Stoneridge, Inc. · NYSE:SRI
Stoneridge — BB&T Capital Markets Transportation Conference 2016
52 slides from Stoneridge's conference presentation, Feb 12, 2016
Slide 1: BB&T Capital Markets Transportation Conference
BB&T Capital Markets Transportation Conference February 10, 2016 TECHNOLOGIES IN MOTION Exhibit 99.1
Slide 2: Forward Looking Statements
STONERIDGE FORWARD LOOKING STATEMENTS Statements in this presentation that are not historical facts are forward - looking statements, which involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. Important fact
Slide 3: Stoneridge Overview
TECHNOLOGIES IN MOTION STONERIDGE OVERVIEW Serving Expanding Markets with Innovative Technologies Demonstrated Organic Growth / Strong Order Book Global Growth with Customers of Choice Leverage of Low Cost Regional Advantages Strong Cash Position for Growth & Acquisitions 3
Slide 4: Stoneridge Overview Global Footprint
▪ Sensors : Temperature, Speed, Position, Pressure , Fluid Level, Torque, Particle Matter (Soot) ▪ Evaporative Emission Reduction and Solenoid Control Valves ▪ High Performance Actuators ▪ Driver Information Systems ▪ Telematic Systems ▪ Advanced Modules (ECU) ▪ Power & Switch Modules ▪ Tachograph S
Slide 5: Business Overview
STONERIDGE BUSINESS OVERVIEW 37% 36% 21% 6% PassCar Lt Truck Comm'l Vehicle PST Ag / Other 50% 21% 29% North America South America Europe / Asia 47% 32% 21% Control Devices Electronics PST NOTE: D oes not include revenue from India JV SERVED MARKETS REGIONS BUSINESS SEGMENTS 5 N A E U R O P E 69% 31
Slide 6: Overview
STONERIDGE OVERVIEW 2014 Revenue $ 661 M ; CAGR 15% [2010 - 2014] 2014 EBITDA $52 M; 8% to Sales POSITIVE FINANCIAL RESULTS Engineering & Capital Investment 10% of 2014 Sales Organic Growth $179M Net New Business [2016 – 2020] Emerging Market Growth 18% CAGR Expected [2015 – 2020] INVESTMENT IN GROW
Slide 7: Market Update
STONERIDGE MARKET UPDATE 7
Slide 8: Stoneridge Customers
11% 8% 6% 5% 5% 5% 4% 3% 3% 2% 15% 10% 7% 16% STONERIDGE CUSTOMERS FORD SCANIA DAIMLER / FREIGHTLINGER GM TRACK & TRACE SERVICES (PST) AFTERMARKET, TIER 1’s & OTHER OEM NAVISTAR VOLVO MAN AMERICAN AXLE PST: OTHER PRODUCTS 2014 Revenue (excludes Wiring) CUSTOMERS OF CHOICE FIAT CHRYSLER 8
Slide 9: Stoneridge Global Production
4Q15 2014 2015 2016 North America Med Duty # 227.2 241.3 217.6 % Δ 6.2% (9.8)% Heavy Duty # 297.5 326.9 250.6 % Δ 9.9% (23.3)% Total # 524.6 568.2 468.2 % Δ 8.3% (17.6)% Europe Med Duty # 70.5 73.2 76.0 % Δ 3.8% 3.8% Heavy Duty # 296.6 344.0 341.5 % Δ 16.0% (0.7)% Total # 367.1 417.2 417.5 % Δ 13.6%
Slide 10: Diversified Vehicle Markets
STONERIDGE DIVERSIFIED VEHICLE MARKETS Source: Dec 2015 IHS; Dec 2015 LMCA, Company Data (2015) 2015 2016 2017 2018 2019 2020 10
Slide 11: Market Segments Drive Growth
STONERIDGE MARKET SEGMENTS DRIVE GROWTH INTELLIGENCE 8% CAGR SAFETY & SECURITY 7% CAGR EMISSIONS 16% CAGR FUEL ECONOMY 5% CAGR ELECTRONICS COMMUNICATIONS We are focused on growth markets Stoneridge Sales Growth 2015 E 2016 2017 2018 2019 2020 SOURCE: Dec 2014 IHS; Oct 2014 Markets & Markets, LMCA, A
Slide 12: Market Segments Drive Growth With Growth Products & Technologies
INTELLIGENCE SAFETY & SECURITY EMISSIONS FUEL ECONOMY ELECTRONICS COMMUNICATIONS Instrumentation ECU Power Modules Door Modules Tachograph Electronic Logging Devices Infotainment Seat Track Position Speed Trailer Tow Alarms Parking Assist Telematics Track & Trace Mirror Replacement High Temperature
Slide 13: Global Organic Sales Estimated Regional Growth Rates
2015 2020 North America Europe South America Asia/Pacific Includes JV STONERIDGE GLOBAL ORGANIC SALES – Estimated Regional Growth Rates 2019 13
Slide 14: Stoneridge Net New Business
