Focus on fleet customers SAF-HOLLAND Investors and Analysts Day

Transcription

1 Focus on fleet customers SAF-HOLLAND Investors and Analysts Day at IAA Commercial Vehicles 2014 September 25, 2014

2 Agenda 1 Trailer Systems Business Unit Update Steffen Schewerda 2 2 Powered Vehicle Systems Business Unit Update Jack Gisinger 17 3 Aftermarket Business Unit Update Alexander Geis 27 4 Financials Update Wilfried Trepels 42 5 Questions & Answers Session 45 2 SAF-HOLLAND Investors and Analysts Day September 25, 2014

3 Gap between TS BU target margin for 2015 and current adj. EBIT margin needs to be closed by implementation of measures Mid-term targets for the Group Sales: 1bn Earnings: 10% adj. EBIT margin Net Working Capital: <10% of sales Capex: < 2% of sales Growth potential for 2015 Trailer Systems + 100mn sales potential Full product range of suspension systems in N.A. with own axle Current adj. EBIT margin not sufficient to reach 10% adj. EBIT target for the Group until 2015 Adj. EBIT FY 2012: 3.0% Increase of N.A. market share of up to 30% in medium term 0./. required adj. 0 EBIT: ~ 6% Participation in potentially growing US disc brake market Development of bundle of measures for margin improvement = Gap adj. EBIT: ~3.0% 10% adj. EBIT margin for the Group - Assumptions - Stable profits in BU Powered Vehicles Systems Overproportional increase of BU Aftermarket share Economies of scale and underproportional increase of overheads 3 SAF-HOLLAND Investors and Analysts Day September 25, 2014

4 Implementation of measures to increase sales and adj. EBIT margin of BU TS until 2015 Measures Content Realization of additional market potentials Explore additional regional markets which are not yet in sales focus (ROW) costs decrease sales increase Introduction of new products Savings in sourcing and operations Optimization of asset structure Development of and go-to-market with new products in core markets, especially in Europe Savings plan in all regions for sourcing and operations Consideration of plant consolidations in Europe and N.A. & outsourcing of business processes (make or buy decision) Sales increase: ~ 100mn (full year effect) Adj. EBIT increase: ~ 20mn (full year effect) SG&A expense controlling Realization of growth with existing resources; underproportional increase of overhead Major impact of measures in 2015, full year effect for BU TS in SAF-HOLLAND Investors and Analysts Day September 25, 2014

5 Status regarding realization of additional sales and adjusted EBIT SALES Shows the sales for the TSBU at half year and full year all numbers in meur Target: % to +17% % HJ FJ HJ FJ HJ FJ HJ FJ The target is to increase sales 12% to 17% in 2015 compared to Comparing 1.HJ 2012 with 1.HJ 2014, sales is up by 38mEUR or 16%. With the sales number we are already almost in our target range. We are confident that this will be realized if the economy holds up and further negative political developments do not occur. 5 SAF-HOLLAND Investors and Analysts Day September 25, 2014

6 Status regarding realization of additional sales and adjusted EBIT Adj. EBIT Shows the adjusted EBIT margin for the TSBU at half year and full year 6% Target: ~ 6% 4.1% 4% 2.8% 2.5% 2.0% 2.2% 2% HJ FJ HJ FJ HJ FJ The TSBU doubled adj. EBIT in 1.HJ 2014 compared to 1.HJ 2013 and achieved around 4.1% adj. EBIT. With all the actions which are under way, the 6% is an achievable target for 2015, (Full-year effect: 2016). The only concern is the political situation in Eastern Europe and the Middle East. 6 SAF-HOLLAND Investors and Analysts Day September 25, 2014

7 Status regarding realization of additional sales and adjusted EBIT Grey columns represent the years until Red triangle shows the status actually accomplished, based on the latest forecast for SALES Current status Adj. EBIT Current status 20% 40% 60% 80% 100% 7 SAF-HOLLAND Investors and Analysts Day September 25, 2014

