Trimas Corporation · NASDAQ:TRS
Trimas — Investor Day (January 2016)
48 slides from Trimas's investor day presentation, Jan 20, 2016
Slide 1: Aerospace Analyst & Investor Meeting January 20, 2016
Aerospace Analyst & Investor Meeting January 20, 2016
Slide 2: Forward-Looking Statement
Forward-Looking Statement Forward-Looking Statement Any “forward-looking” statements contained herein, including, but not limited to, those relating to the Company’s business, financial condition or future results, involve risks and uncertainties, including, but not limited to, risks and uncertainti
Slide 3: Agenda
Agenda • Opening Remarks – Dave Wathen • Aerospace Business Presentation – Tom Aepelbacher and Team ‒ TriMas Aerospace Overview ‒ Industry Overview ‒ Key Strategies – Growth and Margin Improvement ‒ Summary • Question and Answer Session • Allfast Facility Tour • Additional Discussion and Q&A 3
Slide 4: Opening Remarks
Opening Remarks
Slide 5: Vision, Core Values & Strategic Priorities
Vision, Core Values & Strategic Priorities VISION To be a trusted global leader in delivering innovative, engineered product solutions to our customers with superior quality, speed and value. Strategies in place to drive increased shareholder value and returns. 5
Slide 6: Business Overview
Business Overview (Dollars in millions; from continuing operations) Revenue: $337.2 Op. profit margin(1): 24.1% Revenue: $204.2 Op. profit margin(1): 1.0% Revenue: $169.4 Op. profit margin(1): 17.2% Revenue: $183.8 Op. profit margin(1): 14.1% Market-leading businesses with higher margin profiles. LT
Slide 7: Financial Overview
Financial Overview • Positive end market trends include aircraft build rates, shift to composite aircraft and automated assembly • Organic and acquisition capital invested to broaden product portfolio and increase capacity • Margins recently impacted by costs related to acquisitions, new facilities
Slide 8: TriMas Aerospace Overview
TriMas Aerospace Overview
Slide 9: Team Introductions
Team Introductions Keith Brunell Vice President Sales & Marketing Omar Honegger Vice President Engineering, Research & Technology Brian MacDonald General Manager Tom Aepelbacher President Brandon Perlich Division Finance Officer John Gonzalez General Manager & Vice President Operations Julius Uhlman
Slide 10: Key Messages
Key Messages • Positive end market dynamics and trends • Market leader in multiple product areas – capabilities for growth in others • Leveraging broad product portfolio – expanded product portfolio provides scale at customers • Extensive product specification process and intellectual property creat
Slide 11: TriMas Aerospace Overview
TriMas Aerospace Overview Significantly broadened product portfolio and increased capacity during the past three years – positioned for growth and margin expansion. October 1991 TriMas acquires Monogram Aerospace Fasteners November 2015 Parker Hannifin facility acquisition August 2014 New President
Slide 12: 2015 was a busy, transitional year
• Launched TriMas Aerospace at Paris Airshow – combining four main brands of Monogram, Allfast, Mac Fasteners and Martinic Engineering into one offering • Built new team including aerospace fastener industry experts • Won Silver Supplier Award at Boeing and Supplier of the Year at Embraer • Signed l
Slide 13: TriMas Aerospace Overview: Broad product portfolio
TriMas Aerospace Overview Broad product portfolio of established brands – leveraging one aerospace platform. Rotary Blind Bolts Temporary Fasteners Pin & Collar Fasteners Collars Screws Tooling Blind Rivets Solid Rivets Blind Bolts Temporary Fasteners Installation Tools Standard Screws 12-Point Bolt
Slide 14: Product and brand sales mix
Rotary Blind Bolts Solid Rivets Screws/Bo lts Pulled Blind Fasteners Machined Compone nts Temporar y Fasteners Other • Acquired Martinic and Mac Fasteners in 2013 and Allfast in 2014 • In November 2015, acquired Tolleson, Arizona facility of Parker Hannifin, which manufactures complex machined parts
Slide 15: Locations and geographic sales breakdown
BRAND Allfast Fastening Systems Mac Fasteners Martinic Engineering Monogram Aerospace Fasteners TriMas Aerospace Overview Opportunities to expand with global customers. City of Industry, CA Stanton, CA Commerce, CA Tolleson, AZ Tempe, AZ Ottawa, KS Paris, AR Additional sales offices in Europe and As
Slide 16: Sales breakdown and key customers
