Fras-le S.a. · BMFBOVESPA:FRAS3
Fras-le — Investor Presentation (2019)
29 slides from Fras-le's investor presentation, Jan 26, 2019
Slide 1: Presentation to Investors
PRESENTATION TO INVESTORS www.fras-le.com 1
Slide 2: Important Information
IMPORTANT INFORMATION By THIS INSTRUMENT, we make statements about future events that are subject to risks and uncertainties. Such statements are based on the beliefs and assumptions of our Management and on information that the Company has currently access to. Statements about future events include
Slide 3: Randon Companies
RANDON COMPANIES Randon Companies operate in the segments of vehicles and road equipment, auto parts and financial services. • Randon is the market leader in its business segments, exports to all Advantages for Fras-Le continents and is part of Level 1 of BOVESPA Corporate Governance. • Synergies
Slide 4: Fras-le Profile: Management and Shareholding
FRAS-LE PROFILE Management focused on operational efficiency Board of Directors Executive Structure • Chairman: David Abramo Randon | Randon • Vice Chairman: Astor Milton Schmitt | Randon Daniel Raul Randon President Director • Board Member: Daniel Raul Randon │Randon 20 8 • Independent Board Me
Slide 5: Fras-le Profile
FRAS-LE PROFILE Fras-le is one of the largest global manufacturers of friction materials with a unique market positioning About Fras-le 1 Over 62-year old company with important sponsorship of one of the largest industrial conglomerates in Brazil, Randon Companies, and renowned investors such as G
Slide 6: History of growth and successful acquisitions
FRAS-LE PROFILE History of growth and successful acquisitions Since its founding in 1954, Fras-Le has delivered steady growth based on continuous product innovation and acquisitions with great synergy among its operations. Company establishment and Growth Consolidation Positive Outlook beginning o
Slide 7: Global Presence
FRAS-LE PROFILE Global Presence 1 100% 94% 99% 99% 100% 100% 100% 100% 99% United Middle Freios 2 States 3 Argentina 4 Andina 5 Mexico 6 Asia 7 Europa 8 South Africa 9 East 10 Controil 7 6 2 5 9 1 10 8 Industrial Unit Sales Office 4 3 Sales Office/ Warehouse WHILE THE WORLD ACCELERATES, WE INNOVATE
Slide 8: Fras-le Business Segments
COMMERCIAL SCENARIO Fras-le Business Segments Brake linings and pads for heavy vehicles Brake pads and shoes for motorcycles 1 5 Trucks, buses, trailers Utilization in motorcycles of and semi-trailers. all sizes. Brake linings, pads and shoes for light 2 Brake Pads for aircraft 6 vehicles Passenger
Slide 9: Consolidated Net Revenue by Product
COMMERCIAL SCENARIO Consolidated Net Revenue by Product Consolidated Net Income Breakdown by products in 9M16 Brake Linings for Brake Pads and Other Friction Controil Products heavy vehicles Brake Shoes material 53% of Net Income 27% of Net Income 11% of Net Income 9% of Net Income WHILE THE WORLD
Slide 10: Worldwide Potential Market for Heavy Vehicles Brake Linings
COMMERCIAL SCENARIO Worldwide Potential Market for Heavy Vehicles Brake Linings (2015) AFTERMARKET QUANTITY OF FRAS-LE OEMs QUANTITY OF FRAS-LE SETS (thousand) SETS (thousand) BRAZIL 5,399 43% BRAZIL 277 83% USA 32,691 5% NAFTA 2,336 21% EUROPE 8,284 2% EUROPE 308 2% CHINA 15,828 0.3% CHINA 4,288 1%
Slide 11: Business Segments: Domestic and Foreign Markets
COMMERCIAL SCENARIO Business Segments Market diversification: operation in the domestic and international markets (Aftermarket and OEMs) Domestic Market (44.6%) Foreign Market (55.4%) Customers from a large network of distributors Fras-Le has customers in more than 80 Aftermarket (87.6%) of au
Slide 12: Distribution Teams
COMMERCIAL SCENARIO Distribution Teams Belém Fortaleza Recife • Present in all Brazilian States. • Assistance is provided by a team of 26 consultants and 13 regional offices, in Cuiabá addition to Distributors. Goiânia • Synergy between technical and commercial Belo Horizonte consultants of Randon C
Slide 13: Market Share in the Aftermarket
COMMERCIAL SCENARIO Market Share in the Aftermarket (Brazil/ 2015) Strong leadership in the Aftermarket • Brake linings for heavy vehicles • Brake pads • Brake linings for light vehicles Fras-le Regional Competitors Global Competitors Source: Market Intelligence Fras-le WHILE THE WORLD ACCELERATES
Slide 14: Market Share in OEMs
COMMERCIAL SCENARIO Market Share in OEMs (Brazil/ 2015) Strong presence in the market of OEMs • Brake linings for heavy vehicles TOTAL MOTOR VEHICLES + TOWED VEHICLES MOTOR VEHICLES TOWED VEHICLES (trucks, buses, trailers and semi-trailers) (Trucks and Buses) (trailers and semi-trailers) • Brake P
