Kongsberg Automotive Asa · OSL:KOA
Kongsberg Automotive Asa — Investor Day (November 2017)
52 slides from Kongsberg Automotive Asa's investor day presentation, Nov 8, 2017
Slide 1: 2017 Capital Markets Day Kongsberg Automotive
2017 Capital Markets Day Kongsberg Automotive Henning E. Jensen – President & CEO November 8, 2017
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: Events since last CMD (2016)
Bruce E. Taylor – Chairman of the board of directors Events since last CMD (2016)
Slide 4: Executive Summary
Executive Summary Executive Summary ▸ One year after the launching of “the new KA” we are largely confirming the 2016 CMD outlook 2017 CMD In Mill. Euro 2017 2018 2019 2020 ▸ We are by and large on plan with our Sales 1.049 1.132 1.237 1.316 improvement efforts EBIT adj. 48 82 108 122 % of sales 4,6
Slide 5: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 6: Our Segment Structure
An Overview of our Businesses Our Segment Structure Powertrain & Interior Specialty Products Chassis Products MARKET & PRODUCTS MARKET & PRODUCTS MARKET & PRODUCTS Comfort and safety related Powertrain systems and chassis Driver control and fluid handling systems for products for vehicle interiors r
Slide 7: Interior Segment
An Overview of our Businesses Interior Segment Two business units, exclusively focused on the passenger car market ▸ Light Duty Cables (LDC) – cables represent a core competency across multiple KA Light Duty Cables business units; strong product technology and knowledge base ▸ As some traditional LD
Slide 8: Powertrain & Chassis Segment
An Overview of our Businesses Powertrain & Chassis Segment ▸ Technology shift from mechanically based systems towards electronically controlled actuation systems ▸ Product range consist of • AMT Actuators Transmission control • Clutch Actuation Modules • Shift-By-Wire Shifters • PRND Actuators • Shi
Slide 9: Specialty Products segment
An Overview of our Businesses Specialty Products segment Three very different businesses Exclusively focused on air brake applications for trucks and buses Air Couplings ▸ KA is the technology leader with strongly growing market share • Advantageous design qualified premium priced products through l
Slide 10: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 11: General Update (1 of 4)
What has taken place since the last CMD (2016) General Update (1 of 4) ▸ One year ago, we announced a plan for the company that will improve our net results significantly. The plan is ambitious with many components. ▸ We are ahead on some of our initiatives and behind on others. – In the 2016 CMD we
Slide 12: General Update (2 of 4)
What has taken place since the last CMD (2016) General Update (2 of 4) – From an organizational standpoint we said that we would: • Merge driveline and On Highway DCS and create the P&C segment – DONE • Grant more entrepreneurial freedom to our niche businesses through the creation of our Specialty
Slide 13: General Update (3 of 4)
What has taken place since the last CMD (2016) General Update (3 of 4) – We presented a plan to close 6 manufacturing facilities through a restructuring program (in addition to one closure that was already underway). • We have started 4 out of the six closure projects. One is completed, one is solid
Slide 14: General Update (4 of 4)
What has taken place since the last CMD (2016) General Update (4 of 4) – We said that we would improve our cost competitiveness: • The restructuring initiatives have largely been discussed earlier – Due to the delay in one of the restructuring projects, we are somewhat behind on the two last project
Slide 15: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 16: Real GDP Forecast
Market Overview Real GDP Forecast Eurozone US 8% 8% 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% 2017 2018 2019-2023F 2017 2018 2019-2023F China Global 7% 8% 6% 7% 6% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% 2017 2018 2019-2023F 2017 2018 2019-2023F 16 Source: PwC – Global Economy watch: Projections
Slide 17: Interest rate outlook of major economies
Market Overview Interest rate outlook of major economies 6% 5% 4% 3% 2% 1% 0% 2017 2018F 2019-2020F EU US China 17 Source: Trading economics
Slide 18: Light Duty vehicle production reaching over 100 million units by 2020
Market Overview Light Duty vehicle production reaching over 100 million units by 2020 CAGR 2017-2020: CAGR 2017-2020 Millions 2.4% 100 3,1 2,7 2,9 3,8 6% 2,5 3,5 3,7 3,2 17,8 17,3 17,4 1,3% 80 17,1 22,4 23,2 1,3% 60 22,2 22,1 40 22,7 23,1 1,3% 22,3 22,6 20 27,5 27,7 29,2 30,6 3,6% 0 2017 2018 2019 2
Slide 19: Commercial Vehicle production stable around 3 millions units
Market Overview Commercial Vehicle production stable around 3 millions units CAGR 2017-2020: 3500 CAGR 2017-2020 0.6% Millions ,1 ,1 16% 3000 ,1 ,1 ,5 ,6 ,5 ,6 3,8% 2500 ,6 ,7 3,9% 2000 ,6 ,6 683,978 1500 ,8 4,2% ,7 ,7 1000 1,3 -5,8% 500 1,0 1,0 1,1 0 2017 2018 2019 2020 China Asia minus China Europ
