WELCOME
PRESENTATION
DÜRR INVESTOR RELATIONS
November 2014
www.durr.com
DISCLAIMER
This investor 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 could 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 AG, CCI, Investor Relations, November 2014
2
AGENDA
1. Dürr: global leader in strong competitive position
2. Markets
3. Dürr Strategy 2017
4. Financial overview, outlook and summary
© Dürr AG, CCI, Investor Relations, November 2014
3
DÜRR: GLOBAL LEADER IN STRONG
COMPETITIVE POSITION
Customers
Fast facts
World market leader in 95% of Dürr‘s
business portfolio with a market share
between approx. 30-60%
65% of revenue from automotive business; all
OEMs worldwide as customers
Strong emerging markets presence with 50%
share of global incoming orders
High entry barriers with limited competitive set
Business drivers: market growth, growing
replacement potential (automotive); increasing
automation, flexibilization & globalization
(industry); growing installed base & customer
excellence (service)
© Dürr AG, CCI, Investor Relations, November 2014
4
GROUP STRUCTURE WITH 5 DIVISIONS
Figures 2013
PAINT AND
ASSEMBLY
SYSTEMS
APPLICATION
TECHNOLOGY
MEASURING
AND PROCESS
SYSTEMS
Paint Shops &
Final Assembly,
Aircraft
Production
Technology
Paint Application
Technology,
Glueing &
Sealing
Technology
Balancing,
Assembly,
Testing, Filling &
Cleaning
Machines
Sales: € 1,177 m
EBIT: € 98 m
EBIT margin: 8.4%
ROCE: >100%1
Sales: € 540 m
EBIT: € 60 m
EBIT margin: 11.0%
ROCE: 43.2%
Sales: € 584 m
EBIT: € 46 m
EBIT margin: 7.9%
ROCE: 16.2%
CLEAN
TECHNOLOGY
SYSTEMS
WOOD
PROCESSING
SYSTEMS
Air Purification
Systems,
Energy
Efficiency
Systems
Machinery for
Stationary
Woodworking
Sales: € 106 m
EBIT: € 6 m
EBIT margin: 5.7%
ROCE: 17.1%
Sales: € 789 m
EBIT: € 35 m
EBIT margin: 4.4%
ROCE: 11.3%
(¹ negative CE)
© Dürr AG, CCI, Investor Relations, November 2014
5
ORDER INTAKE: SHIFT TO THE AMERICAS1)
Dürr rolling 12 months comparison: Q4 2013 – Q3 2014 (Q4 2012 – Q3 2013)
Incoming orders rolling
12 months
2014 (2013)
Incoming orders rolling
12 months
2014 (2013)
15.2%
(12.0%)
28.9%
(36.8%)
Mature
markets
42%
(40%)
14.7%
(16.8%)
29.8%
(30.8%)
Emerging
markets *
58%
(60%)
* Asia (w/o Japan), Mexico, Brazil, Eastern Europe
1)
Sales revenues rolling
12 months
2014 (2013)
4.4%
(5.2%)
26.7%
(25.4%)
27.4%
(25.5%)
6.4%
(7.4%)
24.8%
(20.6%)
w/o HOMAG
21.7%
(19.5%)
Germany
Rest of Europe incl. Eastern Europe
Emerging markets account for 58% of order intake
North and South America
Strong order intake in Europe and Americas; acceleration in China in H2
Asia (w/o China), Africa, Australia
China
© Dürr AG, CCI, Investor Relations, November 2014
6
AGENDA
1. Dürr: global leader in strong competitive position
2. Markets
3. Dürr Strategy 2017
4. Financial overview, outlook and summary
© Dürr AG, CCI, Investor Relations, November 2014
7
MARKETS
Worldwide automotive industry with steady growth (light vehicle production in m units)
+ 2%
CAGR
+ 5%
CAGR
62
55
52
45
44
43
44
44
44
44
42
40
30
11
11
12
2000
2001
2002
14
2003
19
16
2004
2005
22
2006
25
26
27
2007
2008
2009
38
36 35
36
2010
2011
37
37
2012
2013
developed markets
2011: Emerging markets overtaking developed markets
© Dürr AG, CCI, Investor Relations, November 2014
48
46
44
58
38
40
41
43
44
2014e* 2015e* 2016e* 2017e* 2018e*
emerging markets
* estimated
Source: PwC Autofacts
Last update: October 2014
8
STRONG EMERGING MARKETS GROWTH
India, China, Malaysia & Indonesia with expected automotive production growth > 8%
