Präsentationstitel ohne Bild Arial Bold, 40 pt in drei ...voith.com/corp-en/Annual-Press-Conference-2019_EN.pdfconsiderable funds still available even after the acquisition of BTG

voith.com

Voith GroupCore business stronger, profitable growth achieved

Stuttgart | 2019-12-10

Contents

Where we are today

Highlights of the 2018/19 fiscal year

Financial performance indicators for the 2018/19 fiscal year

Our plans

Strategic priorities and financial outlook

Annual Press Conference | Stuttgart | 2019-12-10

Overview of the 2018/19 fiscal year:good operating performance in a challenging environment

+ 9%Orders received

+ 2%Sales

+ 12%EBIT

+ 49%Group net result


2018/19 fiscal year:strategic progress and market success in all Group Divisions

Down-to-Earth: clear focus on strengthening the successful

core businesses and sustainability portfolio is bearing fruit

Controlled offensive: focus on organic growth, expansion

of the service business and targeted acquisitions to round off

or complement the portfolio in line with strategy

Digital strategy taking effect: increasing market successes with

proprietary digital products


2018/19 fiscal year: highlights Voith Hydro with second largest individual contract in the Company’s history

Major contract in Australia underscores

market leadership in Large Hydro

• Voith supplies innovative components

for “Snowy 2.0” pumped storage power

plant

• Power station is one of the ten largest

of its kind in the world and is vital to

Australia’s future in the field of

renewable energies

• Order volume in mid-three-digit millions


2018/19 fiscal year: highlights Voith Paper with major acquisition

Purchase of BTG strengthens Voith

Paper’s position as full-line supplier

• € 319 million acquisition successfully

closed

• BTG as global supplier of integrated,

highly specialized process solutions

for the global pulp and paper industry

is the perfect addition to Voith Paper’s

portfolio of offerings

• Focused M&A strategy to strengthen

the core business


2018/19 fiscal year: highlights Voith Turbo strengthens its position in key market China

Deeper cooperation with world’s

largest rail vehicle manufacturer

• Two joint ventures with China

Railway Rolling Stock Corporation

(CRRC) founded to further expand

business in market for rail vehicles

and in various industrial markets

• Furthermore, cooperation with

CRRC in the field of electric drive

systems


2018/19 fiscal year: highlights Success on the market with digital products

Growth with proprietary developments

for “Industry 4.0” applications

• Sharp rise in demand for OnCumulus,

the modular IIoT (Industrial Internet of

Things) platform, 20 installations sold to

date

• Further expansion of the young Group

Division with acquisitions such as

Pilotfish and ventures such as TSP

OnCare Digital Assets Inc.


Where we are todaySummary

All key performance indicators increased,

Group objectives achieved and earnings power strengthened.

Market position in core businesses reinforced and at the same time targeted

digital strategy aligned to customer needs driven forward.

Further improvement in starting position for sustainable profitable

growth over the coming years.


Contents

Where we are today



Our plans



Group’s orders receivedPerceptible growth

• Increase in orders received by the Voith

Group of 9 percent on previous year,

forecast thus fulfilled

• Increase driven primarily by sharp

increase at Voith Hydro, other Group

Divisions in line with expectations

• Increase in orders on hand at Sept. 30 up

9 percent on previous year to € 5,630

million, the highest level in seven years

4,285 4,691

Orders received Group (€ 4,691 million)

by Group Division (rounded)

Orders received Group

in € millions

Voith Turbo

31%

Voith Hydro

35%

Voith Paper

33%

2017/18 2018/19

Digital Ventures

1%


Group salesIncrease in a demanding market environment

• As announced, slight increase in Group

sales (up 2 percent)

• Divergent developments in the Group

Divisions: increase in sales at Voith Turbo,

Hydro and Digital Ventures; normalization

on high level at Voith Paper as anticipatedSales Group (€ 4,276 million)

by Group Division (rounded)

