Dürr AG Preliminary Figures 2012 (Conference Call)
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This document provides an overview, financial results, and outlook from a conference call by Dürr Aktiengesellschaft. Key highlights include: - 2012 financial results exceeded both budget and consensus across all major metrics like orders, sales, EBIT, net income, and earnings per share. - Fourth quarter saw strong cash generation with increases in incoming orders, sales revenues, EBIT, net income, and free cash flow compared to the same quarter in 2011. - Full year 2012 orders were down 3% due to declines in China and the Americas but increased in Europe, Germany, and Asia excluding China. Regional order intake was healthy split across markets.
Dürr AG Preliminary Figures 2012 (Conference Call)
- 1. WELCOME DÜRR AKTIENGESELLSCHAFT CONFERENCE CALL PRELIMINARY FIGURES FISCAL YEAR 2012 Ralf W. Dieter, CEO Ralph Heuwing, CFO Bietigheim-Bissingen, February 19, 2013 www.durr.com
- 2. DISCLAIMER This 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 and product development. Such statements should be carefully considered, and it should be understood that many factors might 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. © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 2
- 3. AGENDA 1. Overview 2. Financials 3. Strategy 4. Outlook and summary © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 3
- 4. 1. OVERVIEW All figures above budget and consensus 2011 2012 Incoming orders in € m 2,684.9 2,596.8 -3.3% Orders on hand (December 31) in € m 2,142.7 2,316.8 8.1% Sales revenues in € m 1,922.0 2,399.8 24.9% EBIT in € m 106.5 176.9 66.1% Net income in € m 64.3 111.4 73.3% Earnings per share 3.58 6.20 73.2% Dividend per share 1.20 2.251) 87.5% Cash flow from operating activities in € m 127.9 117.6 -8.1% Free cash flow in € m 91.8 65.9 -28.2% Earnings at record level, EBIT margin reached 7.4% 1) proposal annual general meeting © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 4
- 5. 1. OVERVIEW Q4 with strong cash generation in € m Q4 2011 Q4 2012 Incoming orders 618.4 642.5 3.9% Sales revenues 614.7 642.3 4.5% EBIT 43.0 58.0 34.9% Net income 29.7 40.1 35.0% Cash flow from operating activities 99.7 136.0 36.4% Free cash flow 96.5 125.1 29.6% Book to bill at 1 EBIT margin in Q4 at 9.0% © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 5
- 6. 1. OVERVIEW Q4 order intake above Q3 2012 and Q4 2011 (+17% / +4%) in € m 1,000 866 900 29 800 725 679 35 643 189 618 643 700 28 35 35 Clean Technology 542 557 17 550 Systems 600 21 175 26 182 160 16 159 149 125 500 362 374 364 165 141 Measuring and 338 144 137 166 150 Process Systems 400 13 22 17 116 18 155 97 104 300 101 100 127 80 152 Application 69 466 Technology 200 78 83 379 65 294 336 325 333 275 289 244 100 162 179 169 130 Paint and 0 Assembly Systems Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 6
- 7. 1. OVERVIEW Incoming orders: 2012 vs. 2011 in € m -3% 3,000 2,684.9 2,596.8 Strong European business, 2011 2,500 China recovered in H2 2012 2,000 1,500 -1% -25% +26% 1,000 857.9 852.7 +20% 742.0 648.6 589.4 -51% 483.7 500 322.2 387.1 266.8 131.3 0 Total China America Germany Europe w/o Asia (w/o China), Germany Africa, Australia © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 7
- 8. 1. OVERVIEW Order intake: Healthy regional split Incoming orders Incoming orders Sales revenues 2012 (2011) 2012 (2011) 2012 (2011) 13.5% 32.8% 14.9% 30.4% (14.6%) (32.0%) (12.0%) (30.0%) Mature 23.1% markets Emerging (24.8%) markets * 45% 5.1% (35%) 55% (9.9%) 28.6% (65%) (22.0%) 7.7% (8.2%) 25.3% 18.6% (22.4%) (24.1%) Germany * Asia (w/o Japan), Mexico, Brazil, Eastern Europe Rest of Europe incl. Eastern Europe Emerging markets share 55% North and South America Asia (w/o China), Africa, Australia China most important single market China © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 8