Emerging markets will contribute 2/3 of global growth between 2013 and 2018
in m units
110
100
90
80
70
60
50
40
30
20
10
0
82.6
1.5
19.3
91.6
85.7
1.9
1.8
23.5
21.2
96.2
101.4
2.5
2.3
2.0
25.8
105.5
9
25.2
3
4
21.5
22.7
23.7
19.5
20.5
21.4
21.8
22.9
23.9
20.8
21.0
22.1
22.9
24.1
24.9
2013
2014
2015
2016
2017
2018
© Dürr AG, CCI, Investor Relations, November 2014
Asia (without China)
China
11
29.0
21.5
Europe
5
27.8
24.3
Americas
CAGR in %
Other
4
Source: own estimates, PwC
Last update: October 2014
9
AGENDA
1. Dürr: global leader in strong competitive position
2. Markets
3. Dürr Strategy 2017
4. Financial overview, outlook and summary
© Dürr AG, CCI, Investor Relations, November 2014
10
DÜRR STRATEGY 2017
Innovation
Globalization
LEADING IN
PRODUCTION
EFFICIENCY
Service
© Dürr AG, CCI, Investor Relations, November 2014
Efficiency
11
INNOVATION
LEADING IN PRODUCTION EFFICIENCY
Cost per unit
in a paint shop
Reduction of resource consumption/emissions at
paint shops of a German OEM
Energy
Water
1,800
Invest
20%
Material
41%
Energy
8%
1.5
2.5
1,400
1,200
Service
3%
-36%
4.0
2.0
1.0
1,000
600
6.0
3.0
1,600
1.5
800
Personnel
28%
Paint*
VOC
3.5
2.0
2,000
-67%
-71%
0.5
400
1.0
-73%
2.0
0.5
200
0
0.0
0.0
kWh/unit
m³/unit
0.0
kg/unit
l/unit
Ø cost per unit in a
current paint shop
= € 320 *
* Compared to € 420 15 years ago
*in spray booth only
© Dürr AG, CCI, Investor Relations, November 2014
12
INNOVATION
EXAMPLES ACROSS ALL BUSINESSES
EcoDryScrubber – dry overspray separation
EcoRPL033 – painting robot
EcoCSteam – cleaning with steam
EcoReBooth – paint booth concept
laserTec – new era in wood edge processing
Balancing Technology e.g. for turbochargers
© Dürr AG, CCI, Investor Relations, November 2014
13
GLOBALIZATION
ADDRESSING NEW MARKETS
Industrial products in Application Technology division
Complete range of application products for the general industry
(e.g. plastics, wood, furniture, construction)
Sales channels: Distributors, integrators, Dürr web shop & Dürr
regional centers
Product range (extract):
Pumps and fluid handling equipment, e.g. scoop piston and
suction pumps for the high-pressure range
2-component systems
Product systems for electrostatic application, e.g. electrostatic
atomizers
Conventional application systems, e.g. spray guns
Roll out worldwide within the next 2 years, market size > € 3 bn
© Dürr AG, CCI, Investor Relations, November 2014
14
GLOBALIZATION
FOCUS ON EMERGING MARKETS
China
2005
…
2013
CAGR
in %
Incoming orders (in € m)
146
650
21
Sales revenues (in € m)
83
760
32
271
1,356
22
Employees (12/31)
New Dürr site Shanghai/Baoshan
Double-digit sales growth in Brazil, Mexico and India since 2005
Example China: - Doubling of capacities in space to 63,000m² up to now; new “campus” in China in
2016
- Increasing use as manufacturing, purchasing and engineering center
Test Centers in Japan, China and US
Expansion in South East Asia
© Dürr AG, CCI, Investor Relations, November 2014
15
DÜRR SERVICE
GROWTH STRATEGY1)
Service revenues (in € m)
In % of group revenues
2008
2009
2010
2011
2012
2013
395.9
263.3
362.0
445.0
506.9
535.6
24.7
24.4
28.7
23.2
21.1
22.3
1)
w/o HOMAG
Service type in % of revenues
Maintenance,
assessments,
seminars
14%
Modifications
and upgrades
Spare parts
53%
and repairs
33%
Strengthening service business and capacities in emerging
markets (e.g. China, India, Turkey)
Service pricing, dedicated offerings, complaint management
system, decentralized ware-housing, delivery speed
9M 2014: +9% service sales revenues
Service sales share: 9M 2014: 25% (9M 2013: 22%)
