View
214
Download
0
Category
Preview:
Citation preview
2
This presentation contains statements relating to future results of the company (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “estimate,” “should,” “are likely to be,” “will,” and similar expressions. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including, but not limited to, global economic and market cycles and conditions; the demand for commercial, specialty and light vehicles for which the company supplies products; risks inherent in operating abroad (including foreign currency exchange rates and potential disruption of production and supply due to terrorist attacks or acts of aggression); availability and cost of raw materials, including steel; OEM program delays; demand for and market acceptance of new and existing products; successful development of new products; reliance on major OEM customers; labor relations of the company, its customers and suppliers, including potential disruptions in supply of parts to our facilities or demand for our products due to work stoppages; the financial condition of the company’s suppliers and customers, including potential bankruptcies; Possible adverse effects of any future suspension of normal trade credit terms by our suppliers; potential difficulties competing with companies that have avoided their existing contracts in bankruptcy and reorganization proceedings; successful integration of acquired or merged businesses; the ability to achieve the expected annual savings and synergies from past and future business combinations and the ability to achieve the expected benefits from restructuring actions; success and timing of potential divestitures; potential impairment of long-lived assets, including goodwill; competitive product and pricing pressures; the amount of the company’s debt; the ability of the company to continue to comply with covenants in its financing agreements; the ability of the company to access capital markets; credit ratings of the company’s debt; the outcome of existing and any future legal proceedings, including any litigation with respect to environmental or asbestos-related matters; as well as other risks and uncertainties, including, but not limited to, those detailed from time to time in the filings of the company with the Securities and Exchange Commission.
Forward-Looking Statements
3
Phil Martens Buddy Wacaser Carsten ReinhardtPresident, LVS President, ET President, CVS
• Former President and COO of Plastech
• Former Group VP of Product Creation for Ford Motor Company
• 20 years industry experience
• Former CEO of Meridian Automotive Systems
• Former VP of European Operations & Emerging Markets for Alcoa Fujikura
• 33 years industry experience
• Former CEO of Detroit Diesel, a subsidiary of DCX
• Former General Manager of Western Star, held other mgt. positions at Freightliner
• Educated in Germany and England
Three New Division Presidents
4
Commercial Vehicles Light Vehicles
Broad Product Portfolio
Sales from Continuing Operations $8.8 Billion in FY05
#1 or #2 inmost major
markets
5
Diverse Customer Base
Minimizes Reliance on Any Single Customer
Commercial Vehicle Customers Light Vehicle Customers
DaimlerChrysler13%
General Motors9%
Volkswagen9%
Ford 7%
Asian Based OEMs 3%BMW 3%
PSA 2%Fiat 2%Other LVS 6%
Other CVS16%
Fiat 1%Asian Based OEMs 1%
Ford 1%Volkswagen 1%
General Motors 1%
PACCAR 2%Renault 3%
International 3%
Volvo 8%
DaimlerChrysler9%
6
Strong Global Presence
North America – 51%• FY05 sales $4.5 billion• 46 manufacturing facilities• 7 joint ventures*• 6 technical centers
Europe – 38%• FY05 sales $3.3 billion• 41 manufacturing facilities• 7 joint ventures*• 12 technical centers
South America – 5%• FY05 sales $0.5 billion• 12 manufacturing facilities• 2 joint ventures*• 2 technical centers
Asia Pacific & ROW – 6%• FY05 sales $0.5 billion• 20 manufacturing facilities• 9 joint ventures*• 1 technical center
* Includes consolidated and non-consolidated joint ventures
119 Manufacturing Facilities
25 Joint Ventures*21 Technical
Centers
7
Current Operations in Europe
• 2005 FY sales of $3.3 billion• 10,289 employees
– 2,991 CVS• 52 Emissions
– 6,075 LVS• 2,860 Emissions
– 1,219 LVA• 41 operating facilities*• 7 joint ventures*• 12 technical centers*• Strong and growing presence
in Eastern Europe
* Includes consolidated and non-consolidated joint ventures
8
Strong Growth in Europe
11%8%Asia, S. America and Other
38%29%Europe
51%63%North America
Today5 Years AgoPercentage of Total Sales
9
Close/Sell/Restructure OpenAugsburg, Germany #2 & 3 (Exhaust – 2005) St. Priest, France (Axles – 2005)
Valladolid, Spain (Doors – 2005) Venisseux, France (Axles – 2005)
Villaverde, Spain CVC (Exhaust – 2005) Poznan, Poland (Doors – 2005)
Asti, Italy (LV Ride Control – 2005) Bratislava, Slovakia (Roofs – 2005)
Sheffield, UK (Suspension – 2006) Kysucke Nove Mesto, Slovakia (Doors – 2006)
Mosciano, Italy (Exhaust – 2006) Eastern Europe (LVS – TBA)
Redditch UK (Exhaust – 2006)
Wrexham, UK (Trailers – 2006)
Joigny, France (Exhaust – 2006)
Birmingham, UK (Doors/Roofs – 2006)
Blackpool, UK (Exhaust – 2007)
European Footprint Evolution Including JVs(FY 2005 - 2007)
