Dürr IR Presentation

www.durr.comwww.durr.com

PRESENTATION

DÜRR INVESTOR RELATIONS

March 2014

WELCOME

DISCLAIMER

© Dürr AG, CCI, Investor Relations, March 2014 2

This investor presentation has been prepared independently by Dürr AG (“Dürr”).

The presentation contains statements which address such key issues as Dürr’s

strategy, future financial results, market positions and product development. Such

statements should be carefully considered, and it should be understood that many

factors could cause forecast and actual results to differ from these statements.

These factors include, but are not limited to price fluctuations, currency

fluctuations, developments in raw material and personnel costs, physical and

environmental risks, legal and legislative issues, fiscal, and other regulatory

measures. Stated competitive positions are based on management estimates

supported by information provided by specialized external agencies.

AGENDA


1. Dürr: global leader with strong competitive position

2. Markets

3. Dürr Strategy 2017

4. Financial overview, outlook and summary

DÜRR: GLOBAL LEADER WITH STRONG COMPETITIVE POSITION


Customers Fast facts

World market leader in 90% of Dürr‘s business portfolio with market shares between 30 - 60%

80% of revenue from automotive; all OEMs worldwide as customers

Large installed base supporting service growth

Strong emerging markets presence with 55% share of global incoming orders

High entry barriers with limited competitive set

Business drivers: automotive market growth (green field), growing replacement potential (brown field), service (installed base)

BUSINESSES AT THE DÜRR GROUP


Structure of the Dürr-Group with 4 global divisions

DÜRR-Group

Paint and Assembly Systems

Application Technology

Measuring and Process Systems

Clean Technology Systems

Paint shops and final assembly systems

Paint applicationtechnology

Balancingtechnology

Exhaust air purificationsystems

Aircraft manufacturing engineering

Sealing and glueingtechnology

Cleaning systems

Energy efficiency technology

OVERVIEW DIVISIONS


Profit drivers vary by division

Paint and Assembly Systems

Application Technology

Measuring and Process Systems

Clean Technology Systems

2009 … 2013 2009 … 2013 2009 … 2013 2009 … 2013

Sales revenues (€ m) 494.1 1,176.9 203.9 540.0 324.9 583.6 54.6 106.3

EBIT (€ m) -3.0 98.3 3.0 59.6 10.7 46.3 2.2 6.1

EBIT margin (%) -0.6 8.4 1.4 11.0 3.2 7.9 4.0 5.7

ROCE (%) >100%1 >100%1 2.8 43.2 4.4 16.2 64.3 17.1

Value drivers

» automotive market growth

» modernization

» service

» automotive market growth

» automation

» service

» International-ization

» automation

» synergies

» new applications

» exploring huge market potential

¹ negative CE

Emerging markets share 54%

China most important single market; Americas strong, too

Germany

Rest of Europe incl. Eastern Europe

North and South America

Asia (w/o China), Africa, Australia

China

* Asia (w/o Japan), Mexico, Brazil, Eastern Europe

7

Incoming orders 2013 (2012)

Incoming orders2013 (2012)

Sales revenues2013 (2012)

ORDER INTAKE: SHIFT TO THE AMERICAS

© Dürr AG, CCI, Investor Relations, March 2014

Mature markets Emerging

markets *

46% (45%) 54%

(55%)

27.3% (32.9%)

4.8% (5.0%)

30.7% (18.6%)

23.7% (28.6%)

13.5% (14.9%)

31.7% (30.5%)

7.0% (7.6%)

18.3% (25.3%)

27.2% (23.1%)

15.8% (13.5%)

AGENDA



2. Markets



MARKETS


2011: Emerging markets overtook developed markets

Worldwide automotive industry with steady growth (light vehicle production in m units)

