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Cem Peksaglam (CEO) – Günther C. Binder (CFO)
November 12, 2015
Results 9M / Q3 2015
Agenda
2
Outlook
Overview 9M/15
and Q3/15
Financials 9M/15
and Q3/15
9M/15 and Q3 at a glance At a glance
After a strong revenue increase in H1/2015, Q3 business was hit by several negative market developments, esp. in September
The Group lowered its revenue and profit forecast on Oct . 14, 2015
Reinforcing measures to improve working capital and bottom line
Q3/15: Market squeeze in third quarter
Revenue: -2% yoy to EUR 311 m (adjusted for currency effects: -4%); Q3/15 vs. Q2/15: -19%
EBITDA: -42% yoy to EUR 32 m; margin: 10.3% (Q3/14: 17.4%)
EBIT: -61% yoy to EUR 16 m; margin: 5.0% (Q3/14: 12.7%)
EPS: -68% yoy to EUR 0.12 (Q3/14: EUR 0.38)
9M/15: New record revenue of over EUR 1 billion for the period, decrease in profit
Revenue: +9% yoy to EUR 1,1017 m (adjusted for currency effects: +4%)
EBITDA: -12% yoy to EUR 130 Mio. Euro; margin: 12.8% (9M/14: 15.8%)
EBIT: -22% yoy to EUR 81 Mio. Euro; margin: 8.0% (9M/14: 11.1%)
EPS: -21% yoy to EUR 0.77 (9M/14: EUR 0.98)
3
Cumulated weak demand in many industries and markets result in lower performance
(Revenue in € million; EBIT Margin as a %)
9M/15: Revenue of > EUR 1 bn, profitability decreased
4
Revenue and EBIT Margin 9M (2011–2015)
+9%
+9%
+6%
+12%
+40%
Revenue
Strong revenue increase over the past years, weak in Q3/15.
Drop in EBIT margin due to simultaneous weakening in many target markets.
9M/15: Revenue growth by regions and divisons1
689,3 730,7
9M/2014 9M/2015
5
Europe2
+6% (+5%)
309,3 320,4
9M/2014 9M/2015
Light equipment3
+4% (-5%)
220,2254,1
9M/2014 9M/2015
Americas2
+15% (-0%)
441,4506,6
9M/2014 9M/2015
Compact equipment3
+15% (+13%)
26,6
32,6
9M/2014 9M/2015
Asia-Pacific2
+23% (+12%)
198,5 207,1
9M/2014 9M/2015
Services3
+4% (+0%)
1 In brackets: adjusted for currency effects; 2 Nominal, after cash discounts; 3 Nominal, before cash discounts
(€ million)
(€ million)
(€ million)
(€ million)
(€ million)
(€ million)
Q3/15: Difficult quarter1
230,1 220,4
Q3/14 Q3/15
6
Europe2
-4% (-4%)
105,9 107,2
Q3/14 Q3/15
Light equipment3
+1% (-5%)
76,8 79,2
Q3/14 Q3/15
Americas2
+3% (-7%)
144,2 136,4
Q3/14 Q3/15
Compact equipment3
-5% (-6%)
9,3
11,4
Q3/14 Q3/15
Asia-Pacific2
+22% (+20%)
70,7 73,7
Q3/14 Q3/15
Services3
+4% (+1%)
1 In brackets: adjusted for currency effects; 2 Nominal, after cash discounts; 3 Nominal, before cash discounts
(€ million)
(€ million)
(€ million)
(€ million)
(€ million)
(€ million)
Q3/15: Sudden and drastic drop of revenue in September
0
20
40
60
80
100
120
July/14 July/15 August/14 August/15 September/14 September/15 Q3/14 Q3/15
7
Revenues development by month; percentage change in revenues
(in %; 2014 = 100%)
+5% +7% -13% -2%
September revenue normally the strongest month in Q3,
this year below July and previous year.
Revenue comparison over 3 years
586620
706
276316 311
862936
1017
0
200
400
600
800
1000
1200
H1/13 H1/14 H1/15 Q3/13 Q3/14 Q3/15 9M/13 9M/14 9M/15
8
3 years revenues development in H1, Q3 and 9M
(€ million)
+21%
+13%
Double digit revenue growth over last 3 year-periods
+18%
What happened in Q3/15?
