Wacker Neuson Group › fileadmin › user_upload › ...Outlook Overview Wacker Neuson SE, November...

Wacker Neuson Group

November 2018

Agenda

2

Q3/18

Outlook

Overview

Wacker Neuson SE, November 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


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


Our brands and target groups

5

Construction, gardening/landscaping, energy sector etc. Agriculture, horse breeders, tree nurseries etc.


Global footprint

6

Sales by region Core markets: EMENA & NAM, further internationalization ongoing

Europe 74% Americas 23% Asia-Pacific 3%

Revenue split (2017)


5 year comparison

7

[%][€ m]

Revenue and EBIT margin 2013-2017


Agenda

8

Q3/18

Outlook

Overview


Key figures

9

Revenue yoy

+9%

EBIT yoy

+18%

Op. CF

€ -26 m

FCF

€ 9 m

(margin: 9.6%)

9M/18

NWC1 ratio: 38.6%

(+1.1 PP yoy)

DIO2: 152 days

(+2 days yoy)

Equity ratio: 65.6%

(-1.2 PP yoy)

September 30, 2018

(€ 1,241 m)

(9M/17: € 53 m)(9M/17: € 75 m)

Adj. EBIT yoy

+11%

EPS

€ 1.73

(margin: 9.6%)

(9M/17: € 1.01)

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

+10%

EBIT yoy

+3%

Op. CF

€ 10 m

FCF

€ -3 m

(margin: 9.9%)

Q3/18

(€ 416 m)

(Q3/17: € 51 m)(Q3/17: € 61 m)

Adj. EBIT yoy

-4%

EPS

€ 0.39

(margin: 9.9%)

(Q3/17: € 0.41)


316348 339

425379 392

371

455416

6.5%5.1%

4.2%

11.0% 10.6%

7.8%6.2%

12.1%

9.9%

0%

5%

10%

15%

20%

0

100

200

300

400

500

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

Revenue and earnings

10

+9.8%

Q3/18: Revenue continues to grow

Income statement (condensed)

Q3/18: Comments

Revenue +9.8% yoy (adj. for FX effects: +10.4%)

▪ Continued high demand in core markets of Europe and North America

▪ Limited material availability had a negative impact

Gross profit +4.9% yoy (gross profit margin -1.3 PP)

▪ Limited material availability impacted productivity at production plants

▪ Plant closures in the US and Philippines and the associated relocation

of production lines dampened productivity further

EBIT +2.8% yoy (EBIT margin: -0.7 PP)

▪ Operating costs increased by 6.1%; their share of revenue decreased

by 0.6 PP

▪ A 9.1% rise in selling expenses caused by higher business volume and

increased personnel expenses had a negative impact

Earnings per share -4.9% yoy

▪ Financial result below the previous year at € -2.6 m: Negative FX

effects (€ -2.4 m yoy), in particular due to the devaluation of currencies

in several emerging economies, slight increase in interest income

(€ +0.2 m yoy)

▪ Tax rate increased slightly to 29.6% (Q3/17: 28.5%)

Revenue

[€ m]

1 Expenses for one-off effects and restructuring measures in the amount of € 2.6 m

(9M/17: € 6.6 m) were recognized in Q3/17. Adj. EBIT reflects these effects.

EBIT

margin

€ m Q3/18 Q3/17 9M/18 9M/17

Revenue 415.8 378.7 1,240.9 1,142.4

Gross profit 117.4 111.9 350.6 326.3

as a % of revenue 28.2% 29.5% 28.3% 28.6%

Op. costs incl. other income/expenses -76.3 -71.9 -231.3 -225.3

as a % of revenue -18.4% -19.0% -18.6% -19.7%

EBIT 41.1 40.0 119.3 101.0

as a % of revenue 9.9% 10.6% 9.6% 8.8%

Adj. EBIT1 41.1 42.6 119.3 107.6

as a % of revenue 9.9% 11.2% 9.6% 9.4%

Profit for the period 27.1 28.3 121.2 71.0

EPS (in €) 0.39 0.41 1.73 1.01


9M/18: Strong growth in the compact equipment segment

1,240.9

35.2

299.5

906.2

Total 9M/18

Asia-Pacific

Americas

Europe

Business development by region and business segment

11

9M/18: Growth in all regions

Revenue Europe +8.4% yoy (adj. for FX effects: +9.4%)

