Carraro Business Plan 2017-2021 - Milan, 26th … · 12.00 financial summary 2017-2021 enrico gomiero, cfo 12.30 closing remarks & q&a agenda. carraro business plan 2017-2021 - milan,

1 Carraro Business Plan 2017-2021 - Milan, 26th September 2017


11.00 CARRARO VALUES ENRICO CARRARO, CHAIRMAN 11.20 BUSINESS PLAN: ALBERTO NEGRI, CEO WE KNOW HOW TO DO IT

- CARRARO TWIN SHIFTTM FULVIO LO CONTE, R&D 12.00 FINANCIAL SUMMARY 2017-2021 ENRICO GOMIERO, CFO 12.30 CLOSING REMARKS & Q&A

AGENDA


CARRARO VALUES

WE ARE ACCOUNTABLE WE CREATE VALUE WE DEVELOP TALENTS WE STIMULATE INNOVATION WE WORK TOGETHER


ALBERTO NEGRI, CEO

BUSINESS PLAN: WE KNOW HOW TO DO IT


FOUNDATION: 1932 HEADQUARTERS: CAMPODARSEGO, PADOVA – ITALY 2016 TURNOVER: 593.7 MLN € 2016 PEOPLE: 2,979 (1,289 IN ITALY)

CARRARO AT GLANCE


ENRICO

CARRARO

CHAIRMAN

TOMASO

CARRARO

VICE

CHAIRMAN

ALBERTO

NEGRI

CEO

ENRICO

GOMIERO

CFO

CARRARO MANAGEMENT TEAM

ANDREA CONCHETTO

OPERATIONS

FRANCO CALVO

SALES & MARKETING

FABIO GALLO

STRATEGIC MARKETING

ALESSANDRO GIGLI

IT & PURCHASING

STEFANO IMAGE

SPARE PARTS &

CARRARO TRACTORS

MARCO STELLA

CARRARO AGRITALIA

FULVIO LO CONTE

R&D DRIVELINES

MARIO TOLUSSO

HR & LEGAL AFFAIRS

ENRICO TRACANZAN

R&D TRACTORS

MASSIMO DEL GOBBO

QUALITY ASSURANCE


PLANTS: ITALY (1932), ARGENTINA (2000), BRAZIL (2015), CHINA (2004), INDIA (1998)

ENGINEERING CENTERS: ITALY, ARGENTINA, CHINA, INDIA

SPARE PARTS CENTERS: ITALY, USA, ARGENTINA, CHINA, INDIA

SALES OFFICES: USA (1993)

CARRARO GLOBAL FOOTPRINT

JV


TODAY CARRARO IS THE ONLY GLOBAL PLAYER ABLE TO PROVIDE COMPLETE SOLUTIONS FOR SPECIALIZED AGRICULTURAL TRACTORS, DRIVELINES AND COMPONENTS FOR AGRICULTURAL AND CONSTRUCTION MACHINERY.

