Kongsberg Automotive Asa · OSL:KOA
Kongsberg Automotive Asa — Investor Day (December 2014)
107 slides from Kongsberg Automotive Asa's investor day presentation, Dec 3, 2014
Slide 1: Capital Markets Day 2014
Capital Markets Day 2014 Kongsberg Automotive ASA, December 3, 2014 1
Slide 2: Agenda
Agenda 09:00 Achievements, strategy for growth & targets 09:30 Financial review 09:50 Automotive market outlook 10:05 Break 10:25 Automated Transmission trends in the Commercial Vehicle segment 11:00 Comfort feature trends in the Automotive seating segment 11:35 Summary and closing remarks 11:45 Lun
Slide 3: Who we are
Who we are Enhancing the driving experience Hans Peter Havdal, President & CEO 3
Slide 4: A true global supplier
A true global supplier World class Revenues of Global presence products to the ca. EUR 1 40 locations in global vehicle Billion 20 countries industry Global R&D and More than testing 10 0000 capabilities employees 4
Slide 5: 2014 Key Events
2014 KEY EVENTS Market Finance Operational ▸ Market still weak in ▸ Continued company ▸ Increased focus on Europe deleverage and financial innovation improvements ▸ NA remains healthy. SA is ▸ Starting to pay off in new very challenging for CV ▸ Delivering good cash flow business wins segment ▸ Secu
Slide 6: Changes to senior management team
Executive Committee 2015 Changes to senior management team Hans Peter Havdal, CEO ▸ Lovisa Söderholm, EVP Purchasing Lovisa comes from the role as Chief Purchasing Officer at SKF. Has solid Trond Stabekk, CFO automotive experience from Ford of Europe, Volvo, Jaguar and Aston Martin Lovisa Söderholm,
Slide 7: Recap from 2012 CMD
Recap from 2012 CMD Group Targets Revenue Selective growth focus Margin Gradually improving margin ROCE 15% by 2015 NIBD/EBITDA < 2x by 2015 7
Slide 8: 2015 Business environment
2015 Business environment ▸ We continue to see a challenging market in 2015, main concerns are EU and Brazil ▸ At the same time we need to build a platform for growth through increased innovation efforts ▸ R&D and Sales & Marketing efforts increasing, but new programs launching in 1 to 2 years ▸ Str
Slide 9: Weaker Market than we expected in 2012
Weaker Market than we expected in 2012 CVP in Million Units LVP in Million Units 4,5 115 110 4 105 100 3,5 95 90 3 85 2,5 80 75 2 70 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018 Total CVP 2012 CMD Forecast Total CVP 2013 CMD Forecast Total LVP 2012 CMD Forecast Tot
Slide 10: Increased investments in R&D
Increased investments in R&D R&D of sales MEUR ▸ Increased R&D effort on 7% 70 developing new technology 6% 60 ▸ Supporting future growth plans 5% 50 4% 40 3% 30 2% 20 1% 10 0% 0 2011 2012 2013 2014 2015 R&D R&D of sales 10
Slide 11: The increased innovation efforts are starting to pay off
The increased innovation efforts are starting to pay off Expected business awards in 2014 ▸ Order intake increasing, fueling future organic growth Driver Control 23% 33% ▸ Expected new business account for Driverline 220* about 22 % of 2014 estimated revenue MEUR Fluid Interior 10% 34% * Expected pe
Slide 12: Revised 2015 targets
Revised 2015 targets Group Revenue In line with 2014 ROCE 13% in 2015 NIBD/EBITDA < 2x by 2015 Delivering 15% ROCE would require cut backs in R&D, hurting growth potential 12
Slide 13: Next Moves
& KONGSBERG NEXT MOVES
Slide 14: Platform in place to capture future growth
Platform in place to capture future growth Profitable Growth 1987 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 LTM 2015- beyond 3Q14 Entering the Establishing top three positions in attractive Operational automotive segments Consolidation and recovery improvements Growt
