Wacker Neuson SE. April, 2017

Transcription

1 Wacker Neuson SE April,

2 Agenda The Company Outlook Highlights FY 2016 Financials 2

3 Product range covers customer needs Light Equipment Compact Equipment Services Concrete technology Compaction Excavation Material handling Used machines 1 Academy Repair 1 & Maintenance 1 Financing Worksite technology Rental service 1 Telematics Store 1 Concrete Solutions Over 250 product groups Over 40 product groups 1 In selected countries 3

4 Our brands and target groups Construction industry, gardening and landscaping firms, municipal services, recycling, railroad/track construction, rescue services, energy sector, etc. Agriculture, horse farming, tree nurseries etc. 4

5 Management Areas of responsibility Executive Board Cem Peksaglam CEO Wilfried Trepels CFO Alexander Greschner CSO Martin Lehner CTO Strategy/M&A, HR, legal matters, compliance, real estate, investor relations, corporate communication, sustainability Finance, audit, IT Since January 2017 Sales, logistics, service, marketing Since January 2017 Procurement, production, technology, quality 5

6 5 years comparison Revenue and EBIT margin (in EUR m) (in %) 6

7 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

8 Beside construction, more industries are gaining of importance Markets Light equipment Compact machines Agriculture Target group oriented sales: Revenue split (2016, as %) Business segments 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 Light equipment 27% Compact equipment 51% Services 22% Municipalities 8

9 Share price Share price performance since January 2016 % DAX SDAX Adaption of FY guidance Termination CAT alliance Possible sale of real estate company 9

10 Agenda The Company Outlook Highlights FY 2016 Financials 10

11 Highlights of fiscal 2016 FY revenue at PY s level ( 1,36bn; -1% in, adjusted by currency effects +0.3%) Solid revenue growth in Europe (+4%; > 1bn) Successful bauma fair and innovations setting benchmarks (e.g. electric wheel loader, battery-powered rammers) Transition year for Wacker Neuson progress on many strategically important projects (e.g. SAP, estore, standardization, logistics, aftermarket, digitalization) Relocation of R&D center from Munich to Reichertshofen (Germany) Expansion of international reach New plant in Brazil Groundbreaking for new plant in China Alliance with HAMM AG proves to be successful (rollers) Good financial position (equity ratio: 69%; gearing: 19%) Positive free cash flow ( 29m, +61%) Challenging market environment in energy sector (oil & gas), agricultural and mining sector as well as persisting market weakness in Latin America, South Africa and South Pacific Negative FX translation effect on revenue 2016: -1.3 PP Weak business in Americas (revenue -16%) Strong margin business of light equipment was affected by crisis-hit markets (oil & gas) Skid steer production line in US (ramp-up with difficulties and delays) New non-harmonized emission regulations on diesel engines blocked resources and increased R&D costs EBIT margin reduced by 1PP from 7.5% to 6.5% in 2016 ( 88m) Working capital with 42% of revenue still too high (esp. inventories) 11

12 Global construction equipment sales 2016 vs Challenging market environment 12 Absatz von Erdbaumaschinen, Quelle: ISC-Statistiken, VDMA, Februar 2017

13 2016: Comparison with peer group (construction equipment) Revenues and earnings (2016 vs 2015) in local currency Company Profitability 2016 Change revenue 2016 vs 2015 in local currency Peer 1 (in ) n.a. 6% Peer 2 (in ) Op. Income: +17% (margin: 5.3%; 2015: 4.7%) 3% Wacker Neuson (in ) EBIT: -15% (margin: 6,5%; 2015: 7,5%) Peer 3 (in SEK) Op. Income: +10% (margin: 4.4%; 2015: 4.0%) -1% -1% Peer 4 (in SEK) Op. Profit: -6% (margin: 15.0%; 2015: 15.5%) Peer 5 (in ) Op. Income: -8% (margin: 17.6%; 9M/15: 18.7%) -3% -3% Peer 6 (in ) Op. Income: -28% (margin: 2.2%; 9M/15: 2.8%) Peer 7 (in US-$) Op. profit: -98% (margin: 0.1%; 2015: 3.5%) Peer 8 (in ) Segment Profit: -23% (margin: 9.0%; 9M/15: 10.5%) Peer 9 (in ) Ordinary Loss: bn. Yen (9M/15: -6.5 bn. Yen) Peer 10 (in US-$) Op. Profit: -12% (margin: 10.6%; 2015: 10.5%) -8% -9% -10% -11% -12% 13

