Cooper-standard Holdings Inc. · NYSE:CPS
Cooper-standard — Deutsche Bank 2014 Global Auto Industry Conference
33 slides from Cooper-standard's conference presentation, Jan 14, 2014
Slide 1: Drive for Profitable Growth
DRIVE FOR PROFITABLE GROWTH Deutsche Bank 2014 Global Auto Industry Conference January 2014 CooperStandard
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes “forward-looking statements” within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. We make forward-looking statements in this presentation and may mak
Slide 3: Jeff Edwards, Chairman and Chief Executive Officer
Jeff Edwards Chairman and Chief Executive Officer
Slide 4: Company Snapshot
Company Snapshot Headquarters: Novi, MI Employees: 22,000 Global Suppliers: Rank 691 Global Footprint: 75+ in 19 Countries 7 Design / Engineering Centers Equity Ticker: NYSE: CPS Financial: 2012 Revenue: $2.88 billion 2013 Est. revenue: $3.09 billion Customers: 81% Direct OEM 19% Tiers / Other (1) A
Slide 5: Cooper Standard's Journey
Cooper Standard’s Journey 2004 2005 – 2008 2008 – 2011 2011 - 2013 2014 and Beyond Divestment Expansion Survival Recovery Growth Business was established in 1960 Divested from Cooper Tire & Rubber Company
Slide 6: Cooper Standard's Journey
Cooper Standard’s Journey 2004 2005 – 2008 2008 – 2011 2011 - 2013 2014 and Beyond Divestment Expansion Survival Recovery Growth Strategic Acquisitions: Metzeler Automotive Profiles - Sealing ITT - Fluid Handling ACH - Fuel Rails Gates Corp. Automotive - Fluid Transfer Systems
Slide 7: Cooper Standard's Journey
Cooper Standard’s Journey 2004 2005 – 2008 2008 – 2011 2011 - 2013 2014 and Beyond Divestment Expansion Survival Recovery Growth Global economic / auto industry downturn Managed for near-term Downsized engineering & overhead Tempered capital spending Restructured debt
Slide 8: Cooper Standard's Journey
Cooper Standard’s Journey 2004 2005 – 2008 2008 – 2011 2011 - 2013 2014 and Beyond Divestment Expansion Survival Recovery Growth Rebuilding capabilities and adding management talent Expanded in Romania, Brazil, India and Thailand Entered Serbia and Restructuring European Footprint Rebuilding and re-
Slide 9: Cooper Standard's Journey
Cooper Standard’s Journey 2004 2005 – 2008 2008 – 2011 2011 - 2013 2014 and Beyond Divestment Expansion Survival Recovery Growth Focusing business for profitable growth Tripling our investment in innovation Creating world-class manufacturing operations Growing China, India and other expanding market
Slide 10: Extensive Product Portfolio
Extensive Product Portfolio Sealing & Trim Systems 17%* Static Systems Glass Run Channels Waist belts Encapsulation Day Light Systems Trim Systems Appliqués Bright trim Decorative interior trim Dynamic Systems On Body Seals On Door Seals Convertible Occupant Detection Systems (ODS) Specialty Elastom
Slide 11: Vision
VISION Drive for Profitable Growth TOP 30 * TOP 5 * Top 30 automotive suppliers for sales, Top 5% ROIC CooperStandard
Slide 12: Vision
VISION Drive for Profitable Growth Relentless Focus on the Customer Superior Products and Innovation Advantaged Global Footprint & World-Class Operations High Performing Engaged Workforce * Top 30 automotive suppliers for sales, Top 5% ROIC TOP 30 * TOP 5
Slide 13: 2014 Cooper Standard Top Priorities
2014 Cooper Standard Top Priorities Drive for Profitable Growth Achieve 2014 business plan as measured by EBITDA, FCF, and ROIC Achieve organic growth plans for core product lines Execute defined 2014 action items to position CS to achieve 2015 growth targets Drive disciplined M & A process to suppo
Slide 14: Aligned with and Well-Positioned to Capitalize on Industry Trends
Cooper Standard is Aligned with and Well-Positioned to Capitalize on Industry Trends Avenues for Profitable Growth 1. Capture China Growth 2. Long-term Growth in Emerging Markets 3. North America and Europe Market Recovery 4. Trend Toward Global Platforms 5. Innovation 6. Capture Strategic M&A Oppor
Slide 15: Revenue is Growing
Revenue is Growing Global Sales CAGR >14% $ billion $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 $.10 $1.95 $.28 $2.41 $.31 $2.85 $.41 $.42 $2.88 $3.09 2013E (1) CS Sales Non-Consolidated JVs (1) E= Estimates
Slide 16: Sales are Diversifying
Sales are Diversifying includes non-consolidated JV sales 2004 Sales Ford GM Chrysler 37% 22% 16% 5% 3% 10% 2013 Sales Est. 26% 16% 12% 4% 6% 8% 14% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Ford Renault/Nissan Volvo Daimler BMW GM PSA Toyota Honda Suzuki Chrysler/Fiat VW Tata Others Mahindra
Slide 17: Products Well Represented on Global Platforms 2013
Cooper Standard Products Well Represented on Global Platforms 2013 Denotes Global Platform #1 Ford F-150 #2 Ford Explorer #3 Ford Fiesta / Fusion #4 Ford Focus/Escape #5 GM LaCrosse / Malibu #6 GM Silverado/Sierra #7 GM Tahoe/Yukon/ Escalade #8 Chrysler 200 Mid - Size CUV #9 PSA Picasso/C3 #10 Chrys
