thyssenkrupp Equity Story Materials Services · 2 | November 2017 | thyssenkrupp Equity Story |...
Transcript of thyssenkrupp Equity Story Materials Services · 2 | November 2017 | thyssenkrupp Equity Story |...
2 | November 2017 | thyssenkrupp Equity Story | Materials Services
thyssenkrupp – a diversified industrial group Sales €41.4 bn1; EBIT adj. €1.7 bn1
Components Technology (CT)
Materials Services (MX)
1. Financial figures FY 16/17
Steel Europe (SE)
€8.9 bn €547 mn
€13.7 bn €312 mn
Elevator Technology (ET)
€7.7 bn €922 mn
€7.6 bn €377 mn
Industrial Solutions (IS)
€5.5 bn €111 mn
Continuing operations
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Sales driven customer service organization Sales €13.7 bn
• Materials distribution (just-in-time)
• Processing
• Inventory/Warehouse Management
• Supply Chain Management
• Materials
• Raw materials
Stainless steel AST since March 1, 2014
Warehousing Services 68% of sales
Trading 19% of sales
Production 13% of sales
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Growth opportunities in materials distribution and value added services – from processing via logistics concepts up to SCM solutions
177157
3.3%
2022 2017 • Opportunities for selective high quality growth • Support customers in focusing on core activities
• Higher customer retention, long-term relationship
Primary target market [€ bn] Value added services roll-out across industries
CAGR
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Well diversified across customer groups with footprint in developed countries w/o BA MX w/o Special Materials / Raw Materials / Technical Services1
Sales by customer groups Well-known customers around the world (extract)
Europe #2 | Germany #1 | Eastern Europe #3 | North America #4 Leading positions in fragmented markets
Local Dealers
21%
Others
12%
Energy 4%
Construction
7%
Aerospace
6% 16%
Mechanical engineering 16%
Vehicle manufacturing
18%
Metal-working industry
€10.3 bn
1. FY 16/17
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One-stop shop for wide range of products and value added services1
Sales by product groups
1. FY 16/17 | 2. mainly Technical Services
Only 10% sourced from SE
4% Others2
5%
17% 4%
Pipes and Tubes
Raw Materials
9% NF Metals
Stainless Steel
36%
Carbon Steel
Plastics
€13.7 bn AST
25%
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13/14 14/15 15/16 16/17 17/18E
Sales
Warehousing, Services Trading Production (AST/VDM1)
13,660
9,440 2,502 1,718
14,254
9,102 2,565 2,587
11,886
8,483 1,870 1,534
13,665
9,350 2,580 1,735
Robust demand
Stable trading conditions
EBIT adj. 212 206 128 312 Ongoing sales and performance initiatives vs. foreseeably lower windfall gains
EBIT adj. margin [%] 1.6 1.4 1.1 2.3
BCF 92 313 467 (43)
Upside powered by program as part of
Strong profitability and cash provider even in challenging trading conditions [€ mn]
1. AST/VDM included at MX since March 2014; Sale of VDM (closing July 31, 2015) and RIP (closing Dec. 4, 2014) | 2. FY 13/14: BCF exclusive rail cartel compensation payments
X
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~5% vs. PY
Consequent implementation of measures leads to significant increase in productivity
~12% DIO reduction²
Higher productivity of NWC Higher productivity per FTE
Productivity increase1
1. BU Mat Distr. w/o trading ((volumes ex stock + tolling) / FTE) | 2. Days Inventory Outstanding on average FY 15/16: 67; FY 16/17: 59
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Strategic Way Forward @ Materials Services Upside from continuing strong management initiatives and improving trading conditions
Per
form
an
ce
Gro
wth
+
Target 17/18E 15/16
1.1%
14/15
1.4%
13/14
1.6%
16/17
2.3%
• New structures
• Logistics footprint
• More value added services (processing, SCM)
• Digital transformation
• Performance concept AST
• Sales initiatives & marketing (organic growth)
• Opportunities by selective smaller investments
EBIT adj. margin
>3%
Ø CCR
≥1
X
Performance before Growth
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Just-in-time deliveries
Efficient
Warehousing and logistics system
Central Regional
Local
Logistics and IT excellence: Largest ERP system worldwide provides basis for efficient processes One SAP template for MX with 8,000 users
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Steadily increasing footprint in Eastern Europe
Poland
Romania
Czechia
Hungary
Croatia (Sales) Bulgaria
Serbia
Slovakia
Turkey 2014 1998 2001 2003 2004 2005 2006 2007 2008 2009 2012
Hungary Poland Czech
Republic Russia (closed ´14)
Ukraine (closed ´09) Bulgaria
Romania Slovakia Serbia Croatia Lithuania Turkey
Turkey
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Further standardization of stock selection
Strengthening both logistics and sales skills
Germany – Driving efficiencies in warehousing activities
Sharper processing and services offerings
“Next generation” IT systems
Fully levering data analytics in replenishment
• Lower costs
• Faster response, fulfillment
• Streamlining processes
• Higher customer satisfaction
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Value Added Services Customized
Logistic concepts
Inventory management. Warehouse management. Supply chain management.
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From materials distribution to SCM for attractive industries Example Aerospace: Within nine years sales nearly, EBIT adj. more than tripled
Customers (extract)
100
200
300
400
09/10 10/11 07/08 08/09 11/12 12/13 14/15 13/14 15/16
Index
Sales
EBIT adj. ~€650 mn
sig. above MX margin target
16/17
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10 years B2C shop experience
Digital expansion of multichannel materials distribution and services1 Examples
B2B
Business via digital channels
>€1.3 bn
B2C Sales via
B2C shops
€31 mn
110,000 products
1. FY 16/17
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The digital transformation of MX extends across the entire value chain
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Pricing schemes tailored to customers providing margin upside for MX
New
Minimum prices for smaller customers without potential
Pricing Excellence “Pricing science” Statistical models for optimization of sales prices
System support (SAP)
Systematic price differentiation based on importance of customers and consistent pricing policy
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1. Industrial Internet of Things
Further backend digitalization to increase efficiency toii: One platform to connect machines of different makes and generations
“toii” is an IIoT1 platform that enables machine integration and connects e.g.:
• Bandsaws and bending machines
• Cranes and forklifts • Slitting and
cut to length lines • Milling machines and
laser systems
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AST turnaround driven by effective management initiatives
2014 2008
- 2013
14/15 15/16 17/18E
Strike Massive windfall losses
€ mn ~(600)
Initiatives
Optimize production
footprint and capacity
New sales organization, new markets
Compre-hensive cost optimization
New management
AST
FY 16/17: Employees 2,383
Sales €1.7 bn Production stainless flat 860tt
EBIT adjusted
16/17
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Committed to realize the value upside from tk`s Strategic Way Forward
• Strong materials markets expertise and footprint
• Scalability
• Stable and growing core markets
• Focus on value added services
• Powerful IT & logistics systems
• Digital transformation
• Restructuring track record also proven at AST
X
Consistent powerful cash provider
EBIT adj. margin
>3%
Ø CCR
≥1
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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.”