14 2016: Comparison with peer group (agricultural equipment) Revenues and earnings (2016 vs 2015) in local currency Company Profitability 2016 Change revenue 2016 vs 2015 in local currency Peer 11 (in US-$) Adj. Op. Inc.: -22% (margin: 4.1%; 2015: 5.2%) -1% Wacker Neuson Agriculture (in ) n.a. -4% Peer 12 (in ) EBIT: -35% (margin: 3.6%; 2015: 5.1%) -5% Peer 13 (in US-$) Op. profit: -14% (margin: 8.1%; 2015: 8.6%) -8% Peer 14 (in US-$) Op. profit: -18% (margin: 9.7%; 2015: 10.9%) -8% 14

15 Impact on cost: New emission regulations for diesel engines * Non-harmonized engine emission regulations a cost driver and resource consumer 15 * from 2019/2020 onwards

16 Leading alternative drive technologies

17 North America biggest market for skid steer loaders (SSL) Units-Split 2016e Forecast 2016e 2020e (Global market 2016: ) (Units) % Globally, the North American market has accounted for ~70% of the global units sold (2016e: 74,000 units) The global market will grow and reach 130,000 units in The North American skid steer market is expected to reach 91,000 units by North America Rest of World e 2020e Source: Yengst Report, July

18 Production of skid steer loaders (SSL) in the US Skid Steer loaders (SSL) relocation of R&D and production from Wacker Neuson Austria to US (Wisconsin) in Unexpected difficulties in ramp-up of production and delays due to quality issues with suppliers Production halts and field campaigns reduce profitability Revenue and earnings under expectation and budget Only partial compensation of costs by suppliers 18

19 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, the overall feedback from dealers and customers was very positive 19

20 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 construction period) Office building (3.500qm), R&D Center (3.000qm) 90 employees already relocated Products engineered and produced in Reichertshofen: 20

21 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: kilovoltamps) successfully launched in April 2016 Additional models on the way (expanding to 150 kilovolt-amps) Use of established sales and distribution network in Latin America Wacker Neuson is well prepared for pick-up of demand for mobile generators in Latin America, 2017 still difficult market environment in Brazil 21

22 Breaking ground for 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 follow Plot of 200,000qm, 33,000 qm for modern production hall, offices and logistics spaces, geothermal energy and solar panel systems Start of production: 2018 Growing strategic importance of China and Asia Pacific for Wacker Neuson 22

23 Actual view on plant in China 23

24 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) with a volume of 125m, 5Y and low coupon of 0.69% p.a. in February 2017 Fairs Successful participation at Conexpo trade fair in Las Vegas in March 2017 Dividend Dividend: 0.50 (unchanged) confidence in strategy, earnings potential and continuity (dividend proposal to AGM on May 30, 2017) 24

25 Agenda The Company Outlook Highlights FY 2016 Financials 25

26 Financials of Q4/16 and FY 2016 at a glance Q4/16: Revenue slightly below previous year Revenue: -3% Q4/yoy to 348m (adjusted for currency effects: -2%) Agricultural revenue decreased by 10% EBIT: -19% Q4/yoy to 18m; EBIT margin: 5.2% (Q4/15: 6.3%) EPS: -11% Q4/yoy to 0.16 (Q4/15: 0.18) 2016: Stable revenue Revenue: -1% yoy to 1,361m (adjusted for currency effects: +0.3%) Agricultural revenue decreased by 4% EBIT: -15% yoy to 88m; EBIT margin: 6.5% (2015: 7.5%) EPS: -14% yoy to 0.81 (2015: 0.94) 26

