Carraro Business Plan 2017-2021 - Milan, 26th September 2017 1 AGENDA
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
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 2 CARRARO VALUES
WE ARE ACCOUNTABLE WE CREATE VALUE WE DEVELOP TALENTS WE STIMULATE INNOVATION WE WORK TOGETHER
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 3 BUSINESS PLAN: WE KNOW HOW TO DO IT
ALBERTO NEGRI, CEO
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 4 CARRARO AT GLANCE
. FOUNDATION: 1932 . HEADQUARTERS: CAMPODARSEGO, PADOVA – ITALY . 2016 TURNOVER: 593.7 MLN € . 2016 PEOPLE: 2,979 (1,289 IN ITALY) Carraro Business Plan 2017-2021 - Milan, 26th September 2017 5 CARRARO MANAGEMENT TEAM
ENRICO TOMASO ALBERTO ENRICO CARRARO CARRARO NEGRI GOMIERO CHAIRMAN VICE CEO CFO CHAIRMAN
FRANCO CALVO ALESSANDRO GIGLI MARCO STELLA SALES & MARKETING IT & PURCHASING CARRARO AGRITALIA
ANDREA CONCHETTO STEFANO IMAGE MARIO TOLUSSO OPERATIONS SPARE PARTS & HR & LEGAL AFFAIRS CARRARO TRACTORS
MASSIMO DEL GOBBO FULVIO LO CONTE ENRICO TRACANZAN QUALITY ASSURANCE R&D DRIVELINES R&D TRACTORS
FABIO GALLO STRATEGIC MARKETING
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 6 CARRARO GLOBAL FOOTPRINT
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)
JV
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 7 CARRARO PRODUCTS
SPECIALIZED AGRICULTURAL CONSTRUCTION EQUIPMENT TRACTORS DRIVELINES DRIVELINES & OTHERS
TODAY CARRARO IS THE ONLY GLOBAL PLAYER ABLE TO PROVIDE COMPLETE SOLUTIONS FOR SPECIALIZED AGRICULTURAL TRACTORS, DRIVELINES AND COMPONENTS FOR AGRICULTURAL AND CONSTRUCTION MACHINERY.
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 8 MARKET SEGMENTS & MAIN CUSTOMERS
SPECIALIZED AGRICULTURAL CONSTRUCTION EQUIPMENT TRACTORS DRIVELINES DRIVELINES & OTHERS
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 9 SALES BREAKDOWN
SEGMENT AUTOMOTIVE 2.7% GEOGRAPHICAL AREA CHINA & APAC 4.9%
OTHER 2.3% MATERIAL HANDLING 4.1% INDIA 11.6%
SPARE PARTS LATAM 7.6% 8.6% AGRICULTURAL EMEA CONSTRUCTION 51.3% NAFTA 64.8% EQUIPMENT 11.1% 30.9%
OTHER 2.3% PRODUCT TYPE CUSTOMERS
CNH OTHERS 12.6% 46.6% TRACTORS JOHN DEERE 20.6% AXLES 10.4% 42.1% SPARE PARTS AGCO 8.6% 10.2% GEARS & COMPONENTS CLAAS 6.6% CAT 8.5% TRANSMISSIONS 7.1% MH TRANSAXLES 15.8% WACKER NEUSON SANKO 3.6% *2016 Sales w/out Santerno 2% 2.7%
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 10 THE MARKET
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 11 CARRARO TECHNOLOGY DRIVERS
SECULAR TRENDS OFF HIGHWAY TRENDS CARRARO TECHNOLOGY DRIVERS
TOTAL COST EFFICIENCY & POPULATION GROWTH OF OWNERSHIP PRODUCTIVITY (ELECTRONIC POWER MANAGEMENT, ELECTRIFICATION) ROBUST & EFFECTIVE SCARCE RESOURCES SOLUTIONS
