Sogefi S.p.a. · MIL:SGF
Sogefi — Investor Day (November 2017)
46 slides from Sogefi's investor day presentation, Nov 28, 2017
Slide 1: Technology Presentation
TECHNOLOGY PRESENTATION Milano – November 28th, 2017
Slide 2: Laurent Hebenstreit, Chief Executive Officer
Laurent HEBENSTREIT Chief Executive Officer
Slide 3: Agenda
Agenda 1 Introduction 2 Technology 3 Profitable Growth Strategy 3 I
Slide 4: Introduction
Introduction
Slide 5: Who is Sogefi?
Who is Sogefi? o Young automotive company created in 1980 by Carlo De Benedetti o Listed in Milano Stock Exchange since 1986 o Strong Entrepreneurship DNA o Developed through: • a series of strategic moves • tight cost control o Joined the best automotive suppliers in 2005 o Generated 31M€ of Cash i
Slide 6: 3 Business Units
3 Business Units Suspensions Filtration Air & Cooling o Stabilizer Bars o Oil Filters o Manifolds MAIN o Coil Springs o Engine Air Filters o Coolant Pumps PRODUCTS o Fuel Filters o Coolant Outlet o Cabin Air Filters Housings € 1,574M € 563M € 535M € 480M 36% 34% 30% 2016 Sales Main Competitors 6 I
Slide 7: Sogefi Customers
Sogefi Customers CARS AFTERMARKET TRUCKS 2 WHEELERS 3 WHEELERS MAIN BRANDS 7 I
Slide 8: Well balanced clients mix
Well balanced clients mix Sogefi Top 10 Clients – In % of Total Sales 2015 Ford Renault/Nissan 2016 FCA/CNH Industrial PSA GM Daimler Volkswagen/Audi BMW Toyota Volvo Geely/Volvo 5% 10% 8 I
Slide 9: Supplying premium customers & models
Supplying premium customers & models FERRARI 599 PORSCHE CAYENNE AUDI A6 MASERATI QUATTROPORTE BMW 5-serie MERCEDES GLK VOLVO XC90 JAGUAR F-PACE CORVETTE 9 I
Slide 10: Technology
Technology
Slide 11: Current Trends
Current Trends Air Quality CO2 Emissions Reduction Weight Fine Particles Reduction Reduction Fuel Consumption Reduction Higher technology requirements Filtration Filtration Filtration Air & Cooling Air & Cooling Suspensions 11 I
Slide 12: Stabilizer Bar content
Stabilizer Bar content Weight Content Suspensions reduction by vehicle High Variable wall 45% 24€ thickness Tube TECHNOLOGY Middle Tube 35% 20€ LEVEL Indicative weight by vehicle: Entry Solid Bar ~6kg 16€ 12 I
Slide 13: Coil Spring content
Coil Spring content Weight Content Suspensions reduction by vehicle High Composite 50% 50€ Steel TECHNOLOGY Middle + high performance 25% 23€ LEVEL process Indicative weight by vehicle: Entry Steel ~10kg 20€ 13 I
Slide 14: Disruptive Future Trends
4 Disruptive Future Trends 1 CONNECTIVITY 2 AUTONOMOUS DRIVING o Connected, Autonomous and Shared trends have limited direct impact for Sogefi 3 SHARED MOBILITY o Powertrain electrification is a key trend for Filtration and Air & Cooling ELECTRIFICATION o Sogefi developed with Mc Kinsey support a de
Slide 15: Different types of powertrains
Different types of powertrains New Energy Vehicle (NEV) Internal Combustion Engine (ICE) Electric Vehicle (EV) Hybrid Battery Fuel Cell Pure ICE Electrification 15 I
Slide 16: Different types of powertrains
Different types of powertrains Pure ICE Hybrid BEV FCEV MHEV FHEV PHEV Electrification o ICE: Internal Combustion Engine vehicle, operating on fuel. o MHEV: Mild-Hybrid Electric Vehicle, 48V system. (e.g. New Renault Scenic dCi 110). o FHEV: Full Hybrid Electric Vehicle, operating on fuel, assisted
Slide 17: 2017 Powertrain by region
2017 Powertrain by region EUROPE 54% 90% 41% 87% CHINA 1% 3% NAFTA 2% 3% 6% 19.9 6% 7% 1% 72% 28.0 Rest of 81% 20.8 Asia Rest of the World 22% 6% 78% 1% WORLD 1% 6% 12% 14.9 8.7 Type of engine 17% 2% 4% EV Hybrid Diesel Gasoline LV sales 92.3 (M units) Source: Sogefi and Mc Kinsey Estimated volume,
Slide 18: Diesel/Electric disruption trends
