Yann ALBRAND Chief Financial Officer - SOGEFI Group€¦ · Group presentation page 3 Q1...

Laurent HEBENSTREIT Chief Executive Officer

Yann ALBRAND Chief Financial Officer

Laura PENNINO Investor Relations & CSR

2017 Italian Stock Market Opportunities

Paris, May 17, 2017

2017 Italian Stock Market Opportunities – May, 17 2017

INDEX

2

Group presentation page 3

Q1 Achievements page 9

Performance levers page 19

GROUP PRESENTATION


SOGEFI CUSTOMERS

4

CARS TRUCKS 2 WHEELERS 3 WHEELERS PARTS


Air & Cooling

3 BUSINESS UNITS

5

€ 480.2m(30%)

2016 Sales€ 1,574.1m

€ 535.1m(34%)

€ 562.8m(36%)

FiltrationSuspensions

Products

Stabilizer bars, heavy stab bars & stabilinkers

Coil springsTorsion barsLeaf springsPrecision springs

Oil filtersDiesel filtersAir filtersCoil filters

transmissionCanisters

ManifoldsAirductsCooling

(waterpumps, water outlet housing, waterducts)


Volvo

Toyota

BMW

Volkswagen/Audi

Daimler

GM

PSA

FCA/CNH Industrial

Renault/Nissan

Ford

2016 2015

5 TOP CLIENTS EACH REPRESENTING MORE THAN 10% OF TOTAL SALES

WELL BALANCED CLIENTS MIX

GM EXPERIENCED A 35.6% GROWTH IN 2016

10% 15%

6

5%


2016 RESULTS – P&L HIGHLIGHTS

7

€m 2015 % 2016 % YoY

TOTAL NET SALES 1,499.1 1,574.1 5.0%

CONTRIBUTION MARGIN 420.0 28.0% 453.9 28.8% 8.1%

GROSS INDIRECT COSTS 294.0 19.6% 295.2 18.8% 0.4%

EBITDA 115.5 7.7% 152.7 9.7% 32.2%

EBIT 50.7 3.4% 74.5 4.7% 46.8%

Financial expense (income) (32.8) 2.2% (27.9) 1.8%

PRE-TAX INCOME (LOSS) 17.9 1.2% 46.6 2.9%

Income Tax (12.9) 0.9% (32.6) 2.1%

Minority Interest (3.9) 0.2% (4.7) 0.2%

NET INCOME (LOSS) 1.1 0.1% 9.3 0.6%

CAPITALIZATION - AMORTIZATION INTANGIBLE 3.2 0.2% 0.9 0.1%


2016 RESULTS – FCF HIGHLIGHTS

8

€ 31.2m FCF generation

in 2016 vs a cash burn of

€ 24.8m in 2015

Net financial debt reduced

by € 23,3m in 2016NET DEBT (€m) 322.3 299.0

Without items of non-

ordinary nature, FCF of

€ 21.9m in 2016

FREE CASH FLOW w/o Non Recurring items

9.4 21.9

€m 2015 2016

OPERATING CASH FLOW 54.2 67.3

Restructuring (20.0) (9.4)

SM Warranty Claims (18.0) 9.6

Tax withholdings 0.0 5.7

Other 3.7 3.5

Non recurring items (34.3) 9.4

Taxes (16.1) (18.3)

Interests (28.6) (27.1)

FREE CASH FLOW (24.8) 31.2

Q1 2017 ACHIEVEMENTS


Q1 HIGHLIGHTS

Strong revenue growth with revenues up by 12.6% at € 439.1m. Positive

performance of all three business units and all geographical areas

EBITDA at € 45.1m, i.e. 10.3% on sales

Further improvement in the contribution margin (from 28% to 28.5%)

