Kongsberg Automotive Asa · OSL:KOA
Kongsberg Automotive Asa — Investor Presentation (February 2021)
49 slides from Kongsberg Automotive Asa's investor presentation, Feb 26, 2021
Slide 1: Kongsberg Automotive Investor Presentation
Kongsberg Automotive > Investor Presentation > February 26, 2021
Slide 2: Forward-Looking Statements and Non-IFRS Measures
Kongsberg Automotive Forward-Looking Statements and Non-IFRS Measures Forward-Looking Statements This presentation contains certain “forward-looking statements”. These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in circumstances, which
Slide 3: Today's presenters
Today’s presenters Norbert Loers Robert Pigg Co-CEO, CFO Co-CEO, SVP Off-Highway Zurich (Switzerland) Wilis (USA) > Interim Co-CEO and CFO responsible for Group finance > Interim Co-CEO and SVP Off-Highway responsible for since joining in 2017 Specialty products segment > 15+ years in executive posi
Slide 4: Kongsberg Automotive provides world-class products to the global Light and Commercial Vehicle industry
Kongsberg Automotive provides world-class products to the global Light and Commercial Vehicle industry and beyond We have a high-caliber, experienced team Experienced and dedicated leadership team with on average 20+ years of industry expertise We manage the COVID-19 KA successfully managed COVID-19
Slide 5: KA company overview
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 5
Slide 6: The KA leadership team has on average 20+ years of industry experience
The KA leadership team has on average 20+ years of industry experience and 7+ years of KA tenure Norbert Loers Robert Pigg Bob Riedford David Redfearn Linda Nyquist- Scott Paquette Co-CEO & CFO Co-CEO & President EVP Fluid Transfer Evenrud EVP Interior SVP Off-Highway Powertrain & Systems (FTS) SVP
Slide 7: KA, a world-class supplier to the global automotive industry and beyond
KA, a world-class supplier to the global automotive industry and beyond Selected KPIs, MEUR Sales Adj. EBIT Free Cash Flow1 Selected key facts 2020 969 11 (1%) -37 Every 5th Light or 2019 1,161 71 (6%) -44 Commercial Vehicle globally contains KA products Global production footprint with Mission & pu
Slide 8: KA operates in three segments
KA operates in three segments: Interior, Powertrain & Chassis and Specialty Products Interior Powertrain & Chassis Specialty Products Light Duty Interior Comfort Fluid Transfer Cables Systems Driveline On-Highway Couplings Systems Off-Highway Market position Leading Top 3 Strong #1 / #2 #1 Top 3 pos
Slide 9: Historical financials overview (1/2)
Historical financials overview (1/2) % Adj. EBIT margin (%) Sales performance, MEUR +6% p.a. > KA outgrew its 1,057 1,123 1,161 markets since the 977 969 turnaround in 2016 > Strong, consistent sales and EBIT growth 2016 2017 2018 2019 2020 from 2016 to 2019 > Active management Adj. EBIT performance
Slide 10: Historical financials overview (2/2)
Historical financials overview (2/2) CapEx and restructuring cost (excl. provisions), MEUR Restructuring cost CapEx % CapEx ratio (% of sales) > Through-cycle 4.9 4.4 6.1 5.6 6.2 perspective with 91 84 continuous invest- 23 61 48 55 19 0 ments to sustain future 0 7 growth despite sales 68 65 61 48 4
Slide 11: New business wins: Strong recovery after COVID-19 impact in Q2 2020
New business wins: Strong recovery after COVID-19 impact in Q2 2020 New business wins, per annum sales, MEUR 110 102 89 87 > New business wins 77 65 65 Ø 76 impacted by reduced 43 50 customer sourcing activities due to COVID- 19 in Q2 & Q3 2020 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 > Start of recovery in Q3 20
Slide 12: Book-to-bill performance: High ratio supporting strong future growth
Book-to-bill performance: High ratio supporting strong future growth Booked business1 (MEUR) Book-to-bill ratio2 Book-to-bill performance, LTM, MEUR 1.5 1.5 1.5 1.5 > High book-to-bill ratio 1.4 1.4 1.4 in 2020 despite crisis 1.3 1.2 with booked business volumes exceeding sales to support strong 1,6
Slide 13: Segment financials: Specialty business most resistant to COVID-19 crisis
Segment financials: Specialty business showed most resistant to COVID-19 crisis Interior Powertrain & Chassis Specialty Products Sales, > 2020 heavily impacted MEUR by COVID-19 crisis 437 461 286 304 273 373 402 393 324 across segments > Crisis-resistant recreational business with strong operational
Slide 14: Corporate responsibility
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 14
Slide 15: Guiding principles for Corporate Responsibility
Guiding principles for Corporate Responsibility Corporate Responsibility Strategy based on three defined areas: > People Health & safety, employee training & development, local Leadership & Talent Human Rights & Labor Practices Supply Chain Management communities We aim to develop our employees We a
Slide 16: KA contributes to improving the long-term environmental health of the planet
