2015 results and 2016 perspectives - sogefi group · 6 sogefi group 2015 highlights and 2016...
TRANSCRIPT
2015 Results and
2016 perspectives
Laurent Hebenstreit, CEO
Yann Albrand, CFO
Milano, March 1st 2016
1 SOGEFI GROUP
ENVIRONMENT TRENDS & SOGEFI PRODUCTS
END USERSUSAGE COSTS / BENEFITS
• Vehicle total cost• Fuel economy• Less pollutants• Less green house gases• Car sharing• Autonomous car• Infotainment
MEGAPOLESELECTION & COMMUNICATION
• Clean engines• Promote electric vehicles
STATESHEALTH & SUSTAINABILITY
• Pollutant Emissions Regulations• Green House Gas Emissions
Regulations• Test methods standards
SOGEFI - 3 Business Units
SUSPENSIONS FILTRATIONSPRINGS CABIN AIR FILTERSSTABILIZER BARS
AIR & COOLINGINTAKE MANIFOLDAIR BOX and TUBESWATER PUMPSWATER OUTLETSWATER PIPES
FILTRATIONOIL FILTERSFUEL FILTERSENGINE AIR FILTERSCANISTERSOIL SEPARATORSCAM COVERS
FILTRATIONTRANSMISSION OIL SUMP
VEHICLES MANUFACTURERS
ENGINE
TRANSMISSION
VEHICLE
2 SOGEFI GROUP
FILTRATION PRODUCT PORTFOLIO
METALIC
DIESEL FUEL
FILTERS
PLASTIC
GAZOLINE
FILTERS
PLASTIC
DIESEL FUEL
MODULES
CRANKCASE VENTILATION
BLOW BY
SEPARATORS
CAM-COVER
EVAP
CANISTER
AIR
FILTER
ECO ENGINE
LUBRICATION
MODULES
SPIN ON
LUBRICATION
SYSTEMS
DUAL CLUTCH
TRANSMISSION
FILTER
LUBRIFICATION
FUEL
AIR
ENGINE AIR
BOX
3 SOGEFI GROUP
A&C PRODUCT PORTFOLIO
ENGINE COOLING
WATER
PUMPS
WATER
OUTLETS
WATER
PIPES
MANIFOLD
TOP COVER
ENGINE AIR
INTAKE
SYSTEMS
TUBES
AIR
4 SOGEFI GROUP
SUSPENSIONS PRODUCT PORTFOLIO -
PASSENGER CARS
STABILIZER BARS
TORSION, STRAIGHT BARS
COIL SPRINGS
5 SOGEFI GROUP
SUSPENSIONS PRODUCT PORTFOLIO –
HEAVY DUTY
Leaf Springs
Stabilizer Bars
Antiroll, Straight Bars
Stabilinkers
Track adjusters, Coil Springs
6 SOGEFI GROUP
2015 HIGHLIGHTS AND 2016 PERSPECTIVES
o Revenues up by 11.1% in 2015 at €1,5bn (+9.1% like-for-like)
o Solid organic growth in Europe and North America
o Outperforming market production in all geographical areas
o EBITDA up by €6m despite an €8.3m reduction of capitalized expenses
o Net debt reduced by €17.4m in Q4
o New lean organization to strengthen Sogefi’s competitiveness, leveraging
on quality, cost and innovation
o Planned a € 17m investment for a new plant in Mexico
7 SOGEFI GROUP
SOLID GROWTH IN EUROPE AND NORTH AMERICA
€m Q4 2015 Q4 2014 2015 2014
Europe 226.2 215.4 5.0% 4.1% 943.8 872.1 8.2% 7.1% 7.0% 63.0%
North America 72.6 51.9 39.8% 37.6% 264.1 207.3 27.4% 2.7% 18.8% 17.6%
South America 39.6 45.6 -13.1% 2.0% 174.5 181.4 -3.8% -20.5% 2.8% 11.6%
Asia 32.8 22.9 43.2% 32.7% 111.1 82.7 34.4% 4.5% 18.7% 7.4%
Other 1.2 3.4 -64.9% -65.6% 5.5 5.9 -7.1% -8.9% 0.4%
Total 372.4 339.2 9.8% 10.5% 1,499.1 1,349.4 11.1% 9.1% 100.0%
* Constant exchange rate Source: Sogefi and IHS data
weight
based on
2015
reported
change
like for
like
change*
reported
change
like for
like
change*
reference
market
Sales by Region
8 SOGEFI GROUP
WELL BALANCED CLIENT MIX
Sogefi top 10 clients - in % of total sales
In 2015 Sogefi started Suspensions production for Hyundai and Kia
Autodistribution
Toyota
BMW
Volkswagen/Audi
GM
Daimler
PSA
Renault/Nissan
FCA
Ford
2015 201410% 15%
9 SOGEFI GROUP
POSITIVE CONTRIBUTION FROM ALL BUSINESS UNITS
In € million
Revenue breakdown
