thyssenkrupp Equity Story Elevator Technology February 2018
Elevator Technology: Strong market position and balanced footprint Elevator & Escalator Sales 7.7 bn FY 16/17 13% # 3/4 40% Americas Accessibility PBB 30% EMEA # 2 # 1 30% Asia-Pacific 2 February 2018 thyssenkrupp Equity Story Elevator Technology
Global presence close to the customer Hamburg Krimpen Neuhausen Fort Worth Elevators Middleton Pisa Andoain Mieres Madrid Pune Cheonan Shanghai Zhongshan Escalators Airport solutions Access solutions Branch Porto Alegre >1,000 Locations 18 Factories 3 February 2018 thyssenkrupp Equity Story Elevator Technology
Stable service oriented business Business Model Characteristics Manufacturing ~50% New Installation Installation 1.3m units under maintenance 24,000 service technicians conversion ~80% Ø sales per customer <50k <3% of sales by top 10 customers Modernization Service ~50% Maintenance 4 February 2018 thyssenkrupp Equity Story Elevator Technology
Change & Performance program EBIT adj. [m FY] >1,000 518 600 674 794 860 922 INNOVATION 9.1% 9.7% 10.5% 11.0% 11.5% 12.0% PERFORMANCE 1. MFG NI daproh 2. Service MOD 3. Underperformer 4. Markets + gss synergize+ unite 5. M&A G&A Excellence EMPLOYEES 15.0% 11/12 12/13 13/14 14/15 15/16 16/17 Target 5 February 2018 thyssenkrupp Equity Story Elevator Technology
Transform the industry and be the partner for urban mobility MAX URBAN MOBILITY 6 February 2018 thyssenkrupp Equity Story Elevator Technology
Change & Performance program EBIT adj. [m FY] >1,000 518 600 674 794 860 922 Innovation 9.1% 9.7% 10.5% 11.0% 11.5% 12.0% 15.0% 11/12 12/13 13/14 14/15 15/16 16/17 Target 7 February 2018 thyssenkrupp Equity Story Elevator Technology
HoloLinc MULTI MANUFACTURING NEW INSTALLATION ModLens MAX MODERNIZATION SERVICE 8 February 2018 thyssenkrupp Equity Story Elevator Technology
Bespoke home solutions Enhancing quality of life
Today Visualization >25,000 drawings Customer Manual measuring Excitement work 10 February 2018 thyssenkrupp Equity Story Elevator Technology
Future Visualization Automated process 11 February 2018 thyssenkrupp Equity Story Elevator Technology
Business Transformation Benefits + Sales Time cloud 4x times faster delivery >1,000 units p.a. due to higher conversion up to 30% more Sales due to faster processes >30% efficiency gains in admin +10% additional EBIT p.a.
Introducing thyssenkrupp November 30, 2015 30, 2015 MAX Predictive maintenance Big data, cloud computing, machine learning 13 February 2018 thyssenkrupp Equity Story Elevator Technology
Next Generation Service >110k MAX units already installed at 48,000 different sites 4 countries rollout ongoing plus 2 started 150 Million transactions per day Collecting 100GB data daily MAX already installed for 41,000 customers
Transforming the industry MAX HoloLens SpareParts Delivery Robot Our commitment: 50% reduction of downtime
50 Smartest Companies 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Source: Massachusetts Institute of Technology in 2015
1 billion people reached FY16/17
Change & Performance program EBIT adj. [m FY] >1,000 518 600 674 794 860 922 Performance 9.1% 9.7% 10.5% 11.0% 11.5% 12.0% 1. MFG NI 2. Service MOD 3. Underperformer 4. Markets + daproh gss synergize+ unite 15.0% 5. M&A G&A Excellence 11/12 12/13 13/14 14/15 15/16 16/17 Target 18 February 2018 thyssenkrupp Equity Story Elevator Technology
Service Modernization: Track record Field Operations Performance Program EBIT Margin [%] +2%-p +22% elevate in place elevate currently in roll-out Sales [bn ] 120 m measure volume since FY14/15 Standard Staffing Operating Procedures 12/13 14/15 16/17 19 February 2018 thyssenkrupp Equity Story Elevator Technology
Product Portfolio: Reduction of complexity -35% -27% Platforms [#] -15% Platforms [#] -30% Baseline 15/16 16/17 17/18 Target Baseline 15/16 16/17 17/18 Target 20 February 2018 thyssenkrupp Equity Story Elevator Technology
Example on component level 21 February 2018 thyssenkrupp Equity Story Elevator Technology
Measures taken Example: European Landing door Platforms [#] -35% -70% Reduction in Variety -50% Make or Buy Delivery times On Time >98% Productivity +5.0% Baseline 15/16 16/17 17/18 Target Annual Operational Excellence Scan 22 February 2018 thyssenkrupp Equity Story Elevator Technology
Manufacturing New Installation: Track record Elevator production System Delivery times EBIT Margin [%] +4%-p On Time >98% +32% Productivity +5.0% Sales [bn ] Implemented since 13/14 Annual Operational Excellence Scan 12/13 14/15 16/17 23 February 2018 thyssenkrupp Equity Story Elevator Technology
Manufacturing New Installation: Optimization of Production network New plants FY15/16 Closure Toronto FY14/15 Closure Angers Restructuring Hamburg Restructuring Neuhausen FY15/16 Restructured -130 people Restructuring Mostoles e.g.outsource door production >80% of Global NI Market >150 m tke Invest since FY11/12 Major restructuring Ongoing since FY16/17 24 February 2018 thyssenkrupp Equity Story Elevator Technology
Change & Performance program EBIT adj. [m FY] >1,000 518 600 674 794 860 922 Performance 9.1% 9.7% 10.5% 11.0% 11.5% 12.0% 1. MFG NI 2. Service MOD 3. Underperformer 4. Markets + daproh gss synergize+ unite 15.0% 5. M&A G&A Excellence 11/12 12/13 13/14 14/15 15/16 16/17 Target 25 February 2018 thyssenkrupp Equity Story Elevator Technology
