Conference Call Results Q3 2014 November 5, 2014
Q3 2014: Key developments Despite a more difficult environment, ongoing start-up losses in battery technology, and a slump in Brazilian market, EK delivered solid results in Q3 driven by core business performance Group sales increased 13.9 % yoy to EUR 327.4 (287.5) mn; Strong organic growth at 8.5 % clearly outperforming world car production EKMA contributes an additional EUR 6.1 mn in sales in Q3 2014 (change in consolidation method due to IFRS 11 results in lower comparable sales for 2013) Loss at battery technology in Q3 at previous quarter s level (EBIT EUR -1.9 mn) on overall lacking volumes EBIT contribution from Brazilian subsidiary EUR 1.0 mn lower than py Q3 EBIT(=operating result) up 7.6 % to EUR 41.2 (38.3) mn, margin at 12.6% (13.3%). According to old definition up strongly at EUR 48.0 mn (14.7 % margin ) driven by positive currency effects 2
9-months 2014: China and USA continue to drive global car markets, Brazil and Russia declining considerably New car registrations 9M 2014 (yoy change) -13.0% Russia -8.9% Brazil India 0.0% Western Europe 5.2% USA Japan 5.5% 5.8% China 12.8% -15% -10% -5% 0% 5% 10% 15% 3
Sales by quarter mn 400 350 300 250 324.0 286.8 303.3 281.0 1 296.1 1 333.5 327.4 294.0 291.1 287.5 1 285.4 1 200 150 100 Q1 Q2 Q3 Q4 2013 2014 1 Previous year's figures adjusted due to retroactive application of IFRS 11; at equity treatment of ElringKlinger Marusan Corporation in 2013 4
EBIT by quarter (=operating result as of 2014) mn 60 50 40 32.8 1 42.1 41.0 1 41.5 38.3 1 41.2 34.2 2 30 20 10 0 Q1 Q2 Q3 Q4 2013 2014 1 Previous year's figure adjusted due to retroactive application of IFRS 11; at equity treatment of ElringKlinger Marusan Corporation 2 excl. EUR 17.6 mn one-time gain 5
Q3 2014: OEM sales up 18.7 % driven by core business, higher tooling sales, EKMA mn 400 EBIT +6.6% 29.0 (27.2) 300 269.3 226.8 1 200 100 0 2013 2014 1 Previous year's figures adjusted due to retroactive application of IFRS 11; at equity treatment of ElringKlinger Marusan Corporation (- EUR 6.5 mn) in Q3 2013 6
Q3 2014: Aftermarket sales down 7.4% Higher EBIT due to one-time charge in py mn 50 EBIT +6.3% 6.7 (6.3) 40 33.8 31.3 30 20 10 0 2013 2014 7
Q3 2014: Sales Engineered Plastics down 0.8% mn 40 EBIT +9.3% 4.7 (4.3) 30 23.7 23.5 20 10 0 2013 2014 8
EBIT bridge third quarter of 2014 mn 50 45 40 4.5 41.2 35 38.3-0.2-1.0-0.3-0.1 30 EBIT Q3 2013 EKMA (incl. PPA) Brazil Hug E-Mobility Core business EBIT Q3 2014 9
Group Sales by segment Q3 2014 (py): OE share up driven by structural growth and new products Industrial Parks 0.3% (0.4%) Engineered Plastics 7.2% (8.2%) Services 0.6% (0.7%) Aftermarket 9.6% (11.8%) OEM 82.3% (78.9%) 10
Group Sales by region Q3 2014 (py): Europe up, Brazil down sharply South America & Others 4.4% (5.5%) Asia-Pacific 17.2% (14.8%) incl. exports: ~25% of OE sales Rest of Europe 32.1% (30.1%) NAFTA 16.6% (17.5%) incl. exports: ~25% of OE sales Germany 29.7% (32.1%) 11
Employees worldwide 53.6% outside Germany as of September 30, 2014 (py) Group 7,110 (6,556) +8.5% Germany 3,302 (3,022) International subsidiaries 3,808 (3,534) AG 2,474 (2,266) Domestic subsidiaries 828 (756) 12
Q3 2014: Significant improvement in net cash from operating activities mn 120 100 80 85.9 97.2 60 40 31.8 42.1 20 0 Q3 2013 Q3 2014 9M 2013 9M 2014 13
Q3 2014: Investments vs. depreciation and amortization mn 50 45.0 40 30 27.4 1 20 18.1 1 19.5 10 0 Q3 2013 Q3 2014 Investments in plant, property and equipment, invest. prop. and intangible assets Depreciation and amortization 1 Previous year's figures adjusted due to retroactive application of IFRS 11, resulting from at equity consolidation of ElringKlinger Marusan Corporation in 2013 14
Cash flow bridge first nine months of 2014 mn 250 200 150 +97.2-105.0 100 50 62.9-32.8 +39.3 1.9 63.5 0 Cash at Dec 31, 2013 Net cash from operating activities Investments Dividends paid Change in financial liabilities Others Cash at Sep 30, 2014 15
