Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor...
Transcript of Wacker Neuson SE Analyst and Investor Conference Results ...€¦ · Analyst and Investor...
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Cem Peksaglam (CEO) – Günther C. Binder (CFO)
March 15, 2016
Wacker Neuson SE
Analyst and Investor Conference – Results FY 2015 and Q4 2015
Agenda
Outlook
Overview
Financials 2015
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The ups and downs of fiscal 2015
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Record revenue of € 1.375 billion
Solid growth in Europe (+6%), double-digit growth in Asia-Pacific
(+22%, from a low level)
Compact equipment segment again main growth driver (+15%),
esp. in Americas (+60%)
Progress on expansion of international reach
Successful launch of compact equipment in China
New sales affiliates established in Asia (Shanghai) und Latin
America (Peru, Columbia)
Extension of dealer network for Weidemann and Kramer
Alliance with HAMM AG proved successful (rollers)
Progress on many projects (e.g. eStore, procurement synergies,
logistics, aftermarket, R&D, used equipment)
Innovations setting benchmarks (e.g. dual power excavator,
electric wheel loader, battery-powered rammer etc.)
Solid financial position (equity ratio: 69%; gearing: <20%)
Positive economic value added (€ 1.1 m),
positive free cash flow (€ 17.8 m)
Crisis in many markets/regions hit revenue and especially
profitability in H2/2015
Energy sector (oil & gas) → squeeze on oil prices made it
impossible to cost-effectively extract crude oil in North
America
Extraction of row materials (mining) → low prices negatively
impacted important countries (Australia, Chile, Brazil, South
Africa)
Downturn in the agricultural equipment sector → drop in
prices for milk and other agricultural products dampened
willingness to invest amongst agricultural landholders
Weak markets in France, Russia
Strong US dollar squeezed exports
Negative currency developments in emerging markets
Especially strong margin business of light equipment was
affected by crisis-hit markets
New emission legislation had a major impact on costs, missing
harmonization on standards for North America and Europe
Q4/15 and 2015 at a glance
Q4/15: Revenue increase, profit decrease
Revenue:+3% Q4/yoy to € 358 m (adjusted for currency effects: -1%); Q4/qoq +15%
EBITDA: -17% Q4/yoy to € 41 m; EBIT margin: 11.2% (Q4/14: 13,9%)
EBIT: -31% Q4/yoy to € 22 m; EBITDA margin: 6.3% (Q4/14: 9.4%)
2015: Revenue increase, profit decrease
Revenue: +7% yoy to € 1,375 m (adjusted for currency effects: +3%)
EBITDA: -20% yoy to € 171 m; EBITDA margin: 12.5% (2014: 15.3%)
EBIT: -24% yoy to € 104 m; EBIT margin: 7.5% (2014: 10.6%)
2015: Revenues business segments / regions
Light equipment: -1% yoy (adjusted for currency effects: -9%)
Compact equipment: +15% yoy (adjusted for currency effects: +13%)
Services: +4% (adjusted for currency effects: +0%)
Agriculture: -2% yoy
Europe: +6% yoy (adjusted for currency effects: +5%)
Americas: +8% yoy (adjusted for currency effects: -5%)
Asia-Pacific: +22% yoy (adjusted for currency effects: +12%)
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Fiscal 2015 was another year of revenue growth for Wacker Neuson – despite difficult market conditions.
Global construction machinery markets 2015 vs. 2014
5Sales of earth moving equipment, Source: ISC-Statistics, VDMA, February 2016
Crisis-hit markets dampened willingness to invest and reduced machinery sales
North America
Latin America
Europe Russia
Africa
Middle East
India
China
Rest of Asia
Oceania
Development of raw material and oil prices
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Source: IMF - The International Monetary Fund, February 2016
Price indices development
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Raw materials in total Agriculture Metals Crude oil
(as a %)
2005 = 100%
Low oil prices make exploration economically impossible in some regions
7January 9, 2016
Low oil & gas prices hit Wacker Neuson business
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23%
77%
FY 2014
Oil & Gas Others
Oil & Gas: Wacker Neuson North America exposure
Oil & Gas industry remains difficult
(% of revenue)
14%
86%
FY 2015
Oil & Gas Others
Exposure
decreased
FAO – Food Price Index1
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Continued decrease of food prices
Source: FAO, January 2016, FAO = Food and Agriculture Organization of the United Nations. The FAO Food Price Index is a measure of the monthly change in international prices of a basket
of food commodities. It consists of the average of five commodity group price indices.
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jan 16
Food Meat Dairy Cereals1 100 = average prices 2002-2004
Global market for agricultural machines
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Market for ag machinery declined significantly – 2015 below 2011 level
Source: VDMA Landtechnik (estimated, September 2015)
Rest of world
Latin-/Central America
North America (NAFTA)
Rest of Asia
Japan
India
China
Turkey
Rest of Europe
European Union
Market volume of ag machines in EUR bn.
