Analysts conference Frankfurt March 27, 2018

Transcription

1 Analysts conference Frankfurt March 27, 2018

2 ElringKlinger In a nutshell Founded in 1879 Worldwide 45 production sites Sales of EUR 1,664 million in Family as a strong anchor shareholder +11% annual growth in sales since % EBIT margin pre PPA in 9,611 employees as of Dec 31, Headquartered in Dettingen, close to Stuttgart 2

3 Latest news Dedicated board role for e-mobility, Reiner Drews new COO Management Board as from April 1, 2018 Dr. Stefan Wolf CEO Thomas Jessulat CFO Theo Becker CTO Reiner Drews, COO Born in 1969 Toolmaker, graduate engineer in Production Technology; MBA With ElringKlinger since September 2006 Before that, he held management positions at different companies of the metal industry ElringKlinger will introduce dedicated management board role for e-mobility as of April 1, 2018, to be headed by today s COO Theo Becker Reiner Drews, currently responsible for Cylinder-head Gaskets and Specialty Gasket business divisions, will be appointed COOas of April 1,

4 FY Financial highlights +8% Strong organic growth of 8.1% across all global regions 8.5% EUR 0.50 EBIT (pre PPA) slightly up to EUR (140.4) million Optimization of Swiss site on track, headwinds by SAP implementation Capex ratio improved by disciplined approach to 9.3 (11.0)%, net working capital up due to inventories, operating free cash flow below prior year s level at EUR -67 (-4) million Stable dividend proposal of EUR 0.50 to Annual General Meeting, resulting in a payout ratio of 45 (40)% Outlook for 2018: sales increase +2 to 4 pp above global market growth, EBIT margin (pre PPA) at ~9% 4

5 Markets Megatrends trigger technological transformation process Urbanization Safety systems Scarcity of resources Globalization Technological progress Global megatrends transform the automotive industry Autonomous driving Efficient propulsion Connectivity Climate change Shared mobility 5

6 Markets Automotive growth driven by new drive systems from 2021 on Global combustion engines production Global EV production CAGR +1% CAGR -1% CAGR +24% Source: Morgan Stanley, ElringKlinger Research 6

7 Markets Main driver: Stricter emissions legislation for vehicles Values adjusted to the European NEDC* test cycle USA g CO 2 /km average fleet emissions EU g CO 2 /km average fleet emissions EU 2030 ** 30 % reduction of average fleet emissions (base year: 2021) India g CO 2 /km average fleet emissions China g CO 2 /km average fleet emissions Japan g CO 2 /km average fleet emissions * New European Driving Cycle ** Proposal submitted by the EU commission in November Source: ICCT, ElringKlinger research 7

8 ElringKlinger ElringKlinger s sales structure of products will change Sales split (actual and ambition) in % of total sales Actual Ambition 2030 Non-Automotive products Aftermarket Structural 5% lightweight and 9% e-mobility 4% products Aftermarket Non-Automotive products ~10% ~10% 82% Functional components Structural lightweight and e-mobility products >25% <55% Functional components 8

9 ElringKlinger Prepared to play an active role in the transformation Sales split (ambition) in % of total sales Ambition 2030 Structural lightweighting Less weight and higher degree of functionality Unique production technology E-Mobility Battery, fuel cell, and drivetrain system Track record of successful R&D work and proven competence, e.g. as series producer of e-mobility components Aftermarket Structural lightweight and e-mobility products Non-Automotive products ~10% >25% ~10% <55% Functional components Functional components Continuous high market share Benefitting from global footprint and sound process know-how 9

10 Three strategic areas of ElringKlinger: Lightweighting Lightweight products help to meet CO 2 regulations Technology Markets ElringKlinger -100 kg CO2 km kg weight reduction corresponds to 0.4l/100 km less fuel consumption Less weight helps to lower fuel consumption and thus, to reduce CO 2 emissions Less weight means a higher range of driving for full EVs Advanced materials enable new application areas Improving driving dynamics Technology independent of the drive train Lightweighting trend enforced by emission regulations, imposing penalties on those OEMs which do not meet the reference values Products like the cross-car beam reduce the weight of a car up to 40% Focus: in-house tooling technology enabling the production of complex geometries Different products: Organo sheets (e.g. door module carrier) Hydroform-hybrid (e.g. cross-car beams, front-end carrier, front-end adapter) 10