Slide 15: Key growth trends
Key growth trends ACTIVE CONNECTED EFFICIENCY & GLOBALIZATION COMFORT BRIC SAFETY VEHICLES EMISSIONS • Zero casualty • Always connected • Adaptive driver • CO2 / Fuel • Fewer, but bigger vision assistance Economy global platforms • Information & • Focus on accident Entertainment • Increased comfort
Slide 16: Key businesses growth trends – KA well positioned
Key businesses growth trends – KA well positioned CONNECTED EFFICIENCY & GLOBALIZATION SAFETY COMFORT BRIC VEHICLES EMISSIONS INTERIOR DRIVELINE DRIVER CONTROL FLUID TRANSFER 16
Slide 17: Interior
Interior KA growth 2014 estimated sales Product lines expectations ▸ Comfort part of the business will grow above the global light vehicle production due to increased Above market fitment rates of support and 13% climate systems in cars 22% 21% 290 MEUR ▸ Light duty cables for automotive In line bus
Slide 18: Driveline
Driveline KA growth 2014 estimated sales Product lines expectations ▸ SbW share of AT segment is Powertrain 84% expected to grow above average SbW Above due to more electronic controlled 2% market transmissions 43% ▸ MT segment would grow at par with 250 MEUR Global industry average as DS In line 39
Slide 19: Driver Control
Driver Control KA growth 2014 estimated sales Product lines expectations Powertrain ▸ AMT segment is expected to 84% grow above the global CVP Above growth market 5% 35% 240 47% MEUR ▸ HMI should enjoy an In line average industry growth rate With market 13% ▸ MT segment will slow down HMI Other MT A
Slide 20: Fluid
Fluid KA growth 2014 estimated sales Product lines expectations ▸ CV OEMs further adoption of lightweight couplings should yield Above an above average global CVP market growth for this segment 40% 38% ▸ Dedicated sales organization for 190 MEUR the Industrial business should Above allow for a doubl
Slide 21: Capital Structure, Dividends & Targets
Financials CAPITAL STRUCTURE, DIVIDENDS & TARGETS 21
Slide 22: Capital structure target
Capital structure target 4 3,5 3 2,5 Current level x2,2 2 1,5 Target x1,5 1 0,5 0 2012 2013 2014 2015 2016 leverage ratio ▸ KOA favours debt repayment and solidity ▸ Company targets a gearing ratio of 1.5 22
Slide 23: Dividend Policy for Kongsberg Automotive ASA
Dividend Policy for Kongsberg Automotive ASA ▸ Kongsberg Automotive shall create good value for its shareholders, employees and society ▸ Returns to shareholders will be a combination of changes in share price and dividends ▸ The Board of Directors’ intention is that dividends will be approximately
Slide 24: Beyond 2015 targets
Beyond 2015 targets KPI Targets KA expects an organic growth ratio of Organic 3 – 5% annually 3 – 5 % annually given the present growth market outlook KA have the ambition to deliver above ROCE > 13% 13 % ROCE NIBD/ KA will continue to deleverage to < 1.5 EBITDA increase financial robustness ▸ Our a
Slide 25: Financials
Financials Trond Stabekk, EVP & CFO 25
Slide 26: Since last capital markets day
Since last capital markets day...... ▸ Strengthened profit margins ▸ Improved return on capital employed ▸ Reduced debt further through solid cash flow 26
Slide 27: Group revenue and EBIT (LTM)
Group revenue and EBIT (LTM=last twelve months) Revenues EBIT and EBIT Margin EUR Million EUR Million and percent 982 991 995 987 981 57.8 57.9 57.6 52.5 53.2 5,8% 5,9% 5,9% 5,3% 5,4% Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 27
Slide 28: Free cash flow (LTM)
Free cash flow (LTM=last twelve months) Free cash flow Free cash flow yield EUR Million Percent 51 48 16% 44 15% 41 43 13% 13% 13% Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 28
Slide 29: Segments
AK KONGSBERG
