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1 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
2 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
3 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CARRARO VALUES
WE ARE ACCOUNTABLE WE CREATE VALUE WE DEVELOP TALENTS WE STIMULATE INNOVATION WE WORK TOGETHER
4 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
ALBERTO NEGRI, CEO
BUSINESS PLAN: WE KNOW HOW TO DO IT
5 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
FOUNDATION: 1932 HEADQUARTERS: CAMPODARSEGO, PADOVA – ITALY 2016 TURNOVER: 593.7 MLN € 2016 PEOPLE: 2,979 (1,289 IN ITALY)
CARRARO AT GLANCE
6 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
7 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
8 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
9 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
MARKET SEGMENTS & MAIN CUSTOMERS CONSTRUCTION EQUIPMENT
DRIVELINES & OTHERS AGRICULTURAL
DRIVELINES SPECIALIZED TRACTORS
10 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
*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%
11 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
THE MARKET
12 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
CARRARO TECHNOLOGY DRIVERS
POWER INCREASE LARGER FARM DIMENSIONS
13 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
‣ SYSTEM INTERCONNECTION ‣ HUMAN INTERFACE ‣ FAILURE MANAGER ‣ CONNECTIVITY / BIG DATA ‣ GPS / PRECISION FARMING
ELECTRONIC POWER MANAGEMENT & ELECTRIFICATION
EFFICIENCY & PRODUCTIVITY
‣ 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
14 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
15 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
16 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
17 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CARRARO STRATEGIC PILLARS Q
UA
LITY
CO
ST
SER
VIC
E
GR
OW
TH
SPEE
D
18 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
19 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
20 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
21 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
22 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
23 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
1972
1976
1989
1991
1995
2001
CUSTOMER PARTNERSHIP
TODAY
LONG-TERM RELATIONSHIPS FOR A MUTUAL VALUE GENERATION
24 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
2014-2016 Strategic Focus: Purchasing Saving
Partnership Project: continue supplier base reduction
SUPPLIER PARTNERSHIP
TODAY
FROM SOURCING TO PARTNERSHIP
25 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
26 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CUSTOMER RETENTION MAIN AGREEMENTS 2012-2022
TOMORROW
Most of Business Plan volumes are secured by supply agreements (LTA, contracts, product applications)
27 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
QUALITY, COST, SERVICE IMPROVEMENT
28 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
29 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
…
30 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
Fulvio Lo Conte, R&D
Dual Clutch Power Shift transmission for Tractors
CARRARO TWIN SHIFTTM
31 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CARRARO TWIN SHIFTTM
1939 INVENTOR
ADOLPHE KÉGRESSE
HISTORY
32 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
1983 PORSCHE 956 & 962
2003 VW GOLF R32
1985 AUDI QUATTRO S1
CARRARO TWIN SHIFTTM
1939 INVENTOR
ADOLPHE KÉGRESSE
HISTORY
33 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CARRARO TWIN SHIFTTM
MARKET FEEDBACK
TOMORROW
34 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
-8% fuel consumption
20% clutch power losses
60% of TCO in fuel
CARRARO TWIN SHIFTTM
WHY DUAL CLUTCH?
35 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
CARRARO TWIN SHIFTTM
36 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
CARRARO TWIN SHIFTTM
THE MODULAR CONCEPT
37 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CARRARO PATENT DISTINCTIVENESS: TWO COAXIAL SHAFTS, ONE OUTSIDE THE OTHER
CARRARO TWIN SHIFTTM
38 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
CARRARO TWIN SHIFTTM
39 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
- 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
CARRARO TWIN SHIFTTM
FEATURES
40 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
41 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
42 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
43 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
44 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
45 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
46 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
47 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
Enrico Gomiero, CFO
FINANCIAL SUMMARY 2017-2021
48 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
CARRARO TECHNOLOGY DRIVERS
POWER INCREASE LARGER FARM DIMENSIONS
49 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
50 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
51 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
52 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
53 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
54 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
55 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
56 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
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
57 Carraro Business Plan 2017-2021 - Milan, 26th September 2017
CLOSING REMARKS & Q&A