5 years comparison: Revenue development per quarter
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Quarter-on-quarter comparison (revenues)
The downturn left its mark in second half of the year 2015.
CAGR: 11.2% CAGR: 9.4% CAGR: 5.7% CAGR: 7.9%
(in € m)
5 years comparison: FY revenue and EBIT margin
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Revenue and EBIT margin 2011 - 2015
1 Without Impairment: 12.5%
€ 543 m EBIT generated in 5 years: → Ø € 109 m p.a.
(in %)
11.4%1
7.8% 8.2%10.6%
7.5%
(in € m)
2015: Revenues per region / business segment1
921,7 979,3
2014 2015
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Europe2
+6% (+5%)
422,3 417,1
2014 2015
Light equipment3
-1% (-9%)
323,7348,5
2014 2015
Americas2
+8% (-5%)
606,0697,5
2014 2015
Compact equipment3
+15% (+13%)
38,9
47,5
2014 2015
Asia/Pacific2
+22% (+12%)
273,0 283,9
2014 2015
Services3
+4% (+0%)
1 In brackets: adjusted to discount currency effects; 2 Nominal, after cash discounts; 3 Nominal, before cash discounts
(in € m)
(in € m)
(in € m)
(in € m)
(in € m)
(in € m)
2015 and Q4/15: Comparison of peer group construction divisions (global)
Company
Peer 1 Construction division1
Wacker Neuson Group
Peer 2 Construction division
Peer 3 Construction division
Peer 4 Access Equipment div.2
Peer 5 Construction division
Peer 6 Construction division1
Peer 7 Construction division1
Peer 8 Construction division
Peer 9 Construction division1
Peer 10 Construction division
Peer 11 Construction division
Peer 12 Construction division
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-24%
-25%
-18%
-12%
-7%
-4%
-4%
-11%
-17%
8%
-4%
3%
7%
-24%
-20%
-14%
-13%
-9%
-5%
-5%
-3%
-3%
3%
4%
7%
9%
Change in revenue 2015 vs. 2014 Change in revenue Q4/15 vs. Q4/14
1 fiscal year differs from calendar year, figures show 9M/2015 and Q3/20152 fiscal year differs from calendar year, figures show fiscal year ended in fall 2015
Revenue (Change vs. 2014 and Q4/14)
2015 and Q4/15: Comparison of peer group agriculture divisions (global)
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Revenue (Change vs. 2014 and Q4/14)
Company
Peer 13 Agriculture division1
Wacker Neuson Agr. Div.
Peer 14 Agriculture division1
Peer 15 Agriculture division
Peer 16 Agriculture division -12%
-21%
-25%
-9%
-28%
-23%
-20%
-2%
0%
1 fiscal year differs from calendar year, figures show fiscal year ended in fall 2015
Change in revenue 2015 vs. 2014 Change in revenue Q4/15 vs. Q4/14
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„Zero Emission” – Wacker Neuson, a leader of alternative drive technologies
Alliance with HAMM AG proved successful
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New tandem rollers (1.8 – 4.5 t) and compactors (weighing up to 12 t)
The cooperation has extended the portfolio of soil and asphalt compaction rollers.
Launch of Wacker Neuson
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Internet is gaining of importance
Digitalized offering of whole Wacker Neuson portfolio.
New assembly site in Brazil
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Itatiba, São Paulo, Brazil
Products: mobile generators
Target market: Latin America
Start of production: April 2016
„In the region – for the region“
New CSO Mr. Jan Willem Jongert
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Mr. Jan Willem Jongert (51) will be joining the Executive Board on April 1, 2016.,
taking responsible for the global sales, service, logistics and marketing activities
Jan Willem Jongert
Before joining Wacker Neuson he was CEO of Schwarzmüller
Prior to this, Mr. Jongert spent many years in a number of positions at Jungheinrich:
responsible for sales in Asia-Pacific
heading up an overseas subsidiary in China
responsibility for sales in northern and eastern Europe
Mechanical engineer, bachelor’s degree in international marketing managementJan Willem Jongert
Areas of responsibility for Executive Board from April 1, 2016
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Cem Peksaglam
CEO
Strategy/M&A, HR,
legal matters, compliance,
real estate, investor relations,
corporate communication,
sustainability
Martin Lehner
CTO
Procurement, production,
technology, quality
Günther C. Binder
CFO
Finance, audit, IT
Jan Willem Jongert
CSO
Sales, logistics, service,
marketing
Agenda
Outlook
Overview
Financials 2015
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2015: Development of revenue and profitability
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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)
2015: Comparison of EBIT vs. previous year
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EBIT-change 2015 vs. 2014
1
1 Other income & expense
Earnings negatively impacted by situation in crisis-hit emerging markets/industries, regional/product mix and FX effects.