Long-term target: 30% sales share
© Dürr AG, CCI, Investor Relations, November 2014
16
DÜRR SERVICE
GROWTH STRATEGY
Number of paint robots sold (cumulative figure)
Service in % of total sales by country
9,000
25
8,000
20
7,000
6,000
15
5,000
4,000
10
3,000
2,000
5
1,000
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
© Dürr AG, CCI, Investor Relations, November 2014
0
China
India
Russia
Brazil
Mexico Group
17
DÜRR SERVICE
GROWTH STRATEGY
CustomerExcellence@Dürr
Module “Customer Experience”:
Improvement interaction with customers
Module “Service Excellence”:
Improvement + extension service business
Worldwide program
“Best in Class” for all contact points with the
customer
Consistent service orientation: sales,
proposals, operations, aftersales
Strengthening customer orientation,
enhancing customer loyalty
Capacity increase in service business
Profitable growth in service business
Developing instruments for regular
measurement of customer satisfaction
Further improvement in customer relationships and push of service business
© Dürr AG, CCI, Investor Relations, November 2014
18
DÜRR SERVICE
GROWTH STRATEGY
Increasing potential due to ageing plant structure
Expanding modernization business
Age of paint shops
(based on own calculations)
80%
75%
71%
67%
70%
62%
60%
50%
39%
40%
34%
30%
20%
10%
27%
26%
25%
19% 19%
17%
8%
4%
7%
0%
North
America
>20 years
South
America
Russia
10-20 years
EU
Asia
<10 years
~250 paint shops in the world are older than 20 years
© Dürr AG, CCI, Investor Relations, November 2014
19
EFFICIENCY
Global processes as a basis for profitability
Global processes / localization
Further globalization of Dürr processes
Global processes with full utilization of SAP/CAX/CRM/SharePoint
Strengthening of engineering center in India
Expansion of sourcing offices in China, India, Mexico, Brazil
Expansion of manufacturing in China, Mexico for international supply
Rigorous localization of Dürr products in the emerging markets
Supplemental product portfolio with low-cost/low-end solutions
Reduction of specifications
Local added value
© Dürr AG, CCI, Investor Relations, November 2014
20
EFFICIENCY
Global IT platforms: connected worldwide
Integrated Systems
Enterprise Resource Planning
CAX
Reporting
SharePoint
CRM
Project management software
Dürr Projects
Approx. € 30 m invested
Meeting
Management
Quality
Management
A single database worldwide
Efficient cooperation in all locations
Efficient controlling and timing of capacities
Continuous capex spending necessary
© Dürr AG, CCI, Investor Relations, November 2014
Change
Management
Projects
Information
Management
Site
Management
Milestone
Checklists
21
TAKEOVER OF HOMAG GROUP
Takeover details
Dürr acquired 55.9% of HOMAG Group AG for € 228.1 m in cash
Dürr joined a pool agreement and thus secured 77.9% of the voting rights, family/foundation remains
shareholder with 22.1%
HOMAG is expected to contribute positively to Dürr’s earnings from 2015; consolidation in Q4 2014
HOMAG shares remain listed
HOMAG Group Financials; in € m
2012
2013
Incoming orders
702.1
734.3
Sales
767.0
788.8
EBIT1)
31.4
34.6
Net profit shareholders (without non-controlling interests)
12.7
18.4
Operating cash flow
38.6
46.5
1) after
© Dürr AG, CCI, Investor Relations, November 2014
employee participation
22
TAKEOVER OF HOMAG GROUP
Business activity
Located in Schopfloch, Germany
World market leader in wood processing machines
used in the wood-based panel-processing furniture,
construction supplies and timber home construction
industries.