CONSTRUCTION EQUIPMENT DRIVELINES & OTHERS

AGRICULTURAL DRIVELINES

SPECIALIZED TRACTORS

CARRARO PRODUCTS


MARKET SEGMENTS & MAIN CUSTOMERS CONSTRUCTION EQUIPMENT

DRIVELINES & OTHERS AGRICULTURAL

DRIVELINES SPECIALIZED TRACTORS


*2016 Sales w/out Santerno

SALES BREAKDOWN

AGRICULTURAL 51.3% CONSTRUCTION

EQUIPMENT 30.9%

SPARE PARTS 8.6%

SEGMENT GEOGRAPHICAL AREA

PRODUCT TYPE CUSTOMERS

MATERIAL HANDLING 4.1%

AUTOMOTIVE 2.7%

OTHER 2.3%

EMEA 64.8% NAFTA

11.1%

LATAM 7.6%

INDIA 11.6%

CHINA & APAC 4.9%

AXLES 42.1%

TRANSMISSIONS 15.8%

TRACTORS 20.6%

SPARE PARTS 8.6%

OTHER 2.3%

GEARS & COMPONENTS

6.6%

MH TRANSAXLES 3.6%

OTHERS 46.6%

CNH 12.6%

JOHN DEERE 10.4%

AGCO 10.2%

CLAAS 8.5% CAT

7.1% WACKER NEUSON

2% SANKO 2.7%


THE MARKET


SECULAR TRENDS OFF HIGHWAY TRENDS

DEVELOPING ECONOMIES GROWTH

SCARCE RESOURCES

MASSIVE URBANIZATION

TOTAL COST OF OWNERSHIP

ROBUST & EFFECTIVE SOLUTIONS

NEW TECHNOLOGICAL REQUIREMENTS

CARRARO TECHNOLOGY DRIVERS

EFFICIENCY & PRODUCTIVITY

(ELECTRONIC POWER MANAGEMENT,

ELECTRIFICATION)

WIDER RANGE OF PRODUCTS

(MORE VEHICLE APPLICATIONS FROM BASIC TO PREMIUM;

HEV-EV SOLUTIONS)

POWER INCREASE (BIGGER AND TECHNOLOGICAL

ADVANCED DRIVELINES)

FROM 2WD TO 4WD (AGRICULTURE)

POPULATION GROWTH

ADDENDUM

EMISSION REGULATIONS NOX


POWER INCREASE LARGER FARM DIMENSIONS

C:/Users/c06fran/Desktop/Carraro BP/Estratto MKT.pptx


‣ SYSTEM INTERCONNECTION ‣ HUMAN INTERFACE ‣ FAILURE MANAGER ‣ CONNECTIVITY / BIG DATA ‣ GPS / PRECISION FARMING

ELECTRONIC POWER MANAGEMENT & ELECTRIFICATION


‣ TRANSMISSION CONTROL / DIAGNOSTIC ‣ POWER CONTROL

‣ ASC / ABS ‣ STEER SENSOR ‣ STEER BY WIRE

CAN-BUS

DASHBOARD

ENGINE ECU & ECU

VEHICLE CAN-BUS

SYSTEM COMPETENCE TO SUPPORT OFF-HIGHWAY TECHNOLOGICAL EVOLUTION


SPECIALIZED COMPACT TRACTORS

35HP 70HP 90HP 120HP 100HP

CURRENT

FUTURE

HYBRID ELECTRIC & ELECTRIC TRACTORS

KEY TECHNOLOGIES

DUAL CLUTCH TRANSMISSION CVT TRANSMISSIONS HYBRID ELECTRIC & ELECTRIC TRACTORS

SUSPENDED FRONT AXLES CONNECTIVITY PRESSURIZED CABIN

LIGHT UTILITY

ALPINE

SPECIALIZED

TRACTORS

WIDER RANGE OF PRODUCTS EXTEND SPECIALIZED TRACTORS RANGE

STAGE V EMISSIONS & MOTHER REGULATIONS COMPLIANTS

SPECIALIZED

TRACTORS


Basic: Mechanical / Premium: Electronically controlled

Electronically controlled

Electronically controlled

Mechanical Power Shift Dual Clutch

Electrical Continuous Variable

Planetary Single or Independent Suspension

Power High-Low/ Reverse

Portal IFAS Suspension

Backhoe Loaders Wheel Loaders Tele Boom Handlers Wheel Excavators

AGRICULTURE

CONSTRUCTION EQUIPMENT

WIDER RANGE OF PRODUCTS MORE VEHICLE APPLICATIONS & FROM BASIC TO PREMIUM


MULTILINK

SUSPENDED AXLES PORTAL AXLES

MECHANICAL

& POWERSHIFT

TRANSMISSIONS

MECHANICAL & POWERSHIFT

TRANSMISSIONS

PLANETARY &

SUSPENDED AXLES

NEW CARRARO TWIN SHIFTTM TRANSMISSION

ELECTRIC CVT

KEY TECHNOLOGIES

AXLES

TRANSAXLES

35HP 70HP 500HP 400HP

CURRENT

FUTURE

DUAL CLUTCH ELECTRONIC POWERTRAIN CONTROL (ENGINE & DRIVELINE)

