apr 30, 18 Metzler Buy Mar 20, 18 Lampe Hold May 4, 18 Berenberg Hold Mar 23, 18 Warburg Hold Mar 09, 18 Equinet Hold Nov 24, 17 Kepler Cheuvreux Hold Mar 21, 18 Shareholder structure Family 63% Free float 37% (total shares: 70,140,000) 14 1 As at May 4, Peergroup: Atlas Copco, Bauer, Caterpillar, Cramo, Deutz, Haulotte, Manitou, Palfinger, Ramirent, Terex. 3 Dividend payment to be proposed to the AGM on May 30, 2018.

15 Agenda Overview Financials Q1/18 Outlook 15

16 Relocation of skid steer production to the US pays off Skid steer as key product for North American market Development of contracted dealers in North America Skid Steer market North America e (units) 100,000 75,000 50,000 25,000 81, % 89,000 91,000 +2% e Source: CECE, Off-Highway. Roadshow Truck, Franklin Equipment. North American market for skid steers accounts for ~70% of world market Essential product to be attractive for dealers and rental companies Large potential for further compact equipment sales Expansion of plant in Wisconsin & integration of heaters and light towers from plant in Michigan (closure of plant in 2018) Extension of contracted dealer network for compact and light equipment Pro-active relationship management with key account rental customers and construction companies Focus on diversification of sales channels and industries Light equipment established in new retail channels 16

17 Setting the base for further growth in Asia Successful start of production of mini excavators in Pinghu (China)) Mini excavators for China and the region, production started in January Building on local/regional presence Demand for repair and maintenance of infrastructure is growing, especially in megacities 130,000 qm, 33,000 qm for modern production, offices and logistic facilities Integration of light equipment production from the Philippines into Pinghu (closure of plant in 2018) Mini excavator market China e (units) 50,000 New plant located in Pinghu, 30 km from Shanghai city border. 40,000 30,000 20,000 19, % 33,000 +9% 36,000 10, e Excavator: EZ17. 17

18 Strategic alliances and partnerships leverage our sales Core Markets: Europe & North America OEM (global 1 ) OEM (global) Distribution (EMENA & CIS 2 ) Wacker Neuson produces for Caterpillar 1 HAMM produces for Wacker Neuson Kramer 3 distributes via JD s dealer network Latin America & Asia OEM (Latin America) Distribution (Korea) Distribution (Japan) Distribution (ASEAN) Randon produces for Wacker Neuson Wacker Neuson via Everdigm s network Weidemann via ISEKI s network Wacker Neuson via MHE s network 18 1 Not in Japan. 2 Commonwealth of Independent States. 3 Kramer green line only.

19 Outlook for 2018 Business index for the construction industry at a high level Business index for the agricultural sector at a high level Source: CECE, April Source: CEMA, March Guidance for fiscal 2018 as a whole confirmed Comments Revenue [ m] 2,000 1,500 1, % 1,650 1,700 1, % 1 8.6% FY 2017 FY 2018 EBIT margin 15% 13% 11% 9% 7% 5% Business index in core industries at a high level Order intake higher than prior-year figure Mid-year price increase of 2% on average planned for July 2018 Guidance for fiscal 2018 confirmed Special risks: Delayed deliveries (suppliers having difficulties meeting orders) Currency developments, especially EUR/USD (negative translation effects on revenue, negative transaction effects on earnings) 19 1 Does not include potential one-off income from the sale of a property owned by the Group.