KA contributes to improving the long-term environmental health of the planet MSCI ESG Rating CO2 Emission Intensity, tons per MEUR sales Selected green Only 30% of automotive suppliers with better rating Increase at lower capacity utilization due to COVID-19 initiatives 42.5 41.6 43.4 AAA 37.8 39.8
Slide 17: KA strives for carbon neutrality
KA strives for carbon neutrality KA targets Path to carbon neutrality Energy reduction Renewable energy Landfill waste reduction > KA is committed to Y-o-y reduction vs. 2019 baseline Share of renewable energy Y-o-y reduction vs. 2019 baseline reduce its overall carbon footprint 2021 22 23 24 2025 2
Slide 18: Resilience of KA business
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 18
Slide 19: COVID-19: Active crisis management addressed needs of all stakeholder groups
COVID-19: Active crisis management enabled KA to address needs of all major stakeholder groups Management of the crisis-induced downturn COVID-19 shock COVID-19 is, first and Ensured Maintained Protected Completed foremost, a operational customer employees' equity humanitarian challenge stability sa
Slide 20: 5 resilience factors at KA
5 resilience factors at KA Status-quo assessment and ambition Low High Diversified customer end-markets Products sold to customers in multiple end- Keep & markets with different macro-economic dynamics strengthen Diversified Global, customer diversified Global, diversified customer base end-markets
Slide 21: Diversified end-markets: Diversified customer base within Light and Commercial Vehicle
Diversified end-markets: Diversified customer base End- markets Customers within Light and Commercial Vehicle segment Cash CapEx flow OpEx End markets and top 5 customers, % of total sales in 2020 incl. indirect sales Top end-markets Top 5 Light Vehicle OEM customers1 10% Further customers > No sing
Slide 22: Global diversified customer base
Global diversified customer base: Prevention of any End- markets Customers dominant single customer dependency Cash CapEx flow OpEx Top 20 customers, sorted by % of sales in 2020 incl. indirect sales 13% OEM sales (indirect through Tier) > Broad customer base OEM sales (direct) prevents any dominant
Slide 23: OpEx flexibility: High degree of cost flexing during COVID-19
OpEx flexibility: High degree of cost flexing during End- markets Customers COVID-19 shock, recovery and new baseline in 2020 Cash CapEx flow OpEx Dynamic reaction with OpEx flexibilization, delta of Qx 2020 and avg. quarter 2019, MEUR high OpEx flexibility Application of flexibility COVID-19 levers
Slide 24: Free Cash Flow: COVID-19 recovery and improvements will turn FCF positive
Free Cash Flow: COVID-19 recovery and End- markets Customers further improvements will turn FCF positive Cash CapEx flow OpEx Free Cash Flow incl. 2021 improvements, MEUR Key levers going forward -5 Further recovery from -9 COVID-19 downturn +2 10 Stringent optimization of top +60 line growth while
Slide 25: Updates on markets & trends
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 25
Slide 26: Light Vehicles market: Growth expectation after COVID-19 crisis
Light Vehicles market: Growth Interior Powertrain & Chassis Specialty Products expectation after COVID-19 crisis Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Light Vehicle market size, production volume in mn Overarching Light Vehic
Slide 27: Commercial Vehicles market: Slow recovery to 2019 levels
Commercial Vehicles market: Interior Powertrain & Chassis Specialty Products Slow recovery to 2019 levels Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Commercial Vehicle1 market size, production volume in k Overarching Commercial Ve
Slide 28: Specialty Products: Similar trends as in Light and Commercial Vehicles markets
Specialty Products: Similar trends as in Interior Powertrain & Chassis Specialty Products Light and Commercial Vehicles markets Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Key trends in specialty products Trend impact on take/fitme
Slide 29: Market trends: KA well positioned to benefit from current market trends
Market trends: KA well positioned to benefit from current market trends Selected trends with implication on KA segments Electrification/ Autonomous/ Premium-to-mass/ Air suspension and KA CO2 regulation/ connectivity/ higher interior compressed air segments fuel economy digitalization comfort expect
Slide 30: Product & innovation highlights
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 30
Slide 31: Couplings: Attractive, increasing market demand with further differentiation potential
Couplings: Attractive, increasing Interior Powertrain & Chassis Specialty Products market demand with further Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway differentiation potential Market dynamics Product highlights Higher penetrati
Slide 32: Fluid Transfer Systems: Growing business benefiting from EV transition
Fluid Transfer Systems: Growing Interior Powertrain & Chassis Specialty Products business benefiting from EV Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway transition Market dynamics Product highlights Electrical Vehicle coolant High