Voith Turbo

33%

Voith Hydro

27%

Voith Paper

39%

Sales Group

in € millions

2017/18 2018/19

4,209 4,276

Digital Ventures

1%


Operating resultImprovement in profitability and viability

• EBIT increasing, as forecast, by 12

percent, appreciably faster than sales, i.e.

perceptible improvement in profitability of

Voith’s operating business (return on sales

rising from 4.6 to 5.0 percent)

• Rise in EBIT primarily due to lower build-

up costs at Digital Ventures as budgeted

and another improvement in results at

Voith Paper

• Also appreciable improvement in ROCE,

as forecast

ROCE Group

in %

EBIT Group

in € millions

2017/18* 2018/19

193 215

2017/18* 2018/19

10.9 12.0

*Previous-year figures adjusted for effects from discontinued operations and from other factors


Group net resultAppreciable rise

• Increase in Group net result of 49 percent

• Mainly driven by good development in

operating business and a reduction in tax

rate

49

72

Group net result

in € millions

2017/18* 2018/19


*Previous-year figures adjusted

Balance sheetRobust financial position of the Voith Group

• Sound basis for further growth: equity ratio

only slightly down on record level of

previous year

• Net liquidity at a reassuring level,

considerable funds still available even after

the acquisition of BTG

Equity ratio

in percent

2017/18 2018/19

Net liquidity at end of year under review

in € millions

Sep. 30, 2018* Sep. 30, 2019

28.5 26.2

557552


* As of 2019 calculation according to Financial Terms (excluding minorities and put options)

Voith HydroSuccess with major projects drives business

Voith HydroGood development with strong level of orders received

• Rise in sales of 4 percent exceeds

expectations

• Orders received: 89 percent increase due

to “Snowy 2.0” major project and other

major projects

• Decrease in EBIT is due to the completion

of contracts posted in weaker market

phases with higher price pressure

2017/18* 2018/19

Sales in € millions

2017/18 2018/19

Orders received in € millions

EBIT in € millions Employees

2017/18 2018/19

3,9273,766

50

2017/18 2018/19

1,1031,147

856

1,620

61




Voith Paper Still at a high level

Voith PaperFurther improvement in profitability

• Voith Paper strongest pillar in the Voith

Group despite anticipated normalization of

the paper machine market

• Very high previous-year figure for sales

almost matched; declines in China and

general economic slowdown behind slight

contraction

• Orders received down 22 percent on

previous year due to market environment,

as anticipated

• Further increase in EBIT, successful

measures to boost productivity are

increasingly paying off

2017/18 2018/19


2017/18 2018/19



2017/18 2018/19

6,618 6,646

1,995

1,553

1,7461,660

111102

2017/18 2018/19


Voith TurboSound business performance in challenging environment

Voith TurboRise in sales, fall in profitability

• Rise in sales and orders primarily driven

by dynamic business in the Division

Mobility

• EBIT at previous-year level

• Below-average level of profitability,

declining further

• Structural measures to safeguard

competitiveness and future viability in a

rapidly changing environment

2017/18 2018/19


2017/18 2018/19



2017/18 2018/19

5,543 5,600

1,302 1,398 1,378 1,445

75 76

2017/18 2018/19


Voith Digital Ventures Strong growth, lower level of losses from build-up activities

Voith Digital VenturesFurther growth in investment portfolio

• Sharp increase in sales of 54 percent

on account of inclusion of FlowLink

Systems for the full year and first-time

consolidation of the new ventures Pilotfish

and TSP OnCare Digital Assets Inc.

• Appreciable improvement in the operating

result but still negative, as budgeted, on

account of the ongoing significant level of

research and development expenses and

the losses incurred in building-up the

venture activities


2017/18 2018/19

40

62

EBIT in € millions

-35

-22

2017/18* 2018/19



2018/19 financial performance indicatorsSummary

All key performance indicators in the operating business are pointing upwards.

