Randoncorp S.a. · BMFBOVESPA:RAPT3
Randoncorp — Q3 2019 Earnings Presentation
52 slides from Randoncorp's earnings presentation, November 2019
Slide 1: Institutional Profile 3Q2019 | 9M2019
INSTITUTIONAL PROFILE 3Q2019|9M2019
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 11,355 R$ 3.1 bi LEADERSHIP COMPETITIVENESS GROWTH RECOGNITION leader in the 4th largest present in all Brazilian complementary products one of the most respected automotive market in the economic sectors; and integrated industrial
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 5
Slide 6: 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 SEMI-TRAILERS Fragmented base of clients Brazil Overseas Total Strong distribution dealers in all main 3Q19 6,224 700 6,924 markets 3Q18 5,192 996 6,188 Import barriers ∆% 19.9% -29.7% 11.9% Logistics costs, regulation, import tax and 9M19 1
Slide 10: Semi-Trailers | Leader in Brazil
VEHICLES AND TRAILERS SEMI-TRAILERS| LEADER IN BRAZIL Data from the last 12 months 5,745 5,927 5,219 4,187 4,567 5,546 6,060 5,250 4,105 5,082 4,392 4,475 37.4% 37.7% 37.1% 35.0% 34.8% 35.3% 34.2% 34.3% 32.5% 32.0% 30.5% 32.6% 1,564 1,600 1,430 1,428 1,434 1,551 1,956 2,070 1,714 2,030 2,168 1,938 o
Slide 11: Semi-Trailers | Leader in Brazil: Competitors
VEHICLES AND TRAILERS SEMI-TRAILERS| LEADER IN BRAZIL 54,392 40,493 59,284 59,436 52,537 70,162 56,453 29,620 23,075 24,927 44,589 47,696 (Units Sold – Brazil) Size of Market 17% 19% Others 21% 39% 33% 3% Sergomel 43% 40% 40% 39% 2% 3% 2% 45% 44% 46% 3% 6% Noma 12% 13% 3% 14% Librelato 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 45.4% 2,878 2,327 Concentrated Base of Clients 32.0% 30.4% 2,105 39.7% Large industries or railway companies. 26.1% 1,300 3,256 29.8% 28.8% 28.6% Long order-to-delivery cycle 16.3% 2094 Long commer
Slide 13: Specialty Vehicles
VEHICLES AND TRAILERS SPECIALTY VEHICLES Specialty Vehicles 25 dealers in Brazil MARKET (units) Construction and Mining Industries; 3Q19 3Q18 Δ% Civil Construction; ACTIVITY 113 133 -15.0% Lessors; Development, manufacturing, sale and technical assistance. 9M19 9M18 Δ% Public Bodies; Agriculture. 30
Slide 14: Highlights 3Q2019 | Vehicles and Road Equipment
HIGHLIGHTS 3Q2019 | VEHICLES AND ROAD EQUIPMENT Access the QR Code to check the highlights of Randon in Fenatran 2019 TRAILERS trade show. NOMA ● Demand remained strong in 3Q19. Sales in the LIBRELATO 4.7% SERGOMEL 1.1% brazilian market totalled 16,891 units (+36.5% 14.7% over 3Q18); OTHERS 20.1% ●
Slide 15: Highlights 3Q2019 | Vehicles and Road Equipment
HIGHLIGHTS 3Q2019 | VEHICLES AND ROAD EQUIPMENT RAILCARS ● The railcar market has remained under pressure throughout 2019; ● Randon sold 74 railcars in 3Q2019, 14% lower than 3Q2018; ● For the 4Q2019 demand should remain low, but customers are pointing to better volumes for next year. SPECIALTY VEHI
Slide 16: Market Trends | Vehicles and Road Equipment
