Wacker Neuson Group
July 2019
Agenda
2Wacker Neuson SE, July 2019
Overview 01
Financials Q1/19 02
Outlook 03
Product range to meet the full spectrum of customer needs
3
Light Equipment Compact Equipment
1 FY 2018.2 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
Genuine parts
Telematics
Services
53% of sales127% of sales1 20% of sales1
Wacker Neuson SE, July 2019
Concrete solutions
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 53%
Services 20%
Revenue split (FY 2018, as %)
Business segmentsMost industries demand both light an compact equipment
Wacker Neuson SE, July 2019
Our brands and target groups
5
Construction, gardening/landscaping, energy sector etc. Agriculture, horse breeders, tree nurseries etc.
Wacker Neuson SE, July 2019
Global footprint
6
Sales by region Core markets: EMENA & NAM, further internationalization ongoing
Europe 73% Americas 23% Asia-Pacific 4%
Revenue split (FY 2018)
Wacker Neuson SE, July 2019
5 year comparison
7
Revenue and EBIT margin 2014-2018
Wacker Neuson SE, July 2019
1,2841,375 1,361
1,534
1,707
10.2%
7.4%6.5%
8.6%9.4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
500
1,000
1,500
2,000
2014 2015 2016 2017 2018
CAGR +7.4%[€ m]
Agenda
8Wacker Neuson SE, July 2019
Overview 01
Financials Q1/19 02
Outlook 03
Key figures
91 Net working capital/annualized revenue for the quarter.
2 Days inventory outstanding: (inventory/annualized cost of sales for the quarter)*365.
NWC ratio1: 45.8%
(+6.5PP yoy)
DIO2: 179 days
(+26 days yoy)
Equity ratio: 57.7%
(-7.8PP yoy)
March 31, 2019
Revenue yoy
+17%
EBIT yoy
+31%
Op. CF
€ -116m
FCF
€ -143m
(margin: 6.9%)
Q1/19
(€ 435m)
(Q1/18: € -45m)(Q1/18: € -41m)
Wacker Neuson SE, July 2019
339
425379 392
371
455416
466435
4.2%
11.0% 10.6%
7.8%6.2%
12.3%
10.1%
8.4%6.9%
0%
5%
10%
15%
20%
0
100
200
300
400
500
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Revenue and earnings
10
+17%
Q1/19: Accelerated revenue growth continues from Q4/18
Income statement (excerpt)
Q1/19: Comments
Revenue +17.3% yoy (adj. for FX effects: +15.6%)
▪ Double-digit growth in all reporting regions
▪ Compact equipment for the agricultural sector grew at a significantly
higher-than-average rate (+42% yoy)
Gross profit +15.3% yoy (gross profit margin -0.5PP)
▪ Restructuring at the plant in Wisconsin, USA, continued as planned
▪ Increased costs in production and logistics caused by changes in the
product mix, additional shifts required to manage increased production
volumes and handle unfinished machines
EBIT +31.3% yoy (EBIT margin: +0.7PP)
▪ Operating costs increased at a disproportionately low rate despite a
moderate increase in headcount, wage increases and costs for Bauma
trade show
▪ Operating costs as a share of revenue fell by 1.2PP on the prior year
Earnings per share +42.9% yoy
▪ The financial result was EUR 2.1m up on the previous year: Positive FX
effects (EUR +2.9m yoy) in particular due to the appreciation of
currencies in several emerging economies; interest income slightly below
prior year (EUR -0.8m yoy), mostly due to the initial application of IFRS 16
▪ The tax rate increased slightly to 30.4% (Q1/18: 29.1%)
Revenue
[€ m]
EBIT
margin
€ million Q1/19 Q1/18 Δ
Revenue 434.6 370.5 17.3%
Gross profit 110.9 96.2 15.3%
as a % of revenue 25.5% 26.0% -0.5PP
SG&A incl. other income/expenses -80.7 -73.2 10.2%
as a % of revenue -18.6% -19.8% 1.2PP
EBIT 30.2 23.0 31.3%
as a % of revenue 6.9% 6.2% 0.7PP
Profit for the period 20.8 14.6 42.5%
EPS (in €) 0.30 0.21 42.9%
Wacker Neuson SE, July 2019
Q1/19: Compact equipment driving growth
434.6
13.4
104.5
316.7
Total Q1/19
Asia-Pacific
Americas
Europe
Business development by region and business segment
11
Q1/19: Double-digit growth in all regions
Revenue Europe +18.3% yoy (adj. for FX effects: +18.4%)
▪ Strong demand for compact and light equipment in all regions
▪ Rapid growth in the UK (significant gains with dumpers and excavators),
above-average growth in France, Poland and Austria with increased
market shares
▪ Revenue generated with Weidemann- and Kramer-brand compact
equipment for the agricultural sector +42% yoy
Revenue Americas +14.0% yoy (adj. for FX effects: +6.7%)
▪ Worksite technology (especially generators and light towers) and compact
