Nn, Inc. · NASDAQ:NNBR
Nn — Investor Day (February 2015)
58 slides from Nn's investor day presentation, Feb 5, 2015
Slide 1: 2015 Investor Day Conference: Growing into the Future
2015 Investor Day Conference: Growing into the Future February 5, 2015
Slide 2: Robbie Atkinson, Corporate Treasurer and Investor Relations Manager
New York Investor Day 2015 Robbie Atkinson Corporate Treasurer and Investor Relations Manager History of building and organizing financial infrastructures Joined NN from Regions Financial Corporation where he held several positions, most recently serving as Vice President of Commercial Banking in th
Slide 3: Forward-Looking Statement & Disclaimer
Forward-Looking Statement & Disclaimer Forward Looking Statement: With the exception of the historical information contained in this presentation, the matters described herein contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation
Slide 4: Richard D. Holder, President & CEO
New York Investor Day 2015 Richard D. Holder President & CEO Highly successful history of growing profitable organizations by acquisition, organic growth, and adjacent market growth Joined NN from Eaton Corporation where he held several leadership positions, most recently serving as President of Eat
Slide 5: Agenda
Agenda NN: A Diversified Industrial Company Overview Strategic Plan Update Financials / Market Outlook Group Presentations Autocam Precision Components (APC) Group Metal Bearing Components (MBC) Group Summary Question & Answer Session New Company, No Limits, Endless Opportunities, Growth Beyond End
Slide 6: Building a Diversified Industrial
Building a Diversified Industrial
Slide 7: Hallmarks of a Successful Diversified Industrial
Hallmarks of a Successful Diversified Industrial Outgrowing End Markets Solid Strategy Transformational Technology Flawless Execution Techno
Slide 8: Building a Diversified Industrial: Our Strategy
Building a Diversified Industrial Our Strategy… Focus on a high precision portfolio and outgrowing end markets Build a balanced business that earns through the cycle Invest in and develop transformational technology Develop a fully integrated operating system that supports all of our businesses
Slide 9: Progress against other diversified industrials
Building a Diversified Industrial We have made significant progress against other DIs… Rank among comparable S/Mid-Cap DIs Metric Rank 2012—13 2013—14 Sales Growth 8 1 +7 Adjusted Operating Margin 5 +3 Return on Equity 8 5 +3 Total Return 10 1 +9 P/E Ratio 5 6 -1 but we remain undervalued to our pee
Slide 10: EV/EBITDA versus S/Mid Cap and Premiere DIs
Building a Diversified Industrial year into the Strategic Period EV/EBITDA 8 S/Mid Cap DIs Premiere DIs NN Actuant Altra Ametek Circor Colfax Crane Kaman Park Ohio Worthington Eaton ITW Honeywell Danaher NN multiple based on midpoint of 2015 EBITDA Guidance Source: Bloomberg Analytics
Slide 11: Company Overview
Company Overview
Slide 12: Corporate Organization
Corporate Organization President & CEO Richard Holder James Dorton, CFO William Kelly, CCO Thomas Burwell, Controller Gail Nixon, VP HR Robbie Atkinson, Treasurer & IR Scott Weinstein, CIO Corporate Integration & Transformation James Widders Daniel Brown Angel Calderon Metal Bearing Components Jeffr
Slide 13: Value Proposition
Value Proposition Ability to manufacture precision products with ultra tight tolerances in high volume Total product life cycle Established global footprint Highly specialized skill and engineering in bearing components and precision machining Significant proprietary knowledge and trade secrets Lead
Slide 14: Differentiation
Differentiation High precision manufacturing Operating tolerances of <1 micron Specialty machine building and in-house tooling leading to significant competitive advantages – trade secrets Application specific customer design Repeatable high volume global manufacturing in millions of parts per day Z
Slide 15: Global Footprint
Global Footprint - Metal Bearing Components - Autocam Precision Components - Plastic & Rubber Components - Corporate Headquarters 25 high precision manufacturing facilities on 4 continents
Slide 16: 2014 Strategic Progress
2014 Strategic Progress
Slide 17: 2014 at a Glance
2014 at a Glance January: Presented our strategic plan with goals to double revenue and triple EPS by 2018 —, , IL and Juarez, Mexico June: Acquired tapered roller manufacturer RFK, located in Bosnia & Herzegovina July: Acquired the assets of Chelsea Grinding Company, a cylindrical roller manufactur
Slide 18: Foundation for Growth
Foundation for Growth Five new Board appointments since 2012 New President & CEO in 2013, key management retained Developed Treasury, FP&A, Supply Chain, Shared Services and IT group infrastructure Design of the NN Operating System Enhanced management bandwidth with acquisitions The fundaments of ou
Slide 19: Strategic Plan Progress: Segment Mix
Strategic Plan Progress Segment Mix 21% 9% 9% 70% 51% 43% 52% 39% 6% 9% Metal Bearing Components Plastic & Rubber Components Autocam Precision Components The fundaments of our plan have not changed. We will continue to deliver on our commitments.
