EKForum 14112007 1545 DürrAG - durr.com · Equity ratio 22.9% 23.6% 20.9% Net ... 1995 1996 1997...

Frankfurt, November 14, 2007

Deutsches Eigenkapitalforum

Dürr AktiengesellschaftRalph Heuwing, CFO

© Dürr Aktiengesellschaft, CCI, Deutsches Eigenkapitalforum, November 14, 2007 - 2 -

Disclaimer

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, product development and the effects of continous

improvement processes. 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.


Global systems partner to the automotive and supplier industry

§ World market leader in paint, balancing and cleaningtechnology, leading position in final assembly technology.In these niche markets Dürr has market shares of up to50%

§ Appr. 60% of paint shops and appr. 50% of assemblyplants are equipped with Dürr technology worldwide

§ 90% of sales within the automotive industry

§ Sales 2006: € 1.4 billion with 2 divisionsà € 1.1 billion Paint and Assembly Systems à € 0.3 billion Measuring and Process Systems

§ Employees 06/30/2007: 5,836

§ Founded in 1895

§ Initial public offering in 1989


What makes Dürr unique?

§ 55% of business is plant engineering; 45% is mechanical engineering (assembly). In the mechanical engineering business only key components are manufactured in house

§ Low production depth limits fixed costs

§ Dürr is the only truly global company in its competitive environment (21 countries, 45 locations, 24 production facilities). More than 20 years in India and China

§ Only few competitors on a worldwide scale

§ All OEMs and most suppliers are customers of Dürr. Position with Japanese OEMs still nascent, but encouraging progress


DÜRR AGDÜRR AG

Paint and Assembly SystemsShare of sales ~ 80%

§Paint Systems Turnkey paint shops; service and modernization of existing facilities.

§Application Technology High-tech systems and software for automated paint and sealing application (e.g. robots, atomizers, color-change systems, quality assurance).

§Environmental and Energy Systems Systems for exhaust-air purification, for treatment of residual liquids; energy management (including solutions for reducing energy consumption).

§Factory Assembly Systems Products, systems and conveyor systems for final vehicle assembly and end of line testing. Assembly systems for aircraft construction.

Measuring and Process SystemsShare of sales ~ 20%

§Balancing and Diagnostic Systems Balancing and diagnostic systems (automotive, electrical, turbo, machinery, aerospace), particu-larly for engine and transmission manufacturing.

§Cleaning and Filtration Systems Cleaning, deburring and filtration systems, particu-larly for engine and transmission manufacturing as well as for chip removing and chipless processes of metal binding.

§Schenck Technologie- und Industriepark GmbHProperty service provider

Group structure


Automotive industry in FOCUS


Management

§ Born in 1961

§ Chairman of the Board of Management since January 1, 2006

§ Responsible for Paint and Assembly Systems and Measuring and Process Systems

§ Before: management positions at IBM and Carl Zeiss and restructuring of Carl Schenck

§ Born in 1966

§ With Boston Consulting Group (BCG) since 1990

§ Since 2001 Partner and Vice President at BCG in Munich; before Managing Director at BCG India

§ Experience in banking, automotive and engineering business

Ralph Heuwing, CFORalf Dieter, CEO


§ Building upon strengths: market leadership, industry experience, leading technological edge, global reach

§ Use of market potential and generate new business opportunities; strengtheningmodernization/aftermarket and service business based upon large installed base

§ Strong innovation focus on customer benefit (e.g. cost per unit, energy saving)

Strategy (1) Trimming core business for profitability & growth


From Restructuring to Performance

§ Improving operating performance tobenchmark level

§ Financial discipline

§ Globalisation of engineering and production

§ Selected growth initiatives

2008 - 2010: Profitable growth2005 - 2007: Restructuring program

§ Concentration on core business

§ Financial restructuring

§ Turnaround of non-performingbusinesses

§ Initiation of continuous processimprovement (e.g. workflow, ERP)

Strategyprocess:Dürr 2010

Strategy (2)


Key earnings driver: service

§ Service organization implemented worldwide

§ 120 service products defined; value pricing concept

§ Antenna concept: further expansion

§ Monthly reporting and monitoring at board level

§ Sales target: 30% of total sales

Strategy (3)


Strategy (4)

§ Expansion in growth markets (India, Eastern Europe, China). Foundation of new companies/sites in Turkey (H1 2007), Russia (H2 2007) and Slovakia (H2 2006)

