Wacker Neuson SE...Spare parts Financing Used Machines1 Repair1 Maintenance1 Rental service1...

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1 June 2016 Wacker Neuson SE

Transcript of Wacker Neuson SE...Spare parts Financing Used Machines1 Repair1 Maintenance1 Rental service1...

  • 1

    June 2016

    Wacker Neuson SE

  • Agenda

    Outlook

    The Company

    Financials

    2

  • Product range covers customer needs

    Light Equipment Compact Equipment Service

    Spare parts

    Financing

    Used Machines1

    Repair1

    Maintenance1

    Rental service1

    Concrete Technology Soil and asphalt

    compaction

    Job-site preparation

    Revenue distribution 2015 (Total: € 1.38bn)

    Regions: Europe 71.2%; Americas 25.3%; Asia-Pacific 3.5%

    Business segments: Light Equipment 29.8%; Compact Equipment 49.9%; Services 20.3%

    Excavation

    Material handling

    1In selected countries

    3

  • 0,0%

    5,0%

    10,0%

    15,0%

    20,0%

    25,0%

    30,0%

    0

    200

    400

    600

    800

    1.000

    1.200

    1.400

    1.600

    2012 2013 2014 2015 2016e

    +6%1.09

    (Revenue in EUR billion; EBIT as a %)

    +10%+8% +2-5%

    7.8% 8.2%10.6%

    7.5%

    +31%

    Comparison of years 2012–2016e

    Focus on profitable growth

    4

    1.161.28

    1.38 1.40-1.45

    7-8%

  • Strong brands and sales distribution worldwide for different industries

    Brands & Financing

    Industries

    Construction and other

    industries 66%

    Agriculture 14%

    Services 20%

    Sales channels

    1 Manufacturing for Claas and Caterpillar

    Revenue distribution 2015Direct

    Only in Central Europe

    Offering spare parts, maintenance

    Offering rental of WN machines

    Dealers

    Worldwide

    Offering spare parts (maintenance by dealers)

    Rental chains

    Worldwide

    Offering spare part (maintenance by rental chains or dealers)

    OEM1

    Included in Europe Revenue

    Distribution worldwide

    5

  • International footprint

    More than 50 affiliates, therefore over 30 sales affiliates and 5,200 dealers in over 12,400 sites worldwide

    LE + CE: Milwaukee (USA)

    LE: Northon Shores (USA)

    LE: Manila (Philippines) 2007

    LE: Reichertshofen (Ger)

    CE: Korbach (Ger), 2007

    CE: Hörsching (AT), 2012

    CE: Pfullendorf (Ger), 2008

    CE parts: Kragujevac (Serbia), 2009

    HQ Munich (Ger), 2011

    LE: Light Equipment production

    CE: Compact Equipment production

    6

    LE: Itatiba (Brazil)

  • Official opening of our new assembly facility in Brazil (since April 2016)

    7

    Itatiba, São Paulo, Brazil

    Products: mobile generators:

    50-70 kilovolt-amps (kVA)

    expanding to 150 kVA

    Target market: Latin America

    Start of production: April 2016

    „In the region – for the region“

    Roberto Martinez (Managing Director

    Wacker Neuson Máquinas Ltda. Brazil)

    and Cem Peksaglam (CEO) cutting the

    ribbon at the opening ceremony.

  • Competitive landscape for Wacker Neuson Group

    Fragmented market

    Dominated by niche/specialized manufacturers

    Not targeted by heavy equipment manufacturers

    Quality rather than price

    Significant barriers to market entry

    Light equipment/

    construction

    Market structures and dynamics

    Fragmented market with local manufacturersCompact equipment/

    agriculture

    Global competitors

    Similar target groups to light equipment for the construction

    industry

    Specialized manufacturers

    Compact and heavy equipment providers

    Compact equipment/

    construction

    Ammann

    Atlas Copco/Dynapac

    Bomag

    Bosch pt

    Hilti

    Multiquip/Mikasa

    Competitors

    Giant

    JCB

    Schaeffer

    Thaler

    Compact equipment

    Atlas Weyhausen

    Bobcat (Doosan)

    Kubota

    Manitou/Gehl

    Takeuchi

    Yanmar

    Heavy equipment

    Hitachi

    JCB

    Komatsu

    Liebherr

    Terex

    Volvo

    8

  • 9

    „Zero Emission” – Wacker Neuson, a leader of alternative drive technologies

  • Alliance with HAMM AG proved successful

    10

    The cooperation has extended the portfolio of soil and asphalt compaction rollers.