20 Agenda Appendix 20

21 Strategy 2022 and mid-term targets Strategy 2022 Mid-term targets

22 Progress with Strategy 2022 CUSTOMER-CENTRICITY ACCELERATION Expansion of (direct) sales network to include Slovakia 1 Optimization and expansion of dealer structure in North America Progress with financing solutions for customers and distribution partners Expansion of rental portfolio to include more flexible solutions tailored to individual customer needs R&D focus: Alternative drive technologies, presentation of further zero emission products at INTERMAT in France (April 2018) Successful net working capital management, with optimized inventory structure in particular Improvements to processes and organizational structure in aftermarket proving effective FOCUS EXCELLENCE Profitable business field: Aftermarket & services now an independent legal entity Initiatives to enhance delivery capabilities Internationalization: Successful launch of excavator production in China Targeted financing for further growth: promissory note in USD (Schuldschein), new medium-term credit lines Reduction in structure costs and optimization of value chain: Integration of light equipment production from Manila (Philippines) into plant Pinghu (China) underway Integration of Light equipment production from Norton Shores, (Michigan, USA) into plant Menomonee Falls (Wisconsin, USA) underway Employee development programs Training initiatives 22 1 Countries with direct sales (120 Wacker Neuson sales and service stations): Germany, Austria, Switzerland, Poland, Czech Republic, Slovakia, Benelux countries, Denmark, Sweden.

23 Services Close to our Customers Contractors, rental companies, farms, railway, industrial groups, retailers Training E-Business Rental Financing Telematics Used Service Spare Parts We work in markets where we provide a competitive product & service package to our customers where we have or will reach a sustainably leading position where we can be a first mover in fulfilling customer needs that support the groups overall profitability 23

24 Tailwind from global markets Construction industry: machinery sales +11% Development of agricultural sector in Germany 1,000, , , , , , , , , , % +11% e 2018e 2019e 2020e 2021e China Europe India Japan North America Rest Source: Off-Highway Research, August Price developments for butter & milk in the EU Source: German Farmer s association, March Most major regional equipment markets are expected to see growth in 2018 Europe and Americas main growth drivers Europe: strong business in the construction sector, upbeat mood in the agricultural sector North America: stronger revenue from skid steer loaders and other compact equipment Asia-Pacific: a key driver will be China Source: Nilesen, Milchindustrieverband, Die Welt,

25 Competitive landscape for Wacker Neuson Group Market structures and dynamics Competitors Fragmented market Ammann Multiquip/Mikasa Light equipment/ construction Dominated by niche/specialized manufacturers Not targeted by heavy equipment manufacturers Quality rather than price Atlas Copco/Dynapac Bomag Bosch pt Significant barriers to market entry Hilti Compact equipment/ agriculture Fragmented market with local manufacturers Giant JCB Schaeffer Thaler Global competitors Compact equipment Heavy equipment Compact equipment/ construction Similar target groups to light equipment for the construction industry Specialized manufacturers Compact and heavy equipment providers Atlas Weyhausen Bobcat (Doosan) Kubota Manitou/Gehl Hitachi JCB Komatsu Liebherr Takeuchi Terex Yanmar Volvo 25

26 Challenges: New emission regulations for diesel engines Engine emissions regulations lack of harmonization driving costs and consuming resources 26

27 Wacker Neuson Group leading alternative drive technologies EZ17e 27

28 Financial calendar and contact May 14, 2018 May 15, 2018 May 16, 2018 May 23, 2018 May 30, 2018 June 6, 2018 June 20, 2018 June 21, 2018 June 27, 2018 June 28, 2018 August 7, 2018 London roadshow Zurich roadshow Equity Forum (spring edition), Frankfurt Berenberg Tarrytown Conference, New York Annual General Meeting, Munich DB Access Conference, Berlin Paris roadshow Warburg Highlights Conference, Hamburg Milan roadshow Lugano roadshow Publication of 2018 half-year report; analysts and investors call Disclaimer This report contains forward-looking statements which are based on current estimates and assumptions made by corporate management at Wacker Neuson SE. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by Wacker Neuson SE and its affiliated companies depend on a number of risks and uncertainties and may therefore differ materially from forward-looking statements. Many of these factors are outside the Company s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and market players. The Company neither plans nor undertakes to update any forward-looking statements. All rights reserved. Valid May Wacker Neuson SE accepts no liability for the accuracy and completeness of information provided in this brochure. Reprint only with the written approval of Wacker Neuson SE in Munich, Germany. The German version shall govern in all instances. Contact Wacker Neuson SE IR Contact: (0) ir@wackerneuson.com 28