Civil Militar y Long-term relationships with customers – provide superior quality and lead times to ensure positive customer feedback. Sales Breakdown Based on 2015 management estimates Key Customers TriMas Aerospace Overview OEM Distribu tion 16
Slide 17: Products, applications and value proposition
TriMas Aerospace Overview Brand Product Application Value Proposition High Strength Blind Fasteners Tight or one-sided access areas, composite control surfaces and structure Proprietary automated fasteners reduce labor and provide installed cost savings Blind Rivets Thin skin assemblies Responsive s
Slide 18: Solid and Blind Rivet Product Placement
TriMas Aerospace Overview Solid Rivet Product Placement Blind Rivet Product Placement Wings 18
Slide 19: Blind Bolt and Standard Screws Product Placement
TriMas Aerospace Overview Blind Bolt Product Placement Standard Screws Product Placement Systems and Payloads NAS Screws Engines AS Std 12-Point Bolts Interiors AN, NAS and MS Screws Bulkheads AN, NAS and MS Bolts Structural MS Bolts Aircraft Skin Dovetail Recess Screws Nacelles MAF Adjustable Pins
Slide 20: Martinic Product Placement
Auxiliary Power Unit Fuel Inerting Pallet Fuel Manifolds Fixtures A/C System Housing Fuel System Components Hydraulic System Housings TriMas Aerospace Overview Martinic Product Placement 20 TriMas Aerospace is well-positioned on the interior and exterior of current and future aircraft.
Slide 21: Industry Overview
Industry Overview
Slide 22: Boeing and Airbus Build Rates
Boeing and Airbus Build Rates Note: Total numbers shown above include selected Boeing and Airbus platforms. Source: ICF International presentation from October 2015. Build rate growth every year with a step function in 2017. Platforms 2012A 2013A 2014A 2015E 2016E 2017E 2018E A320 447 493 490 478 35
Slide 23: Key Platforms for TriMas Aerospace
Key Platforms for TriMas Aerospace Civil A320 ++ A350 ++ A380 + B737 +++ B747 + B777 ++ B787 +++ Tables below represent most significant platforms for TriMas Aerospace: TriMas Aerospace is positioned for growth. Military F-18 - - C-17 - - - F-35A + The “+” or “-” and number of each, is illustrativ
Slide 24: Other Industry Trends
Other Industry Trends • Robotic assembly – blind bolts are preferred approach for automated aircraft assembly and one-sided installations • Shift to composite – more content on several newer, composite aircraft programs compared to legacy programs • Inventory reductions at distributors and OEMs cons
Slide 25: Key Strategies – Growth and Margin Improvement
Key Strategies – Growth and Margin Improvement
Slide 26: Growth Strategies
• Grow with projected increase in build rates • Leverage one aerospace platform – expand with existing customers and products • Expand and develop products ‒ Current products (share, new applications) ‒ New products (standards, innovate) • Acquire complementary companies Growth Strategies Many oppor
Slide 27: Leverage One Aerospace Platform
Complexity and Price Industry Volume Higher Higher Lower Lower Composi-Lok Rotary Blind Bolts OSI Bolts Solid Rivets Blind Rivets Blind Bolts Temporary Fasteners Standard Screws 12-Point Bolts Position TriMas Aerospace as the aerospace fastener supplier of choice. Leverage One Aerospace Platform Com
Slide 28: Leverage One Aerospace Platform: Examples of success
Examples of success: • Major distributors ‒ Customer annual strategy sessions ‒ Martinic ‒ Allfast • Airbus ‒ Mac Fasteners Leverage One Aerospace Platform Broader product portfolio and increased sales leading to new opportunities. 28
Slide 29: Expand and Develop Products
Expand and Develop Products Product differentiation, intellectual property, long development cycles and specification process create barriers to entry. Time to Achieve Share Gain On existing products and applications Application Growth On qualified product on new programs Qualifications Of existing
Slide 30: Engineering, Research & Technology Team
Unique approach to drive the development of new protected products, while collaborating with customers on requested new solutions. ENGINEE R IN G • Engineering support to customers at local plant level as needed • Technical support services to customers • Intellectual property portfolio management R
Slide 31: Near-term and Longer-term Benefits
Near-term Benefits • Addresses immediate customer- focused needs • Connects customer engineers with TriMas Aerospace engineers • Provides additional customer “touchpoints” and customer service • Recommend current products to solve customer problems • Provides direct resources to take advantage of ne
