Elringklinger - Conference Call Q1 2014 Presentation

Conference Call

Results Q1 2014

May 8, 2014

Group sales up 15.3%, organically 13.4 % at EUR 324.0 ( 281.0) mn solidly

outperforming world car production (+ 3.5 %)

Negative impact from currency translation of EUR 8.6 mn (2.7 PP)

Retroactive at equity consolidation of EKMA (IFRS 11) over the quarters for

2013 (slightly lower sales and earnings basis);

EKMA contributes an additional EUR 6.0 mn in sales in Q1 2014

Adverse earnings effect from pre-expenses and start-up losses in battery

technology (EBIT EUR -2.2 mn)

Solid sales and earnings increase in the exhaust abatement division (EBIT

EUR 7.7 mn)

EBIT(=operating result) up by 28.4 % to EUR 42.1 mn despite

EUR 1.0 mn increase y-o-y in expenses for employee benefit scheme

Q1 2014: Key developments

2

20,9%

14,1%

7,2%

1,4%

-1,7%

-2,3%

-6,9%

-10% -5% 0% 5% 10% 15% 20% 25% 30%

India

Russia

Brazil

USA

Western Europe

China

Japan

Q1 2014: Western Europe recovers from 25-year low,

yet still more than 20 % below peak – BRI markets shrink

3

New car registrations Q1 2014 (yoy change)

281.01 296.11

287.51 285.41

324.0

100

150

200

250

300

350

400

Q1 Q2 Q3 Q4

2013 2014

286.8 303.3

294.0 291.1

Sales by quarter

1Previous year's figures adjusted due to retroactive application of IFRS 11;

at equity treatment of ElringKlinger Marusan Corporation in 2013

€ mn

4

EBIT by quarter (=operating result as of 2014)

32.81

41.2 38.6

34.22

42.1

0

10

20

30

40

50

60

Q1 Q2 Q3 Q4

2013 2014

€ mn

5

1 Previous year's figure adjusted due to retroactive application of IFRS 11;

at equity treatment of ElringKlinger Marusan Corporation 2 excl. EUR 17.6 mn one-time gain

Q1 2014: OEM sales up 17.9% driven by core

business and strong performance at Hug

223.91

263.9

0

100

200

300

400

2013 20141Previous year's figures adjusted due to retroactive application of IFRS 11;

at equity treatment of ElringKlinger Marusan Corporation (- EUR 5.8 mn) in Q1 2013

EBIT +40.2%

31.4 (22.4)

€ mn

6

Q1 2014: Aftermarket sales up 8.6%

30.1 32.7

0

10

20

30

40

50

2013 2014

EBIT +6.3%

6.8 (6.4)

€ mn

7

Q1 2014: Sales Engineered Plastics slightly up 3.4%

23.7 24.5

0

10

20

30

40

2013 2014

EBIT +6.5%

3.3 (3.1)

€ mn

8

Group Sales by segment Q1 2014 (py): OE share up

driven by structural growth and new product ramp-ups

Industrial Parks

0.3% (0.4%) Services

0.5% (0.8%)

OEM

81.5 (79.7%)

Engineered Plastics

7.6% (8.4%)

Aftermarket

10.1% (10.7%)

9

Group Sales by region Q1 2014 (py)

South America &

Others 3.8% (5.8%)

Rest of Europe 33.5% (31.7%)

Germany

29.9% (31.3%)

Asia-Pacific 16.5% (13.9%) incl. exports:

~25% of OE sales

NAFTA 16.3% (17.4%)

incl. exports: ~25% of OE sales

10

Employees worldwide – 54.0% now outside Germany

AG

2,375 (2,064)

Domestic

subsidiaries

793 (853)

International

subsidiaries

3,720 (3,396)

Group

6,888 (6,313)

+9.1%

Germany

3,168 (2,917)

as of March 31, 2014 (py)

