corporate presentation - baader · codinox distribution of hug products 2016 stake in hofer...

Corporate presentation September 2017

2

Global megatrends

transform the automotive

industry

Technological progress

Urbanization

Scarcity of resources

Globalization

Climate change

Safety systems

Autonomous driving

Efficient propulsion

Connectivity

Shared mobility

Markets

Megatrends trigger technological transformation process

Corporate presentation | September 2017

3

Global megatrends

transform the automotive

industry

Markets

Transformation process determines ElringKlinger’s framework

• Engineering and tooling capabilities help ElringKlinger to edge ahead of competition.

• ElringKlinger is going to improve earnings and to generate cash flow.

• ElringKlinger has enacted a strong set of non-financial rules and commitments.

• Automotive is a growing market.

• The structure of market growth is biased towards green mobility.

• A global network of production sites is key to success for a supplier.


Markets

Operations

4

Automotive is a growing market

Peak of combustion engine car cycle expected for 2021

Global combustion engines production Global EV production

Source: Morgan Stanley (2016), ElringKlinger Research

20

22

2

02

1

20

24

20

26

2

02

5

20

28

2

02

7

20

30

2

02

9

CAGR -1%

20

23

20

20

2

01

9

20

18

2

01

7

20

16

2

01

5

CAGR +2%

20

19

20

30

20

25

20

18

20

27

2

02

6

20

28

CAGR +29%

20

24

2

02

3

20

29

20

22

2

02

1

20

20

20

17

2

01

6

20

15


5

Structure of market growth biased towards green mobility

Uncertainties characterize transformation process

Internal combustion Hybrid Full-electric

What are the global leading

markets for E-mobility

?

Who will be the player in EV market

?

What will drive customers’

acceptance of the change

?

Will there be a next stage of

emission regulations

?

Will OEMs develop a next generation of combustion

engine

? Will

full-hybrid cars be too costly

? Are OEM plans regarding full-

electric cars too ambitious

? Will urban and rural demand

be different

?

How environment- friendly is total

balance of power generation

? Corporate presentation | September 2017


ElringKlinger already well prepared for transformation

6

Internal combustion Hybrid Full-electric

ElringKlinger with traditional product portfolio, neither significantly exposed to diesel nor to gasoline

ElringKlinger with extended range of products

ElringKlinger with broadened and transformed product portfolio, based on strong innovation power

Cylinder-head gaskets

Special gaskets

Shielding parts

Plastic modules

Structural components

Battery components

Drivetrain systems

Fuel cell systems

Present Bridge Future



ElringKlinger provides a transformed portfolio

7 Corporate presentation | September 2017

Cylinder-Head Gaskets

Shielding Technology

Lightweighting/Elastomer

E-Mobility

Specialty Gaskets Underbody protection

Metal-elastomer

gaskets

Front-end carrier

Tank shielding

Disk carrier

Metallic bipolar

plate

Cross-car beam

Dampening pan

Door module carrier

Battery module

Stra

teg

ic are

as

Functional Components

E-Mobility

Light- weighting

Engine shielding

Brake hat

Side impact

protection

Cell casing

Electric drive train

Fuel cell stack

Cell contact system

Present Future


ElringKlinger has set the course for mobility of the future

8

27%

hofer Powertrain Products GmbH

53%

47%

Battery and fuel cell systems

Besides R&D, advancement and realization capabilities

Research and development capabilities

hofer AG


Transmission systems, electric engine, electronics,

software

• Extension of ElringKlinger‘s core competences in the field of drivetrain solutions for hybrid and electric cars

• Focus on small-series production in sports and luxury car segment

9

Global network of production sites is essential for success

ElringKlinger represented in all important auto regions

Production locations of global top 15 OEMs ( ) ElringKlinger production sites ( )

South Africa

Southeast Asia

China

Japan

Korea

Eastern Europe/ Turkey

South America

Germany

Italy Spain

France

UK

USA/Canada

Mexico

India


Engineering and tooling capabilities help ElringKlinger to edge ahead of competition

