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ElringKlinger Group
Conference Call
Results Q2 2013
August 9, 2013
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Q2 2013: Key developments
Group sales plus 6.0% (organically: +7.2%) despite ongoing weakness in Europe – once more outperforming global vehicle markets (+3.5%)
Direct sales share in Asia increasing to 17% (incl. exports 24%)
Record quarterly operating result EUR 41.2 mn, despite E-Mobility pre-expenses and weak Aftermarket
EBIT burdened by negative FX effects of EUR 1.9 mn –increase to EUR 39.3 mn
Integration of Hug successfully completed: sales more than doubled y-o-y, Group EBIT margin achieved despite PPA
New Thale site went operational in Q2 – relocation from Switzerland finished
Freudenberg France still loss-making due to poor French market (-8%)
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H1 2013: Market trends – Europe at 20-year lows
3
21
8
-5
-10
-11
10
-8
-7
-20 -10 0 10 20 30 40
Western Europe
UK
France
Italy
Spain
USA
China
Germany
Car Sales
% change
y-o-y
Sales by quarter – negative FX impact of EUR 4.6 mn in Q2
277.6279.8286.0283.8
303.3286.8
100
150
200
250
300
350
Q1 Q2 Q3 Q4
2012 2013
€ mn
4
25.8
36.537.539.0
41.2
33.3
0
10
20
30
40
50
60
Q1 Q2 Q3 Q4
2012 2013 5
Q2 2013: Operating result at EUR 41.2 mn
€ mn
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Q2 2013: EBIT came in at EUR 39.3 mn (EUR 1.9 mn neg. FX)
€ mn
37.3 38.336.0
24.4
39.335.8
0
15
30
45
60
Q1 Q2 Q3 Q4
2012 2013
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Q2 2013: OEM sales up 7.0%
€ mn
248.4
232.2
0
50
100
150
200
250
300
Q2 2012 Q2 2013
EBIT +6.6%28.9 (27.1)
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Q2 2013: Aftermarket sales stable
€ mn
29.029.0
15
20
25
30
35
Q2 2012 Q2 2013
EBIT -18.1%5.9 (7.2)
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Q2 2013: Sales Engineered Plastics up 3.6%
€ mn
22.922.1
0
5
10
15
20
25
30
Q2 2012 Q2 2013
EBIT +17.1%4.1 (3.5)
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Group Sales by segment Q2 2013 (py)OE share up due to structural growth and new product ramp-ups
Engineered Plastics 7.5% (7.7%)
OEM 82.0 (81.1%)
Services 0.6% (0.6%)
Aftermarket9.5% (10.2%)
Industrial Parks0.4% (0.4%)
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Group Sales by region Q2 2013 (py) Almost 55% of OE sales in Asia and the Americas
Germany 29.9% (29.6%)
NAFTA16.6% (18.5%)
incl. exports: ~25% of OE sales
South America &Others
5.8% (5.9%)
Rest of Europe 31.1% (30.9%)
Asia and Australia 16.6% (15.1%)
incl. exports: ~24% of OE sales
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Employees ElringKlinger Group worldwide –54.1% outside of Germany
AG2,090 (2,043)
Domestic subsidiaries864 (847)
International subsidiaries3,480 (3,341)
as of June 30, 2013 (py)
Group6,434 (6,231)
+3.3%
Germany2,954 (2,890)
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Q2 2013: Net cash from operating activities improved by more than 50%
22.5
36.5
0
10
20
30
40
50
Q2 2012 Q2 2013
€ mn
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Q2 2013: Investments vs. depreciation
29.024.5
18.220.0
0
10
20
30
40
50
Q2 2012 Q2 2013
Investments in plant, property and equipment, invest. prop. and intangible assets
Depreciation/Amortization
€ mn
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Q2 2013: Sales and operating result
1 Incl. currency effects
in € mn
Q2
2013
Q2
2012
Change
in %
Sales 303.3 286.0 +6.0%
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Cost of Sales 215.6 203.0 +6.2%
EBITDA1 57.5 58.3 -1.4%
EBIT1 39.3 38.3 +2.6%
Operating Result 41.2 37.5 +9.9%
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Q2 2013: Financial Result and Net Income
in € mnQ2
2013
Q2
2012
Change
in %
Net finance cost 4.9 2.3 +113,0%
EBT 36.3 35.3 +2.8%
Taxes 7.7 9.3 -17.2%
Net income 28.6 26.0 +10.0%
Profit attributable
to EK shareholders26.2 25.3 +3.6%
EPS (in €) 0.41 0.40 +2.5%
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Balance sheet structure as at June 30, 2013Solid Equity Ratio at 48.8%, shift to long-term debt
26.829.342.642.6
0
24.421.1
57.457.448.849.6