8 Detailed overview regarding additional sales potential Score board shows the three different areas with sales potential Grey columns represent the years until 2015 Red triangle tells what we have actually accomplished Existing markets and products Current status New products 2015 Current status New markets Current status 20% 40% 60% 80% 100% 8 SAF-HOLLAND Investors and Analysts Day September 25, 2014

9 Status of sales existing markets and products Current status USA Brazil China Europe Competitor is fighting back massively. However, we continue to gain additional business. Trend for future: Weak market after the soccer world cup. Elections in October will have an impact. Trend for future: First strong orders placed with domestic Chinese OEM s. Trend for future: Market conditions are ok at the moment. The crisis in Eastern Europe and in Syria do have an effect on our business. Trailer OEM s building their own axles and suspensions. Reason to be concerned? Our reaction? Answer during IAA 2014.? 9 SAF-HOLLAND Investors and Analysts Day September 25, 2014

10 Reaction Our response in a nutshell: 1. Develop products to establish different pricing strategies 2. End User Approach While the End User Approach is already discussed widely, the product development needs to be explained: TODAY FUTURE INTRADISC/ INTRADRUM Competing in Price sensitive low cost segment: Curtain siders and Coolers against independent competition and captive OEM production. Feature required high end segment: Tankers, Tippers against independent competition. INTRA S Competing in Price sensitive low cost segment: Curtain siders and Coolers against independent competition and captive OEM production. FOCUS: COST INTRA R Competing in Feature required high end segment: Tankers, Tippers against independent competition. FOCUS: FEATURES 10 SAF-HOLLAND Investors and Analysts Day September 25, 2014

11 Innovation on IAA A few of the 20 (!) innovations SAF-HOLLAND is showing on this show INTRA S INTRA R Carbon Fiber Axle Aluminum Composite Brake drum SAF Direct Temperature Sensing Wide Bearing for higher loads Fully Galvanized axle Air Dampening New Modular Suspensions Driven Axle systems Crane axles Performance and corrosion guarantees 11 SAF-HOLLAND Investors and Analysts Day September 25, 2014 * working title

12 Status of sales market exploration with new products Sales from new products: Current status be our guest at the IAA and during the guided tour on our both 12 SAF-HOLLAND Investors and Analysts Day September 25, 2014

13 Status of sales existing markets and products Current status Canada Is hurting the TSBU adj. EBIT. However, restructuring started, first effects in late Trend for future: Middle East Very promising development. Trend for future: South East Asia First signs of improvement. The team in the region is gaining traction. However, sustainability and progress needs to be proven over the next 12 months. Trend for future: ROW Good progress in other regions. Trend for future: 13 SAF-HOLLAND Investors and Analysts Day September 25, 2014

14 Status regarding improvement of adjusted EBIT Savings in operations and sourcing On a very good way. Potential for 2015 already identified. Adj. EBIT in Brazil Eats up some of the Trailer Systems Business Unit s adj. EBIT. Improvement over the last months. However, difficult market situation. Current status Current status Adj. EBIT in China China showed a very strong financial performance. Current status Warranty cost Higher than budgeted. We are dealing with some legacy cost here. Products which are 4 to 6 years old are failing. However, over the last few months, we see the warranty cost going down. Current status Profit from new products First profits will show up in 2015, as we are introducing those products right now. Current status 14 SAF-HOLLAND Investors and Analysts Day September 25, 2014

15 Status regarding improvement of adjusted EBIT Price reductions In line with our assumptions. Plant consolidation in Europe First results are visible. Project running very well. We are in the middle of construction. Project is on time and on budget. Current status Current status Plant consolidation North America First adjustments are already done. Further decision end of 2014 / beginning of Current status SG&A controlling On the way and progressing. Cost centers are at or below budget. Current status Structure Has been evaluated. Overhead has been reduced. Current status 15 SAF-HOLLAND Investors and Analysts Day September 25, 2014