WIDER RANGE OF PRODUCTS DEVELOPING NEW TECHNOLOGICAL (MORE VEHICLE APPLICATIONS ECONOMIES GROWTH REQUIREMENTS FROM BASIC TO PREMIUM; HEV-EV SOLUTIONS)
MASSIVE URBANIZATION NOX EMISSION REGULATIONS POWER INCREASE (BIGGER AND TECHNOLOGICAL ADVANCED DRIVELINES) LARGER FARM POWER INCREASE DIMENSIONS
ADDENDUM FROM 2WD TO 4WD (AGRICULTURE)
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 12 EFFICIENCY & PRODUCTIVITY SYSTEM COMPETENCE TO SUPPORT OFF-HIGHWAY TECHNOLOGICAL EVOLUTION
DASHBOARD ‣ SYSTEM INTERCONNECTION ‣ HUMAN INTERFACE ‣ FAILURE MANAGER VEHICLE ‣ CONNECTIVITY / BIG DATA CAN-BUS ‣ GPS / PRECISION FARMING
‣ TRANSMISSION CONTROL / DIAGNOSTIC ‣ POWER CONTROL CAN-BUS ‣ ASC / ABS ENGINE ECU & ECU ‣ STEER SENSOR ‣ STEER BY WIRE
ELECTRONIC POWER MANAGEMENT & ELECTRIFICATION
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 13 WIDER RANGE OF PRODUCTS EXTEND SPECIALIZED TRACTORS RANGE
ALPINE
LIGHT UTILITY
HYBRID ELECTRIC & ELECTRIC TRACTORS
SPECIALIZED CURRENT SPECIALIZED SPECIALIZED COMPACT TRACTORS TRACTORS TRACTORS FUTURE
35HP 70HP 90HP 100HP 120HP
KEY SUSPENDED FRONT AXLES DUAL CLUTCH TRANSMISSION TECHNOLOGIES CONNECTIVITY CVT TRANSMISSIONS PRESSURIZED CABIN HYBRID ELECTRIC & ELECTRIC TRACTORS
STAGE V EMISSIONS & MOTHER REGULATIONS COMPLIANTS
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 14 WIDER RANGE OF PRODUCTS MORE VEHICLE APPLICATIONS & FROM BASIC TO PREMIUM
AGRICULTURE
Portal Planetary IFAS Suspension Single or Independent Suspension Electronically controlled
Power High-Low/ Power Shift Electrical Mechanical Reverse Dual Clutch Continuous Variable Electronically controlled CONSTRUCTION EQUIPMENT
Backhoe Loaders Wheel Loaders Tele Boom Handlers Wheel Excavators
Basic: Mechanical / Premium: Electronically controlled
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 15 POWER INCREASE DRIVELINES
ELECTRIC CVT
NEW CARRARO TWIN SHIFTTM TRANSAXLES TRANSMISSION
MECHANICAL MECHANICAL & & POWERSHIFT POWERSHIFT TRANSMISSIONS TRANSMISSIONS
CURRENT PLANETARY & MULTILINK AXLES PORTAL AXLES SUSPENDED AXLES SUSPENDED AXLES FUTURE
35HP 70HP 150HP 200HP 250HP 400HP 500HP
KEY ELECTRONIC POWERTRAIN DUAL CLUTCH ELECTRIC CVT TECHNOLOGIES CONTROL (ENGINE & DRIVELINE)
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 16
CARRARO STRATEGIC PILLARS
SPEED
GROWTH
SERVICE
COST QUALITY
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 17 CARRARO STRATEGIC PILLARS
WE KNOW HOW TO DO IT MARKETS MARKETS
CUSTOMER SATISFACTION EXPAND CUSTOMER BASE . CUSTOMER INTIMACY & RETENTION . TECHNOLOGY CROSS- . QUALITY, COST, SERVICE . LOCAL FOR LOCAL FERTILIZATION IMPROVEMENT . NEW AREAS/SEGMENTS . LONG TERM AGREEMENTS . STRENGTHEN EMERGING . MANUFACTURING 4.0 MARKETS . PARTNERSHIPS . WORLDWIDE SERVICE PRODUCTS PRODUCTS
