wacker neuson se...strongest growth in the compact equipment segment 370.5 11.0 91.7 267.8 total...

Wacker Neuson SE

Roadshow presentation, June 2018

Agenda

2

Q1/18

Outlook

Overview

Wacker Neuson SE, June 2018

Product range to meet the full spectrum of customer needs

3

Light Equipment Compact Equipment

1 FY 2017.2 In selected countries.

Concrete technology Compaction

Demolition Power & Lighting Pumps

Heating

Excavators

Dumpers

Telehandlers Wheel loaders

Skid SteersBackhoe-loaders

AcademyUsed machines2

Repair2 &

Maintenance2

Financing

Rental service2

e-Store2

Spare parts

Telematics

Services

52% of sales127% of sales1 21% of sales1


Target industries besides construction

4

Markets Light equipment Compact equipment

Agriculture

Renovation/rehabilitation

Development

Infrastructure (road and highway

construction, bridge construction)

Gardening and landscaping

Handling logistics/port logistics

Residential construction

Demolition

Maintenance/repairs

Industry & Recycling

Underground construction

Oil & gas/energy industry

Events

Municipalities

Target group oriented sales:

Light equipment 27%

Compact equipment 52%

Services 21%

Revenue split (2017, as %)

Business segmentsMost industries demand both light an compact equipment


Our brands and target groups

5

Construction, gardening/landscaping, energy sector etc. Agriculture, horse breeders, tree nurseries etc.


Global footprint

6

Sales by region Core markets: EMENA & NAM, further internationalization ongoing

Europe 74% Americas 23% Asia-Pacific 3%

Revenue split (2017)


5 year comparison

7

[%][€ m]

Revenue and EBIT margin 2013-2017


Agenda

8

Q1/18

Outlook

Overview


Key Figures

9

Revenue yoy

+9.5%

EBIT yoy

+60.8%

Op. CF

€ -41m

FCF

€ -45m

(margin: 6.2%)

Q1/18

NWC1-ratio: 37.9%

(-4.9PP yoy)

DIO2: 150 days

(-17 days yoy)

Equity ratio: 65.8%

(-1.2PP yoy)

March 31, 2018

(€ 370.5m)

(Q1/17: € -26m)(Q1/17: € -19m)

Adj. EBIT yoy

+41.1%

EPS yoy

+61.5%

(margin: 6.2%)

(€ 0.21)

1 Average net working capital for the quarter / annualized revenue for the quarter.2 Days inventory outstanding: (average inventory for the quarter / annualized cost of sales for the quarter)*365.


316

381

316348 339

425379 392

371

5.5%

8.7%

6.5%5.1%

4.2%

11.0% 10.6%

7.8%6.2%

0%

5%

10%

15%

20%

0

100

200

300

400

500

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Revenue and earnings

10

+9.5%

Revenue and earnings significantly higher than in Q1/17

Income statement (excerpt)

Comments on Q1

Revenue +9.5%

Strong demand in core markets Europe and North America, deliveries

delayed by bottlenecks on supplier side

Currency-adjusted revenue increased 14.2%

Gross profit margin at prior-year level (+0.1PP)

Less favorable regional and product mix yoy

Higher material prices, limited material availability

EBIT +60.8%

Operating cost at prior-year level, percentage of revenue down by 2.0PP

Adjustments: In Q1/18, no adjustments were made. A negative one-off

effect in the amount of € 2.0m was reported in Q1/17.1

Earnings per share +61.5%

Financial result: Negative FX effects (€ -1.6m), slight increase in interest

income (€ +0.3m)

Tax rate stable at 29.1% (Q1/17: 29.0%)

Revenue

[€ m]

[€ m] Q1/18 Q1/17 Δ

Revenue 370.5 338.5 9.5%

Gross Profit 100.6 91.9 9.5%

as a % of revenue 27.2% 27.1% 0.1PP

SG&A incl. other income/expenses -77.6 -77.6 0.0%

as a % of revenue -20.9% -22.9% 2.0PP

EBIT 23.0 14.3 60.8%


Adj. EBIT 23.0 16.3 41.1%


Profit for the period 14.6 9.3 57.0%

EPS (in €) 0.21 0.13 61.5%

1 Linked to changes to the Executive Board.

EBIT

margin


Strongest growth in the compact equipment segment

370.5

11.0

91.7

267.8

Total Q1/18

Asia-Pacific

Americas

Europe

Business development by region and business segment

11

Growth mainly driven by Europe and North America

Revenue Europe +8% yoy (adj. for currency effects: +9%)