Customers produce home and office furniture, kitchens,
parquet and laminate flooring, windows, doors, stairs
and also complete wooden house construction systems.
The biggest customer is IKEA.
28% market share
International group with 37 locations worldwide; only 21% of sales revenues in Germany
5,400 employees worldwide, thereof approx. 4,000 in Germany
Solidly financed, equity ratio at 33%; net debt at € 70 m
Clear improvement in operating results in recent years, EBIT margin at 4.4%
© Dürr AG, CCI, Investor Relations, November 2014
23
TAKEOVER OF HOMAG GROUP
Optimal addition to Dürr´s portfolio
Target areas: mechanical and plant engineering, automation technology, measuring systems,
environmental business
World market leadership, innovation leader
Market niches without major players & no major Chinese players
No restructuring cases but acquisition targets with earnings improvement potential
Globalization/localization in emerging markets, making use of Dürr‘s excellent positioning
in these markets
Operational improvements (e.g. processes, best practice, tools) and synergies
(e.g. R&D, purchasing, sales, service)
© Dürr AG, CCI, Investor Relations, November 2014
24
TAKEOVER OF HOMAG GROUP
Substantial value increase expected
Optimization measures initiated at HOMAG Group will be
continued and supported
Globalization of value added
Further optimization and synergy opportunities (examples):
Process improvements
Global IT structures
Purchasing
Financing
Technologies/products (e.g. automation/robotics)
Earnings increase at HOMAG Group will continue
© Dürr AG, CCI, Investor Relations, November 2014
25
AGENDA
1. Dürr: global leader in strong competitive position
2. Markets
3. Dürr Strategy 2017
4. Financial overview, outlook and summary
© Dürr AG, CCI, Investor Relations, November 2014
26
STRONG EARNINGS1)
EBIT margin above guidance
in € m
2012
2013
9M 2013
9M 2014
Q3 2013
Q3 2014
Incoming orders
2,596.8
2,387.1
1,797.5
1,928.3
504.0
656.8
Sales revenues
2,399.8
2,406.9
1,746.1
1,641.7
614.4
581.3
Orders on hand
(end of period)
2,316.8
2,150.1
2,253.8
2,488.6
2,253.8
2,488.6
437.8
487.4
340.3
369.0
120.4
135.4
18.2
20.3
19.5
22.5
19.6
23.3
176.9
203.0
134.1
149.8
51.7
60.6
7.4
8.4
7.7
9.1
8.4
10.4
111.4
140.9
87.6
100.3
35.2
42.4
Gross profit on sales
Gross margin (%)
EBIT
EBIT margin (%)
Net income
1) w/o
© Dürr AG, CCI, Investor Relations, November 2014
HOMAG
27
CASH FLOW1)
Strong cash generation in the last years
in € m
2012
2013
9M 2013
9M 2014
EBT
147.7
184.6
119.1
135.4
Depreciation and amortization
28.5
27.4
22.5
20.2
Interest result
29.6
19.0
15.1
15.1
-21.3
-35.9
-25.5
-27.5
Provisions
-17.2
12.8
14.0
-10.0
Net working capital
-69.1
122.6
-83.5
62.1
19.4
-1.4
-16.3
-12.8
Cash flow from operating activities
117.6
329.1
45.4
182.5
Interest paid (net)
-20.3
-16.2
-16.1
-15.9
Capital expenditures
-31.4
-51.0
-34.0
-25.8
65.9
261.9