The Voith Group is on the right path towards a competitive level of

results with an appreciable increase in returns.

Voith can continue to make powerful investments in the central

issues of the future and make targeted acquisitions over the

coming years.


Contents

Where we are today



Our plans



OutlookCore business addresses global megatrends

Decarbonization Digitalization Circular economy

VISION

CO2 neutrality

CONTRIBUTION BY VOITH

• Hydropower as a "silent

climate saver"

• paper produced in a resource-

saving manner as an

alternative material

• Electrification of the

powertrain

VISION

Digitized Industry


• Customer-oriented digital

solutions for core business to

support digital transformation

in key global industries

VISION

Closed cycles


• Development of innovations to

close cycles in our industries


CO2 pollution from plastics production Packaging accounts for the lion's share of plastics consumption


The threat of plastic to the world's climate

Share of CO2 emissions from global plastics production in maximum

budget to meet 1.5 degree target* by 2050

What do we need plastic for?

Use by industry. Total quantity: 407 million tons

Plastic

56 CO2e**

= 10 –13%

A total of 420 - 570

billion tons of CO2

* In the Climate Treaty of 2015, the international community agreed to limit global warming to

1.5 degrees Celsius compared with the pre-industrial era.

** CO2 equivalents: Unit of measurement for standardising the climate impact of different

greenhouse gases.

Source: Plastikatlas 2019 / CIEL, IPCC

Industrial machinery 3 Electronics 18

Transport & Traffic 27

Commodities 42

Textile 47

Construction sector 65

Packaging (usually used only once) 146 Other 59

Source: Plastikatlas 2019 / GEYER

Megatrend Digitalization:

Example Voith Hydro

OnCare.Acoustic


Megatrend circular economyVoith is already a player in decisive cycles

Hydropower as source for

renewable energy

Water cycle(Pump-storage

power plant)

Activities along resource cyclesSustainability as Leitmotif

Hydro

power plant

pump

reservoir

water

Paper

Sustainable and efficient paper

production technologies from a

single source

Paper cycle

paper machine

paper

waste paper

stock pre-

paration

Turbo

Drives as a contribution to

conserving resources and reducing

CO2 emissions

Drive cycle

Drive

componentsefficiency

increase

drive

management drive

components


Megatrend circular economyVoith can tap into additional growth

Sustainable storage of electrical

energy

Energy

cycle

Activities along resource cyclesSustainability as Leitmotif

Energy storage

power generation

storage

usage

recovery

Water treatment

Minimization of water and waste

water

Water cycle

water

industrial

usage

preparation

storage

Recycling

Recycling of waste and residual

materials

Recycling

cycle

material

consumption

collection

recycling


OutlookVoith Group from 2022 CO₂-neutral


• From 2022, all Voith locations worldwide will

no longer leave a carbon footprint

• Short-term purchase of electricity CO2

neutral and offsetting unavoidable CO2

emissions with compensation measures

• Annual investment of five million euros in

energy efficiency

• CO2 neutrality is important for environment,

society and economy

OutlookOur strategic priorities

Further strengthen

successful core business


Strengthen digitization,

decarbonization and

circular economy in the

portfolio

Opening up adjacent

business fields

Outlook for 2019/20 fiscal yearStabilization of positive trend

Stable

Orders received

Increase

Sales

Perceptible

increase

EBIT



“Over the coming years, Voith will become bigger, even more

innovative and significantly more profitable. By reinforcing our

core business and our digital strategy focused on customer

needs, we are pursuing a clear objective: we intend to use our

extensive technological expertise and in-depth knowledge of

markets as basis to become a driving force and key player in the

post-carbon industry of the digital age.”

Dr. Toralf Haag, President & CEO

Documents

Präsentationstitel ohne Bild Arial Bold, 40 pt in drei ...voith.com/corp-en/Annual-Press-Conference-2019_EN.pdfconsiderable funds still available even after the acquisition of BTG