Slide 20: Strategic Plan Progress: End Market Mix
Strategic Plan Progress 4% 5% 5% 8% 10% 8% 17% 70% 9% 31% 60% 50% 39% 52% 32% End Market Mix Light Auto Industrial/Aerospace/Medical Commercial Transportation General/Plastics The fundaments of our plan have not changed. We will continue to deliver on our commitments.
Slide 21: Strategic Plan Accomplishments in 2014
Strategic Plan Accomplishments in 2014 Corporate Identity and Branding Operational Excellence Functional Excellence One Corporate Identity Enhanced Marketing Common Customer Solutions Top Down Strategy New Supply Chain Operations Financial and Business Systems Consolidation Level 3: Offset Economic
Slide 22: Today
Today 2015 forecasted revenue of $690M—$710M Traded on Nasdaq (NNBR) Global reach, local depth 25 manufacturing facilities with operations in 10 countries 4,200 employees Continuous investment in technology leadership Supplying to diversified end markets in over 30 countries NN founded in Erwin, TN
Slide 23: Road to $1 Billion
Road to $1 Billion $ Millions $1,000 $1,000 $1,000 $926 $900 $800 $772 $700 $680 $600 $500 $400 $373 $300 $200 2013 Base 2018 2014 Full Year Pro Forma Revenue Organic Growth 3% per Year Adjacent Markets 5% per Year Acquisitions Outpace the Market with Expanded Focus and Investment $1+ billion in rev
Slide 24: James H. Dorton, Senior Vice President & Chief Financial Officer
New York Investor Day 2015 James H. Dorton Senior Vice President & Chief Financial Officer 30+ year career in public company financial management Joined NN in 2005 as CFO after serving as CFO of Specialty Foods Group Previously held several leadership positions at Bowater, Inc. and Intergraph Corpor
Slide 25: Expanding Operating Margins
Expanding Operating Margins APC MBC PRC 2013 Operating Margin 2018 Operating Margin
Slide 26: Strategic Building Blocks 2018
Strategic Building Blocks 2018 31.9% EPS CAGR 18.2% ROIC 21.8% Sales CAGR 37.5% Operating Income CAGR 25.8% Manufacturing Margin
Slide 27: Today & Future Vision – Segment Mix
Today & Future Vision – Segment Mix Revenue = $680M* Revenue = $1B Metal Bearing Components Plastic & Rubber Components Autocam Precision Components *Proforma full year consolidated revenue
Slide 28: Today & Future Vision – End Markets
Today & Future Vision – End Markets Revenue = $680M* Revenue = $1B 5% 0% 8% 17% [PERCENTAGE] 10% 0% 8% [PERCENTAGE] 32% Light Auto Industrial/Aerospace/Medical Commercial Transportation General/Plastics *Proforma full year consolidated revenue
Slide 29: Macro Trends
Macro Trends Positioned to become the feeder company of choice in our markets Tier 1 and Tier 2 suppliers are concentrating on purchasing with fewer, larger suppliers Supply chain localization continues to gain momentum Low cost oil is an economic stimulus CAFE Standards driving global innovation
Slide 30: Macro Trend: CAFE Standards
Macro Trend: CAFE Standards Global Fuel Efficiency Standards U.S. fuel efficiency requirements increase from 35 MPG in 2014 to 56 MPG in 2025 ? 60% higher The EU’s 2020 requirement of 77 MPG is ~40% higher than the U.S. same-year requirement China and Japan will both require fuel efficiency to reach
Slide 31: Financial Strategy / Policy
Financial Strategy / Policy Build upon a strong, global operating platform while maintaining financial strength and flexibility Financial policy: Maintain healthy leverage over business cycles and strategic growth period: Debt to EBITDA 2.0x – 3.0x, < 4.0x at peak Cash flow priorities: 1) Debt repay