    New tandem rollers (1.8 – 4.5 t) and compactors (weighing up to 12 t)

  • Agenda

    Outlook

    The Company

    Financials

    11

  • Q1/16: Development of revenue and profitability

    12

    Q1/16 As % of

    revenue

    Q1/15 As % of

    revenueChange in %1

    Revenue 316.4 100.0 324.3 100.0 -2.4 (-1.3)

    Gross profit 87.0 27.5 96.5 29.7 -9.8

    Sales and service expenses 46.0 14.5 45.2 13.9 1.8

    Research and development expenses 8.9 2.8 8.1 2.5 9.9

    General administrative expenses 16.2 5.1 17.5 5.4 -7.4

    Operating expenses2 71.1 22.5 70.8 21.8 0.4

    EBITDA 34.0 10.7 47.4 14.6 -28.3

    EBIT 17.3 5.5 31.7 9.8 -45,4

    Net profit 11.1 3.5 21.3 6.6 -47.9

    Net profit per share in € 0.16 0.30 -47.9

    Income statement (extract) and number of employees

    (€ million)

    1 in brackets: adjusted to discount currency effects

    2 without other income/expenses

  • Q1/16: Revenue growth by regions and divisons1

    231,3 227,4

    Q1/15 Q1/16

    13

    Europe2

    -2% (-1%)

    100,091,7

    Q1/15 Q1/16

    Light equipment3

    -8% (-7%)

    83,971,6

    Q1/15 Q1/16

    Americas2

    -15% (-14%)

    166,1 165,2

    Q1/15 Q1/16

    Compact equipment3

    -1% (+0%)

    9,1

    17,4

    Q1/15 Q1/16

    Asia-Pacific2

    +91% (+98%)

    62,5 63,5

    Q1/15 Q1/16

    Services3

    +2% (+3%)

    1 In brackets: adjusted for currency effects; 2 Nominal, after cash discounts; 3 Nominal, before cash discounts

    (€ million)

    (€ million)

    (€ million)

    (€ million)

    (€ million)

    (€ million)

    NA business weak – demand for light equipment remained subdued

  • Share price development

    14

    ISIN / WK DE000WACK012 / WACK01

    Reuters / Bloomberg WACGn.DE / WAC GR

    Indices SDAX, DAXplus family, CDAX, GEX, Classic All Shares

    Share Prime All Share

    Total shares 70.140.000

    Shareholder structure 63% Family; 37% Free float (thereof management: 0.5%)

    Share price performance since January 2016

    Key figures share

    in € 2011 2012 2013 2014 2015 Q1/16

    Earnings per share 1.22 0.77 0.87 1.30 0.94 0.16

    Dividend 0.50 0.30 0.40 0.50 0.50 –

    End of period 9.55 10.35 11.49 16.96 14.23 13.98

    High 13.49 13.45 12.75 18.00 24.60 15.57

    Low 8.35 9.06 9.24 11.49 11.12 11.44

    Book value1 12.84 13.04 13.34 14.42 15.17 15.15

    Market capitalization (in € m) 669.8 725.9 805.6 1,189.2 998.1 980.6

    as %

    1 before minority interests

  • Agenda

    Outlook

    The Company

    Financials

    15

  • -1 0 1 2 3 4 5

    2016

    2017

    2018

    Country

    Value in

    2015e in € bn

    Germany 293.6

    United Kingdom 202.8

    France 202.8

    Italy 161.0

    Spain 80.2

    Netherlands 66.9

    Switzerland 55.6

    Poland 45.5

    Norway 41.9

    Belgium 40.0

    Sweden 34.0

    Austria 32.9

    Euroconstruct

    Countries (EC-19) 1,370.7

    (change as a %)

    +3.0+2.7

    +2.0

    Outlook for Europe – Growth in percent for 2016, 2017 and 2018

    Construction industry trends in Europe

    16Euroconstruct December 2015

    +7.4+8.3+7.7

    -1.3

  • 0

    5

    10

    15

    20

    25

    30

    0,0

    200,0

    400,0

    600,0

    800,0

    1.000,0

    1.200,0

    1.400,0

    1.600,0

    2015 2016e

    (Revenue in € billion)