June 30, 2012 June 30, 2013 June 30, 2012 June 30, 2013
Assets
in %
Non-current liabilities
Current liabilities
Shareholder‘s equityNon-current assets
Current assets
Liabilities and
shareholder’s equity in %
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Q2 2013: Hug successfully integrated
CARB certification boosting sales: market share in USA of ~35%; New projects for inland water vessels and natural gas operated power plants
Start of production in Thale, Saxony-Anhalt, in Q2 limits exposure in CHF and further improves cost structure
As of August 1st ElringKlinger acquired another 25% interest in Hug, now holding a stake of 93.7% – minority interests will be scaled back in the future
Expected EBIT contribution in 2013: > EUR 7 mn (-3.0 mn)
in € mn Hug in € mn Hug
Q2
2012
Q2
2013
∆ Q2
2012
Q2
2013
∆
Sales 8.4 18.2 +9.8 EBIT -0.8 +3.9 +4.7
PPA -0.5 -0.2 +0.3 EBT -0.9 +3.8 +4.7
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Q2 2013: Restructuring Freudenberg France
Extremely sluggish French car market (-8.0% in Q2 2013) weighs on capacity utilization at EK Meillor (sales EKFR -11%, Germany +17%, Italy +3%)
Target: Slight overall EBT improvement for the full year (EUR 0.1 mn in 2012) assuming slight pick-up in French car market
German and Italian production site both at double-digit EBIT margins
Group EBIT margin dilution by Freudenberg + Hummel: - 0.4 PP
in € mn Freudenberg in € mn Freudenberg
Q2
2012
Q2
2013
∆ Q2
2012
Q2
2013
∆
Sales 13.3 12.9 -0.4 EBIT 0.5 0.5 -
PPA - - - EBT 0.3 0.3 -
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Outlook 2013: Markets
ElringKlinger expects overall worldwide car production in 2013 to stagnate or increase only modestly
Gloom in Western European car sales begins to lighten in July,Germany up 2%
Short and mid-term demand will be driven by Asia and the Americas
Moderate improvement of truck business in H2 visible:> Pre-buying due to EURO VI introduction might have a positive
effect in Europe> US Class 8 order intake implies modest growth in H2
New products & secular growth in ElringKlinger’s core business combined with a strong position in Asia should enable the Group to outgrow markets
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Outlook 2013: Financial performance
Q2 order intake: plus 11.0% to EUR 374.1 (337.1) mn Book-to-bill ratio: 1.23Order backlog up 18.3% (EUR 573.8 mn)
Based on the assumption that global vehicle production will stagnate or grow only modestly, the ElringKlinger Group expects sales to grow by 5 to 7% organically in 2013;Should global car production only stagnate, sales growth will come in rather at the lower end of this range
Group EBIT margin still burdened by weaker margins of the acquired entities, related PPA, and by pre-expenses for E-Mobility; Dilution will decrease as compared to 2012
In total, EBIT is expected to grow at a faster rate than sales – targeting a range of EUR 150 to 155 mn (EUR 136 mn in 2012)
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ElringKlinger Group
Thank you for your attention!
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Disclaimer – Forward-looking Statements and PredictionsThis presentation contains statements about the future. These statements are based
on current expectations, market evaluations and predictions by the Management Board,
and on information that is currently available to them. The statements about the futureshould not be interpreted as guarantees of the future developments and results that they
refer to. Whilst the Management Board are convinced that the statements that have
been made, and the convictions and expectations on which they are based, are realistic,
they rely on suppositions that may conceivably prove to be incorrect; future results anddevelopments are dependant on a multitude of factors, they involve various risks and
imponderabilities that can affect whether the ongoing development deviates from the
expectations that have been expressed. These factors include, for example, changes tothe general economic and business situation, variations of exchange rates and interest
rates, poor acceptance of new products and services, and changes to business strategy.