Strong growth in particular in France, England, Poland, Austria and

Benelux countries; recovery momentum continues in Southern Europe

Revenue compact equipment for the agricultural sector +12%, alliance

with John Deere developing as planned

Revenue Americas +13% yoy (adj. for currency effects: +29%)

Double-digit growth in both North and South America

Region again makes positive contribution to earnings

Strong growth in worksite technology and compact equipment

Intensified competitive pressures due to imports from the Eurozone

becoming more expensive

Rental chains show high level of investment activity

Revenue Asia-Pacific +16% yoy (adj. for currency effects: +26%)

Strong growth reported for excavators in China

Start of production at new plant in Pinghu (near Shanghai)

Restructuring in Australia completed (provision for negative one-off effect

from the sale of a building already recognized in Q4/17)

72%

25%

3%

100%

+8%

+13%

+16%

+9%

share yoy

36.2

1.4

-0.7

23.0

EBIT1

Comments on Q1

Revenue [€ m]

370.5

73.2

199.4

103.2

Total Q1/18

Services

Compact Equipment

Light Equipment 27%

53%

20%

100%

+5%

+13%

+7%

+9%

share yoy

1 EBIT for regions before consolidation.2 Revenue by business segment before cash discounts.

Revenue [€ m]2


1,067 1,057 1,067 1,093 1,102 1,083 1,103 1,115 1,124

67% 66% 68% 69% 67% 65% 67% 69% 66%

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

235258

224206

237 245

195

148

193

22%24%

21% 19%22% 23%

18%13%

17%

0%

10%

20%

30%

40%

50%

60%

70%

0

100

200

300

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Sound balance sheet structure

12

At 17%, gearing1 remains at a conservative level

Net financial debt higher than at the close of the year due to seasonally

higher net working capital

Promissory note (Schuldschein) of USD 100m issued end of February

2018

Short-term credit lines replaced with three medium-term credit lines

1.7

1.3

1.5 1.4

1.9

0.90.8

0.7

1.2

0.0

0.5

1.0

1.5

2.0

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Net financial debt

[€ m]

Comments on Q1

Equity

[€ m]

Gearing1 further reduced yoy

Stable equity ratio

Net financial debt/EBITDA2 at low level

1 Net financial debt / equity. 2 Net financial debt/annualized EBITDA for the quarter.

Gearing1

Equity ratio

Net financial debt/

EBITDA2 [x]


-31

12

35

19

-26

28

5146

-45-50

-30

-10

10

30

50

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Management of net working capital proving effective

13

Free cash flow negative due to seasonality

Net working capital ratio1 down 5PP yoy

Days inventory outstanding (DIO)2 down 17 days yoy

Cash flow from operating activities € -41.4m (Q1/17: € -19.1m) primarily

due to an increase in net working capital € +52.4m (Q1/17: € +21.4m)

Seasonal increase in inventory in Q1

Delayed deliveries (due to bottlenecks on supplier side)

Increase in trade receivables due to higher business volume

Drop in cash flow from investment activities (Q1/18: € -3.7m;

Q1/17: € -6.9m) due to sale of building in Australia

470 455 446 445 452 445 434 435 443

187

152

180

159167

134148

141150

100

150

200

250

300

0

100

200

300

400

500

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

1 Average net working capital for the quarter / annualized revenue for the quarter.2 (Average inventory for the quarter / annualized cost of sales for the quarter)*365.

Comments on Q1

587 596 579 567 580 588 577 553 561

46%

39%

46%41% 43%

35%38%

35%38%

0%

10%

20%

30%

40%

50%

60%

70%

0

100

200

300

400

500

600

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18

Free cash flow

[€ m]

Ø Net working capital

[€ m]

Ø Inventory

[€ m]

Net working capital

as a % of sales1

DIO2 in days


80

100

120

140

160

180

200

220

240

Wacker Neuson SDAX DAX Peergroup

Share & Dividend

14

Our share in 2017 & 2018

Key figures per share

Stable dividend policy (40 – 50% payout ratio)

1 As at June 08, 2018. 2 Peergroup: Atlas Copco, Bauer, Caterpillar, Cramo, Deutz, Haulotte, Manitou, Palfinger, Ramirent, Terex.

