IR PRESENTATION August 2016
COMPANY PROFILE At the forefront of the market Leading in the formation of steel, stainless steel, and aluminum for sophisticated metal components and subsystems for vehicle comfort and safety DEEP DRAWING SEQUENCE SEAT COMPONENTS INSTRUMENT PANEL CARRIERS 2
COMPANY PROFILE A complete value chain Integrated teams develop product and process innovation LARGE SCALE PRODUCTION In tool design In joining and assembly technology For high precision and speed For the production of units by the millions TOOL DESIGN DEVELOPMENT 3
COMPANY PROFILE Focused on three product areas Growth vigorously pursued in all three areas Revenue 2015 (in %) High share of structural components: Better-thanaverage unit prices due to large volume parts Mechanical components for electrical and electronic applications 20 Structural components and subsystems for vehicle bodies/chassis 45 100% = EUR 404.6 million 35 Safety components for airbags, seats, and steering 4
COMPANY PROFILE A comprehensive product range Mechanical components for electrical/electronic applications E-ENGINE HOUSINGS Safety components for airbag, seats, and steering STEERING ROD ADJUSTMENT MECHANISMS Structural components for vehicle body and chassis CROSS-MEMBERS ABS AND ESP HOUSINGS SEAT ADJUSTMENTS, SEAT STRUCTURES AIR SUSPENSION SYSTEM COMPONENTS COMPONENTS FOR POWER DRIVES AIRBAG COMPONENTS HEAT SHIELDS 5
COMPANY PROFILE Strong international orientation Rising share of international business Revenue 2015 (in %) Germany 39 China 4 100% = EUR 404.6 million 19 Share of exports from German location Mexico 10 12 16 Canada Czech Republic 6
COMPANY PROFILE Broadly diversified customer structure Exceptionally positioned in the international automotive industry Revenue 2015 (in %) Broad diversification of revenue ensures independence from individual customers 19 (*) 13 10 4 6 100% = EUR 404.6 million 10 7 7 7 8 8 Other customers from the automotive industry, including ( * ) 7
COMPANY PROFILE Extensive expertise in lightweight construction Manufacturers must meet ever growing emission requirements one way is by reducing the vehicle s weight We positioned ourselves early on in the lightweight segment with innovative product and process solutions Cost-efficient lightweight construction Costs Purpose Lightweight Construction (costs are irrelevant) "Eco-Friendly Lightweight Construction" Cost-Efficient Lightweight Construction PWO s expertise: Minimizing material costs while keeping production costs stable Our special expertise lies in cost-efficient lightweight construction Degree of lightweight construction Weight Manufacturing costs Material costs Production costs Engineer costs 8
COMPANY PROFILE Extensive expertise in lightweight construction Lightweight materials, improve geometry Use of lightweight steel designs as substitution Magnesium Cast Concept Lightweight construction by changing the material thickness PWO Innovation PWO Innovation 2.6mm 3.2mm 9
COMPANY PROFILE Global delivery capabilities PWO production and assembly locations PWO locations Located in countries with high production of premium vehicles First assembly location opened in Shenyang in 2015 Cooperation partners Located in countries where premium segment market volume is too low Further expansion via additional assembly locations Additional locations require only limited investment PWO production locations Cooperation partners PWO assembly location Potential additional assembly locations 10
COMPANY PROFILE Balanced shareholder structure Consult Invest Local family who has been a long-term investor in PWO since the late 1990s Sparkasse Offenburg A long-term investment of a local business partner Delta Lloyd Shareholder structure based on 3.125 million shares as of August 31, 2016 Consult Invest Beteiligungsberatungs-GmbH, Böblingen 46.62% Free Float 53.38% thereof Sparkasse Offenburg 6.40% Delta Lloyd, Amsterdam 2.88% Shareholding reduced for internal strategic reasons Other institutional and private investors with interests of less than 3% Sources: WpHG notifications; own analyses 11
COMPANY PROFILE Shareholder-friendly dividend policy 2016 dividend payment Dividend per share development(eur) Continuation of shareholderfriendly dividend policy Dividend increase based on solid business performance 1.20 1.30 1.00 1.40 1.60 1.80 1.45 1.55 Attractive yield of 4.3 percent based on year-end closing share price 0.55 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 12
SECOND QUARTER OF 2016 Selected figures from the income statement Revenue: +4% Total output also rose EBIT before ccy. effects: +25% Efforts of prior years are starting to pay off EBIT margin improved by as much as one percentage point Net income for the period more than doubled (in EUR millions) Q2 2016 Q2 2015 Revenue 105.0 101.2 Total output 109.7 106.3 EBIT before currency effects 6.6 5.3 EBIT margin (before currency effects, %) 6.0 5.0 EBIT including currency effects 6.4 3.9 Net income for the period 3.5 1.5 Earnings per share (EUR) 1.12 0.49 13
SECOND QUARTER OF 2016 Very favorable development of locations Germany Revenues (in EUR million) Stable revenues; improved EBIT Rest of Europe Growth continued; EBIT still slightly below Q2/15 but almost doubled again compared to Q1/16 150 100 50 0 Germany Rest of Europe Total 105.0 101.2 NAFTA Area Asia Group NAFTA Area Pleasing performance in Canada; continued high revenue in Mexico with EBIT at breakeven level EBIT before currency effects (in EUR million) 10 6 2 5.3 Total 6.6 Asia Further growth; EBIT clearly positive -2 Germany Q2 2015 Rest of Europe Q2 2016 NAFTA Area Asia Group 14