+ 2% CAGR

+ 5% CAGR

45 43 44 44 44 44 44 4440

3036 36 37 37 39 41 42 43 43

11 11 12 14 1619

2225 26 27

3538

4246 48

5257 59 61

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e

developed markets emerging markets

* estimatedSource: PwC Autofacts

Last update: January 2014

CONTINUED STRONG EMERGING MARKETS GROWTH EXPECTED


BRIC, Thailand, Malaysia & Indonesia with expected LV production growth > 7%

75% emerging markets’ contribution to growth between 2014 and 2018

20.8 21.7 22.7 23.5 24.5 24.7

19.5 20.4 21.7 22.9 23.6 23.9

22.0 22.8 23.5 24.5 25.2 25.618.7 20.8 23.4 25.5 26.8 27.61.5

1.72.0 2.1

2.1 2.3

0

10

20

30

40

50

60

70

80

90

100

110

2013 2014 2015 2016 2017 2018

America Europe Asia (without China) China Other

CAGR in %

Source: own estimates, PwCLast update: January 2014

in m units

3

9

8

3

4

82.5 87.493.3 98.5 102.2

104.1

AGENDA



2. Markets



DÜRR STRATEGY 2017

12

Service

Globalization

Efficiency

Innovation

LEADING INPRODUCTION EFFICIENCY


1. INNOVATIONLEADING IN PRODUCTION EFFICIENCY


Cost per unit optimization in a paint shop

Cost per unit in aDürr Eco+Paintshop

= € 250-370

35%cost reduction

goal 2015

Cost per unit in aDürr Eco+Paintshop

= € 300-450

20%cost reduction

2012

Cost per unit in a current paintshop

= € 380-570

Material41%

Invest20%

Energy8%

Personnel28%Service

3%

1. INNOVATION EXAMPLES


EcoReBooth - paint booth concept

EcoDryScrubber - dry overspray separation

EcoPositioner – aircraft positioning system

EcoRPL033 - painting robot

Balancing Technology e.g. for turbochargers

EcoCSteam - cleaning with steam


Energy efficiency: efficient use of energy and waste heat

Heat exchangers

� up to 600 °C

Heat transferNatural refrigerant CO 2 NH3

� 8-40 °C heat source� up to 90 °C heat sink

Heat pump

Strategic goal: broad product range across all rele vant technologies

ORC

� 100-500 °C

Heat-to-power

Compact Power System

� 900-1,000 °C

Rollout / Commercialization of energy efficient products

Globalization / Emerging Markets

Insourcing / Increase of value added

Innovations

1. INNOVATION

2. GLOBALIZATIONFOCUS ON EMERGING MARKETS


China 2005 … 2013 CAGR

in %

Incoming orders (in € m) 146 650 21

Sales revenues (in € m) 83 760 32

Employees (12/31) 271 1,356 22

Average sales growth (2005-2013):Brazil: 30%, Mexico: 11%, India: 29%

Example China: - Doubling of capacities in space to 63,000 m²- Increasing use as manufacturing, purchasing and engineering center

Test Center in Japan, China and US

Expansion in South East Asia

New Dürr site Shanghai/Baoshan

2. GLOBALIZATION EXAMPLES OF CAPACITIES EXPANSIONS


Location Highlights

BrazilSão Paulo

Location extension in 2012 by 2,000m² to 10,000m²New organizational structure, all BUs now representedBig increase in workforceExtension APT Training Center

MexicoQuerétaro

New location and extension of the area from 5,000m² to 12,300m²Extended workbench for Dürr USA and Dürr worldwideDetail engineering for Dürr USA

PolandRadom

Expansion of production to 6,700m²Completion November 2013: New production hall, staff buildings and warehouseRented halls and tents will be replaced

2. GLOBALIZATION EXAMPLES OF CAPACITIES EXPANSIONS


Location Highlights

South AfricaPort Elizabeth

Move-in in August 2013Expansion of office space from 400m² to 900m²The area for manufacturing and storage has quadrupled and now amounts to 1,000m²

ThailandBangkok New location with currently 9 employees for the care of the

South East Asian market

19

Acquisitions: Making use of Dürr’s global footprint


Agramkow

World market leader in filling technology for household appliance & heat pump industries� Push in emerging market presence� Expansion of addressable markets, in non-automotive and in environmental friendly cooling liquids

Kleinmichel / Rickert

2 acquisitions in glueingtechnology: specialists for glueing in the final assembly process (e. g. windows) and the body shop� Global expansion & growing markets

LTBExhaust air purification specialist Luft- und Thermotechnik Bayreuth (LTB) strengthens Dürr’s position in terms of product offering� Pushing LTB’s business globally

2. GLOBALIZATION

3. SERVICEGROWTH STRATEGY


2008 2009 2010 2011 2012 2013

Service revenues (in € m) 395.9 263.3 362.0 445.0 506.9 535.6

In % of group revenues 24.7 24.4 28.7 23.2 21.1 22.3

Actions

Increase service business and capacities in emerging markets (e.g. China, India, Turkey)