11 Three strategic areas of ElringKlinger: E-Mobility Battery JV with CITC targets China and global markets Technology Markets ElringKlinger 0 gco 2 30 min Zero emission possible Batteries can be recharged to a 80% level within 30 minutes E-mobility as main contributor to Automotive growth from 2021 on Emission reduction targets as key driver of the industry National quota regulations for electric vehicles in discussion Cooperation with Chinese battery manufacturer CITC/CALB Signed in Targeting global markets CALB in charge of the cell, ElringKlinger responsible for design, cell contacts and housing + 4,000 Lower maintenance costs than a combustion engine car Public recharging stations in Germany with upward trend State-funded incentive programs support the forward movement Expanding recharging infrastructure Established e-mobility supplier as series producer of cell contacting systems since 2011 Enhancing driving comfort by lowest acoustic emission 11

12 Three strategic areas of ElringKlinger: E-Mobility Fuel cell market with substantial growth potential Technology Markets ElringKlinger >500 km 0 gco 2 + Large range of driving Zero emission possible for both power generation and fuel cell in use Multiple applications (e.g. cars, LCVs, trucks, buses, trains, forklifts) China as main market opportunity subsidizing each bus driven by a fuel cell system Market entry in Europe supported by economies of scale in the mid-term perspective PEM fuel cell stack developed: 300 cells generate 63 kwel Broad range of products: Full PEMFC stack Components: Metallic bipolar plates, end and media modules, casings R&D and testing Patents for several designs of bipolar plates and media modules 2-5 min Easy and fast to refuel Increasing number of H 2 fueling stations 12

13 Three strategic areas of ElringKlinger: E-Mobility Stake in hofer complementing the e-mobility path Technology Markets ElringKlinger EDU 4 Combines power management electronics, transmission and electric engine Production-ready system enables acceleration from 0 to 100 km/h in 4 seconds Smart control of power flow via intelligent software technology Intelligent thermal managementimproves cooling performance Strong growth of PHEV, BEV and FCEV forecast, particularly form 2021 onward Differentiated market: mass market, premium market as well as luxury segment Acquisition of stake in hofer 28.9% of hofer AG 53% of hofer powertrain products Broad range of products (e.g. system integration, control soft-ware, power management electronics, thermal management, safety concepts) By offering sophisticated high-tech solutions, addressing high-end sports and luxury car segment + To be flexibly integrated into PHEV, BEV, and FCEV 13

14 Three strategic areas of ElringKlinger: Functional Components Continuous growth prospects in a transforming world Cylinder-head Gaskets Fully dependent on combustion and hybrid world High global market share of 40-50% Strong remaining business in those regions and for those applications which will not transform too fast Profound material and process know-how that is also used for new products (e.g. for bipolar plates or cell contacting systems) 14

15 Three strategic areas of ElringKlinger: Functional Components Continuous growth prospects in a transforming world Specialty Gaskets, Shielding Technology & Plastic Modules Partly dependent on combustion and hybrid world Specialty Gaskets Special coating know-how and sealing competence from -40 C to 1,100 C Products like gaskets for cooling systems still needed in full EV Shielding Technology Strong demand for thermal, acoustic and aerodynamic applications Substantial opportunities for EMC (electromagnetic compatibility) shielding Plastic Modules with a number of applications for e-mobility world, e.g.: housing modules for battery systems Casings, end and media modules for PEMFC Cover (incl. sealing) for EDUs 15

16 ElringKlinger Broader scope of ElringKlinger content by wide product range Content per car in EUR Present Future EUR Content per car ,000 EUR ( EUR incl. cross-car beam) 16

17 Financials

18 FY : Orders and sales FX headwinds on orders and sales Order intake in EUR million Order backlog in EUR million Sales bridge in EUR million/ in % +2.2%* 1, % 1,664 1, %** 1,001 1, % % % FX M&A Organic *FX-adjusted: +6.6% **FX-adjusted: +12.4% Differences due to rounding 18

19 FY : Orders and sales Ongoing internationalization and diversified customer structure Sales by region in % of total sales Sales by customer group in % of total sales +6.9% 608 5% 17% 10% 30% 33% 35% 2007 South America/ Rest of World 1,127 6% 16% 18% 30% 2012 Asia- Pacific 1,557 4% 19% 19% 31% 27% NAFTA 1,664 5% 19% 19% 31% 26% Rest of Europe Germany Other 38% Aftermarket 9% Tier 1 14% American OEMs 19% French OEMs 4% German OEMs 16% 19

20 FY : Income statement Positive signs of recovery partly set off EBITDA in EUR million EBIT bridge vs. in EUR million +3.1% % Optimization Swiss site Operating leverage High demand NAFTA 20

