Commercial Vehicle Group, Inc. · NASDAQ:CVGI
Commercial Vehicle — Bank of America Merrill Lynch 2019 Leveraged Finance Conference
23 slides from Commercial Vehicle's conference presentation, Dec 3, 2019
Slide 1: Fourth Quarter 2019 Investor Presentation
Patrick Miller President & CEO Tim Trenary Chief Financial Officer & Treasurer Kirk Feiler VP Corporate Development & COMMERCIAL VEHICLE GROUP, INC. Investor Relations Fourth Quarter 2019 Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and sim
Slide 3: Commercial Vehicle Group - NASDAQ: CVGI
Commercial Vehicle Group - NASDAQ: CVGI • ~$900 million global manufacturer to commercial vehicle industry • Leading supplier of electrical wire harnesses, seating systems and Who We other cab related products Are • Growing provider of control panels and electro-mechanical assemblies • Managing comp
Slide 4: 2018 Sales
2018 Sales Region Product 11% 7% N. America 8% Seating Systems 18% EMEA 41% Wire Harnesses APAC 22% Trim 71% Structures 22% Wipers / Mirrors End Market Customer Volvo 8% OEM Truck 4% 19% 5% Daimler OEM Construction 33% 15% 46% Paccar Aftermarket 16% Caterpillar OEM Automotive 6% John Deere 22% 11% 7
Slide 5: Products
Products Wire Harnesses & Controls Seats & Seating Systems Wiper Systems, Mirrors & Interior Trim Controls Cabs and Sleeper Boxes Page | 5 COMMERCIAL VEHICLE GROUP, INC.
Slide 6: FSE Overview
FSE Overview ➢ Acquisition completed on September 17, 2019 ➢ Aligns with CVG’s business model and strategy ▪ Focus on complex, low- to mid-volume applications ▪ Product lines expand CVG’s reach into the electronic space ➢ Products and capabilities include: ▪ Military electronic devices and systems ▪
Slide 7: Electrical Systems $513 million
Electrical Systems Electrical Systems Segment: Electrical wire harnesses and control panel assemblies for increasingly complex and content-rich electrical and data distribution systems in vehicles and other applications; trim products evolving to include electrical content FY 2018 MARKET SECTOR MIX
Slide 8: Growth Drivers – Electrical Systems
Growth Drivers – Electrical Systems ➢ Macro Economic Trends - Global electrical distribution market expected to grow 6.5% CAGR through 2023* ➢ Diversification - Adjacent market penetration in electric and traditional powertrain, industrial applications, military, rail and other applications ➢ Digita
Slide 9: Global Seating $398 million
Global Seating Global Seating Segment: Strong brand recognition in $3.1B addressable global market* (~$15B available market)* with established market position and new wins in Asia Pacific market FY 2018 MARKET SECTOR MIX PRODUCT METRICS (SALES) PORTFOLIO SALES 7% 5% Seats and Seating Systems $398 mi
Slide 10: Growth Drivers – Global Seating
Growth Drivers – Global Seating ➢ Brand - Strong brand recognition ➢ Product Enhancements - New modular seat product leverages product engineering, design and manufacturing capabilities across end markets; maintains functionality and styling options while reducing complexity and cost ➢ Global Trends
Slide 11: End Market Outlook - North America
End Market Outlook - North America Heavy-Duty Truck (Class 8) Build (000’s) Medium-Duty Truck (Class 5-7) Build (000’s) 345 343 324 273 273 266 274 292 249 260 261 256 262 238 2017 2018 2019E 2020E 2021E 2022E 2023 E 2017 2018 2019E 2020E 2021E 2022E 2023E Source: October 2019 ACT Research Report ➢
Slide 12: End Market Outlook – Global Construction Equipment
End Market Outlook – Global Construction Equipment MD-HD Construction Machinery (000’s) 1,222 1,121 1,007 896 2017 2018 2019E 2020E Source: Management estimates, Millmark, S&OP data ➢ Global MD-HD construction machinery growth driven by infrastructure and oil spending ▪ Decline in production volumes
Slide 13: Secular Growth Themes Drive Investment
Secular Growth Themes Drive Investment Target high-growth, less Target high-growth, cyclical less adjacent markets (e.g. cyclical industrialmarkets automation) Trends driving Grow core wire harness proliferation of Deliver differentiated and trim products with electrical solutions new customers comp