▪ Strong growth in particular in England (marked growth with excavators

and dumpers) as well as in France, Poland, Austria and Benelux

countries; recovery momentum continued in Southern Europe

▪ Revenue from compact equipment for the agricultural sector +14% on

previous year, new John Deere dealers

Revenue Americas +9.7% yoy (adj. for FX effects: +17.4%)

▪ Strong growth in worksite technology (esp. generators and light towers)

▪ Skid steer loaders proved to be a key product and sales driver for other

compact equipment

▪ Rental chains show high level of investment activity

▪ Downturn in business in South America due to political uncertainties

Revenue Asia-Pacific +5.7% yoy (adj. for FX effects: +12.1%)

▪ Positive development in particular with excavators in China

▪ Production at new plant in Pinghu (near Shanghai) started according to

plan

73%

24%

3%

100%

+8%

+10%

+6%

+9%

share yoy

133.9

-1.6

-3.5

119.3

EBIT1

9M/18: Comments

Revenue [€ m]

1,240.9

251.4

673.8

338.5

Total 9M/18

Services

Compact equipment

Light Equipment 27%

53%

20%

100%

+4%

+12%

+7%

+9%

share yoy

1 EBIT for regions before consolidation.2 Revenue by business segment before cash discounts.

Revenue [€ m]2

1,067 1,093 1,102 1,083 1,103 1,115 1,124 1,171 1,200

68% 69% 67% 65% 67% 69% 66% 65% 66%

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

1,400

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

224206

237 245

195

148

193 188 193

21% 19%22% 23%

18%13%

17% 16% 16%

0%

10%

20%

30%

40%

50%

60%

70%

0

100

200

300

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

Sound balance sheet structure

12

▪ At 16%, gearing1 remains at a conservative level

▪ Net financial debt/EBITDA remains at a low rate

▪ Healthy financing structure provides framework for winning market

shares and driving further profitable growth

1.5 1.4

1.9

0.90.8

0.7

1.2

0.60.8

0.0

0.5

1.0

1.5

2.0

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

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]


32.2

-19.1

33.3

60.6 63.2

-41.4

6.1 9.5

-60

-40

-20

0

20

40

60

80

100

Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

Bottlenecks in supply chain continued to have dampening effect

13

Negative impact on cash flow from operating activities

Net working capital ratio 1 PP above prior-year level

Days inventory outstanding (DIO) slightly higher at 152 days

▪ At € -25.8 m, cash flow from operating activities after nine months is

negative (9M/17: € 74.8 m); causes for this are:

Increased net working capital (€ -100.0 m; 9M/17: € -26.6 m):

• Increased number of unfinished machines due to delivery delays caused

by bottlenecks in the supply chain, stocking up on pre-buy engines, more

conservative inventory strategy for raw materials and supplies

• Increase in trade receivables due to higher business volume and strong

revenue in September

Increased investments in the Group's flexible rental business, expansion of

the dealer network in the US and the resulting rise in financing solutions

▪ Free cash flow1 at € 8.8 m after nine months (9M/17: € 52.7 m)

448 443 462428 439 431

455 459496

181

159171

129

150140

154

130

152

100

150

200

250

300

0

100

200

300

400

500

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

1 Includes one-off proceeds of € 60.0 m from the sale of a real-estate company owned by the Group in Q2/18.

9M/18: Comments

565 569 590 586 568539

584622 641

45%41%

44%

34%38%

34%39%

34%39%

0%

10%

20%

30%

40%

50%

60%

70%

0

100

200

300

400

500

600

700

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

Net working capital

[€ m]

Inventory [€ m]

Net working capital

as a % of revenue

DIO [days]Cash flow from operating

activities [€ m]


60

80

100

120

Wacker Neuson SDAX DAX Peergroup

Share development

14

The share in 20181

Key figures per share

Stable dividend policy (40 – 50% payout ratio)

1 As at Nov. 5, 2018. 2 Peergroup: Atlas Copco, Bauer, Caterpillar, Cramo, Deutz, Haulotte, Manitou, Palfinger, Ramirent, Terex.