21 FY : Income statement Important factors on earnings level Aluminum Nantiat (F) Part 1 Sevelen (CH) 20 Part 2 18 Kecskemét (HU) High-grade steel C-steel Polyamides Reus (E) 2015 Optimization of Swiss site on track Main part of migration finalized Next step: migration of second part to new factory in Hungary completion scheduled for end of 2018 Continuing optimization of cost structure at Swiss site to be finished by end of 2019 Annual optimization impact of EUR 10 million p.a. planned for 2018 and 2019 Commodity prices further increased Aluminum: cut of supply by China C-Steel: EU anti-dumping measures resulting in shortage of supply Polyamide: prices triggered by high global demand for lightweighting products 21

22 FY : Income statement Strong impact on financial result by FX headwinds EBT in EUR million Net income (attr. to shareh.) in EUR mn Earnings per share in EUR Financial result % Financial result % %

23 FY Stable dividend proposed Dividend payment in EUR Payout ratio in % of Group EPS Equity in EUR million Equity ratio in % of total assets Employees headcount as of Dec % 44.0% +0.4% +11.9% * ,591 9, % 60% Abroad 41% 40% Germany * Joint proposal of Supervisory Board and Management Board to the AGM 23

24 FY : Balance sheet Net working capital mainly driven by inventories Net Working Capital (NWC) in EUR million NWC ratio in % of total sales Inventories bridge in EUR million 33.7% 33.3% +12.5% % +5.5% % thereof: tools Inventories Trade receivables Trade payables FX M&A Sales growth Tools (FXadj.) Aftermarket Others 24

25 FY : Balance sheet Improved maturity structure by issued Schuldscheindarlehen Net financial debt in EUR million Maturity structure of financial debt in EUR million +21.5% Current financial debt Non-current financial debt Cash and cash equivalents -45 Cash and cash equivalent Current (up to 1 year) Non-current (between 1 and 5 years) Non-current (>5 years) 25

26 FY : Cash flow statement Disciplined capex, increased inventories and SSD affected cash flow Capex (in PPE) in EUR million Capex (in PPE) ratio in % of total sales Cash flow bridge in EUR million 11.0% 9.3% +15.5% % Capex (in PPE) Cash Operating cash flow Financing activities Investments FX/ Others Cash SSD = Schuldscheindarlehen 26

27 FY : Segments Strong margin increase in Engineered Plastics Sales in EUR million EBIT margin in % Original Equipment (OE) +6.8% Aftermarket +6.4% 1,294 1, Engineered Plastics Services & Industrial Parks +9.2% %

28 Financial agenda Improving execution Focus on improving operational excellence Improved approach to the management of inventories Expansion of trade payables Continuing disciplined capex approach Focus on improved operating free cash flow Balancing and managing the Group throughout the transformation process of the industry 28

29 Outlook

30 Expectations for 2018 Global markets expected to grow further Light vehicle production growth in % vs. +3% Europe Stable situation in Germany Growth in Southern Europe +1% NAFTA Rising truck market Subdued demand for LVs +3% Asia-Pacific High demand for SUVs in China Modest growth in Japan +10% South America Low basis Turnaround achieved +2-3% Global Solid growth prospects Supported by Europe and China Source: OICA, HSBC, JP Morgan, ElringKlinger research 30

31 Expectations for 2018 Numerous factors intensify general environment of uncertainty 2018 Mid-term Ongoing discussion on diesel subject and court decisionson city bans of diesel cars Geopolitical tensions and higher national interests as risk factors Commodity price development Costs for shaping production facilities to Group standard Costs of the transformation process of the industry Optimized cost structure esp. at highly utilized locations Increasing sales Continuous improvement of production processes on a global basis Optimized purchasing and logistic processes within the Group Benefitting from early preparationsfor future Automotive technologies 31

32 Group Outlook Mid-term 2 4 percentage points above global market growth Sales Above global market growth ~ 9% EBIT margin pre PPA Successive improvement 32

33 Group Further indicators for FY 2018 and mid-term perspective FY actual FY 2018 expected Mid-term expected ROCE in % 8.2% Slightimprovement Increase based on earnings and NWC improvements Capex (in PPE) in % of total sales 9.3% 9-10% Continuation at comparable level Net working capital (NWC) in % of total sales 33.3% Below prior-year level Slight step-by-step improvement Operating FCF in EURmillion Slight improvement Continuous improvement Equity ratio in % of total assets % Continuation at comparable level 33

34 Analysts conference Frankfurt March 27, 2018