Emak S.p.a. · MIL:EM
Emak — H1 2003 Earnings Presentation
26 slides from Emak's earnings presentation, Oct 15, 2003
Slide 1: 2003 Half Year Company results
2003 Half Year Company results Presentation to the Financial Community Milan, 15th October, 2003
Slide 2: Contents
Contents Introduction to Emak Emak Group identity Emak share: index performance Turnover breakdown Economic and financial data Market outlook Emak targets Strategic guidelines 2003 projections 2
Slide 3: Introduction to Emak
Introduction to Emak Emak is a European leader in the Design, Engineering, Manufacturing, Marketing of outdoor power equipments such as chainsaws, brushcutters, lawnmowers 3
Slide 4: Introduction to Emak
Introduction to Emak Core business focused on gardening, landscaping and forestry equipments Euro 147 million of sales in 2002, more than 80% in Europe 2 plants in Italy 5 commercial branches in Europe 120 Distributors in 70 countries 17,000 dealers 4 4
Slide 5: Introduction to Emak: Brands
Introduction to Emak Brands Oleo-Mac and Efco for dealer network and Dynamac/private labels for retail chains Wide range and well balanced product mix Among Europe’s top five 4 5
Slide 6: Superior economic performance for shareholder value creation
Introduction to Emak Superior economic performance for shareholder value creation: period 1998/2002 ROE > 15% ROCE > 20% PAY OUT > 43% 6
Slide 7: Historical growth and profitability
Introduction to Emak Historical growth and profitability CAGR 1999/2002% SALES = 18% EBITDA = 21% EBIT = 28% Net Profit = 32% CASH FLOW = 21% 7
Slide 8: Emak Share: index performance
Emak Share: index performance 150 140 130 120 110 Emak 100 Mibstar Mibtel 90 80 70 60 gen-03 mar-03 mag-03 lug-03 set-03 Source: Official Data 8
Slide 9: Strengthening of Emak Group identity
Strengthening of Emak Group identity Emak UK Emak Bx Emak D Emak F Emak I Headquarter Emak E 9
Slide 10: Turnover breakdown: Sales by geographical area
Turnover breakdown Sales distribution by geographical area Area H1 2003H1 2002H1 Italy 24,0 26,2% 21,0 24,0% Europe 56,3 61,5% 52,4 59,9% - Western Europe 42,0 45,9% 40,0 45,8% - Eastern Europe 14,3 15,6% 12,4 14,1% Rest of the world 11,3 12,3% 14,1 16,1% - North America 3,0 3,3% 4,7 5,4% - South Am
Slide 11: Turnover breakdown: Sales by product line
Turnover breakdown Sales distribution by product line H1 2003H1 2002H1 Product Brushcutters - Decespugliatori 21,3 23,3% 21,3 24,3% Chainsaws - Motoseghe 14,0 15,3% 12,9 14,8% Lawnmowers - Rasaerba 17,0 18,5% 13,7 15,7% Garden Tractors - Trattorini 9,9 10,8% 10,2 11,6% Others (pumps, blowers, hedge
Slide 12: Consolidated P&L Accounts
Economic and financial data Consolidated P&L Accounts 2002 % 2003H1 % 2002H1 % GROWTH 147,0 100% Turnover 91,6 100% 87,5 100% 4,6% 22,9 15,6% Ebitda 16,5 18,0% 15,2 17,4% 8,4% 16,8 11,4% Ebit 13,6 14,8% 12,3 14,1% 10,3% Net financ. (1,4) 1,0% expences (0,4) 0,4% (1,0) 1,1% Income before 15,3 10,4% t
Slide 13: Consolidated assets and liabilities
Economic and financial data Consolidated assets and liabilities 2002 2003H1 2002H1 24,2 Net fixed assets 24,3 25,2 60,5* Net current assets 64,8* 57,9* 84,7* Total invested capital 89,1* 83,1* 65,1* Net Equity 67,7* 61,0* 0,5* Minority interests 0,6* 0,5* (19,1) Net financial position (20,8) (21,6)
Slide 14: Market Outlook
Market Outlook Europe and USA: • 80%÷85% of total world market • demand mostly for replacement products, driven by GDP growth • weather conditions extremely negative in Europe in the past season (high temperature, no rain) Developing countries: • increasing demand in East Europe and Far East South A
Slide 15: Market Outlook
Market Outlook • 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 Eu
Slide 16: Emak targets
Emak targets Growth of sales turnover higher than market increase Growth of operative profitability 16
Slide 17: Strategic Guidelines
Strategic Guidelines In order to reach these objectives EMAK has develop a focused strategy aiming to the achievement of excellence on five points • Product Innovation • Competitiveness • Quality • Distribution Network • Resources 17
Slide 18: Strategic Guidelines: Product innovation
Strategic Guidelines Product innovation • better understanding of customer needs • engineering with style Burn Right : a new generation of clean engines 18
Slide 19: Strategic Guidelines: Competitiveness
Strategic Guidelines Strengthening of competitive position through Product cost reduction plans New plant in China for “price sensitive” products Extensive use of ICT to re-engineer corporate organization and process (E- team work / ABC – ABM/PLM) 19
Slide 20: Strategic Guidelines: Quality
Strategic Guidelines Quality • Fit for use concept • Reliability •Measurement of customer satisfaction 20
Slide 21: Strategic Guidelines: Strengthening of distribution network
Strategic Guidelines Strengthening of distribution network Focus on markets directly controlled by Emak • consolidation of leadership position in Italy • increased market shares of Emak subsidiaries in F, D, UK, E, BLX • acquisition of STAUB brand in France 21
Slide 22: Strategic Guidelines: Distribution network and marketing
Strategic Guidelines Strengthening of distribution network Marketing activities • strengthen Oleo-Mac and Efco brand awareness to increase sell-out dealer (Oleo Mac Star and Efco Plus) Improvement of after sale service • improvement of product support also through ICT • improvement of spare parts pr
Slide 23: Strategic Guidelines: Resources optimisation
Strategic StrategicGuidelines Guidelines Resources optimisation Resources optimisation Human resources Human resources Working capital Working capital Investments 2023
Slide 24: Strategic Guidelines: Investment Policy
Strategic Guidelines Investment Policy 2000/2002 2003/2005 % on Turnover/yearly 5% 6% Breakdown: R&D 16% 23% New Product 24% 42% Production Equipments 22% 15% ICT 8% 10% Buildings 30% 10% 24
Slide 25: 2003: results estimation
2003: results estimation 2003 E 2002 Turnover 153 mln € 147 mln € EBITDA/Turnover 16% 15,6% EBIT/Turnover 12% 11,4% 25
Slide 26: In collaboration with Borsa Italiana S.p.A. - Divisione STAR
In collaboration with BORSA ITALIANA S.P.A. - Divisione STAR