16 Summary and conclusion The development of the last 12 months shows that the TSBU is on the right path. Beside the sales growth, the measurements to increase the adj. EBIT were executed and are being executed. The adj. EBIT development is reflecting these efforts. The targets can be achieved. However, the current development in Eastern Europe and the Middle East might effect our business in Europe. Therefore, the targets remain very ambitious, especially on the earnings side. Full year effect of this plan will not show in 2015, but in This is due to the fact that some measures will be completed in the second half of SAF-HOLLAND Investors and Analysts Day September 25, 2014

17 Agenda 1 Trailer Systems Business Unit Update Steffen Schewerda 2 2 Powered Vehicle Systems Business Unit Update Jack Gisinger 17 3 Aftermarket Business Unit Update Alexander Geis 27 4 Financials Update Wilfried Trepels 42 5 Questions & Answers Session SAF-HOLLAND Investors and Analysts Day September 25, 2014

18 Powered Vehicle Systems benefits from strongly growing markets Global Truck Sales > 6t (in mn) 4 3 2,745 2,524 2,602 2,635 2,819 3,034 3,257 3,485 3, Source: LMCA, ACT Research 18 SAF-HOLLAND Investors and Analysts Day September 25, 2014

19 End user trends and priorities Vehicle buying criteria (IBM Truck 2020) Fuel efficiency, CO 2 SAF-HOLLAND response Light weight products; ADZ next generation; FW AL, FW32-14 Total cost of ownership (TCO) SAF-HOLLAND response Six years performance guarantee, Compact lift suspension, extensive Aftermarket distribution network Sustainability, GHG Reduction SAF-HOLLAND response No lube / low lube, light weight systems, integrated lube systems Safety SAF-HOLLAND response Reliability SAF-HOLLAND response Electronic lock indicator, fifth wheel w / standard visual lock indicator, air release lock mechanism Cast steel / ductile top plates, forged / heat treated lock systems, long life single piece suspension lower control arm 19 SAF-HOLLAND Investors and Analysts Day September 25, 2014

20 Powered Vehicle Systems Product Portfolio FIFTH WHEEL VOCATIONAL DRIVE SUSPENSION BUS / RV SUSPENSION VOCATIONAL LIFT SUSPENSION 20 SAF-HOLLAND Investors and Analysts Day September 25, 2014

21 Powered Vehicle Systems Fifth Wheel Published fifth wheel databook position at Navistar results in year over year market share growth of 63% 2. Localized production of fifth wheels in China with serial fifth wheel production for a major truck OEM for the China and the S.E. Asian markets successfully implemented 3. Launch of Light-Weight, Low/No Lube fifth wheels for Global market 4. Localized production of cast steel fifth wheels in Thailand initiated for a Japanese OEM 5. Emphasis on the fleet pull through strategy providing excellent up selling opportunities in all regions 6. Launch of updated and improved Electronic Lock Sensors with Tractor systems integration 21 SAF-HOLLAND Investors and Analysts Day September 25, 2014

22 Powered Vehicle Systems Vocational Drive Suspensions Release of ADZ vocational suspension by three major North American OEM s 2. Enhanced ADZ suspension released in 2014 with increased reliability, lower weight and improved performance 4. Implementation of a full time sales presence operating from our Powered Vehicle base in Singen, focusing on Vocational suspension opportunities with multiple inquiries and design activities 3. North American economy is improving especially in the area of home sales and housing starts and this coupled with the continuing oil and gas exploration is increasing the vocational truck build 22 SAF-HOLLAND Investors and Analysts Day September 25, 2014

23 Powered Vehicle Systems Vocational Lift Suspensions Major marketing and sales program implemented for the LSZ product line, with positive results to Business Plan 2. Development and release of a fully plumbed system for the LSZ enhancing revenue and margin potential 4. 20k capacity unit to be released in Q with an 8-10k unit to follow within six months 5. Product being introduced in major export and emerging markets such as India and China 3. Established a PDQ (Product Delivered Quick) program for North America with multiple styles available for shipment within 24 hours 23 SAF-HOLLAND Investors and Analysts Day September 25, 2014