Slide 30: Revenues and EBIT margin per segment (LTM)
Revenues and EBIT margin per segment (LTM) Revenues EBIT Margin EUR Million percent 13,0% 297 302 282 10,9% 270 253 251 9,4% 8,8% 194 7,7% 184 7,2% 1,6% 1,0% Driveline Interior Fluid Transfer DCS Driveline Interior Fluid Transfer DCS EBIT (margin) 2013 EBIT margin 2014 Revenues LTM 2013 Revenues LTM
Slide 31: Gearing, ROCE, Liquidity & Funding
GEARING, ROCE, LIQUIDTY & FUNDING 31
Slide 32: Continue focus on reducing gearing level
Continue focus on reducing gearing level NIBD/EBITDA 4,50 Times ▸ Gearing significantly reduced over 4,00 3.9 3.8 the last years 3,50 3,00 ▸ Trend towards target of Net 2,50 2.5 Debt/EBITDA ratio below 2x by 2015 2,00 2.3 on track 2.0 [VALUE] 1,50 1,00 ▸ Focus: continue to reduce the gearing ratio t
Slide 33: Targeting > 13% ROCE by 2015 and beyond
Targeting > 13% ROCE by 2015 and beyond ▸ Multiple levers for improvement Return on Capital Employed (ROCE) Percent 18% – Revenue growth in high-margin 16% Target: segments 14% > 13 % 12% – Improved margins in currently 10% low-yielding segments 8% 6% – Higher capital efficiency, i.e. 4% maintaining
Slide 34: Liquidity situation further improved
Liquidity situation further improved Liquidity reserve 140 ▸ Liquidity reserve 120 strengthend 100 71 MEUR 80 64 ▸ Debt level further 60 reduced 40 58 20 42 0 Q3 13 Q3 14 Cash Facility 34
Slide 35: A new revolving facility
A new revolving facility Existing facility New facility Total size 315 MEUR RCF + 35 MEUR Overdraft 300 MEUR RCF+ 20 MEUR Overdraft Maturity March 2017 January 2018 + extension options to 2019 and 2020 Lenders DNB / Nordea DNB / Danske Bank/ BNP Paribas Margin in % NIBD/EBITDA NIBD/EBITDA p.a. >4.0x
Slide 36: Summary
Summary ▸ Have delivered on the path towards the targets – Operational margins improved – Increased the return on capital employed – Reduced the gearing on the balance sheet ▸ Growth in revenues important factor in improving the return on capital employed further long term ▸ Financing further improv
Slide 37: Market Outlook
Market Outlook Philippe Toth,VP M&A and Investor Relations 37
Slide 38: Agenda
Agenda ▸ KA regional exposure to end- markets segment ▸ Some macro economic drivers ▸ Regional Light Vehicle and Commercial Vehicle market ▸ Regional new business wins ▸ Summary 38
Slide 39: Group exposure by end-markets & regions
Group exposure by end-markets & regions 60% ▸ CV segment is mainly 50% exposed toward European underlying 40% Asia growth SA 30% NA ▸ LDV segment is fairly balanced between 20% EU North America and Europe 10% 0% ▸ Off-highway and RV Commercial Light Duty Non Auto Off-Highway/RV Vehicles Vehicles seg
Slide 40: Drivers for LDV demand
Drivers for LDV demand ▸ GDP growth & Consumer Price Index drives scrapping and replacement rate ▸ In mature economies very little growth in vehicle densities, but growth comes mainly from demographic growth or.. ▸ …Increased vehicle density in developing markets ▸ Credit availability ▸ Oil prices ▸
Slide 41: Drivers for CV demand
Drivers for CV demand ▸ Growth in Heavy Duty (>15t) trucks follows GDP growth closely , but w. scaling factor ▸ Credit availability ▸ Oil prices influence positively fleet owner profitability ▸ Local governmental stimulus packages also influence market short term ▸ Demand also strongly related to fr
Slide 42: GDP growth – in large economies
GDP growth – in large economies 10% 8% ▸ Slower growth in China a new reality? 6% ▸ North America shows 4% improvement 2% ▸ Eurozone still subdued 0% -2% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Eurozone USA China Source: LMC & WorldBank 42
Slide 43: Will this price change impact the demand?