150HP 200HP 250HP

ELECTRIC CVT

POWER INCREASE DRIVELINES


CARRARO STRATEGIC PILLARS Q

UA

LITY

CO

ST

SER

VIC

E

GR

OW

TH

SPEE

D


CARRARO STRATEGIC PILLARS

TODAY TOMORROW FUTURE

WE KNOW HOW TO DO IT

CUSTOMER INTIMACY TECHNOLOGY CROSS-

FERTILIZATION MANUFACTURING 4.0 PARTNERSHIPS WORLDWIDE SERVICE

MARKETS

CUSTOMER SATISFACTION & RETENTION

EXPAND CUSTOMER BASE

QUALITY, COST, SERVICE IMPROVEMENT

LONG TERM AGREEMENTS

LOCAL FOR LOCAL NEW AREAS/SEGMENTS STRENGTHEN EMERGING

MARKETS

PRODUCTS

140 MLN € INVESTMENTS LAST 10 YEARS: “BRING NEW PRODUCTS TO THE MARKET”

GO BEYOND

ELECTRICAL CVT ELECTRICAL HYBRID & FULL

ELECTRIC SPECIALIZED TRACTOR

MARKETS

PRODUCTS







MARKETS






MARKETS

PRODUCTS


GO BEYOND



MARKETS

PRODUCTS


6 SPEED POWERSHIFT TRANSMISSION ELECTRONICALLY CONTROLLED WITH DIRECT DRIVE

IFAS SUSPENSION SYSTEM FOR SPECIALIZED TRACTORS

NEW LOW PROFILE CAB FOR SPECIALIZED TRACTORS

1.8

80

M

HYDRAULIC SUPER CREEPER

EMERGING MARKET GRADER

CUSTOMER INTIMACY UNDERSTAND CUSTOMER NEEDS & DEVELOP TAILOR MADE SOLUTIONS

…

TODAY


4WD ENGAGEMENT

OPTIONS:

- PRESSURE MONITOR

- STEERING ANGLE READING

- VEHICLE SPEED MONITOR

- BRAKE MONITOR

REAR ELECTRO HYDRAULIC PTO

OPTIONS:

- OUTPUT SPEED READING

- POWER MANAGEMENT

- DRIVER PRESENCE MONITOR

REAR HITCH

FRONT HYDRAULIC DIFFERENTIAL LOCK

SUSPENDED AXLE

POWER HI-LO

POWER REVERSER

DUAL CLUTCH CONTROL

ROBOTIZATION

OPTIONS:

- DRIVER PRESENCE MONITOR

- WET CLUTCH THERMAL MANAGEMENT

THROTTLE BY WIRE

CRUISE CONTROL

SPEED CONTROL DIFFERENTIAL LOCKUP

TECHNOLOGY CROSS-FERTILIZATION

TODAY

SYSTEM PROVIDER APPROACH: WE KNOW HOW TO DO IT


New ERP implementation (startup 2012) Worldwide CAD interconnected with

Manufacturing Execution System (from design to manufacturing) Robotization Lean manufacturing principles