27 Business performance sales split by region 2016 Revenue by region 1,2 (in m) 3% 1,375 +3% (+6%) 1, % (-15%) 4% 25% % +4% (+6%) 71% % Europe Americas Asia-Pacific 1 In brackets: adjusted to discount currency effects; 2 Nominal, after cash discounts 27 Europe All-time high: revenue above EUR 1bn; +4% to EUR 1,021 m despite weak agriculture market, difficulties in Turkey, Russia and South Africa EBIT of EUR 97.9m EBIT margin of 9.6% (PY: 11.5%) Special projects central logistics, estore, R&D relocation to Reichertshofen etc. bauma (all 3 years) Americas Revenue -16% to EUR 292m EBIT of EUR -9.3m EBIT margin of -3.2% (PY: 1.3%) Weak markets in NA and SA, delay of US-production for skid steers and ramp up of Brazilian plant Asia-Pacific Revenue +3% to EUR 49m EBIT of EUR -8.5m EBIT margin of -17% (PY: 0.2%) Low demand in Australia/New Zealand, sales/logistics built-up, preparation for new plant in China

28 Business performance sales split by business segments 2016 Revenue by business segment 1, 2 (in m) Light equipment Difficult market environment (oil & gas, emerging markets) revenue decrease by 9% to EUR 378m 20% +5% (+6%) % Solid performance in Europe but weak demand in the US Compact equipment (incl. OEM) +2% (+3%) Revenue increase by 2% to EUR 709m despite decrease of agriculture machines (-5%) 50% % Successful use of global sales network Services 30% -9% (-8%) % Revenue +5% to EUR 297m despite central logistics project (bundling spare parts for compact machines) Success: Customer orientated service portfolio ( All it takes, one-stop-shop) Light equipment Compact equipment Services 1 In brackets: adjusted to discount currency effects; 2 Nominal, before cash discounts 28

29 Development of revenue and profitability 2016 Income statement (extract) and number of employees (in m) Change Comparison of EBIT vs. previous year in % 2015 in % in % Gross profit: Revenue 1, , Gross profit Sales and Service exp R&D expenses General admin. exp Operating expenses Other Income and Expenses Financial result EBIT Net profit Net profit per share in Volume effect: -3.9m vs. PY Margin effect: -4.5m vs. PY S,G&A: -5.6m vs. PY (reasons: bauma fair 2016, sales projects for future growth, additional personnel, new emission regulations, transfer technical departments to Reichertshofen) Other income & expense: -1.7m vs. PY (fewer currency gains than PY) Financial result: -0.6 m vs. PY Employees 1 4,792 4, w/o temporary workers 29

30 Key figures from balance sheet excellent credit standing Net financial debt and Gearing Financial debt/ebitda (in m) % 19% 18% 19% 19% (as %) 40% 35% 30% 25% 20% 15% 10% 5% 0% (x) 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 1,5 1,2 1,2 1,3 0, Equity (before minority interests) FY 2016 (in m) (as %) Equity increased slightly by 2% to 1,087 m vs % 70% 68% 69% 69% % 78% 76% 74% 72% 70% 68% 66% 64% 62% Equity ratio of 69% Net financial debt 206m (Gearing of 19% on PY s level) 2017 February: Refinance of Schuldschein loan from 2012 ( 90 m), securing funds in the total amount of 125 million (5Y, low coupon of 0.69% p.a.) 30

31 Business performance: Increase of free cash flow in 2016 Free cash flow (qoq ) Inventories (qoq ) (in m) (in m) (DIO) Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/ Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16e 0 (in m) % Working Capital (qoq ) 41% 49% % % 39% % 41% Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 (as % of sales 1 ) 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 calculation: working capital reported at the closing date/annual revenue calculated on the basis of last quarter 31 FY 2016 Operating cash flow of 131m (on PY s level) CapEx decreased by 10% to 107m Free Cash Flow increased by 61% to 29m Decrease of inventories by 7% (yoy) Working Capital ratio increased 1PP (yoy)