Strong New Business Awards 2016 2017 2018 2019 2020 $ NNB 13% - 17% Expect approximately $109 M in Net New Business in 2016 - 2017 Expect $ 179M in Net New Business [ 2016 – 2020] ▪ 2015 Net New Business of approximately $33.0 million beat our expectations by approximately $13.0 million ▪ Implies Ne
Slide 15: Stoneridge Strategic Roadmap / Expected Outcome
15 STONERIDGE STRATEGIC ROADMAP / EXPECTED OUTCOME Strengthen The Foundation Expand From The Core Add Strategic Technologies World Class Operating Metrics & Processes Strategic Supply Chain Excellence Regional Manufacturing Excellence Business Balance – Market, Customer, Region Market Bala
Slide 16: Key Takeaway Points for 2016
STONERIDGE KEY TAKEAWAY POINTS FOR 2016 16 16 Sales Growth Faster than the Market Balanced Exposure ► N.A. Passenger Car European & N.A. Truck ► Asia South America Addressing Brazil’s economic situation ► Adjusting cost structure to match demand plan ► Focus on growth areas – Track & Trace Setting a
Slide 17: Control Devices
STONERIDGE CONTROL DEVICES 17
Slide 18: Control Devices Organizing Theme
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 Revenue ($000) Organizing Theme ▪ Core Competency – Control Devices “Enables Vehicle Performance” by providing sensing & control technology to customers ▪ Market - Control Devices strives to serve the global ground transportation marke
Slide 19: Market Segments Drive Growth: Control Devices
INTELLIGENCE 8% CAGR SAFETY & SECURITY 7% CAGR EMISSIONS 16% CAGR FUEL ECONOMY 5% CAGR ELECTRONICS COMMUNICATIONS We are focused on growth markets Stoneridge Sales Growth 2015 E 2016 2017 2018 2019 2020 SOURCE: IHS, Markets & Markets, LMCA, ACT Research Company Data Control Devices Targeting Emissio
Slide 20: Stoneridge Control Devices
▪ SHIFT - BY - WIRE ▪ POWER TAKE - OFF UNIT ▪ FRONT AXLE DISCONNECT ▪ TURBO CHARGER ACTUATOR ▪ FLUID LEVEL ▪ PRESSURE ▪ INTERIOR ▪ EXTERIOR ▪ HIDDEN SWITCHES ▪ CANISTER VENT SOLENOID (CVS) ▪ CVS GEN2 ▪ FUEL TANK ISOLATION VALVE (FTIV) ▪ 3 - PORT CVS SOLENOID VALVES SENSING CONTROL COMMUNICATION STON
Slide 21: Stoneridge Global Reach
Control Devices Has Been Leveraging SRI LCC Manufacturing Sites STONERIDGE GLOBAL REACH 21
Slide 22: Shift by Wire
STONERIDGE SHIFT BY WIRE 1Q16 2Q16 3Q16 4Q16 18% 22% 29% 31% ▪ Launch going as planned in Canton, MA & Juarez, Mexico ▪ All customer commitments & internal objectives met ▪ Cadence of incremental sales dollars from Shift by Wire in 2016 22
Slide 23: Electronics
STONERIDGE ELECTRONICS 23
Slide 24: Stoneridge Focus Markets
CORE GLOBAL MARKETS FOR STONERDIGE ELECTRONICS Off - Road & Construction Light to Heavy Trucks & Buses Agriculture & Material Handling Stoneridge is a long term supplier with a global footprint to the leading OEMs STONERIDGE FOCUS MARKETS 24
Slide 25: Why We Win
STONERIDGE WHY WE WIN ▪ Very strong customer relationships ▪ T rusted long lasting strategic partner to leading Commercial and Industrial Vehicle manufacturers ▪ Core competency in vehicle electrical architectures ▪ Unique solutions tailored to commercial vehicles needs ▪ Fast and flexible supplier
Slide 26: Market Segments Drive Growth
SAFETY AND SECURITY FUEL ECONOMY DRIVER INTERACTION ▪ Alarms ▪ Telematics ▪ Tracking ▪ Vision & Safety ▪ Tachographs & ELDs ▪ Instrumentation ▪ ECU ▪ Power Modules ▪ Door Modules ▪ Infotainment ▪ Alarms ▪ Telematics ▪ Tracking ▪ Vision & Safety ▪ Tachographs & ELDs STONERIDGE MARKET SEGMENTS DRIVE G
Slide 27: Stoneridge Safety & Security
Trends And Market Drivers ▪ Increasing focus and global spread of the regulations governing operator/driver safety notably with regards to driver fatigue ▪ Regulations require tracking and managing vehicle and operator performance ▪ Growing trend in Active safety systems including Drowsiness & Distr
Slide 28: Stoneridge MirrorEye