Slide 20: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 21: How well positioned are we for the big automotive trends? (1 of 2)
The road forward How well positioned are we for the big automotive trends? (1 of 2) ▸ Infotainment and Connectivity – Generally speaking, Kongsberg Automotive (KA) is an automotive supplier in the areas of mechanical products. With regards to Infotainment and Connectivity we have limited exposure bo
Slide 22: How well positioned are we for the big automotive trends? (2 of 2)
The road forward How well positioned are we for the big automotive trends? (2 of 2) ▸ Autonomous Vehicles – Overall, KA is not directly active in the autonomous vehicle field. Two of our businesses (P&C and Interior) are indirectly affected by this new product category: – P&C We are, through our P&C
Slide 23: We are currently comfortable with our product portfolio
The road forward We are currently comfortable with our product portfolio ▸ We have three business segments that all have significant upside from both a top line and a bottom line perspective: – Interior Interior is well placed in the most attractive automotive segment that we serve from a market gro
Slide 24: Growth Prospects
The road forward Growth Prospects ▸ From a market and competitive position standpoint, we are well positioned for growth in our Interior and Specialty Products segments. The main drivers for this are: – Interior: being at the right place at the right time with the right products during strong market
Slide 25: Looking for M&A targets
The road forward Looking for M&A targets The automotive supplier industry is in a phase of consolidation. There will be many acquisitions of smaller players driven by new technologies and the needs for scale If the right opportunities become available in the market we will go after acquisitions as l
Slide 26: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 27: Growing with Fluid Transfer Systems
Capital Markets Day 2017 Growing with Fluid Transfer Systems November 8th 27 27
Slide 28: Fluid Transfer System - Introduction
Fluid Transfer system – Introduction Business World class supplier of fluid handling & high performance hose Fluid Transfer Systems products for vehicle and industrial markets, which provide competitive advantage and profitable growth opportunities above market rates Segments and products • Passenge
Slide 29: Fluid Transfer Systems - Unparalleled Customer Relationships
Selected customers Selected Selected Industrial customers CV customers PV Fluid Transfer Systems - Unparalleled Customer Relationships 29
Slide 30: Fluid Transfer Systems - Products
Fluid Transfer Systems - Products KA growth LTM Q3 2017 sales Product lines expectations Fluoropolymer based hoses for segments: Above Oil, Gas, Pharma , Food, Hydraulic,.. market 15% 23% Passenger Vehicle fuel hose & Above Ind assemblies and hydraulic brake hoses market 4% PV CV 27% 10% Commercial
Slide 31: Fluid Transfer Systems - Differentiators & Success Factors
Fluid Transfer Systems - Differentiators & Success Factors • Vertical integrated from material granulates to end product. • In global top 3 of fluoropolymer based hose producers Combination • World’s # 1 in Fluoro-Comp® manufacturing Unique • Nylon multilayer capabilities up to 5 layers • Broad port
Slide 32: Fluid Transfer Systems - Profitable Growth
Fluid Transfer Systems - Profitable Growth Changed • Changed to regional structure – more customer focused organizational • Agility & responsiveness Improved structure • Closure of the Easley plant in USA 1Q 2018, relocating to a new facility in Mexico Improve our • Planned closure of the Burton pla
Slide 33: Fluid Transfer Systems - Growth Drivers
Fluid Transfer Systems - Growth Drivers Automotive trends in favour of Fluid Transfer Systems high Drivers PV + CV legislations Green House Gas performance hose products : High performance materials Global energy Safety Light weight and high temperature resistance plastics Advanced multilayer
Slide 34: The world's leading fuel hose: A truly unique hose
The world’s leading fuel hose: Teflon® impregnated Fibreglass / Aramid braid Weight Reduction Carbon lined Teflon® PTFE • Fluor-comp® up to 62 % vs stainless steel braided hose • Fluor-comp® up to 70 % vs rubber Temperature Resistance • Fluor-comp® up to 100 % higher vs nylon hose • Fluor-comp® up t
Slide 35: Fluid Transfer Systems - Growth Drivers (Industrial)
Fluid Transfer Systems - Growth Drivers Fluid Transfer Systems competitive Drivers Industrial advantages in the industrial segment: legislations Supply chain Take advantage of the Kongsberg Automotive quality systems for the high end sub segments Emerging markets Safety Utilising our global foot
Slide 36: Fluid Transfer Systems - Summary