    Revenue and margins 2015–2016e

    1.38+2% to +5%

    EBIT Margin

    7.5%

    1.40–1.45

    Forecast for 2016

    17

    Europe

    North America

    Latin America

    South Africa and Sub Sahara

    Asia

    Australia

    Agriculture

    Construction

    Mining

    Oil & Gas

    Other channels

    1

    Wacker Neuson Group revenue trend 2016e

    Some developments offset each other, low visibility

    1 Strong increase, but from a low base

    Revenue growth +2% to +5%, EBIT Margin 7.0% to 8.0%

    Investments of ~ 100 m €, positive free cash flow

    EBIT Margin

    7-8%

  • Goal: To increase revenue to more than EUR 2 bn in medium term and boost profitability

    Medium-term goal: keep on profitable growth track

    18

  • 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

    Great reason for choosing Wacker Neuson Group

    19

  • Appendix

  • 2015: Development of revenue and profitability

    21

    2015in % of

    revenue2014

    in % of

    revenueChange in %1

    Revenue 1,375.3 100.0 1,284.3 100.0 +7.1 (+2.7)

    Gross profit 384.5 28.0 381.3 29.7 +0.8

    SG&A and R&D cost2 -291.3 21.2 -262.9 20.5 +10.8

    Operating expenses2 93.2 6.8 118.4 9.2 -21.3

    EBIT 103.6 7.5 136.2 10.6 -23.9

    Net profit 66.2 4.8 91.5 7.1 -27.7

    Net profit per share in € 0.94 1.30 -27.7

    EBITDA 171.3 12.5 196.3 15.3 -12.7

    Number of employees 4,632 4,372 +5.9

    Income statement (extract) and number of employees for 2015 and Q4 2015

    1 in brackets: adjusted to discount currency effects2 without other income/expenses

    Q4/2015in % of

    revenueQ4/2014

    in % of

    revenueChange in %1

    357.9 100.0 348.1 100.0 +2.8 (-0.8)

    90.6 25.3 98.8 28.4 -8.3

    -73.0 20.4 -70.1 20.1 +4.1

    17.6 4.9 28.7 8.2 -38.7

    22.4 6.3 32.7 9.4 -31.5

    12.4 3.5 22.5 6.5 -44.9

    0.18 0.32 -44.9

    41.0 11.5 48.3 13.9 -15.1

    4,632 4,372 +5.9

    (in € m)

  • 90

    214177 180 199

    901 915936

    1.0121.064

    10,0%

    23,4%

    18,9%17,7%

    18,7%

    0,0%

    5,0%

    10,0%

    15,0%

    20,0%

    25,0%

    30,0%

    35,0%

    40,0%

    0

    200

    400

    600

    800

    1.000

    2011 2012 2013 2014 2015

    Net financial debt Equity before minority interests Gearing as a %

    2015: Gearing and equity

    22

    High equity ratio of 69%, gearing

  • 2015: Working capital development

    23

    2011 2012 2013 2014 2015

    Inventories Trade receivables Trade payables

    Working Capital ratio1

    35.1% 40.9% 38.1% 38.2% 40.1%

    (in € m)

    +4%

    WC: +8% 574.5

    532.2

    +23%

    +12%

    453.1456.8

    370.5

    Working capital 2011 – 2015

    1 calculation: working capital reported at the closing date / annual revenue calculated on the basis of Q4

    180.0

    173.3

    164.0147.8

    158.4

    474.6

    424.0

    333.8360.1274.5

    -80.1-65.2-44.7-51.1-62.4

  • +23%

    (in € million)

    -17%

    +13%

    2014 2015

    67.7

    2014 2015

    17.8

    21.5

    2014 2015

    131.0

    106.8

    (in € million)

    -85.3

    +33%

    -113.2

    Depreciation/amortizationCash flow

    from operating activities

    Cash flow

    from investment activitiesFree cash flow

    2015: Comfortable liquidity situation despite high investments

    24

    (in € million) (in € million)

    2014 2015

    60.1

  • (€ million)

