business model vtg ag – growing together - baaderbaaderinvestmentconference.com/pdf/vtg.pdf ·...
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Panel Presentation VTG AG – Moving potential towards success
Baader Investment Conference
September 2017
VTG business model
1
Founded in 1951
More than 80,000 railcars
Europe (73,900)
US (5,200)
Russia (3,300)
Solid asset base
Strong and stable cash
generation
Complementary logistics
services
Reliable dividend payer
Investor Presentation, ©2017 VTG Aktiengesellschaft
Rail Logistics Leading European rail forwarder
Tank Container Logistics Major global TC operator
Europe’s number 1
Railcar Division Europe’s largest railcar leasing company
32%
16%
52%
Segment distribution
2
Sales 2016
3%
95%
1%
99%
EBITDA 2016 Assets*
€ 987 m € 345 m € 2.2 bn
Railcar division contributes
52% of sales …
… but 95% of EBITDA and… … holds the vast majority of
assets.
Railcar
Rail Logistics
Tank Container Logistics
Investor Presentation, ©2017 VTG Aktiengesellschaft
* Tangible fixed assets as of December 31, 2016
Railcar Division at a glance
3
Infrastructure character
High utilization rate (~90%)
Leasing model transfers utilization
risk mostly to customer
High contract renewal rates (>80%)
Stable pricing
Constant need for railcars (avg.
contract length ~3 years)
Unique industry dynamics
Profile
Investor Presentation, ©2017 VTG Aktiengesellschaft
29,300x
36,600x * Incl. sliding wall wagons of TWA
36%
44%
Tank Cars
Standard Freight Cars*
16,500x 20%
Intermodal Cars
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Q1/2007 Q1/2009 Q1/2011 Q1/2013 Q1/2015 Q1/2017
Key figures reflect resilient business model
4
Comment
Stable utilization rate due to:
Average leasing contract length of 3 years
High renewal rate
Limited availability of specialized wagons
and/or high switching costs
2009/2010: During economic crisis only
slight decrease
93.9%
(Q4/2007)
87.0%
(Q1/2010)
Acquisition of AAE
(Q1/2015)
Utilization development
Investor Presentation, ©2017 VTG Aktiengesellschaft
Operating Cash Flow
113137
155 149 154169 174 184 191
337 345
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
* Reduced by one-time effect of € 1.3 m in 2008
*
EBITDA development (in €m)
(in €m)
AA
E takeover
AA
E takeover
111 117
150 145 138126
136150 160
283
326
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
5 Investor Presentation, ©2017 VTG Aktiengesellschaft
Market Environment
6
Market Environment
Investor Presentation, ©2017 VTG Aktiengesellschaft
Germany 12%
Poland 9%
France 4%
Austria 4%
Czech Republic 4%
Italy 4%
Slovakia 2%
Others 21%
Other railcar owners 7%
Others 10%
Nacco/CIT 1%
Touax 2%
GATX 3%
Ermewa (SNCF) 6%
VTG 11%
Source: Company Information, General Contract of Use for wagons (GCU)
Split of European wagon fleet
National Railroads Private wagon hire
~700,000 wagons
Sources: DB, Company Information, UMLER
DB fleet development*
Historical US fleet development
* DB fleet excl. rented wagons
50
60
70
80
90
100
110
120
130
140
150
2000 … 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
53%
47% 20%
80%
∆ Private and others:
+ 450,000 wagons
2000 2016
~1,700,000 wagons ~1,600,000 wagons
Private and others Railroads
7 Investor Presentation, ©2017 VTG Aktiengesellschaft
Nacco Acquisition
Acquisition:
Rationale:
Transaction:
Transaction Highlights
11.09.2017 8 Investor Presentation, ©2017 VTG Aktiengesellschaft
VTG to acquire French-based railcar lessor Nacco
Acquisition supports VTG´s strategy to further strengthen its
position in the European railcar leasing market
Enlargement of customer base
Improvement of fleet balance (age, type mix,…)
Broader offerings to customers
Larger platform for digital offerings
Lower management costs per unit
Administrative and purchasing synergies
Higher free cash flow generation
&
Financing of transaction via debt and capital increase/other
capital markets instruments
Expected closing: Q4 2017
Snapshot of Nacco
11.09.2017 9
Investor Presentation, ©2017 VTG Aktiengesellschaft
Nacco at a glance
Full service railcar lessor founded 1972
Headquartered in Paris with offices in Hamburg
and Crewe (UK)
Approx. 61 employees
Diversified fleet with 14,000 wagons in Europe
Over 180 customers in 16 countries
No. 4 in European railcar leasing market
Complementary customer base compared to VTG
Since 2014 indirect subsidiary of US-based CIT
Group (NYSE: CIT)
Fleet composition
44%
40%
16% Intermodal
Standard freight
Tank
By Type*
~ 14,000
By Age*
46%
15%
8%
16% 15%
0-10 11-20 21-30 31-40 >40
Ø ~19 yrs. !