Service pricing, dedicated offerings, complaint management system, decentralized ware-housing, delivery speed

Modificationsand upgrades

55%Spare partsand repair

30%

Main-tenance,

assessments, seminars

15%

Service type in % of revenues


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0

5

10

15

20

25

China India Russia Brazil Mexico Group

Number of sold paint robots (cumulative) Service in % of total sales by country



Customer Excellence@Dürr

Further improvement of customer relationships and p ush of service business

Module “Service Excellence”:Improvement + extension service business

Module “Customer Experience”:Improvement interaction with customers

Worldwide program

“Best in Class” for all contact points with the customer

Strengthen customer orientation, enhance customer loyalty

Develop instruments for regular measurement of customer satisfaction

Consistent service orientation: Sales, proposals, operations, after-sales

Capacity increase in service business

Profitable growth in service business



75% 71% 67%62%

39%

17%25%

7%

19%

34%

8% 4%

26%19%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

NorthAmerica

SouthAmerica

Russia EU Asia

Age of paintshops(based on own calculations)

>20 years 10 - 20 years <10 years

~250 paintshops in the world are older than 20 years

Increasing potential due to ageing plant structure �� Expanding modernization business



Further globalization of Dürr processes

Global processes with full utilization of SAP/CAX/CRM/Sharepoint

Strengthening of engineering center in India

Expansion of sourcing offices in China, India, Mexico, Brazil

Expansion of manufacturing in China, Mexico for international supply

Rigorous localization of Dürr products in the emergi ng markets

Supplemental product portfolio with low-cost/low-end solutions

Reduction of specifications

Local added value

Global process as basis for profitability

Global processes / localization

4. EFFICIENCY

4. EFFICIENCY


Global IT structure: connected worldwide

Enterprise Resource Planning

CAX

Reporting

SharePoint

CRM

Project management software Dürr Projects

Integrated Systems

Ca. € 30 m invested

One database worldwide

Efficient cooperation in all locations

Efficient controlling and timing of capacities

Continuous capex spending necessary

ChangeManagement

Site Management

MeetingManagement

Projects

MilestoneChecklists

InformationManagement

QualityManagement

AGENDA



2. Markets



STRONG EARNINGS


in € m 2011 2012 2013 Q4 2012 Q4 2013

Incoming orders 2,684.9 2,596.8 2,387.1 642.5 589.6

Sales revenues 1,922.0 2,399.8 2,406.9 642.3 660.8

Orders on hand(end of period)

2,142.7 2,316.8 2,150.1 2,316.8 2,150.1

Gross profit on sales 331.4 437.8 487.4 126.8 147.1

Gross margin (%) 17.2 18.2 20.3 19.7 22.3

EBIT 106.5 176.9 203.0 58.0 68.9

EBIT margin (%) 5.5 7.4 8.4 9.0 10.4

Net income 64,3 111.4 140.9 40.1 53.3

CASH FLOW


in € m 2011 2012 2013

EBT 85.8 147.7 184.6

Depreciation and amortization 20.6 28.5 27.4

Interest result 21.3 29.6 19.0

Income taxes paid -14.3 -21.3 -35.9

Changes

Provisions 0.6 -17.2 12.8

Net working capital -2.3 -69.1 122.6

Other 16.2 19.4 -1.4

Cash flow from operating activities 127.9 117.6 329.1

Interest paid (net) -16.5 -20.3 -16.2

Capital expenditures -19.6 -31.4 -51.0

Free cash flow 91.8 65.9 261.9

Strong cash generation

SOLID FINANCIAL STRUCTURE


Cash deposits and financial assets: € 548 m, net financial status increased 7 years in a row