-4.7
140.8
Income taxes paid
Changes
Other
Free cash flow
1 ) w/o
© Dürr AG, CCI, Investor Relations, November 2014
HOMAG
28
SOLID FINANCIAL STRUCTURE1)
12/31/2011
12/31/2012
12/31/2013
09/30/2014
364.3
432.1
511.4
566.2
Equity ratio in %
21.9
23.9
25.7
25.5
Net financial status in € m
51.8
96.7
280.5
377.7
Net working capital in € m
32.6
98.6
-33.1
-90.3
6.1
14.8
-4.9
-14.8
28.4
43.9
66.2
75.62)
Equity in € m
DWC (days working capital)
ROCE in %
Total cash including time deposits, bonds etc. at € 715.2 m (12/31/2013: € 547.2 m)
Net cash at record level
Equity up by € 101.5 m compared to 09/30/2013
ROCE above 75%
© Dürr AG, CCI, Investor Relations, November 2014
1) w/o
HOMAG
2) annualized
29
ROCE AT RECORD LEVEL
2006
EBIT in € m
…
2009
…
2012
2013
33.1
5.7
176.9
203.0
Capital employed in € m
420.1
356.3
402.6
306.4
NWC in € m
154.7
57.4
98.6
-33.1
40.9
19.2
14.8
-4.9
7.9
1.6
43.9
66.2
DWC
ROCE in %
ROCE in %
Dürr business model favors low capital
employed
Strong focus on NWC management
CE has decreased since 2006 although
business volume has almost doubled
70
60
50
40
30
20
10
0
10
8
6
4
2
0
2006
© Dürr AG, CCI, Investor Relations, November 2014
CE turnover
2007
2008
2009
2010
2011
2012
2013
30
OUTLOOK 20141)
Order intake at upper end of target corridor, sales at € 2,300 m, EBIT margin at ~9% expected
in € m
in %
2,750
2,3002,500
2,500
25
~2,300
2,250
20
Sales
2,000
1,750
15
1,500
1,250
10
1,000
~9.0
Incoming
orders
Gross margin
(in %)
EBIT margin
(in %)
750
5
500
250
0
0
2009
2010
© Dürr AG, CCI, Investor Relations, November 2014
2011
2012
2013
2014e
1 ) w/o
HOMAG
31
SUMMARY
Strong market conditions, positioning for further growth
Ongoing demand, full order pipeline, numerous new projects are coming to the market (e.g. China &
North America)
Positioning for further growth: focus on emerging markets, brownfield business, product innovation
and new business segments (e.g. industrial business/application technology)
Service and modernization business becoming more important, group-wide project “Customer
Excellence@Dürr” with first success
Cost containment, global processes, localization
Solid financial structure, fully funded until 2021
HOMAG takeover will contribute positively to Dürr’s earnings after financing costs; strong sales &
earnings increase in 2015
© Dürr AG, CCI, Investor Relations, November 2014
32
FINANCIAL CALENDAR
11/12/2014
11/13/2014
11/18/2014
11/25/2014
11/26/2014
12/01/2014
12/09/2014
01/09/2015
01/12/2015
Contact
UBS European Conference 2014, London
LBBW German Day, London
3rd MainFirst Paris Conference, Paris
German Equity Forum, Frankfurt
UBS German Senior Investor Conference, Munich
Goldman Sachs Small & Mid Cap Symposium, London
CBS Small & Mid Cap Conference Geneva 2014, Geneva
18th Oddo Midcap Forum, Lyon
Commerzbank German Investment Seminar, New York
Dürr Aktiengesellschaft
Corporate Communications & Investor Relations