MARKET TRENDS| VEHICLES AND ROAD EQUIPMENT SEMI-TRAILERS RAILCARS SPECIALTY VEHICLES DOMESTIC LOW DEMAND IN BIDS MARKET 2019 BACKHOE LOADERS MARKETS RECOVERY IN 2020 OVERSEAS MARKETS OVERSEAS NEW ORDERS OFF-ROAD TRUCKS 2020 HARVEST 16
Slide 17: Performance 3Q19 | Vehicles and Road Equipment
PERFORMANCE 3Q19| VEHICLES AND ROAD EQUIPMENT Consolidated Net Revenue (R$ million) Exports (US$ million) +0.4% +22.4% 45.9 46.1 +21.5% 1,693.0 -30.7% 1,382.9 19.9 516.5 627.6 13.8 3Q18 3Q19 9M18 9M19 3Q18 3Q19 9M18 9M19 Consolidated EBITDA | EBITDA Margin (R$ million) Investments (R$ million) +80.1
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 3Q19 3Q18 Diversified base of clients Un. % CNR Un. % CNR Customer segmentation from OEM to aftermarket and Auto Parts exports; Friction Material (un.)² 24,917 16.9% 26,741 20.0% Moderated imports Others Materials Fras-le (un.)² 6,4
Slide 20: Diversified Model | Auto Parts Division
DIVERSIFIED MODEL| AUTO PARTS DIVISION SEGMENT PRODUCTS CUSTOMERS 5% Wheel End 13% Exports 17% Randon Friction 24% Material 15% Axles and 38% OEM 12% Suspensions MAN 54% 20% 15% Others Meritor 45% 6% Aftermarket 23% 16% Volvo Coupling 9% Brakes 5% Systems G. Comolatti 19% Mercedes 4% Iveco 4% 1% Sca
Slide 21: Leader in Brazil | Auto Parts Division
LEADER IN BRAZIL| AUTO PARTS DIVISION MARKET SHARE AUTO PARTS 92.0% 93.0% 96.0% 91.0% 86.7% 82.0% 53.9% 52.9% 56.0% 56.0% 50.0% 52.0% 54.0% 54.0% 43.4% 43.0% 50.0% 46.0% 45.0% 48.0% 46.0% 45.0% 37.0% 42.0% 43% 38% 37% 2014 2015 2016 2017 2018 9M19 Fifth Wheel (OEM) Air Brakes (OEM) Brake Shoes (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 3Q2019 | Auto Parts Division
HIGHLIGHTS 3Q2019 | AUTO PARTS DIVISION Access the QR Code to check Fras-le’s Blog FRICTION AND AUTO PARTS with tips and news about the automotive market ● Sales of friction materials decreased by 6.8% in 3Q19 compared to the same period of the previous year; ● The economic slowdown, the seasonality
Slide 24: Highlights 3Q2019 | Auto Parts Division
HIGHLIGHTS 3Q2019 | AUTO PARTS DIVISION AXLES AND COUPLING WHEEL END SUSPENSIONS SYSTEMS BRAKE SYSTEMS (HUBS AND DRUMS) ● Sales of axles, suspensions and coupling systems remained stable comparing the 3Q2019 with the 3Q2018. Hubs and Drums volumes grew by 7.5% over the same period last year. ● In 3Q
Slide 25: Market Trends | Auto Parts Division
MARKET TRENDS| AUTO PARTS DIVISION OEM – DOMESTIC DOMESTIC AFTERMARKET MARKETS OVERSEAS POSITIVE POSITIVE NEUTRAL OUTLOOK OUTLOOK OUTLOOK PERSPECTIVA HEAVY TRUCKS MORE STABLE POSITIVA USA ECONOMY STILL SEGMENT IN GOOD PACE SEMI-HEAVY Mercado americano em ritmo acelerado MEDIUM GROWING
Slide 26: Performance 3Q19 | Auto Parts Division
PERFORMANCE 3Q19| AUTO PARTS DIVISION Consolidated Net Revenue (R$ million)¹ Exports (US$ million) +27.4% -0.6% 1,972.2 81.3 80.8 -8.8% +26.1% 1,548.0 551.9 695.8 29.6 27.0 3Q18 3Q19 9M18 9M19 3Q18 3Q19 9M18 9M19 ¹No operations with Randon Implementos Consolidated EBITDA | EBITDA Margin (R$ million)
Slide 27: Financial Services
FINANCIAL SERVICES ‘Companies
Slide 28: Financial Services Performance 3Q19