FIRST-HALF OF 2016 Selected figures from the income statement Revenue: +4% Growth restrained by falling raw material prices Related effect on EBIT was immaterial EBIT before ccy. effects: +12% Margin clearly improved despite somewhat weaker Q1 Currency effects resulted primarily from the translationrelated impairment of Group loans (in EUR millions) H1 2016 H1 2015 Revenue 208.7 200.8 Total output 209.9 209.5 EBIT before currency effects 11.5 10.2 EBIT margin (before currency effects, %) 5.5 4.9 EBIT including currency effects 10.0 9.6 Net income for the period 4.8 4.7 Earnings per share (EUR) 1.55 1.50 15
FIRST-HALF OF 2016 Selected figures from the balance sheet Stable balance sheet structure Limited rise in total assets Particularly negative effect from measurement of pension provisions Other balance sheet items are being very closely managed Net debt declined slightly (in EUR millions) 6/2016 12/2015 Non-current assets 196.9 196.1 Current assets 161.9 150.7 Equity 95.8 103.1 Non-current liabilities 144.6 141.2 Current liabilities 118.4 102.5 Total assets 358.8 346.8 Net debt 126.3 132.8 Equity ratio (%) 26.7 29.7 16
FIRST-HALF OF 2016 Selected figures from the cash flow statement Positive free cash flow Cash flow from operating activities significantly better Yet only slightly less than onethird of the total investments planned for 2016 have been made; German and Czech Republic locations continue to be the focus (in EUR million) H1 2016 H1 2015 Cash flow from operating activities 24.3 3.5 Cash flow from investing activities -11.4-15.7 Interest paid and received -2.1-2.2 Free cash flow 10.9-14.4 Investments (EUR million) incl. lease financing Total: 15.8 11.5 Asia NAFTA Area Rest of Europe 0.5 1.2 0.6 3.0 7.8 Asia: 0.2 Germany 4.4 7.8 H1 2015 H1 2016 17
NEW BUSINESS Very successful in acquiring new orders Company achieves record level of new business volume in 2015 Lifetime volume, including tools, at EUR 600 million New orders secure the development planned for all locations Continued success in the first half of 2016 New business PWO Group (Lifetime volume, EUR million) 375 456 280 600 465 25 31 20 350 425 260 560 430 2012 2013 2014 2015 H1 2016 Series orders Tool orders 40 35 However, going forward volatility expected to continue depending on when customers award orders 18
NEW BUSINESS Global presence is gaining importance Supplier of choice for instrument panel cross carriers made of lightweight steel Superior market position Major order acquired with a lifetime volume of more than EUR 100 million for the replacement of previous polymer-hybrid solution Lightweight expertise and global presence essential for winning orders Major orders for instrument panel carriers lifetime: 7 yrs. Vol. >EUR 25 million lifetime: 9 yrs. Vol. >EUR 20 million lifetime: 10 yrs. Vol. >EUR 50 million lifetime: 10 yrs. Vol. >EUR 20 million Lifetime from SOP lifetime: 9 yrs. Vol. >EUR 100 million lifetime: 6/7 yrs. Vol. EUR ~90 million lifetime: 6 yrs. Vol. EUR ~40 million 19
OUTLOOK Growth and results Forecast for 2016 Revenue: EUR~410 million EBIT before ccy. effects: EUR 20 million New business: Similar volume to 2015 depending on amount of investment necessary Germany Slight decline in revenue and total output EBIT visibly below prior year s level Rest of Europe Moderate rise in revenue and total output EBIT margin to remain clearly above the Group's average NAFTA Minor changes in revenue and total output, significantly higher EBIT expected overall compared to FY 2015 Stable EBIT contribution from Canadian location Break-even EBIT on a full-year basis expected in Mexico Additional assembly location planned in Mexico Asia Roughly 50% increase in revenue Total output to rise by almost one third EBIT: Break-even expected Growth driver: Marked rise in tool revenue in Suzhou and ramp-up of new assembly plant in Shenyang 20
OUTLOOK Investments and cash flow Forecast for 2016 Investment volume: EUR ~ 35 million Positive free cash flow Equity ratio at previous year s level Dynamic leverage ratio to decline moderately The focus in 2016 Germany: Completion of new office building, modernization of presses, and substantial project-related investment Czech Republic: Expansion of press facilities; new press to be brought into operations NAFTA Area project-related investment China: Expansion of Shenyang location Investments (in EUR millions) incl. lease financing 3-year investment outlook: EUR 100 million Despite today s extremely high level of new business, investment not to exceed longterm average Total: 37.4 28.8 ~ 35 3.3 6.5 2 3 3.3 11.2 2.7 9 10.9 16.4 20 11.9 2014 2015 2016e Asia NAFTA Area Rest of Europe Germany 21
PWO s business model Leading market position Global presence Highly innovative products and processes Consistent improvement in locations profitability 22
Disclaimer This presentation contains forward-looking statements that are based on current assumptions, expectations, estimates, forecasts, and other information currently available to the PWO Management Board, and on assumptions, expectations, estimates, forecasts, and budgets that are derived from these. The forward-looking statements should not be understood as guarantees of future developments and results that are mentioned therein. Various known and unknown risks and uncertainties, as well as other factors, may result in actual developments and results diverging significantly from estimates that are mentioned here explicitly or are contained implicitly. These factors include those that PWO has described in published reports, and which are available on the PWO website at www.progress-werk.de. Irrespective of statutory regulations, PWO accepts no obligation to update such forward-looking statements and to adjust them to future events or developments. The figures in this presentation are usually presented in EUR million. Differences may occur between the individual amounts and the sum of these amounts due to rounding. Such differences are not of a significant nature. 23