    2011 2012 2013 2014 2015

    Average capital employed (in % of revenue) Revenue Return on capital employed (ROCE II) Weighted average cost of capital (WACC)

    (65.2%)

    (72.7%)(74.1%) (69.9%)

    1 (ROCE II – WACC) * average capital employed = economic value added (EVA)2 Return on equity = Profit/loss after minority interests / average equity before minority interests3 Return on assets = Profit/loss before minority interests / average balance sheet total

    991.61,091.7

    1,375.3

    1,159.5

    1,284.3

    646.9

    793.6859.4 897.1

    7.5% 7.5% 7.1% 7.1%

    12.5%

    7.6% 7.7%

    10.8%

    ROCE II > WACC, positive EVA1: EUR 1.1 million

    2015: Positive economic value added (EVA)1

    25

    (71.0%)976.6

    7.1%

    7.3%

    ROE (%)2 9.0 6.1 6.6 9.4 6.4

    ROA (%)3 7.0 4.3 4.6 6.7 4.4

  • (Revenue in € million; EBIT Margin as a %)

    Q1/16: Multi-year comparison (5 years)

    26

    Revenue and EBIT Margin Q1 (2012–2016)

    Revenue in Q1/16 more or less on par with record level Q1/15 (only -2%),

    but profitability weak and unsatisfactory

    9.6%

    4.3%

    7.6%

    9.8%

    5.5%

    +11% -2%

  • 31,734,0

    15,5

    22,4

    17,3

    9,8%8,9%

    5,0%6,3%

    5,5%

    0,0%

    2,0%

    4,0%

    6,0%

    8,0%

    10,0%

    12,0%

    14,0%

    16,0%

    18,0%

    20,0%

    0,0

    5,0

    10,0

    15,0

    20,0

    25,0

    30,0

    35,0

    40,0

    Q1/15 Q2/15 Q3/15 Q4/15 Q1/16

    EBIT EBIT margin

    Q1/16: Development of profit since Q1/15

    27

    EBIT development Q1/15-Q1/16

    (EBIT in € million; EBIT Margin as a %)

    Revenue in € million 324.3 382.1 311.0 357.9 316.4

  • Construction and other industries

    Agriculture

    Services

    Q1/16 Q1/15

    65% 65%

    15% 16%

    20% 19%

    Q1/16: Ag business (Weidemann, Kramer, Claas)

    Q1/15 Q1/16

    28

    (in €m)

    53.6

    47.5

    Continued downturn in Ag business

    Q1/16 vs. Q1/15: -11%

    (2015 vs. 2014: -2%)

    -11%

    Revenue breakdown for Q1/16 Revenues1 Q1/16 vs. Q1/15

    (% of revenue)

    1 Nominal, before cash discounts

  • Q1/16: Comparison of EBIT vs. previous year

    29

    1

    1 Other income & expense

    Earnings negatively impacted in crisis-hit emerging markets/industries, regional/product mix and FX effects.

    (in € m)

    0

    5

    10

    15

    20

    25

    30

    35

    EBIT Q1/15 Revenue volume effect Revenue margin effect S,G&A Other EBIT Q1/16

    31.7 -2.4-7.1

    -0.2 -4.7

    17.3

    EBIT-change Q1/16 vs. Q1/15

  • Q1/16: Development of profit per region

    30

    EBIT-change by region Q1/16 vs. Q1/15

    (€ million)

    0

    5

    10

    15

    20

    25

    30

    35

    40

    EBIT Q1/15 Europe Americas Asia-Pacific Consolidation EBIT Q1/16

    Q1/16 vs. Q1/15 Europe Americas Asia-Pacific Total

    Revenue -2% -15% +91% -2%

    EBIT -42% -118% -94% -45%

    EBIT Margin (Q1/15)1 9.1% (15.5%) -2.1% (9.9%) 0.6% (19.8%) 5.5% (9.8%)

    31.7 -15.2

    -9.8

    -1.7

    +12.3 17.3

    1 EBIT Margin of regions on total external sales

  • 0,0

    2,0

    4,0

    6,0

    8,0

    10,0

    12,0

    14,0

    16,0

    18,0

    20,0

    Q1/15 Q1/16-35,0

    -30,0

    -25,0

    -20,0

    -15,0

    -10,0

    -5,0

    0,0

    Q1/15 Q1/16

    -25

    -20

    -15

    -10

    -05

    00

    Q1/15 Q1/16

    -70%

    (in € million)(in € million)