11

Q1 2014: Net cash from operating activities improved

17.8 18.8

0

10

20

30

2013 2014

€ mn

12

Q1 2014: Investments vs. depreciation

24.31

29.2

18.21 18.7

0

10

20

30

40

Q1 2013 Q1 2014

Investments in plant, property and equipment, invest. prop. and intangible assets

Depreciation1 Previous year's figures adjusted due to retroactive application of IFRS 11,

resulting from at equity consolidation of ElringKlinger Marusan Corporation in 2013

€ mn

13

Development cash flows Q1 2014

62.9

18.8

7.7

-29.2

60.2

0

20

40

60

80

100

120

140

Cash as at Dec.31, 2013

Net cash fromoperatingactivities

Investments Change infinancialliabilities

Cash as at Mar.31, 2014

14

41.2 42.6 28.7 23.6

58.8 57.4

21.1 25.9

50.2 50.5

March 31, 2013 March 31, 2014 March 31, 2013 March 31, 2014

Balance sheet structure as at March 31, 2014

Equity Ratio above 50%

Non-current liabilities

Current liabilities

Shareholder‘s equity Non-current assets

Current assets

Assets

in %

Liabilities and

shareholder’s equity in %

15

16

Q1 2014: Sales and EBIT (=operating result)

in € mn

Q1

2014

Q1

2013

Change

in %

Sales 324.0 281.0 +15,3%

Cost of Sales 232.8 204.6 +13.8%

EBITDA 60.8 51.0 +19.2%

EBIT 42.1 32.8 +28.4%

Previous year's figures adjusted due to retroactive application of IFRS 11, resulting from at equity consolidation of ElringKlinger Marusan Corporation in 2013

17

Q1 2014: Financial Result and Net Income

in € mn

Q1

2014

Q1

2013

Change

in %

Net finance cost -2.6 0.2 -

EBT 39.5 33.0 +19.7%

Taxes 10.2 8.4 +21.4%

Net income 29.3 24.6 19.1%

Profit attrib. to

EK shareholders 27.9 23.8 +17.2%

EPS (in €) 0.44 0.37 +18.9%

Previous year's figures adjusted due to retroactive application of IFRS 11, resulting from at equity consolidation of ElringKlinger Marusan Corporation in 2013

18

Q1 2014: Strong performance of Exhaust Gas

Purification division

in € mn Hug Group

Q1

2014

Q1

2013

Q4

2013 ∆ Q1

Sales 20.7 11.0 15.3 + 9.7

EBIT 7.7 1.1 6.0 + 6.6

PPA -0.3 -0.5 -0.3 -

Drivers: CARB retrofit, inland waterway vessels and exhaust gas

purification systems for large natural gas engines

Project-related business implies higher sales/earnings volatility in the

quarters

EK expects overall worldwide car production to increase by 2-3%

Demand once again driven by China, ASEAN and to a lesser extent North

America; Lower growth in percentage terms when compared to 2013

Europe – which is still more than 20% below 2007 highs – to pick up

moderately in 2014, possibly a further pick-up in momentum in 2015

Mixed picture in BRI markets: Mid single-digit decline percentagewise in

Brazil and Russia; India might recover from 2013 double-digit dip

Truck sales in Europe following Euro VI pre-buying better than feared; for

the full year moderate decline; EK increases value sold-in

North American truck market continues to show solid growth and is

expected to see an increase of almost 10% driven by economic recovery

Outlook 2014: Markets

19

Outlook 2014: Financial performance

in € mn FY 2013

Guidance

FY 2014

Sales 1,175.2 5-7% organic growth

(plus 25 mn scope change) 2

Adj. EBIT1 149.2 160 - 165

Investments 127.2 100 - 110

(+ up to 20 mn HFHT)

20

Full consolidation of JV ElringKlinger Marusan Corporation to add

approx. EUR 25 mn in sales but 0.3 PP dilution to Group margin

Order intake Q1 up 0,6 % at 331.2 mn, backlog tops prior year

by 20.7% (EUR 602.6 mn)

1 EBIT=operating result as is standard as from Dec. 31, 2013

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.

22