equipment were key growth drivers
▪ Growth dampened by pre-buy effects in Q4/18 related to changes in
emissions legislation in Canada
▪ Positive developments in South America, uncertainties remain
▪ Earnings bolstered by improved currency situation,
restructuring in the US continued as planned
Revenue Asia-Pacific +21.8% yoy (adj. for FX effects: +20.9%)
▪ Production in China ramped up on schedule, positive development with
light equipment and excavators
▪ First mini and compact excavators delivered to John Deere
73%
24%
3%
100%
+18%
+14%
+22%
+17%
share yoy
46.1
2.5
-1.7
30.2
EBIT1
Q1/19: Comments
Revenue [€ m]
434.6
82.3
245.8
109.8
Total Q1/19
Services
Compact equipment
Light equipment 25%
56%
19%
100%
+6%
+25%
+12%
+17%
share yoy
1 EBIT for regions before consolidation.2 Revenue by business segment before cash discounts.
Revenue [€ m]2
Wacker Neuson SE, July 2019
Rise in inventories and receivables drive up net working capital
12
Inventories
Trade payables
Trade receivables
▪ Seasonal rise in inventories, further increase in pre-buy engines
▪ Rise in trade receivables due to the increased volume of business and
expansion of the dealer network in North America
▪ Rise in trade payables due to the increased volume of business and an
increase in inventory compared with the prior-year quarter.
→ Significant, temporary rise in net working capital (see the following
slide)
1 Days inventory outstanding = (inventories/(cost of sales*4))*365 days; 2 Days sales outstanding =
(receivables/(revenue*4))*365 days; 3 Days payables outstanding = (payables/(cost of sales*4))*365 days.
Comment
Trade payables [€ m]
Inventories
[€ m]
462428 439 434 459 462
500553
633
171
129150 141 153
130151 144
179
0
100
200
300
400
0
100
200
300
400
500
600
700
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
DIO1
[days]
241272
249 235273
320 304 303
371
65 58 60 5567 64 67
59
78
0
50
100
150
200
0
100
200
300
400
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
113 114 120134
149163 167
213 208
42 34 41 43 50 46 50 56 59
0
100
200
300
400
0
100
200
300
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Trade receivables [€ m]
DPO3
[days]
DSO2
[days]
Wacker Neuson SE, July 2019
13
Net working capital
Free cash flow
Cash flow from operating activities
▪ Increase in net working capital due to a temporary rise in inventory and
increased trade receivables (see previous slide)
▪ Financing programs used to establish a network of anchor dealers in
North America (rise in other assets)
▪ Increased investments in growth
▪ Major yet temporary impact on free cash flow, normalization of
inventory levels and reduction in trade receivables expected over the
coming months
-19
3361 63
-41
610 8
-116-150
-100
-50
0
50
100
150
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Comment
-26
2851 46
-45
57
-3
-12
-143-160
-120
-80
-40
0
40
80
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Free cash flow
[€ m]
Cash flow from operating activities
[€ m]Net working capital
[€ m]
590 586 568 536583
620 638 644
797
44%
34% 38% 34%39%
34%38%
35%
46%
0%
20%
40%
60%
80%
100%
0
200
400
600
800
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Net working capital
[as a % of sales]
Cash flow impacted by a rise in net working capital
Wacker Neuson SE, July 2019
1,102 1,083 1,103 1,115 1,122 1,170 1,200 1,221 1,241
67% 65% 67% 69%65% 65% 65% 64%
58%
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
1,200
1,400
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
237 245
195
148
193 188 193 205
358
22% 23%18%
13%17% 16% 16% 17%
29%
0%
10%
20%
30%
40%
50%
60%
70%
0
100
200
300
400
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Increased gearing in balance sheet
14
▪ Temporary reduction in equity ratio due to increased debt and a
structural reduction of around 2PP due to the first-time application of
IFRS 16
▪ Marked rise in net financial debt, gearing1 increased to 29%
▪ May 2019: Promissory note (Schuldschein) successfully issued with
attractive interest rates and terms of five and seven years to secure
long-term funding for the Group’s accelerated growth
1.9
0.90.8
0.7
1.2
0.60.8 0.8
1.6
0.0
0.5
1.0
1.5
2.0
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19
Net financial debt
[€ m]
Equity
[€ m]