Slide 14: 2019 Finance Update
2019 Finance Update COMMERCIAL VEHICLE GROUP, INC.
Slide 15: Consolidated Statement of Income for Nine Months Ended September 30
Consolidated Statement of Income for Nine Months Ended September 30 $M except per share data 2019 2018 Change Revenue 711.8 674.1 5.6% Gross Profit 99.6 98.6 1.0% Gross Margin 14.0% 14.6% SGA 49.0 45.2 8.4% Operating Income 49.5 52.4 (5.6)% Operating Margin 7.0% 7.8% Diluted Earnings Per Share $ 0.8
Slide 16: Cost Impacts Decline
Cost Impacts Decline $ Millions $3.0 $2.5 $0.8 $0.5 $2.0 $1.5 $0.8 $1.2 $1.0 $0.3 $0.5 $1.1 $0.6 $0.7 $0.2 $0.0 1Q 2Q 3Q Mexican Wage (net) Troubled Supplier Manufacturing Investments ➢ Actions taken to lessen the impact of headwinds, including pricing and cost-out initiatives, have been successful
Slide 17: Electrical Systems Segment Results for Nine Months Ended September 30
Electrical Systems Segment Results for Nine Months Ended September 30 Electrical Systems 2019 Sales $M 2019 2018 Change Revenue 417.0 385.7 8.1% Gross Profit 58.9 57.6 2.3% 20% Truck OEMs Gross Margin 14.1% 14.9% Construction OEMs 10% 52% SG&A 11.9 11.3 4.8% Aftermarket / OE Service 18% Other Operat
Slide 18: Global Seating Segment Results for Nine Months Ended September 30
Global Seating Segment Results for Nine Months Ended September 30 Global Seating 2019 Sales $M 2019 2018 Change Revenue 305.1 298.3 2.4% Gross Profit 40.8 41.5 (1.7)% 10% Truck OEMs Construction OEMs Gross Margin 13.4% 13.9% 21% 51% Aftermarket / OE Service SG&A 15.6 16.9 (7.8)% 18% Other Operating
Slide 19: Disciplined Capital Management
Disciplined Capital Management Capital Structure Capital Allocation Priority ($M) 9/30/2019 9/30/2018 Cash 38.7 57.5 Liquidity ABL Availability 70.5 63.3 Total Liquidity 109.2 120.8 Growth Debt 162.1 169.5 TTM EBITDA 76.3 77.9 Gross Leverage 2.1x 2.2x De-lever Net Leverage 1.6x 1.4x See appendix for
Slide 20: Investment Highlights
Investment Highlights ➢ Leading supplier of electrical wire harnesses, seating systems and a full range of cab related components to the global commercial vehicle industry ➢ Recent acquisition of FSE diversifies product offerings and end markets ➢ Industry and secular trends support growth potential
Slide 21: Appendix
Appendix COMMERCIAL VEHICLE GROUP, INC.
Slide 22: Use of Non-GAAP Measures
Use of Non-GAAP Measures This presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Management uses these non-GAAP financial measures internally to evaluate the Company’s performance, engage in financial and operat
Slide 23: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Trailing Twelve Months $ Millions Ended September 30th, 2019 2018 Net Income $ 35.7 $ 28.4 Interest 18.4 12.6 Provision for Income Taxes 7.6 21.2 Depreciation 13.2 14.4 Amortization 1.4 1.3 EBITDA $ 76.3 $ 77.9 As of September 30th, 2019 2018 Deb
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