FINANCIAL SERVICES PERFORMANCE 3Q19 Coop-Payment Plan Quotas Sold It is among the leaders in coop- payment plans for commercial 3Q2019 3Q2018 Δ% 9M2019 9M2018 Δ% vehicles and real estate 3,673 3,941 -6.8% 10,135 9,720 4.3% SEGMENTS: 29 Thousand Customers • Trailers • Real estate and vehicles Quotas
Slide 29: Performance 3Q2019 | Financial Services
PERFORMANCE 3Q2019 | FINANCIAL SERVICES Consolidated Net Revenue (R$ million) Randon Bank - ROE (%) +18.7% 141.8 8.3% 8.5% 8.0% 119.5 7.6% 7.4% 7.0% +15.4% 41.5 47.9 2014 2015 2016 2017 2018 9M19 3Q18 3Q19 9M18 9M19 EBITDA Consolidado | Margem EBITDA (R$ Milhões) Randon Consórcios – ROE (%) -5.9% +1
Slide 30: Highlights 3Q19 | Market
HIGHLIGHTS 3Q19| MARKET KEY FACTORS FOR TRUCK/TRAILER DEMAND PRODUCTION GDP Harvest 3Q19 3Q18 ∆% 9M19 9M18 ∆% Confidence Employment Trailers³ 17,459 13,689 27.5% 49,750 34,508 44.2% Interest rates Trucks² 32,056 27,590 16.2% 87,452 77,254 13.2% Inflation Buses² 7,719 8,096 -4.7% 21,783 2
Slide 31: Highlights 3Q19 | Consolidated Results
HIGHLIGHTS 3Q19| CONSOLIDATED RESULTS Consolidated Net Revenue by Segment Main Figures 3Q19 3Q18 Δ% 9M19 9M18 Δ% +23.6% Total Gross Revenue ¹ 1,975,384 1,597,274 23.7% 5,485,659 4,347,357 26.2% 1,109.9 1,371.3 Domestic market 1,813,669 1,403,154 29.3% 4,991,486 3,884,206 28.5% Exports 161,714 194,12
Slide 32: Capital Markets
CAPITAL MARKETS RAPT4 Price/Daily Liquidity - R$ per share| R$ million +53.2% 7.17 9.26 9.59 4.71 3.45 6.26 2.45 20.8 17.2 +29.2% 16.1 9.3 8.1 9.1 4.1 2014 2015 2016 2017 2018 9M18 9M19 Dividends and Interest on Equity - R$ million | R$ per share 0.14 0.09 0.10 0.00 0.00 49.3 30.7 34.9 0.0 0.0 2015
Slide 33: Financial Results: Gross Debt Breakdown
FINANCIAL RESULTS Gross Debt Breakdown 9M19 - R$ million Foreign Total Gross Debt R$ 2,870.4 Currency Gross debt in BR currency R$ 2,364.1 17.6% Gross debt in foreign currency R$ 506.2 USD rate (June 30,2019) R$ 4.1644 Domestic Average Cost of Debt in BRL 7.2% per year Currency 82.4% Average Cost of
Slide 34: Financial Results: Consolidated Net Debt
FINANCIAL RESULTS Consolidated Net Debt (without Randon Bank) - R$ million – 9M19 *Net Debt/EBITDA 1.45 x 6.93 x 2.95 x 1.19 x 1.51 x 1.22 x 1,882.5 1,762.7 1,859.1 1,898.2 1,565.0 1,777.8 -385.6 -351.9 -697.2 -779.9 -1,052.0 -824.9 -2,678.1 -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 9M2019 - R$ 1.7 billion 9M2018- R$ 1.4 billion 34.9% 33.1% 31.4% 26.2% 26.1% 21.2% 9.4% 7.0% 4.4% 2.9% 2.1% 1.4% Employees Taxes Financial Institutions Interest of minority Interest on Equity Profit Retained in the shareholders and Dividends period 40
Slide 41: Outlook
OUTLOOK ECONOMY ● GDP¹: growth of 0.92% for 2019; ● Grain harvest²: 1st CONAB survey estimates production of 245.8 million tons of grains in the 2019/2020 crop; ● Inflation¹: estimated to close 2019 at 3.29%, below target; ● Interest rate¹: Selic rate should close the year at 4.5% per year; Source:
Slide 42: Financial Results: Revenue