Industrial footprint optimization

Manufacturing 4.0

Gorizia plant shutdown (2015) Argentina plant rightsizing (2016-2018) Brazil plant startup (2015) Spare parts Hub relocation (2018) Local for local production (from 1998) to

support global partners & local customers

MANUFACTURING EXCELLENCE DOME

MANUFACTURING EXCELLENCE

100% people involved in at least one “Dome” improvement project

TODAY


1972

1976

1989

1991

1995

2001

CUSTOMER PARTNERSHIP

TODAY

LONG-TERM RELATIONSHIPS FOR A MUTUAL VALUE GENERATION


2014-2016 Strategic Focus: Purchasing Saving

Partnership Project: continue supplier base reduction

SUPPLIER PARTNERSHIP

TODAY

FROM SOURCING TO PARTNERSHIP







MARKETS






MARKETS

PRODUCTS


GO BEYOND



MARKETS

PRODUCTS


CUSTOMER RETENTION MAIN AGREEMENTS 2012-2022

TOMORROW

Most of Business Plan volumes are secured by supply agreements (LTA, contracts, product applications)


Excellence in Execution, Global Service, Local for Local approach

Manufacturing Excellence Dome After Sales Excellence Network

Over 70 Spare Parts dealers & Service centers worldwide

CUSTOMER SATISFACTION

TOMORROW








MARKETS






MARKETS

PRODUCTS


GO BEYOND



MARKETS

PRODUCTS


PORTAL AXLES CARRARO TWIN SHIFTTM

AG TRANSM. TELEHANDLER

TRANSMISSION

HYDRAULIC SUPER CREEPER STANDARDIZATION PROJECT

POWERSHIFT AG TRANSM.

140 MLN € IN R&D / LAST 10 YEARS

TOMORROW

MORE THAN 30 NEW PRODUCTS IN THE PIPELINE. SOME KEY-EXAMPLES

LOW PROFILE CAB

…


Fulvio Lo Conte, R&D

Dual Clutch Power Shift transmission for Tractors

CARRARO TWIN SHIFTTM

http://www.omniauto.it/magazine/12854/tutti-gli-automatici-a-doppia-frizione



1939 INVENTOR

ADOLPHE KÉGRESSE

HISTORY



1983 PORSCHE 956 & 962

2003 VW GOLF R32

1985 AUDI QUATTRO S1


1939 INVENTOR

ADOLPHE KÉGRESSE

HISTORY




MARKET FEEDBACK

TOMORROW

C:/Users/c06fran/Desktop/Carraro BP/JD DCT.wmv


-8% fuel consumption

20% clutch power losses

60% of TCO in fuel


WHY DUAL CLUTCH?


WET CLUTCH TCB 90 2004 T100 PR 2006 PTU FERRARI 2011 T120 PR SOP 2018

CLUTCH CONTROL POWER MANAGEMENT THERMAL MANAGEMENT

AMT SHIFTING SYSTEM TCB80SPS 2010

IN HOUSE KNOW-HOW



Dual Clutch Module Range Module FWD/REV master clutch

2 AXIS COMPACT LAY-OUT

8 SPEED POWER SHIFT DUAL CLUTCH MODULE

4 (3 FOR T100) SERVO SYNCHRO RANGES

UP TO 32F+32R SPEEDS (IDEAL SPEED SPREAD)

POWERTRAIN MANAGEMENT THRU PROPRIETARY ECU


THE MODULAR CONCEPT


CARRARO PATENT DISTINCTIVENESS: TWO COAXIAL SHAFTS, ONE OUTSIDE THE OTHER



ADVANTAGES FEATURES

- MORE PS SPEEDS IN THE WORKING AREA - OPTIMIZED GEAR STEP IN THE ENTIRE SPEED RANGE - SPEEDS & RANGE SHIFT FULLY E-CONTROLLED

SHORTER CYCLE TIME COMFORTABLE DRIVING PRODUCTIVITY

- DCT TECHNOLOGY = LESS CLUTCHES @ SAME PS SPEEDS - OPTIMIZED SUBSYSTEMS / LUBRICATION / SPLASHING - WHOLE POWER TRAIN ELECTRONIC MANAGEMENT