Reduced impact of indirect costs

Net debt improved by € 31.2m to € 291.4m vs end March 2016

Continuous actions on performance levers to support profitable growth

On track in its turnaround plan

10


ALL GEOGRAPHICAL AREAS AND ALL BUSINESS UNITS

CONTRIBUTED WITH SIGNIFICANT GROWTH

11

Outperformed

reference markets

including in Europe

€m Q1 2017 Q1 2016

Europe 274.0 253.2 8.2% 9.5% 62.4% 4.2%

North America 81.2 70.3 15.4% 10.8% 18.5% 2.5%

South America 48.9 37.5 30.6% 14.1% 11.1% 19.1%

Asia 39.5 31.3 26.4% 25.7% 9.0% 6.8%

Intercompany eliminations -4.5 -2.2 -1.0%

Total 439.1 390.1 12.6% 11.0% 100.0% 5.8%Source: Sogefi and IHS data

weight

based on

Q1 2017

reported

change

Constant

exchange

rates

reference

market

€m Q1 2017 Q1 2016

Suspensions 153.2 143.1 7.1% 6.0%

Filtration 149.2 131.1 13.8% 12.1%

Air & Cooling 137.9 117.0 17.8% 15.7%

Intercompany eliminations -1.2 -1.1Total 439.1 390.1 12.6% 11.0%

Constant

exchange

rates

reported

change


16

26.8

Q1 2016 Q1 2017

34.6

45.1

Q1 2016 Q1 2017

109.2125

Q1 2016 Q1 2017

FURTHER PROFITABILITY INCREASE IN Q1 2017

Contribution margin

EBITDA

EBIT

28.0%

8.9%

10.3%

4.1%

6.1%

mostly driven by:

Contribution margin improvement

Control of indirect costs

Reduction of total labour costs %

to sales from 21.7% to 20.5%

+14.5%

+30.2%

+67.5%

12

€m / % sales28.5%


CONTINUOUS EFFORT IN INDIRECT COSTS OPTIMIZATION

IN Q1 2017 GROSS INDIRECT COSTS WERE 17.5% OF TOTAL SALES

1.4 points improvement vs Q1 2016

2.3 points improvement vs Q1 2015

13

in % of sales

19.8%

18.9%

17.5%

Q1 2015 Q1 2016 Q1 2017

Structure costs reduction

Better sharing/ allocating functions

Key levers for savings on indirect costs

Cost rationalizationNew plants designed more efficiently

2017 Italian Stock Market Opportunities – May, 17 2017 14

Q1 2017 EBITDA REFLECTS TURNAROUND ACTIONS

20.9

34.9 34.6

45.1

Q1 2014 Q1 2015 Q1 2016 Q1 2017


Q1 2017 RESULTS – P&L HIGHLIGHTS

15

€m Q1 2016 % Q1 2017 % YoY

TOTAL NET SALES 390.1 439.1 12.6%

CONTRIBUTION MARGIN 109.2 28.0% 125.0 28.5% 14.5%

GROSS INDIRECT COSTS 73.5 18.9% 76.8 17.5% 4.4%

EBITDA 34.6 8.9% 45.1 10.3% 30.2%

EBIT 16.0 4.1% 26.8 6.1% 67.5%

Financial expense (income) -8.5 2.2% -6.4 1.4%

PRE-TAX INCOME (LOSS) 7.5 1.9% 20.4 4.7%

Income Tax -3.4 0.9% -7.7 1.8%

Minority Interest -1.2 0.3% -1.1 0.3%

NET INCOME (LOSS) 2.9 0.8% 11.6 2.6%

CAPITALIZATION - AMORTIZATION INTANGIBLE 0.6 0.2% -1.3 -0.3%


Net debt (end of period) 322.6 291.4

€ 6.9m FCF generation

represents 1.6% of sales

Net financial debt reduced

by € 31,2m versus end

March 2016

Q1 2017 RESULTS – FCF HIGHLIGHTS

€m Q1 2016 Q1 2017

OPERATING CASH FLOW 13.7 18.9

Restructuring -4.2 -3.3

Warranty Claims 0.7 0.1

Non Ordinary items -3.5 -3.2

Taxes -3.0 -3.4

Interests -7.4 -5.4

FREE CASH FLOW -0.2 6.9


VALUE CREATION THROUGH ROCE INCREASE

+7.8 points ROCE increase versus Q1 2016

CE: Average Capital Employed (end of period) EBIT: 12 months rolling

9.1%

10.7%

12.8%

14.9%

16.9%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017


NFP/EBITDA RATIO CONTINUING TO IMPROVE

NFP: Net debt (end of period) EBITDA: 12 months rolling

2.80

2.56

2.27

1.961.79

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

PERFORMANCE LEVERS


PERFORMANCE LEVERS

20

To join the best-in-class in

terms of:

