Elica S.p.a. · MIL:ELC
Elica — Investor Presentation (November 2007)
24 slides from Elica's investor presentation, Nov 14, 2007
Slide 1: 3Y Plan 2008-2010
The Hi-Life company 3Y Plan 2008- 2008-2010 November 14th 2007 The The Hi-Life company Hi-Life Company 1
Slide 2: Agenda
Agenda Market scenario 3Y Plan strategic pillars and key financials Elica organisation 3Y Plan details Revenues & margin growth Cost competitiveness Strong financial structure The The Hi-Life company Hi-Life Company 2
Slide 3: Worldwide cooker hoods demand evolution
Worldwide cooker hoods demand evolution Volume data Europe: 1÷2% 4.6% Americas: 1÷2% RoW*: 4÷6% Demand drivers - GDP growth (developing ~3% countries) 2÷3% - Replacement - New housing construction - Housing renovation CAGR ’07 vs.‘06 CAGR - Growth G off high income '04-'06 '07-'10 families *Includes
Slide 4: Raw materials
Raw materials Steel Stainless steel Copper - 2008 Market consensus for - 2008 Market consensus for - 2008 Forward Curve: i iron ore prices: i t i l stainless steel t l iis rising i i ttrend d 1% vs. 2007 -1% +35% vs. 2007 - Elica Plan estimate on - Elica Plan estimate on - Elica Plan estimate on ste
Slide 5: Exchange rates
Exchange rates EUR/USD EUR/JPY - 3Y Plan assumption: 1,456 - 3Y Plan assumption: 166,90 - Assumption based on cash - Assumption based on cash exchange rate on Nov. 6th exchange rate on Nov. 6th 2007 2007 Planned hedging actions: Industrial: increase of dollar-based sourcing Hedging instruments:
Slide 6: Market scenario
Market scenario … • Growth of high high-end, end European European-style style hoods segments + both in the Americas and in Asia • “Go “G green”” trend t d for f energy efficiency ffi i + • Growth of “free standing” channels and consumer + purchases of standalone hoods • Major j white ggoods OEMs wi
Slide 7: Strategic pillars of the Plan
… and consistent strategic pillars of the Plan Leadership also in financial performance Revenues & margin Cost Strong financial growth th competitiveness titi structure t t Own brands Delocalisation Net profit optimisation Working capital Product innovation LCC sourcing stability Geographical and Le
Slide 8: 3Y Plan 2008-2010
3Y Plan 2008 2008-2010 2010 €M 2007 CAGR ‘07-’10 2010 Net sales 432 3÷4% 475÷490 Restructuring costs 3.0 M€, all in 2008 EBIT after non-recurring items 25 9÷11% 32÷34 % on sales (5.7%) (6.7÷7.0%) N t Result Net R lt 9 15÷20% 14÷16 % on sales (2.1%) (2.9÷3.3%) EPS fully diluted 14 € cents 15÷20% 22÷2
Slide 9: A talented team and a new structure
A talented team and a new structure Completely new functions Chairman Reengineered functions Francesco Casoli Internal Auditing Communication & Press Release Massimo Enrico Ferri Donatella Vici CEO Andrea Sasso Human Resources Information Technology Marco Scippa Massimo Lo Campo Quality & Consumer C
Slide 10: Organisation vitality
Organisation vitality - Marketing & Innovation Director 40% internal people - Elica Polska Managing Director growth g - Qualityy & Consumer Care Managerg - B2B Hoods & Motors Sales Director - Internal Auditor - ElicaMex Plant Manager - Mergo Plant Manager - Group Procurement Director New key positio
Slide 11: Source of net sales growth
Source of net sales growth By SBU Hoods - by Brand Hoods - by Region Americas 41% Own M t Motors 17% 61% brands Europe 39% Client Hoods 83% 39% brands RoW 20% Total Total Group p 100% 100% Hoods Total 100% Hoods The The Hi-Life company 11 Hi-Life Company
Slide 12: Own brands strategy
Own brands strategy Rationalisation and focus: Luxury – High end - From 9 to just 3 main brands Premium segment leader - Product range optimisation coherently with clear brand missions Value (with style) for money Hoods sales (value) Unleash full potential of Own brands 25% 30% innovative and appeal
