Slide 1: Institutional Profile 2Q2019|1H2019
INSTITUTIONAL PROFILE 2Q2019|1H2019
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains forward-looking statements that are subject to risks and uncertainties. These statements are based on Management's beliefs and assumptions, as well as on currently available information. Forward-looking statements include information on our current in
Slide 3: Randon Profile
RANDON PROFILE Foundation IPO Employees Market Cap 1949 1974 11,386 R$ 3.0 bi LEADERSHIP COMPETITIVENESS GROWTH RECOGNITION leader in the 4th largest automotive market in the complementary products world; and integrated industrial one of the most respected present in all Brazilian parts; bra
Slide 4: Randon Profile
RANDON PROFILE Among the 10 largest manufacturers of road equipment in the world; VEHICLES Second largest manufacturer of railcars in Brazil; AND Largest Brazilian manufacturer of specialty vehicles up to 30 tons; TRAILERS One of the largest manufacturers of backhoe loaders in Brazil. One
Slide 5: Randon Profile: Operating Structure
RANDON PROFILE OPERATING STRUCTURE INTERNATIONAL OFFICES 5
Slide 6: Randon Profile: Governance
RANDON PROFILE GOVERNANCE Board of Directors David Abramo Randon– Chairman Alexandre Randon – Vice-Chairman Hugo E. I. Ferreira – Board Member Tag Along Pedro Ferro Neto – Board Member 80.0% Ruy Lopes Filho – Board Member Executive Committee Daniel Raul Randon CEO Alexandre Gazzi Sergio L. M. de Car
Slide 7: Randon Profile: Corporate Structure
RANDON PROFILE CORPORATE STRUCTURE 7
Slide 8: Vehicles and Trailers
VEHICLES AND TRAILERS TRAILERS RAILCARS SPECIALTY VEHICLES 8
Slide 9: Semi-Trailers
VEHICLES AND TRAILERS SEMI-TRAILERS MARKET CHARACTERISTICS Trailers Sold (units) Fragmented base of clients Brazil Overseas Total Strong distribution dealers in all main 2Q19 6,142 815 6,957 markets; 2Q18 4,241 711 4,952 Import barriers ∆% 44.8% 14.6% 40.5% Logistics costs, regulation, import tax 1H
Slide 10: Semi-Trailers | Leader in Brazil
VEHICLES AND TRAILERS SEMI-TRAILERS| LEADER IN BRAZIL Data from the last 12 months 6,060 4,720 5,546 5,250 3,979 5,082 3,651 4,187 4,567 4,105 4,392 4,475 42.1% 39.0% 37.4% 36.5% 35.0% 34.8% 35.3% 32.5% 32.0% 34.2% 32.6% 30.5% 1,552 1,989 1,564 1,600 1,430 1,428 1,434 1,551 1,956 2,070 1,714 1,333 j
Slide 11: Semi-Trailers | Leader in Brazil: Competitors
VEHICLES AND TRAILERS SEMI-TRAILERS| LEADER IN BRAZIL 54,401 40,493 59,284 59,435 52,537 70,161 56,452 29,620 23,075 24,927 44,589 30,805 Others (Units Sold – Brazil) Size of Market 21% 17% 19% Sergomel 33% 40% 39% 40% 39% 3% 3% 45% 44% 46% 43% 2% 3% Noma 3% 6% 13% 12% 13% Librelato 3% 1% 1% 1% 2% 9
Slide 12: Railcars
VEHICLES AND TRAILERS RAILCARS Railcar Production 5,616 4,703 4,608 MARKET CHARACTERISTICS 2,888 3,903 3,256 2,878 2,327 Concentrated Base of Clients 45.4% Large industries or railway companies. 32.0% 30.4% 2,105 39.7% 26.1% 1,300 29.8% 28.8% 28.6% Long order-to-delivery cycle Long commercial/indust
