Laurent HEBENSTREIT Chief Executive Officer - Yann ALBRAND - SOGEFI Group
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Laurent HEBENSTREIT
Chief Executive Officer
Yann ALBRAND
Chief Financial Officer
Laura PENNINO
Investor Relations & CSR
2017 Italian Stock Market Opportunities
Paris, May 17, 2017
INDEX
Group presentation page 3
Q1 Achievements page 9
Performance levers page 19
2017 Italian Stock Market Opportunities – May, 17 2017 2
GROUP PRESENTATION
SOGEFI CUSTOMERS
CARS TRUCKS 2 WHEELERS 3 WHEELERS PARTS
2017 Italian Stock Market Opportunities – May, 17 2017 4
3 BUSINESS UNITS
Suspensions Filtration Air & Cooling
Stabilizer bars, Oil filters Manifolds
heavy stab bars & Diesel filters Airducts
stabilinkers Air filters Cooling
Coil springs Coil filters (waterpumps,
Products Torsion bars transmission water outlet
Leaf springs Canisters housing,
Precision springs waterducts)
2016 Sales € 562.8m € 535.1m € 480.2m
€ 1,574.1m (36%) (34%) (30%)
2017 Italian Stock Market Opportunities – May, 17 2017 5
5 TOP CLIENTS EACH REPRESENTING MORE THAN
10% OF TOTAL SALES
Ford
Renault/Nissan
FCA/CNH Industrial
PSA
GM
Daimler
Volkswagen/Audi
BMW
Toyota 5% 10% 15%
Volvo
2016 2015
WELL BALANCED CLIENTS MIX
GM EXPERIENCED A 35.6% GROWTH IN 2016
2017 Italian Stock Market Opportunities – May, 17 2017 6
2016 RESULTS – P&L HIGHLIGHTS
€m 2015 % 2016 % YoY
TOTAL NET SALES 1,499.1 1,574.1 5.0%
CONTRIBUTION MARGIN 420.0 28.0% 453.9 28.8% 8.1%
GROSS INDIRECT COSTS 294.0 19.6% 295.2 18.8% 0.4%
EBITDA 115.5 7.7% 152.7 9.7% 32.2%
EBIT 50.7 3.4% 74.5 4.7% 46.8%
Financial expense (income) (32.8) 2.2% (27.9) 1.8%
PRE-TAX INCOME (LOSS) 17.9 1.2% 46.6 2.9%
Income Tax (12.9) 0.9% (32.6) 2.1%
Minority Interest (3.9) 0.2% (4.7) 0.2%
NET INCOME (LOSS) 1.1 0.1% 9.3 0.6%
CAPITALIZATION - AMORTIZATION
INTANGIBLE 3.2 0.2% 0.9 0.1%
2017 Italian Stock Market Opportunities – May, 17 2017 7
2016 RESULTS – FCF HIGHLIGHTS
€m 2015 2016
OPERATING CASH FLOW 54.2 67.3
Restructuring (20.0) (9.4)
SM Warranty Claims (18.0) 9.6
Tax withholdings 0.0 5.7
Other 3.7 3.5
Non recurring items (34.3) 9.4
Taxes (16.1) (18.3) € 31.2m FCF generation
Interests (28.6) (27.1) in 2016 vs a cash burn of
FREE CASH FLOW (24.8) 31.2 € 24.8m in 2015
Without items of non-
FREE CASH FLOW w/o Non
9.4 21.9
ordinary nature, FCF of
Recurring items
€ 21.9m in 2016
Net financial debt reduced
NET DEBT (€m) 322.3 299.0
by € 23,3m in 2016
2017 Italian Stock Market Opportunities – May, 17 2017 8
Q1 2017 ACHIEVEMENTS
Q1 HIGHLIGHTS
Strong revenue growth with revenues up by 12.6% at € 439.1m. Positive
performance of all three business units and all geographical areas
EBITDA at € 45.1m, i.e. 10.3% on sales
Further improvement in the contribution margin (from 28% to 28.5%)
Reduced impact of indirect costs
Net debt improved by € 31.2m to € 291.4m vs end March 2016
Continuous actions on performance levers to support profitable growth
On track in its turnaround plan
2017 Italian Stock Market Opportunities – May, 17 2017 10ALL GEOGRAPHICAL AREAS AND ALL BUSINESS UNITS
CONTRIBUTED WITH SIGNIFICANT GROWTH
Constant weight
€m Q1 2017 Q1 2016 reported exchange based on
reference
change market
rates Q1 2017
Outperformed
Europe 274.0 253.2 8.2% 9.5% 62.4% 4.2%
North America 81.2 70.3 15.4% 10.8% 18.5% 2.5% reference markets
South America 48.9 37.5 30.6% 14.1% 11.1% 19.1%
including in Europe
Asia 39.5 31.3 26.4% 25.7% 9.0% 6.8%
Intercompany eliminations -4.5 -2.2 -1.0%
Total 439.1 390.1 12.6% 11.0% 100.0% 5.8%
Source: Sogefi and IHS data
Constant
reported
€m Q1 2017 Q1 2016 exchange
change
rates
Suspensions 153.2 143.1 7.1% 6.0%
Filtration 149.2 131.1 13.8% 12.1%
Air & Cooling 137.9 117.0 17.8% 15.7%
Intercompany eliminations -1.2 -1.1
Total 439.1 390.1 12.6% 11.0%
2017 Italian Stock Market Opportunities – May, 17 2017 11FURTHER PROFITABILITY INCREASE IN Q1 2017