Mirror R eplacement System for Trucks ▪ Lower fuel consumption and enhanced safety ▪ Elimination of traditional blind spots behind the mirrors ▪ Support object recognition and advanced driver a ssistance features ▪ Very high quality self - cleaning cameras ▪ High resolution high brightness displays
Slide 29: Stoneridge Fuel Economy
Trends And Market Drivers ▪ Fuel efficiency and low emissions continue to grow in importance and both drive need of enhanced sophistication and control in the vehicle electrical systems ▪ Focus areas are improving vehicle performance as well as the efficient utilization of the vehicles ▪ This leads
Slide 30: Stoneridge Driver Interaction
Trend And Market Drivers ▪ Higher general demand for real time information for the drivers as well as from the OEMs ▪ Information management (the right info at the right time) and connectivity ▪ Driver comfort is highly prioritized e.g. infotainment and media content Stoneridge Adding Value ▪ Flexib
Slide 31: PST
STONERIDGE PST 31
Slide 32: Brazilian Overview: Economic and Automotive Scenario
STONERIDGE BRAZILIAN OVERVIEW Economic and Automotive Scenario 32 Source : Economic - Brazil Central Bank (Focus – Jan, 28 2016 – Median / Aggregate ) ECONOMIC SCENARIO (Base January, 2016) (3.7) (3.0) 0.8 2015 2016 2017 10.7 7.2 5.7 2015 2016 2017 14.3 14.6 12.8 2015 2016 2017 3.90 4.30 4.40 2015 2
Slide 33: Stoneridge PST Sales – USD & Local Currency
USD / BRL 392.2 BRL 350.7 BRL 385.3 BRL 329.2 BRL 323.2 BRL 2011 2012 2013 2014 2015 ACTUAL LTM LC USD/BRL RATE Δ 2015 = Actuals thru Sep LTM thru 09/30/15 * 2015 Full Year Average Rate 3.3313 USD / BRL PST not consolidated until 2012 234.2 USD 180.4 USD 178.5 USD 139.8 USD 109.8 USD 2011 2012 201
Slide 34: Stoneridge PST IBT – USD & Local Currency
USD / BRL 14.7 BRL (9.2) BRL 11.7 BRL (28.0) BRL (21.9) BRL 2011 2012 2013 2014 2015 ACTUAL LTM LC 8.8 USD (5.0) USD 5.4 USD (15.4) USD (12.5) USD 2011 2012 2013 2014 2015 ACTUAL LTM USD STONERIDGE PST IBT – USD & LOCAL CURRENCY USD/BRL RATE Δ 16.7% 10.7% 9.1% 37.9% Income Before Taxes [millions A
Slide 35: PST Actions Taken
STONERIDGE PST ACTIONS TAKEN Pricing Actions ▪ Redesigned entire audio line for reduced cost ▪ Continued focus on Track & Trace Cost Reductions ▪ Size cost structure to match demand forecast ▪ Production Direct Labor / Indirect Labor in 2 nd Quarter & July 2015 Cash Generation ▪ Reduced inventory by
Slide 36: PST 2016 Key Initiatives
STONERIDGE PST 2016 KEY INITIATIVES ▪ Size the Business aiming for higher Operating Income Support to help develop a specific operating program Put in place an additional restructuring plan for 1 st Qtr 2016 ▪ Mitigate Impacts of Currency Devaluation Average price increase of 6.0% after April 2016 T
Slide 37: PST Summary
STONERIDGE PST SUMMARY 37 37 Monitoring the marketing conditions in order to offset head winds and act in advance to mitigate possible negative impacts Economic scenario expected to worsen in 2016 compared to 2015 Another round of price increases needed in order to maintain the Gross Margin Cost str
Slide 38: Cost Actions Taken to Improve Financial Outlook
STONERIDGE COST ACTIONS TAKEN TO IMPROVE FINANCIAL OUTLOOK • Manufacturing productivity / efficiency actions • PST Restructuring in January 2016 • Electronics Restructuring – North America & Europe 38 February 10, 2016
Slide 39: 2016 Manufacturing Objectives & Priorities
STONERIDGE 2016 MANUFACTURING OBJECTIVES & PRIORITIES ▪ Insure new product launches meet all targets ▪ Canton Ford & GM SBW ▪ Lexington Soot Sensor ▪ Juarez Ford SBW and EGT ▪ Prepare the Juarez Plant for significant growth in revenue and complexity ▪ Develop talent and depth of critical plant leade
Slide 40: 2016 Manufacturing Productivity / Efficiency Actions
