Slide 1: 2003 STAR Company Results
2003 STAR COMPANY RESULTS Milan, 2004 february 26th
Slide 2: Contents
Contents 1. COMPANY PROFILE • Emak Group Structure • Introduction 2. STRATEGIC GUIDELINES • 2003 International Scenario • Market Targets • Strategic Guidelines • Investment Policy 3. FINANCIAL DATA • Turnover breakdown • Economic and Financial data • Projections
Slide 3: Introduction
Introduction Emak is a European leader in Design, Engineering, Manufacturing, Marketing of outdoor power equipments -3-
Slide 4: Emak key data, brands and structure
DATA Euro 153 million of sales in 2003, more than 80% in Europe BRANDS POSITION Oleo-Mac and Efco for dealer network and Among top five in Dynamac/private labels Europe for retail chains CORE BUSINESS Focused on gardening, landscaping and forestry equipments STRUCTURE PRODUCT 2 plants in Italy and 1
Slide 5: Emak Group structure
Emak Group structure as of December 31, 2003 EMAK S.p.A. COMAG Srl (I) 99,4% EMAK SUMINISTROS ESPANA SA (E) 90% EMAK U.K. LTD (UK) 100% KENS INTERNATIONAL SA (B) 99,8% EMAK BENELUX N.V. (B) 83,2% EMAK DEUTSCHLAND GmbH (D) 80% EMAK FRANCE SAS (F) 100% JIANGMEN EMAK OUTDOOR POWER EQUIPMENT Co. Ltd. (C
Slide 6: Emak Group
Emak Group Emak UK Emak Bx Emak D Emak F Emak I Emak E (Headquarter) Comag -6-
Slide 7: Emak Group
waren | Emak Group (@iistiar ) (2 “eteo)) (ormanac) 7 PY Emak MEMBER OF THE YAMA GROUP
Slide 8: 2003 International scenario: Europe and USA
2003 International scenario Europe and Usa: • 80% ÷ 85% of total world market • Demand mostly for replacement products, driven by GDP growth • Hot and dry weather during summer 2003 in Europe causing a high stock level of lawnmowers and brushcutters on the shelves -8-
Slide 9: 2003 International scenario: Developing countries
2003 International scenario Developing countries: • Increasing demand in East Europe and Far East South America: • Demand influenced by local political and economic situations (Argentina, Venezuela) but now recovering Other Areas: • Competitiveness problems due to US $ weakness vs € in USA, Far East
Slide 10: Market Challenge
Market Challenge • Increasing importance of DIY channel generally everywhere • More and more demanding end users • Tougher and tougher competition by consolidated group • Competition for premium price products by new manufacturers from China • More and more stringent emission regulations in USA and
Slide 11: Emak targets
Emak targets Growth of sales turnover higher than market increase Growth of operative profitability - 11 -
Slide 12: Strategic Guidelines
Strategic Guidelines To reach these objectives EMAK has developed a focused strategy for the achievement of excellence on five points Product Innovation Competitiveness Quality Distribution Network Organization and Resources - 12 -
Slide 13: Product Innovation
Product Innovation • Better understanding of customer needs • Engineering with style - 13 -
Slide 14: Product Innovation
Product Product Innovation …..a new generation of clean engines • Product Lifecycle Management - 14 -
Slide 15: Competitiveness
Competitiveness • Product cost reduction plans • New plant in China for “price sensitive” products Plant:20,000 mq Start up: Q4 2004 • Extensive use of ICT to re-engineer corporate organization and process - 15 -
Slide 16: Quality
Quality Fit for use concept Measurement Reliability of customer satisfaction - 16 -
Slide 17: Distribution Network
Distribution Network Focus on markets directly controlled by Emak Acquisition of Consolidation of leadership STAUB brand in position in Italy France Increase of market shares of Emak subsidiaries in F, D, UK, E, BLX - 17 -
Slide 18: Distribution Network
Distribution Network Marketing activities: Higher Oleo-Mac and Efco brand awareness through a selected dealer network Improvement of after sale service through: ICT product support WEBCAT spare parts process management Development of OEM business: Specific products lines Development of busin
Slide 19: Organization & Resources
Organization & Resources • Higher efficency in company processes/costs reduction • Better service (added value for customers) • Indicators for the monitoring of company’s process performances • Focus on human resources value • Plan for working capital optimisation • Investments: focus on ROI - 19 -
Slide 20: Investment Policy
Investment Policy 2001/2003 2004/2006 Investments in million Euro 24 31 % on Turnover/yearly 4,9% 5,2% 2001/2003 2004/2006 8% 25% R&D/New 31% Product 38% Production 33% Equipments ICT 22% Buildings 12% 12% Other 19% Intangibles - 20 -
Slide 21: Contents: 3. Financial Data
Contents 3. FINANCIAL DATA - 21 -
Slide 22: Turnover breakdown by geographical area
Turnover breakdown Sales distribution by geographical area Area 2003 2002 Italy 38,6 25,3% 36,6 24,9% Europe 90,5 59,3% 84,3 57,3% - Western Europe 66,9 43,8% 64,9 44,1% - Other European 23,6 15,5% 19,4 13,2% Countries North America 6,5 4,2% 7,6 5,2% Rest of the world 17,1 11,2% 18,5 12,6% - South A
Slide 23: Turnover breakdown by product line
Turnover breakdown Sales distribution by product line Product 2003 % 2002 % Brushcutters 31,8 20,8% 32,0 21,8% Chainsaws 33,1 21,7% 30,1 20,5% Lawnmowers 22,9 15,0% 18,8 12,8% Garden Tractors 12,7 8,3% 13,3 9,0% Others (pumps blowers,hedge trimmers,electric 35,1 23,0% 34,8 23,7% products) Spare part
Slide 24: Economic and financial data: P&L
Economic and financial data Consolidated P&L Accounts 2003 % 2002 % Turnover 152,7 100% 147,0 100% Ebitda 23,9 15,6% 22,9 15,6% Ebit 17,6 11,5% 16,8 11,4% Income before taxes 16,6 10,9% 15,3 10,4% Taxes (7) 4,6% (6,3) 4,3% Group net profit 9,5 6,2% 9,0 6,1% Million Euro Estimated - 24 -
Slide 25: Consolidated assets and liabilities
Economic and financial data Consolidated assets and liabilities Emak Group 2003 2002 Million Euro Net fixed assets 25,7 24,2 Net current assets 60,5* 54,3 Total invested capital 86,2 78,5 Net Equity 64,5* 58,9 Minority interests 0,6* 0,5 Net financial debt 21,1 19,1 Debt/Equity 0,32 0,32 * Estimated
Slide 26: Financial Performance Main Ratios Analysis 2002-2003
Financial Performance Main Ratios Analysis 2002-2003 ROE > 15% ROCE > 20% PAY OUT > 43% - 26 -
Slide 27: Emak Share: index performance
Emak Share: index performance 170 150 EMAK 130 MIB STAR 110 MIBTEL 90 70 50 11/2/02 11/2/03 11/2/04 Fonte: Company Profile di Borsa Italiana - 27 -
Slide 28: Estimated Growth Projections
Estimated Growth Projections CAGR 2004/2006 Turnover 12,2% Ebitda 16,9% Ebit 19,1% - 28 -
Slide 29: In collaboration with Borsa Italiana STAR
TECNOLOGIA PER IL VERDE In collaboration with BORSA ITALIANA S.P.A. - Divisione STAR