Net financial debt and gearing1
Equity and equity ratio
Net financial debt/EBITDA2
1 Net financial debt/equity. 2 Net financial debt/annualized EBITDA for the quarter.
Gearing1
Equity ratio
Net financial debt/
EBITDA2 [x]
Comment
Wacker Neuson SE, July 2019
50
75
100
125
Wacker Neuson SDAX DAX Peergroup
Share Development
15
The share in 2018/191
Key figures per share
Dividend payout
1 As at June 17, 2019 2 Peergroup: Ashtead, Atlas Copco, Bauer, Caterpillar, Cramo, Deutz, DoosanBobcat, Haulotte,
Husqvarna, John Deere, Komatsu, Manitou, Palfinger, Ramirent, Terex, United Rentals, Volvo. 3 As at June 19, 2019.
1.30
0.940.81
1.25
2.06
0.50 0.50 0.500.60
38%53%
62%48% 53%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
0.00
0.50
1.00
1.50
2.00
2.50
2014 2015 2016 2017 2018
EPS in € Dividend per share in € payout ratio
Family 58%
Free float 42%
in € Q1/19 Q1/18
Earnings per share 0.30 0.21
Book value per share 17.69 16.00
Share price end of period 21.20 28.14
Market capitalization (€ m) 1,487.0 1,973.7(Total shares: 70,140,000)
Coverage3 Shareholder structure
Bank TP (€) Recom. Date
Hauck & Aufhäuser 36.50 Buy June 14, 2019
Warburg 28.80 Buy June 17, 2019
MainFirst 28.00 Outperform June 11, 2019
Metzler 27.00 Buy May 16, 2019
Berenberg 27.00 Buy Jan 20, 2019
Commerzbank 25.80 Hold June 19, 2019
Bankhaus Lampe 23.00 Buy May 07, 2019
Kepler Cheuvreux 22.00 Hold May 08, 2019
Pareto 21.30 Hold May 07, 2019
0.60
Special
dividend
0.50
% -45%
2
+34%
1.10
Wacker Neuson SE, July 2019
Agenda
16Wacker Neuson SE, July 2019
Overview 01
Financials Q1/19 02
Outlook 03
17
▪ Development of anchor dealers 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
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.
Wacker Neuson SE, July 2019
Relocation of skid steer production to the US pays off
Skid steer as key product for North American market Development of anchor dealers in North America
1 Source: CECE, Off-Highway, 2018.
52,100
65,00072,000
0
20,000
40,000
60,000
80,000
2018 2019e 2023e
18
New plant located in Pinghu, 30 km from Shanghai city border.
▪ Mini and compact excavators for Asia-Pacific, production of the first model
(1.7 tons) started in Q1/18, production of larger models (5-7 tons) started in
Q4/18
▪ OEM cooperation with John Deere helps to improve capacity utilization
(cooperation covers machines in the range of 1.7 to 7.5 tons)
▪ Building on local/regional presence Demand for repair and maintenance
of infrastructure is growing, especially in megacities
Wacker Neuson SE, July 2019
Setting the base for further growth in Asia
Successful start of production in Pinghu (China))
Mini excavator market China 2018 – 2023e (units)1
Excavator: EZ17.