32 Agenda The Company Outlook Highlights FY 2016 Financials 32

33 Global construction machinery sales back on growth path: +7% for machinery sales CAGR: 5,7% Wacker Neuson s expectations -30% +7% +25% Europe main growth driver, esp. Central Europe Market recovery in North America stronger revenues from SSL, no more one-off effects expected Latin America bottomed out Growth driver: new product lines (generators, compact equipment) Asia-Pacific: Recovering environment, mid term strong growth market Focus on excavator business, restructuring of Australian business ongoing, bearing fruits in e 2018e 2019e 2020e 2021e China Europa Indien Japan Nordamerika Rest Source: Off-Highway Research, March

34 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, December

35 Optimistic forecast for 2017 good start and indications Financials Forecast 2017e 2016 FYe Mid term Revenue EUR bn >2.0 EBIT margin % (operational) Working Capital ratio % > <40 < e vs Revenue increase by 3 to 7% Increase of EBIT margin by 1 to 2 PP CapEx EUR 107 m 120 m Depending on growth Free cash flow 29 m positive positive 1 Assumed there is no significant deterioration of political, economic or industry-specific environment; excl. potential sales and earnings contributions from cooperation's, JVs and acquisitions concluded during the course of the year. 2 Excl. one-off earnings (by end of 2017) from a potential transaction of a real estate company held by the Group. 35

36 Selected actions to improve profitability Targeted expansion of aftermarket and services business Continued program cleanup (elimination or out-sourcing) Allocation of product groups according strategic principle of developing and manufacturing products in the region, for the region Further market penetration with core products and diversification of end markets Leveraging synergies in sales (cross selling) Ongoing internationalization Continued cost control, eg critical assessment of hires and spendings Supplier base for skid steer production in US improved and secured Optimization of average working capital (especially inventories) Process optimization lean management, standardization of components; supplier management and qualification, product platforms, estore for easy identification and purchasing 36

37 Dividend proposal to AGM (May 30, 2017) Dividend payouts Total payout ( million) Payout ratio (as a %) Eligible shares (in m) Dividend per share (in ) Earnings per share (in ) Dividend yield 2 (as a %) Proposal to AGM (May 30, 2017) 2 As of Dec. 31 of each year 0.50 per share (payout of EUR 35.07m on May 31,2017) Keeping level of last two years, ensuring dividend continuity despite a difficult period (2015/2016) Confidence in the earnings potential and in the success of corporate strategy; also reflects optimistic outlook for 2017 and following years 37

38 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 correctness of this information or opinions contained herein. Certain statements contained in this document may be statements of future expectations and other forward looking statements that are based on management s current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. None of Wacker Neuson SE or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its content or otherwise arising in connection with this document. This document does not constitute an offer or invitation to purchase or subscribe for any securities and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. 38

39 Appendix

40 Financial calendar and IR contact Financial Calendar May 11, 2017 May 23, 2017 May 30, 2017 June 29, 2017 August 8, 2017 November 9, 2017 Publication of first-quarter report 2017; Analyst Conference Call Roadshow, Frankfurt AGM, Munich Roadshow, Paris Publication of half-year report 2017; Analyst Conference Call Publication of nine-month report 2017; Analyst Conference Call Numerous international trade fairs, roadshows and conferences IR contact Investor Relations Department Preussenstrasse 41, Munich, Germany Phone: , Fax:

41 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 41

42 Our vision Growth Internationalization Professionalization Integration Growth We aim for profitable growth and healthy return on capital employed. We do not believe in revenue growth at any cost. Internationalization We want to establish our company as a global player with a strong position in our target markets. To achieve this, we employ qualified people whose diverse cultural backgrounds are an invaluable asset to our company. Professionalization We strive for excellence in everything we do. Integration Our company is the result of mergers between various family-run enterprises each with a unique corporate culture. We have set down our values in writing and live by them. We actively integrate all of our companies into the Group and will continue to do so in the future. 42

43 Great reasons for choosing Wacker Neuson Group Strong financial position independence Long-term growth strategies, family culture Technology leader Highest product and service quality Flexible production, sophisticated logistics Balanced revenue structure Cross-industry focus Global footprint customer proximity Experienced, highly motivated employees Sustainable business practices Unparalleled extensive portfolio Strong profit margins 43