Diesel/Electric disruption trends 1 Diesel disruption mainly affecting Europe due to o More stringent regulations o Consumers turning away from Diesel o Politics • Diesel circulation restrictions in large cities Diesel share in Europe: from 41% in 2017 to 25% in 2027 in Base case scenario (20% in St
Slide 19: 2022 Sogefi Forecast
2022 Sogefi Forecast All scenarios predict a reduction of ICE from 98% in 2017 to 93% in Base Case and 89% in Strong Case in 2022 Share of 2022 sales per type of engine, LV1 global 68% 64% 60% Scenario EV High Base case 11% 13% 11% 13% 13% 11% 13% 17% 9% Strong case 75% 71% 66% EV scenarios 18% Type
Slide 20: 2027 Sogefi Forecast
2027 Sogefi Forecast All scenarios predict a reduction of ICE to reach 86% in Base Case and 81% in Strong Case in 2027 Share of 2027 sales per type of engine, LV1 global Scenario EV High 59% 56% 53% Base case 19% 15% 18% 15% 11% 18% 15% 14% 7% Strong case 63% 60% 56% EV scenarios Type of engine 14%
Slide 21: Powertrain Forecast by region (Sogefi Base Case)
Powertrain Forecast by region (Sogefi Base Case) NAFTA EUROPE 2017 2022 2027 2017 2022 2027 CHINA EV 1% 5% 11% EV 1% 6% 13% 2017 2022 2027 Hybrid 6% 9% 15% Hybrid 3% 7% 14% EV 2% 8% 17% ICE Diesel 7% 6% 5% ICE Diesel 41% 32% 25% Hybrid 3% 11% 18% ICE Gasoline 87% 80% 69% ICE Gasoline 54% 55% 49% ICE
Slide 22: Light Vehicles Sales Forecast (Sogefi Base Case)
Light Vehicles Sales Forecast (Sogefi Base Case) o Strong growth of Hybrid powertrains and Electric Vehicles (EV) o But total Internal Combustion Engine (ICE) remains flat 2017 2022 2027 CAGR 17/22 CAGR 22/27 Total Vehicles 92 99 110 1.4% 2.1% (M units) EV 1 6 15 35% 19% Hybrid 4 9 17 19% 14% ICE Di
Slide 23: Sogefi Filtration / Air&Cooling Main Products
Sogefi Filtration / Air&Cooling Main Products Filtration Air & Cooling OEM AFTERMARKET Oil Filter Manifold Engine Air Coolant Pump Fuel Filter European Car Park Cabin Air Filter 10 years average age Coolant Outlet Housing 23 I
Slide 24: Hybrid Powertrain
Hybrid Powertrain Volume Effect New Product Air & Cooling VOLUME X2 Manifold Coolant Coolant Outlet Pump Housing Battery Pack Battery Pack Filtration coolant Manifold Thermal Pack Engine Air Oil Filter High performance Coolant Valve Fuel Filter Cabin Air Filter 24 I
Slide 25: BEV Powertrain
BEV Powertrain Volume Effect New Product Air & Cooling Battery Pack Battery Pack Coolant Manifold Module Battery Thermal Pack Electric Cooling Module VOLUME X2 Filtration Electric Coolant Outlet Coolant Valve High performance Coolant Pump Housing Cabin Air Filter 25 I
Slide 26: FCEV Powertrain
FCEV Powertrain New Product Air & Cooling Electric Coolant Coolant Outlet Pump Housing Coolant Valve Filtration Fuel Cell Air Filter High performance Fuel Cell Water Filters Separator Cabin Air Filter 26 I
Slide 27: Sogefi on Hybrid and Electric Powertrain
SOGEFI on Hybrid and Electric Powertrain TX5 3-serie A8 MALIBU PACIFICA S-CLASS PANAMERA ZOE FORTWO B-CLASS 500 27 I
Slide 28: Sogefi Filtration / Air&Cooling products offer opportunities
Sogefi Filtration / Air&Cooling products offer opportunities o Even if all scenarios predict an increase of EV, the total ICE powertrains could remain flat or a substantial part of the market until 2027. o Hybrid powertrain is a first step towards a world of multiple powertrains. o The rise of EV is
Slide 29: Oil Filter content
Oil Filter content Filtration Content Oil Filter Module High + Oil Cooler 23€ + Valves TECHNOLOGY Oil Filter Element Middle 2€ LEVEL + Cap Entry Oil Filter 1€ Spin-on 29 I
Slide 30: Engine Air Filter content
Engine Air Filter content Filtration Content Engine High Air Intake System 28€ Filter Element TECHNOLOGY Middle + Box 9€ LEVEL Filter Element Entry 2€ 30 I
Slide 31: Air Cabin Filter content