Slide 13: Specialty Vehicles
VEHICLES AND TRAILERS SPECIALTY VEHICLES Specialty Vehicles 25 dealers in Brazil MARKET (units) Construction and Mining Industries 2Q19 2Q18 Δ% Civil Construction; ACTIVITY 97 172 -43.6% Lessors; Development, manufacturing, sale and technical assistance. 1H19 1H18 Δ% Public Bodies; Agriculture. 194
Slide 14: Highlights 2Q2019 | Vehicles and Road Equipment
HIGHLIGHTS 2Q2019 | VEHICLES AND ROAD EQUIPMENT Access the following QR Code to learn about the manufacturing process of TRAILERS trailers ● Demand remained heated in 2Q19. Sales in the Brazilian market totaled 16,856 units (+ 56.9% over 2Q18); ● Randon delivered 5,740 semi-trailers in the quarter;
Slide 15: Highlights 2Q2019 | Vehicles and Road Equipment
HIGHLIGHTS 2Q2019 | VEHICLES AND ROAD EQUIPMENT RAILCARS ● The rail car market is expected to remain pressured throughout 2019; ● In 2Q2019, Randon sold 1 railcar, against 128 units in the same period of the previous year (-99.2%); ● Customers should place new orders of railcars only next year. SPEC
Slide 16: Market Trends | Vehicles and Road Equipment
MARKET TRENDS| VEHICLES AND ROAD EQUIPMENT TRAILERS RAILCARS SPECIALTY VEHICLES DOMESTIC LOW DEMAND IN BIDS MARKET 2019 BACKHOE LOADERS MARKETS RECOVERY IN OVERSEAS MARKETS OVERSEAS 2020 FENATRAN RAILCAR PARTS OFF-ROAD TRUCKS AGRIBUSINESS 16
Slide 17: Performance 2Q19 | Vehicles and Road Equipment
PERFORMANCE 2Q19| VEHICLES AND ROAD EQUIPMENT Consolidated Net Revenue (R$ million) Exports (US$ million) +23.0% +24.1% 1,065.3 32.3 +27.0% +23.9% 866.3 26.1 586.4 17.7 461.8 14.3 2Q18 2Q19 1H18 1H19 2Q18 2Q19 1H18 1H19 Consolidated EBITDA | EBITDA Margin (R$ million) Investments (R$ million) +99.0%
Slide 18: Auto Parts Division
AUTO PARTS DIVISION BRAKING CHASSIS COUPLING SYSTEMS SUSPENSION WHEEL END 18
Slide 19: Auto Parts Sales Volumes
AUTO PARTS DIVISION AUTO PARTS SALES VOLUMES MARKET CHARACTERISTICS Diversified base of clients Customer segmentation from OEM to aftermarket and 2Q19 2Q18 1H19 1H18 Δ% Δ% Un. exports; Un. % CNR Un. % CNR Un. % CNR Un. % CNR Un. Auto parts Moderated imports Friction Material (un.)¹ 23,575 18.7% 26,2
Slide 20: Diversified Model | Auto Parts Division
DIVERSIFIED MODEL| AUTO PARTS DIVISION SEGMENT PRODUCTS CUSTOMERS 5% Coupling 9% Exports 16% Comercial Randon 25% Vehicles 15% Brakes Frictions, 17% Brakes Disks OEM 12% and MAN 52% 15% actuation systems Others Meritor Aftermarket 38% 45% 6% Wheel end 23% 15% 12% Volvo 5% G. Comolatti Axles and Merc
Slide 21: Leader in Brazil | Auto Parts Division
LEADER IN BRAZIL| AUTO PARTS DIVISION MARKET SHARE AUTO PARTS 92% 93% 96% 94% 87% 82% 54% 53% 52% 50% 56% 56% 50% 43% 54%46% 54% 46% 45% 42% 48% 43% 42% 43% 37% 38% 37% 2014 2015 2016 2017 2018 1H19 1H19 1S19 Fifth QuintaWheel Roda(OEM) (OEM) Freios a Ar(OEM) Air Brakes (OEM) Brake Shoes Lonas (Afte
Slide 22: Recent Expansion | Auto Parts Division
RECENT EXPANSION| AUTO PARTS DIVISION Nov/2017 China Dec/2017 Jan/2018 Feb/2018 India Oct/2018 Jun/2019 Mexico 22
