Jost Werke Se

Thank you very much. Good morning from Neu-Isenburg and a warm welcome to the Yoast Q3 2022 Investors and Analysts Conference. We're very happy, Christian and I, to report to you the numbers for Q3 and I would like to start directly with the highlights of the third quarter of 2022. Yoast could increase its sales by almost 30% to 327 million in the third quarter. with strong growth both in the transport business line with almost 29% growth and the agricultural business line with 33% growth. We could also grow our adjusted EBIT by 25% to 30 million in one quarter. That calculates to an adjusted EBIT margin of 9.3%. In this quarter, we benefited once again from our global footprint The very strong development we had in North America and also APA could somewhat offset the weaker but still growing environment that we had in Europe. Also in Q3, the visibility improved because some of the supply chain issues that our customers were having mainly, they eased and the demand, especially for trucks, remained very robust despite the macro concerns that we have with inflation and the Russia-Ukraine conflict and others. So based on that positive development so far, we have raised our guidance for sales and for adjusted EBIT for the fiscal year 2022. So let's have a brief look at the markets, how they developed compared to the previous year. In Q3, as I already mentioned, the truck markets, especially in Europe, could recover because some of the supply chain issues were resolved. There's still some concerns in Europe, obviously due to the conflict and other items, but supply chain situation for the truck customer has improved considerably. And with that, we have the 23% growth in the truck industry. In traders, 1% growth. There we had a strong market already in the last year, so it continues to be on a high level. The tractor markets contracted by 8%. mainly impacted due to uncertainties of energy and rising costs and also some supply chain issues. In that environment, JOST had an 18% growth, benefiting mainly from the recovering in the truck market and good performance also in the other market segments. North America, exceptional development in North America, especially in trucks with plus 33%, also driven by the resolution of some supply chain constraints that they've had in the past. The trailer market also grew by 8% and also the tractor market grew by 9%. For Joss, that means an increase of 58% driven on a very good market penetration, but also increase in prices and also a considerable FX effect that Christian will explain in more detail. Asia Pacific Africa, a minus 13 you see here for the truck market. That's a combination of a very weak Chinese market that has in numbers a big weight, but also a good market development in India, in Australia, in South Africa and in other regions. So it calculates to minus 13 the impact for yours and also for Australia. Many others I would think is less because China in numbers has a high impact, but in turnover and in margin doesn't have that big of an impact. And that's why you will see the numbers not go down as much as you can see with the 28% at the bottom. Trader markets in Asia growing by 9% and our performance, as I mentioned, 28%, mainly driven by the other countries outside of China where we had a very good development. With that, let's come to more detailed numbers that Christian will explain to you.

Good morning, ladies and gentlemen, and also from my side, a warm welcome to our Q3 investors and analysts conference. As Joachim already pointed out, that was yet another very successful quarter for Joost. We were very happy with the development, both top line and bottom line, but I'll come to the group at a later stage. Let's quickly go through the regions as you already are very familiar with, starting with Europe, our biggest region. Here you can see that we even outpaced the growth that we had enjoyed in Q2, where we were 17.1% higher organically. This quarter, we were already 19.6 percentage points or percentage percent higher than the same quarter a year before. So a very positive development here, even though we did encounter some FX headwinds, especially coming from the Swedish Corona. The main reason for the higher growth is especially the fact that we were able to pass on some of the input cost increases to our customers. Unfortunately, not all of them have yet been passed on, but basically we are in process to do so more. But this quarter was severely impacted by higher energy prices, still some material increases. but especially energy due to the Ukraine war had had an impact on our ability to grow further. And when it comes to adjusted EBIT, you see as well a slight decline here coming from 10.4 million in the Q3 2021 to 7 million in Q3 2022. And that is a decrease of roughly 32.6%. Again, this is mainly due to input cost increasing. And also here we did have significant foreign exchange headwinds again from the Swedish Krona, which devalued especially against the RMB plus also the US dollar. And that had a very negative impact in the quarter alone of minus 2.7 million and minus 8 million in the full year to date numbers. Overall, we will continue to try to pass on the majority of the input cost increases to our customers and are very confident we will be able to do so in the long run. I would like to mention that Europe, this is something that those of you who have been with us and following us for some period of time know that, but for all the others, just again to reiterate, Europe bears the blunt of the headquarter cost and these are not passed on to the other regions. So with that, I would like to come to the next region, which is North America. North America enjoyed a very, very strong growth again. And going to the next slide, please. We are seeing a growth here in North America of 57.7%. This is organically 35.4%, where you can see, again, Joe's grew both in agriculture and in the transport business line. And despite strong FX tailwinds of 22.3%, it's