Fluid Transfer Systems - Summary Passenger Vehicle • Grow and maintain our #1 position in Fluoro-Comp ® fuel hose • Gain significant growth in hydraulic brake hose • Penetrate market of battery coolant/heating lines Commercial Vehicle • Increase market share in emission control + turbo in USA • Gain
Slide 37: Off-Highway
Capital Markets Day 2017 Off-Highway November 8th 37 37
Slide 38: Introduction to Off-Highway
Introduction to Off-Highway Highly specialized unit focused on a variety of end markets with various products and technologies ▸ Significant growth potential Off Highway ▸ Focus on defending current niches and defining new applications for our base technologies ▸ In the Off Highway area: – There is
Slide 39: Introduction to Off-Highway
Introduction to Off-Highway We develop Driver Control Systems for: Off Highway ▸ Powersports ▸ Construction Machinery ▸ Agricultural Machinery ▸ Outdoor Power Equipment
Slide 40: Summary of Off-Highway
Summary of Off-Highway KA growth 2017 estimated sales Product lines expectations Steering Systems Above market Steering Systems 7% HMI / Electronics Electronic Foot and Hand Controls 17% 27% Above market Cables & Controls 27% HMI / Electronics Above 22% Pedals & Electronic Hand Controls market Wire
Slide 41: Off-Highway – Our Competence
Off-Highway – Our Competence ▸ Our Off-Highway team delivers growth . . . – Through being customer oriented with flexible solutions that can be tailored to their specific requirements – By clearly understanding our customer’s environment, challenges and needs – With having full electronics design, d
Slide 42: Growth in Off-Highway - Drivers
Growth in Off-Highway - Drivers ▸ Our Off-Highway vehicle markets are migrating from mechanical controls to electronic controls or electronically assisted controls ▸ Drivers for this change are – Emissions legislation • Stage 5 EU emissions regulation • Emissions regulation catch up in China & India
Slide 43: Growth in Off-Highway - Example
Growth in Off-Highway - Example ▸ Electronic power steering (EPS) system for leading Powersports OEM – Original versions developed for On-Highway three-wheelers – Driver control and comfort benefits lead to development of other variants optimised for Side-by-Side and ATV platforms – EPS take-up has
Slide 44: Off-Highway Summary
Off-Highway Summary ▸ Steering Systems – Gain significant growth by broadening our customer base in Power Sports – Expand into the Agriculture Market with EPS Integrated systems ▸ HMI / Electronic – Obtain growth by developing engineered solutions to meet the Power Sports customer needs – Rationaliz
Slide 45: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 46: Financial overview – 2017 Progress
Financials Financial overview – 2017 Progress Group Revenue and normalized EBIT adj. of continued business Revenue (€m) Normalized EBIT adj. (€m) 271 268 260 244 241 241 241 13.9 13.5 218 11.7 11.3 9.7 9.0 7.7 6.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 ▸ 2016 figures have been normalized for “one timers”
Slide 47: Financial overview – a recap to 2016 CMD
Financials Financial overview – a recap to 2016 CMD Intro ▸ We have reclassified our OPE activities from the LDC business unit to the Off Highway business unit ▸ Also, in the 2016 CMD figures we had misclassified legal settlements in the amount of € 4.5M in P&C originating from pre 2014. This should
Slide 48: Financial overview – a recap to 2016 CMD
Financials Financial overview – a recap to 2016 CMD 2016 CMD reclassified for OPE xfer and Legal 2016 CMD Including Restructuring Benefits Settements (excluding discontinued Ops) In Mill. Euro 2016 2017 2018 2019 In Mill. Euro 2016 2017 2018 2019 Sales 351 366 386 432 Sales 351 366 386 432 Powertrai
Slide 49: Financials – 2016 CMD plan vs. 2017 Update
Financials Financials – 2016 CMD plan vs. 2017 Update 2016 CMD reclassified for OPE xfer and Legal 2017 CMD Settements (excluding discontinued Ops) 2016 Actual , 2017-2019 Outlook In Mill. Euro In Mill. Euro 2016 2017 2018 2019 2016 2017 2018 2019 ACT ACT/FCST Plan Plan Sales 351 366 386 432 Sales 3
Slide 50: Financial overview
Financials Financial overview How does 2017 CMD look compared to 2016 CMD? 2016 CMD P&L with Restr. Costs & Benefits reclassified for 2017 CMD elimination of non cont'd ops In Mill. Euro 2016 2017 2018 2019 In Mill. Euro 2017 2018 2019 2020 Sales 944 974 1.037 1.151 Sales 1.049 1.132 1.237 1.316 EBI
Slide 51: Agenda
Agenda ▸ Executive Summary ▸ An overview of our businesses ▸ What has taken place since the last CMD (2016) – General Update – Restructuring Initiatives – Other Improvement Initiatives – Status on the Principal Model ▸ Markets ▸ The road forward – How well positioned are we for the big automotive tr
Slide 52: Summary & Conclusion
Conclusion & Wrap-up Summary & Conclusion ▸ One year after the launching of “the new KA” we are largely confirming the 2016 CMD outlook 2017 CMD In Mill. Euro 2017 2018 2019 2020 ▸ We are by and large on plan with our Sales 1.049 1.132 1.237 1.316 improvement efforts EBIT adj. 48 82 108 122 % of sal