Forvia Se · EURONEXT:FRVIA
Forvia — Faurecia — Investor Day (May 2018)
57 slides from Forvia's investor day presentation, May 15, 2018
Slide 1: Capital Markets Day – Faurecia Transformation
Capital Markets Day May 15, 2018 Faurecia Transformation
Slide 2: Agenda
Agenda 1 2020 financial targets 2 Sustainable Mobility update 3 Smart Life on Board 4 2025 ambition Capital Markets Day – May 15, 2018 2
Slide 3: Between 2014 and 2017, Faurecia continuously increased value creation
Between 2014 and 2017, Faurecia continuously increased value creation… ACCELERATED MOMENTUM IN SALES INCREASED OPERATING MARGIN €1,170m €17.0bn €13.8bn €595m 6.9% CAGR of sales +7.2% 4.3% +260bps of sales 2014 2017 2014 2017 IMPROVING NET CASH FLOW ENHANCED ROCE 28% €435m 25% 6.9% 22% €216m 2.6% of
Slide 4: Accelerated investment in innovation whilst strengthening financial flexibility
…and accelerated investment in innovation whilst strengthening financial flexibility INVESTMENT IN INNOVATION (€m) STRENGHTENED NET DEBT / EBITDA RATIO Objective: innovation spend > €200m 160 1.3x 130 105 +23% 0.2x 2015 2016 2017 2014 2017 SUCCESSFUL REFINANCING DRAMATIC IMPROVEMENT IN CREDIT RATING
Slide 5: Market trends and assumptions
Market trends and assumptions AUTOMOTIVE MEGATRENDS (CARE) AUTOMOTIVE PRODUCTION GROWTH 2018-2025 CONNECTED AUTONOMOUS Europe North c. +1% Asia / America China c. +0.5% c. +3% South America RIDE-SHARING ELECTRIFIED c. +5% Worldwide c. +2% Currency assumptions: USD/€ @ 1.22, CNY/€ @ 7.80 from 2018 Ca
Slide 6: Powertrain mix assumptions
Powertrain mix assumptions Light vehicles 92m 107m 113m vehicles vehicles vehicles 1% Fuel cell EV ◼ Pure ICE powertrains drop from 95% in 2017 2% 4% 8% to 52% in 2030 11% Battery EV 30% ◼ Diesel powertrain decline might accelerate further 35% Hybrid 77% ◼ Fuel cell is the unique zero emissions alte
Slide 7: Autonomous vehicle assumptions
Autonomous vehicle assumptions AUTOMATION LEVELS 5 Full automation No more driver required ◼ Level 4 will be the most common automation level adopted by 2025 for autonomous vehicles 4 High Full autonomous drive automation in specific environments ◼ Light vehicles are already "autonomous" for 3 out o
Slide 8: Our 2020 financial targets confirm our strong potential for value creation
Our 2020 financial targets confirm our strong potential for value creation 2020 FINANCIAL TARGETS Operating Margin Net Cash Flow Sales target target target > €20bn 8% of sales 4% of sales Capital Markets Day – May 15, 2018 8
Slide 9: Sales growth to reach > €20bn is secured for 2020
Sales growth to reach > €20bn is secured for 2020 2020 Sales target > €20bn RECORD 2015-2017 ORDER INTAKE SALES IN CHINA c. €4.5bn CAGR +15% €62bn x2 ◼ Record 2015-2017 order intake and current Non order book secure growth at > 7% CAGR €53bn €2.2bn C-OEMs €47bn ◼ Commercial vehicles CAGR > 15% 40% C
Slide 10: Profitable growth driven by geographic, product and customer mix
Profitable growth driven by geographic, product and customer mix 2020 OM target 8% of sales SALES BY REGION SALES BY CUSTOMER TYPE Favorable regional mix Favorable customer mix RoW Premium & SUVs (incl. EVs) ◼ Strong growth in Asia drives 6% €8.0bn Asia €6.7bn margin improvement 17% 2017 €17bn 50% E
Slide 11: Global R&D Power and Blockchain for Program Management
"Global R&D Power" and "Blockchain for Program Management" 2020 Improving engineering efficiency OM target 8% of sales R&D HOURLY RATE ROADMAP ◼ 30% reduction in hourly rate through best-shoring €70 ◼ +1,200 engineers in India €64 €60 €55 2018-2020 cumulated savings of c. €100m €50 FY 2020 savings o
