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Wacker Neuson Group
September 2018
Agenda
2
H1/18
Outlook
Overview
Wacker Neuson SE, September 2018
Product range to meet the full spectrum of customer needs
3
Light Equipment Compact Equipment
1 FY 2017.2 In selected countries.
Concrete technology Compaction
Demolition Power & Lighting Pumps
Heating
Excavators
Dumpers
Telehandlers Wheel loaders
Skid SteersBackhoe-loaders
AcademyUsed machines2
Repair2 &
Maintenance2
Financing
Rental service2
E-Store2
Genuine parts
Telematics
Services
52% of sales127% of sales1 21% of sales1
Wacker Neuson SE, September 2018
Concrete solutions
Target industries besides construction
4
Markets Light equipment Compact equipment
Agriculture
Renovation/rehabilitation
Development
Infrastructure (road and highway
construction, bridge construction)
Gardening and landscaping
Handling logistics/port logistics
Residential construction
Demolition
Maintenance/repairs
Industry & Recycling
Underground construction
Oil & gas/energy industry
Events
Municipalities
Target group oriented sales:
Light equipment 27%
Compact equipment 52%
Services 21%
Revenue split (2017, as %)
Business segmentsMost industries demand both light an compact equipment
Wacker Neuson SE, September 2018
Our brands and target groups
5
Construction, gardening/landscaping, energy sector etc. Agriculture, horse breeders, tree nurseries etc.
Wacker Neuson SE, September 2018
Global footprint
6
Sales by region Core markets: EMENA & NAM, further internationalization ongoing
Europe 74% Americas 23% Asia-Pacific 3%
Revenue split (2017)
Wacker Neuson SE, September 2018
5 year comparison
7
[%][€ m]
Revenue and EBIT margin 2013-2017
Wacker Neuson SE, September 2018
Agenda
8
H1/18
Outlook
Overview
Wacker Neuson SE, September 2018
Key Figures
9
Revenue yoy
+8%
EBIT yoy
+28%
Op. CF
€ -35m
FCF
€ 12m
(margin: 9.5%)
H1/18
NWC1-ratio: 34.2%
(-0.2PP yoy)
DIO2: 130 days
(+1 day yoy)
Equity ratio: 65.3%
(-0.2PP yoy)
June 30, 2018
(€ 825m)
(H1/17: € 2m)(H1/17: € 14m)
Adj. EBIT yoy
+20%
EPS
€ 1.34
(margin: 9.5%)
(H1/17: € 0.60)
1 Net working capital / annualized revenue for the quarter.2 Days inventory outstanding = (Inventory / annualized cost of sales for the quarter) * 365 days.
Revenue yoy
+7%
EBIT yoy
+18%
Op. CF
€ 6m
FCF
€ 57m
(margin: 12.1%)
Q2/18
(€ 455m)
(Q2/17: € 28m)(Q2/17: € 33m)
Adj. EBIT yoy
+13%
EPS
€ 1.13
(margin: 12.1%)
(Q2/17: € 0.47)
Wacker Neuson SE, September 2018
381
316348 339
425379 392
371
455
8,7%
6,5%5,1%
4,2%
11,0% 10,6%
7,8%6,2%
12,1%
0%
5%
10%
15%
20%
0
100
200
300
400
500
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Revenue and earnings
10
+6.9%
Q2/18: Revenue and EBIT grow significantly
Income statement (excerpt), H1/18
Comments on H1/18
Revenue +8.0%
Strong demand in core markets of Europe and North America,
bottlenecks on the supply side remain challenging
Currency-adjusted revenue increased 11.9%
Gross profit margin slightly above prior-year level (+0.2PP)
Increased revenue and positive development of business with flexible
rental solutions
Higher material prices, limited material availability and restructuring
efforts burden profitability
EBIT +28.2%
Strict cost control, ongoing improvements to internal processes
In the previous year, one-off effects from impairment losses on old
inventory and reorganization initiatives negatively impacted EBIT in the
amount of EUR 4.0 million
Earnings per share +123.3%
One-off earnings in the amount of € 54.8m from the sale of a real-estate
company held by the Group
Financial result € -1.8m yoy due to a rise in interest expenses
(€ 1.2m) and increased negative FX effects (€ 0.6m)
Revenue
[€ m]
[€ m] Q2/18 Q2/17 H1/18 H1/17
Revenue 454.6 425.2 825.1 763.7
Gross Profit 132.6 122.5 233.2 214.4
as a % of revenue 29.2% 28.8% 28.3% 28.1%
Op. costs incl. other income/expenses -77.4 -75.8 -155.0 -153.4
as a % of revenue -17.0% -17.8% -18.8% -20.1%
EBIT 55.2 46.7 78.2 61.0
as a % of revenue 12.1% 11.0% 9.5% 8.0%
Adj. EBIT 55.2 48.7 78.2 65.0