Market conditions worsened in Q3/15 significantly
Agriculture business decreased sharply by 28%, crises deepened significantly (H1/15: +17%; 9M/15: +1%)
Ongoing market crises in emerging countries e.g. RUS, BRA, CHL, ZAF
Lower demand in countries dependent on commodities and energy prices e.g. CAN, USA, AUS
Business in mature markets developed weaker than expected e.g. FRA, AUS
Less favorable product and regional mix
Further impacts on profitability, especially in comparison to Q3/14
Production capacities have been adjusted to meet future demand, e.g. increase of headcounts (thereof 2/3 in factories)
Margins and volumes of US export products under pressure due to stronger US dollar
Negative FX effects on EBIT in emerging markets, especially in Latin America
Lower FX gains compared to 2014 gap of 8 m € earnings contribution vs. prev. year (net of total other income/other expenses)
9
A sum of unfavorable developments let Wacker Neuson revenues and earnings decrease in Q3/15 compared to prev. year.
Low food and commodity prices hit our business
10
Current decrease in Crude Oil- and Food price index
Source: FAO and World bank
Low oil prices make exploration economically impossible
11
Price for OPEC crude oil – currently approx. 47$ Fracking makes profit above 50$ per barrel
Source: InfoMine
Price Nov. 2014: 82$
Low oil & gas prices hit our business
12
23%
77%
FY 2014
Oil & Gas Others
Oil and Gas: Wacker Neuson North America exposure 2014/2015e
Oil & Gas industry remains difficult
(% of revenue)
12%
88%
FY 2015e
Oil & Gas Others
Worldwide agricultural machinery market significantly decreasing
13
World market of agricultural machineries and tractors
Source: VDMA/Newspaper Eilbote; July 2015
Rest of world
Latin-/Central America
North America (NAFTA)
Rest of Asia
Japan
India
China
Turkey
Rest of Europe
European Union
Revenue in Euro bn per region
9M and Q3/15: Comparison of peer group construction divisions
Company Change in Profit 9M Change in Profit Q3
Wacker Neuson EBIT: -22% EBIT: -61%
Peer 1 Construction division Op. profit: +5% Op. profit: +27%
Peer 2 (Constr./Agri.) Not disclosing Not disclosing
Peer 3 Construction division Op. Income: +11% Op. Income: -11%
Peer 4 Access Equipment division1 Op. Income: -19% Op. Income: -56%
Peer 5 Construction division2 EBIT: -60% EBIT: -58%
Peer 6 Construction division2 Profit: -21% Profit: -23%
Peer 7 Construction division Op. Profit: >100% Op. Profit: >100%
Peer 8 Construction division Op. Profit: -8% Op. Profit: -22%
Peer 9 Construction division2 Ordinary Income: Loss Ordinary Income: Loss
Peer 10 Construction division Op. Income: Loss Op. Income: +68%
Peer 11 Construction division Op. Profit: +3% Op. profit: -5%
14
-30%
-13%
-13%
-15%
-15%
-7%
-8%
-17%
-6%
-8%
4%
-2%
-30% -10%
Revenue and Profit (Change vs. 9M/14 and Q3/14)
1 Noncalendar fiscal year, figures show 2015 and Q4; 2 Noncalendar fiscal year, figures show H1 and Q2
-24%
-18%
-13%
-13%
-9%
-6%
-6%
-3%
-1%
2%
6%
9%
-25% -15% -5% 5%
Change revenue 9M/15 vs. 9M/14 Change revenue Q3/15 vs. Q3/14
Agenda
15
Outlook
Overview 9M/15
and Q3/15
Financials 9M/15
and Q3/15
9M/15: Revenue increase
16
9M/15 As % of
revenue
9M/14 As % of
revenueChange in %
Revenue 1,017.4 100.0 936.2 100.0 8.7
Gross profit 293.9 28.9 282.4 30.2 4.1
Sales and service expenses 138.7 13.6 125.1 13.4 10.9
Research and development expenses 25.3 2.5 21.1 2.3 19.9
General administrative expenses 54.3 5.3 46.6 5.0 16.5
Operating expenses1 218.3 21.5 192.8 20.6 13.2
EBITDA 130.3 12.8 148.1 15.8 -12.0
EBIT 81.2 8.0 103.5 11.1 -21.5
Net profit 53.7 5.3 69.0 7.4 -22.2
Net profit per share in € 0.77 0.98
Number of employees 4,696 4,271 10.0