G&A Excellence program STRUCTURAL DELAYERING PROCESS OPTIMIZATION CONTENT Functional concepts and organizational/process blueprints Bundling of Back-office processes Optimize collaboration models across sites Avoid duplication of tasks Prioritization and focus on key projects Simplified and leaner reporting 100 m of savings to be achieved in next 3 years across all levels and functions 26 February 2018 thyssenkrupp Equity Story Elevator Technology
Example: Optimization of Back-Office Processes Example Germany Global Rollout Plan Business Service Centers Berlin Münster Consolidation of administration Branch Branch Branch Branch Branch Branch Branch Branch Branch Branch Branch Branch 1 Branch 1 1 Branch 1 1 Branch 1 Branch 1 1 Branch 1 Branch 1 Branch 1 Branch 1 Branch 1 10 1 20 1 30 1 55 >10% reduction of admin staff 27 February 2018 thyssenkrupp Equity Story Elevator Technology
Change & Performance program EBIT adj. [m FY] >1,000 518 600 674 794 860 922 Performance 9.1% 9.7% 10.5% 11.0% 11.5% 12.0% 1. MFG NI 2. Service MOD 3. Underperformer 4. Markets + daproh gss synergize+ unite 15.0% 5. M&A G&A Excellence 11/12 12/13 13/14 14/15 15/16 16/17 Target 28 February 2018 thyssenkrupp Equity Story Elevator Technology
Consequent strategy execution shows results [m FY] Order Intake Sales 6,149 +27% 7,834 5,705 +35% 7,674 11/12 12/13 13/14 14/15 15/16 16/17 11/12 12/13 13/14 14/15 15/16 16/17 EBIT adj. EBIT rep. 518 +78% 922 387 +90% 736 11/12 12/13 13/14 14/15 15/16 16/17 11/12 12/13 13/14 14/15 15/16 16/17 29 February 2018 thyssenkrupp Equity Story Elevator Technology
Benchmarking of Adj. EBIT-Margin with Peers Margin [%] 19.7 Δ YoY Q3 2017 17.8-1.9%-P A Target: 15 % 15.3 14.2-1.1%-P B 12.7 11.7 13.2 12.0 +0.5%-P +0.3%-P C Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Source: Publicly available information 30 February 2018 thyssenkrupp Equity Story Elevator Technology
Outperformance against peers EBIT adj. Margin B +2.4%-P +1.5%-P C -0.5%-P 2012 2013 2014 2015 2016 Source: Publicly available information A -3.7%-P 31 February 2018 thyssenkrupp Equity Story Elevator Technology
Business Cash Flow: Improvement driven by NWC Development Business Cash Flow ONWC as % of Net Sales 8.6 834 +155% 4.3 5.7 C 326 4.2 1.9 1.3 BCF adjusted for Corp Mark payments 11/12 12/13 13/14 14/15 15/16 16/17-0.9 11/12 12/13 13/14 14/15 15/16 16/17 B 32 February 2018 thyssenkrupp Equity Story Elevator Technology
Management commitment to continuous growth and margin improvement [m ] 14/15 15/16 16/17 17/18E Order Intake 7,704 7,631 7,834 Moderate growth Sales 7,208 7,468 7,674 Moderate growth supported by strong order backlog EBIT adj. 794 860 922 EBIT adj. margin [%] 11.0 11.5 12.0 BCF w/o Corporate Mark 756 904 834 Operational improvements Investments in growth and restructuring payments Operational improvements supported by program as part of 33 February 2018 thyssenkrupp Equity Story Elevator Technology
Clear strategy to achieve our targets Key Drivers and Challenges Change & Performance program Our Targets INNOVATION Urbanization Digitalization PERFORMANCE 1. MFG NI daproh 2. Service MOD 3. Underperformer + gss synergize+ 4. Markets unite 5. M&A G&A Excellence EMPLOYEES Transform the Industry >1,000m 15% Margin 34 February 2018 thyssenkrupp Equity Story Elevator Technology
Disclaimer thyssenkrupp AG The information set forth and included in this presentation is not provided in connection with an offer or solicitation for the purchase or sale of a security and is intended for informational purposes only. This presentation contains forward-looking statements that are subject to risks and uncertainties. Statements contained herein that are not statements of historical fact may be deemed to be forward-looking information. When we use words such as plan, believe, expect, anticipate, intend, estimate, may or similar expressions, we are making forward-looking statements. You should not rely on forward-looking statements because they are subject to a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from those indicated. These factors include, but are not limited to, the following: (i) market risks: principally economic price and volume developments, (ii) dependence on performance of major customers and industries, (iii) our level of debt, management of interest rate risk and hedging against commodity price risks; (iv) costs associated with, and regulation relating to, our pension liabilities and healthcare measures, (v) environmental protection and remediation of real estate and associated with rising standards for real estate environmental protection, (vi) volatility of steel prices and dependence on the automotive industry, (vii) availability of raw materials; (viii) inflation, interest rate levels and fluctuations in exchange rates; (ix) general economic, political and business conditions and existing and future governmental regulation; and (x) the effects of competition. Please note that we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. 35 February 2018 thyssenkrupp Equity Story Elevator Technology