Dürr AG: Conference Call Q3/9M 2013

WELCOME
DÜRR AKTIENGESELLSCHAFT

CONFERENCE CALL
RESULTS JANUARY – SEPTEMBER 2013
Ralf W. Dieter, CEO
Ralph Heuwing, CFO

Bietigheim-Bissingen, November 6, 2013

www.durr.com

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 – Q3, November 6, 2013

2

ORDERS ON TRACK, SALES ACCELERATING,
BOOK-TO-BILL AT 1
9 months
2013

9 months
2012

Incoming orders

1,797.5

1,954.3

-8.0%

504.0

550.0

-8.4%

Sales revenues

1,746.1

1,757.5

-0.6%

614.5

594.2

3.4%

Orders on hand (09/30)

2,253.8

2,332.1

-3.4%

2,253.8

2,332.1

-3.4%

in € m

Δ

Q3
2013

Q3
2012

Δ

Incoming orders at expected level
Order backlog stays on a high level
Project pipeline continues to be strong


3

INCOMING ORDERS BY REGION
JANUARY – SEPTEMBER 2013 VS. 2012
in € m
2.500

2.000

-8%

Strong EM business (e.g. China, Brazil)

1,954.3
1,797.5

Germany and Europe weak as expected
1.500
2012
-20%

+9%

1.000

2013

+5%
-28%

523.5

568.1

500

414.8

433.7

593.5
472.4

336.0

-5%

240.8
86.5

82.5

0
Total

China


America

Germany

Europe (w/o
Germany)

Asia (w/o China)
Africa
4

STRONG EARNINGS GROWTH
in € m

9 months
2013

9 months
2012

Δ

Q3
2013

Q3
2012

Δ

Gross profit on sales

340.3

311.0

9.4%

120.4

112.9

6.6%

EBITDA

156.5

138.6

12.9%

60.6

53.5

13.3%

EBIT

134.1

118.9

12.8%

51.7

46.5

11.2%

87.6

71.3

22.9%

35.2

27.3

28.9%

Net income

Gross margin reached 19.5% in first 9 months 2013 (9 months 2012: 17.7%)
Moderate increase of SG&A costs: +4.5%
EBIT margin reached 7.7% in first nine months 2013 (9 months 2012: 6.8%); in the middle of our
new guidance range
Net income supported by strong improvement of financial result


5

CONSIDERABLE CASH FLOW IMPROVEMENT
IN FIRST NINE MONTHS 2013
9 months
2013

9 months
2012

119.1

95.7

46.9

36.2

Depreciation and amortization of non-current assets

22.5

19.8

9.0

6.9

Interest result

15.1

23.5

4.6

10.4

-25.5

-13.2

-9.2

-4.4

14.0

-10.4

4.4

4.8

Δ Net working capital

-83.5

-147.6

-29.9

-27.6

Other

-16.3

13.8

7.5

20.0

45.4

-18.4

33.3

46.3

Interest paid (net)

-16.1

-19.7

-15.4

-17.6

Capital expenditures

-34.0

-21.1

-12.3

-6.0

-4.7

-59.2

5.6

22.7

in € m
EBT

Income taxes paid
Δ Provisions

Cash flow from operating activities

Free cash flow


Q3
2013

Q3
2012

6

NWC SEASONALITY SIMILAR TO 2012
09/30/2013
NWC in € m
DWC (Days Working Capital)
DSO (Days Sales Outstanding)

12/31/2012

09/30/2012

181.8

98.6

177.7

28.1

14.8

27.3

131.6

104.3

115.7

NWC => Decrease in Q4 expected
DWC => Should be within the target range of 20 to 25 days at year end


7

WIP AND PROGRESS BILLINGS: WIP
BALANCE IN BETWEEN THE TYPICAL RANGE
in € m

09/30/2013 12/31/2012 09/30/2012

Assets
1

WIP in excess of billings

419.5

349.1

387.5

-1,196.9

-1,200.6

-1,261.9

1,722.8

1,654.8

1,713.2

525.9

454.2

451.3

-44.2

-28.0

-34.0

Liabilities
Work in process from contracts (WIP)
Progress billings
2

Billings in excess of WIP

Machinery business
WIP
3

Progress billings

32.7

32.2

33.0

4

Billings in excess of WIP

-11.5

4.2

-1.0

Total WIP less total progress billings

-94.9

-109.3

-62.8

Prepayments (liabilities)

558.6

486.4

484.3

Balance
1 - 2 - 4
2 + 3


8

EQUITY FURTHER STRENGTHENED
09/30/2013

12/31/2012

09/30/2012

464.7

432.1

411.3

Equity ratio in %

23.9

23.9

23.5

Net financial status in € m

37.0

96.7

-25.8

246.7

349.3

249.7

Gearing in %

-8.7

-28.8

5.9

ROCE1) in %

34.9

43.9

32.1

Equity in € m

Cash in € m

Equity ratio should increase in Q4
Cash including term deposits and financial assets (e.g. bonds): € 305 m
1) annualized