Slide 33: Off-Highway: Diverse segment with strong product portfolio
Off-Highway: Diverse segment Interior Powertrain & Chassis Specialty Products with strong product portfolio Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Market dynamics Product highlights Electrification, Emission Electric power ste
Slide 34: Driveline: Segment with high market dynamic and new emerging customers
Driveline: Segment with high Interior Powertrain & Chassis Specialty Products market dynamic and new Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway emerging customers Market dynamics Product highlights Shift from ICE to Shift in car p
Slide 35: On-Highway: High performing transmission business
On-Highway: High performing Interior Powertrain & Chassis Specialty Products transmission business Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Market dynamics Product highlights Shift to Increasing Adoption of air Gear actuation sy
Slide 36: Light Duty Cables: KA with leading market position
Light Duty Cables: KA with Interior Powertrain & Chassis Specialty Products leading market position Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Market dynamics Product highlights Shift from mechanical Cost pressure Electric actuato
Slide 37: ICS: Growing market position in favorable environment
ICS: Growing market position in Interior Powertrain & Chassis Specialty Products favorable environment Light Duty Cables Interior Comfort Systems Driveline On- highway Coup- lings Fluid Transfer Systems Off- Highway Market dynamics Product highlights Increasing focus on Seat features as Seat ventila
Slide 38: Highlight Interior Comfort Systems
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 38
Slide 39: Market-leading supplier of seat climate and support systems
Interior Comfort Systems is a market-leading supplier of seat climate and support systems Seat comfort systems All product categories among Top 3 market positions KA as word-class supplier with competitive advantages Headrest and growth opportunities in market with only few mechanisms specialist pla
Slide 40: ICS is technology leader
ICS is technology leader Advanced valve technologies Value propositions > Can support bolster, for pneumatic comfort systems Key improvements vs. previous product lumbar, and massage functions Lower noise -3 dB > Best-in-class package size for optimal application footprint Lower weight -46 % > Best-
Slide 41: ICS with clear path toward cash flow generation
ICS with clear path toward cash flow generation +7% p.a. Expected development 153 147 Sales 140 > Strong sales growth in indexed to 2019 130 coming years with newly developed products > Cash flow positive from 100 103 2022 onwards due to better 90 Capex efficiency and capacity utilization 2019 20 21
Slide 42: Most of ICS components' markets expected to grow with 2-3% CAGR until 2025
Most of ICS components' markets expected to grow with 2-3% CAGR until 2025 Strategic ambition by product line Market size of product line in MEUR Ventilation Lumbar support > All ICS product lines, except seat heating, in Focus on higher usage of existing solutions and Leverage cutting-edge valve te
Slide 43: ICS is a market-leading supplier of interior comfort products
ICS is a market-leading supplier of interior comfort products ICS value proposition To "A System" Technology leader providing high-end products with excellent quality Today Well positioned provider of fully integrated solutions of Seat Support, Seat Heat, and Seat Cooling Strong growth as a result o
Slide 44: Summary & conclusion
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 44
Slide 45: Investor highlights KA
We have a high-caliber, Experienced and dedicated leadership team with experienced team strong industry track-record Investor We manage the COVID-19 Active COVID-19 crisis management enabled KA highlights KA crisis successfully to address needs of all stakeholder groups Strong profitable growth sinc
Slide 46: Management priorities for 2021
We have a high-caliber, Strengthen KA executive team with Jörg Buchheim as new experienced team CEO and drive people agenda priorities We manage the COVID-19 Continue to prioritize employee safety while ensuring Management crisis successfully supply chain resilience priorities for We deliver strong
Slide 47: Outlook 2021
Sales ~130 > Defend strong position and build on our strong Outlook 2021 book-to-bill ratio in all segments incl. EV-related 969 ~1,100 products, OFH & electronics > Further expand our global customer base and These forward-looking 2020 2021 continue to gain market shares statements are based on sev
Slide 48: Q&A
Content KA company overview Corporate responsibility Resilience of KA business Updates on markets & trends Product & innovation highlights Highlight Interior Comfort Systems Summary & conclusion Q&A 48
Slide 49: Kongsberg Automotive
A KONGSBERG AUTOMOTIVE
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