- 9. AGENDA 1. Overview 2. Financials 3. Strategy 4. Outlook and summary © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 9
- 10. 2. FINANCIALS Net income above € 100 m for the first time 2011 2012 Sales revenues in € m 1,922.0 2,399.8 24.9% Gross profit on sales in € m 331.4 437.8 32.1% Gross margin in % 17.2 18.2 +1%-point R&D in € m -29.5 -37.2 26.1% SG&A in € m -196.0 -225.7 15.2% EBIT in € m 106.5 176.9 66.1% Financial result in € m -20.7 -29.2 41.1% EBT in € m 85.8 147.7 72.1% Income taxes in € m -21.5 -36.3 68.8% Net income in € m 64.3 111.4 73.3% © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 10
- 11. 2. FINANCIALS Income statement Strong sales momentum (+25%) Gross margin increased to 18.2% in 2012 (2011: 17.2%) Higher margins in new business, good order execution, clear improvement in H2 2012 R&D expense increased by 26%, further strengthening of competitive position Cost containment in SG&A costs: increase by 15% Hardly any impact from other operating expenses/income Financial result worsened mainly due to one-offs (write-off of syn loan transaction fees, interest assessment on long-term labor accounts) Income tax rate at 25% due to the use of tax loss carry forwards Net income margin at 4.6% © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 11
- 12. 2. FINANCIALS Cash flow/free cash flow in € m 2011 2012 EBT 85.8 147.7 Depreciation and amortization 20.6 28.5 Interest result 21.3 29.6 Income taxes paid -14.3 -21.3 Changes Provisions 0.6 -17.2 Net working capital -2.3 -69.1 Other 16.2 19.4 Cash flow from operating activities 127.9 117.6 Interest paid (net) -16.5 -20.3 Capital expenditures -19.6 -31.4 Free cash flow 91.8 65.9 Cash flow above expectations due to strong earnings increase; cash flow affected by NWC increase © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 12
- 13. 2. FINANCIALS Net working capital: on track 12/31/2011 12/31/2012 NWC in € m 32.6 98.6 DWC (Days Working Capital) 6.1 14.8 DSO (Days Sales Outstanding) 117.2 104.3 Moderate NWC increase DWC better than target range of 20-25 days DSO decrease due to moderate increase in accounts receivable © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 13
- 14. 2. FINANCIALS WIP and progress billings: High prepayment level at year-end 2012 in € m 12/31/2011 12/31/2012 Assets 1 WIP in excess of billings 297.6 349.1 Liabilities 2 Billings in excess of WIP 428.2 454.2 Machinery business 3 Progress billings 18.6 32.2 4 Billings in excess of WIP -4.5 4.2 Total balance Total WIP less total progress billings 1 - 2 - 4 -126.1 -109.3 Prepayments (liabilities) 2 + 3 446.8 486.4 Progress billings were € 109 m higher than future receivables1) => future cash out 1) these future receivables are not included in trade receivables © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 14
- 15. 2. FINANCIALS Net financial status further improved 12/31/2011 12/31/2012 Equity in € m 364.3 432.1 Equity ratio in % 21.9 23.9 Net financial status in € m +51.8 +96.7 Cash in € m 298.6 349.3 Gearing in % -16.6 -28.8 ROCE in % 28.4 43.9 Cash position at a high level, equity base strengthened in absolute and relative terms Equity ratio should improve further in the coming years © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 15