as a % of revenue 12.1% 11.5% 9.5% 8.5%
Income from sale of a real estate company 54.8 0.0 54.8 0.0
Profit for the period 79.5 33.4 94.1 42.7
EPS (in €) 1.13 0.47 1.34 0.60
EBIT
margin
Wacker Neuson SE, September 2018
H1/18: Strong growth in the compact equipment segment
825,1
24,1
201,8
599,2
Total H1/18
Asia-Pacific
Americas
Europe
Business development by region and business segment
11
H1/18: Growth mainly driven by Europe and North America
Revenue Europe +7.8% yoy (adj. for FX effects: +8.9%)
Strong growth, particularly in France, England, Poland, Austria and
Benelux countries
Recovery momentum continues in Southern Europe
Revenue with compact equipment for the agricultural sector +11.5%,
partnership with John Deere developing well
Problems with material availability on supply side slow down sales
Revenue Americas +9.2% yoy (adj. for FX effects: +20.9%)
Demand from rental chains remained strong in the second quarter
Strong growth in worksite technology and compact equipment
Intensified competitive pressures due to imports from the Eurozone
becoming more expensive
Bottlenecks among suppliers, increased steel prices and ongoing
restructuring measures burden profitability
Revenue Asia-Pacific +3.9% yoy (adj. for FX effects: +10.8%)
Ramp-up of production at new plant in Pinghu (near Shanghai) is
progressing, integration of light equipment is underway
Positive business developments in Australia after restructuring had been
completed
73%
24%
3%
100%
+7.8%
+9.2%
+3.9%
+8.0%
share yoy
86.7
2.0
-2.2
78.2
EBIT1
Comments on H1/18
Revenue [€ m]
825,1
159,6
450,0
230,1
Total H1/18
Services
Compact Equipment
Light Equipment 27%
54%
19%
100%
+3.0%
+11.2%
+8.1%
+8.0%
share yoy
1 EBIT for regions before consolidation.2 Revenue by business segment before cash discounts.
Revenue [€ m]2
Wacker Neuson SE, September 2018
1.057 1.067 1.093 1.102 1.083 1.103 1.115 1.124 1.171
66% 68% 69% 67% 65% 67% 69% 66% 65%
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1.000
1.200
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
258
224206
237 245
195
148
193 188
24%21% 19%
22% 23%18%
13%17% 16%
0%
10%
20%
30%
40%
50%
60%
70%
0
100
200
300
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Sound balance sheet structure
12
At 16%, gearing1 remains at a conservative level
Net financial debt/EBITDA at a low level due to increased profitability
Healthy financial standing provides an ideal basis for winning market
shares and ensuring profitable growth
1,3
1,5 1,4
1,9
0,90,8
0,7
1,2
0,6
0,0
0,5
1,0
1,5
2,0
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Net financial debt
[€ m]
Comments
Equity
[€ m]
Gearing1 further reduced yoy
Stable equity ratio
Net financial debt/EBITDA2 at low level
1 Net financial debt / equity. 2 Net financial debt/annualized EBITDA for the quarter.
Gearing1
Equity ratio
Net financial debt/
EBITDA2 [x]
Wacker Neuson SE, September 2018
12
35
19
-26
28
5146
-45
57
-60
-40
-20
0
20
40
60
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Supply chain challenges burden inventory and cash flow
13
Free cash flow impacted by sale of real estate company
Net working capital ratio1 stable yoy
Rise in inventory due to bottlenecks on supply side
Cash flow from operating activities: € -35.3m (H1/17: € 14.2m), primarily
due to an increase in net working capital of € +81.8m (H1/17: € +37.0m)
Rise in inventory due to bottlenecks on supply side, machines
could not be completed and shipped to customers
Increased trade receivables due to high volume of invoiced orders,
in particular during the last month of Q2/18
Free cash flow of € 11.5m (H1/17: € 1.7m) includes proceeds from the
sale of a real estate company held by the Group in the amount of € 60m
in Q2/18
445 448 443 462428 439 431
455 459
149
181
159171
129
150140
154
130
100
150
200
250
300
0
100
200
300
400
500
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
1 Net working capital / annualized revenue for the quarter.2 (Inventory / annualized cost of sales for the quarter) * 365 days.