FUEL ECONOMY RESPONSIVENESS

MODULAR TRANSMISSION ARCHITECTURE - HYDRAULICS - CONTROL STRATEGIES - VALIDATION

RELIABILITY COST SERVICEABILITY

WIDER MKT COVERAGE FLEXIBLE PRODUCT OFFER

- COMPACT AND PATENTED DESIGN - EASIER PRODUCT APPLICABILITY - SYNERGY WITH PHL VERSIONS

- INTERNAL IP & K-H COVERING COMPLETE SYSTEM: MECHANICS, HYDRAULICS AND ELECTRONICS - MORE CONFIDENCE BY END USERS IN SERVICEABILITY OF STEPPED VS. CVT TRANSMISSIONS

OEM EFFECTIVE SUPPORT EASIER CUSTOMIZATION



- MORE PS SPEEDS IN THE WORKING AREA - OPTIMIZED GEAR STEP IN THE ENTIRE SPEED RANGE - SPEEDS & RANGE SHIFT FULLY E-CONTROLLED

- DCT TECHNOLOGY = LESS CLUTCHES - OPTIMIZED SUBSYSTEMS / LUBRICATION / SPLASHING - WHOLE POWER TRAIN ELECTRONIC MANAGEMENT

- MODULAR DESIGN, COMPACT & PATENTED, INTERNAL K-H COVERING COMPLETE SYSTEM - SYNERGY WITH PHL VERSIONS

PS CVT CTS

- THERMAL MANAGEMENT IN EXTREME CONDITIONS - ZERO DYNAMIC - HILL OLDER - INCHING MODE

+

+++

-

+++

-

-

+++ +

++ +

+ +++

++

++ +

PRODUCTIVITY

ECO FUEL - RESPONSIVENESS

RELIABILITY - SERVICEABILITY

SPECIAL PERFORMANCE

COST


FEATURES







MARKETS






MARKETS

PRODUCTS


GO BEYOND



MARKETS

PRODUCTS


GRAIN: 550 MLN TONS IN 2020 (+50 MLN TONS VS. 2015) PERSONAL PRODUCTIVITY: 47,000 YUAN (30,000 YUAN IN 2015)

UPGRADING OF PLANTATION STRUCTURES IMPROVEMENT OF ANIMAL & FISH INDUSTRY AGRICULTURAL TECHNOLOGY IMPROVEMENT

STRENGHTEN EMERGING MARKETS PRESENCE CHINA: NEW ROADMAP FOR AGRICULTURE (2016-2025)

FUTURE


STRENGHTEN EMERGING MARKETS PRESENCE JOINT VENTURE FOR AGRICULTURAL TRACTORS CARRARO – SHANDONG JUMING

NEWCO AGRIMING AGRICULTURE EQUIPMENT CO. LTD (HEADQUARTERS: ZIBO, SHANDONG – CHINA)

OWNERSHIP: 51% SHANDONG JUMING GROUP, 49% CARRARO

SCOPE: FURTHER STRENGTHENING OF CARRARO'S PRESENCE IN THE CHINESE AGRICULTURAL MARKET

STRENGHTS

TRACTORS & DRIVELINES KNOW-HOW

SUPPLY DRIVELINES FROM CARRARO QINGDAO PLANT (SHANDONG)

JUMING DEALERS’ NETWORK

JUMING KNOWLEDGE OF CHINA AG MARKET

FUTURE


BOOST LOCAL FOR LOCAL, PREFERABLY WITH LOCAL PARTNERS, TO OVERCOME ENTRY BARRIERS (DUTIES & LOCAL CONTENT)