- 16. 2. FINANCIALS ROCE clearly above cost of capital 2006 2007 2008 2009 2010 2011 2012 EBIT in € m 33.1 55.7 72.7 5.7 36.6 106.5 176.9 Capital employed in € m 420.1 378.8 432.1 356.3 356.7 374.8 402.6 NWC in € m 154.7 128.9 151.8 57.4 27.3 32.6 98.6 DWC 40.9 31.4 34.1 19.2 7.8 6.1 14.8 ROCE in % 7.9 14.7 16.8 1.6 10.3 28.4 43.9 ROCE in % CE turnover Dürr’s business model favors low capital 50 7 employed 6 40 5 30 4 Strong focus on NWC management 3 20 2 Even slight CE decrease since 2006 10 1 despite almost doubling of business volume 0 0 2006 2007 2008 2009 2010 2011 2012 © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 16
- 17. 2. FINANCIALS Divisional breakdown 2012 (2011) DÜRR Group Paint and Assembly Systems Application Technology Incoming orders: € 1,326.1 m (€ 1,340.4 m) Incoming orders: € 556.6 m (€ 580.8 m) Sales: € 1,125.2 m (€ 878.7 m) Sales: € 531.2 m (€ 406.8 m) EBIT: € 73.9 m (€ 40.5 m) EBIT: € 52.4 m (€ 31.1 m) Measuring and Process Systems Clean Technology Systems Incoming orders: € 600.6 m (€ 662.7 m) Incoming orders: € 113.5 m (€ 101.0 m) Sales: € 647.9 m (€ 550.4 m) Sales: € 95.5 m (€ 86.1 m) EBIT: € 57.6 m (€ 31.4 m) EBIT: € 3.8 m (€ 4.9 m) © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 17
- 18. AGENDA 1. Overview 2. Financials 3. Strategy 4. Outlook and summary © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 18
- 19. 3. STRATEGY Growth, optimization and new business in focus Growth focus on emerging markets acquisitions Customer benefit service and modernization Growth initiatives product innovation Process optimization Optimization capacities Value creation Portfolio disposal global processes/localization New business Restructuring cleantech Process optimization energy efficiency Sales push Focus Dürr 2010 Dürr 2015 (2005-2006) (2007-2010) © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 19
- 20. 3. STRATEGY Emerging markets growth CAGR China 2005 … 2012 in % Incoming orders in € m 146 853 29 Sales revenues in € m 83 730 36 Employees (12/31) 271 1,6001) 29 Construction site Dürr Baoshan Average sales growth (2005-2012): Brazil: 35%, Mexico: 24%, India: 36% Total expenditure for capacity expansion 2012/2013: € 50 m with focus on emerging markets Example China: - Doubling of capacities in space to 63.000 m² - Increasing use as manufacturing, purchasing and engineering center ¹) including external workers (~ 400) © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 20
- 21. 3. STRATEGY China, India, Russia, Malaysia, Thailand, Indonesia: expected LV production growth >8% Emerging markets contribute 75% to total growth between 2012 and 2017 in m units CAGR in % 102.2 94.8 98.8 110 2.7 8 88.9 2.6 100 83.0 2.5 79.0 2.2 90 2.0 1.8 25.2 26.2 10 80 23.5 21.4 70 16.4 18.9 60 24.9 25.8 3 23.6 24.6 50 21.8 22.3 40 21.8 22.7 23.3 4 30 19.3 19.4 20.5 20 10 19.7 20.4 21.2 22.4 23.4 24.2 4 0 2012 2013 2014 2015 2016 2017 source: own estimates, PwC America Europe Asia (without China) China other last update: January 2013 © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 21
- 22. 3. STRATEGY Emerging markets: South East Asia1) – the next growth area Dürr office in Bangkok South East Asia1) Germany GDP (USD) 2.89 bn 3.57 bn ∅ GDP growth +6% +1% (till 2017) LV production 4.2 m 5.6 m ∅ LV production growth +8% +2% 1) Indonesia, Malaysia, Philippines, Thailand, Vietnam (till 2017) © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 22
- 23. 3. STRATEGY Expanding service business: 14% revenue growth in 2012 2008 2009 2010 2011 2012 Sales revenues in € m 395.9 263.3 362.0 445.4 506.9 Share of group sales in % 24.7 24.4 28.7 23.2 21.1 Increasing potential due to ageing plant structure1) 80% 75% 71% 70% 67% 62% 60% 50% 39% 40% 34% 30% 25% 26% 27% 17% 19% 19% 20% 8% 4% 7% 10% 0% North South Russia EU Asia America America >20 years 10 - 20 years <10 years ~250 paint shops in the world are older than 20 years 1) based on own calculations © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 23