Comments on H1/18
593 565 569 590 586 568539
584622
39%
45%41%
44%
34%38%
34%39%
34%
0%
10%
20%
30%
40%
50%
60%
70%
0
100
200
300
400
500
600
700
Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
Free cash flow
[€ m]
Net working capital
[€ m]
Inventory
[€ m]
Net working capital
as a % of sales1
DIO2 in days
Wacker Neuson SE, September 2018
Share development
14
Our share in 20181
Key figures per share
Stable dividend policy (40 – 50% payout ratio)
1 As at September 10, 2018. 2 Peergroup: Atlas Copco, Bauer, Caterpillar, Cramo, Deutz, Haulotte, Manitou,
Palfinger, Ramirent, Terex. 3 As at September 17, 2018.
%
2
0,87
1,30
0,940,81
1,25
0,400,50 0,50 0,50
0,60
46%38%
53%62%
48%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
0
0,5
1
1,5
2
2,5
2013 2014 2015 2016 2017
EPS in € Dividend per share in € (paid out for respective year) Payout ratio
Family 63%
Free float 37%
in € H1/18 H1/17
Earnings per share 1.34 0.60
Share price end of period 21.76 21.23
Book value per share 16.70 15.43
Market capitalization (€ m) 1,526.2 1,489.1(total shares: 70,140,000)
Bank TP (€) Recom. Date
Hauck & Aufhäuser 40.00 Buy Sep 13, 18
Lampe 33.00 Buy Aug 07, 18
Metzler 32.00 Buy May 09, 18
Berenberg 31.00 Buy Aug 08, 18
Equinet 27.20 Hold Aug 03, 18
Warburg 26.10 Hold Sep 13, 18
Kepler Cheuvreux 26.00 Hold Sep 11, 18
Coverage3 Shareholder structure
-23%
2
Wacker Neuson SE, September 2018
60
80
100
120
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18
Wacker Neuson SDAX DAX Peergroup
Agenda
15
H1/18
Outlook
Overview
Wacker Neuson SE, September 2018
16
Extension of contracted dealer network for compact and light
equipment
Pro-active relationship management with key account rental
customers and construction companies
Focus on diversification of sales channels and industries
Light equipment established in new retail channels
North American market for skid steers accounts for ~70% of world market
Essential product to be attractive for dealers and rental companies
Large potential for further compact equipment sales
Expansion of plant in Wisconsin & integration of heaters and light towers
from plant in Michigan (plant has been closed in 2018)
81.00089.000 91.000
0
25.000
50.000
75.000
100.000
2016 2017 2020e
Skid Steer market North America1
2016 – 2020e (units)
Roadshow Truck, Franklin Equipment.
Wacker Neuson SE, September 2018
Relocation of skid steer production to the US pays off
Skid steer as key product for North American market Development of contracted dealers in North America
1 Source: CECE, Off-Highway, 2018.
36.800
50.000 50.000
0
20.000
40.000
60.000
2017 2018e 2022e
17
New plant located in Pinghu, 30 km from Shanghai city border.
Mini and compact excavators for Asia-Pacific, production of the first model
(EZ17, 1.7 tons) started in January
Newly entered cooperation with John Deere will help to improve capacity
utilization (cooperation covers machines in the range of 1.7 to 7.5 tons)
Integration of light equipment production from the Philippines into Pinghu is
underway (closure of plant in 2018)
Building on local/regional presence Demand for repair and maintenance
of infrastructure is growing, especially in megacities
Wacker Neuson SE, September 2018
Setting the base for further growth in Asia
Successful start of production in Pinghu (China))
Mini excavator market China 2017 – 2022e (units)1
Excavator: EZ17.
1 Source: Off-Highway, August 2018.
Strategic alliances and partnerships leverage our sales
181 Not in Japan. 2 Commonwealth of Independent States. 3 Kramer “green line” only. 4 WN = Wacker Neuson.
Wacker Neuson produces for Caterpillar1 Kramer3 distributes via JD‘s dealer network
WN4 via Everdigm‘s network Weidemann via ISEKI‘s network WN4 via MHE‘s network
HAMM produces for Wacker Neuson
OEM (global)OEM (global1) Distribution (EMENA & CIS2)
OEM (Latin America) Distribution (Korea) Distribution (Japan) Distribution (ASEAN)
Core Markets: Europe & North America
Latin America & Asia
Wacker Neuson SE, September 2018
Randon produces for WN4 WN4 produces for John Deere
OEM (Asia-Pacific)
