voith group on a good footing for future...
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Annual press conference | Stuttgart | December 7, 2017 | Public 1
Voith Group On a good footing for future growthStuttgart, December 7, 2017
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Contents
1. Where we now stand1.1 Highlights in the 2016/17 fiscal year1.2 Key figures for the 2016/17 fiscal year
2. What we are planning2.1 Outlook for 20182.2 Medium-term objectives
Annual press conference | Stuttgart | December 7, 2017 | Public 2
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Overview of the 2016/17 fiscal yearA good year for Voith
Annual press conference | Stuttgart | December 7, 2017 | Public 3
Positive performance in operating business, sustainable improvement in earnings power confirmed.
Significant strengthening in the balance sheet, room for maneuver significantly expanded.
Digital agenda moves forward as planned – First key milestones reached.
Core business developedwith an eye to the future, pioneering innovations in all Group Divisions.
1 2 3 4
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1. Positive performance in operating business Sustainable improvement in earnings power confirmed
• Forecasts for the 2016/17 fiscal year achieved and even exceeded in some cases.
• Orders received above expectations in a slightly brighter investment climate, sales as anticipated stable at the high level of the previous year.
• Rise in profit from operations in core business, increase in efficiency as part of the Group’s reorganizationmore and more visible.
• Start-up costs for Voith Digital Solutions covered from current operations.
• Net income (after tax) for the year at an all-time high.
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2. Significant strengthening in the balance sheetRoom for maneuver significantly expanded
• Equity ratio reached a historical high.• Voith Group posts a sharp increase in net liquidity
before embarking on its next phase of growth. • Change in legal form from a GmbH to GmbH & Co.
KGaA is to give Voith more headroom and support the growth strategy.
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3. Digital agenda moves forward as planned First key milestones reached
• Internal development of Voith Digital Solutions almost completed: Products and services, projects and teams transferred from the three traditional Group Divisions and Group’s own IT integrated.
• Expansion of the portfolio of digital offerings, first lighthouse project launched in the shape of the online marketplace merQbiz.
• Numerous incubator projects instigated in all Group Divisions.
• Majority holding in the digital agency Ray Sono as the first largish acquisition.
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4. Core business developed with an eye to the future Pioneering innovations – example electric drive• Voith on the way to becoming a system vendor of electric drives and for digital
vehicle and fleet management systems.
• Our approach is a combination of electrical drive and precise real-time fleet management system (launch will be at the IAA Commercial Vehicles trade fair in 2018).
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Where we now stand Conclusion
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• Robust market position further strengthened in a challenging competitive setting.
• Efficient structures and sustainable improvement in return on sales in core business achieved following the Group’s successful reorganization.
• Innovativeness increased throughout the Group, technology leadership lastingly strengthened thanks to greater forward-looking investments.
• Fully developed strategic and financial agility for organic growth and growth through acquisitions.
Ready for the next phase of growth!
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Contents
1. Where we now stand1.1 Highlights in fiscal 2016/171.2 Key figures for fiscal 2016/17
2. What we are planning2.1 Outlook for 20182.2 Medium-term objectives
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Orders received in the GroupAppreciable increase
Annual press conference | Stuttgart | December 7, 2017 | Public 10
• Orders received: year-on-year increase of 6.3 %
• Strongest rise (24 %) in orders received by Voith Paper.
• Orders on hand remain at a high level: € 5.2 billion (€ 5.3 billion).
• Book-to-bill rate greater than 1.Voith Turbo
31 % Voith Hydro
27 %Voith Paper
42 %
Orders received Group in € millions
Orders received Group (€4,368 million)
by Group Division (rounded)
4,108 4,368
2015/16 2016/17
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4,252 4,223
Group’s salesAs expected at the previous year’s high level
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Voith Turbo
31 % Voith Hydro
33 %Voith Paper
36 %
• Stable sales performance in line with the forecast for the year.
• Heterogeneous developments in the three core divisions: – slight increase at Voith Paper, – stable performance at Voith Hydro,– decline as expected at Voith Turbo.
• Portfolio remains well-balanced with three core divisions that are of virtually equal importance.
2015/16 2016/17
Sales Group in € millions
Sales (€4,223 million)
by Group Division (rounded)
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Profit from OperationsProfitability in core business increased further
12
• Profits of the three core operating divisions up on the previous year in total, especially thanks to the sharp increase at Voith Paper.
• Decline in the profit from operations for the Group due to planned start-up costs for Voith Digital Solutions.
2015/16 2016/17
295275 241304
Profit from operations for the three Group Divisions in total
Profit from operations for the Group
Annual press conference | Stuttgart | December 7, 2017 | Public
2015/16 2016/17
114
105
107
106
91
76
Hydro
Paper
Turbo
295 304
Profit from operations in core business in € millions
Profit from operations: Group vs. core business in € millions
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Group’s net result At a high level
13
• The Group’s net result was impacted substantially by revenue from the sale of KUKA.
Annual press conference | Stuttgart | December 7, 2017 | Public
Group’s net result in € millions
2015/16 2016/17
29
596
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Annual press conference | Stuttgart | December 7, 2017 | Public 14
Voith Hydro Worldwide active• Electricity for eight million people in Angola:
Cambambe 2 hydropower plant put into operation.
• Modernization of South Africa’s second-largest pumped storage power plant, and so enhancement of quality and reliability the country’s power supply.
• Voith and China Three Gorges sign strategic cooperation agreement – Objective is to promote hydropower business in Africa.