Air Cabin Filter content Filtration Content Anti-allergen High 3€ Synthetic media with activated carbon + anti-allergen properties + high performance TECHNOLOGY Particles and Middle 2€ LEVEL odours Synthetic media with activated carbon Entry Pollen 1€ Synthetic media 31 I
Slide 32: Aftermarket Pricing Power
Aftermarket Pricing Power Filtration Price Index High Premium 100 TECHNOLOGY Middle Mid Range 85 LEVEL Entry 80 Private Label 32 I
Slide 33: Air Intake Manifold content
Air Intake Manifold content Air & Cooling Content Hot Air flow High With Actuator 40€ Cooled and Cooler Air flow Cooled Air flow TECHNOLOGY Middle With Actuator 23€ LEVEL Cooled Air flow Entry Simple 10€ 33 I
Slide 34: Coolant Pump content
Coolant Pump content Air & Cooling Content Flow control with e-valve High or e-motor Smart Coolant 25€ Pump outlet TECHNOLOGY Pump module Middle 20€ LEVEL with Cooler + + + Thermostat Impeller Entry Mechanical 8€ Inlet Outlet pump 34 I
Slide 35: Coolant Outlet Housing content
Coolant Outlet Housing content Air & Cooling Content Coolant Outlet Housing Smart High M Multi Way 25€ Valves TECHNOLOGY Electric Middle 13€ LEVEL Thermostat Entry Thermostat 8€ 35 I
Slide 36: Sogefi Ventures
Sogefi Ventures disrupting existing business Startups are becoming key players of the automotive world creating new business OBJECTIVES HOW 1. Monitor the fields relevant to Sogefi: Generate profits Air and Cooling, Filtration, Suspensions Add value to existing Sogefi 2. Build joint development agre
Slide 37: Profitable Growth Strategy
Profitable Growth Strategy
Slide 38: Profitability improvement plan
Profitability improvement plan 5 performance drivers to increase operational efficiency 1 PURCHASING 2 SHOPFLOOR 33 PROGRAM MANAGEMENT 4 INDIRECT COSTS REDUCTION o Cost reduction o Scrap reduction o Price increases o Polyvalence and through technical o Direct labor for technical Polycompetence modif
Slide 39: Sogefi Excellence System
Sogefi Excellence System Strategic cost reduction initiative 1245 945 o A deep analysis of the cost base has been done 380 290 o On € 100m addressable 100 costs some productivity potential have been TOTAL Material for final Transformation Costs analized Adressable costs identified with expected prod
Slide 40: Growth Strategies: Harvest, Challenger, Leader
Harvest ✓ Growth Strategies : Harvest, Challenger, Leader Challenger ✓ Leader ✓ Filtration Air & Cooling OEM AFTERMARKET N°4 ✓N°1 N°2 Oil Filter ✓ France ✓ ✓ Worldwide Worldwide Manifold Engine Air ✓ ✓ ✓ ✓ ✓ Coolant Pump ✓ Fuel Filter ✓ European Car Park Cabin Air Filter 10 years average age Coolant
Slide 41: Geographical Expansion and cost competitive footprint
Geographical Expansion and cost competitive footprint ASIA EMEA Romania NAFTA Morocco ✓ ✓✓✓ China ✓ Mexico ✓✓✓ India ✓✓✓ Suspensions EMEA project Filtration Air & Cooling 41 I
Slide 42: Tangible Investments 2014-2017E
Tangible Investments 2014-2017E 70 59 51 42 36 2013 2014 2015 2016 2017E Health & Safety, Quality, Capacity increase, Efficiency, New products, New plants 42 I
Slide 43: Value Creation Through ROCE Increase
Value Creation Through ROCE Increase 17.5% Benchmark* 13.5% 12.8% 10.2% 2015 Q3 2015 Q3 2016 Q3 2017 EBIT: 12 months rolling * Lazard – Roland Berger: global automotive suppliers study. ROCE of ~600 key suppliers 43 I
Slide 44: Debt/EBITDA Ratio Improved
DEBT/EBITDA Ratio Improved Leverage now supports Profitable Growth Strategy 3.7 2.3 1.6 Q3 2015 Q3 2016 Q3 2017 DEBT: Net debt (end of period) EBITDA: 12 months rolling 44 I
Slide 45: Executive Summary
Executive Summary Sogefi Strengths 1. Entrepreneurship DNA 2. Intimacy with R&D, Purchasing and Top Management of vehicle manufacturers 3. Recognized technical credibility to develop, launch and ramp-up innovative products 4. Multi-brand Aftermarket provides resilience to OEM volumes fluctuations Hi
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