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1
Mobilität erfahren – Zukunft entwickeln.Experience mobility – Drive the future.
ElringKlinger Group
Analysts Conference
on the 2009 Financial Year
March 30, 2010
2
Business Year 2009: Key developments
Most severe crisis of the automotive industry in the last 30 years:
OE car production falling by more than 40 % at times
Cost cutting measures, introduction of short-time work at German plants
and compelling working capital management
Gradual recovery of passenger production as of HY 2
Strong investments in property plant and equipment (EUR 89.7 mn)
despite the crisis improves competetive edge
Further build-up of R&D capacities at New Business Areas division
Engineered Plastics: New plant opening at Bietigheim-Bissingen
(Nov. 2009)
10 % stake increase in Changchun ElringKlinger Ltd. to 88 % (June 2009)
2
3
Business Year 2009: Car Production versus Car Sales
(% change y-o-y)
17.2
44.4
-10.9
8.8
-49.4
23.2
-21.2
-1.6
-6.5
12.8
43.8
-30.8
3.5
-34.1
-62.3
-16.9
-10.3
-13.8
-80 -60 -40 -20 0 20 40 60 80
World
Europe
Russia
USA
Brazil
Japan
China
India
Germany
Car SalesCar Production
4
Business Year 2009: Business trends
Truck segment still very weak with share in Group sales down
from 11% to 6% of Group sales in 2009
Engineered Plastics (PTFE) business strongly affected by extremely weak
demand from customers in machine and plant engineering
Gradually improved gross margin
Lower Material prices failed to contribute significantly due to reduced
purchasing volumes
Decreasing settlement payments for hedging of alloy surcharges (Nickel)
Positive earnings effect of EUR 3.6 mn from reversal of material-related
provisions exceeding settlements payments (previous year burdened by
EUR 15.9 mn recognition of provisions)
Second scenario to achieve 540-580 mn in sales and 8-10% EBIT margin
met
3
5
Sales: Long-term growth above market
579608
528
475459417
393367
312
658
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
€ mn
6
133.8*
173.8*
162.8
187.4*
160.1*
151.3*
138.2*
129.7*
100
120
140
160
180
200
Q1 Q2 Q3 Q4
2008 2009
€ mn
Sales recovering quarter by quarter
* incl. acquisitions
4
7
20.420.3
6.8
15.8
20.23
18.72
10.010.7
0
10
20
30
Q1 Q2 Q3 Q4
€ mn
Focusing on profitability: EBIT by quarter
EBIT EBIT adjusted1 excl. EUR 3.1 mn from currency effects 2 incl. EUR 2.0 mn in R&D grants 3 incl. EUR 1.6 mn in R&D grants
7.61
8
Sales in the OEM business down 12.2%
476.5
418.2
200
300
400
500
600
2008 2009
€ mn
EBT22.6 (24.5)
5
9
Sales in the Aftermarket down 4.9%
98.193.3
40
60
80
100
120
140
2008 2009
€ mnEBT
18.4 (18.2)
10
Sales in Engineered Plastics down 18.4%
69.1
56.4
20
40
60
80
100
120
2008 2009
€ mnEBT
5.0 (12.7)
6
11
Group Sales by Market Segments 2009 (py)
Engineered Plastics 9.7% (10.5%)
OEM 72.2% (72.4%)
Services 0.6% (0.9%)
Aftermarket16.1% (14.9%)
Real Estate Business1.4% (1.3%)
12
Group sales by products and services 2009 (py)
Cylinder-Head Gaskets12.7% (16.9%)
Specialty Gaskets 13.7% (15.1%)
Cam Cover Modules/ Elastomer Gaskets
17.0% (18.3%)
Heat Shields28.8% (22.1%)
Aftermarket 16.1% (14.9%)
Real Estate Business1.4% (1.3%)
Services0.6% (0.9%)Engineered Plastics
9.7% (10.5%)
7
13
Group Sales by region 2009 (py)Share of Asia and South America trending up
Germany 33.1% (35.9%)
NAFTA14.6% (15.3%)
South America &Others
6.4% (5.2%)
Rest of Europe 32.1% (32.4%)
Asia and Australia 13.8% (11.2%)
14
Employees ElringKlinger Group worldwide
AG
1,636 (1,737)
Domestic
subsidiaries589 (630)
International
subsidiaries1,946 (1,808)
as of December 31, 2009
(py) Group4,171 (4,175)
headcount exl. aquisition 4,124
Germany2,225 (2,367)
8
15
Investments vs. depreciation and amortization – well set up for post-crisis years
95.0
49.6
137.9
95.0
71.2
45.7
61.7
48.0
0
20
40
60
80
100
120
140
160
180
200
2006 2007 2008 2009
Investments in plant, property and equipment, invest. prop. and intangible assets
Depreciation and amortization
16
FY 2009: Sales and EBIT
in € mnFY
2009
Sales 579.3 657.8
Cost of sales 426.3 464.22
EBIT1 63.3 71.53
EBITDA 134.5 133.23
FY2008
- 11.9
- 8.2
- 11.5
+ 1.0
Changein %
1 Incl. currency effects2 Figure adjusted, cf. notes p.126 3 Incl. EUR 5.8 mn badwill MARUSAN, EUR 0.7 gain from
insurance proceeds, EUR 1.1 mn collective wage payment, EUR 3.6 mn ppa (n.a. at EBITDA level),
EUR 15.9 mn prov. for commodity-price hedging
9
17
FY 2009: Financial Result and Net Income
in € mn
Net finance costs - 13.9 -15.8 - 12.0
EBT 49.4 60.0 - 17.7
Taxes 16.8 - 13.1
Net income 43.2 - 19.4
14.6
34.8
Minority interests 1.6 3.3
Profit attributable to
shareholders of EK 33.2 39.8 - 16.6
FY2009
FY2008
Changein %
Net finance costs
EBT
Taxes
Net income
Net finance costs
EBT
Taxes
- 51.5
18
Business Year 2009: Dividend increase
EPS came in at EUR 0.58 per share as compared to EUR 0.69 per share
in the previous year
Proposed dividend to AGM for FY 2009:
EUR 0.20 up 33% on last year‘s EUR 0.15 EUR
10
19
FY 2009: Net cash from operating activities and op. FCF
148.8
98.2
-37.6
58.2
-50
0
50
100
150
200
€ mn
2008 2009
Op. FCFNet cash from op. activities
20
Balance Sheet Structure ElringKlinger Group:
Equity ratio 41.3% - up after prior financing of acquisitions
Dec. 31, 2008 Dec. 31, 2009
26.7
35.6
37.7