• Additionally Voith will supply two 350-MW units for the Zhejiang Changlongshan pumped storage power plant.
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2015/16 2016/17
Voith Hydro Improvement in profitability, sales at a high level
• Sales and profit from operationsstable at a high level.
• Slight improvement in return ratios.
• Appreciable fall in orders received due to delays in several major projects.
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2015/16 2016/17 2015/16 2016/17
4,934 4,507
2015/16 2016/17
1,388 1,381 1,3871,180
105
Sales in € millions Orders received in € millions
Profit from operations in € millions Employees
106
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Voith Paper Improved market environment• Voith supplies one of the world’s most powerful specialty
paper machines to Papierfabrik August Koehler SE.
• Voith sets new record by commissioning the tissue machine supplied to Little Rapids: The machine achieved its maximum operating speedwithin one week.
• The Bohui Paper Group signed an order for one of the world’s largest board machines.
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Voith Paper Significant improvement in all key figures
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• Sharp increase in orders received (+24 %) in a brighter market environment.
• Sales growth driven by growth across all divisions.
• Above-proportionate 40 % increase in profit from operations; cost cuts and increases in productivity paying off more and more.
2015/16 2016/17
Sales in € millions
2015/16 2016/17
Orders received in € millions
Profit from operations in € millions Employees
2015/16 2016/17
6,550 6,449
2015/16 2016/17
1,4631,813
1,456 1,527
76107
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Annual press conference | Stuttgart | December 7, 2017 | Public 18
Voith Turbo Challenging market environment• Voith supplies 100th BHS Turbo Gearbox to Siemens.
This gearbox marks a milestone in the cooperation between Voith and Siemens.
• One million retarders shipped worldwide. The VR 115CT has been specially developed to cope with the very toughest operating conditions in China.
• Negotiations on cooperation with CRRC, the world’s largest railway manufacturer. As a result, Voith Turbo will grow its business in China sharply.
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Voith Turbo Satisfactory performance, turnaround in orders received
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• Orders received with significant growth of around 8 %.
• Sales fell as expected as a con-sequence of lower orders received in previous years.
• Declining sales volume and shift in the sales mix lead to fall in profits.
2015/16 2016/17
2015/16 2016/17 2015/16 2016/17
2015/16 2016/17
1,397 1,283 1,247 1,344
114 91
Sales in € millions Orders received in € millions
Profit from operations in € millions Employees
5,702 5,408
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Voith Digital SolutionsConstruction progressing as planned
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• Dynamic development in the first full financial year, sales expectations exceeded.
• Profit from Operations result of € -43 million affected by scheduled start-up costs.
Total sales (€ 299 millions)
Sales Voith Digital Solutions
€ 13 millionSales generated for
traditional Group Divisions
€ 286 million
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Balance sheetStrong increase in the equity ratioand further improvement in liquidity
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Equity ratio in %
09/30/2016 09/30/2017
Net liquidity in € millions
09/30/2016 09/30/2017
14.9
27.3
168
648
• Significant improvement in the Group’s financial position, greater financial freedom for new phase of growth.
• Equity ratio reached a historical high.
• Net liquidity increases by just under half a billion Euros.
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Key figures for fiscal year 2016/17 Conclusion
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• Voith stands on a strong foundation, with a very solid balance sheet.
• The Group has made visible progress on the path to achieving sustainable competitive profitability in its core operational business.
• Due to its sustainably strengthened portfolio, Voith can finance the development of Digital Solutions from its own operating business.
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Contents
1. Where we now stand1.1 Highlights in fiscal 2016/171.2 Key figures for fiscal 2016/17
2. What we are planning2.1 Outlook for 20182.2 Medium-term objectives
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Outlook for 2018Slight improvement in general conditions anticipated
• Slight economic tailwind: Upturn in growth in the global economy, with far greater buoyancy in emerging markets than in industrialized countries.
• Brightening investment climate: Voith expects a more favorable market environment in most core markets, but demand from the raw materials and oil and gas sectors will likely remain restrained.
• Latent political risks: Large number of geopolitical uncertainties and lack of clarity about world trade policy continue to exert pressure.
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Outlook for 2018Clear strategic priorities
• New growth phase: Leverage market opportunities in the brighter global economic environment to drive organic growth across all Group Divisions and examine M&A opportunities.
• Press ahead with digital transformation: Further development of Voith Digital Solutions into a growth driver for the Group, launch of new digital products and solutions in faster and faster succession.
• Keep the company competitive and fit for the future: Following the Group’s successful reorganization, implement further measures to optimize structures and processes and further promote transformation of our corporate culture.
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Outlook for 2018Improvement in the most important key figures forecast
• Orders received: Positive trend likely to continue in the current fiscal year.
• Sales: Appreciable growth forecast, mainly underpinned by Voith Paper and Voith Turbo, as well as Voith Digital Solutions.
• Profit from operations: Slight increase in the cumulated profit from operations of the three core business segments. Taking into account the investments in VoithDigital Solutions, profit from operations and the ROCE will improve.
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Contents
1. Where we now stand1.1 Highlights in fiscal 2016/171.2 Key figures for fiscal 2016/17
2. What we are planning2.1 Outlook for 20182.2 Medium-term objectives
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Medium-term objectivesSecure our strong base, leverage opportunities
• Our ambition: Sustainable profitable growth and expansion of our market and technology leadership in our traditional core business.
• Our mission: To develop the Voith Group further into a significant shaper of the digital industry.
• Our motivation: To secure Voith’s long-term independence as a family-owned company.
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