Slide 12: Operations Execution and Transformation
"Operations Execution and Transformation" 2020 Increased industrial efficiency OM target 8% of sales ◼ Plant ranking and program/plant risk assessment allow short and mid-term risk management to improve anticipation and reduce need for reactivity ◼ Acceleration in digital transformation ◼ Tooling au
Slide 13: Global Business Services
"Global Business Services" 2020 Leaner cost structure OM target 8% of sales EUROPE Sao Joao de Madeira Poland (Portugal), Grojec (Poland) ◼ Covering 5 support functions: Finance, Purchasing Administration, NORTH AMERICA Sales administration, HR and IT Changchun Puebla (Mexico) ◼ Centralization from
Slide 14: We target an 8% operating margin in 2020
We target an 8% operating margin in 2020, up 110bps vs. 2017, 2020 while accelerating R&D and innovation OM target 8% of sales +25 bps -100 bps +25 bps +75 bps Global ◼ Positive contribution from R&D Global Power NVS increased volumes (+23%) Business -35 bps Services puts us above 8% OM +120 bps R&D
Slide 15: We target to increase cash generation to 4% of sales
We target to increase cash generation to 4% of sales 2020 Net Cash Flow 4% of sales CONVERT2CASH INITIATIVE TO STRENGTHEN CASH CULTURE ◼ Drive the cash conversion cycle ◼ At least 60% D&D paid at launch +40 bps -45 bps ◼ Tooling paid in full 3 months after launch +40 bps -35 bps bps -10 4.0% ◼ Accel
Slide 16: Cash allocation strategy focused on bolt-on acquisitions and shareholder remuneration
Cash allocation strategy focused on bolt-on acquisitions and fair shareholder remuneration ◼ Between 2018 and 2020, Faurecia will generate c. €2bn of cumulated net cash flow ◼ Focus on bolt-on acquisitions in line with strategic priorities: ◼ New Value Spaces for Smart Life on Board and Sustainable
Slide 17: A de-risked profile and an increased resilience
A de-risked profile and an increased resilience DE-RISKED PROFILE INCREASED RESILIENCE ◼ Robust balance-sheet ◼ A more balanced geographic mix ◼ Low net-debt-to-EBITDA ratio and customer portfolio ◼ Sound financing structure ◼ Increased operational flexibility ◼ Limited exposure to bank credit ◼ Hig
Slide 18: Demonstrating our potential: Take-aways
Demonstrating our potential Take-aways ◼ 2017 – 2018 2020 2020 2020 Clear strategy deployment focused on Sales target OM target Net Cash Flow > €20bn 8% of sales 4% of sales Sustainable Mobility and Smart Life on Board Creation of FaureciaTech ◼ 2018 – 2020 ROCE to reach 30% in 2020 Accelerating pro
Slide 19: Sustainable Mobility Strategic update
Sustainable Mobility Christophe Schmitt Mathias Miedreich Strategic update
Slide 20: A world of opportunities
A world of opportunities ◼ Stringent regulations and new ultra-green technology breakthroughs ◼ All markets getting emissionized including China and India Commercial Vehicles, High Horsepower engines, industrial applications ◼ Nearly 50% of the market will be electrified by 2030 ◼ Smart Cities will
Slide 21: Relative importance of powertrains driven by regulations, use cases and cost
Relative importance of powertrains driven by regulations, use cases and cost INTERNAL COMBUSTION ENGINE ZERO EMISSIONS GDI Diesel Hybrid Natural Gas* BEV FCEV Light vehicles Europe > 2l Utility Commercial vehicles vehicles Trucks High horsepower Capital Markets Day – May 15, 2018 21 * Being reviewed
Slide 22: Addressable market growth +€32bn by 2030
Addressable market growth +€32bn by 2030 50% of growth is generated by Zero Emission market MARKET SIZE (€bn) DRIVERS (€bn) vs 2017 CAGR +8% €51.3bn CMD CAGR excl. EV +4% NEV regulations in China 19.0 Zero Emissions Additional content on battery +15 (battery pack & fuel cell) pack and stack €35.3bn