Slide 32: Autocam Precision Components Group
jp auiocam Precision Components Group
Slide 33: Warren A. Veltman, Senior Vice President & Autocam Precision Components Group
New York Investor Day 2015 Warren A. Veltman Senior Vice President & Autocam Precision Components Group 31 year career in financial management Joined NN in 2014 after serving as CFO of Autocam since 1990 During his career at Autocam Mr. Veltman helped steer the company through an IPO, and through se
Slide 34: APC Group Organization
APC Group Organization John Buchan Vice President Operations Ed Hekman Vice President Business Development Mark Scott Director of Finance Robert Fraser Director of Information Systems Mike Clay Technical Director Years with Autocam Industry Experience
Slide 35: APC Group Overview
APC Group Overview Produce complex close tolerance precision components through highly engineered process technologies and advanced machining development Target transportation and general industry segments whose advancing technologies provide expanding growth opportunities and result in a balanced e
Slide 36: APC global footprint
Marshall, MI (2) Kentwood, MI (2) Wheeling, IL Juárez, Mexico Marnaz, France Dowagiac, MI Wellington, OH (2) Kamienna Góra, Poland São João da Boa Vista, Brazil (2) Boituva, Brazil Wuxi, China Wuxi, China (JV) Strong global footprint allows NN to serve customers around the world
Slide 37: Market Size: Fuel Saving Segment
Market Size: Fuel Saving Segment Product Segments, Markets and Customers Fuel Systems Powertrain Power Steering Electric Motors Addressable $2 billion $1 billion $500 million $300 million Market (2014) 17% 13% 10% 10% Market Growth CAGR CAGR CAGR CAGR Technologies GDI Conversion VVT/VCT More Electri
Slide 38: Target Segments: Fuel Saving Technologies
Target Segments: Fuel Saving Technologies GDI HP Diesel VCT/VVT Multi-Speed Trans EPS MPG Increase + 15—20% (1) + 20—30% (1) + 4—6% (2) + 5—10% (3) + 3—5% (4) CPV Impact + $54 (1) + $89 (1) + $10 (2) + $20 (3) + $4 (4) Market Growth > 17% CAGR > 10% CAGR > 10% CAGR > 15% CAGR > 10% CAGR Global Adopt
Slide 39: Segments: General Industrial, Aerospace
Segments: General Industrial, Aerospace Product Segments, Markets & Customers Consumer Tools HVAC Rec/ATV Industrial Motors Aerospace Fluid Power Addressable $2 billion $3 billion $200 million $3 billion $10+ billion $5+ billion Market (2014) Market Growth Technologies Longer battery life, EPS (Stee
Slide 40: APC Customer Profile
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Slide 41: Sales Growth Path – China JV
Sales Growth Path – China JV Wuxi Weifu Autocam Precision Machinery Co. Ltd. • JV Partner - Wuxi Weifu High-Technology Co., Ltd., publically traded on the Shenzhen Stock Exchange • Location — Wuxi, China • Business Purpose— manufacture high-precision automotive parts for relevant domestic manufactur
Slide 42: APC: Road to $500 Million
APC: Road to $500 Million $ Millions $500 $500 $500 $480 $475 $450 $425 $425 $400 $375 $350 $348 $325 $300 $200 2014 Base 2018 End of Life Projects $30 million Fuel Saving Technologies Growth $107 million Adjacent Markets General Industrial $55 million Strategic Acquisition $20 million Outpace the M
Slide 43: APC Summary
APC Summary Experienced management Technology leader Targeted growth markets o Transportation – fuel savings technologies o General industrial o Aerospace Global footprint Full life cycle management Our customers value our engineered process technologies, global footprint, and flexible production sy