24 Powered Vehicle Systems Bus/RV Suspensions Corpco awarded standard suspension position for major Chinese Bus OEM for their new 9 meter bus 2. Major Japanese OEM awards front steer suspension to SAF-HOLLAND for their new export bus chassis 3. Bus suspension models from Corpco on final approval evaluation by OEM in India 4. SAF-HOLLAND confirmed as standard suspension supplier for major North American inter city bus manufacturer 5. Integration activities ongoing with Corpco Beijing Technologies: a) New warehouse and light manufacturing facility to be on-line in Q b) Revised and updated ERP system implemented with support from Global IT team in Q c) Plans established for in-house testing facility located in China by Q SAF-HOLLAND Investors and Analysts Day September 25, 2014

25 Powered Vehicle Systems - Lean enterprise project Emphasize a fleet pull-through strategy globally, concentrating on up selling customers on added options for fifth wheel assemblies, such as air release, ELI, no / lo lube, etc. Current status Initiative to continue to differentiate product pricing at the OEMs in Long Term Agreements (LTA) that protect specialty fifth wheel pricing and option pricing from price down formulas Current status Consolidation of European fifth wheel facilities within the GmbH group completed Current status Reinforce lean concepts and activities at all Powered Vehicle Systems operations, including a renewed emphasis on back office activities Current status 25 SAF-HOLLAND Investors and Analysts Day September 25, 2014

26 Powered Vehicle Systems - Risks and Opportunities Risks Global uncertainty slows down the North American/European recovery and reduces the current excellent vehicle forecast for 2015 Supply of critical raw materials, especially fifth wheel castings, is restricted by unknown market pressures on our suppliers Chinese Large / Medium bus sales continue at the current low pace for 2015 North American defense spending continues to degrade into 2015 and further Opportunities Market acceptance of our new vocational suspension line is rapid and ahead of expectations North American defense spending increases due to uncertainties in the Global security situation Market share at Navistar returns to traditional levels (35-40%) from current 12% Corpco suspensions provide significant growth in emerging markets; India, Russia, Brazil, etc. New LSZ suspension system provides increased sales in India and China European truck transportation market continues to grow in SAF-HOLLAND Investors and Analysts Day September 25, 2014

27 Agenda 1 Trailer Systems Business Unit Update Steffen Schewerda 2 2 Powered Vehicle Systems Business Unit Update Jack Gisinger 17 3 Aftermarket Business Unit Update Alexander Geis 27 4 Financials Update Wilfried Trepels 42 5 Questions & Answers Session SAF-HOLLAND Investors and Analysts Day September 25, 2014

28 Central AM - warehouses globally Central PDC Cincinnati, USA Central PDC Aschaffenburg, Germany Central PDC Dubai, UAE 28 SAF-HOLLAND Investors and Analysts Day September 25, 2014

29 Europe Central warehouse Subsidiaries/regional warehouses Representatives 7 29 SAF-HOLLAND Investors and Analysts Day September 25, 2014

30 North America Central warehouse Subsidiaries/regional warehouses 30 SAF-HOLLAND Investors and Analysts Day September 25, 2014

31 Latin America + Brazil Subsidiaries/regional warehouses Sales offices 31 SAF-HOLLAND Investors and Analysts Day September 25, 2014

32 Asia - Pacific Central warehouse Subsidiaries/regional warehouses Representatives Sales offices 32 SAF-HOLLAND Investors and Analysts Day September 25, 2014

33 Middle East - South Africa Central warehouse Subsidiaries/regional warehouses Representatives 33 SAF-HOLLAND Investors and Analysts Day September 25, 2014

34 What s next? Key activities Further development / growth of African, Asian and South American markets Further extension of SAUER Germany Quality Parts product range Introduction of GOLD LINE TM Quality Parts in North America Promotion of recently launched SAF basic axle range within the region Expansion of local assembly activities to reduce costs Improved parts & service availability due to PDC upgrade 34 SAF-HOLLAND Investors and Analysts Day September 25, 2014