140 MLN € INVESTMENTS LAST 10 GO BEYOND YEARS: “BRING NEW PRODUCTS TO . ELECTRICAL CVT THE MARKET” . ELECTRICAL HYBRID & FULL ELECTRIC SPECIALIZED TRACTOR
TODAY TOMORROW FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 18 CARRARO STRATEGIC PILLARS
WE KNOW HOW TO DO IT MARKETS MARKETS
CUSTOMER SATISFACTION EXPAND CUSTOMER BASE . CUSTOMER INTIMACY & RETENTION . TECHNOLOGY CROSS- . QUALITY, COST, SERVICE . LOCAL FOR LOCAL FERTILIZATION IMPROVEMENT . NEW AREAS/SEGMENTS . LONG TERM AGREEMENTS . STRENGTHEN EMERGING . MANUFACTURING 4.0 MARKETS . PARTNERSHIPS . WORLDWIDE SERVICE PRODUCTS PRODUCTS
140 MLN € INVESTMENTS LAST 10 GO BEYOND YEARS: “BRING NEW PRODUCTS TO . ELECTRICAL CVT THE MARKET” . ELECTRICAL HYBRID & FULL ELECTRIC SPECIALIZED TRACTOR
TODAY TOMORROW FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 19 CUSTOMER INTIMACY UNDERSTAND CUSTOMER NEEDS & DEVELOP TAILOR MADE SOLUTIONS NEW LOW PROFILE CAB 6 SPEED POWERSHIFT HYDRAULIC SUPER CREEPER FOR SPECIALIZED TRACTORS TRANSMISSION ELECTRONICALLY
CONTROLLED WITH DIRECT DRIVE
M 1.880
IFAS SUSPENSION SYSTEM EMERGING MARKET GRADER FOR SPECIALIZED TRACTORS
…
TODAY
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 20 TECHNOLOGY CROSS-FERTILIZATION SYSTEM PROVIDER APPROACH: WE KNOW HOW TO DO IT
POWER HI-LO POWER REVERSER DUAL CLUTCH CONTROL ROBOTIZATION
REAR HITCH OPTIONS: - DRIVER PRESENCE MONITOR REAR ELECTRO HYDRAULIC PTO - WET CLUTCH THERMAL MANAGEMENT OPTIONS: - OUTPUT SPEED READING - POWER MANAGEMENT - DRIVER PRESENCE MONITOR
THROTTLE BY WIRE
CRUISE CONTROL DIFFERENTIAL LOCKUP SPEED CONTROL 4WD ENGAGEMENT
FRONT HYDRAULIC OPTIONS: DIFFERENTIAL LOCK - PRESSURE MONITOR
SUSPENDED AXLE - STEERING ANGLE READING - VEHICLE SPEED MONITOR - BRAKE MONITOR TODAY
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 21 MANUFACTURING EXCELLENCE
Industrial footprint optimization MANUFACTURING EXCELLENCE DOME . 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 4.0
. New ERP implementation (startup 2012) . Worldwide CAD interconnected with Manufacturing Execution System (from design to manufacturing) . Robotization . Lean manufacturing principles 100% people involved in at least one “Dome” improvement project TODAY
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 22 CUSTOMER PARTNERSHIP LONG-TERM RELATIONSHIPS FOR A MUTUAL VALUE GENERATION 1972 1976 1989 1991 1995 2001
TODAY
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 23 SUPPLIER PARTNERSHIP FROM SOURCING TO PARTNERSHIP 2014-2016 Strategic Focus: Purchasing Saving
Partnership Project: continue supplier base reduction
TODAY