Will this price change impact the demand? Source: Thomson Reuters 43
Slide 44: Average fleet age (CV) increasing…should trigger replacement?
Average fleet age (CV) increasing…should trigger replacement? 10,5 10,0 9,5 9,0 EU HD truck >15t EU MD truck 7,5-15t 8,5 US Class 8 8,0 7,5 7,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Ref: EUROSTAT, ACT Reasearch Co.LLC 44
Slide 45: Light Vehicle density development should sustain demand in emerging market
Light Vehicle density development should sustain demand in emerging market LVP CAGR Population Vehicles/1000 pers (2001-2013) 2013 1000 3.0% 316 m 900 800 -0.9% 504 m 700 20.3% 1357 m 600 13.9% 1252 m 500 400 ▸ USA and Europe should 300 mainly see replacement demand 200 100 ▸ Density increase in eme
Slide 46: At a crossroads
At a crossroads ▸ Recovery is slowing down… ……but when will aging truck fleet be replaced? ▸ Global environment more complex & hard to predict ▸ Volatility in macro economic outlook remains high 46
Slide 47: Market Outlook - Passenger Vehicles
MARKET OUTLOOK - PASSENGER VEHICLES 47
Slide 48: Triad markets LDV production
Triad markets LDV production Units In Millions 30 Stability Recession Recovery Forecast CAGR:14-20 25 2014 2015 20 4.6% 2.2% 3% 15 5.1% 2.2% 3% 10 0.9% -4.4% -2% 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: IHS EU 27 North America Ja
Slide 49: Emerging markets LDV production
Emerging markets LDV production Units In Millions 35 Stability Recession Recovery Forecast CAGR:14-20 30 2014 2015 5% 25 8.5% 8.2% 20 13% 15 25% 10 21% 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: IHS Greater China India Brazil Russi
Slide 50: Automotive represents 45% of KA BRIC revenue
Automotive represents 45% of KA BRIC revenue Supplied vehicle examples Products Brake Seat Heat AT Shifter Ford Kuga Volvo S60 vaccum Manual VW Amarok Shifter Nissan Pulsar Shift tower Seat Heat 50 VW Polo
Slide 51: Market Outlook – Commercial Vehicles
MARKET OUTLOOK – COMMERCIAL VEHICLES 51
Slide 52: Triad markets CV production
Triad markets CV production Units In Millions Stability Recession Recovery Forecast 0,8 2014 2015 CAGR:14-20 0,7 7% 0,6 5.5% 12% 0,5 2% -10.1% 6.4% 0,4 5% 0,3 5.7% 6.7% 0,2 0,1 0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: LMC EU 27 N
Slide 53: Emerging markets CV production
Emerging markets CV production Units In Millions 1,6 Stability Recession Recovery Forecast 1,4 2014 2015 CAGR:14-20 1,2 -6.4% 4.4% 7% 1,0 0,8 0,6 11% 0,4 0,2 0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: LMC South America China India
Slide 54: Commercial vehicles represent 55% of KA BRIC revenue
Commercial vehicles represent 55% of KA BRIC revenue Supplied vehicle examples Products 54
Slide 55: Top KA Customers
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Slide 56: Top Customers (KA Group) a mixed growth picture
Top Customers (KA Group) a mixed growth picture Percentage of total KA sales Customer 2015 expected growth Customer CAGR (14-20) Volvo Group 9% Volvo Group 5% Volvo Group 5% Ford 9% Ford 4,5% Ford 3% FCA 7% FCA -1% FCA 2% GM 6% GM -1% GM 1% RSA/Nissan 5% RSA/Nissan 3% RSA/Nissan 4% JLR 4% JLR 14% JL
Slide 57: New Business Wins
NEW BUSINESS WINS 57
Slide 58: Significant business awards last twelve months
Significant business awards last twelve months 50 % 33% 12 % 220 MEUR* LTM 5% Global * Expected per annum value ‣ Continue trend toward booking more business in BRIC than current revenue exposure 58
Slide 59: Summary & Outlook
AK KONGSBERG SUMMARY & OUTLOOK
Slide 60: Agenda
Agenda 09:00 Achievements, strategy for growth & targets 09:30 Financial review 09:50 Automotive market outlook 10:05 Break 10:25 Automated Transmission trends in the Commercial Vehicle segment 11:00 Comfort feature trends in the Automotive seating segment 11:35 Summary and closing remarks 11:45 Lun