%+93% -14%1

2

0.87

1.30

0.940.81

1.25

0.400.50 0.50 0.50

0.60

46%38%

53%62%

48%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

0.5

1

1.5

2

2.5

2013 2014 2015 2016 2017

EPS in € Dividend per share in € (paid out for respective year) Payout ratio

Family 63%

Free float 37%

in € Q1/18 Q1/17

Earnings per share 0.21 0.13

Share price end of period 28.14 21.02

Book value per share 16.02 15.69

Market capitalization (€ m) 1,973.7 1,474.3(total shares: 70,140,000)

Bank TP (€) Recom. Date

Hauck & Aufhäuser 40.00 Buy Jun 08, 18

Metzler 32.00 Buy May 09, 18

Lampe 33.00 Hold May 08, 18

Berenberg 31.00 Hold May 09, 18

Warburg 29.00 Hold May 09, 18

Equinet 27.20 Hold Nov 24, 17

Kepler Cheuvreux 27.00 Hold May 09, 18

Coverage1 Shareholder structure


Agenda

15

Q1/18

Outlook

Overview


16

Extension of contracted dealer network for compact and light

equipment

Pro-active relationship management with key account rental

customers and construction companies

Focus on diversification of sales channels and industries

Light equipment established in new retail channels

North American market for skid steers accounts for ~70% of world market

Essential product to be attractive for dealers and rental companies

Large potential for further compact equipment sales

Expansion of plant in Wisconsin & integration of heaters and light towers

from plant in Michigan (closure of plant in 2018)

81,00089,000 91,000

0

25,000

50,000

75,000

100,000

2016 2017 2020e

Skid Steer market North America1

2016 – 2020e (units)

Roadshow Truck, Franklin Equipment.


Relocation of skid steer production to the US pays off

Skid steer as key product for North American market Development of contracted dealers in North America

1 Source: CECE, Off-Highway.

36,600

43,00045,000

0

10,000

20,000

30,000

40,000

50,000

2017 2018e 2022e

17

New plant located in Pinghu, 30 km from Shanghai city border.

Mini excavators for China and the region, production started in January

Building on local/regional presence Demand for repair and maintenance

of infrastructure is growing, especially in megacities

130,000 qm, 33,000 qm for modern production, offices and logistic facilities

Integration of light equipment production from the Philippines into Pinghu

(closure of plant in 2018)


Setting the base for further growth in Asia

Successful start of production of mini excavators in Pinghu (China))

Mini excavator market China 2017 – 2022e (units)1

Excavator: EZ17.

1 Source: OHW Report April 2018.

Strategic alliances and partnerships leverage our sales

181 Not in Japan.

2 Commonwealth of Independent States. 3 Kramer “green line” only.

Wacker Neuson produces for Caterpillar1 Kramer3 distributes via JD‘s dealer network

Wacker Neuson via Everdigm‘s network Weidemann via ISEKI‘s network Wacker Neuson via MHE‘s network

HAMM produces for Wacker Neuson

OEM (global)OEM (global1) Distribution (EMENA & CIS2)

OEM (Latin America) Distribution (Korea) Distribution (Japan) Distribution (ASEAN)

Core Markets: Europe & North America

Latin America & Asia


Randon produces for Wacker Neuson

Strategic alliance with John Deere in EMENA and CIS1

191 Commonwealth of Independent States. 2 Revenues of FY 2016 in USD bn, agricultural sectors only;

3 FY ending October 31, 2016; 4 FY ending September 30, 2016. Source: Annual reports. Wacker Neuson SE, June 2018

John Deere

Kubota

CNH Industrial

AGCO

Claas

SAME Deutz-Fahr

18.5

11.7

10.1

7.4

4.0

1.5

John Deere: Market leader within agricultural machinery2

3

4

9 small and compact wheel loaders 4 telehandlers4 tele wheel

loaders

Start in EMENA & CIS1 (Region 2)

Outlook for 2018

20

Guidance for fiscal 2018 as a whole confirmed

Business index for the construction industry at a high level Business index for the agricultural sector at a high level

Comments

1 Does not include potential one-off income from the sale of a property owned by the Group.

Business index in core industries at a high level

Order intake higher than prior-year figure

Mid-year price increase of 2% on average planned for July 2018

Guidance for fiscal 2018 confirmed

Special risks:

Delayed deliveries (suppliers having difficulties meeting orders)

Currency developments, especially EUR/USD (negative translation

effects on revenue, negative transaction effects on earnings)

1,534

8.6%

5%

7%

9%

11%

13%

15%

0

500

1,000

1,500

2,000

FY 2017 FY 2018

1,650 – 1,700

9.0 – 10.0%1

Source: CECE, May 2018. Source: CEMA, March 2018.