Slide 44: Metal Bearing Components
su NN Metal Bearing Components
Slide 45: Jeffrey Manzagol, Senior Vice President, Metal Bearing Components Group
New York Investor Day 2015 Jeffrey Manzagol Senior Vice President, Metal Bearing Components Group Joined NN from Kaydon Corporation where he served as President of the Bearings Division from 2005 to 2014, leading their penetration into Renewable Energy and their acquisition of Avon Bearings Started
Slide 46: MBC Group Organization
MBC Group Organization Rob Heinrich Jeff Manzagol Senior Vice President Vice President Global Rollers Div. Dario Galetti Vice President Global Balls Div. Jeff Hodge Vice President Business Development Trevor Lynch Group Controller Mike Hand Vice President Global Sales
Slide 47: MBC Group Overview
MBC Group Overview Global Leader in the Supply of Precision Components to the Bearing Industry and other Related Applications o Precision Balls o Precision Rollers o Stamped Metal Components World Class Performance in Quality, Delivery and Cost Management 7 Factories in 6 Countries 2 Centers of Exce
Slide 48: MBC Global Footprint
MBC Global Footprint Pinerolo, Italy Erwin, TN Mountain City, TN Kysucke Nove Mesto, Slovakia Veenendaal, Netherlands Konjic, Bosnia Kunshan, China Strong global footprint allows NN to serve customers around the world
Slide 49: Global Market Size
Global Market Size Product Segments, Markets and Customers Automotive Aerospace Railway Linear Systems Fluid Power Addressable $1 billion $250 million $125 million $100 million $100 million Market (2014) Market Growth Growth Drivers Penetration in Build rate on Increased utilization Expanding indust
Slide 50: MBC High Growth Product Segments
MBC High Growth Product Segments Competitive Profile Primary Markets Market Growth Key Regions/Markets Balls Tapered Rollers Other Rollers Cages Sheet Metal Parts Primarily outsourced Automotive, electrical aero and industrial Automotive growth in developing markets Primarily insourced Industrial, a
Slide 51: MBC Customer Profiles
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Slide 52: MBC: Road to $400 Million
MBC: Road to $400 Million $ Millions $400 $400 $390 $375 $350 $325 $326 $300 $290 $275 $250 $225 2014 Base 2018 End of Life Projects $20 million Organic Growth $36 million Adjacent Markets $63 million Strategic Acquisition $20 million Outpace the Market with Expanded Focus and Investment $400 millio
Slide 53: MBC Summary
MBC Summary Strategic Priorities: Exploit the roller outsourcing trend Expand our range in industrial and aerospace bearings Expand capacity in developing markets Expand in non-bearing applications
Slide 54: Wrap Up & Summary
Wrap Up & Summary
Slide 55: Road to $1 Billion
Road to $1 Billion $ Millions $1,000 $1,000 $1,000 $926 $900 $800 $772 $700 $680 $600 $500 $400 $373 $300 $200 2013 Base 2018 2014 Full Year Pro Forma Revenue Organic Growth 3% per Year Adjacent Markets 5% per Year Acquisitions Outpace the Market with Expanded Focus and Investment $1+ billion in rev
Slide 56: Summary – NN, a Diversified Industrial
Summary – NN, a Diversified Industrial all our business groups the parts Bringing the best of NN to all our markets
Slide 57: Question & Answer
Slide 58: 2015 Investor Day Conference: Growing into the Future
2015 Investor Day Conference: Growing into the Future February 5, 2015