    -20.6

    Depreciation/amortizationCash flow

    from operating activities

    Cash flow

    from investment activitiesFree cash flow

    Q1/16: Comfortable liquidity situation despite high investments

    31

    (in € million) (in € million)

    -6.1

    +17%

    -25.4

    -29.7

    -50,0

    -45,0

    -40,0

    -35,0

    -30,0

    -25,0

    -20,0

    -15,0

    -10,0

    -5,0

    0,0

    Q1/15 Q1/16

    -22%

    -45.9

    -35.8

    +6%15.7

    16.7

  • Q1/16: Working capital development

    32

    305369 344

    495 464

    181

    191 197

    227220

    -73 -57 -72 -97 -85

    March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016

    Inventories Trade receivables Trade payables

    Working Capital ratio (3M annualized revenue)

    37.7% 48.9% 40.2% 48.2% 47.3%

    Decrease of working capital due to strict inventory management

    (€ million)

    -3%

    WC: -4%

    599

    469

    -12%

    -6%

    503

    413

    Working capital Q1/12 – Q1/16

    625

  • 149

    257

    185226 235

    919 926950

    1.065 1.062

    16%

    28%

    19%21% 22%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    40%

    45%

    50%

    0

    200

    400

    600

    800

    1.000

    Q1/12 Q1/13 Q1/14 Q1/15 Q1/16

    Net financial debt Equity before minority interests Gearing as a %

    Q1/16: Gearing and equity

    33

    High equity ratio of 67%, increase of net debt by 4%

    (€ million)

    Equity, net debt and gearing Q1/12 – Q1/16

    +4%

  • Q1/16: Comparison of peer group construction divisions

    Company Change in Profit Q1 (Margin)

    Peer 1 Construction division Op. Profit: 1 Mio.$ (Q1/15: -4 Mio.$) (margin: 0.9%)

    Wacker Neuson EBIT: -45% (margin: 5.5%)

    Peer 2 Construction division Op. Income: -3% (margin: 2.8%)

    Peer 3 (Constr./Agri.) Not disclosing

    Peer 4 Construction division Adj. Op. Profit: +28% (margin: 4.3%)

    Peer 5 Construction division Op. Profit: -9% (margin: 12.0%)

    Peer 6 Construction division1 Op. Profit: +17% (margin: 10.4%)

    Peer 7 Construction division Op. profit: 14 Mio.$ (Q1/15: 0 Mio.$) (margin: 2.6%)

    Peer 8 Construction division1 Op. Profit: -15% (margin: 11.2%)

    Peer 9 Construction division Op. Profit: -41% (margin: 10.9%)

    Peer 10 Tele handlers Not disclosing

    34

    -19%

    -12%

    -11%

    -11%

    -8%

    -5%

    -3%

    -2%

    -2%

    -20% -15% -10% -5% 0% 5%

    Change revenue Q1/16 vs. Q1/15

    1 No calendar fiscal year, ending March 31; figures showing Q4.

    -43%

    17%

    Q1/16: Comparison of peer group construction divisions

  • Q1/16: Comparison of peer group agriculture divisions (global)

    35

    Company Change in Profit Q1 (Margin)

    Peer 11 Agriculture division Op. Income: -59% (margin: 1.2%)

    Wacker Neuson Agr. Div. Not disclosing

    Peer 12 Agriculture division Op. Profit: -56% (margin: 4.2%)-18%

    -11%

    -8%

    -20% -15% -10% -5% 0%

    Change revenue Q1/16 vs. Q1/15

    Q1/16: Comparison of peer group agricultural divisions

  • Financial calendar and IR contact

    Financial Calendar

    IR contact

    Investor Relations Department

    Preussenstrasse 41, 80809 Munich, Germany

    Phone: +49-89-35402-713, Fax: +49-89-35402-298

    [email protected]

    August 4, 2016 Publication of half-year report 2016; Analysts' Conference Call

    November 10, 2016 Publication of nine-month report 2016; Analysts' Conference, Frankfurt

    Numerous international trade fairs, roadshows and conferences

    36

  • DisclaimerCautionary 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.

    37