CIE Automotive, S.a. · BME:CIE
CIE Automotive — Merger or Acquisition (June 2013)
29 slides from CIE Automotive's merger presentation, June 2013
Slide 1: Mahindra CIE Automotive
MAHINDRA CIE AUTOMOTIVE Industrial Group specialized in Managing High Value Added Processes June 20131
Slide 2: Table of Contents
Table of Contents 1 Introduction to the Mahindra CIE Alliance 2 Rationale for the Alliance 3 Introduction to CIE Automotive & Systech 4 Key Transaction Steps Industrial Group specialized in Managing High Value Added Processes 2
Slide 3: CIE Automotive + Mahindra Global Alliance Overview
CIE Automotive + Mahindra Global Alliance Overview CIE Automotive, Spain and Mahindra & Mahindra (M&M), India enter into a global Alliance in the automotive component business Cross investment by both groups CIE Automotive, through Autometal, to invest in automotive component businesses of M&M’s
Slide 4: CIE Automotive + Mahindra Global Alliance Schematic Representation
CIE Automotive + Mahindra Global Alliance Schematic Representation M&M CIE Automotive Mahindra Systech Autometal Forging* Forgings, Machining Castings, Stampings, Brazil Plastics, Painting Machining Forgings Composites Gears Stampings Aluminum, Forgings, Mexico Machining, Stampings, Aluminum Plastic
Slide 5: Table of Contents
Table of Contents 1 Introduction to the Mahindra CIE Alliance 2 Rationale for the Alliance 3 Introduction to CIE Automotive & Systech 4 Key Transaction Steps Industrial Group specialized in Managing High Value Added Processes 5
Slide 6: Industry structure
Industry structure As industry consolidates via acquisitions/partnerships, global presence is key 30,000 EMs1 60 Nu umber off supplie motive OE 20,000 40 Number of Autom 10,000 20 ers 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2 2 2 2 2 Source: Boston Consulting Group
Slide 7: Strategic positioning in high growth markets
Strategic positioning in high growth markets Annual Vehicle production: Period 2012 – 2017 (Mn units.) Europa Mexico Brazil India Russia World 22 4,3 4,0 2,4 98 19 60 6,0 2,1 80 3,2 2,9 3,7 2012 2017E 2012 2017E 2012 2017E 2012 2017E 2012 2017E 2012 2017E In 2013 year is Growth in 2013E 2013E Growth
Slide 8: Why India?
Why India? In Asia we are committed to INDIA Significant growth in the coming years. Great country, country very competitive costs for domestic market and export. W ld leader World l d ini Heavy H V hi l iindustry. Vehicle d t The world leader in forging. forging A country with great opportunity to
Slide 9: Transaction impact
Transaction impact CIE Automotive Mahindra Systech Forgings, Stampings, Castings, Forgings, Castings, Forgings Castings Composites Composites, Segments Machining, Plastics, Paintings, Stamping, Gears Aluminum OEM Customers Nafta,, Mercosur,, Europe, p , China India and Europe p Markets Russia, Moroc
Slide 10: Complementary product market presence
Complementary product market presence Process EU NAFTA Brazil Russia India China St Stampings i Forgings(1) Gears/ Machining (2) Plastics Aluminum Castings P i ti Painting Roof Sys. Composites Magnets ( ) Forgings (1) g g in EU largely g y complementary p y – CIE serves car markets while Systech y s
Slide 11: New forging powerhouse under Autometal management
New forging powerhouse under Autometal management Forgings Europe Forgings China Forgings Nafta Forgings India Forgings Brazil Creation of a major forging group with global footprint Industrial Group specialized in Managing High Value Added Processes 11
Slide 12: Diversifying into new high growth markets
Diversifying into new high growth markets Asia Asia Europe America Europe America Sales 2012 Sales 2017 Consolidating a significant market share in the Asian market, g with the strategy continuing gy of emerging g g markets growth g Industrial Group specialized in Managing High Value Added Processes
Slide 13: Diversification bringing less volatility to cash flows
Diversification bringing less volatility to cash flows Diversifying financial markets Three different vehicles to invest in the Auto sector: CIE Automotive: Global market investment Autometal: Investment in emerging markets Equities Mahindra CIE Automotive: Investment in Asia and Global Forg
Slide 14: Alliance with a partner that has a perfect match
Alliance with a partner that has a perfect match CIE Automotive & Mahindra groups have similar values & focus areas Focus on financial returns Strong g organic g & inorganic g growth g Multi - technology Decentralized (local) decision process Independent business units JV / Acqui
Slide 15: The transaction in numbers