Slide 61: Market summary and outlook
Market summary and outlook Country/ CAGR Expected 2015 growth rate Outlook region 2014 -2020 2.2% • Slow turn around 3% 6.4% • Gradual recovery driven by replacement 7% demand 2.2% • Leveling off of production after recovery 3% 5.5% • Strength in North America 2% 8.2% • Production will remain relati
Slide 62: Automated Transmission trends in the Commercial vehicles segment
Automated Transmission trends in the Commercial vehicles segment Capital Markets Day, 3.12.2014, Trond Fiskum & Espen Moe 62
Slide 63: Agenda
Agenda ▸ Market trends & automated manual transmissions (AMT) in the commercial vehicles industry ▸ Our AMT ambitions ▸ Our strategic enablers and product offering 63
Slide 64: Market trends & automated manual transmissions in the commercial vehicles industry
MARKET TRENDS & AUTOMATED MANUAL TRANSMISSIONS IN THE COMMERCIAL VEHICLES INDUSTRY 64
Slide 65: Overview of Driver Control Systems
Overview of Driver Control Systems KA growth 2014 estimated sales Product lines expectations ▸ AMT segment is expected to grow Above AMT above the global CVP growth market 5% HMI Powertrain 35% ▸ MT segment will decline as AMT Below 240 47% Other penetration rate is increasing globally 40% MEUR mark
Slide 66: Commercial vehicle industry
Commercial vehicle industry Heavy duty truck characteristics ▸ Price of ca EUR 100 K ▸ Engine size of 400 to 750 hp ▸ Hard working machines – 150K km per year and ca. 2 mill. km over lifetime ▸ Strong focus on vehicle uptime and predictable cost per km ▸ Increasing challenge to find enough skilled d
Slide 67: KA ambitions in AMT
KA ambitions in AMT ▸ KA target is to become a significant supplier of AMT actuator solutions to the global CV industry within the next 10 years – 1-2 major AMT business wins per year over the next 3-5 years – Market share above 10% by 2025 67
Slide 68: Key growth trends
Key growth trends CONNECTED EFFICIENCY & GLOBALIZATION ACTIVE SAFETY COMFORT VEHICLES EMISSIONS BRIC • Zero casualty • Always connected • Advanced driver • CO2 / Fuel • Fewer, but bigger vision assistance Economy global platforms • Information & • Focus on accident Entertainment • Increased comfort
Slide 69: From manual to automated transmissions in the truck industry
From manual to automated transmissions in the truck industry Trends Market solutions From manual …to automated transmissions… transmissions Fuel efficiency Lower emissions Driver comfort Benefits of automated transmissions ▸ Computer operated clutch and gearing => no clutch pedal Safety ▸ Higher fue
Slide 70: Enhancing the driving experience
Enhancing the driving experience y\S KONGSBERG AUTOMOTIVE 70
Slide 71: AMT share of production in key truck markets
AMT share of production in key truck markets 100% ▸ Europe to stabilize 90% on high AMT level 80% Europe 70% ▸ Americas have 60% North been slow to follow, 50% America but AMT shares 40% rising sharply in South America recent years 30% 20% China ▸ China will follow, 10% but timing is still 0% uncert
Slide 72: Impact of higher AMT share on KA's MT business
Impact of higher AMT share on KA’s MT business 5,0 ▸ MT volumes still 4,5 significant due to 4,0 overall market 3,5 growth TOTAL Millions trucks/year 3,0 2,5 ▸ KA to benefit from a MT significant 2,0 aftermarket 1,5 AMT 1,0 0,5 0,0 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 73: Our customers position in AMT segment
Our customers position in AMT segment Key KA customers High ▸ European truck OEMs are AMT leaders ▸ Chinese truck AMT volumes remain low AMT share - Will they develop AMT themselves or thru partnerships with Western OEMs? Low ▸ Transmission OEMs like ZF (EU), Eaton (US) & Low High Fast Gear (China)
Slide 74: Market value of AMT actuation systems