by Business Unit
Suspensions37.1%
Filtration35.7%
Air&Cooling27.2%
Business Unit sales
reported
change
like for like
change*
Suspensions 10.1% 9.2%
Filtration 13.2% 10.0%
Air&Cooling 9.3% 7.5%
507 474374
558 536
409
Suspensions Filtration Air&Cooling
2014 2015
10 SOGEFI GROUP
2015 RESULTS – P&L HIGHLIGHTS
2014 % 2015 % vs PY
(in €m)
TOTAL NET SALES 1,349.4 1,499.1 11.1%
GROSS MARGIN 455.5 33.8% 496.1 33.1% 8.9%
PROFIT BEFORE INDIRECT EXPENSES 389.4 28.9% 419.9 28.0% 7.8%
Gross indirect operating expenses (280.3) (294.0) 4.9%
Internally made equipment 38.8 30.5 -8.3
Other Non Operating Costs (13.2) (19.5) -6.3EBITDA PRE- NON RECURRING ITEMS 134.6 10.0% 136.9 9.1% +2.3
D&A (59.9) (64.7)EBIT PRE-NON RECURRING ITEMS 74.7 5.5% 72.2 4.8% -2.5
Non recurring items (26.5) (21.5) +5.0EBIT 48.3 3.6% 50.7 3.4% +2.5Interest (Income) Expenses (26.8) (32.8) -6.0PRE-TAX INCOME (LOSS) 21.5 1.6% 18.0 1.2% -3.5Income Tax (13.1) (12.9) +0.2Minority Interest (4.8) (3.9) +0.9NET INCOME (LOSS) 3.6 0.3% 1.1 0.1% -2.5
EBITDA 109.5 8.1% 115.5 7.7% +6.0
CAPITALIZATION - AMORTIZATION INTANGIBLE 16.1 3.2 -12.9
11 SOGEFI GROUP
CAPITALIZATION / AMORTIZATION OF INTANGIBLES
At constant capitalization in 2015:
• Q4 2015 EBITDA would have been €32.4m or 8.7% of sales, slightly above the 8.5% in Q4 2014
• EBITDA for the year 2015 would have been €123.8m +13.1% versus 2014
Lowest capitalization since Air & Cooling acquisition in July 2011
12,5
18,4
34,139,2 38,8
30,5
10,313,4
18,621,2 22,7
27,3
0
5
10
15
20
25
30
35
40
45
2010 2011 2012 2013 2014 2015
capitalization amortization
12 SOGEFI GROUP
2015 RESULTS – FCF HIGHLIGHTS
€m 2014 2015
NET DEBT 304.3 322.3
Net financial debt was reduced by
€ 17,4m in Q4 2015 to € 322.3m
versus € 339.7m at end September
2015
2015 FCF includes € 18m
advanced payment to the 2 car
manufacturers on warranty claims.
Without this negative impact, the
net debt would have remained
unchanged over the year (€ 304.3m
as of end 2014).
€m 2014 2015
Ebitda w/o non recurring 134,6 136,9
Changes in net working capital 8,0 (2,7)
Capital expenditures (84,4) (81,6)
Other operating asset (liabilities) (2,6) 1,4
OPERATING CASH FLOW 55,6 54,0
Warranty claims (2,9) (20,3)
Restructuring (17,7) (20,0)
Disposal of assets 3,9 4,2
Non recurring items (16,8) (36,1)
Taxes (12,7) (14,3)
Interests (22,3) (28,4)
FREE CASH FLOW 3,8 (24,8)
13 SOGEFI GROUP
UPDATE ON THE QUALITY CLAIMS
Claims by 2 car manufacturers related to Cooling products developed by Systèmes Moteurs (SM) before
its sale to Sogefi (July 2011)
Legal procedure against the supplier of the defective sub-part initiated by SM in 2012 at the Chateauroux
Court in France
In June 2012, the Court has appointed an expert to investigate the technical and financial issues :
• root cause
• technical responsibilities
• assessment of damages
In 2015, the 2 car manufacturers have joined the expertise
Current claims (yet to be assessed) :
• € 122.8m, out of which € 60.4m before the closing € 26.6m in the 7 months after (according to
Sogefi’s estimates)
• € 65.9m for brand damage/ loss on future sales, deemed remote by our lawyer.
The company already has paid € 3.0m via debit notes + € 18.0m of advance payments in H1 2015.