The transaction in numbers Integration of a Group of companies with a recurrent level (1) of: Revenues: EUR 650 Mn EBITDA : EUR 66 Mn Net financial debt: EUR 170 Mn The transaction is mainly cash neutral at CIE Automotive level: Cash paid for equity acquisitions for Mahindra stake in Sys
Slide 16: Thoughts on value creation
Thoughts on value creation BENEFICIAL FOR ALL SHAREHOLDERS • CIE Automotive has proven financial performance over last 16 years with domain knowledge in automotive components business, in all different geographical areas. • CIE Automotive, with successful track record of M&As, has also proved its in
Slide 17: Table of contents
Table of contents 1 Introduction to the Mahindra CIE Alliance 2 Rationale for the Alliance 3 Introduction to CIE Automotive & Systech 4 Key Transaction Steps Industrial Group specialized in Managing High Value Added Processes 17
Slide 18: Overview of CIE Automotive
Overview of CIE Automotive Company Overview Financial Summary Listed in Spain with a significant EUR Mn CY 10 CY 11 CY 12 subsidiary listed in Brazil Sales 1,591 1,840 1,647 Key business areas include forgings, EBITDA 193 234 224 machining stampings, machining, stampings casting, casting plastic
Slide 19: Overview of Autometal
Overview of Autometal Company Overview Financial Summary Listed in Brazil EUR Mn CY 10 CY 11 CY 12 Key business areas include Sales 670 671 641 forgings, machining, stampings, EBITDA 128 126 108 casting plastics casting, plastics, aluminum and painting EBITDA margin 19.2% 18.7% 16.9% Locations
Slide 20: Overview of Systech auto components
Overview of Systech auto components Business Overview Financial Summary • Largest part of Mahindra Systech Sector INR mn FY11 FY12 FY13 (~80%) Sales: India 13,364 18,231 18,413 • FY13 Sales of ~INR 40,000 mn / Euro Sales: Europe 22,448 26,488 22,175 580 mn Euro mn • 19 Manufacturing facilities in 4
Slide 21: CIE Automotive performance
CIE Automotive performance Profitable growth history over 10 years; successful track record of 50 M&As Sales Evolution (EUR Mn) ¹ EBITDA Evolution (EUR Mn) RoCE(2) 15,5% in 2012 Auto EBITDA margin of 15,8% in 2012 (1) 2006 to 2011 data deducting turnover of diesel oil used for blending (2) ROCE
Slide 22: CIE Automotive unique positioning
CIE Automotive unique positioning Tier 1.5 : Supply parts to OEMs and Tier 1 Business Characteristics Excellent relationship and penetration with all OEM and Tier 1 Strong Commercial customers Relationships Track record with over 50 new integrations in the last 10 year on Growth Fuelled by a global
Slide 23: Table of contents
Table of contents 1 Introduction to the Mahindra CIE Alliance 2 Rationale for the Alliance 3 Introduction to CIE Automotive & Systech 4 Key Transaction Steps Industrial Group specialized in Managing High Value Added Processes 23
Slide 24: Transaction structure (STEP 1)
Transaction structure (STEP 1) CIE Automotive, through Autometal, to purchase stake in MFL, MHIL, and MCL from M&M 75% M&M CIE (S (Spain) Share Sh Purchase + Open Offer Mahindra Autometal (Brazil) Forgings Share 72% Purchase + Open offer Mahindra Composites PIA 2 (Spain) 28% Share Purchase Mahindra
Slide 25: Transaction structure (STEP 2)
Transaction structure (STEP 2) Mahindra CIE Automotive is created 13 5% 13.5% M&M CIE Automotive 28% ~75% ~20% 72% % ~51% PIA 2 (Spain) Autometal ~[51]% Mahindra CIE Automotive Limited* Mahindra Forgings (Europe) Merger Mahindra Mahindra Mahindra Mahindra MUSCO Investments Gears PIA 3 Composites Hin
Slide 26: Swap ratios
Swap ratios Company Swap Ratio Mahindra Hinoday 1.10 M hi d C Mahindra Composites it 0 90 0.90 Mahindra Gears Europe 0.17 Mahindra Gears India 0.20 MUSCO 2.84 CIE Forgings 1.05 *Swap ratios are based to 1 share of Mahindra Forgings Limited Industrial Group specialized in Managing High Value Added Pr
Slide 27: Estimated timeline for transaction and regulatory approvals
Estimated timeline for transaction and regulatory approvals Event Estimated Dates Transaction Signing [June 15, 2013] Closure of Open Offer [Oct, 2013] Receipt of High Court Approval [April, 2014] Regulatory approvals Competition Commission of India Bundeskartelamt, Germany (Anti-Trust Authority) SE
Slide 28: Advisors
Advisors Legal Advisors Manager of the tender offers Independent valuers providing Swap Ratios for Merger NM RAIJI Independent valuers for the capital increase in CIE Industrial Group specialized in Managing High Value Added Processes 28
Slide 29: Industrial Group specialized in Managing High Value Added Processes
Industrial Group specialized in Managing High Value Added Processes 29