Market value of AMT actuation systems € 1.800 ▸ Estimated market € 1.600 potential of EUR 1.5 € 1.400 bill. by 2025 € 1.200 CAGR: 15% ▸ Major value within € 1.000 clutch & gear box Millions € 800 actuation € 600 € 400 ▸ Key suppliers in the € 200 market currently: €0 – Wabco 2014 2020 2025 – ZF Sach
Slide 75: Well positioned for growth
Our product strategy WELL POSITIONED FOR GROWTH 75
Slide 76: Strategic growth enablers
Strategic growth enablers Excellence in execution -Knowledge based product development -Customer responsiveness and service Global presence & local support Product engineering expertise AMT actuation -Presence in all regions -Clutch and gear box actuation -Local customer teams solutions -Electronics
Slide 77: AMT product areas
AMT product areas Gear shifters Gear box actuation Lever with knob Gear Control Unit Stalk shifter Electronic Control Unit Button/switch Clutch actuation Gear shift and select actuators Concentric slave cylinder External actuators 77 77
Slide 78: AMT shifter solutions
AMT shifter solutions Current AMT shifter supplied by KA to Volvo Truck Future AMT shifter development in collaboration with DS KA unique features ▸ Leveraging DS passenger car technology to enable cost efficiency and speed to market ▸ In-house competence to meet customer specific needs and ergonomi
Slide 79: AMT clutch actuation solutions
AMT clutch actuation solutions External pneumatic clutch actuator Concentric (internal) clutch actuator External electric clutch actuator KA unique features ▸ Best in class actuation speed for quicker ▸ Excellent knowledge in Electric motor gear shift, better fuel efficiency technology to meet futur
Slide 80: AMT gear box actuation solutions
AMT gear box actuation solutions Complete gear control unit KA unique features ▸ Innovative solutions, unique in the market place ▸ Unique integration of KA’s best in class clutch actuator Total system(*) value per ▸ Robust & reliable gear actuator design vehicle: ca EUR 600-1100 ▸ Minimized weight
Slide 81: Summary
Summary ▸ AMT market segment will grow significantly the next 5-10 years ▸ KA aims to be a significant supplier of AMT actuation solutions ▸ KA is well positioned to capture this growth opportunity ▸ Several ongoing product developments are expected to materialize into business wins 81
Slide 82: Thank you for your attention
THANK YOU FOR YOUR ATTENTION 82
Slide 83: Future look: Seat comfort & climate
Future look: Seat comfort & climate Hans Jørgen Mørland, VP Sales & Marketing, Interior Daniel Josefson, New Business Development, Interior 83
Slide 84: Enhancing the driving experience
Enhancing the driving experience y\S KONGSBERG AUTOMOTIVE 84
Slide 85: Interior
Interior KA growth 2014 estimated sales Product lines expectations ▸ Comfort part of the business will grow above the global light vehicle production due to Above increased fitment rates of support market and climate systems in cars 13% 22% ▸ Light duty cables for automotive 21% 290 MEUR business wi
Slide 86: Our ambition
Our ambition “Develop and deliver the best seat comfort solutions available on the market” Within 2016: Recognized as the technology leader in the seat comfort market Develop the best, most motivated seat comfort team in the world 86
Slide 87: Strategic growth enablers
Strategic growth enablers Global footprint Innovative products Providing systems, not components Measureable performance data Dedicated local customer teams Scalable features 87
Slide 88: Trends & Customer Needs
Driving the growth TRENDS & CUSTOMER NEEDS 88
Slide 89: Increasing fitment rates of all comfort systems
Increasing fitment rates of all comfort systems ▸ Examples of seat heat fitment rates: 75 % 95% E-Segment Down segment C-Segment 30 % 50% A-Segment 10 % 25% 89
Slide 90: More luxury and premium features being added