Slide 23: Faurecia sales growth +€4bn to 2025
Faurecia sales growth +€4bn to 2025 Driven by Light Vehicles Innovation and Zero Emissions SALES (€bn) MARKET SHARE €11.7bn 2017 2025 2030 CAGR +8% CAGR excl. EV +6% 2.5 Zero Emissions - 12% 13% €8.4bn 20% 0.8 High Horsepower 12% (Hug Eng.) 17% 21% 1.0 1.5 Commercial Vehicles 16% 25% 28% 0.4 9% 1.1
Slide 24: Light vehicles
Light vehicles Capturing market share through best-in-class technology to meet regulations BUSINESS OBJECTIVES TO 2025 KEY INNOVATIVE PRODUCTS Exhaust Heat Recovery System (EHRS) generation 3 CAGR +5% €5.9bn -2% CO2 for hybrid vehicles Target Innovative Compact design & cost competitive SOP 2020 1.7
Slide 25: Commercial vehicles
Commercial vehicles Faurecia growing market share through innovations & partnerships COMMERCIAL VEHICLES PRODUCT ROADMAP: INDIA/CHINA HIGHLIGHTS SINCE 2017 REGULATIONS BHARAT IV BHARAT VI / ADDITIONAL ULTRA- CHINA VI LOW NOx CONTENT ◼ China, India emissionized from 2020 2017 2020 2025 (50% global ma
Slide 26: High Horsepower – Hug Engineering
High Horsepower – Hug Engineering Leveraging Commercial Vehicles business model and technologies HIGH HORSEPOWER GROWTH PLAN HIGHLIGHTS SINCE 2017 HUG ENGINEERING GLOBAL EXPANSION / SCALE UP FAURECIA ACQUISITION OF HUG ENGINEERING NEW CUSTOMERS TECHNOLOGY 2017 2020 2025 ◼ Market leader ◼ Drive globa
Slide 27: Zero Emissions – Battery pack systems
Zero Emissions – Battery pack systems Targeting average content > €600 per battery electric vehicle BATTERY INTEGRATION PRODUCT ROADMAP HOUSING COVER BATTERY HOUSING FULL HOUSING INTEGRATING THERMAL MANAGEMENT AND BATTERY MODULE 2017 2020 2025 Faurecia content €40 to 60 €200 to 300 > €600 per vehicl
Slide 28: Zero Emissions – Fuel Cell Systems
Zero Emissions – Fuel Cell Systems Targeting up to €6,000 content per Fuel Cell Electric Vehicle FUEL CELL TARGETED PRODUCT RANGE H2 TANKS VALVE & H2 MANAGEMENT FUEL CELL STACK SYSTEM 2019 2020 2023 100KW system Faurecia content 2 tanks €2,100 €650 €3,300 per vehicle 35KW range extender €1,200 €350
Slide 29: Zero Emissions
Zero Emissions Enable zero emission take-off through breakthrough performance-to-cost BUSINESS OBJECTIVES TO 2025 HIGHLIGHTS SINCE 2017 REGULATIONS ◼ NEV regulations in China €1.0bn ◼ Low emission zones in major cities ORGANIZATION & PARTNERSHIPS ◼ Creation of Zero Emission division ◼ Key breakthrou
Slide 30: Robust and profitable growth going forward confirmed
Robust and profitable growth going forward confirmed Confirms targets presented at 2017 Capital Markets Day CAGR In €m 2017 2020 2025 2030 2017 - 2025 NEW VALUE SPACES 2018-2025 cumulated Sales 4,493 5,240 8,400 11,700 > 8% Innovation o/w Light Vehicles 4,010 4,200 5,900 6,900 5% €350m - €400m Capex
Slide 31: Sustainable Mobility Take-aways
Sustainable Mobility Take-aways Vision Strategic Drivers Ambition 2030 ◼ Be the leading clean mobility ◼ Zero emissions is a great Sales company with benchmark opportunity to enhance top ◼ €11.7bn technology and profitability line growth ◼ > 8% CAGR 2017-2030 ◼ Commercial Vehicles ◼ Leadership in fu
Slide 32: Smart Life on Board
Faurecia inspiring mobility Smart Life on Board
Slide 33: Agenda
Agenda 1 New Value Spaces Patrick Koller 2 Demonstrator Tour David Degrange 3 Value Creation Jean-Michel Renaudie/Eelco Spoelder Capital Markets Day – May 15, 2018 34
Slide 34: Agenda
Agenda 1 New Value Spaces Patrick Koller 2 Demonstrator Tour David Degrange 3 Value Creation Jean-Michel Renaudie/Eelco Spoelder Capital Markets Day – May 15, 2018 35