35 What s next? Geographical expansion Further expansion to be checked and raising countries to be identified East Africa on the raise, high potential for A2 - SAUER Indonesia and Papua-Neuguinea: Due to excessive mining activities, big potential for Heavy Duty OE-components + A2 - SAUER Possible new subsidiaries with regional warehouses 35 SAF-HOLLAND Investors and Analysts Day September 25, 2014

36 New PDC - Dubai Key facts Current PDC New PDC Plot size: n / a sqm (completely paved) Warehouse size: sqm sqm ( sqm expansion area) Office size: 120 sqm 350 sqm 36 SAF-HOLLAND Investors and Analysts Day September 25, 2014

37 A2 Brands SAUER and GOLD LINE TM SAUER : Introduced in 2012 to factor the increasing age of trucks and trailers in export markets Positioned against grey part suppliers and private labels for trucks & trailers older than 8-10 years in price sensitive markets not competing against SAF-HOLLAND Original Parts SAUER is using existing logistics and sales networks and trusted partners GOLD LINE TM : Introduction in Q1 / 2015 to supplementary support the all makes program Positioned against the A2 brands of the truck & trailer market in North, Central and South America GOLD LINE TM will also comprise products especially designed by SAF-HOLLAND for the independent aftermarket The ultimate goal of the A2 branding strategy is to maximize the uptime of a truck & trailer in the second and third life of trucks & trailers with reasonable priced spare parts from SAF-HOLLAND as a quality parts supplier with high technical expertise 37 SAF-HOLLAND Investors and Analysts Day September 25, 2014

38 A2 Brands SAUER and GOLD LINE TM OUTLOOK : Display on SAF-HOLLAND trade show stands after successful kick off at Automechanika Frankfurt in September 2014 Slogan: powered by SAF-HOLLAND Broaden product portfolio at additional products for all regions (Africa, Asia, South America) Develop GOLD LINE TM as an all makes program for American specifications Increase local availability by certifying additional sales partners Add additional product lines 38 SAF-HOLLAND Investors and Analysts Day September 25, 2014

39 SAF-HOLLAND: Going mobile QR SAF-HOLLAND QR Code on Axles/Suspensions and Fifths Wheels fully implemented Landing Gear started with one product lien, rest will follow soon after plant consolidation program Approx. 350,000 new serial number tags per year added More languages available in POD Parts on Demand catalogue: German, English, French, Spanish, Portuguese, Russian & Arabian language Advantages of QR Code use Very fast No mistakes Scan code: direct link to the spare parts list Simple process Outlook Increase level of automation more data automatically derived from ERP/CRM systems Real-time order tracking Include customized services in new web concept 39 SAF-HOLLAND Investors and Analysts Day September 25, 2014

40 SAF-HOLLAND: Going mobile SAF-HOLLAND App Service 24/7 App published at Automechanika / IAA Integration into CRM system to have the most recent information available Languages based on Phone settings: planned so far are German, English, Russian, French, Spanish, Italian Functions Workshop: GPS based Official Service partner (TOP Service) search Parts dealer: GPS based Original Parts dealer search (Preferred resellers could be positioned accordingly) QR Code scanner POD Shop: mobile version of online shop Emergency call: direct access to SH 24/7 helpdesk operated by a service provider Impress: basic company information and explanation of used symbols 40 SAF-HOLLAND Investors and Analysts Day September 25, 2014

41 SAF-HOLLAND: Going mobile 41 SAF-HOLLAND Investors and Analysts Day September 25, 2014

42 Agenda 1 Trailer Systems Business Unit Update Steffen Schewerda 2 2 Powered Vehicle Systems Business Unit Update Jack Gisinger 17 3 Aftermarket Business Unit Update Alexander Geis 27 4 Financials Update Wilfried Trepels 42 5 Questions & Answers Session SAF-HOLLAND Investors and Analysts Day September 25, 2014