Slide 23: Highlights 2Q2019 | Auto Parts Division
HIGHLIGHTS 2Q2019 | AUTO PARTS DIVISION Access the following QR Code to watch the new vídeo of Fras-le’s brake FRICTION AND AUTO PARTS shoes to subways. ● Sales of friction materials decreased by 10.2% in 2Q19 compared to the same period of the previous year; ● Although volume declined, sales were m
Slide 24: Highlights 2Q2019 | Auto Parts Division
HIGHLIGHTS 2Q2019 | AUTO PARTS DIVISION AXLES AND SUSPENSIONS COUPLING SYSTEMS ● Axle and suspension sales grew by ● Coupling systems presented a 19.1% 29.1% in 2Q2019 compared to 2Q2018; increase in 2Q2019 sales compared to the same period of the previous year; ● In this quarter, Suspensys announce
Slide 25: Market Trends | Auto Parts Division
MARKET TRENDS| AUTO PARTS DIVISION OEM – DOMESTIC DOMESTIC AFTERMARKET MARKETS OVERSEAS 52% 23% 25% POSITIVE POSITIVE NEUTRAL OUTLOOK OUTLOOK OUTLOOK North PERSPECTIVA American marketPOSITIVA still at a More stable Heavy good pace segment Mercado americano Medium and em ritmo acelerado A
Slide 26: Performance 2Q2019 | Auto Parts Division
PERFORMANCE 2Q2019 | AUTO PARTS DIVISION Consolidated Net Revenue (R$ million)¹ Exports (US$ million) +28.9% +28.1% +5.2% +4.1% 1,276.4 51.7 53.9 996.2 666.1 26.7 28.1 516.7 2Q18 2Q19 1H18 1H19 2Q18 2Q19 1H18 1H19 ¹No operations with Randon Implementos Consolidated EBITDA | EBITDA Margin (R$ million
Slide 27: Financial Services
FINANCIAL SERVICES ‘Companies
Slide 28: Performance 2Q2019 | Financial Services
PERFORMANCE 2Q2019 | FINANCIAL SERVICES Coop-Payment Plan Quotas Sold It is among the leaders in coop- payment plans for commercial 2Q19 2Q18 Δ% 1H19 1H18 Δ% vehicles and real estate 3,668 3,245 3.4% 6,462 5,779 11.8% SEGMENTS: 30 Thousand Customers Trailers Real estate and vehicles Quotas Accrued M
Slide 29: Performance 2Q2019 | Financial Services
PERFORMANCE 2Q2019 | FINANCIAL SERVICES Consolidated Net Revenue (R$ million) Randon Bank - ROE (%) +20.4% +22.9% 93.9 8.3% 8.8% 78.0 8.0% 7.6% 7.4% 7.0% 49.6 40.4 2Q18 2Q19 1H18 1H19 2014 2015 2016 2017 2018 1H19 Consolidated EBITDA| EBITDA Margin (R$ million) Randon Consórcios - ROE (%) -2.7% +25.
Slide 30: Market 2Q2019 | Highlights
MARKET 2Q2019 | HIGHLIGHTS KEY FACTORS FOR TRUCK/TRAILER DEMAND PRODUCTION GDP Harvest 2Q19 2Q18 ∆% 1H19 1H18 ∆% Confidence Employment Trailers³ 17,571 11,510 52.7% 32,279 20,819 55.0% Interest rates Inflation Trucks² 30,677 25,153 22.0% 55,438 49,587 11.8% Buses² 7,907 8,069 -2.0% 14,02
Slide 31: Highlights | Consolidated Results 2Q19
HIGHLIGHTS| CONSOLIDATED RESULTS 2Q19 Consolidated Net Revenue by Segment 2Q19 2Q18 Δ% 1H19 1H18 Δ% Total Gross Revenue¹ 1,873,904 1,450,576 29.2% 3,510,276 2,750,083 27.6% +27.8% Domestic market 1,694,385 1,304,997 29.8% 3,177,817 2,481,052 28.1% 1,018.9 1,302.1 Exports 179,519 145,579 23.3% 332,45
Slide 32: Capital Markets