Balance sheet structure as at September 30, 2014 Shift from current to non-current liabilities Assets in % Liabilities and shareholder s equity in % 58.3 57.1 49.3 50.5 28.3 24.7 41.7 42.9 22.4 24.8 Sep 30, 2013 Sep 30, 2014 Sep 30, 2013 Sep 30, 2014 Non-current assets Current assets Shareholder s equity Non-current liabilities Current liabilities 16
Q3 2014: Sales and EBIT (=operating result) in mn Q3 2014 Q3 2013 Change in % Sales 327.4 287.5 +13.9% Cost of Sales 236.1 203.0 +16.3% EBITDA 60.7 56.4 +7.6% EBIT 41.2 38.3 +7.6% Previous year's figures adjusted due to retroactive application of IFRS 11, resulting from at equity consolidation of ElringKlinger Marusan Corporation in 2013 17
Q3 2014: Financial Result and Net Income in mn Q3 2014 Q3 2013 Change in % Net finance cost +3.7-5.6 n.m. EBT 44.9 32.7 +37.3% Taxes 11.1 10.2 +8.8% Net income 33.8 22.4 +50.9% Profit attrib. to EK shareholders 32.4 22.5 +44.0% EPS (in ) 0.51 0.36 +41.7% Previous year's figures adjusted due to retroactive application of IFRS 11, resulting from at equity consolidation of ElringKlinger Marusan Corporation in 2013 18
Q3 2014: Exhaust Gas Purification division impacted by product mix and sequentially lower sales in mn Hug Group Q3 2014 Q3 2013 Q2 2014 Q3 Sales 17.1 13.1 19.5 +4.0 EBIT 2.0 2.3 4.0-0.3 PPA -0.3-0.3-0.3 0.0 Project-related and product-mix related business implies higher sales/earnings volatility over the quarters Sales in Q3 down sequentially due to fewer large orders being invoiced; Lower EBIT due to product mix Hug s EBIT margin in the full year to exceed Group average 19
Outlook 2014: Markets show a mixed picture World economy seems to slowdown; Geopolitical risk factors have increased (Russia, Mid East, Ebola) EK expects overall worldwide car production to grow by 2-3% Demand primarily driven by China, USA. In the US strong growth in light trucks passenger cars flat Modest Western European recovery from historically low levels to continue Mixed picture in BRI markets: Sharp drop in vehicle sales in Brazil and Russia; sales in India recovering somewhat Truck sales in Europe following Euro VI pre-buying facing declines; EK increases value sold-in 20
2 Outlook 2014: Financial performance - Guidance reiterated in mn FY 2013 Sales 1,175.2 Guidance FY 2014 5-7% organic growth (+ close to EUR 25 mn ElringKlinger Marusan Corp.) Adj. EBIT 1 149.2 160-165 Investments 127.2 1 EBIT=operating result as is standard as from Dec. 31, 2013 100-110 (+ up to EUR 20 mn for HFHT) Full consolidation of ElringKlinger Marusan Corporation adds approx. EUR 25 mn in sales but 0.3 PP dilution to Group margin Strong order intake: In Q3 up by 13.9% at EUR 330.3 (289.9) mn Backlog exceeds prior year by 13.9% (EUR 651.9 mn) Outlook includes weaker than planned performance in Brazil 21
Disclaimer Forward-looking Statements and Predictions This presentation contains statements about the future. These statements are based on current expectations, market evaluations and predictions by the Management Board, and on information that is currently available to them. The statements about the future should not be interpreted as guarantees of the future developments and results that they refer to. Whilst the Management Board are convinced that the statements that have been made, and the convictions and expectations on which they are based, are realistic, they rely on suppositions that may conceivably prove to be incorrect; future results and developments are dependant on a multitude of factors, they involve various risks and imponderabilities that can affect whether the ongoing development deviates from the expectations that have been expressed. These factors include, for example, changes to the general economic and business situation, variations of exchange rates and interest rates, poor acceptance of new products and services, and changes to business strategy. 23