€m / % sales
+14.5% 28.5%
28.0%
Contribution
margin 125
109.2
Q1 2016 Q1 2017 mostly driven by:
10.3%
Contribution margin improvement
+30.2%
Control of indirect costs
8.9%
EBITDA
Reduction of total labour costs %
45.1
34.6 to sales from 21.7% to 20.5%
Q1 2016 Q1 2017
+67.5% 6.1%
4.1%
EBIT 26.8
16
Q1 2016 Q1 2017
2017 Italian Stock Market Opportunities – May, 17 2017 12CONTINUOUS EFFORT IN INDIRECT COSTS
OPTIMIZATION
IN Q1 2017 GROSS INDIRECT COSTS WERE 17.5% OF TOTAL SALES
1.4 points improvement vs Q1 2016
2.3 points improvement vs Q1 2015
19.8%
in % of sales 18.9%
17.5%
Q1 2015 Q1 2016 Q1 2017
Key levers for savings on indirect costs
Structure costs reduction Cost rationalization
Better sharing/ allocating functions New plants designed more efficiently
2017 Italian Stock Market Opportunities – May, 17 2017 13Q1 2017 EBITDA REFLECTS TURNAROUND ACTIONS
45.1
34.9 34.6
20.9
Q1 2014 Q1 2015 Q1 2016 Q1 2017
2017 Italian Stock Market Opportunities – May, 17 2017 14Q1 2017 RESULTS – P&L HIGHLIGHTS
€m Q1 2016 % Q1 2017 % YoY
TOTAL NET SALES 390.1 439.1 12.6%
CONTRIBUTION MARGIN 109.2 28.0% 125.0 28.5% 14.5%
GROSS INDIRECT COSTS 73.5 18.9% 76.8 17.5% 4.4%
EBITDA 34.6 8.9% 45.1 10.3% 30.2%
EBIT 16.0 4.1% 26.8 6.1% 67.5%
Financial expense (income) -8.5 2.2% -6.4 1.4%
PRE-TAX INCOME (LOSS) 7.5 1.9% 20.4 4.7%
Income Tax -3.4 0.9% -7.7 1.8%
Minority Interest -1.2 0.3% -1.1 0.3%
NET INCOME (LOSS) 2.9 0.8% 11.6 2.6%
CAPITALIZATION - AMORTIZATION
INTANGIBLE 0.6 0.2% -1.3 -0.3%
2017 Italian Stock Market Opportunities – May, 17 2017 15Q1 2017 RESULTS – FCF HIGHLIGHTS
€m Q1 2016 Q1 2017
OPERATING CASH FLOW 13.7 18.9
Restructuring -4.2 -3.3
Warranty Claims 0.7 0.1
Non Ordinary items -3.5 -3.2
Taxes -3.0 -3.4
€ 6.9m FCF generation
Interests -7.4 -5.4
FREE CASH FLOW -0.2 6.9 represents 1.6% of sales
Net financial debt reduced
Net debt (end of period) 322.6 291.4
by € 31,2m versus end
March 2016
2017 Italian Stock Market Opportunities – May, 17 2017 16VALUE CREATION THROUGH ROCE INCREASE
16.9%
14.9%
12.8%
10.7%
9.1%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
+7.8 points ROCE increase versus Q1 2016
CE: Average Capital Employed (end of period) EBIT: 12 months rolling
2017 Italian Stock Market Opportunities – May, 17 2017 17NFP/EBITDA RATIO CONTINUING TO IMPROVE
2.80
2.56
2.27
1.96
1.79
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
NFP: Net debt (end of period) EBITDA: 12 months rolling
2017 Italian Stock Market Opportunities – May, 17 2017 18PERFORMANCE LEVERS
PERFORMANCE LEVERS
KEY OBJECTIVES KEY LEVERS
To join the best-in-class in To increase operational
terms of: efficiency, 5 performance
levers:
Safety
Quality Purchasing excellence
Sustainability Shopfloor excellence
Customers’ satisfaction Program management
Profitability excellence
Cash flow Indirect cost optimization
Innovation Competitive footprint
2017 Italian Stock Market Opportunities – May, 17 2017 20PROFITABILITY LEVERS
5 performance drivers to increase operational efficiency
1 Purchasing
2 Shopfloor
3 Program
Management 4 Indirect costs
reduction
Cost reduction Scrap reduction Price increases for Polyvalence and
through technical Direct labor technical Polycompetence
modifications productivity modifications Process redesign
Pluriannual price - Higher
Systematic price
and productivity automatization
increases for
5
negotiations - Shorter reaction Competitive
times to volume fluctuations
Low Cost Country footprint
deviations Development and
sourcing Indirect labor tooling cash
productivity payment Industrial
increase excellence
- Lean Plant competitivity
organizations plan
2017 Italian Stock Market Opportunities – May, 17 2017 21PROGRAM MANAGEMENT EXCELLENCE
Continuous price negotiation from first quotation to end of life to
maximize pricing power.