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 24 CARRARO STRATEGIC PILLARS
WE KNOW HOW TO DO IT MARKETS MARKETS
CUSTOMER SATISFACTION EXPAND CUSTOMER BASE . CUSTOMER INTIMACY & RETENTION . TECHNOLOGY CROSS- . QUALITY, COST, SERVICE . LOCAL FOR LOCAL FERTILIZATION IMPROVEMENT . NEW AREAS/SEGMENTS . LONG TERM AGREEMENTS . STRENGTHEN EMERGING . MANUFACTURING 4.0 MARKETS . PARTNERSHIPS . WORLDWIDE SERVICE PRODUCTS PRODUCTS
140 MLN € INVESTMENTS LAST 10 GO BEYOND YEARS: “BRING NEW PRODUCTS TO . ELECTRICAL CVT THE MARKET” . ELECTRICAL HYBRID & FULL ELECTRIC SPECIALIZED TRACTOR
TODAY TOMORROW FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 25 CUSTOMER RETENTION MAIN AGREEMENTS 2012-2022
Most of Business Plan volumes are secured by supply agreements (LTA, contracts, product applications)
TOMORROW
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 26 CUSTOMER SATISFACTION QUALITY, COST, SERVICE IMPROVEMENT
Manufacturing Excellence Dome After Sales Excellence Network
Over 70 Spare Parts dealers & Service centers worldwide Excellence in Execution, Global Service, Local for Local approach TOMORROW
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 27 CARRARO STRATEGIC PILLARS
WE KNOW HOW TO DO IT MARKETS MARKETS
CUSTOMER SATISFACTION EXPAND CUSTOMER BASE . CUSTOMER INTIMACY & RETENTION . TECHNOLOGY CROSS- . QUALITY, COST, SERVICE . LOCAL FOR LOCAL FERTILIZATION IMPROVEMENT . NEW AREAS/SEGMENTS . LONG TERM AGREEMENTS . STRENGTHEN EMERGING . MANUFACTURING 4.0 MARKETS . PARTNERSHIPS . WORLDWIDE SERVICE PRODUCTS PRODUCTS
140 MLN € INVESTMENTS LAST 10 GO BEYOND YEARS: “BRING NEW PRODUCTS TO . ELECTRICAL CVT THE MARKET” . ELECTRICAL HYBRID & FULL ELECTRIC SPECIALIZED TRACTOR
TODAY TOMORROW FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 28 140 MLN € IN R&D / LAST 10 YEARS
MORE THAN 30 NEW PRODUCTS IN THE PIPELINE. SOME KEY-EXAMPLES
CARRARO TWIN SHIFTTM TELEHANDLER POWERSHIFT PORTAL AXLES AG TRANSM. TRANSMISSION AG TRANSM.
HYDRAULIC SUPER CREEPER STANDARDIZATION LOW PROFILE CAB PROJECT
…
TOMORROW
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 29 CARRARO TWIN SHIFTTM Dual Clutch Power Shift transmission for Tractors
Fulvio Lo Conte, R&D
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 30 CARRARO TWIN SHIFTTM HISTORY
1939 INVENTOR ADOLPHE KÉGRESSE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 31 CARRARO TWIN SHIFTTM HISTORY 1983 PORSCHE 956 & 962
1985 AUDI QUATTRO S1
1939 INVENTOR 2003 ADOLPHE KÉGRESSE VW GOLF R32
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 32 CARRARO TWIN SHIFTTM MARKET FEEDBACK
TOMORROW
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 33 CARRARO TWIN SHIFTTM WHY DUAL CLUTCH?
