ThyssenKrupp Hans Christoph Atzpodien Wir entwickeln die Zukunft für Sie.
Engineering Powerhouse Within ThyssenKrupp Business Units Engineering (E) (Sales: 5,641 m; Employees: 18,841) Procurement (P) Similar business models / Synergies by know-how transfer across BUs Marine Systems Process Technologies Resource Technologies Construction (C) & Services (S) System Engineering Products & Services with market positions (#) Sales ( m) Employees Non-nuclear submarines (#1) Naval surface vessels frigates & corvettes ~1,300 ~4,050 Note: Sales and employees as of FY 2012/13 and Sep 30, 2013 Plants for: Nitrogen Fertilizers (#1) Electrolysis (#1) Coke Technology (#1) Oil & Gas / Polymers ~1,400 ~5,400 Plants & equipment for: Open Pit Mining (#1) Cement industry (#3) ~2,100 ~5,700 70% of employees have an engineering / technical degree Production systems for: Automotive industry (#2) Aerospace industry ~800 ~3,650 2
Award of Order / Contract Core Competence in Engineering, Project Execution and Risk Management Know-how transfer based on similar value chain across BUs Engineering (E) Procurement (P) & Integration Construction (C) Training & Services (S) Engineering Power House Construction Management Service Provider Comprehensive Risk Management through Bid and Execution Phase Bid / No-Bid Bid Preparation Bid Calculation Bid Submission & Negotiation Project Management Scheduling Cost-Controlling Reporting Bid Phase Execution Phase Bid / No Bid Decision Bid Submission Contract Signing Effective Date of Contract Provisional Acceptance Certificate Factory Acceptance Certificate Close Project 3
Industrial Solution s Leading Engineering Competence Supports Better for More Drivers Demand ( More ) Business opportunities Demand ( Better ) Constraints Fertilizer demand (m t) Emission reduction Demography +9% 183 199 Climate change 2013 2018 Urbanization Cement demand (bn t) +23% 3.9 4.8 Leading engineering expertise Waste conversion Finite resources 2013 2018 Automobile production (m pcs) E-Mobility Globalization +22% 81 99 Political framework 2013 2018 Sources: IFA June 2014, Global Cement Report, ProCar 2013 4
Cash Generator With High Earnings Visibility in million FY 12/13 FY 13/14E Order backlog 14,641 mid-term revenue secured Order intake 5,283 sustainable order intake ~ 6 bn Sales 5,641 >5% top line growth ~ 6 bn EBIT adj.* 640 good profitability with >700 EBIT margin adj.* 11.3% benchmark ambition >10% FCF 487 strong cash provider * incl. notional interest credit on excess prepayments 5
Enhancing Growth Across All Regions & Becoming a Global Leading Player 1 2 3 4 Leveraging Growth EPC, Technology & Innovation, Service, M&A Integration & Regionalization Regional Clusters, Joint Customer Marketing People Global Mobility, Recruiting Performance Risk Management, Cultural Change, 8 bn sales with EBIT margin* on benchmark level * incl. notional interest credit from excess prepayment 6
1 Enhancing EPC Business Competence Worldwide to Leverage Growth Widen competence to execute large-scale contracts (> 1 bn) Improve footprint in the regions and connect as global network < 50 m 100 m 300 m 1 bn > 1 bn Competence in EPC Competence Existing Target Expand Engineering capabilities & capacities Project Management Engineering Procurement Construction De-bottlenecking of key capabilities Additional Basic Engineering and EPC execution centers needed Modular Design concept Design to cost with Engineering Low cost sourcing in India/China Procurement hubs and global procurement Construction planning competence Acquisition & Strategic partnering Restructure commissioning management on site 7
1 Expansion of Service as a Sustainable Source of High Margins Development Service Share of Sales Driving Services through 5.6 bn >10% FY 2012/13 > 8 bn >20% Target Dedicated Service Organizations Expansion of Service Center Footprint Local Service Strategies Evaluating New Opportunities Grow Service Share of Sales to >20% 8
2 Growth in All Regions Supported by Strong Local Presence Close to Customers Sales by customer regions FY 2012/13* SSA IND EU/CIS 6% 5% 15% 31% AMS MENA 18% 25% AP * Sales split for core plant technology business (Process Technologies & Resource Technologies) 9
2 Joint Forces for a More Efficient Market Penetration & Customer Approach: Synergies by Integration & Regionalization 3 independent businesses to be integrated into ONE Harmonization & Standardization functions Operations Project Management Engineering Procurement Construction Quality Management IT Tools 10
Process Technologies: Offering Critical Proprietary Technologies Raw Materials Conversion Technologies Precursors & Intermediates Customer Products End Markets Proprietary Technology along e.g. Chemical Value Chain Natural Gas Gas Reforming Syngas Fertilizers Agriculture Crude Oil Oil Refining Olefins & Aromatics Organic Chemicals & Polymers Packaging Textiles Biomass Biotechnology Organic Acids Biopolymers Automotive Life Sciences Coal Gasification Coke Plant Technologies Syngas Coke, Coke Oven Gas Electric Power Fuel Steel Energy Automotive Construction Minerals (Salt) Electrolysis Chlorine, Caustic Soda Inorganic & Organic Chemicals Chemical Processing 11
World s Largest Fertilizer Complex in Saudi-Arabien Production capacity Cultivated area Annual production 4.3 m ha 3,300 t/day ammonia 12