Liabilities and
shareholders‘ equityin %
31.9
Shareholders‘ equity
Non-current liabilities
Current liabilities
Dec. 31, 2008 Dec. 31, 2009
68.1
Assetsin %
Non-current assets
Current assets
34.8
65.2
19.9
38.8
41.3
11
21
Enabling CO2 reduction and alternative drivetrains: The key drivers in post-crisis auto markets
Substituting
Metal by Plastic
Alternative Drivetrain
Fuel-cell and Battery
Technology
Reducing CO2 and
NOx
Enabling
Downsizing
22
Reducing CO2: Substituting metal by plastic
Weight reduction =
lower consumption
ElringKlinger designs cam covers,
gearbox casings and oil pan modules
with many integrated features
More than 20 potential applications in
the engine and the transmission
12
23
Going small: Downsizing the engine
Same output from lower displacement
Direct injection, higher pressure
Gasketing more demanding
Turbo-charging
Rising temperatures
More heat shields
24
Reducing NOx
Tightened environmental regulations
Euro 5 and 6 require significant NOx
reduction
SCR (Selective Catalytic Reduction)
adapter module enabling high
temperature sealing and thermal/
mechanical shielding for SCR injection
systems
Truck and passenger car modules
Newly developed modules for diesel
cars and the new generation of gasoline
engines
13
25
DPF: Pioneering nano coating material for soot reduction
ElringKlinger is already supplying
specialty gaskets, joints and heat
shields for DPFs
Euro-5-legislation requires DPFs for
most diesel powertrains
New precious-metal free coating
material for reduction of particulate
matter
Specimens endurance and field tests
currently under way
26
Fuel-cell technology: Mobile and stationary
Fuel-cell components for PEM, SOFC
and DMFC applications
Auxiliary power units (SOFC-system)
for trucks HVAC
New development project win:
Cogeneration units (SOFC-system) for
households and homes
PEM bipolar plates for full drive-train
application
Strong patent base established
14
27
Battery Technology: Market entry with lithium-ion batterycomponents
Separators and bipolar plates for
bipolar lead/acid batteries
Entry in lithium-ion battery market
> cell and module connectors
> plastic housing module frames
For use in hybrids and pure electric
cars
First contract to SOP in late 2010/2011
with European OE
Development projects in Shielding
Technology division
> electromagnetic/acoustic shielding
> temperature management
28
Outlook 2010: Company/Markets
Global vehicle production returns to growth: ElringKlinger assumes 3% to
4% increase in vehicle production in 2010
Car sales Germany could fall up to 30 %, but strong pick-up in exports
European car market overall stable or slightly negative productionwise
US light vehicle production expected to grow in the upper single-digits
Chinese car production posting further single-digit growth
Raw material prices still at manageable levels when seen over the mid-
term, but rising since mid 2009.
Moderate increase in personnel cost based on collective wage agreements
already concluded
15
29
World Car Production recovering driven by Asia
63e
73
66
57
0
20
40
60
80
100
2007 2008 2009 2010
in mn
units
Source: PWC, January 2010
30
Outlook 2010: Corporate
Engineered Plastics (PTFE): Signs of order intake recovery
Second production system for Moldflon installed focusing on medtech
industry
Truck area: No signs of a major recovery before HY 2 2010 in Europe
Promising prospects with Chinese truck & engine manufacturers
Capex in plant, property and equipment incl. tooling will come in lower at
EUR 65.0 to 75.0 mn
Two new plants in China, incl. equipment (EUR 10-15 mn)
New logistics center (for OE and AM) at Dettingen improves cost structure
and product turnover (EUR 14 mn)
16
31
Outlook 2010: Corporate
Further build-up of New Business Areas division: Fuel-cell and battery
technology, DPF-coating
Sustained cost-cutting measures supported by investments in
rationalization undertaken
Raw material prices still at managable levels when seen over the mid-term
but rising since mid 2009
Moderate increase in personnel cost based on collective wage agreements
concluded
Short-time work at German plants ended
32
Outlook 2010: Financials
Order intake in Q4 2009 was strongest ever posted in a final quarter at
EUR 173,8 mn (EUR 106,1 mn)
Order backlog up 16 %
Return to pre-crisis sales and profitability levels until 2012 the latest,
that is much faster than car markets
Further decline of net debt level
Assuming a continuing moderate recovery of world car markets ElringKlinger
anticipates an organic increase in sales of between 7% and 10%
EBIT is expected to grow disproportionately at a rate of 12% to 15%
Good technological starting position for long term-growth
17
33
Thank you for your attention.
ElringKlinger Group
Mobilität erfahren – Zukunft entwickeln.
Experience mobility – Drive the future.
34
Disclaimer – Forward-looking Statements and Predictions
This 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 future
should 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 and
developments 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 to
the general economic and business situation, variations of exchange rates and interest
rates, poor acceptance of new products and services, and changes to business strategy.