now another record quarter with 106 million in sales in a single quarter in North America. The adjusted EBIT grew more than 64% to 10.5 million, and therefore the margin also improved to 9.9% in quarter three. That is a 64% growth compared to the same quarter a year before, and the margin improved from... from 9.5% to 9.9% or also compared to Q2 an even better margin where in Q2 we enjoyed a 9.7% EBIT margin. This is also boosted significantly by much higher aftermarket sales in the region where we are now at 31% compared also to the last quarter where we had only slightly below 30%. So coming to Asia Pacific Africa, a very interesting turning point because compared to Q2, where we were below last year's sales and EBIT, we are now above last year's sales and EBIT. And you can really see that sales have grown to uh 49 million uh compared to the 38 million we've we've enjoyed in q3 2021 and the margin is uh has a or the ebit has improved from 6.2 to 11.1 million euros for q3 so overall a turning point because uh you you've all been very familiar with the sharp decline of the chinese market where at the end of Q2 2021, the Chinese market for trucks contracted dramatically because a new emissions regulation was going into effect and the pre-buy effects that we'd enjoyed before have veined. And therefore now, the markets in China are recovering or stabilizing and we are now in China better than we were a year before. But overall, the impact of China on our business in the Asia Pacific Africa region is unusually low. It continues to be unusually low while for instance in 21 we had year-to-date about a 50% market share of China within Asia Pacific Africa. We're this year down to 28%. So there's tremendous potential for the Chinese market to recover and we are very much looking forward to seeing that in the months to come. So overall, we have had a better utilization rate, especially for the Chinese production plants. And as we've seen all year long, all the other countries in the APAR region, which is specifically India, Australia, South Africa, and also our Southeast Asian companies served out of Singapore, they have always had traditionally higher EBIT margins because we simply sell much more heavy duty and off-road couplings, which come at a much, much higher rate. EBIT margin. So summing it up and coming to the group numbers, we will, we will see here. Now you see the breakdown also in growth by business line. You see that the agricultural business line grew by 33% to 83 million in sales and the transport business line grew by 29%. So overall we are now at roughly 30%. unorganically reported or 24% organically. That is that is a significantly higher growth than we've also had in Q2. Basically, as I've said before, we are trying to pass on all the input factor increases to our customers and are somewhat successful there or quite successful, I should say. Obviously, if you pass on those input factors and you just increase the price for your product by the increase in material costs, This leads to a margin decline and that is also what you're seeing here this quarter. We are down from 9.6% in 21 to 9.3% in 22. And that's just a mathematical effect. However, and this is the very important fact, this is now the third consecutive quarter where we enjoyed more than 300 million in sales. And also we are now above 30 million in adjusted EBIT. And if you compare it to the nine month figure, you'll see that we are for adjusted EBIT, we're at 96.9 million. So also there we've enjoyed three consecutive quarters above 30 million in profit. And that is something the group has never had before. So we were very, very happy to use the opportunity to increase our guidance for the full year. And you've seen the numbers that is basically in line with what you're already seeing here for year to date numbers. Overall, the impact of rising input factor cost remains. This is something that we will see definitely throughout Q4, and we will need to see what will happen in the year to come. So it's going to be an interesting year to come as well. With that, I would just quickly guide you through our net income development. And here you can see that from a reported net income of 51 million, we grow to EBIT of 72 million and an adjusted EBIT of 97 million, what I just mentioned. And the good thing is what you can see here is, first of all, our taxes are extremely stable, 5 million per quarter, also in Q3. The finance result is very similar to what we've seen before with 6 million for the year-to-date numbers or roughly 2 million per quarter. And then the two adjustment items, depreciation of purchase price allocations as well as other exceptionals is absolutely stable and in line with prior year where we were also recording 21 million and 4 million other exceptionals. Last year, we had a one-time effect and that was the sale of our hydraulics business in the UK that led to an additional adjustment in Q2 2021. But overall, basically, the message I'm trying to convey is that the development outside of our reported figures is totally stable. And another very positive thing is that we continue to have a much lower tax rate than we have to use as a performer tax rate. So with the 15 million year to date in taxes, we are significantly below the 27 million that you also see here as a performer tax rate of 30%. So we are enjoying a much, much better tax rate than we have to report in our adjusted numbers. So the adjusted net income is 64 million and therefore much better than last year where we recorded 55 million. That also means that our adjusted earnings per share rose by 15% to €4.28 per share, and that is also better than the 3.72 that we recorded a year before. Now let's go to some balance sheet and balance sheet KPIs. The ROSI fortunately increased to 17% and that is 0.6 percentage points better than in Q2. Very happy about that. Equity ratio now almost at 35%. very much driven by the operating results. However, also some positive development because of the