Slide 35: Four megatrends (CARE) transform automotive interiors paradigm
Four megatrends (CARE) transform automotive interiors paradigm CONNECTED AUTONOMOUS RIDE-SHARING ELECTRIFIED Seamless continuity Multiple use cases Specific interiors More freedom between home for non-driving individualized in interior and vehicle scenarii and adaptable architecture Consumer is the
Slide 36: The interior becomes the new differentiator
The interior becomes the new differentiator VERSATILE CONNECTED PREDICTIVE Capital Markets Day – May 15, 2018 37
Slide 37: User experience drives development of New Value Spaces
User experience drives development of New Value Spaces "You feel better at the end "You have an individual of your journey. "You always feel "You have a personal safety cocoon You collect pertinent data the perfect temperature sound bubble in all positions" for your predictive health care" and air q
Slide 38: User experience drives development of New Value Spaces
User experience drives development of New Value Spaces "The car adapts to you, "Seamless and perfect "Full cockpit architecture "Software systems you control it integration for a personalized for predictive as you wish" of technologies" experience" multi- functional experience" INTUITIVE HMI SMART S
Slide 39: Ambition to become leader in Cockpit Intelligence Platform
Ambition to become leader in Cockpit Intelligence Platform (CIP) Hardware, software, AI and services ◼ System-agnostic open and modular platform ◼ Faurecia unique position with Parrot, Accenture and our full interior scope CIP Core CIP Sense CIP Connect CIP Cloud Added-Value Services AI Additional f
Slide 40: FaureciaTech
A technology organisation to accelerate innovation and transformation FaureciaTech PARTNERSHIPS INCUBATOR & TECHNOLOGY SCALE-UP DIVISIONS PLATFORMS Cockpit of the Future Interiors ACADEMICS START UPS Seating Clean Mobility DIGITAL SERVICES FACTORY Capital Markets Day – May 15, 2018 41
Slide 41: Acquisitions and partnerships to accelerate innovation and transformation
Acquisitions and partnerships to accelerate innovation and transformation ACQUISITIONS SYSTEMS TECHNOLOGY PARTNERSHIPS PARTNERSHIPS START UP INVESTMENTS Capital Markets Day – May 15, 2018 42
Slide 42: Faurecia has unique set of key competences to develop New Value Spaces
Faurecia has unique set of key competences to develop New Value Spaces CORE COMPETENCES COMPETENCES BEING RAPIDLY ACCELERATED ◼ Systems integration ◼ Systems architecture ◼ Software & electronics, data analytics, ◼ Comfort artificial intelligence and deep learning ◼ Ergonomics, HMI and cognitive exp
Slide 43: Unique player with a full presence over all New Value Spaces
With its ecosystem, Faurecia is the unique player with a full presence over all New Value Spaces CORE BUSINESS NEW VALUE SPACES Cockpit Smart Surfaces Personalized Immersive Enhanced Intelligence Climate Advanced Interiors Seating Sound Health & Platform Comfort Safety Experience Display Interior We
Slide 44: Strategy to increase addressable market through a triple win offer
Strategy to significantly increase our addressable market through the creation of a "triple win" offer Win-win consumer and OEM Content per vehicle SYSTEMS INTEGRATION 2017 2025 Unique UX replacing multiple ECUs €150 €1,600 and reducing obsolescence (Cockpit Intelligence Platform) TECHNOBRICKS Creat
Slide 45: Agenda
Agenda 1 New Value Spaces Patrick Koller 2 Demonstrator Tour David Degrange 3 Value Creation Jean-Michel Renaudie/Eelco Spoelder Capital Markets Day – May 15, 2018 46