Large-scale contracts received in lightweighting technology

10

Organo sheets

Technology: reinforced thermoplastics with injected plastic devices

Launching order of door module carriers by Brose: Received in H1 2016 Volume: more than EUR 100 million until 2024 SOP in H2 2017 in Hungary and 2018 in China

Hydroform-hybrid technology

Commonly developed with German premium OEM, license agreement in 2015

Launching order with a volume of more than EUR 120 million until 2020, produced in China and Canada since 2015

Large-scale order for next generation of vehicles from US market Received in H2 2016 Representing a triple-digit million Euro volume over five years New location in close proximity to customer, ramped up in mid-2017


© Brose

11


ElringKlinger will benefit from continuous industry growth

Providing drivetrain and propulsion system for

full-electric vehicle

Increasing sales contribution of for generating

stable sales

gaskets know-how

As market leader, using

lightweight components

of Aftermarket in NAFTA and

China

Higher market share

at Shielding Technology into

profitable sales

high order situation

Turning

Euro in sales

2 bn Close to

2020

fuel cells

Market introduction of


Growing Aftermarket business by gaining

new market shares in NAFTA and China

12

Earnings improvement and cash flow generation

Most important building blocks to improve profitability

EBIT margin pre PPA – in %

Reducing high operational fixed cost base

at Shielding Technology division step by step FY 2016

9.0%

Mid-term

~ 13%

Basic business

Improving product mix by further marketing highly sophisticated lightweight products

Increasing sales at Exhaust Gas Purification division by

providing solutions for new ship regulations

Improving product mix at Engineered

Plastics segment


Outlook FY 2017

Guidance confirmed

13

1,033 1,127 1,150

1,326 1,507 1,557

12.6% 12.5% 13.0% 12.2%

9.3% 9.0%

2011 2012 2013 2014 2015 2016 2017e … Mid-term

EBIT margin pre PPA

Sales

~13% ~ 9 to 10%

Sales – in EUR million EBIT margin pre PPA – in % of total sales

Organically 2 to 4%

above market growth

Expected market growth 2017: 1-2%, mid-term on average at 2%

Organically 2 to 4% p.a.

above market growth


Appendix

15

ElringKlinger

Structural overview

ElringKlinger Group

Original Equipment Sales: EUR 1,294 million Employees: 7,536

All figures refer to FY 2016

83.1% of Group sales

Aftermarket Sales: EUR 147 million Employees: 174

9.5% of Group sales

Engineered Plastics Sales: EUR 102 million Employees: 698

6.5% of Group sales

Services Sales: EUR 10 million Employees: 181

0.6% of Group sales

Industrial Parks Sales: EUR 5 million Employees: 2

0.3% of Group sales

Cylinder-Head Gaskets

13%

Specialty Gaskets

18%

Lightweighting/Elastomer

22%

Shielding Technology

26%

Exhaust Gas Purification

3%

E-Mobility 1%

Other <1%

Sales: EUR 1,557 million EBIT EUR 135.6 million Employees: 8,591 EBIT margin 8.7 %


16

Product portfolio

Concept Car

Cylinder-head gaskets

Specialty gaskets

Shielding Technology Thermal shielding Acoustic shielding

Lightweighting/ Elastomer Technology Door module carrier Cockpit cross-car beam Plastic devices (cam cover)