Slide 13: Product innovation
Product innovation Consumer experience Product performance Design - Distinctive to brands’ identity Deep Silence - EDS3 upgrade - Range extension of - Extension of EDS3 product breakthrough design range ((“Evolution”) Evolution ) - Moving parts Filtering - Odour absorption/essence diffuser Usability
Slide 14: Example of product launches
Example of product launches 2007 2008 2009-2010 More and more exclusive and l luxury products d t Space Ola High-end electronic interfaces on full range Chrome Stone Gallery Range extension: both wider and deeper Saturnia Magic Hood The company 14 The Hi-Life Hi-Life Company
Slide 15: Geographical and channels expansion
Geographical and channels expansion Own brands Client brands Geographical expansion through direct Consolidate leadership sales presence - New clients - North America (Chicago) - Increase penetration on major clients - CIS (Moscow) (focus on the Americas through ElicaMex) New channels and clients Ma
Slide 16: Key points of motors business
Key points of motors business P d t evolution Product l ti P d t portfolio Product tf li strategy t t Product evolution Launch - Production relocation (Poland) - Energy-efficient Energy efficient systems for industrial - New materials refrigeration - Simpler electronics - Combustion control systems
Slide 17: Overall manufacturing and sourcing targets
Overall manufacturing and sourcing targets Cumulative savings Savings as % on 2008 – 2010 ((M€)) total p product cost Manufacturing 10.8 2.9% Sourcing activities 3.0 0.8% Raw materials -5.3 53 -1.4% 1 4% Total 8.5 2.3% Total net savings 2008 – 2010: 8.5 8 5 M€ Acceleration of benefits from 2009 The
Slide 18: Manufacturing delocalisation
Manufacturing delocalisation Hoods volume allocation Mission Key y actions 200 2007 2010 Italy - High-end products - Rationalisation of 95% 70% manufacturing - Capital-intensive footprint (3.0 M€ manufacturing restructuring costs in 2008) - Partial production transfer to Poland Poland - OEM products
Slide 19: LCC sourcing growth: 3YP targets
LCC sourcing growth: 3YP targets 30% 20% 15% LCC share of 10% sourcing 2007 2008 2009 2010 % on total components (in value) Eastern Europe China Target geogra- phical Locall purchasing L h i Mexico areas office by end-2007 Turkey Mediterranean Africa Cumulative savings 2008 – 2010: 3.0 M € The The H
Slide 20: Lean structure: SG&A
Lean structure: SG&A CAGR 2004-2007 2007-2010 14.5% - Strict cost control 6.9% - 1.5 M€ savings from 3÷4% 3÷4% merger and integration of all Italian Elica Group hoods companies Sales SG&A Sales SG&A The The Hi-Life company 20 Hi-Life Company
Slide 21: Optimal financial structure
Optimal financial structure Net profit optimisation Capex optimisation M€ Capacity ramp-up ramp up in • Ramp-up R off sales l ffrom: Poland and Mexico - Elica Polska 21.5 - ElicaMex 20 18 16 Working capital stability • More complex supply chain: - 2007 2008 2009 2010 - Global manufacturing - Global
Slide 22: Net Profit variance drivers
Net Profit variance drivers Sales growth 20% Net Profit increase from 2007 to 2010 Cost reduction 35% +5÷7 5 7 M€ Financial 45% structure improvement The The Hi-Life company 22 Hi-Life Company
Slide 23: Opportunities on top of 3Y Plan
Opportunities on top of 3Y Plan 3Y Plan is based on organic growth Value-accretive acquisitions and strategic alliances are under exploration If suitable targets were not available, cash-back h b k tto shareholders h h ld iis planned l d The The Hi-Life company 23 Hi-Life Company
Slide 24: Disclaimer
Disclaimer This presentation contains forwards-looking information and statements about Elica S.p.A. and its Group. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regar