Safety

Quality

Sustainability

Customers’ satisfaction

Profitability

Cash flow

Innovation

KEY OBJECTIVES

To increase operational

efficiency, 5 performance

levers:

Purchasing excellence

Shopfloor excellence

Program management

excellence

Indirect cost optimization

Competitive footprint

KEY LEVERS


PROFITABILITY LEVERS

21

Cost reduction

through technical

modifications

Pluriannual price

and productivity

negotiations

Low Cost Country

sourcing

Purchasing1 Scrap reduction

Direct labor productivity

- Higher automatization

- Shorter reaction times to deviations

Indirect labor productivity increase

- Lean organizations

Shopfloor2 Price increases for

technical

modifications

Systematic price

increases for

volume fluctuations

Development and

tooling cash

payment

Program Management3

Polyvalence and

Polycompetence

Process redesign

Indirect costsreduction4

Competitivefootprint5

Industrial

excellence

Plant competitivity

plan

5 performance drivers to increase operational efficiency


PROGRAM MANAGEMENT EXCELLENCE

Continuous price negotiation from first quotation to end of life to maximize pricing power.

22

Renegotiation of the

contract price


Sogefi has already received new orders for both local and the European markets

that will bring in additional annual sales of € 30 million from 2020

The plant, which will start operating at the beginning of 2018, will manufacture two

different models of engine filtration systems for OEM and OES:

• metal diesel filter

• oil filtration module

The 10,000 square-meters factory will be built in the free trade zone of Tangier and

will employ 120 people.

Potential new business initiatives currently under negotiation could increase annual

sales to € 60 million in 2021, the plant size to 25,000 square-meters and the

number of employees to 300.

In a full scale scenario, the total investment could reach € 10 million

23

COMPETITIVE FOOTPRINT: SOGEFI TO BUILD A NEW FACTORY IN MOROCCO


WHY INVEST IN MOROCCO

Competitivefootprint2

Low Cost Country

sourcing

Direct and Indirect labour

cost optimization

Lean organization

Several international car and component suppliers have already invested or are planning to

invest in the country, for which a production of 1 million vehicles per year is envisaged

around 2025

The company has

already received new

orders

Supporting future profitable

growth in OEM and OES,

both locally and in Europe

Leverage on Moroccan

plant to enter new business

segments

Business opportunity1

Incentives on capex

Tax breaks for start up

phase

Tangier Free Trade Zone for

import and export duties

Euro-Mediterranean trade

agreement

Indirect benefits3


A new 8,000 square metres plant will be built in Wujiang (Shanghai area) on the

existing industrial site that currently hosts a 15,000 square metres stabilizer bars

factory, which started operating in 2014.

The purpose of the initiative is to meet the increasing demand for coil springs in China,

in view of the growth forecasts for the local car market, the gradual replacement of

leaf springs and the higher technical standards required by local manufacturers.

The start of the new production should ensure additional annual sales of € 20 million

for the company from 2023.

The investment for the new plant amounts to € 8 million.

When the coil spring plant is fully operational, the Wujiang suspensions site will

generate € 70 million in annual sales and employ 300 people.

25

SOGEFI TO BUILD A NEW COIL SPRINGS FACTORY IN CHINA AT THE END OF 2018


2017 OUTLOOK

For the automotive market, after a first quarter of sustained growth,

the outlook for 2017 shows a positive trend, albeit at a slower pace.

Concerning Sogefi, the positive performance recorded in the first

quarter confirms the projected improvement in profitability for 2017.

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PLANNED COMMUNICATION IN 2017

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CEO Conference – Milan – 27 June 2017

Roadshow in London – 5 July 2017

Roadshows in Paris and Frankfurt – Fall 2017


CONTACTS

Yann Albrand, Group CFO

Laura Pennino, Investor Relations and CSR

SOGEFI

Via Ciovassino, 1/a

20121 Milano – Italia

Tel: 39 02 46750214

Fax: +39 02 43511348

Mail: [email protected]

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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.

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Yann ALBRAND Chief Financial Officer - SOGEFI Group€¦ · Group presentation page 3 Q1...

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