More luxury and premium features being added Bundling of premium options Electronic controls add content 90
Slide 91: Japanese & North American OEMs adapting EU premium standards
Japanese & North American OEMs adapting EU premium standards ▸ Increasing customer interest in pneumatic seat support technology ▸ Increasing interest in luxury and comfort features like massage ▸ Seat ventilation moving from “tick-in-the-box“ option to providing actual function due to negative cons
Slide 92: Reduced size, mass, power and noise requirements
Reduced size, mass, power and noise requirements ▸ Main drivers: – Reducing fuel consumption – Electric / alternative fuel vehicles ▸ Consequences: – Ever thinner seats with reduced packaging space. – At lower engine noise, quiet products are a must – Customers honor even minor weight reductions 92
Slide 93: Well positioned for growth
Our product strategy WELL POSITIONED FOR GROWTH 93
Slide 94: KA offers a wide range of comfort features
KA offers a wide range of comfort features 94
Slide 95: Seat support
Seat support TWO WAY LUMBAR SUPPORT SYSTEMS FOUR WAY LUMBAR SUPPORT SYSTEMS SIDE SUPPORT SYSTEMS MASSAGE SYSTEMS 95
Slide 96: Seat climate
Seat climate SEAT HEATING FOR VOLUME CARS SEAT VENTILATION SYSTEMS SEAT HEATING FOR PREMIUM CARS 96
Slide 97: Why provide complete systems?
Why provide complete systems? SYSTEM INTEGRATOR ▸ “Higher” in the value chain – can add more value ▸ Strategic development partner to the OEMs ▸ Drives innovation and performance on complete system level ONE-STOP SHOP ▸ Stronger and less complex supply base for the OEMs 97
Slide 98: Expandable modular systems
Expandable modular systems ▸ Common building blocks across platforms ▸ Reducing – lead time – cost – risk 98
Slide 99: From the Mini to the 7-series…
From the Mini to the 7-series… 99
Slide 100: Modular & scalable comfort features - matching a range of vehicle needs
Modular & scalable comfort features - matching a range of vehicle needs Lumbar & bolster Platform Seat Heat Seat Ventilation Massage systems Mini 1-series X1 3-series X3/4 5-series X5/6 6 & 7 series Rolls Royce 100
Slide 101: Being with the right customers
Maximizing the growth potential BEING WITH THE RIGHT CUSTOMERS 101
Slide 102: Premium OEMs
Premium OEMs Est. share of 2014 revenue Interior Systems ▸ Premium OEMs deliver high 3% content & fitment rates for comfort products and have 6% strong and reliable sales 8% ▸ KA‘s comfort products are well positioned with premium 8% OEMs today (sales>35% tot revenue) & we plan to 10% capitalize fur
Slide 103: Selected growth with volume OEMs
Selected growth with volume OEMs ▸ Increasing penetration by seat comfort products into mid and low segments (A, B & C) and vehicle price classes (Mid & Entry) ▸ Modular and scalable products will support this growth by offering more standardized options for the volume market ▸ KA is targeting selec
Slide 104: Catching the growth in Japan, China and North America
Catching the growth in Japan, China and North America North America: • Comfort is lagging towards EU premium cars • Catch up efforts in achieving best seat comfort is driving market demand for KA systems Japan: • Increasing customer interest in high-end pneumatic systems China: • High market growth
Slide 105: Thank you for your attention
Questions? THANK YOU FOR YOUR ATTENTION 105
Slide 106: Summary: KA – Beyond 2015
Hans Peter Havdal, President & CEO SUMMARY: KA – BEYOND 2015 106
Slide 107: Our business foundation
Our business foundation • Enhancing the driving experience Vision • Provide world-class products to the global vehicle industry to enhance the driving Mission experience, making it safer, more comfortable and sustainable • Growth between 3 to 5% Objectives • ROCE > 13% • Gearing < 1.5 • Innovation S