Ongoing strong improvement of equity ratio to be expected in the next years

ROCE reached impressive 66% in 2013, well above the cost of capital

12/31/2010 12/31/2011 12/31/2012 12/31/2013

Equity in € m 319.4 364.3 432.1 511.4

Equity ratio in % 26.3 21.9 23.9 25.7

Net financial status in € m 23.6 51.8 96.7 280.5

Net working capital in € m 27.3 32.6 98.6 -33.1

DWC (days working capital) 7.8 6.1 14.8 -4.9

ROCE in % 10.3 28.4 43.9 66.2

ROCE AT RECORD LEVEL

Dürr business model favors low capital employed

Strong focus on NWC management

CE has decreased since 2006 although business volume has almost doubled 0

2

4

6

8

10

010203040506070

2006 2007 2008 2009 2010 2011 2012 2013

ROCE in % CE turnover

30© Dürr AG, CCI, Investor Relations, March 2014

2006 2007 2008 2009 2010 2011 2012 2013

EBIT in € m 33.1 55.7 72.7 5.7 36.6 106.5 176.9 203.0

Capital employed in € m 420.1 378.8 432.1 356.3 356.7 374.8 402.6 306.4

NWC in € m 154.7 128.9 151.8 57.4 27.3 32.6 98.6 -33.1

DWC 40.9 31.4 34.1 19.2 7.8 6.1 14.8 -4.9

ROCE in % 7.9 14.7 16.8 1.6 10.3 28.4 43.9 66.2

0

5

10

15

20

-500

-250

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

2009 2010 2011 2012 2013 2014e

Sales

Incomingorders

Gross margin(in %)EBIT margin(in %)

OUTLOOK


EBIT margin of 8.5% in focus

in %in € m

8.5

8.0

2,400-2,500

2,300-2,500

Shareholder structure (as of February 2014) *

25.1% Heinz Dürr GmbH, Berlin

3.5%Heinz und Heide Dürr Stiftung, Berlin

71.4%Institutional and private investors

25.1%

3.5%71.4%

SHAREHOLDER STRUCTURE / DIVIDEND POLICY


* figures rounded

(thereof 0.7% share of Dürr management)

Free float at 71.4%

Dividend policy: 30-40% payout ratio

SUMMARY


Ongoing demand, full order pipeline, a lot of new projects are coming to the market (e.g. China, Brazil, USA)

Positioning for further growth: focus on emerging markets, product innovation and new business segments (environmental & energy business)

Service and modernization business are becoming more important, new project “Customer Excellence@Dürr” started

Cost containment, global processes, localization

2014: moderate positive development in sales and earnings

Solid financial structure, fully funded until 9/2015

Strong market conditions, positioning for further growth

FINANCIAL CALENDAR


04/30/2014 Annual General Meeting, Bietigheim-Bissingen05/06/2014 Interim report for the first quarter of 201405/09/2014 Investors' day, Bietigheim-Bissingen07/31/2014 Interim financial report for the first half of 201411/06/2014 Interim report for the first nine months of 2014

Contact Dürr AktiengesellschaftGünter DielmannCorporate Communications & Investor RelationsCarl-Benz-Str. 3474321 Bietigheim-BissingenGermany

Phone: +49 7142 78-1785E-mail: [email protected]


Appendix

BUSINESS UNITS *


Dürr 50%, Eisenmann 10-15%, Taikisha/Geico 20%local competitors: Scivic, Giffin, Gallagher Kaiser, Trinity (Toyota)

Paint and Final Assembly Systems

Dürr >50%, ABB 15-20%, Fanuc 15-20%, Yaskawa <10%Application Technology

Airbus Varel, Claas/Brötje, Hyde, MTorres, Comau Pico, Thyssen KruppAircraft and

Technology Systems

Balancing Dürr 40%, Kokusai 15%, CEMB 10%Filling Dürr 25%, Cinetic 22%, Sihi 15%Testing Dürr 30%, BEP 20%, Fori 10%, Siemens 5%

Balancing and Assembly Products

Dürr 30%, Harry Major, Tecnofirma, Roll, Pero, Amsonic, HöckhCleaning and Filtration

Systems

Air purification Dürr 40-50%**, John Zink/KEU 20%, CTP 10%Clean Technology

Systems

* own estimates, average of last 3 years** market share relating to business with exhaust-gas purification systems for automotive paint shops

SALES DEVELOPMENT PASSENGER CARS JANUARY-DECEMBER 2013/12


Change year-over-year in %

-8

-6

-4

-2

-2

0

0

8

23

-10 -5 0 5 10 15 20 25

India

Russia

Germany

Western Europe

Brazil

Japan

new EU countries

USA

China

Dürr IR Presentation

Entertainment & Humor

Transcript of Dürr IR Presentation