43 Placement of convertible bond for SAF-HOLLAND Rationale: Optimization of financing structure and costs. Benefit from attractively low interest rates at the Capital Markets until Basis for renegotiation of existing bank loan agreements. Former financing structure New financing structure Corporate Bond Term Loan A Rev. Credit lines 1) Corporate Bond Convertible Bond Rev. Credit lines 2) 75 mn. EUR 65.2 mn. EUR mn. EUR 75 mn. EUR mn EUR mn. EUR 04 / / / / / / 2019 Reduction of interest costs: 2 mn. EUR p.a. (as if 2014). Enhancement of maturity structure. Increased financial headroom (+ 20 mn. EUR) and flexibility (263.2 mn. EUR -> mn. EUR). Reduction of covenants with more headroom and flexibility. Safeguarding the company for the future. 1) Utilized: 55 mn. EUR (08/31/14) 2) under negotiation, planned to be finalized by mid of 10 / SAF-HOLLAND Investors and Analysts Day September 25, 2014

44 Termsheet Convertible bond SAF-HOLLAND Issue Size Denomination Redemption price Coupon Maturity Date: ISIN / WKN Status of the bond Conversion price Conversion premium Conversion ratio per Bond Conversion period Dividend protection Call option Listing EUR million EUR 100,000 (the Principle Amount ) per Bond 100% of Principle Amount 1.00% p.a., payable semi-annually in arrears on March 12 and Sep. 12, of each year, first time on March 12 September 12, 2020 (6 years) ISIN DE000A1ZN7J4 / WKN A1ZN7J Unsecured, unsubordinated, ranking pari passu with all other present and future unsecured and unsubordinated obligations of the issuer EUR per Share initially, equal to the product of (1+Conversion premium) and the Reference Share price, subject to the adjustment pursuant to antidilution provisions 20% above the Reference Share price 8, Shares per Bond initially Starting October 23, 2014 to seventh trading day preceding the Maturity Date Up to 0.27 EUR per share per year After 4 years, if actual share price is 30% > than conversion price (16.08 EUR) Open Market (Freiverkehr) Frankfurt Stock Exchange 44 SAF-HOLLAND Investors and Analysts Day September 25, 2014

45 Agenda 1 Trailer Systems Business Unit Update Steffen Schewerda 2 2 Powered Vehicle Systems Business Unit Update Jack Gisinger 17 3 Aftermarket Business Unit Update Alexander Geis 27 4 Financials Update Wilfried Trepels 42 5 Questions & Answers Session SAF-HOLLAND Investors and Analysts Day September 25, 2014

46 Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The information in this document has been prepared by SAF-HOLLAND S.A. ("SAF-HOLLAND") for use at a road show presentation by SAF-HOLLAND and does not constitute a recommendation regarding securities of SAF-HOLLAND. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither SAF-HOLLAND nor any of SAF-HOLLAND's advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this document, which neither SAF-HOLLAND nor its advisors are under an obligation to update, revise or affirm. The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform them-selves about and to observe any such restrictions. In particular, this presentation may not be distributed into the United States, Australia, Japan or Canada. This presentation contains statements concerning the expected future business of SAF-HOLLAND, expected growth prospects and other opportunities for an increase in value of the company as well as other financial data and certain third-party market data. These forward-looking statements are based on management's current expectations, estimates and projections and on third-party market data, respectively. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Neither SAF-HOLLAND nor its advisors has any obligation to periodically update or release any revisions to the forward-looking statements contained in this presentation to reflect events or circumstances after the date of this presentation. This presentation constitutes neither an offer to sell nor a solicitation to buy any securities in the United States, Germany or any other jurisdiction. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. In particular, this presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities of SAF-HOLLAND in the United States. Securities of SAF-HOLLAND may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. SAF-HOLLAND does not intend to conduct a public offering or any placement of securities in the United States. 46 SAF-HOLLAND Investors and Analysts Day September 25, 2014

47 Investor Relations: SAF-HOLLAND GmbH Claudia Hoellen Hauptstraße Bessenbach Phone Telefax Mobile SAF-HOLLAND Investors and Analysts Day September 25, 2014