rising interest rates, which means a lower number for our pension obligations. But overall, 35%, I believe, is a quite stable and very positive development for the equity ratio. And then net debt, we're down below 1.5 times EBITDA leverage. And that's, of course, quite positive. As you had seen before, we were above, but this is now an improvement of minus 0.15 times EBITDA. And also net debt is down by 11 million and therefore very happy to show that. If we then look at working capital and cash flow, also here another positive development we are positive in operating cash flow we are positive in free cash flow and the cash conversion rate increased by 0.3 times 2.07 at 0.7 and this is again we we are focusing on trying to bring down our working capital and uh we'll do so uh we'll do so also for uh further and In the meantime, we are not neglecting any investments and that is also something you see here. We've invested 9.1 million euros and this is converts to 2.8% of sales in the quarter alone. Year to date, we're roughly at 2% of sales. So we will stay within the guided range of 2.5%. And a vast majority of those new investments is going towards a new plant in India that we're building for the agricultural business. The networking capital is still elevated at 21.2% of sales, but we are on target to achieve the 20 or below percent of sales at year end. So also there, we see some positive developments and hopefully we will achieve the 20%. So with that all, I think overall a quite successful quarter with record sales, record profits year to date and within the quarter. Very happy to report that for the group and I would like to hand it back over to Joachim for the outlook for the year.

Okay, well thank you Christian and let me give you what we expect for the remainder of the year. From a market, you can say that the fundamentals of the market are still very strong in both in transport and in agriculture. For trucks in Europe, we expect a slight growth because we see that the supply chain issues are being resolved and our customers are able to produce more than they were last year. On trailers, still on a very high level, some slight decline, but 2021 has been a very strong year already for the trailer business, and 2022 will continue to be a strong year. And also in tractors, you see a very slight decline. You know, there's some customers that are a bit concerned about energy prices, fertilizer prices, and interest rates going up. So that is... bringing the expectation down a little bit on the agricultural sector, but still at a very solid and very high level. North America continues to be very strong. So we will end up between 10 and 15% higher in truck production as well as trailer production and also tractors in North America continue to grow. Fortunately, also the high horsepower tractors and not so much the the low horsepower tractors and the high horsepower tractors they have bigger loaders and therefore are a more profitable business for us than the compact loaders the compact loaders on the compact tractors so APA here as I said you have to take it with a grain of salt because the Chinese numbers are dominant in that more dominant in this market view than they are in our in our actual results but the Chinese truck markets continue to be slow so if this year there's no further improvement expected everybody's hoping for next year for the recovery but the other markets are doing fine and they're doing actually quite well and those are as Christian already mentioned the more profitable margins markets because that's where the heavy duty equipment is being sold And also for trailer, the markets outside of China are doing well. And in China, we see a bit of a decline. But overall, you can say considering all the factors with rising interest rates, with the Ukraine-Russia conflict and other global factors. It's amazing how resilient this market environment is and how fundamentally strong transport and agriculture are in these times. And we expect therefore to have a very strong remainder and a very strong year for 2022. That's why we were able to raise our guidance. We are very happy to do so. Sales we used to guide in middle single digit growth. We now expect a low double digit growth and we will exceed the 1.2 billion mark first time in the history of JOST. Also adjusted EBIT will grow with high single digits. So also here more than the initial mid single digit growth. Of course, sales growing faster than EBITS calculates to a slight decline in the margin where we had 10% last year. So here we, despite higher numbers on both ends, we expect a slight decline. And CapEx, Christian mentioned already, we continue to invest into our future and we will stay in the 2.5% of sales CapEx ratio for 2022. So let's summarize the situation until today. The third consecutive quarter in JOST history exceeding 300 million in sales. So we're really having a run here in terms of sales and in terms of adjusted EBIT, where we have 30 million in adjusted EBIT in the third quarter consecutive and more than 90 million in the year-to-date numbers. We are able to leverage and continue to be leveraged our good position in North America to grow and to benefit from the strong demand for our products in agriculture and also in transport. Both business line transport and agriculture were the growth drivers in Q3 and we ended up proving the strong underlying fundamentals of these sectors. Our order book has been expanding and it goes into 2023, especially the order book from our customers. So every discussion that we have with them, they have still very strong order books and it shows a sustainable demand despite the slowdown of the global economy and the macroeconomic concerns that I've already mentioned. So we therefore raised our guidance for the fiscal year 2022 and we will be beyond the 1.2 billion mark for the first time in JOST's history. So that's the summary. Thank you very much for your attention and we're looking forward to your questions.