10
Employment and Efficiency
10,28911,017Total
1,2191,647Light Vehicle Aftermarket
6,0756,833Light Vehicles
2,9912,534Commercial Vehicles
Today5 Years AgoEurope Employment
+18%+18%
38%29%Sales$374 k$184 kSales per employee (incl. LVA)
36%34%Employment
Memo: Percent of World
11
LVS Operations in EuropeWholly-Owned Operations• Brussels, Belgium (door modules) • Liberec, Czech Republic (door
modules)• Esson, France (window regulators)• Saint-Die, France (latches)• Sully-sur-Loire, France (window
regulators)• Dietzenbach, Germany (sales and
engineering offices)• Frankfurt, Germany (roofs)• Gifhorn, Germany (roofs)• Poznan, Poland (door modules)• Bratislava, Slovakia (roofs)• Abrera, Spain (window regulators,
door modules)• Birmingham, United Kingdom
(apertures)
Joint Ventures• ArvinMeritor – PHA Door Systems
s.r.o, Kysucke Nove Mesto, Slovakia (door modules)
13
ET Operations in EuropeWholly-Owned Operations• Mlada Boleslav, Czech Republic• Augsburg, Germany• Finnentrop, Germany • Jaszarokszallas, Hungary • Terni, Italy • Turin, Italy • Roermond, Netherlands• Orcoyen (Pamplona), Spain • San Esteve de Sesrovires, Spain• Valencia, Spain • Golcuk, Turkey • Redditch, United Kingdom • Warton, England, United Kingdom
Joint Ventures• Arvin Exhaust s.r.o., Prague, Czech
Republic
15
CVS Operations in EuropeWholly-Owned Operations• Mitry-Mory, France (axles, suspension systems)• Koblenz, Germany (sales and engineering office) • Cameri, Italy (axles, housings, gears, carriers and
caps, diff cases, wedge brakes)• Verona, Italy (axles, suspension systems, tire
inflation systems)• Amsterdam, Netherlands (procurement and IT office)• Helmond, Netherlands (axles, suspension systems,
tire inflation systems)• Barcelona, Spain (axles, suspension systems, tire
inflation systems)• Lindesberg, Sweden (axles, carriers, gears, bevel
sets, diff cages, housings)• Zurich, Switzerland (brakes, axles, StopMaster and
Allmakes products)• Istanbul, Turkey (sales office)• Cwmbran, Wales, United Kingdom (brakes, off-
highway, hydraulic actuation)
Joint Ventures• Ege Fren Sanayii ve Ticaret, Izmir, Turkey (brakes)• ArvinMeritor CVS Axles France SAS, St. Priest,
Franc (axles)• Fonderie Venissieux SAS, Venissieux, France (axle
foundry)
17
Western Europe Heavy Truck Volume Forecast
CY 2005 CY 2006 CY 2007
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
84 88 86 74 82 83 81 69 82
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
FY 2006 FY 2007 FY 2008
315
315(Thousands of vehicles)
18
Balance Sheet Strengthening
61%59%
63%
2003 2004 2005 2006 E
$561
$469
$659
2003 2004 2005 2006 E
$299
$948
$696
2003 2004 2005 2006 E
$1,647
$1,354 $1,378
2003 2004 2005 2006 E
Debt-to-capitalization ratio
Unfunded pension liability(millions)
Term debt due within 5 years(millions)
Net debt (1)
(millions)
(1) Excludes any potential divestiture proceeds
$980
19
In ProcessLVA Europe
$9 millionSoldEquity share in Purolator India
In ProcessN.A. Ride Control
Close 4QAnnouncedS. Africa Ride Control
SoldN.A. Purolator filters
SoldN.A. Exhaust
Announced LVS MSSC suspension components
Close 4QAnnouncedN.A. Motion Control
$39 millionSoldCVS Off-Highway Brakes
ProceedsStatus
Divestiture Status
$198 million
20
FY 2006 Outlook –Continuing Operations Before Special Items
(in millions, except EPS)
Sales 9,000$ - 9,100$
Operating Margin 2.9% - 3.0%
Interest Expense (125) - (124)Effective Tax Rate 24% - 23%
Income from Continuing Operations 116$ - 123$
Diluted Earnings Per Share 1.65$ - 1.75$
Free Cash Flow (Total Company) 200$ - 225$
Full Year Outlook (1)FY 2006
(1) Outlook does not include the impact of any future acquisitions or divestitures, the impact of additional restructuring actions and any other special items.
21
“Activate” existing mechanical products
Pursuing Profitable Business Expansion
Increase presence in emerging
markets
Grow commercial vehicle emissions,
specialty and aftermarket businesses
22
• U.S. may adopt SCR solution– Improves fuel efficiency– Low sulfur diesel capacity
constraint
• Lean NOx Traps• Combined PM and NOx Traps
– SCRT (SCR+DPF)– Lean NOx Trap with Plasma
Fuel Reformer
2007U.S.
Solution
2006Europe
Solution
EGRExhaust Gas Recirculation (EGR)• Reduces NOx
Diesel Particulate Filter (DPF)• Reduces PM• Vocational application uses actively regenerated filter
Urea
ControlSelective Catalytic Reduction (SCR)• Reduces NOx• Reduces PM• Improves fuel economy
Beyond2007
Diesel Emissions Solutions
23
Emissions Technologies Business Unit
2006 AND PRIOR
Light Vehicle Emissions• Technology• Scale and capacity• Resources
Commercial Vehicle Emissions• New regulations• New products• Explosive growth
EmissionsTechnologies
• Leverage technology and products
• Align capacity• Mobilize resources for
growth
2007 AND BEYOND
24
Phil Martens Buddy Wacaser Carsten ReinhardtPresident, LVS President, ET President, CVS
Three New Division Presidents
25
• Diversified product portfolio and customer base
• Leading and expanding positions in Europe and elsewhere
• Strengthened balance sheet
• Ideal position to seize key growth opportunities, providing offsets for projected heavy truck downturn
Investment Highlights
Recommended