Income statement (extract) and number of employees
(€ million)
1 without other income/expenses
9M/15: Development of profit per region
17
EBIT-change by region 9M/15 vs. 9M/14
(€ million)
-10
10
30
50
70
90
110
EBIT 9M/14 Europe Americas Asia-Pacific Consolidation EBIT 9M/15
9M/15 vs. 9M/14 Europe Americas Asia-Pacific Total
Revenue +6% +15% +22% +9%
EBIT -11% -55% +168% -22%
EBIT Margin (9M/14)1 7.5% (9.1%) 1.1% (3.0%) 3.0% (1.9%) 8.0% (11.1%)
103.5 -11.4
-9.3+1.3 -2.9
81.2
1 EBIT Margin of regions on total external sales
Comparison of 9M/15 EBIT vs. previous year
18
EBIT-Change 9M/15 vs. 9M/14
(€ million)
0
20
40
60
80
100
120
EBIT 9M/14 Revenue volume effect Revenue margin effect S,G&A Other EBIT 9M/15
103.5
24.5 -13.1
-25.5
-8.281.2
1
1 Other income & expense
Product and regional mix, sharp decline in several markets in Q3/15 (unexpected)
Q3/15: Revenue increase
19
Q3/15 As % of
revenue
Q3/14 As % of
revenueChange in %
Revenue 311.0 100.0 316.2 100.0 -1.6
Gross profit 86.3 27.7 95.8 30.3 -9.9
Sales and service expenses 44.8 14.4 41.8 13.2 7.2
Research and development expenses 8.0 2.6 7.3 2.3 9.6
General administrative expenses 19.1 6.1 15.9 5.0 20.1
Operating expenses1 71.8 23.1 65.0 20.6 10.5
EBITDA 32.1 10.3 55.1 17.4 -41.7
EBIT 15.5 5.0 40.1 12.7 -61.3
Net profit 8.5 2.7 26.5 8.4 -67.9
Net profit per share in € 0.12 0.38
Number of employees 4,696 4,271 10.0
Income statement (extract) and number of employees
(€ million)
1 without other income/expenses
Q3/15: Development of profit per region
20
EBIT-change by region Q3/15 vs. Q3/14
(€ million)
0
5
10
15
20
25
30
35
40
45
EBIT Q3/14 Europe Americas Asia-Pacific Consolidation EBIT Q3/15
Q3/15 vs. Q3/14 Europe Americas Asia-Pacific Total
Revenue -4% +3% +23% -2%
EBIT -48% -161% +172% -61%
EBIT Margin (Q3/14)1 5.7% (10.7%) -2.1% (3.7%) 2.2% (1.9%) 5.0% (12.7%)
40.1 -19.6
-11.4
+0.5
+6.2 15.5
1 EBIT Margin of regions on total external sales
Comparison of Q3/15 EBIT vs. previous year
21
EBIT-Change Q3/15 vs. Q3/14
(€ million)
0
5
10
15
20
25
30
35
40
45
EBIT Q3/14 Revenue volume effect Revenue margin effect S,G&A Other EBIT Q3/15
40.1 -1.6-7.8
-6.8
-8.3
15.5
1 Other income & expense
1
Based on strong EBIT in Q3/14, decrease in EBIT Q3/15 was significant (e.g. crisis in several markets, unfavorable product and regional mix)
EBIT comparison over 3 years
40
63 66
27
40
16
67
104
81
0
20
40
60
80
100
120
H1/13 H1/14 H1/15 Q3/13 Q3/14 Q3/15 9M/13 9M/14 9M/15
22
3 years EBIT development in H1, Q3 and 9M
(€ million)
+63%
-42%
Double digit revenue growth over last 3 year-periods
+21%
Cost structure
23
Operating expenses: 23% of group revenue
257
329
276297 292
328316
348
324
382
311
26,0% 21,1% 21,5% 21,6% 22,2%
19,2%20,6% 20,1%
21,8%19,8%
23,1%
15,9%14,2% 13,9% 13,7% 14,4%
12,6% 13,2% 13,1% 13,9%12,7%
14,4%
2,8% 2,1% 2,4% 1,7% 2,4% 2,1% 2,3% 2,2% 2,5% 2,4% 2,6%
7,3%
4,8% 5,2% 6,1% 5,4% 4,5% 5,0% 4,9% 5,4% 4,6%6,1%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
0
50
100
150
200
250
300
350
400
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15
Revenue Sales expenses R&D costs General and administrative expenses Sales expenses, R&D costs &General and administrative expenses
(€ million; as % of revenue)
1 before capitalized expenses; 9M/15 incl. capitalized expenses 3.3%
1
9M/13: 22.7% 9M/15: 21.5%9M/14: 20.6%
9M/15: Working capital development
24
243,7350,5 349,4
411,2513,8
172,6
153,5 180,8
200,5
186,8
-66,2 -63,6 -63,6 -88,6 -91,0
Sept. 30, 2011 Sept. 30, 2012 Sept. 30, 2013 Sept. 30, 2014 Sept. 30, 2015
Inventories Trade receivables Trade payables
Working Capital ratio (3M annualized revenue)
35.2% 43.3% 42.2% 41.3% 49.0%
Measures for reducing Working Capital will be noticeable in Q4/15.