20% clutch power losses -8% fuel consumption 60% of TCO in fuel
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 34 CARRARO TWIN SHIFTTM
WET CLUTCH . TCB 90 2004 . T100 PR 2006 . PTU FERRARI 2011 . T120 PR SOP 2018
AMT SHIFTING SYSTEM . TCB80SPS 2010
N HOUSE . CLUTCH CONTROL I . POWER MANAGEMENT . THERMAL MANAGEMENT KNOW-HOW
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 35 CARRARO TWIN SHIFTTM THE MODULAR CONCEPT
. 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
Dual Clutch Module FWD/REV Range Module master clutch
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 36 CARRARO TWIN SHIFTTM
CARRARO PATENT DISTINCTIVENESS: TWO COAXIAL SHAFTS, ONE OUTSIDE THE OTHER
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 37 CARRARO TWIN SHIFTTM
FEATURES ADVANTAGES
- MORE PS SPEEDS IN THE WORKING AREA SHORTER CYCLE TIME - OPTIMIZED GEAR STEP IN THE ENTIRE SPEED RANGE COMFORTABLE DRIVING - SPEEDS & RANGE SHIFT FULLY E-CONTROLLED PRODUCTIVITY
- DCT TECHNOLOGY = LESS CLUTCHES @ SAME PS SPEEDS FUEL ECONOMY - OPTIMIZED SUBSYSTEMS / LUBRICATION / SPLASHING RESPONSIVENESS - WHOLE POWER TRAIN ELECTRONIC MANAGEMENT
MODULAR TRANSMISSION ARCHITECTURE RELIABILITY - HYDRAULICS COST - CONTROL STRATEGIES SERVICEABILITY - VALIDATION
- COMPACT AND PATENTED DESIGN WIDER MKT COVERAGE - EASIER PRODUCT APPLICABILITY FLEXIBLE PRODUCT OFFER - SYNERGY WITH PHL VERSIONS
- INTERNAL IP & K-H COVERING COMPLETE SYSTEM: MECHANICS, HYDRAULICS AND ELECTRONICS OEM EFFECTIVE SUPPORT - MORE CONFIDENCE BY END USERS IN SERVICEABILITY OF EASIER CUSTOMIZATION STEPPED VS. CVT TRANSMISSIONS
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 38 CARRARO TWIN SHIFTTM
FEATURES CTS PS CVT
PRODUCTIVITY - MORE PS SPEEDS IN THE WORKING AREA - OPTIMIZED GEAR STEP IN THE ENTIRE SPEED RANGE ++ + +++ - SPEEDS & RANGE SHIFT FULLY E-CONTROLLED
ECO FUEL - RESPONSIVENESS - DCT TECHNOLOGY = LESS CLUTCHES - OPTIMIZED SUBSYSTEMS / LUBRICATION / SPLASHING +++ + - - WHOLE POWER TRAIN ELECTRONIC MANAGEMENT
RELIABILITY - SERVICEABILITY - MODULAR DESIGN, COMPACT & PATENTED, INTERNAL K-H COVERING COMPLETE SYSTEM +++ + - - SYNERGY WITH PHL VERSIONS SPECIAL PERFORMANCE - THERMAL MANAGEMENT IN EXTREME CONDITIONS - ZERO DYNAMIC - HILL OLDER ++ + +++ - INCHING MODE COST ++ + -
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 39 CARRARO STRATEGIC PILLARS
WE KNOW HOW TO DO IT MARKETS MARKETS
CUSTOMER SATISFACTION EXPAND CUSTOMER BASE . CUSTOMER INTIMACY & RETENTION . TECHNOLOGY CROSS- . QUALITY, COST, SERVICE . LOCAL FOR LOCAL FERTILIZATION IMPROVEMENT . NEW AREAS/SEGMENTS . LONG TERM AGREEMENTS . STRENGTHEN EMERGING . MANUFACTURING 4.0 MARKETS . PARTNERSHIPS . WORLDWIDE SERVICE PRODUCTS PRODUCTS
140 MLN € INVESTMENTS LAST 10 GO BEYOND YEARS: “BRING NEW PRODUCTS TO . ELECTRICAL CVT THE MARKET” . ELECTRICAL HYBRID & FULL ELECTRIC SPECIALIZED TRACTOR
TODAY TOMORROW FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 40 STRENGHTEN EMERGING MARKETS PRESENCE CHINA: NEW ROADMAP FOR AGRICULTURE (2016-2025)