E-Mobility Battery module Fuel cell


17

Mission statement

What is driving us

Green mobility

Our vision

Being an essential partner by

(1) Providing technologically sophisticated solutions for customers’ needs

(2) Shaping performance and quality to the next level

(3) Assuming social responsibility as a global corporate player

Our mission


18

Track record

Focused acquisitions supplemented Group’s growth

Year of selected acquisition and product area

ElringKlinger Group 2005: EUR 475 million 2016: EUR 1,557 million

SEVEX Group Heat shields 2008

Marusan JV Gaskets, heat shields 2008

Freudenberg (parts) Gaskets 2011

Hug Engineering Exhaust gas purification 2011

Hummel Tools, plastics 2011

new enerday Fuel cell technology 2014

Polytetra Heat management 2014

M&W Transmission plates 2015

COdiNOx Distribution of Hug products 2016

Stake in hofer Transmission systems, electronics, software 2017


19

Q2 2017

Order situation favorable, FX headwinds in sales

Order intake – in EUR million

Sales – in EUR million

Order backlog – in EUR million

Sales – in EUR million

+4.3%

Q2 2017

407.8

Organic

18.1 +4.6%

M&A

2.6 +0.7%

FX

-3.8 -1.0%

Q2 2016

390.9

+4.3%

Q2 2017

408

Q1

433

Q4

407

Q3

374

Q2 2016

391

494445

384441 413

-6.3%

Q2 2017 Q1 Q4 Q3 Q2 2016

+12.9%

Q2 2017

999

Q1

994

Q4

933

Q3

895

Q2 2016

885


20

Q2 2017

Operating result increased despite high Swiss fixed cost base

EBITDA – in EUR million

Net income (attr. to shareholders) – in EUR million

EBIT (pre PPA) – in EUR million EBIT margin (pre PPA) – in % of total sales

Earnings per share – in EUR

-19.4%

Q2 2017

0.29

Q1

0.40

Q4

0.31

Q3

0.30

Q2 2016

0.36

+3.4%

Q2 2017

60.5

Q1

62.6

Q4

64.5

Q3

55.1

Q2 2016

58.5

-18.6%

Q2 2017

18.4

Q1

25.1

Q4

19.7

Q3

19.0

Q2 2016

22.6

+2.8%

Q2 2017

37.2

9.1

Q1

39.1

Q4

39.5

Q3

32.6

Q2 2016

36.2

9.3


21

Q2 2017

Capex mainly spent for ramp-ups in the US and Hungary

Net working capital – in EUR million

Operating free cash flow – in EUR million

Capex (in PPE) – in EUR million

Net financial debt – in EUR million

581

Q4

539

Q3

529

Q2 2016

532

+15.6%

Q2 2017

615

Q1

-61.9%

Q2 2017

-10.2

Q1

-11.6

Q4

0.4

Q3

1.8

Q2 2016

-6.3

+17.5%

Q2 2017

42.4

Q1

29.6

Q4

54.7

Q3

43.0

Q2 2016

36.1 573

Q4

571

Q1

+5.4%

Q2 2017

541

Q2 2016

525

Q3

542


22

Q2 2017: Segments

Profitable sales growth in all major segments

Original Equipment (OE) Aftermarket

Engineered Plastics Services & Industrial Parks

Sales – in EUR million EBIT margin – in %

+4.6%

Q2 2017

338

6.9

Q1

360

Q4

347

Q3

309

Q2 2016

323

6.8

+3.1%

Q2 2017

40.2

21.9

Q1

40.2

Q4

33.1

Q3

35.9

Q2 2016

39.0

22.6

+3.6%

Q2 2017

26.3

14.4

Q1

29.5

Q4

24.3

Q3

25.8

Q2 2016

25.4

16.1 3.4

2.9

Q1

3.8

Q4

3.3

Q3

4.0

Q2 2016

-2.9%

Q2 2017

3.5

8.6


23

FY 2016: Income Statement

Ongoing internationalization and diversified customer structure

Sales 2016 by region – in EUR million resp. % Sales 2016 by customer – in % of total sales

Germany 412.3

27% (27%)

Rest of Europe 489.1

31% (31%)

NAFTA 292.0

19% (20%)

Asia-Pacific 299.0

19% (18%)

South America/

Rest of World 65.1

4% (4%)