- 24. 3. STRATEGY Leading in Production Efficiency: Dürr innovations in 2012 R&D expenditure in € m 2010 2011 2012 25.8 29.5 37.2 Main goal: cost per unit reduction Higher automation/flexibilization needs Differentiation from competitors 34 new products in 2012 © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 24
- 25. 3. STRATEGY New business: product portfolio of Dürr’s Clean Technology Systems division Environmental technolgy Energy efficiency technology Waste air purification Power generation Heat storage Conversion Exchange Adsorption, Treatment of Compact Power ORC Latent heat Heat pumps Heat exchangers thermal and hazardous waste System storage catalytic oxidation > 1,000 C 1,000-1,200 C 900-1,000 C 100-1,000 C 60-150 C 60-150 C up to 600 C © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 25
- 26. AGENDA 1. Overview 2. Financials 3. Strategy 4. Outlook and summary © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 26
- 27. 4. OUTLOOK AND SUMMARY (1) 7.5% EBIT margin in focus – Ongoing growth and profit improvement expected 2,400- 2,685 2,597 2,300- Sales in € m 2,400 2,600 Incoming orders in € m 2,500 1,922 1,782 1,464 1,642 1,460 1,261 1,217 1,185 1,078 2009 2010 2011 2012 2013e 2005 2006 2007 2008 2009 2010 2011 2012 2013e 7-7.5% 7.4% EBIT margin 176.9 (EBIT in € m) 5.5% 106.5 2.9% 0.5% 36.6 5.7 2009 2010 2011 2012 2013e © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 27
- 28. 4. OUTLOOK AND SUMMARY (2) 2012: Best year in Dürr‘s history Dividend of € 2.25 per share proposed Strong growth potential for global automotive industry, good opportunities for Dürr despite weak European markets Cash flow improving considerably in 2013/2014, free cash flow should exceed € 70 m annually in 2013/2014 Further acquisitions planned => strengthen core portfolio & Clean Technology Systems © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 28
- 29. FINANCIAL CALENDAR 03/13/2013 Publication annual financial report 2012 04/26/2013 Annual general meeting, Bietigheim-Bissingen 05/07/2013 Interim report for the first quarter of 2013 08/01/2013 Interim financial report for the first half of 2013 11/06/2013 Interim report for the first nine months of 2013 CONTACT: Dürr Aktiengesellschaft Günter Dielmann Corporate Communications & Investor Relations Carl-Benz-Str. 34 74321 Bietigheim-Bissingen Germany Phone +49 7142 78-1785 E-mail [email protected] © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 29
- 30. Appendix © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 30
- 31. SHAREHOLDER STRUCTURE Free float at 70% Shareholder structure (as of January 2013)* 26.5% Heinz Dürr GmbH, Berlin 26.5% Heinz und Heide Dürr 3.5% Stiftung GmbH, Stuttgart Institutional and private 70.0% 70.0% 3.5% investors (thereof 1% share of Dürr Management Board) * figures rounded © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 31
- 32. PASSENGER CARS SALES DECEMBER 2012 VS. 2011 Change year-over-year in % Japan 30 USA 13 Russia 10 India 10 China 8 Brazil 6 new EU countries -3 Germany -3 Western Europe -8 -10 -5 0 5 10 15 20 25 30 35 40 © Dürr Aktiengesellschaft, CCI, Conference Call - preliminary figures 2012, February 19, 2013 32
- 33. DÜRR AKTIENGESELLSCHAFT CONFERENCE CALL PRELIMINARY FIGURES FISCAL YEAR 2012 Ralf W. Dieter, CEO Ralph Heuwing, CFO Bietigheim-Bissingen, February 19, 2013 www.durr.com