CAPITAL MARKETS RAPT4 Price/Daily Liquidity - R$ per share| R$ million +46.5% 7.17 9.26 6.17 9.04 4.71 2.45 3.45 +8.6% 19.5 17.2 17.9 9.3 8.1 9.1 4.1 2014 2015 2016 2017 2018 1S18 1S19 Dividends and Interest on Equity - R$ million | R$ per share 0.19 0.14 0.09 0.00 0.00 59.0 49.3 30.7 0.0 0.0 2014 2
Slide 33: Financial Results
FINANCIAL RESULTS Gross Debt Breakdown 1H19 - R$ million| % Total Gross Debt R$ 2,772.0 Foreign Currency Gross debt in BR currency R$ 2,256.8 18.6% Gross debt in foreign currency R$ 515.2 USD rate (June 30,2019) R$ 3.8322 Domestic Average Cost of Debt in BRL 7.6% per year Currency 81.4% Average Cost
Slide 34: Financial Results
FINANCIAL RESULTS Consolidated Net Debt (without Randon Bank) - R$ million – 1H19 *Net Debt/EBITDA 1.45 x 6.93 x 2.95 x 1.19 x 1.51 x 1.49 x 1,882.5 1,762.7 1,859.1 1,565.0 1,777.8 1,727.9 -385.6 -351.9 -697.2 -886.5 -1,052.0 -824.9 -2,614.4 -2,268.0 -2,114.6 -2,262.2 -2,684.1 -2,829.9 Dec, 2014 Dec
Slide 35: We are 11.4 thousand employees
PEOPLE We are 11.4 thousand employees “Cheerful, innovative people working together to, with their results, perpetuate Randon Companies.” Raul Randon (in memoriam) 35
Slide 36: Internal Programs
PEOPLE Internal Programs People are our greatest asset, talents that need to be developed and maintained. 36
Slide 37: Social Commitment
SUSTAINABILITY Social commitment Believing in dreams is part of our reality More than 5,700 children and adolescents served over 16 years by the Elisabetha Randon Institute 37
Slide 38: Environment
SUSTAINABILITY Environment Environmental Awareness and Prevention Culture In 2018, R$ 12 million was invested in environmental preservation and conservation, guided by the Health, Safety and Environment policy. 38
Slide 39: Environment
SUSTAINABILITY Environment WASTEWATER WASTE R$ 4.4 million / year It is the economy obtained by the best use of the raw material, and consequently, reduction of scrap produced. 24,000 Tons / Year It is the volume of scrap metal generated by Randon, Fras-le, Suspensys, Master and Jost, which is sent
Slide 40: Sustainability: Consolidated Added Value
SUSTAINABILITY Consolidated Added Value 1H2019- R$ 1.1 billion 1H2018- R$ 865.8 million 34.3% 35.8% 31.6% 26.7% 23.7% 20.1% 10.9% 8.6% 5.2% 3.1% Employees Taxes Financial Institutions Interest of minority Profit Retained in the period shareholders 40
Slide 41: Outlook
OUTLOOK Economy ● ¹GDP: growth forecast of 0.81% for 2019; ● ² Agricultural harvest: 10th CONAB survey estimates production of 240 million tons of grains in the 2018/2019 crop; ● ¹Inflation: estimated to close 2019 at 3.76%, below target; ● ¹Interest Rate: Selic rate should close the year at 5.0% pe
Slide 42: Financial Results
FINANCIAL RESULTS Total Gross Revenue - Including Intercompany Sales - R$ million CAGR 6,044.2 +2.6% 5,457.3 +27.6% 4,236.9 4,215.6 3,680.2 +29.2% 3,510.3 2,750.1 1,873.9 1,450.6 2014 2015 2016 2017 2018 2Q18 2Q19 1H18 1H19 Consolidated Net Revenue - R$ million CAGR +3.0% 4,262.6 3,778.8 +25.5% 3,09
Slide 43: Operating Results