*31.12.2016
(in yrs.)
Nacco Earnings Potential
11.09.2017 10 Investor Presentation, ©2017 VTG Aktiengesellschaft
P&L contribution* Synergy potential
Overlapping geographical footprint
Similar customers but different share of wallet
Identical regulatory environment
Comparable office locations, IT-systems, etc.
VTG operations only
Overlapping operations
Representations Nacco
Realization of up to €10 m in synergies from
SG&A savings expected
Further savings in procurement and
maintenance envisaged
Significant reduction of replacement CapEx in
the years to come estimated
Offices Nacco Headquarters Nacco
Expected sales
in 2018 Approx. EUR 120m
Expected
EBITDA in 2018
Approx. EUR 100m
(before transaction and integration costs)
Expected EPS Accretive from 2018 on
(before transaction and integration costs,
after envisaged capital increase)
Comments
* Assumption: Closing in Q4/2017 – Subject to antitrust approval
11 Investor Presentation, ©2017 VTG Aktiengesellschaft
Any Questions?
Save the date 2017
Financial Calendar 2017:
March 7 Preliminary Results FY 2016
April 6 Annual Report FY 2016
April 6 Analyst Conference, Hamburg
May 4 Quarterly Statement Q1 2017
June 8 Annual General Meeting, Hamburg
August 29 Half-Yearly Financial Results 2017
November 16 Quarterly Statement Q3 2017
Alexander Drews
Investor Relations Manager
Phone: +49 40 2354 1352
Fax: +49 40 2354 1350
Email: [email protected]
VTG Aktiengesellschaft, Nagelsweg 34, 20097 Hamburg, Germany
Christoph Marx
Head of Investor Relations
Phone: +49 40 2354 1351
Fax: +49 40 2354 1350
Email: [email protected]
Contact Investor Relations
Investor Presentation, ©2017 VTG Aktiengesellschaft
13 Investor Presentation, ©2017 VTG Aktiengesellschaft
Appendix
N/A 0
0.30 0.300.33 0.35 0.37
0.420.45
0.50
0.75
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
VTG Group with strong anchor shareholders
Ownership structure
VTG Share
SDAX Performance Index
14
(IPO) Ø +7.6%
Investor Presentation, ©2017 VTG Aktiengesellschaft
Kuehne Holding AG
20%
Joachim Herz Stiftung
10%
Freefloat 41%
Morgan Stanley
Infrastructure
29%
Share price development
Group dividend per share (in €) 0%
50%
100%
150%
200%
250%
300%
Jun-07 Jul-09 Jul-11 Jul-13 Aug-15 Aug-17
H1/2017 H1/2016 Δ*
Sales 498.8 493.3 + 1.1%
EBITDA 163.3 165.8 - 1.6%
EBIT 69.2 72.7 - 4.8 %
EBT 39.3 41.1 - 4.3 %
EPS (in €) 0.74 0.71 + 4.2 %
H1 2017 - Executive Summary
11.09.2017 15
Clear pick up in demand in Q2 2017
Rail Logistics with positive sales trend
Railcar significantly improved
Increase in utilization mainly attributable to
intermodal
Intended acquisition of Nacco announced
Revenue guidance confirmed – Update on
EBITDA outlook
Group figures
Investor Presentation, ©2017 VTG Aktiengesellschaft
EBITDA Guidance (in € bn)
Highlights (in € m)
Outlook
Revenue guidance unchanged:
Slight increase of Sales in FY 2017 expected
EBITDA guidance updated:
Unexpected increase in demand leads to high
preparation expenses
Nacco effects included
EBITDA to range between 330 m€ and 360 m€ Original EBITDA
Guidance
> 345.3 m€
Updated EBITDA
Guidance
330 m€
360 m€