. 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
FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 41 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
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 42 STRENGHTEN EMERGING MARKETS PRESENCE
BOOST LOCAL FOR LOCAL, PREFERABLY WITH LOCAL PARTNERS, TO OVERCOME ENTRY BARRIERS (DUTIES & LOCAL CONTENT)
PROSPECT GEOGRAPHIC AREAS: BRAZIL, TURKEY, RUSSIA, AFRICA …
FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 43 CARRARO STRATEGIC PILLARS
WE KNOW HOW TO DO IT MARKETS MARKETS
CUSTOMER SATISFACTION EXPAND CUSTOMER BASE . CUSTOMER INTIMACY & RETENTION . TECHNOLOGY CROSS- . QUALITY, COST, SERVICE . LOCAL FOR LOCAL FERTILIZATION IMPROVEMENT . NEW AREAS/SEGMENTS . LONG TERM AGREEMENTS . STRENGTHEN EMERGING . MANUFACTURING 4.0 MARKETS . PARTNERSHIPS . WORLDWIDE SERVICE PRODUCTS PRODUCTS
140 MLN € INVESTMENTS LAST 10 GO BEYOND YEARS: “BRING NEW PRODUCTS TO . ELECTRICAL CVT THE MARKET” . ELECTRICAL HYBRID & FULL ELECTRIC SPECIALIZED TRACTOR
TODAY TOMORROW FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 44 ELECTRICAL CVT
LEVERAGE: . HISTORICAL COMPETENCE IN OFF-HIGHWAY DRIVELINES . PROFOUND EXPERIENCE IN MATERIAL HANDLING ELECTRICAL POWERTRAINS . ELECTRICAL AND ELECTRONIC CONTROL EXPERIENCE
OPTIONAL SECONDARY CAN BUS
VEHICLE CAN BUS
DASHBOARD POWER ECU ECU 1 ECU 2
TO REALIZE: ELECTRICAL CONTINUOUS VARIABLE TRANSMISSION
CVT POWERSPLIT GEARBOX REPLACE HYDROSTATIC WITH ELECTRICAL: . FUEL EFFICIENCY . SMOOTH AND PRECISE VEHICLE HANDLING . ENHANCED PRODUCTIVITY
ELECTRICAL MOTOR FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 45 HYBRID & FULL ELECTRIC TRACTOR
LEVERAGE: . HISTORICAL COMPETENCE IN SPECIALIZED TRACTORS . OFF-HIGHWAY DRIVELINES KNOW HOW . KNOW-HOW AS SYSTEM INTEGRATOR IN ELECTRICAL POWERTRAINS FOR URBAN BUSES (BREDA MENARINI)
OPTIONAL SECONDARY CAN BUS VEHICLE CAN BUS DASHBOARD POWER ECU ECU 1 ECU 2
TO REALIZE: HYBRID & FULL ELECTRIC SPECIALIZED TRACTORS
. 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 FUTURE
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 46 FINANCIAL SUMMARY 2017-2021
Enrico Gomiero, CFO
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 47 CARRARO TECHNOLOGY DRIVERS
SECULAR TRENDS OFF HIGHWAY TRENDS CARRARO TECHNOLOGY DRIVERS
TOTAL COST EFFICIENCY & POPULATION GROWTH OF OWNERSHIP PRODUCTIVITY (ELECTRONIC POWER MANAGEMENT, ELECTRIFICATION) ROBUST & EFFECTIVE SCARCE RESOURCES SOLUTIONS
WIDER RANGE OF PRODUCTS DEVELOPING NEW TECHNOLOGICAL (MORE VEHICLE APPLICATIONS ECONOMIES GROWTH REQUIREMENTS FROM BASIC TO PREMIUM; HEV-EV SOLUTIONS)
MASSIVE URBANIZATION NOX EMISSION REGULATIONS POWER INCREASE (BIGGER AND TECHNOLOGICAL ADVANCED DRIVELINES) LARGER FARM POWER INCREASE DIMENSIONS
ADDENDUM FROM 2WD TO 4WD (AGRICULTURE)
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 48 CARRARO CYCLE POSITIONING
MARKET TRENDS & CYCLE
CAGR 2017-2021: 2.82%
AGRICULTURAL & CONSTRUCTION EQUIPMENT GLOBAL VOLUME TREND INCREMENTAL TURNOVER >100 MLN €
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 … ...