Slide 18: The Cooper Standard Vision
The Cooper Standard Vision Drive for Profitable Growth Growth platforms 2012-2020: Sealing & Trim Systems $1.8B >10% 2020E Fuel & Brake Systems $0.6B >11% 2020E Fluid Transfer Systems $6.4B >11% 2020E % represents compound annual growth rate
Slide 19: Drive for Profitable Growth
Drive for Profitable Growth Strategic plan focuses on core product segments – Sealing & Trim Systems – Fluid Transfer Systems – Fuel & Brake Delivery Investing in breakthrough technologies Building company-wide capabilities to support growth, optimize returns and deliver higher ROIC (BBP, program ma
Slide 20: Breakthrough Technologies
Breakthrough Technologies Sealing & Trim Systems – Plastic replacing rubber (TPV) – Trim fully integrated with vehicle sealing systems Fluid Transfer Systems – New innovations for high performance hose applications – Revolutionary materials and constructions (nano technologies) Fuel & Brake Delivery
Slide 21: Summary
Summary All employees aligned and engaged with the strategic plan Stabilize our European business and focus on North and South America financial performance Continue to make necessary infrastructure / capacity investments and fund our Asia growth strategy Continue to evaluate partnerships and acquis
Slide 22: Allen Campbell, Executive Vice President and Chief Financial Officer
Allen Campbell Executive Vice President and Chief Financial Officer
Slide 23: September 2013 Year-to-Date Performance
September 2013 Year-to-Date Performance $ USD millions Sept 2013 YTD LTM Sales $2,296.3 $2,993.5 Gross Profit 367.6 467.3 % Margin 16.0% 15.6% SA&E 220.8 295.6 Operating Profit 127.5 125.4 % Margin 5.6% 4.2% Net Income $66.3 $56.4 Adjusted EBITDA $228.7 $299.6 % Margin 10.0% 10.0% EBITDA and Adjuste
Slide 24: Period of Transition
Period of Transition North America recovery Investing in regional management talent Capacity and footprint optimization Investments in technologies to improve competitiveness Short-term challenges associated with product complexities
Slide 25: North America Challenges
North America Challenges Ramp-up of new technologies and product offerings in Sealing & Trim – Cost – Learning curve Execution challenges – Launch challenges – Capacity constraints Additional operating costs to meet accelerated production volume North America Production Volume million 18 15 12 9 6 3
Slide 26: Investing in People
Investing in People SA&E $ million Engineering Headcount $400 $300 $200 $100 $0 2013E » 700 800 600 400 200 - Restaffing – Support increased launch activity – Manage additional product complexities – Enhance global customer support – Staff Europe and Asia management teams – Create world-class operat
Slide 27: Investing in Capital to Fuel Future Growth
Investing in Capital to Fuel Future Growth Capacity and footprint optimization – Sremska Mitrovica , Serbia – Aguascalientes, Mexico – Fairview, Michigan, US – Kunshan, China (2014) – Technical Center, India (2014) Product development – Transition from EPDM to plastics – Advanced design in Sealing &
Slide 28: Investing in Future Programs
Investing in Future Programs Tooling expenditures increasing working capital requirements – To support new program awards and replacement business – Ultimately reimbursed by our customers Tooling $ million $180 $120 $60 $0 2008 2009 2010 2011 2012 2013E $82 $68 $73 $94 $121 » $170 Note: Includes sho
Slide 29: 2014 Guidance
2014 Guidance Sales of $3.25 - $3.35 billion Improvement over LTM EBITDA margin Key Assumptions: - North American production 16.8 million - Europe (including Russia) production 19.6 million - Average full year exchange rate $1.28/Euro Further guidance during Q4 2013 Earning call TOP 30 / TOP 5
Slide 30: GS PASSION,
GS PASSION,
Slide 31: EBITDA and Adjusted EBITDA – Nine Months Ended September 30, 2013
EBITDA and Adjusted EBITDA – Nine Months Ended September 30, 2013 Nine Months ($ USD Millions) Three Months Ended Ended Mar 31, Jun 31, Sep 30, Sep 30, 2013 2013 2013 Net income $ 20.7 $ 27.4 $ 20.6 $ 68.7 Income tax expense 7.9 12.2 4.5 24.6 Interest expense, net of interest income 11.2 13.6 15.2 4
Slide 32: LTM Adjusted EBITDA % Margin as of September 30, 2013
LTM Adjusted EBITDA % Margin as of September 30, 2013 Twelve Months ($ USD Millions) Three Months Ended Ended Dec 31, 2012 Mar 31, 2013 Jun 30, 2013 Sep 30, 2013 Sep 30, 2013 Net income (loss) $ (9.9) $ 20.7 $ 27.4 $ 20.6 $ 58.8 Income tax expense 1.2 7.9 12.2 4.5 25.8 Interest expense, net of inter
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA and adjusted EBITDA are measures not recognized under Generally Accepted Accounting Principles (GAAP) which exclude certain non-cash and non-recurring items. When analyzing the company’s operating performance, investors should use EBITDA and adjusted EBITDA in addi
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