Nn, Inc. · NASDAQ:NNBR
Nn — Investor Presentation (March 2015)
32 slides from Nn's investor presentation, Mar 18, 2015
Slide 1: Investor Presentation
Investor Presentation March 17, 2015
Slide 2: Forward-Looking Statement & Disclaimer
Forward-Looking Statement & Disclaimer Forward Looking Statement: With the exception of the historical information contained in this presentation, the matters described herein contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation
Slide 3: Building a Diversified Industrial
Building a Diversified Industrial
Slide 4: Building a Diversified Industrial
Building a Diversified Industrial Focused on a high Building a balanced precision portfolio and Gr business that earns outgrowing end mark oughout the cycle Outgrowing End Str Solid Markets Strategy Outgrowing ets ansformational Flawless ansformationalTechnology ExecutionT Investing in transformatio
Slide 5: Progress against other diversified industrials but undervalued
Building a Diversified Industrial We have made significant progress against other DIs… Rank among comparable S/Mid-Cap DIs Metric Ä Rank 2012—13 2013—14 Sales Growth 8 1 +7 Adjusted Operating 8 5 +3 Margin Return on Equity 8 5 +3 Total Return 10 1 +9 P/E Ratio 5 6 -1 …but we remain undervalued to ou
Slide 6: EV/EBITDA versus S/Mid Cap and Premiere DIs
Building a Diversified Industrial 1 year into the Strategic Period EV/EBITDA 8 S/Mid Cap DIs Premiere DIs NN Actuant Altra Ametek Circor Colfax Crane Kaman Park Ohio Worthington Eaton ITW Honeywell Danaher
Slide 7: NN multiple based on midpoint of 2015 EBITDA Guidance
NN multiple based on midpoint of 2015 EBITDA Guidance Source: Bloomberg Analytics Company Overview
Slide 8: 2014 at a Glance
2014 at a Glance February: Acquired V-S Industries, a high precision manufacturer with locations in Wheeling, IL and Juarez, Mexico June: Acquired tapered roller manufacturer RFK, located in Bosnia & Herzegovina July: Acquired the assets of Chelsea Grinding Company, a cylindrical roller manufacturer
Slide 9: Today
Today 2015 forecasted revenue of $690M—$710M Global reach, local depth Top 3 globally in both bearing components, and precision metal components 25 manufacturing facilities with operations in 10 countries 4,200 employees Three R&D Centers around the globe Supplying to diversified end markets in over
Slide 10: Foundation for Growth
Foundation for Growth Five new Board appointments since 2012 New President & CEO in 2013, key management retained Developed Treasury, FP&A, Supply Chain, Shared Services and IT group infrastructure Design of the NN Operating System Enhanced management bandwidth with acquisitions The fundaments of ou
Slide 11: Company Overview
Company Overview End Product Mix Geography Markets Plastic & Rubber Asia General/Plastics Components Commercial South Transportation 6% America 7% 5% 8% 11% 7% Industrial/ 17% Aerospace /Medical 43% 51% 32% 50% Metal Europe North 70% Bearing Autocam America Components Precision Light Auto Components
Slide 12: Customer Profile
AN Customer Profile @) ZF Lenksysteme @ NTN E:T-N <se S Aide mee OTEKT LIN BLACKS. & DECKER. EMERSON Ey “Automotive SCHAEFFLER DELPHI VS HAEco
Slide 13: Value Proposition
Value Proposition Ability to manufacture precision products with ultra tight tolerances in high volume Total product life cycle Established global footprint Highly specialized skill and engineering in bearing components and precision machining Significant proprietary knowledge and trade secrets Lead
Slide 14: Differentiation
Differentiation High precision manufacturing Operating tolerances of <1 micron Specialty machine building and in-house tooling leading to significant competitive advantages – trade secrets Application specific customer design Repeatable high volume global manufacturing in millions of parts per day Z
Slide 15: Global Footprint
Global Footprint Metal Bearing Components Autocam Precision Components Plastic & Rubber Components Corporate Headquarters 25 high precision manufacturing facilities on 4 continents
Slide 16: Moving Forward
Moving Forward 16
Slide 17: Road to $1 Billion