Market Perspective - Process Technologies: Shale Gas Boom a Significant Demand Driver for Chemical Plants Global Market Size (bn ) Market Segments ~15 +2% CAGR ~17 Fertilizers Polymers Coking Plants Source: own estimates 2013 2019 Regional Electrolysis Gasification Oil & Gas Chemicals producers expand/modernize production Growing global consumption and wealth drive demand for chemicals Shale gas leads to additional momentum along petrochemical value chain, i.e. fertilizers, polymers Trend towards large scale plants and EPC Market segments most positively impacted: Polymers, Fertilizers, Gasification and Oil & Gas 13
Resource Technologies: Broad Exposure in Cement and Mining Sectors Covering entire Cement production chain Comprehensive Mining chain coverage Raw material preparation Clinker production Cement manufacturing 14
Lump Sum Turnkey Cement Plant in Namibia Raw material processing Clinker production Cement manufacturing Production capacity Freeway Annual production 222 km 2,100 t/day cement 2x2 lanes 15
Fully Mobile Crushing System in China Capacity 3,500 t/h rock Annual capacity Overburden per year 15 m m³ 6x Pyramid of Cheops 16
Market Perspective - Resource Technologies: Positive Market Trends in Cement Compensate Slow-down in Mining Global Market Size (bn ) Market Segments Mining Cement ~7-3% CAGR ~6 ~5 +4% CAGR ~6 2013 2019 Source: own estimates 2013 2019 Open Pit Mining Cement Regional Sustained high demand for cement plants driven by infrastructure growth in emerging markets Rising amount of turnkey cement plant projects Lower mining customer new installation demand cushioned by growing service & maintenance and single value chain components business Slow recovery of mining customer new installation demand expected towards 2019 17
System Engineering: World Class Customer Base Car Body Technologies Selected Customers Assembly Systems Testing Solutions New Businesses 18
Fully Automated Engine Assembly Plant in the US Production capacity Equipped cars Annual production 325,000 96 engines/day 19
Market Perspective - System Engineering: Long-term Positive Market Outlook with Main Growth Drivers in Asia Global Market Size (bn ) Market Segments ~6 +4% CAGR ~7 Source: own estimates 2013 2019 Automotive Aerospace Regional Stable project volume on high level OEM investments driven by car model cycles E-mobility trend as additional project opportunity Main growth markets Asia Pacific & China New opportunities in aerospace industry 20
Marine Systems: Leading Skills in System Integration Submarines Naval Surface Vessels Air Independent Propulsion Increasing range (factor 3.5) Increasing indiscretion rate Increasing effectiveness MEKO Modularity Easier to manufacture Easier to service Easier to convert, modernize or upgrade 21
World s Most Modern Non-nuclear Submarine in Germany Complexity Car 23 hrs 2 t Boeing 777 50,000 hrs 254 t 0 10 20 30 40 Production time (months) 700,000 hrs 1,650 t Submarine 350,000 Parts Boeing 777 100,000 Parts Car 3,000 Parts 22
Market Perspective - Marine Systems: Global Defense Budgets Drive Naval Demand Global Market Size (bn ) Market Segments ~4 +6% CAGR ~6 Source: own estimates 2013 2019 Submarines Naval Surface Vessels Regional Solid global project pipeline Governmental defense programs driving investments across regions Growing service market with demand for modernization & maintenance 23
Committed to Growth and Performance > 8 bn 5.6 bn Market Growth Growth Strategy Leveraging Growth Integration & Regionalization People Performance 2012/13 Target Global EPC & Service Provider with Strong Technological Expertise 24
Disclaimer ThyssenKrupp AG The information set forth and included in this presentation is not provided in connection with an offer or solicitation for the purchase or sale of a security and is intended for informational purposes only. This presentation contains forward-looking statements that are subject to risks and uncertainties. Statements contained herein that are not statements of historical fact may be deemed to be forward-looking information. When we use words such as plan, believe, expect, anticipate, intend, estimate, may or similar expressions, we are making forward-looking statements. You should not rely on forward-looking statements because they are subject to a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from those indicated. These factors include, but are not limited to, the following: (i) market risks: principally economic price and volume developments, (ii) dependence on performance of major customers and industries, (iii) our level of debt, management of interest rate risk and hedging against commodity price risks; (iv) costs associated with, and regulation relating to, our pension liabilities and healthcare measures, (v) environmental protection and remediation of real estate and associated with rising standards for real estate environmental protection, (vi) volatility of steel prices and dependence on the automotive industry, (vii) availability of raw materials; (viii) inflation, interest rate levels and fluctuations in exchange rates; (ix) general economic, political and business conditions and existing and future governmental regulation; and (x) the effects of competition. Please note that we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. 25