STONERIDGE 2016 MANUFACTURING PRODUCTIVITY / EFFICIENCY ACTIONS ▪ Drive Productivity Improvements ▪ Plants objective established to absorb all wage (and unit volume) increases and reduce DL cost year over year ▪ Improve Asset Utilization In Targeted Plants & Processes ▪ Global SMT Efficiency and Qua
Slide 41: 2016 Restructuring
STONERIDGE 2016 RESTRUCTURING Focus on Cost to Offset Negative Market Conditions 41 ▪ PST : Cost Actions taken in January to address Declining Market ▪ Production related reduction of 67 positions due to continued drop in volume ▪ Streamlined support structure reducing supply chain & process managem
Slide 42: Financials
STONERIDGE FINANCIALS 42
Slide 43: Improving Financial Performance
STONERIDGE IMPROVING FINANCIAL PERFORMANCE ▪ Top Line Growth – Control Devices [8.4%], Europe Electronics [0.9%] ▪ 2015 estimated Sales down 2% affected by approximately $69 million unfavorable FX translation ▪ Electronic estimated Sales actually up 15% on constant currency basis ▪ Managing PST even
Slide 44: Improving Financial Metrics
STONERIDGE IMPROVING FINANCIAL METRICS 1Q15 2Q15 3Q15 3Q Net Sales YTD USD [millions] Actual Actual Actual Actual Control Devices / Electronics / Corp 142.0 149.1 144.8 435.8 PST 26.5 23.0 24.3 73.9 Eliminations (5.7) (6.8) (7.0) (19.5) Consolidated 162.8 165.3 162.1 490.2 Operating Income Control D
Slide 45: Other Financials: Debt Leverage and Capital Structure
STONERIDGE OTHER FINANCIALS 45 DEBT LEVERAGE 4.1x 2.8x 2.5x 2.4x 2.3x 2012 2013 2014 3Q15 4Q15 E $100 $100 $175 $200 Previous Structure Current Structure ABL Bonds Revolving Credit CAPITAL STRUCTURE New Revolving Credit Agreement saves approximately $12 million in Interest Expense Oct 1, 14 refinanc
Slide 46: Stoneridge Proforma Credit / Cash Metrics
2.4x 1.6x 2015 LTM 2016 ACTUAL ESTIMATE Leverage Leverage = Total Debt / LTM EBITDA 7.8x 11.4x 2015 LTM 2016 ACTUAL ESTIMATE Interest Coverage = LTM EBITDA / Interest Expense 55.2% 42.1% 3Q15 2016 ACTUAL ESTIMATE 29.3 81.5 3Q15 2016 ACTUAL ESTIMATE 1Q15 excludes the impact of $2.23 million for Non -
Slide 47: 2015 Guidance
STONERIDGE 2015 GUIDANCE 47 2015 Guidance Updated on 11/03/15 SALES $642.2 - $652.2 GROSS MARGIN 27.4% - 27.7% OP MARGIN 4.4% - 4.5% * EPS $0.86 - $0.93 ** Excludes the impact of: * 1Q15 Non - Cash CEO Retirement Expense $2.2 million ** 1Q15 Non - Cash CEO Retirement Expense $0.08 / Diluted Share FX
Slide 48: Stoneridge Summary
TECHNOLOGIES IN MOTION STONERIDGE SUMMARY Serving Expanding Markets with Innovative Technologies Demonstrated Organic Growth / Strong Order Book Global Growth with Customers of Choice Leverage of Low Cost Regional Advantages Largest Organic Sales uplift in Company history for 2016 of approxi
Slide 49: Key Takeaway Points for 2016
STONERIDGE KEY TAKEAWAY POINTS FOR 2016 49 49 Sales Growth Faster than the Market Balanced Exposure ► N.A. Passenger Car European & N.A. Truck ► Asia South America Addressing Brazil’s economic situation ► Adjusting cost structure to match demand plan ► Focus on growth areas – Track & Trace Setting a
Slide 50: STONERIDGE 50 50
STONERIDGE 50 50
Slide 51: Stoneridge Unlocking the Potential
Markets Customers Products Regions Pick Winners PST 51 The information in this document belongs to Stoneridge, Inc. or its subsidiaries and may be confidential. This document and inf ormation in it may not be copied, reproduced, revealed or appropriated, either in whole or in part, without the prior
Slide 52: Stoneridge Increasing Content Per Vehicle
52 2014 2015 2016 2017 2018 2019 MEDIUM / HD CAR / LT TRUCK The information in this document belongs to Stoneridge, Inc. or its subsidiaries and may be confidential. This document and inf ormation in it may not be copied, reproduced, revealed or appropriated, either in whole or in part, without the
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