FUTURE

PROSPECT GEOGRAPHIC AREAS: BRAZIL, TURKEY, RUSSIA, AFRICA …

STRENGHTEN EMERGING MARKETS PRESENCE







MARKETS






MARKETS

PRODUCTS


GO BEYOND



MARKETS

PRODUCTS


ELECTRICAL CVT

FUTURE ELECTRICAL MOTOR

CVT POWERSPLIT GEARBOX

POWER ECU ECU 1 ECU 2 DASHBOARD

VEHICLE CAN BUS

OPTIONAL SECONDARY CAN BUS

LEVERAGE: HISTORICAL COMPETENCE IN OFF-HIGHWAY DRIVELINES

PROFOUND EXPERIENCE IN MATERIAL HANDLING ELECTRICAL POWERTRAINS ELECTRICAL AND ELECTRONIC CONTROL EXPERIENCE

REPLACE HYDROSTATIC WITH ELECTRICAL:

FUEL EFFICIENCY

SMOOTH AND PRECISE VEHICLE HANDLING

ENHANCED PRODUCTIVITY

TO REALIZE: ELECTRICAL CONTINUOUS VARIABLE TRANSMISSION


HYBRID & FULL ELECTRIC TRACTOR

FUTURE

POWER ECU ECU 1 ECU 2 DASHBOARD

VEHICLE CAN BUS

OPTIONAL SECONDARY CAN BUS

INTERNAL COMBUSTION ENGINE DOWNSIZING PRECISE TRACTION CONTROL IN ALL WORKING CONDITIONS FRONT ELECTRICAL DRIVE / ELECTRICAL TRACTION BOOST REGENERATIVE BRAKING (POWERTRAIN EFFICIENCY) ZERO EMISSION FOR SPECIAL USES (GREENHOUSE, SHED AND ORCHARD) AUXILIARIES ELECTRIFICATIONS

LEVERAGE: HISTORICAL COMPETENCE IN SPECIALIZED TRACTORS

OFF-HIGHWAY DRIVELINES KNOW HOW

KNOW-HOW AS SYSTEM INTEGRATOR IN ELECTRICAL POWERTRAINS FOR URBAN BUSES (BREDA MENARINI)

TO REALIZE: HYBRID & FULL ELECTRIC SPECIALIZED TRACTORS


Enrico Gomiero, CFO

FINANCIAL SUMMARY 2017-2021


SECULAR TRENDS OFF HIGHWAY TRENDS

DEVELOPING ECONOMIES GROWTH

SCARCE RESOURCES

MASSIVE URBANIZATION

TOTAL COST OF OWNERSHIP

ROBUST & EFFECTIVE SOLUTIONS

NEW TECHNOLOGICAL REQUIREMENTS



(ELECTRONIC POWER MANAGEMENT,

ELECTRIFICATION)

WIDER RANGE OF PRODUCTS

(MORE VEHICLE APPLICATIONS FROM BASIC TO PREMIUM;

HEV-EV SOLUTIONS)

POWER INCREASE (BIGGER AND TECHNOLOGICAL

ADVANCED DRIVELINES)

FROM 2WD TO 4WD (AGRICULTURE)

POPULATION GROWTH

ADDENDUM

EMISSION REGULATIONS NOX


POWER INCREASE LARGER FARM DIMENSIONS

C:/Users/c06fran/Desktop/Carraro BP/CARRARO BP 2017-2021_Final.pptx


Y2007 Y2008 Y2009 Y2010 Y2011 Y2012 Y2013 Y2014 Y2015 Y2016 Y2017 Y2018 Y2019 Y2020 Y2021 Y2022 Y2023

MARKET TRENDS & CYCLE

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2007 2021 … ...

CARRARO CYCLE POSITIONING

AGRICULTURAL & CONSTRUCTION EQUIPMENT

GLOBAL VOLUME TREND

140 MLN € IN R&D 90 MLN € IN R&D

INCREMENTAL

TURNOVER

>100 MLN €

CAGR 2017-2021: 2.82%

Source: ANFAVEA; Off-Highway Research; Starks; OEM Interviews; Carraro Market Intelligence


R&D INVESTMENT Ʃ 2017-21

90 M€

SALES GROWTH CAGR 2016-21

+3,8 %

EBITDA GROWTH CAGR 2016-21

+9,3 %

CAPEX Ʃ 2017-21

101 M€

Note: 2016 proforma w/o Santerno.