(in € m)
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EBIT 2014 Revenue volume effect Revenue margin effect S,G&A Other EBIT 2015
136.2
27.0 -23.8
-28.4
-7.4103.6
2015: Development of profit per region
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EBIT-change by region 2015 vs. 2014
2015 vs. 2014 Europe Americas Asia-Pacific Total
Revenue +6% +8% +22% +7%
EBIT -9% -82% -87% -24%
EBIT margin (2014)1 11.5% (13.5%) 1.2% (7.4%) 0.0% (2.4%) 7.5% (10.6%)
1 EBIT Margin of regions on total external sales
(in € m)
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EBIT 2014 Europe Americas Asia-Pacific Consolidation EBIT 2015
136.2 -11.6
-19.7
-0.8 -0.5 103.6
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214177 180 199
901 915 9361.012
1.064
10,0%
23,4%
18,9%17,7%
18,7%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
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2011 2012 2013 2014 2015
Net financial debt Equity before minority interests Gearing as a %
2015: Gearing and equity
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High equity ratio of 69%, gearing <20%
(€ million)
Equity, net debt and gearing 2011 – 2015
(as a % of equity)
2015: Working capital development
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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
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(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
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(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
Share price development
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in € 2011 2012 2013 2014 2015
Earnings per share 1.22 0.77 0.87 1.30 0.94
Dividend payment 0.501 0.30 0.40 0.50 0.50
End of period 9.55 10.35 11.49 16.96 14.23
High 13.49 13.45 12.75 18.00 24.60
Low 8.35 9.06 9.24 11.49 11.12
Market capitalization (in € m) 669.8 725.9 805.6 1,189.2 998.1
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 2015 with peak on April 27
Key figures share
%
1 Dividend payment to be proposed at the AGM on May 31, 2016
Proposed dividend for AGM on May 31, 2016
20151 20141 2013 2012 2011 2010 2009 2008 2007
Total payout (€ million)
35.07 35.07 28.06 21.04 35.07 11.92 0 13.33 35.07
Payout ratio2 (as a %) 53.0 38.3 45.9 38.9 40.9 49.8 - 32.0 40.0
Eligible shares(in m)
70.14 70.14 70.14 70.14 70.14 70.14 70.14 70.14 70.14
Dividend per share (in €) 0.50 0.50 0.40 0.30 0.50 0.17 0 0.19 0.50
Earnings per share (in €) 0.94 1.30 0.87 0.77 1.22 0.34 -1.57 0.53 1.1
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1 Dividend payment to be proposed at the AGM on May 31, 20162 Based on net consolidated profit for the period before purchase price allocation in 2007 and 2008. Due to the diminishing effects of purchase price allocation,
the payout ratio has been based on net consolidated profit for the period after purchase price allocation since 2010.
Dividend payouts 2007 – 2015
Dividend of EUR 0.50 per share reflects confidence in the earnings potential
and in the success of corporate strategy.
Agenda
Outlook
Overview
Financials 2015
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0
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200,0
400,0
600,0
800,0
1.000,0
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2015 2016e
(Revenue in € billion)
Revenue and margins 2015–2016e
1.38
+2% to +5%
EBIT Margin
7.5%
1.40–1.45
Cautious forecast for 2016
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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%
Our “GIPI” vision
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Growth – Internationalization – Professionalization – Integration
Our company is the result of mergers between various family-run enterprises each with a unique corporate culture.
We have set down our own values in writing and live by them. We actively integrate all of our companies into the Group and will continue to do so in the future.
Integration
We want to establish our company as a global player with a strong position in our target markets. To achieve this, we employ qualified people whose diverse cultural backgrounds are an invaluable asset to our company.
InternationalizationGrowthWe aim for profitable growth and healthy return on capital employed. We do not believe in revenue growth at any cost.
ProfessionalizationWe strive for excellence in everything we do.
Targeted expansion of profitable business fields, restructuring of low margin business fields
Further market penetration with core products and diversification of end markets
Continued internationalization
Continued cost control
Critical assessment and, where appropriate, postponement of investments
Critical assessment of all new hires
Optimization of inventories (enhanced structure; less inventories)
Focus on supplier management and qualification
Process optimization through lean management activities, standardization of components and processes;
development of new platforms
Investments into new technologies and innovations (R&D rd. 3.2% of revenue p.a.)
…
Reinforcing measures to improve bottom line, e.g.
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Goal: To increase revenue to more than EUR 2 bn. in medium term and boost profitability
Medium-term goal: > 2 bn. Euro revenue
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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
March 15, 2016 Publication of financial results 2015; Press Conference, Munich; Analysts' Conference Call
April 12, 2016 Capital Market Day on bauma, Munich
May 12, 2016 Publication of first-quarter report 2016; Analysts' Conference Call
May 31, 2016 AGM, Munich
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
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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.
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