Slide 32: Existing Product Growth
Significant opportunity to grow within current product sets. Existing Product Growth Product Category Market Size(1) Market Share(1) Opportunity Collars (Monogram) $190 million 3% +++ Solid Rivets (Allfast) $75 million 50% ++ Blind Rivets (Allfast) $150 million 20% ++ 12-Point Bolts (Mac Fasteners)
Slide 33: Product Expansion
Product opportunities for future growth. Product Expansion Market Size Current Share Comp le x it y 2016 2017 2018 Temporary Fasteners Blind Fasteners Solid Rivets Screws Collars Engine Bolts Studs Nuts Inserts Sleeved Pins Expand and Develop Products Fittings Machined Components (not drawn to scale
Slide 34: Complementary Acquisitions
Expect top and bottom line growth from recent acquisitions – potential for future acquisitions to accelerate growth. Complementary Acquisitions • Generational asset to build scale, add management capability and broaden product portfolio • Business significantly integrated into TriMas Aerospace 15 mo
Slide 35: Margin Expansion Strategies
Margin Expansion Strategies • Execute on profitable growth strategies • Leverage one aerospace platform • Continue implementation of TriMas Operating System TriMas Aerospace is focused on expanding margins – using all the tools and tactics available. 35
Slide 36: Execute on Profitable Growth
Execute on Profitable Growth • Increased sales over existing fixed cost structure will drive higher margins – already invested in much of required capacity • Pricing strategies • More favorable product mix ‒ New collar families have higher margins due to product complexities ‒ Returning to normalize
Slide 37: Leverage One Aerospace Platform
Leverage One Aerospace Platform • Organization has been restructured – continues to be refined • Sharing of best practices creates additional opportunities • Ability to leverage ‒ Material spend ‒ Indirect labor ‒ Supply chain ‒ Recent examples: tooling, wire, rebuild of equipment and insourced spec
Slide 38: TriMas Operating System
TriMas Operating System • Implemented the TriMas Operating System (TOS) at all locations • Implementing strategic manufacturing center highlighting all customer requirements • Revamped SIOP (Sales, Inventory and Operating Plan) process • Instituted capacity planning (daily metrics) • Instituted Mana
Slide 39: The Attack on Margin Improvement
The Attack on Margin Improvement • Analyzed last eight years of market and plant conditions to create GAP analysis • Set up actions and assigned accountability • Defined measures and analyzed current state versus past state • Defined success Focus on metrics and data driven decisions – driving conti
Slide 40: TriMas
SS TriMas
Slide 41: Bridging Segment Profitability
Bridging Segment Profitability • Mid-to-high single-digit sales growth • Profit expansion driven by a mix of organic growth, complementary acquisitions and internal cost initiatives • Half of margin expansion expected from execution of internal TriMas Operating System initiatives • Other half of mar
Slide 42: Aerospace Takeaways
Aerospace Takeaways Strategic Priorities Be a Workplace of Choice for Great People Drive Profitable Growth Enhance Margins Optimize Resource and Capital Allocations • Leverage combined platform for future growth • Collaborate with customers to develop value-added, innovative products for future airc
Slide 43: Key Messages
Key Messages • Positive end market dynamics and trends • Market leader in multiple product areas – capabilities for growth in others • Leveraging broad product portfolio – expanded product portfolio provides scale at customers • Extensive product specification process and intellectual property creat
Slide 44: Questions and Answers
Questions and Answers
Slide 45: Allfast Facility Tour
Allfast Facility Tour
Slide 46: Facility Tour
Facility Tour • Square footage: Building 1 – 118,000 Building 2 – 65,000 • More than 230 employees • Years at location: Building 1 – 35 years Building 2 – 3 years • Two shifts at Allfast: 5:00 AM – 1:30 PM and 1:30 PM – 10:00 PM Main Building 46
Slide 47: Additional Discussion Questions and Answers
Additional Discussion Questions and Answers
Slide 48: Investor Relations Contacts and Events
Investor Relations Contacts and Events Investor Relations Contacts Future Investor Events March 7 – Seaport Global Securities 1x1 Industrial Conference – San Francisco March 8-10 – JPM Aviation, Transportation & Industrials Conference – New York March 14-16 – Roth OC Conference – Dana Point, CA To b