Road to $1 Billion $ Millions $1,000 $1,000 $1,000 $926 2014 Full Year Pro $900 Forma Revenue $800 $772 Organic Growth $700 $680 3% per Year $600 Adjacent Markets $500 5% per Year $400 $373 Acquisitions $300 $200 2013 Base 2018 Outpace the Market with Expanded Focus and Investment $1+ billion in rev
Slide 18: Expanding Operating Margins
Expanding Operating Margins 18 17% 16 16% 14 14% 14% 13% 12 12% 12% 10 10% 10% 8 8% 3% 3% APC MBC PRC 2014 Adj. Operating Margin 2015 Forecasted Adj. Operating Margin 2018 Strategic Plan All percentages rounded to the nearest whole number
Slide 19: Today & Future Vision – End Markets
Today & Future Vision – End Markets 2014 2018 Revenue = $680M* Revenue = $1B Light Auto Light Auto – CAFE Related Technologies 5% 0% 0% 8% 10% Industrial/Aerospace/Medical 8% 17% Commercial Transportation 70% 50% General/Plastics 32% Building a balanced business that earns throughout the cycle 19 *P
Slide 20: Today & Future Vision – Segment Mix
Today & Future Vision – Segment Mix 2014 2018 Revenue = $680M* Revenue = $1B 43% % 51% 43% 52% 39% % 6% 9% 6% 31 43% 51 50 %%% Autocam Precision60Components Plastic & Rubber Components Metal Bearing Components % % Segment mix continues to improve as our revenues continue to grow *Proforma full year
Slide 21: Strategic Building Blocks 2018
Strategic Building Blocks 2018 31.9% 18.2% EPS CAGR ROIC 37.5% 25.8% 21.8% Operating Manufacturing Sales CAGR Income Margin CAGR
Slide 22: Financial Strategy / Policy
Financial Strategy / Policy Build upon a strong, global operating platform while maintaining financial strength and flexibility Financial policy: Maintain healthy leverage over business cycles and strategic growth period: Debt to EBITDA 2.0x – 3.0x, < 4.0x at peak Cash flow priorities: 1) Debt repay
Slide 23: Autocam Precision Components Group
autocam Precision Components Group
Slide 24: Macro Trend: CAFE Standards
Macro Trend: CAFE Standards Global Fuel Efficiency Standards 77 mpg 56 mpg 50 mpg U.S. fuel efficiency requirements increase from 35 MPG in 2014 to 56 MPG in 2025 ? 60% higher The EU’s 2020 requirement of 77 MPG is ~40% higher than the U.S. same-year requirement China and Japan will both require fue
Slide 25: Target Segments: Fuel Saving Technologies
Target Segments: Fuel Saving Technologies GDI HP Diesel VCT/VVT Multi-Speed Trans EPS MPG Increase + 15—20% (1) + 20—30% (1) + 4—6% (2) + 5—10% (3) + 3—5% (4) CPV Impact + $54 (1) + $89 (1) + $10 (2) + $20 (3) + $4 (4) Market Growth > 17% CAGR > 10% CAGR > 10% CAGR > 15% CAGR > 10% CAGR Global Adopt
Slide 26: Target Segments: Fuel Saving Technologies
Target Segments: Fuel Saving Technologies MPFI V6 GDI V6 GDI Fuel System Precision Turned Part content: Precision Turned Part content: • 6 injectors • 6 Injectors • 1 High pressure fuel pump • 2 High pressure fittings $6.00 per vehicle $60 per vehicle • Technology requires more precision, tighter to
Slide 27: Expansion Segments: General Industrial, Aerospace
Expansion Segments: General Industrial, Aerospace Product Segments, Markets & Customers Consumer Tools HVAC Rec/ATV Industrial Motors Aerospace Fluid Power Addressable $2 billion $3 billion $200 million $3 billion $10+ billion $5+ billion Market (2014) Market Growth Technologies Longer battery life,
Slide 28: JOC Bearing Components Group
joc bearing Components Group
Slide 29: Macro Trends
Macro Trends Outsourcings of key components is increasing Tier 1 and Tier 2 suppliers are concentrating on purchasing with fewer, larger suppliers Supply chain localization continues to gain momentum Increasing fuel economy standards are driving technology
Slide 30: Target Segments
Target Segments Product Segments, Markets and Customers 2014 Automotive Aerospace Railway Linear Systems Fluid Power Industrial 35% Addressable $1 billion $250 million $125 million $100 million $100 million Market (2014) 65% Automotive Market Growth Penetration in Build rate on Increased utilization
Slide 31: MBC High Growth Product Segments
MBC High Growth Product Segments Balls Tapered Rollers Other Rollers Cages Sheet Metal Parts Competitive Profile Primarily outsourced Primarily insourced Primarily insourced Mixed and fragmented Mixed and fragmented Industrial, automotive, Automotive, electrical Industrial and some Primary Markets o
Slide 32: Investor Presentation
Investor Presentation March 17, 2015