Y2007 Y2008 Y2009 Y2010 Y2011 Y2012 Y2013 Y2014 Y2015 Y2016 Y2017 Y2018 Y2019 Y2020 Y2021 Y2022 Y2023
140 MLN € IN R&D 90 MLN € IN R&D
Source: ANFAVEA; Off-Highway Research; Starks; OEM Interviews; Carraro Market Intelligence
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 49 2017-21BP / KEY FIGURES
SALES GROWTH EBITDA GROWTH CAGR 2016-21 CAGR 2016-21
+3,8 % +9,3 %
R&D INVESTMENT CAPEX Ʃ 2017-21 Ʃ 2017-21 90 M€ 101 M€
Note: 2016 proforma w/o Santerno.
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 50 2017-21BP / SALES TREND MAIN TOPICS SALES TREND - CAGR 16-21 [3,8 %] mainly driven by the REVENUES BY BUSINESS AREA development of a 800 wider range of products CAGR: 3,8% 670 700 - Carraro’s market view is 558 583 focused on customer 600 140 TRACTORS satisfaction and retention, 500 115 138 58 furthermore are also being 48 55 implemented actions to 400 SPARE PARTS expand customers’ base 300 472 200 395 390 NEW BUSINESS DRIVELINES & 100 COMPONENTS DEVELOPMENT
0
€ - TRACTORS:
M 2016A* 2017F 2018BP 2019BP 2020BP 2021BP extend specialized tractors range (Alpine, Compact)
REVENUES BY APPLICATION MARKET - TRANSMISSIONS AG: 800 develop dual clutch power shift CAGR: 3,8% 670 from 100 HP to 230 700 558 583 54 (Carraro Twin Shift™) 600 58 OTHER 51 53 - AXLES AG: 500 55 48 183 extend axles versions 400 SPARE PARTS 173 171 (Portal axle, IFAS) taking 300 the advantage from the CONSTR. standardization project 200 375 286 303 EQUIPMENT 100 - TRANSMISSIONS CE: AGRICULTURAL
0 develop new products (TCH)
€ for teleboom handlers and 2016A* 2017F 2018BP 2019BP 2020BP 2021BP M extend new versions (TCB) for backhoe loaders (*): 2016 proforma w/o Santerno.
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 51 2017-21BP / EBITDA MAIN TOPICS SALES & EBITDA EVOLUTION
- SALES CAGR 16-21 [+3,8 %] ADJUSTED EBITDA - EBITDA CAGR 16-21 [+9,3 %] 75 PROFITABILITY DEFENCE +27 M€ VS 2017 1. MANUFACTURING 4.0 48 48 AND SUPPLIERS PARTNERSHIP - Industrial footprint optimization > Argentina plant rightsizing > new logistics project aimed at EBITDA Adj. insourcing handling services [M€] > robotization and lean approach - Purchasing cost reduction 2016A* 2017F 2018BP 2019BP 2020BP 2021BP > review partnership strategy with new supplier base > focus on suppliers quality
MARGIN PROGRESSION 2. STANDARDIZATION 11,2% - Design for Manufacturing +3% ON SALES > configuration decomplexity 8,6% 8,2% VS 2017 by components reduction in order to optimize product cost 3. overheads reduction 3. OVERHEADS REDUCTION 2. standardization (R&D NOT INVOLVED) 1. insourcing & - Non R&D OVH EBITDA Adj. manufacturing [< 9% on sales ] optimization % on SALES - Restructuring costs 2016-19 2016A* 2017F 2021BP [11,6 M€] - R&D White Collars (*): 2016 proforma w/o Santerno. [>23% of total WC] Note: EBITDA Adj w/o restructuring costs and extraordinary incomes from disposal.