9

PAINT AND ASSEMBLY SYSTEMS
Operating result: Better than expected
in € m

9 months 9 months
2013
2012

Q3
2013

Q3
2012

Incoming orders

836.6

992.8

210.8

289.4

Sales revenues

863.5

810.5

304.3

279.3

67.7

50.1

24.2

19.9

EBIT

Weaker order intake in Q3 due to order placement delays; improvement in Q4 expected
EBIT margin increased from 6.2% (9M 2012) to 7.8% (9M 2013) due to solid order execution and
economies of scale from higher volume


10

APPLICATION TECHNOLOGY
Strong margins in Q3
in € m

9 months 9 months
2013
2012

Q3
2013

Q3
2012

Incoming orders

421.0

406.8

95.1

103.6

Sales revenues

390.0

396.7

133.6

132.2

43.4

37.9

16.1

12.3

EBIT

Book-to-bill at 1.1
Sales increase in Q3 in line with expectations
EBIT margin reached 12% level in Q3


11

MEASURING AND PROCESS SYSTEMS
Stronger order momentum in Q3
in € m

9 months 9 months
2013
2012

Q3
2013

Q3
2012

Incoming orders

445.9

475.8

161.5

141.3

Sales revenues

420.9

482.8

147.2

159.0

27.0

40.4

10.7

17.6

EBIT

Order intake improved in Q3 across all machinery activities; book-to-bill at 1.1
Pronounced sales decline at Cleaning and Filtration Systems due to selective order intake in 2012
Earnings decrease due to significantly lower sales volume, capacity reductions and structural
changes at Cleaning and Filtration Systems; one-offs in Q3 and Q4


12

CLEAN TECHNOLOGY SYSTEMS
Book-to-bill at 1.3
in € m

9 months 9 months
2013
2012

Q3
2013

Q3
2012

Incoming orders

94.0

78.9

36.6

15.7

Sales revenues

71.7

67.5

29.3

23.7

3.1

2.0

1.8

1.3

EBIT

Incoming orders 19% above previous year´s level
Strong earnings improvement despite start-up costs in energy efficiency activities


13

PASSENGER CAR SALES DEVELOPMENT
JANUARY – SEPTEMBER 2013/12
Change year-over-year in %

21

China

8

USA

-1

Brazil

-3

new EU countries

-4

Western Europe

-5

Japan

-6

Germany

-7

Russia

-8

India
-10

-5

0


5

10

15

20

25
14

FIRST UPWARD REVISION OF MARKET
EXPECTATIONS SINCE SIX QUARTERS
China, Brazil, India, Thailand, Malaysia & Indonesia with expected LV production growth >8%
CAGR in %
110
100
90
80
70
60
50
40
30
20
10
0

79.2
1.9
16.6

81.8
1.5
18.5

86.6
1.6
20.7

101.7
2.2

3

25.2

26.6

10

24.2

25.0

3

97.8
1.8

92.5
1.7
23.1

21.8

21.7

22.6

23.3

20.2

21.7

22.9

23.4

4

19.3

19.4

19.6

20.7

21.5

22.7

23.7

24.5

5

2012

2013

2014

2015

2016

2017

America

Europe

Asia (without China)


China

Other

Source: own estimates, PwC
Last update: October 2013
15

SERVICE BUSINESS
Significant potential in modernization business
Δ
in %

9 months
2013
Sales revenues (in € m)
In % of group sales

9 months
2012

382.8

362.6

5.6

21.9

20.6

1.3 ppt

Service mix 9 months 2013
15%

Significant modernization potential, e.g. interior painting,
upgrades and refurbishment
Stricter environmental regulations, e.g. in China

30%

55%

Modifications and upgrades
Spare parts and repair
Maintenance, assessments, seminars

16

OUTLOOK:
FURTHER MARGIN EXPANSION AHEAD
Sales in € m

2,400

2,4002,600

Incoming orders in € m

1,922

1,782
1,460

1,078

2009

2011

2012

2013e

1,642

1,464

1,217

1,261

2010

2,685 2,597 2,3002,500

1,185

2005 2006 2007 2008 2009 2010 2011 2012 2013e

EBIT margin / EBIT in € m

7.5-8%
7.4%
176.9

5.5%
106.5

2.9%
0.5%
5.7

36.6

2009

2010


2011

2012

2013e
17

SUMMARY
2013 on track, EBIT margin reached 7.7% after first 9 months 2013

Order momentum to improve in Q4

Continued growth potential for global automotive industry, pipeline is filling up again

Cash flow expected to improve considerably in 2013/2014, free cash flow should
exceed € 70 m p.a. in 2013/2014


18

FINANCIAL CALENDAR
02/25/2014
04/30/2014
05/06/2014
05/09/2014
07/31/2014
11/05/2014

CONTACT:

Preliminary figures for the fiscal 2013: press conference
Annual general meeting, Bietigheim-Bissingen
Interim report for the first quarter of 2014
Investors' day, Bietigheim-Bissingen
Interim financial report for the first half of 2014
Interim report for the first nine months of 2014

Dürr Aktiengesellschaft
Günter Dielmann
Corporate Communications & Investor Relations
Carl-Benz-Str. 34
74321 Bietigheim-Bissingen
Germany
Phone
E-mail

+49 7142 78-1785
investor.relations@durr.com


19

Dürr AG: Conference Call Q3/9M 2013

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