Slide 46: Faurecia Tour
Faurecia Tour A complete system solution offer to meet customer demand DEMONSTRATOR 1 DEMONSTRATOR 2 DEMONSTRATOR 3 DEMONSTRATOR 4 DEMONSTRATOR 5 Smart surfaces Intuitive HMI solutions Personalized climate comfort Enhanced health & wellness Advanced safety Smart actuation & air quality Intuitive HMI
Slide 47: Agenda
Agenda 1 New Value Spaces Patrick Koller 2 Demonstrator Tour David Degrange 3 Value Creation Jean-Michel Renaudie/Eelco Spoelder Capital Markets Day – May 15, 2018 48
Slide 48: Penetration of new functionalities is accelerating by 2025
Penetration of new functionalities is accelerating by 2025 Some examples SUV/ CUV/ Premium New EV Customers Penetration Penetration Function Function 2017 2025 2017 2025 XL-display 20-30% 40-60% XL-display < 10% > 90% HMI Smart Control Unit n.a. 10-30% HMI Smart Control Unit n.a. > 50% Advanced Comf
Slide 49: Ambition is to achieve leadership on the New Value Spaces
Ambition is to achieve leadership on the New Value Spaces thanks to our unique ability to offer system-optimization GROWTH OF CONTENT PER VEHICLE (CPV) AND MARKET SHARE ON FAURECIA’S ADDRESSABLE MARKETS SEATING INTERIORS COCKPIT OF THE FUTURE Market Share 2017 CPV & €400 €750 €1,200 €300 €450 €1,100
Slide 50: Faurecia unique positioning matches with customer archetypes
Faurecia unique positioning matches with customer archetypes NEW ENTRANTS PREMIUM OEMS TRADITIONAL OEMS Disruptive trendsetters Technology leaders High volume/mass production and fast time to market High content per vehicle Mainstream technology deployment Favorable business model Sustainable busine
Slide 51: Business already awarded and important interest across the board
Business already awarded and important interest across the board ALL CUSTOMERS, ALL VALUE SPACES ◼ More than €1.5bn of lifetime sales already Large displays, smart surfaces, lighting, wellness, health monitoring, thermal comfort, safety, awarded for New Value Spaces HMI solutions, connectivity, info
Slide 52: A significant Smart Life on Board growth ambition
A significant Smart Life on Board growth ambition Average growth: 33% per year from 2020 SMART LIFE ON BOARD NEW VALUE SPACES SALES €4.2bn ◼ Growth largely independent of autonomous driving deployment INTERIORS CAGR ◼ 2018-2025 cumulated: +33% SEATING ◼ Innovation €650m - €700m €1.0bn ◼ Capex €350m
Slide 53: Smart Life on Board Take-aways
Smart Life on Board Take-aways ◼ First-mover advantage through our core Seating and Interiors businesses, key competences, global presence, momentum in China and established partnerships & ecosystem ◼ BtoCtoB solution provider meeting consumer expectations ◼ Growth already starting and strong custom
Slide 54: 2025 Ambition
Patrick Koller 2025 Ambition
Slide 55: Ambition to reach €30bn of sales in 2025
Ambition to reach €30bn of sales in 2025 Secured growth for 2020 and conservative assumptions for New Value Spaces SALES (€bn) 2020 Net Cash Flow €30bn* CAGR 4% of sales > +8% OM New Value 6.8 Spaces 8% of sales CAGR > +7% CAGR > €20bn +28% €17bn 2.0 0.5 23.2 Core > 18.0 16.5 2017 2017 2020e 2020e 2
Slide 56: New Value Spaces take off in 2020 to reach almost €7bn in 2025
New Value Spaces take off in 2020 to reach almost €7bn in 2025 SALES IN NEW VALUE SPACES (€bn) TAKE-AWAYS €6.8bn ◼ Strategy perfectly aligned CAGR +39% with automotive megatrends Sustainable 2.6 Mobility ◼ Unique competitive position €2.0bn Smart Life ◼ Consumer oriented business 4.2 1.0 on Board mo
Slide 57: Faurecia inspiring mobility
‘Faurecia inspiring mobility