+8 – 11%Revenue

[€ m]

EBIT

margin

47.0

2012 2013 2014 2015 2016 2017


Agenda

21

Appendix


22

“Strategy 2022” and mid-term targets

“Strategy 2022” Mid-term targets 2022


Progress with “Strategy 2022”

23

ACCELERATION

EXCELLENCE

CUSTOMER-CENTRICITY

FOCUS

Expansion of (direct) sales network to include Slovakia1

Optimization and expansion of dealer structure in North America

Progress with financing solutions for customers and distribution

partners

Expansion of rental portfolio to include more flexible solutions tailored

to individual customer needs

R&D focus: Alternative drive technologies, presentation of further zero

emission products at INTERMAT in France (April 2018)

Successful net working capital management, with optimized inventory

structure in particular

Improvements to processes and organizational structure in

aftermarket proving effective

Reduction in structure costs and optimization of value chain:

Integration of light equipment production from Manila

(Philippines) into plant Pinghu (China) underway

Integration of Light equipment production from Norton Shores,

(Michigan, USA) into plant Menomonee Falls (Wisconsin, USA)

underway

Employee development programs

Training initiatives

Profitable business field: Aftermarket & services now an independent

legal entity

Initiatives to enhance delivery capabilities

Internationalization: Successful launch of excavator production in China

Targeted financing for further growth: promissory note in USD

(Schuldschein), new medium-term credit lines

1 Countries with direct sales (120 Wacker Neuson sales and service stations): Germany, Austria,

Switzerland, Poland, Czech Republic, Slovakia, Benelux countries, Denmark, Sweden.Wacker Neuson SE, June 2018

24

Source: Off-Highway Research, August 2017.

Most major regional equipment markets are expected to see growth

in 2018

Europe and Americas main growth drivers

Europe: strong business in the construction sector, upbeat mood

in the agricultural sector

North America: stronger revenue from skid steer loaders and

other compact equipment

Asia-Pacific: a key driver will be China

+11%

+15%

1,000,000

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

2012 2013 2014 2015 2016 2017e 2018e 2019e 2020e 2021e

Tailwind from global markets

Construction industry: 2017–2021 machinery sales +11% Development of agricultural sector in Germany


Europe India Japan North America RestChina

Price developments for butter & milk in the EU

Source: Nilesen, Milchindustrieverband, Die Welt, 2017.

Source: German Farmer’s association, March 2018.

Fragmented market

Dominated by niche/specialized manufacturers

Not targeted by heavy equipment manufacturers

Quality rather than price

Significant barriers to market entry

Light equipment/

construction

Market structures and dynamics

Fragmented market with local manufacturersCompact equipment/

agriculture

Global competitors

Similar target groups to light equipment for the construction

industry

Specialized manufacturers

Compact and heavy equipment providers

Compact equipment/

construction

Ammann

Atlas Copco/Dynapac

Bomag

Bosch pt

Hilti

Multiquip/Mikasa

Competitors

Giant

JCB

Schaeffer

Thaler

Compact equipment

Atlas Weyhausen

Bobcat (Doosan)

Kubota

Manitou/Gehl

Takeuchi

Yanmar

Heavy equipment

Hitachi

JCB

Komatsu

Liebherr

Terex

Volvo

25

Competitive landscape for Wacker Neuson Group


26Wacker Neuson SE, June 2018

Challenges: New emission regulations for diesel engines

Engine emissions regulations – lack of harmonization driving costs and consuming resources

27

EZ17e


Leadership in alternative drive technologies

Financial calendar and contact

28

June 20, 2018 Paris roadshow

June 21, 2018 Warburg Highlights Conference, Hamburg

June 27, 2018 Milan roadshow

June 28, 2018 Lugano roadshow

August 7, 2018 Publication of 2018 half-year report; analysts and investors call

September 24, 2018 Baader Investment Conference, Munich

September 25, 2018 Berenberg and Goldman Sachs Seventh German Corporate Conference, Munich

November 8, 2018 Publication of Q3 report; analysts and investors call

Numerous other conferences and roadshows


Disclaimer

Cautionary note regarding forward-looking statements

The information contained in this document has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on, the

fairness, accuracy, completeness or correctness of this information or opinions contained herein.

Certain statements contained in this document may be statements of future expectations and other forward looking statements that are based on management‘s current view and assumptions and

involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

None of Wacker Neuson SE or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this

document or its content or otherwise arising in connection with this document.

This document does not constitute an offer or invitation to purchase or subscribe for any securities and neither it nor any part of it shall form the basis of or be relied upon in connection with any

contract or commitment whatsoever.

Contact

Wacker Neuson SE

IR Contact: +49 - (0)89 - 354 02 - 173

[email protected]

www.wackerneusongroup.com

wacker neuson se...strongest growth in the compact equipment segment 370.5 11.0 91.7 267.8 total...

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