2017-21BP / KEY FIGURES


286 303 375

173 171

183 48 55

58 51 53

54 558 583

670

0

100

200

300

400

500

600

700

800

2016A* 2017F 2018BP 2019BP 2020BP 2021BP M€

REVENUES BY APPLICATION MARKET

OTHER

SPARE PARTS

CONSTR. EQUIPMENT

AGRICULTURAL

MAIN TOPICS

SALES TREND

- CAGR 16-21 [3,8 %] mainly driven by the development of a wider range of products

- Carraro’s market view is focused on customer satisfaction and retention, furthermore are also being implemented actions to expand customers’ base

NEW BUSINESS DEVELOPMENT

- TRACTORS: extend specialized tractors range (Alpine, Compact)

- TRANSMISSIONS AG: develop dual clutch power shift from 100 HP to 230 (Carraro Twin Shift™)

- AXLES AG: extend axles versions (Portal axle, IFAS) taking the advantage from the standardization project

- TRANSMISSIONS CE: develop new products (TCH) for teleboom handlers and extend new versions (TCB) for backhoe loaders

(*): 2016 proforma w/o Santerno.

395 390 472

48 55

58 115 138

140 558 583

670

0

100

200

300

400

500

600

700

800

2016A* 2017F 2018BP 2019BP 2020BP 2021BP M€

REVENUES BY BUSINESS AREA

TRACTORS

SPARE PARTS

DRIVELINES & COMPONENTS

CAGR: 3,8%

CAGR: 3,8%

2017-21BP / SALES TREND


8,6% 8,2%

11,2%

2016A* 2017F 2021BP

MARGIN PROGRESSION

EBITDA Adj. % on SALES

48 48

75

2016A* 2017F 2018BP 2019BP 2020BP 2021BP

ADJUSTED EBITDA

EBITDA Adj. [M€]

MAIN TOPICS

SALES & EBITDA EVOLUTION

- SALES CAGR 16-21 [+3,8 %]

- EBITDA CAGR 16-21 [+9,3 %]

PROFITABILITY DEFENCE

1. MANUFACTURING 4.0 AND SUPPLIERS PARTNERSHIP

- Industrial footprint optimization > Argentina plant rightsizing > new logistics project aimed at insourcing handling services > robotization and lean approach

- Purchasing cost reduction > review partnership strategy with new supplier base > focus on suppliers quality

2. STANDARDIZATION

- Design for Manufacturing > configuration decomplexity by components reduction in order to optimize product cost

3. OVERHEADS REDUCTION (R&D NOT INVOLVED)

- Non R&D OVH [< 9% on sales ]

- Restructuring costs 2016-19 [11,6 M€]

- R&D White Collars [>23% of total WC]

(*): 2016 proforma w/o Santerno.

1. insourcing & manufacturing optimization

2. standardization

3. overheads reduction

+3% ON SALES VS 2017

+27 M€ VS 2017

Note: EBITDA Adj w/o restructuring costs and extraordinary incomes from disposal.

2017-21BP / EBITDA


MAIN TOPICS

OPERATION

- Logistic Project > New warehouse area in Campodarsego > New Spare Parts Hub in Poggiofiorito

- Production capacity increase in Brazil

- Investments focused on top technologies & efficiency

OTHER DEPARTMENTS

- Information Technology: focus on application convergence & technology update in order to support manufacturing efficiency and improve stakeholder connections (new portal)