Previous year‘s figures grey-colored in brackets

Ford 11%

GM 8%

Daimler 8%

VW Group 7%

BMW 5%

Renault-Nissan

3%

Volvo Trucks

3%

PSA 2%

FCA 2%

Tier 1 15%

Aftermarket 9%

Other 27%


24

Balance sheet

Placement of a Schuldscheindarlehen in early Q3 2017

• Originally planned volume: EUR 100 million

• Tranches: 5, 7 and 10 years

• Use of proceeds: General corporate purposes, refinancing of short-term liabilities

• Sole-Lead Manager: Landesbank Baden-Württemberg

• Closing in early Q3 2017:

Volume: EUR 200 million

Interest rate: 1.23% on average

44

Improvement of maturity structure

Non-current (>5 years)

+200

Non-current (between 1

and 5 years)

272

On daily basis and current

257

-200

Financial liabilities as at Dec. 31, 2016 – in EUR million


25

Balance sheet

Continuing healthy equity ratio at around 50%

Equity – in EUR million Equity ratio – in % of total equity and liabilities

642 701

775

856 886

50.6 50.4 49.7 48.5

47.2

30.0

40.0

50.0

60.0

70.0

0

200

400

600

800

1,000

2012 2013 2014 2015 2016

Equity Equity ratio

40 - 50% of total assets


26

Dividend policy

Payout ratio within long-term range of 30 to 40% of EPS

Dividend payment – in EUR Payout ratio – in % of group EPS

0.45

0.50

0.55 0.55

0.50

33 30

33 38

40

0

25

50

75

0.00

0.10

0.20

0.30

0.40

0.50

0.60

2012 2013 2014 2015 2016

Dividend payment Payout ratio

30 - 40% of Group earnings per share



Focused R&D activities, tooling affects working capital

27

Net working capital – in EUR million

230 257 290 322 328

186 207 245 287 300

-58 -69 -69 -86 -103 -100

100

300

500

700

900

2012 2013 2014 2015 2016

Trade payables

Trade receivables

Inventories

8 9 9 10 7

58 57 58 61 67

0

20

40

60

80

100

2012 2013 2014 2015 2016

thereof capitalized

66 66 67 71 75

R&D highlights

• Integration of tools implies a technological lead position in the development of ideas

• Main focus: lightweight components, e-mobility

• 570 R&D employees at sites of parent company and 18 subsidiaries

• 68 new international patents in 2016

• Mid-term indication: ~ 5-6% of total sales

Working capital highlights

• Tools included in inventories until sale with start of serial production

• Organizational measures regarding receivables and inventories with positive impact

• Mid-term indication: Improvement of net working capital by 1 to 2 percentage points compared to 2016 level of 33.7%

R&D – in EUR million R&D ratio – in % of total sales

5.8% 5.7% 5.0% 4.7% 4.8%

32% 34% 35% 35% 34%


28

Expectations for 2017

Global markets expected to grow, esp. in Asia and Europe

NAFTA

+0%

Western Europe

+2%

Germany

-1%

Asia/ Pacific

+5%

China

+2% Japan

+0%

Global

+1-2%

Brazil

+1%

Eastern Europe

+5-7%

Light vehicle production – in million units

Source: OICA, HSBC, ElringKlinger research


Outlook

Further indicators for FY 2017 and the medium term

29

FY 2016 actual

FY 2017 expected

Mid-term targets

ROCE in % 8.7% Slight year-on-year improvement

15%

R&D costs in % of total sales 4.8% ~ 5-6% ~ 5-6%

Capex (in PPE) in % of total sales

11.0% Below prior-year level ~ 9%

Net working capital (NWC)