§ Gain access to new automotive customers (first successes with Honda, Nissan and Toyota in transplants)

§ Increase presence in the aircraft industry

§ Internal growth before external: leveraging growth potential with new products (e.g. sealing: automated seam welding, Green Paint Shop Concept)

Growth dimensions


Green Paint Shop Concept (standard paint shop, 35 units per hour)

Goal: Reduction of energy costs, costs per unit and environmental pollution

Methods: More than 20 different optimization measures (e.g.):

- multiple shift usage of heated air

- software controlled conditioning of booth temperature and humidity

Results: 60% less gas/energy

44% less fresh water

32% less CO2

11% less electricity

Cost savings per painted body € 16

Cost savings over automobile life cycle (7 years): > € 17 m

Strategy (5)


Sealing

§ Market share 2006: 16% → target ≥ 50%

§ Market volume 2006: € 130 m

§ New Dürr product development 2006: doser

Strategy (6)


6 months 2007 at a glance

Sales revenues 650.3 626.3 +3.8%

Incoming orders 912.4 845.3 +7.9%

∆

Orders on hand (June 30) 1,070.6 929.9 +15.1%

H1 2007 H1 2006

in € m

§ Book to bill with 1.4 (1.3) favourable

§ Orders on hand increased by 33% compared to year end 2006

§ Project pipeline strong

§ Q2 sales revenues up 9.2% compared to Q2 2006


20.2% (32.0%)

22.0%(19.0%) 39.7%

(37.7%)

18.1% (11.3%)

38.8%(35.3%)

19.8%(21.9%)

22.4%(18.3%)

19.0%(24.5%)

§ Declining order intake in China only temporary; further orders expected

§ Stabilized order intake in North America (including Mexico)

Incoming orders Sales

Germany Europe excluding Germany North & South America Asia, Africa, Australia

Incoming orders and sales H1 2007 (2006): Well balanced across regions


Gross profit on sales 104.7 106.5 -1.7%

EBITDA before one-time-effects 20.4 20.1 +1.5%

Operating result (EBIT before one-time-effects) 11.4 9.7 +17.5%

Net income 0.0 -3.3 -

∆H1 2007 H1 2006

in € m

§ Gross margin reduced to 16.1% (17.0%). Higher efficiency and effects of service/revamp strategy offset by execution of low margin orders at Paint and Assembly Systems and execution problems in India

§ SG&A costs under control

Operating result up 17.5% in H1 2007


20042005H1 2006

20042005 20042005 2004FY 2006 FY 2005

EBIT 11.5 5.6 35.8 -71.5 Income taxes -3.7 -5.3 -5.6 -4.6Amortization and depreciation 9.0 10.4 19.1 54.2Changes- NWC 3.9 -17.5 8.8 -82.1- Provisions -13.9 -16.8 -20.2 -25.1- Other assets/liabilities -30.1 -28.2 -47.7 -18.5Cash flow from operating activities -23.3 -51.8 -9.8 -147.6Capital expenditures -12.2 -6.0 -18.0 -25.7Interest result -9.9 -10,5 -18.9 -32.8Free cash flow -45.4 -68.3¹ -26.7 -206.1

in € m

Cash flow/free cash flow

§ Strong improvement in cash flow; positive cash flow expected in 2007

§ Change in other assets/liabilities influenced by decrease of restructuring liabilities

H1 2007

1 without settlement of 20 m €


Solid financial structure after concentrationon core business

Equity 245.2 245.7 248.1

Equity ratio 22.9% 23.6% 20.9%

Net financial debt 145.5 96.5 84.9

Net working capital 155.8 154.7 171.5

Cash 58.6 101.5 124.7

06/30/2007 12/31/2006

§ Net financial debt increased, also due to cash-out for restructuring

§ Financial needs higher during the year

§ Unchanged NWC compared to 12/31/2006 despite higher business volume

12/31/2005

in € m


Market development

§ Automotive market remains growth industry and will grow in the coming years by at least 3% p.a.