Günter Dielmann / Stefan Burkhardt
Carl-Benz-Str. 34
74321 Bietigheim-Bissingen
Germany
Phone: +49 7142 78-1785 /-3558
Telefax: +49 7142 78-1716
E-mail: [email protected]
© Dürr AG, CCI, Investor Relations, November 2014
33
Appendix
© Dürr AG, CCI, Investor Relations, November 2014
34
TAKEOVER HOMAG GROUP
Pro forma consolidation, without synergies, financing costs or other effects
P&L 2013
Dürr
HOMAG Group
Dürr
(incl. HOMAG Group)
Sales in € m
2,407
789
3,196
EBIT in € m
203
35
238
EBIT margin in %
8.4
4.4
7.5
Net profit group in € m
141
19
160
Net profit shareholders
in € m
140
18
1501)
Earnings per share in €
4.05
4.34
1) assumption:
© Dürr AG, CCI, Investor Relations, November 2014
55.9% shareholding of Dürr
35
TAKEOVER HOMAG GROUP
Pro forma consolidation, without synergies, financing costs or other effects
Key financial ratios new as of
6/30/2014
Equity in € m
Dürr1)
(incl. HOMAG Group)
Dürr
507
507
Net financial status in € m
227
-68
Goodwill in € m
288
4472)
Goodwill in % of balance sheet
12.9
15.9
2,233
2,813
(without non-controlling interests)
Balance sheet total in € m
1) assumption:
55.9% shareholding of Dürr; including Bond issue
disclosure of hidden reserves of € 125 m
2) assumption:
© Dürr AG, CCI, Investor Relations, November 2014
36
SHAREHOLDER STRUCTURE / DIVIDEND
POLICY
Free float at 71.4%
Shareholder structure (as of October 2014)*
25.1%
Heinz Dürr GmbH, Berlin
3.5%
Heinz und Heide Dürr Stiftung, Berlin
71.4%
Institutional and private investors
Dividend policy: 30-40% payout ratio
* figures rounded
© Dürr AG, CCI, Investor Relations, November 2014
37
MARKET SHARE DÜRR/COMPETITORS*
Paint and Final Assembly
Systems
Application Technology
Balancing and Assembly
Products
Cleaning and Surface
Processing
Dürr 50%, Eisenmann 10-15%, Taikisha/Geico 20%
local competitors: Scivic, Giffin, Gallagher Kaiser, Trinity (Toyota)
Dürr >50%, ABB 15-20%, Fanuc 15-20%, Yaskawa <10%
Balancing
Filling
Testing
Dürr 40%, Kokusai 15%, CEMB 10%
Dürr 25%, Fives Cinetic 22%, SAT Anlagentechnik 15%
Dürr 30%, BEP 20%, Fori 10%, Siemens 5%
Dürr 40%**, Valiant 20%, ABB 8%, Elwema 6%, Markert 4%, Sugino 4%
Clean Technology Systems
Air purification Dürr 40-50%***, John Zink/KEU 20%, CTP 10%
Wood Processing Systems
Dürr 28%, Biesse 10%, Scm group 7%, IMA 4%
* own estimates, average of last 3 years
** market share relating to automotive business
*** market share relating to business with exhaust-gas purification systems for automotive paint shops
© Dürr AG, CCI, Investor Relations, November 2014
38
SALES DEVELOPMENT PASSENGER CARS
JANUARY-SEPTEMBER 2014/13
Change year-on-year in %
16
New EU countries
China
13
Japan
6
USA
5
Western Europe
5
3
Germany
-0.4
India
-9
Brazil
-13
Russia
-15
-10
-5
0
5
10
15
20
Source: The German Association of the Automotive Industry (VDA); October 2014
© Dürr AG, CCI, Investor Relations, November 2014
39