1 Source: Off-Highway, April 2019.
Strategic alliances and partnerships leverage our sales
191 Not in Japan, phasing out. 2 Commonwealth of Independent States. 3 Kramer “green line” only. 4 WN = Wacker Neuson.
Wacker Neuson produces
for Caterpillar1
Kramer3 distributes
via JD‘s dealer network
Weidemann distributes
via ISEKI‘s network
Wacker Neuson distributes
via MHE‘s network
HAMM produces
for Wacker Neuson
OEM (Latin America) Sales (Japan) Sales (ASEAN)
Core Markets
Further partnerships in Latin America & Asia
Wacker Neuson SE, July 2019
Randon produces for Wacker Neuson
OEM (global)OEM (global1) Sales (EMENA & CIS2) OEM (APAC) OEM (Europe)
Wacker Neuson produces
for John Deere
Wacker Neuson produces
for Würth
Strategic alliance with John Deere in EMENA and CIS1
201 Commonwealth of Independent States. 2 Revenues of FY 2017 in € bn, agricultural sectors only.
3 FY ending October 31. 4 FY ending September 30. Source: Annual reports. Wacker Neuson SE, July 2019
John Deere: Market leader within agricultural machinery2
9 small and compact wheel loaders 9 telehandlers4 tele wheel
loaders
Start in EMENA & CIS1 (Region 2)
1.3
3.8
7.4
9.9
11.3
17.9
SAME Deutz-Fahr
Claas
AGCO
CNH Industrial
Kubota
John Deere
4
3
[€ bn]
Outlook for 2019
21
Revenue and earnings guidance for 2019 confirmed
Business index for construction industry Business index for agricultural industry
▪ CECE business index at a high level, expectations in the agricultural sector
have cooled according to CEMA
▪ IMF lowered its economic outlook once again in April, macroeconomic
uncertainties remain in place
▪ Situation in the supply chain has improved compared with 2018; however,
the risk of delayed deliveries remains
▪ Revenue and earnings guidance for 2019 confirmed, with revenue
expected in the upper half of the projected range
▪ Net working capital expressed as a percentage of revenue is expected to
be slightly lower than the prior-year level
Source: CECE, May 2019 Source: CEMA, May 2019
2012 2013 2014 2015 2016 2017 2018 2019
1,707
9.4%
8%
9%
10%
11%
12%
0
500
1,000
1,500
2,000
2018 Guidance 2019
1,775-1,850
9.5-10.2%
+4-8%Revenue
[€ m]
EBIT
margin
Comments
Wacker Neuson SE, July 2019
Agenda
22Wacker Neuson SE, July 2019
Appendix
23
“Strategy 2022” and mid-term targets
“Strategy 2022” Mid-term targets 2022
Wacker Neuson SE, July 2019
24
Source: Off-Highway Research, April 2019.
▪ Worldwide construction equipment market to remain on a very high
level
▪ Strategy 2022 focuses on market share gains, especially with
compact equipment
Tailwind from global markets
Construction industry: 2019–2023 machinery sales Development of agricultural sector in Germany
Wacker Neuson SE, July 2019
Europe India Japan North America RestChina
Milk price development in Germany
Source: ife Institut für Ernährungswirtschaft, Kiel, March 2019.
Source: German Farmer’s association, March 2019.
Price [Cent / kg milk]
[Units]
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
Bomag
Husqvarna
Multiquip/Mikasa
Weber MT
Competitors
JCB
Manitou
Schaeffer
Thaler
Compact equipment
Atlas Weyhausen
Bobcat (Doosan)
Kubota
Manitou
Takeuchi
Yanmar
Heavy equipment
Caterpillar
Hitachi
JCB
Komatsu
Liebherr
Volvo
25
Competitive landscape for Wacker Neuson Group
Wacker Neuson SE, July 2019
26Wacker Neuson SE, July 2019
Challenges: New emission regulations for diesel engines
Engine emissions regulations – lack of harmonization driving costs and consuming resources
27
Continuous expansion of zero emission portfolio
Wacker Neuson SE, July 2019
EZ17e
DW15e
DT10e
AP1840e AP2560e
AS60e
AP1850e
ACBe
Financial Calendar and Contact
28
July 1, 2019 Roadshow Paris
August 6, 2019 Publication of half-year report 2019; analysts’ & investors’ conference call
August 28, 2019 Commerzbank Sector Conference, Frankfurt
September 24, 2019 Berenberg/Goldman Sachs German Corporate Conference, Munich
November 7, 2019 Publication of Q3 report 2019; analysts’ & investors’ conference call
Contact
Wacker Neuson SE
IR Contact: +49 - (0)89 - 354 02 - 427
www.wackerneusongroup.com
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.
Wacker Neuson SE, July 2019