(€ million)
-7%
WC: +17%
609.6
523.0
+2%
+25%
466.5440.4
350.1
Working capital 9M/11 – 9M/15
9M/15: Investments and cash flow development
4,2
-28,4
9M/14 9M/1544,6
49,1
9M/14 9M/15
-72,4-81,2
9M/14 9M/15
(€ million)
76,6
52,8
9M/14 9M/15
(€ million) (€ million)(€ million)
Cash flow from
investment activitiesDepreciation
Cash flow from
operating activitiesFree cash flow
Positive free cash flow of 14.8 million € in Q3/15 (Q3/14: 3,2 million €).
Measures to reduce inventories already implemented.
+12%
+10%
25
-31%
71
195 214 199241
871917 924
9901.046
8%
21%23%
20%
23%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
200
400
600
800
1.000
9M/11 9M/12 9M/13 9M/14 9M/15
Net financial debt Equity before minority interests Gearing as a %
9M/15: Gearing and equity
26
High equity ratio of 66%, increase of net debt by 21% due to WC increase
(€ million)
Equity, net debt and gearing 9M/11 – 9M/15
+21%
Share price development
27
in € 2011 2012 2013 2014 9M/14 9M/15
Earnings per share 1.22 0.77 0.87 1.30 0.98 0.77
Dividend payment 0.50 0.30 0.40 0.50 –
End of period 9.55 10.35 11.49 16.96 15.15 12.96
High 13.49 13.45 12.75 18.00 18.00 24.60
Low 8.35 9.06 9.24 11.49 11.73 12.60
Market capitalization (in € m) 669.8 725.9 805.6 1,189.2 1,062.6 909.0
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)
1 Manitou, Haulotte, Palfinger, Caterpillar, Terex, Ramirent, Cramo, Atlas Copco, Bauer, Deutz
1
Share price performance since Jan. 1, 2015 and peak on April 27, 2015
Key figures share
Agenda
28
Outlook
Overview Q3/15
and 9M/15
Financials Q3/15
and 9M/15
0
5
10
15
20
25
30
0,0
200,0
400,0
600,0
800,0
1.000,0
1.200,0
1.400,0
1.600,0
2014 2015e
(Revenue in € billion)
Revenue and Margins 2014–2015e
1.28
+5-9%
EBIT margin
10.6%
1.35–1.40
EBIT margin
7-8%
1 Previously revenue increase by 9% to 13% (1.40 – 1.45 bn €);
EBIT margin between 9.5% and 10.5%.
Forecast 2015 (revised on Oct. 14, 20151)
29
Europe
North America
Latin America
South Africa and Sub Sahara
Asia
Australia
Agriculture
Construction
Oil & Gas
Other channels
2
Wacker Neuson Group revenue trend 2016
Extreme volatility, low visibility
2 Strong increase, but from a low basis
Reinforcing measures to improve bottom line
Continued cost control, process optimization, leveraging synergies
Savings in procurement (supported by external consultancy)
Ongoing cost awareness throughout the organization, identification of further saving potentials
Ongoing restructuring measures in selective affiliates
Only selective hiring, where necessary (case-by-case decision)
Using flexibility in staffing of factories (temporary workers), where applicable
Focus on reduction of inventories
Continued penetration of core markets, especially via cross-selling and focus on diversification
Continued internationalization, long-term market penetration of emerging markets with localized products
New technologies and innovations (e.g. electric drivers, dual power, health and comfort protection)
Opportunities for mergers and acquisitions growing
Our actions to current market situation
30
Long-term goals remain unchanged and will – fostered by our strategies – contribute further growth to our Group.
Group plans to reach EUR 2 bn revenue midterm
The Group plans to increase revenue and profitability.
31
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
ir@wackerneuson.com
November 12, 2015 Publication of nine-month report 2015
November 23 – 25, 2015 German Equity Forum, Frankfurt
March 15, 2016 Publication of financial results 2015; Press Conference, Munich; Analysts' Conference Call
April, 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
32
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.
DisclaimerCautionary note regarding forward-looking statements
33
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