Strategic alliance with John Deere in EMENA and CIS1
191 Commonwealth of Independent States. 2 Revenues of FY 2017 in € bn, agricultural sectors only.
3 FY ending October 31. 4 FY ending September 30. Source: Annual reports. Wacker Neuson SE, September 2018
John Deere: Market leader within agricultural machinery2
9 small and compact wheel loaders 9 telehandlers4 tele wheel
loaders
Start in EMENA & CIS1 (Region 2)
1,3
3,8
7,4
9,9
11,3
17,9
SAME Deutz-Fahr
Claas
AGCO
CNH Industrial
Kubota
John Deere
4
3
[€ bn]
Outlook for fiscal 2018
20
Guidance for fiscal 2018 confirmed
Construction: Manufacturers’ expectations have cooled slightly Ag: Business index has deteriorated from a high level
Comments
Order development further positive
Mid-year price increase of 2% on average effective since July 2018
Special risks:
Delayed deliveries (suppliers having difficulties meeting orders) and
further uncertainties caused by force majeure (flooding in Japan,
strike at sub-supplier)
Currency developments, especially EUR/USD
1.534
8,6%
5%
7%
9%
11%
13%
15%
0
500
1.000
1.500
2.000
FY 2017 FY 2018
1,650 – 1,700
9.0 – 10.0%
Source: CECE, July 2018. Source: CEMA, August 2018.
+8 – 11%Revenue
[€ m]
EBIT
margin
2012 2013 2014 2015 2016 2017 20182011
Wacker Neuson SE, September 2018
Agenda
21
Appendix
Wacker Neuson SE, September 2018
22
“Strategy 2022” and mid-term targets
“Strategy 2022” Mid-term targets 2022
Wacker Neuson SE, September 2018
Progress with “Strategy 2022”
23
ACCELERATION
EXCELLENCE
CUSTOMER CENTRICITY
FOCUS
Ongoing optimization and expansion of dealer structure in North
America
Progress with financing solutions for customers and distribution
partners
Listening to the market at “Voice of Customer” events
Expansion of rental portfolio to include more flexible solutions tailored
to individual customer needs
Streamlined internal supply chain: Integration of logistics functions into
European production for light equipment successfully completed
Reorganization of procurement
Net working capital management: Software to manage stocks more
successfully has been rolled out in most parts of the Group
Investment in seed fund for industry 4.0 startups
Reduction in structure costs and optimization of value chain:
Integration of light equipment production from Manila
(Philippines) into plant Pinghu (China) is progressing
Integration of light equipment production from Norton Shores
(Michigan, USA) into plant Menomonee Falls (Wisconsin, USA)
is almost complete
Processes to avoid old stock have been installed
Roll-out of global Used Portal is underway
Digitalization: New telematics solution, digital maintenance and repair
services
Internationalization: Meeting demand in China with locally manufactured
excavators and light equipment
Agriculture: Partnership with John Deere is developing well
Reduction of vertical integration in production sites is underway
Wacker Neuson SE, September 2018
24
Source: Off-Highway Research, August 2017.
Most major regional equipment markets are expected to see growth
in 2018
Europe and Americas main growth drivers
Europe: strong business in the construction and agricultural
sector
North America: stronger revenue from skid steer loaders and
other compact equipment
Asia-Pacific: a key driver will be China
+11%
+15%
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2012 2013 2014 2015 2016 2017e 2018e 2019e 2020e 2021e
Tailwind from global markets
Construction industry: 2017–2021 machinery sales +11% Development of agricultural sector in Germany
Wacker Neuson SE, September 2018
Europe India Japan North America RestChina
Price developments for butter & milk in the EU
Source: Nilesen, Milchindustrieverband, Die Welt, 2017.
Source: German Farmer’s association, June 2018.
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
Bomag
Husqvarna
Multiquip/Mikasa
Weber MT
Competitors
JCB
Manitou
Schaeffer
Thaler
Compact equipment
Atlas Weyhausen
Bobcat (Doosan)
Kubota
Manitou
Takeuchi
Yanmar
Heavy equipment
Caterpillar
Hitachi
JCB
Komatsu
Liebherr
Volvo
25
Competitive landscape for Wacker Neuson Group
Wacker Neuson SE, September 2018
26Wacker Neuson SE, September 2018
Challenges: New emission regulations for diesel engines
Engine emissions regulations – lack of harmonization driving costs and consuming resources
27
EZ17e
Wacker Neuson SE, September 2018
Leadership in alternative drive technologies
DW15e
DT10e
Financial calendar and contact
28
September 24, 2018 Baader Investment Conference, Munich
September 25, 2018 Berenberg and Goldman Sachs Seventh German Corporate Conference, Munich
November 8, 2018 Publication of Q3 report; analysts and investors call
November 12, 2018 Roadshow Frankfurt/Main
November 15, 2018 HSBC Luxembourg Day, Luxembourg
November 16, 2018 Roadshow, Cologne / Düsseldorf
December 4, 2018 Berenberg European Corporate Conference, Pennyhill (UK)
December 6, 2018 Family Office Capital Day, Vienna
Wacker Neuson SE, September 2018
Disclaimer
Cautionary 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.
Contact
Wacker Neuson SE
IR Contact: +49 - (0)89 - 354 02 - 427
ir@wackerneuson.com
www.wackerneusongroup.com