As of June 2015, Sogefi prudently has booked an accrual of € 11.8m
Sogefi has started an arbitration procedure against the seller of SM. A decision is expected in 2016
14 SOGEFI GROUP
FOCUS ON QUALITY: BACK TO BASICS
Action plan for an increased focus on quality
Introduction of a new mindset at all company levels
All managers MBO to include Quality KPIs
All people to get at least one Quality objective at their own level
Increase detection and reactivity for customer claims management. Better tracking of
the problem solving process
Reinforcement of technical expertise of the Group
Simplified process flow
Collection of best practices/lesson learned
Increased involvement of top management and BU general managers
Quick Response Quality Control
15 SOGEFI GROUP
FOCUS ON RAW MATERIALS
1) Action plan for savings on Raw Materials
Use of alternative raw materials
Improve pricing through negotiations
Develop supplier network
Partner with a limited number of suppliers
Low cost / Best cost sourcing
2) Limit and mitigate negative impact of raw materials prices increases in Brazil
and Argentina
3) Capture additional savings opportunities from raw materials prices decreases
16 SOGEFI GROUP
NEW LEAN ORGANIZATION
CEOL. HEBENSTREIT
HumanResources
Finance, I. S. and
Administration
Innovation &Product
Marketing
Finance
InformationSystems
Purchasing
Legal
Engine SystemsProjects Asia
Mergers &Acquisitions
BEFORE OCTOBER 1st 2015
OperationalEfficiency
CEOL. HEBENSTREIT
Central functions are reduced from 7 to 3:
Finance, Information Systems and Administration
Innovation et Product Marketing
Human Resources
“Lean”, therefore lighter, simpler
and less expensive
17 SOGEFI GROUP
NEW PRODUCT ORIENTED ORGANIZATION
Air & CoolingBusiness Unit
SuspensionsBusiness Unit
FiltrationBusiness Unit
North AmericaRegion
CEOL. HEBENSTREIT
OCTOBER 1st 2015
North America Region to support all three business units
Enhance synergies and best practices sharing
Develop new business opportunities
Three product Business units
Direct purchasing within business units
CEOL. HEBENSTREIT
BEFORE
Engine SystemsBusiness Unit
AftermarketBusiness Unit
SuspensionsBusiness Unit
18 SOGEFI GROUP
FOCUS ON INDIRECT COSTS
Structure costs reduction
Cost rationalization
New, lean, product-oriented
organization
New plants designed more
efficiently
Capacity expansion in low cost
countries
Gross indirect costs on sales
In 2015 gross indirect costs were 19.6% of total sales,
the lowest ratio for Sogefi
Action plan for savings on
indirect costs
21,8%
20,1%20,9% 20,7% 20,8%
19,6%
2010 2011 2012 2013 2014 2015
19 SOGEFI GROUP
INVESTING FOR PROFITABLE GROWTH
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015
Tangibles % on sales
increase production capacity
industrialize new products
Tangible investments
improve processes
increase productivity
2015 Sogefi investments priorities:
In € million
20 SOGEFI GROUP
INVESTMENTS FOR PROFITABLE GROWTH
NEW PLANT IN MEXICO
€ 17m investment at Monterrey in a new plant
serving all three Business units
Suspensions building
Filtration and A&C building
3D Rendering
Building completion as of mid February
16,000 m2 of total covered surface
€ 60m of additional sales after start up phase
21 SOGEFI GROUP
SOGEFI’S PRODUCTION IN NORTH AMERICA
Sogefi footprint
Target sales in Mexico and United States
Chrysler
Ford (Hermosillo)
Ford
Daimler
80%
20%
BMW
VW
Co-localization of facilities maximizes
synergies in management, back office and
taxes
Possibility to expand the building from
16,000 m2 to 25,000 m2
Total surface of 45,600 m2
Location is about 10 km driving distance
from international airport
Plant is about 20 km from Monterrey center
22 SOGEFI GROUP
2016 OUTLOOK
In 2016 the global car market is expected to increase by 2.5%.
Sogefi expects to continue the positive trends in North America, China and
India.
In Europe after the important business expansion seen in 2015, the company
expects a more modest growth, while in South America market conditions
remain difficult.
23 SOGEFI GROUP
CONTACTS
Yann Albrand, Group CFO
Laura Pennino, Investor Relations
SOGEFI
Via Flavio Gioia, 8
20149 Milano – Italia
Tel: 39 02 4675 0214
Fax: +39 02 43511348
Mail: [email protected]
24 SOGEFI GROUP
DISCLAIMER
• This document has been prepared by SOGEFI S.p.A. for information purposes only and for use in presentations of
the Group’s results and strategies.
• For further details on the SOGEFI Group. reference should be made to publicly available information. including the
Annual Report. the Semi-Annual and Quarterly Reports.
• Statements contained in this document. particularly the ones regarding any SOGEFI Group possible or assumed
future performance are or may be forward looking statements and in this respect they involve some risks and
uncertainties.
• Any reference to past performance of the SOGEFI Group shall not be taken as an indication of future performance.
• This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall
form the basis of or be relied upon in connection with any contract or commitment whatsoever.