§ US business seems to stabilize on a low level

§ Paint shops and assembly plants need to be reorganized and modernized, mostly for productivity and flexibility reasons (e.g. energy costs)

§ New car models (number & diversity) drive our demand

§ New projects (mostly greenfield paint and final assembly) in India, China and Eastern Europe will be decided in a volume of above € 1 bn in the next quarters

Forecast


Markets –Capex per unit of major OEM’s stable

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CAPEX/ unit (in €)

1 Until 1999 without Chrysler GroupSource: Osiris Database, Datastream (Thomson), Marketing Systems ProCar 10/2005, Mercer analysis & research

Toyota

FordGeneral Motors

HondaVW Group

Hyundai

BMW

DaimlerChrysler1

§ Stable OEM investments per unit despite ongoing outsourcing trend


Markets – Forecast by growth drivers

Car production volume by region(1.000 units)

1Emerging Regions/OEM: China, Asia, South AmericaSource: Marketing Systems ProCar; Mercer Studies; Own estimates

2003 Production

2009 Production

78% 71%

22%

29%59,200

73,000

Traditional

Emerging1

2003 Production

2009 Production

90% 85%

10%

15%59,200

73,000

Traditional players

New players- China- Korea

2003 2009

(34%) (21%)

66%

79%

134

188

OEM

Suppliers

Automotive investments(global; € bn)

Car production volume by OEMs(1.000 units)

+5.8% CAGR

Emerging markets, new OEMs and suppliers drive our growth

+3.6%CAGR

+3.6%CAGR


Markets – Our own perceptionsFull project pipeline and growing market share

1

10

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2004 2005 2006 2007

Projects inthe market

Dürr Paint and Assembly Systems order intake, annualized

Logarithmic illustration in € bn

Source: Own calculations

10

5

1


Summary: On track

§ 2007: Sales growth between 5 and 10%

§ 2007: Strong earnings improvement driven by

► improved processes► higher margin orders in H2 compared to H1► turnaround at loss-making operations (e.g. Cleaning and Filtration Systems, US-business)

§ Requests for quotation remain strong. The automobile market should see healthy growth in the next years

§ 2008: Operating profit margin goal of 5% (EBIT before one-offs)

§ 2010: Operating profit margin goal well above 5%


Financial calendar

Contact: Dürr AktiengesellschaftGünter DielmannCorporate Communications & Investor RelationsOtto-Dürr-Strasse 870435 StuttgartGermany

Phone: +49 (0)711 136-1785E-mail: [email protected]

11/15/2007 Interim report first nine months of 2007

February 2008 Preliminary figures 2007

03/20/2008 Annual press conference and analyst meeting

05/02/2008 Annual general meeting



Shareholder structure October 01, 2007

incl. about 1% held by Dürr Management


Paint Systems Dürr 40%, Eisenmann 20%, Taikisha 13%, Local Competitors: Scivic, Giffin, Geico, Trinity (Toyota)

Application Technology Dürr 50%, Fanuc 13%, ABB 12%, Eisenmann 6%

Environmental and Energy Systems Dürr 20%Competitors: Eisenmann, Taikisha, John Zink, Megtec, CTP

Factory Assembly Systems Dürr 9%, Siemens 9%, Cinetic, Daifuku, Rotem

Balancing and Diagnostic Systems Dürr 30%, American Hofmann 15%, CEMB 10%, BTI <10%

Cleaning and Filtration Systems Dürr 35%, Valiant 15%, Cinetic 12%, LPW 12%

*Own essentials, average in last 3 years

Competitive situation/market shares* Business units


Schenck Technologie- und Industriepark GmbH1)

Property service provider in Darmstadt:

facility management, logistics,

professional training

§ 105,000 m² property, 134,000 m² rentable space, 53% office space, 47% shop floor, vacancy rate 13%

§ 68% of rentable space is in proprietary possession

§ Proportion of Dürr companies of rental income: 34%

§ 2006: sales revenues € 13.7 m, rental income: € 9.6 m

1) included in Measuring and Process Systems division


FY 2005 FY 2006

NWC in € m 171.5 154.7 155.8

DWC 44.1 40.9 37.4

Order backlog/NWC 4.2 5.2 6.9

∆ NWC without change in prepayments in € m 6.7 -1.3 3.1

H1 2007

NWC: Under control


Outlook

0

5

10

15

20

25

30

35

NorthAmerica

Mercosur WesternEurope

EasternEurope

Asia Others (incl.Iran)

2006

2012+1.0 +0.6

+0.7

+3.0

+6.8

+1.0

in m units

Regional development of light vehicle production 2006 - 2012

Source: Own estimates, CSM, J.D. Power, PwC

1)

1)Including light trucks & SUVs

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EKForum 14112007 1545 DürrAG - durr.com · Equity ratio 22.9% 23.6% 20.9% Net ... 1995 1996 1997...

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