FINANCIAL RESULTS Total Gross Revenue - Including Intercompany Sales – R$ million CAGR +2.6% +26.2% 6,044.2 5,457.3 5,485.7 4,236.9 4,215.6 4,347.4 3,680.2 +23.7% 1,975.4 1,597.3 2014 2015 2016 2017 2018 3Q18 3Q19 9M18 9M19 Receita Líquida Consolidada – R$ Milhões CAGR +3.0% +24.8% 4,262.6 3,778.8 3
Slide 43: Operating Results: Exports
OPERATING RESULTS Exports - US$ million CAGR 191.6 -1.2% 182.3 158.2 151.6 155.4 -0.2% 127.2 126.9 -17.6% 49.4 40.7 2014 2015 2016 2017 2018 3Q18 3Q19 9M18 9M19 Exports – Destination by Economic Block | US$ million 44.5% 41.7% 31.2% 31.9% 12.2% 14.3% 4.9% 7.1% 2.7% 2.3% 1.0% 0.5% 2.1% 2.1% 0.6% 0.8%
Slide 44: Financial Results: Gross Profit
FINANCIAL RESULTS Gross Profit| Gross Margin - R$ million CAGR +30.2% +1.8% 25.0% 24.5% 24.7% 25.1% 23.7% 23.8% 24.0% 20.7% 19.9% 1,012.5 954.7 943.0 +24.4% 733.0 640.9 697.0 520.9 272.3 338.6 2014 2015 2016 2017 2018 3Q18 3Q19 9M18 9M19 Consolidated COGS Breakdown | R$ million Others Depreciation 1
Slide 45: Financial Results: EBITDA
FINANCIAL RESULTS EBITDA | EBITDA Margin - R$ million CAGR +28.6% +21.8% +3.4% 13.0% 13.1% 13.5% 14.0% 14.3% 13.9% 10.5% 5.2% 5.4% 559.8 530.1 490.5 435.2 308.2 161.9 149.4 192.1 142.7 2014 2015 2016 2017 2018 3Q18 3Q19 9M18 9M19 EBITDA | Quarterly EBITDA Margin - R$ million 15.6% 13.5% 14.0% 11.8%
Slide 46: Resultados Financeiros: Net Income
RESULTADOS FINANCEIROS Net Income| Net Margin - R$ million +88.6% +67.5% CAGR -6.9% 5.3% 1.6% 3.6% 3.8% 5.7% 3.8% 5.1% -0.8% -2.6% 202.0 194.7 151.7 116.3 78.5 46.7 41.7 -24.6 -67.2 2014 2015 2016 2017 2018 3Q18 3Q19 9M18 9M19 Net Income| Quarterly Net Margin - R$ million 6.5% 5.7% 3.8% 2.9% 2.8% 84
Slide 47: Financial Results: Debt and Net Debt/EBITDA
FINANCIAL RESULTS Gross Debt Breakdown - R$ million| % Debt | Net Debt/ EBITDA - R$ million Net Debt (Without Randon Bank) 8.38 2.16 4.30 1.79 1.97 1.66 1.34 1.22 1,357.3 1,057.8 1,100.2 1,086.7 779.9 666.2 613.5 553.3 2014 2015 2016 2017 2018 9M19 9M18 9M19 47
Slide 48: Schedule of Debt Repayment 9M19
FINANCIAL RESULTS Schedule of Debt Repayment 9M19 - R$ million 2024 a 2033 48
Slide 49: Financial Results: Investments and Shareholders' Equity
FINANCIAL RESULTS Investments - R$ million CAGR +186.6% +79.5% +2.4% 178.0 161.6 130.6 137.4 124.8 99.2 84.8 43.2 29.6 2014 2015 2016 2017 2018 3Q18 3Q19 9M18 9M19 Shareholders’ Equity| ROE - R$ million (without non-controlling shareholders) 15.1% 10.6% 15.1% 3.3% -1.7% 1,695.3 -5.3% 1,527.3 1,431.6
Slide 50: Consolidated Income Statement by Segment
FINANCIAL RESULTS Consolidated Income Statement by Segment - R$ million/% 50
Slide 51: Consolidated Income Statement by Segment, Quarterly
FINANCIAL RESULTS Consolidated Income Statement (by Segment/Quarterly) - R$ million/% 3Q18 4Q18 2018 1Q19 2Q19 3Q19 Consolidated Net Revenue 1,109.9 1,212.2 4,262.6 1,133.6 1,302.1 1,371.3 % Vehicles and Trailers 46.5% 45.3% 45.3% 42.3% 45.0% 45.8% % Auto Parts 49.7% 51.0% 50.8% 53.8% 51.2% 50.7% %
Slide 52: Investor Relations
Investor Relations IR Contact ri@randon.com.br +55 (54) 3239.2505