%

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 € Q3/18 Q3/17

Earnings per share 0.39 0.41

Share price end of period 22.08 28.07

Book value per share 17.11 15.72

Market capitalization (€ m) 1,548.7 1,968.8(total shares: 70,140,000)

Bank TP (€) Recom. Date

Hauck & Aufhäuser 40.00 Buy Oct 05, 18

Lampe 33.00 Buy Nov 02, 18

Metzler 32.00 Buy May 09, 18

Berenberg 31.00 Buy Sep 17, 18

Warburg 26.10 Hold Sep 13, 18

Kepler Cheuvreux 26.00 Hold Sep 11, 18

Equinet 24.10 Neutral Nov 02, 18

Coverage1 Shareholder structure

-30%

2


Agenda

15

Q3/18

Outlook

Overview


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.


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

(1.7 tons) started in January, start of production of larger models (5-7 tons)

in Q4/18

▪ OEM 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

▪ Building on local/regional presence Demand for repair and maintenance

of infrastructure is growing, especially in megacities


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


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, November 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 2018

20

Revenue and earnings guidance for 2018 confirmed

Business index for construction has recently improved again Business index for the ag sector continues its downward trend

Comments

▪ Business index (CECE) for the construction industry picks up again in

October after four months in decline

▪ Expectations in the agricultural sector have cooled significantly

according to CEMA

▪ Order intake for compact equipment remains at a high level

▪ Revenue and earnings guidance for full-year 2018 confirmed; net

working capital as a percentage of revenues expected to be slightly

higher than in the previous year

▪ Continued risk of delayed deliveries due to bottlenecks in the supply

chain

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, October 2018. Source: CEMA, October 2018.

+8 – 11%Revenue [€ m] EBIT

margin

2012 2013 2014 2015 2016 2017 2018


Agenda

21

Appendix


22

“Strategy 2022” and mid-term targets

“Strategy 2022” Mid-term targets 2022


Progress with “Strategy 2022”

23

ACCELERATION

EXCELLENCE

CUSTOMER CENTRICITY

FOCUS

▪ Expansion of dealer network in North America and China

▪ 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 value chain

▪ Integration of European logistics function into the European

light equipment production plant

▪ Closure of US logistics company and transfer of its logistics

function to the US sales company in preparation for Q1/19

▪ Reorganization of procurement

▪ 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)

Integration of light equipment production from Norton Shores

(Michigan, USA) into plant Menomonee Falls (Wisconsin, USA)

▪ Processes to avoid old stock have been installed

▪ Roll-out of global Used Portal is underway

▪ Wacker Neuson is a founding partner of the Construction Equipment

Forum, which aims to connect companies in the global value chain

▪ Digitalization: New telematics solution, digital maintenance and repair

services

▪ Sales partnership with John Deere for EMENA & CIS1 (agricultural

machines only)

▪ OEM cooperation with John Deere covering mini and compact

excavators for Asia-Pacific

▪ Reduction of vertical integration in production sites

▪ Closure of plant Manila (Philippines) and Norton Shores (USA)

Wacker Neuson SE, November 20181 Commonwealth of Independent States.

24

Source: Off-Highway Research, August 2017.

▪ Most major equipment markets are expected to see growth in the

next years

▪ Europe and Americas main growth drivers

Europe: strong business in the construction and agricultural

sector

North America: skid steer loader as door opener for 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


Europe India Japan North America RestChina

Milk price development in Germany

Source: ife Institut für Ernährungswirtschaft, Kiel, October 2018.

Source: German Farmer’s association, September 2018.

Price [Cent / kg milk]

[Units]

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


26Wacker Neuson SE, November 2018

Challenges: New emission regulations for diesel engines

Engine emissions regulations – lack of harmonization driving costs and consuming resources

27

EZ17e


Leadership in alternative drive technologies

DW15e

DT10e

Financial calendar and contact

28

November 8, 2018 Publication of nine-month report 2018

November 12, 2018 Roadshow, Frankfurt

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

January 10/11, 2019 ODDO BHF Forum, Lyon

January 22, 2019 Kepler Cheuvreux German Corporate Conference, Frankfurt

March 14, 2019 Publication of the 2018 Annual Report

Contact

Wacker Neuson SE

IR Contact: +49 - (0)89 - 354 02 - 427

[email protected]

www.wackerneusongroup.com

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.


Date post:	29-May-2020
Category:	Documents
Upload:	others
View:	13 times
Download:	0 times

Wacker Neuson Group › fileadmin › user_upload › ...Outlook Overview Wacker Neuson SE, November...

Documents