Renegotiation of the
contract price
2017 Italian Stock Market Opportunities – May, 17 2017 22COMPETITIVE FOOTPRINT:
SOGEFI TO BUILD A NEW FACTORY IN MOROCCO
Sogefi has already received new orders for both local and the European markets
that will bring in additional annual sales of € 30 million from 2020
The plant, which will start operating at the beginning of 2018, will manufacture two
different models of engine filtration systems for OEM and OES:
• metal diesel filter
• oil filtration module
The 10,000 square-meters factory will be built in the free trade zone of Tangier and
will employ 120 people.
Potential new business initiatives currently under negotiation could increase annual
sales to € 60 million in 2021, the plant size to 25,000 square-meters and the
number of employees to 300.
In a full scale scenario, the total investment could reach € 10 million
2017 Italian Stock Market Opportunities – May, 17 2017 23WHY INVEST IN MOROCCO
1 Business
opportunity 2
Competitive
footprint 3 Indirect benefits
The company has Low Cost Country Incentives on capex
already received new sourcing
orders Tax breaks for start up
Direct and Indirect labour phase
Supporting future profitable cost optimization
growth in OEM and OES, Tangier Free Trade Zone for
Lean organization import and export duties
both locally and in Europe
Leverage on Moroccan Euro-Mediterranean trade
plant to enter new business agreement
segments
Several international car and component suppliers have already invested or are planning to
invest in the country, for which a production of 1 million vehicles per year is envisaged
around 2025
2017 Italian Stock Market Opportunities – May, 17 2017 24SOGEFI TO BUILD A NEW COIL SPRINGS FACTORY
IN CHINA AT THE END OF 2018
A new 8,000 square metres plant will be built in Wujiang (Shanghai area) on the
existing industrial site that currently hosts a 15,000 square metres stabilizer bars
factory, which started operating in 2014.
The purpose of the initiative is to meet the increasing demand for coil springs in China,
in view of the growth forecasts for the local car market, the gradual replacement of
leaf springs and the higher technical standards required by local manufacturers.
The start of the new production should ensure additional annual sales of € 20 million
for the company from 2023.
The investment for the new plant amounts to € 8 million.
When the coil spring plant is fully operational, the Wujiang suspensions site will
generate € 70 million in annual sales and employ 300 people.
2017 Italian Stock Market Opportunities – May, 17 2017 252017 OUTLOOK
For the automotive market, after a first quarter of sustained growth,
the outlook for 2017 shows a positive trend, albeit at a slower pace.
Concerning Sogefi, the positive performance recorded in the first
quarter confirms the projected improvement in profitability for 2017.
2017 Italian Stock Market Opportunities – May, 17 2017 26PLANNED COMMUNICATION IN 2017
CEO Conference – Milan – 27 June 2017
Roadshow in London – 5 July 2017
Roadshows in Paris and Frankfurt – Fall 2017
2017 Italian Stock Market Opportunities – May, 17 2017 27CONTACTS
Yann Albrand, Group CFO
Laura Pennino, Investor Relations and CSR
SOGEFI
Via Ciovassino, 1/a
20121 Milano – Italia
Tel: 39 02 46750214
Fax: +39 02 43511348
Mail: ir@sogefigroup.com
2017 Italian Stock Market Opportunities – May, 17 2017 28DISCLAIMER
This document has been prepared by SOGEFI S.p.A. for information purposes only and for use in presentations
of the Group’s results and strategies.
For further details on the SOGEFI Group. reference should be made to publicly available information. including
the Annual Report. the Semi-Annual and Quarterly Reports.
Statements contained in this document. particularly the ones regarding any SOGEFI Group possible or
assumed future performance are or may be forward looking statements and in this respect they involve some
risks and uncertainties.
Any reference to past performance of the SOGEFI Group shall not be taken as an indication of future
performance.
This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of
it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
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