OPERATING RESULTS Exports - US$ million CAGR -1.2% 191.6 182.3 158.2 151.6 155.4 +10.8% +11.7% 77.8 86.2 41.0 45.8 2014 2015 2016 2017 2018 2Q18 2Q19 1H18 1H19 Exports – Destination by Economic Block | US$ million 46.2% 42.0% 32.7% 33.6% 12.6% 7.4% 9.1% 2.7% 2.0% 4.2% 2.3% 2.0% 1.4% 0.5% 0.4% 0.8% 0
Slide 44: Financial Results
FINANCIAL RESULTS Gross Profit| Gross Margin - R$ million CAGR +1.8% 26.7% 25.0% 25.3% 23.7% 23.8% 23.9% 23.7% 20.7% 19.9% 1,012.5 943.0 +33.7% 640.9 697.0 +42.5% 616.1 520.9 460.8 347.2 243.7 2014 2015 2016 2017 2018 2Q18 2Q19 1H18 1H19 Consolidated COGS Breakdown | R$ million Others 12.3% Deprecia
Slide 45: Financial Results
FINANCIAL RESULTS EBITDA | EBITDA Margin - R$ million CAGR +3,4% 13.0% 13.1% 15.6% 14.7% 13.9% 10.5% 12.4% 5.2% 5.4% 559.8 490.5 +18.3% +61.3% 338.0 308.2 285.8 161.9 203.7 142.7 126.3 2014 2015 2016 2017 2018 2Q18 2Q19 1H18 1H19 EBITDA | Quarterly EBITDA Margin - R$ million 15.6% 12.4% 13.5% 11.8%
Slide 46: Financial Results
FINANCIAL RESULTS Net Income| Net Margin - R$ million CAGR -6.9% 5.3% 3.6% 3.1% 6.5% 3.8% 4.8% -0.8% -2.6% 1.6% 202.0 +168.9% +55.7% 151.7 116.2 84.5 74.6 46.7 31.4 -24.6 -67.2 2014 2015 2016 2017 2018 2Q18 2Q19 1H18 1H19 Net Income| Quarterly Net Margin - R$ million 6.5% 3.1% 3.8% 2.9% 2.8% 84.5 41
Slide 47: Financial Results
FINANCIAL RESULTS Gross Debt Breakdown - R$ million| % Gross Debt Indexes IPCA Origin of Debt - Short and Long Term Fixed + 2.0% JUNE/2019 Exchange Rate R$ Million 3.0% Fixed 2,772.0 10.4% 2,356.5 Libor + Exchange 515.2 Rate Foreign Currency 277.4 12.0% Domestic Currency CDI 2,256.8 71.4% 415.4 2,07
Slide 48: Financial Results
FINANCIAL RESULTS Schedule of Debt Repayment 1H19 - R$ million 544.7 551.2 495.9 497.1 442.3 69.1 59.6 43.8 79.0 132.8 240.8 475.6 491.5 453.3 130.9 417.0 309.5 109.9 2019 2020 2021 2022 2023 2024 a 2033 Domestic Currency Foreign Currency 48
Slide 49: Financial Results
FINANCIAL RESULTS Investments - R$ million CAGR +2.4% +34.0% 161.6 137.4 +141.7% 124.8 130.6 93.2 69.6 56.4 43.2 23.4 2014 2015 2016 2017 2018 2Q18 2Q19 1H18 1H19 Shareholders’ Equity| ROE - R$ million (without non-controlling shareholders) 15.1% 11.7% 10.6% 3.3% -1.7% -5.3% 1,655.7 1,527.3 1,431.6
Slide 50: Consolidated Income Statement by Segment
FINANCIAL RESULTS Consolidated Income Statement by Segment - R$ million/% Vehicles and Trailers Auto Parts Financial Services Consolidated Semi-trailers 2Q19 2Q18 Δ% 2Q19 2Q18 Δ% 2Q19 2Q18 Δ% 2Q19 2Q18 Δ% Gross Revenue 718,226 558,583 28.6% 844,337 655,267 28.9% 54,767 44,669 22.6% 1,617,330 1,258,5
Slide 51: Consolidated Income Statement (by Segment/Quarterly)
FINANCIAL RESULTS Consolidated Income Statement (by Segment/Quarterly) - R$ million/% 2Q18 3Q18 4Q18 2018 1Q19 2Q19 Consolidated Net Revenue 1,018.9 1,109.9 1,212.2 4,262.6 1,133.6 1,302.1 % Vehicles and Trailers 45.3% 46.5% 45.3% 45.3% 42.3% 45.0% % Auto Parts 50.7% 49.7% 51.0% 50.8% 53.8% 51.2% %
Slide 52: Investor Relations
Investor Relations IR Contact ri@randon.com.br +55 54 3239.2505