Slide 15: Flexibility for world production
COMPANY`S COMPETITIVE EDGES Flexibility for world production (global expansion strategy) By producing in several countries, Fras-le: • gets nearer its customers; • is able to better communicate with the market; • offers shorter delivery times; • reduces its logistics costs; • is better accepted by
Slide 16: Quality and Production Capacity
COMPANY`S COMPETITITVE EDGES Quality and Production Capacity Product quality and Brand Recognition Production Capacity • Certified to ISO 9001, ISO 14001, TS 16949 and OHSAS • Fras-le production system is based on Lean 18001 Standards. Manufacturing Methods and on the Theory of Constraints. • Ma
Slide 17: Technological Aspects
COMPANY`S COMPETITIVE EDGES Technological Aspects The largest and the most modern R&D Center in Latin First Proving Ground for testing in Southern Brazil America • In order to quickly meet the demands of the automotive • Fras-Le has one of the most advanced and best equipped industry, Randon Com
Slide 18: Volumes | Consolidated
OPERATIONAL PERFORMANCE Volumes | Consolidated Product Line Volume Production Sales VAR VAR Millions of Pieces 2013 2014 2015 9M15 9M16 9M15/ 2013 2014 2015 9M15 9M16 9M15/ 9M16 9M16 Brake linings for heavy vehicles 55.4 56.9 51.6 39.8 36.1 -9.2% 54.6 57.5 48.8 37.2 34.9 -6.2% Brake pads 23.6 22.2 2
Slide 19: Sale Revenues
OPERATIONAL PERFORMANCE Sale Revenues Consolidated Net Revenue (R$ MM ) CAGR: + 10.4% - 3.1% WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 19
Slide 20: Sales in the Foreign Market
OPERATIONAL PERFORMANCE Sales in the Foreign Market Exports – Brazil (US$ MM) Sales in the Foreign Market (Brazil+Controlled/US$ MM) CAGR: - 11.3% + 15.8% - 0.8% Destination by Economic Bloc WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 20
Slide 21: Cost of Goods Sold Breakdown
OPERATIONAL PERFORMANCE Cost of Goods Sold Breakdown | Parent Company 9M16 (% over total COGS) Main Row-Materials Oil Derivatives Phenolic Resin Fiberglass Petroleum coke Minerals Barite Graphite Metal Componentes WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 21
Slide 22: Profitability and SG&A
OPERATIONAL PERFORMANCE Profitability and SG&A Operational Expenses – SG&A Gross Income and Gross Margin (R$ MM and %) (R$ MM over Net Revenue %) -1.6% -15.0% WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 22
Slide 23: EBITDA, Net Income and Investments
OPERATIONAL PERFORMANCE EBITDA | Net Income| Investments Ebitda and Ebitda Margin (R$ MM and %) Net Income and Margin (R$ MM and %) CAGR: +14.9% + 19.8% + 8.3% CAGR: + 14.2% Investments (R$ MM ) WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 23
Slide 24: Financial Management
FINANCIAL PERFORMANCE Financial Management Consolidated Gross Debt (R$ MM) Annual Amortization of Long-Term Debt (R$ MM) Financial Resources (R$ MM) WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 24
Slide 25: Shareholder return and Capital Increase
CAPITAL MARKETS Shareholder return and Capital Increase JSCP Payments and Dividends (R$ MM) New Capital Structure Capital Increase - Share Offers Quantity of paid-up shares 92,592,593 Price per share R$ 3.24 CAGR: + 10.9% Paid-up value R$ 300 MM Offer conclusion date 20/04/2016 Financial conclusion
Slide 26: Shareholder Profile and Share Performance
CAPITAL MARKETS Shareholder Profile and Share Performance Fras-le Shareholder Profile - Sep/16 Shares Performance (% Participation over total shares) (5 years + 9M16 follow-up) 5.3% 1.4% 6.9% Controlling Group Institucional/LE Privite Individual 51.6% 34.9% Overseas Shareholders Treasury Shares WHIL
Slide 27: Sustainability: Human Resources
SUSTAINABILITY Human Resources Regular presence in the ranking of the Best Companies to Work For in Brazil. 1998 2004 2006 2010 2012 2014 2002 2005 2007 2011 2013 2015 Evolution in the employees number. Total Global Total in Brazil Total Abroad WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STO
Slide 28: Sustainability: Social Programs
SUSTAINABILITY Social Programs Several social programs developed, benefiting employes, their families and the society. AGE WHILE THE WORLD ACCELERATES, WE INNOVATE TO YOU STOP SAFELY www.fras-le.com 28
Slide 29: Thank you very much!
Thank you very much! Investor Relations Area Website: http://ri.fras-le.com.br E-mail: ri@fras-le.com Phone: +55 (54) 3239.1517 Daniel Raul Randon President Director Ricardo Reimer Superintendent and IR Director Ivan Bolsoni Management Roberto Pezzi Controller Staff Investor Relations Photography Cr