in % of total sales

33.7% Below prior-year level Improvement by

1-2 percentage points compared to 2016

Operating FCF in EUR million

-3.8 Slightly positive Improvement by

earnings momentum, disciplined capex and

better NWC ratio

Equity ratio in % of total assets 47.2% 40-50% 40-50%


30

Last 5 quarters

Key figures Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016

Order intake 413 494 445 384 441

Order backlog 999 994 933 895 885

Sales 408 433 407 374 391

EBITDA 61 63 65 55 59

EBIT pre PPA 37.2 39.1 39.5 32.6 36.2

EBIT margin pre PPA (in %) 9.1 9.0 9.7 8.7 9.3

EBIT (reported) 35.8 37.9 38.4 31.2 35.2

EBT 28.0 34.5 39.4 27.6 32.6

Net income attributable to shareholders 18.4 25.1 19.7 19.0 22.6

Earnings per share (in EUR) 0.29 0.40 0.31 0.30 0.36

Capex (in PPE) 42.4 29.6 54.7 43.0 36.1

Operating free cash flow -10.2 -11.6 0.4 1.8 -6.6

Net working capital 571 573 525 541 542

Equity ratio (in %) 44.4 46.3 47.2 46.9 46.3

Net financial debt 615 581 539 529 532

Employees (as at quarter-end) 9,012 8,738 8,591 8,433 8,283

All figures in EUR million unless otherwise described


31

Last 5 quarters

Segmental figures Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016

Group Sales 407.8 433.3 407.2 374.2 390.9

EBIT (reported) 35.8 37.9 38.4 31.2 35.2

EBIT margin (in %) 8.8 8.7 9.4 8.3 9.0

Original Equipment Sales 337.9 359.9 346.5 308.5 323.0

EBIT (reported) 23.2 25.1 27.6 19.0 22.0

EBIT margin (in %) 6.9 7.0 8.0 6.2 6.8

Aftermarket Sales 40.2 40.2 33.1 35.9 39.0

EBIT (reported) 8.8 7.7 6.2 7.6 8.8

EBIT margin (in %) 21.9 19.2 18.7 21.2 22.6

Engineered Plastics Sales 26.3 29.5 24.3 25.8 25.4

EBIT (reported) 3.8 4.3 4.7 3.9 4.1

EBIT margin (in %) 14.4 14.6 19.3 15.1 16.1

Services Sales 2.4 2.7 2.3 2.5 2.5

EBIT (reported) 0.1 0.7 0.0 0.6 0.3

EBIT margin (in %) 4.2 25.9 0.0 24.0 12.0

Industrial Parks Sales 1.1 1.0 1.0 1.5 1.0

EBIT (reported) -0.1 -0.1 -0.1 0.0 0.0

EBIT margin (in %) -9.1 -10.0 -10.0 0.0 0.0



32

Last 5 years

Key figures 2016 2015 2014 2013 2012

Order intake 1,694 1,615 1,419 1,284 1,135

Order backlog 933 796 688 595 456

Sales 1,557 1,507 1,326 1,150 1,127

EBITDA 231 223 233 239 218

(Adjusted) EBIT pre PPA 140 140 162 150 141

(Adjusted) EBIT margin pre PPA (in %) 9.0 9.3 12.2 13.0 12.5

EBIT (reported) 136 135 154 164 139

EBT 124 129 153 149 124

Net income attributable to shareholders 79 92 106 105 86

Earnings per share (in EUR) 1.24 1.45 1.67 1.66 1.35

Dividend per share (in EUR) 0.50 0.55 0.55 0.50 0.45

Capex (in PPE) 171 176 147 114 103

Operating free cash flow -4 -65 -12 -4 8

ROCE (in %) 8.7 9.5 12.4 14.4 13.3

Net working capital 525 523 466 396 357

Equity ratio (in %) 47.2 48.5 49.7 50.4 50.6

Net financial debt 539 487 348 295 260

Employees (as at Dec. 31) 8,591 7,912 7,255 6,716 6,263



33

Last 5 years

Segmental figures 2016 2015 2014 2013 2012

Group Sales 1,557.4 1,507.3 1,325.8 1,150.1 1,127.2

EBIT (reported) 135.6 135.2 154.0 164.2 138.6

EBIT margin (in %) 8.7 9.0 11.6 14.3 12.3

Original Equipment Sales 1,294.3 1,255.8 1,089.7 925.9 906.6

EBIT (reported) 88.9 91.2 111.2 123.2 93.1

EBIT margin (in %) 6.9 7.3 10.2 13.3 10.3

Aftermarket Sales 147.3 142.2 130.7 119.3 117.8

EBIT (reported) 30.5 28.2 25.1 22.5 24.4

EBIT margin (in %) 20.7 19.8 19.2 18.9 20.7

Engineered Plastics Sales 101.7 96.6 92.9 92.6 91.3