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 52 2017-21BP / CAPEX & INVESTMENTS MAIN TOPICS
OPERATION ensure - Logistic Project development > New warehouse area of new in Campodarsego products support > New Spare Parts Hub in push on Poggiofiorito global cutting-edge - Production capacity manufacturing technology increase in Brazil footprint - Investments focused on top technologies & efficiency DEPRECIATION BP2017-21 enhance OTHER DEPARTMENTS achieve components 102 M€ production - Information Technology: CAPEX focus on application standardization efficiency BP2017-21 & capacity convergence & technology update in order to support 101 M€ manufacturing efficiency and improve stakeholder connections (new portal) focus on reduce OCUS financial environmental F R&D sustainability impact - All new projects costs have sustain impact on R&D total costs instead of on R&D capex external partnership R&D 2017-21: (JV) TOTAL INVESTMENT 90 M€ > CAPEX 6 M€ > EXPENSES 84 M€
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 53 2017-21BP / OPERATING CASH FLOW
MAIN TOPICS
BP17-21 OCF REMARKS
over BP period, robust
M€ M€ 2017A 2021BP Operating Cash Flow will 80 80 grow with EBITDA supporting: 70 70 - CAPEX [101M€ IN 5Y] -20 with focus on new 60 60 technologies, production 50 50 efficiency and capability -22 40 40 -18 75 - DIVIDENDS policy in order to 30 0,5 30 reward shareholders’ 48 commitment, consistently 20 20 with bank Agreements 31 34 10 10 [BP payout ratio > 50%] 0 0
Note(1): EBITDA Adj w/o restructuring costs and extraordinary incomes from disposal. (**): 2017A effect mainly due to NWC recovery (not recurrent).
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 54 2017-21BP / FINANCIAL RATIOS
MAIN TOPICS FINANCIAL RATIOS NFP -40 M€ -183M€ -131M€ -91M€ FINANCIAL RATIOS [M€] NFP VS 2017 - Continuous improvement, 5,0 x 12,0 x year by year, definitely better 3,92 x performing than agreed with 4,0 x 11,0 x banks also after dividends payment 3,0 x 10,0 x - Main positive extraordinary 2,0 x 1,55 x 9,0 x effects: 0,71 x 2° tranche of capital increase 1,0 x 8,0 x GEARING [19M€ in May ‘17]
0,0 x 7,0 x Friulia [8M€ in Sep ‘17] 1,0 x 6,0 x Revenue from sale of 45% 2,0 x 5,0 x O&KA stake 4,10 x 3,0 x 4,0 x 2,72 x 4,0 x 3,0 x
5,0 x 2,0 x 1,21 x NFP / 6,0 x 1,0 x EBITDA
7,0 x 0,0 x 2016A 2017F 2018BP 2019BP 2020BP 2021BP
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 55 CARRARO GROUP / FINANCIAL STRUCTURE
CREDIT LINES CREDIT LINES MAIN TOPICS BY INSTITUTE SHORT / LONG TERM (JUN 2017) FINANCIAL STRUCTURE NFP -40 M€ - NFP steadily improving -131M€ -91M€ [M€] NFP VS 2017 - Debt structure changes: due to regular debt 350 repayment, in 2021 weight EU Bank of uncommitted short credit 1 lines is expected to increase. 25,3% 300 LONG TERM EU Bank COMMITTED - Actual banks' concentration INDIA 2 250 178 [142 M€] will be even more significant Banks 21,6% in the future. 11,1% LONG TERM 200 - Therefore, in order to align COMMITTED CHINA EU Bank 3 51 [37 M€] short and long term positions Banks 9,5% and to avoid excessive 14,7% EU Bank 5 150 EU Bank 4 concentration on few financial 6,9% SHORT 8,4% partners, new agreements are TERM BANK_8 100 COMMITTED under evaluation. SHORT TERM 0,0% 163 [128 M€] 163 EU UNCOMMITTED - Alongside, relationships Uncommitt BANK_7 50 with international financial ed Banks 0,0% 2,3% institutions, especially Indian 0 and Chinese, are expected to
grow following a local for local
€ 2017F 2021BP
funding policy. M SHORT TERM 2021BP is not to be LONG TERM considered as a target, new agreements are under evaluation
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 56 CLOSING REMARKS & Q&A
Carraro Business Plan 2017-2021 - Milan, 26th September 2017 57