FOCUS R&D

- All new projects costs have impact on R&D total costs instead of on R&D capex

R&D 2017-21: TOTAL INVESTMENT 90 M€ > CAPEX 6 M€ > EXPENSES 84 M€

DEPRECIATION BP2017-21

102 M€ CAPEX BP2017-21

101 M€

ensure

of new products support

global

footprint

push on cutting-edge technology

focus on financial

reduce

impact

sustain external

partnership (JV)

achieve components

enhance production efficiency & capacity

standardization

environmental

manufacturing

sustainability

development

2017-21BP / CAPEX & INVESTMENTS


75

34

-20

-22

0

10

20

30

40

50

60

70

80

M€

2021BP

48

31

0,5

-18

0

10

20

30

40

50

60

70

80

M€

2017A

MAIN TOPICS

BP17-21 OCF REMARKS

over BP period, robust Operating Cash Flow will grow with EBITDA supporting:

- CAPEX [101M€ IN 5Y] with focus on new technologies, production efficiency and capability

- DIVIDENDS policy in order to reward shareholders’ commitment, consistently with bank Agreements

[BP payout ratio > 50%]

Note(1): EBITDA Adj w/o restructuring costs and extraordinary incomes from disposal.

(**): 2017A effect mainly due to NWC recovery (not recurrent).

2017-21BP / OPERATING CASH FLOW


3,92 x

1,55 x

0,71 x

4,10 x

2,72 x

1,21 x

0,0 x

1,0 x

2,0 x

3,0 x

4,0 x

5,0 x

6,0 x

7,0 x

8,0 x

9,0 x

10,0 x

11,0 x

12,0 x

7,0 x

6,0 x

5,0 x

4,0 x

3,0 x

2,0 x

1,0 x

0,0 x

1,0 x

2,0 x

3,0 x

4,0 x

5,0 x

2016A 2017F 2018BP 2019BP 2020BP 2021BP

FINANCIAL RATIOS MAIN TOPICS

FINANCIAL RATIOS

- Continuous improvement, year by year, definitely better performing than agreed with banks also after dividends payment

- Main positive extraordinary effects: 2° tranche of capital increase [19M€ in May ‘17]

Friulia [8M€ in Sep ‘17]

Revenue from sale of 45% O&KA stake

NFP / EBITDA

-40 M€ NFP VS 2017

GEARING

-183M€ -131M€ -91M€ NFP [M€]

2017-21BP / FINANCIAL RATIOS


163 163

178

51

0

50

100

150

200

250

300

350

2017F 2021BP

M€

CREDIT LINES SHORT / LONG TERM

SHORT TERM

LONG TERM

EU Bank 1

25,3% EU Bank

2 21,6%

EU Bank 3 9,5%

EU Bank 4 8,4%

EU Bank 5 6,9%

EU Uncommitt

ed Banks 2,3%

BANK_7 0,0%

BANK_8 0,0%

CHINA Banks 14,7%

INDIA Banks 11,1%

CREDIT LINES BY INSTITUTE

(JUN 2017)

MAIN TOPICS

FINANCIAL STRUCTURE

- NFP steadily improving

- Debt structure changes: due to regular debt repayment, in 2021 weight of uncommitted short credit lines is expected to increase.

- Actual banks' concentration will be even more significant in the future.

- Therefore, in order to align short and long term positions and to avoid excessive concentration on few financial partners, new agreements are under evaluation.

- Alongside, relationships with international financial institutions, especially Indian and Chinese, are expected to grow following a local for local funding policy.

NFP [M€]

-131M€ -91M€ -40 M€

NFP VS 2017

SHORT TERM COMMITTED [128 M€]

LONG TERM COMMITTED [142 M€]

LONG TERM COMMITTED [37 M€]

SHORT TERM UNCOMMITTED

CARRARO GROUP / FINANCIAL STRUCTURE

2021BP is not to be considered as a target,

new agreements are under evaluation


CLOSING REMARKS & Q&A

Documents

Carraro Business Plan 2017-2021 - Milan, 26th … · 12.00 financial summary 2017-2021 enrico gomiero, cfo 12.30 closing remarks & q&a agenda. carraro business plan 2017-2021 - milan,