EBIT (reported) 14.9 13.2 15.4 16.1 15.7

EBIT margin (in %) 14.7 13.7 16.6 17.4 17.2

Services Sales 9.7 8.3 8.1 8.1 7.3

EBIT (reported) 1.6 2.0 1.9 2.3 2.2

EBIT margin (in %) 16.5 24.1 23.5 28.4 30.1

Industrial Parks Sales 4.5 4.3 4.5 4.3 4.2

EBIT (reported) -0.3 0.7 0.4 0.1 0.4

EBIT margin (in %) n.a. 16.3 8.9 2.3 9.5



34

Senior management

(from left to right)

Dr. Stefan Wolf, CEO (since 2005)

In charge of OE Sales, Aftermarket, HR, Legal, Corporate Communications, and Group companies | With ElringKlinger since 1997 | Chairman of Baden-Württemberg‘s Employers‘ Association of the Metal and Electric Industry (Südwestmetall) | Member of the Management Board of the German Association of the Auto-motive Industry (VDA) | Chairman of the Supervisory Board of Norma Group SE

Theo Becker, COO (since 2006)

In charge of Production and Technology, all plants and New Business Areas | With ElringKlinger since 1994 | 40 years of professional experience

Thomas Jessulat, CFO (since 2016)

In charge of Finance, Controlling, Tax and IT | With ElringKlinger since 2005 | 22 years of professional experience


35

Ownership and market capitalization

Shareholder structure as at Dec. 31, 2016

Family Walter H.

Lechler and estate of

Klaus Lechler

52%

Institutional investors

33%

Private investors

15%

Market capitalization as at Dec. 31 – in EUR million

400

933

1,679

1,215

1,616

1,874 1,825

1,489

1,006

2008 2009 2010 2011 2012 2013 2014 2015 2016


36

IR calendar and contact

Date Event

Sep 19-20, 2017 Conferences, Munich

Oct 4, 2017 Conference, London

Nov 7, 2017 Q3 2017

ElringKlinger AG Investor Relations/Corporate PR Max-Eyth-Str. 2 72581 Dettingen/Erms Germany E-Mail: [email protected]

Dr. Jens Winter Head of Investor Relations/Corporate PR E: [email protected] T: +49 7123 724 88335 M: +49 151 1181 1184

Kathrin Graf Investor Relations/Corporate PR E: [email protected] T: +49 7123 724 88279 M: +49 175 228 1666

Heiderose Mall Investor Relations/Corporate PR E: [email protected] T: +49 7123 724 463

Christoph Staib Investor Relations/Corporate PR E: [email protected] T: +49 7123 724 9358


Forward-looking statements and predictions

This presentation contains statements about the future. These statements are based on current expectations,

market evaluations and predictions by the Management Board, and on information that is currently available to

them. The statements about the future should not be interpreted as guarantees of the future developments and

results that they refer to. Whilst the Management Board is convinced that the statements that have been made,

and the convictions and expectations on which they are based, are realistic, they rely on suppositions that may

conceivably prove to be incorrect; future results and developments are dependent on a multitude of factors, they

involve various risks and imponderabilities that can affect whether the ongoing development deviates from the

expectations that have been expressed. These factors include, for example, changes to the general economic and

business situation, variations of exchange rates and interest rates, poor acceptance of new products and services,

and changes to business strategy.

37

Disclaimer


corporate presentation - baader · codinox distribution of hug products 2016 stake in hofer...

Documents