GRAMMER AG Presentation Cordonnier Baader … · copyright 2017 grammer ag –baader investment conference 2017 september 21, 2017 page 14 grammer ag – agm & new shareholder structure

Investor PresentationBAADER INVESTMENT CONFERENCE

September 21, 2017

Copyright 2017 GRAMMER AG – BAADER INVESTMENT CONFERENCE 2017 Page 2September 21, 2017

GRAMMER Group at a GlanceGRAMMER Group at a Glance1

Strategic Roadmap for Profitable Growth & Value GenerationStrategic Roadmap for Profitable Growth & Value Generation2

GRAMMER GROUP – INVESTOR PRESENTATIONContent

2017 AGM Summary & Post-AGM Events2017 AGM Summary & Post-AGM Events3

Financial Highlights H1-2017 & Outlook FY 2017Financial Highlights H1-2017 & Outlook FY 20174

GRAMMER at a Glance


GRAMMER GROUP – KEY FACTSLeading global player in the automotive and commercial vehicles industry

1

Revenues by product segment (FY 2016)Revenues by product segment (FY 2016)Automotive* Commercial Vehicles*

Group revenues by region and division (FY 2016)Group revenues by region and division (FY 2016)

Offroad58%

Truck26%

Others8%

Railway8%

Total: € 1.3 billion Total: € 0.5 billion

by region by division

Automotive73%

CommercialVehicles27%

EMEA70% APAC

15%

Americas15%

Total: € 1.7 billion Total: € 1.7 billion

Key OEM customersKey OEM customers

Automotive Commercial Vehicles

Consoles40%

InteriorComponents 10%Others 13%

Headrests37%

Key product segmentsKey product segmentsAutomotive Commercial Vehicles

Headrests

Consoles & Armrests

Interior Components

Offroad Seats

TruckSeats

Railway Seats

*) Group = Automotive + Commercial Vehicles - Consolidation


Production

GRAMMER GROUP – GLOBAL FOOTPRINTGlobal production and R&D network on 4 continents

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Location with R&D activities

AmericasLocations: 8Employees: 2,000Revenue: € 250 million

EuropeLocations: 26Employees: 9,000Revenue: € 1,200 million

Asia / PacificLocations: 7Employees: 1,500Revenue: € 250 million


Group revenues in € billion, 10-year developmentGroup revenues in € billion, 10-year development

0.89

1.00 1.01

0.72

0.93

1.091.13

1.27

1.371.43

1.70

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

+19%

GRAMMER GROUP – LONG-TERM GROWTHStrong track record of global revenue growth

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Strategic Roadmap forProfitable Growth & Value Generation


Driving Profitable GrowthDriving Profitable Growth4

Driving Global GrowthDriving Global Growth1

Driving InnovationsDriving Innovations2

Driving Strategic DevelopmentDriving Strategic Development3

Global setup, innovative products & strategic acquisitions build crucial basis for future success

Strategic Partnership with Ningbo Jifeng supports continuation of GRAMMER’s successful global growth

Optimized processes and structures for better cost base

GRAMMER Group is set for profitable growth and strong value generation

GRAMMER GROUP – ON THE MOVEOur strategic roadmap for driving profitable growth & value generation

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Copyright 2017 GRAMMER AG – BAADER INVESTMENT CONFERENCE 2017 September 21, 2017 Page 9

GRAMMER GROUP – DRIVING GLOBAL GROWTHGRAMMER to continue drive growth outside of Europe in both divisions

2

Global Growth 2016 – 2021eGlobal Growth 2016 – 2021e

Global Car Production* +11%

GRAMMER Product Sales

Regional Growth 2016 – 2021eRegional Growth 2016 – 2021e

EUROPE:Car Production* +7%GRAMMER Product Sales: +10%

AMERICAS:Car Production* +8%GRAMMER Product Sales: >100%

ASIA:Car Production* +14%GRAMMER Product Sales: +30%2016 2021e

+30%

Aut

omot

ive

Aut

omot

ive

Regional Sales SplitRegional Sales Split

2021e

Global Growth 2016 – 2021eGlobal Growth 2016 – 2021e

Global Truck Production* +11%

GRAMMER Product Sales

Regional Growth 2016 – 2021eRegional Growth 2016 – 2021e

EUROPE:Truck Production* +21%GRAMMER Product Sales: +30%

AMERICAS:Truck Production* +28%GRAMMER Product Sales: +85%

ASIA:Truck Production* +2%GRAMMER Product Sales: >100%2016 2021e

+50%

Com

mer

cial

Veh

icle

sC

omm

erci

al V

ehic

les

Regional Sales SplitRegional Sales Split

2021e

EMEA60% APAC

20%

Americas20%

Total: € 1.5 billion

Total: € 0.7 billion

EMEA55% APAC

20%

Americas25%

*) Source: IHS

*) Source: IHS *) Source: IHS


Interior as main differentiation factor for the OEM

1

Optimized ergonomics and functionality Intuitive HMIs on functional surfaces

Intelligent interior for all driving situationsScientific research for comfort & safetyGenius Cab – innovative cabin interior

Superb comfort & luxurious appearance

HMI, FunctionalSurfaces &

Ambient Lighting

Comfort &Ergonomics +

Health Solutions

Elegant & Luxurious

Appearance

Active & PassiveSafety

Interior defines well-being and comfort of driver/passenger

2 Massive upgrade & expansionof interior functionality

3

GRAMMER GROUP – DRIVING INNOVATIONSDevelopment focus secures our innovative leadership in interior & seating

2

Digital Interfaces& Sensors

Light Weight and“Green” Materials


GRAMMER’s M&A HistoryGRAMMER’s M&A History

Successful M&A transactions and acquisitions in the past in all core product segments

Larger M&A DealsPurchase price> € 500 million

Larger M&A DealsPurchase price> € 500 million

GRAMMER’s M&A Transaction ScopeGRAMMER’s M&A Transaction Scope

Midsize M&A DealsPurchase price

€ 100 to 500 million

Midsize M&A DealsPurchase price

€ 100 to 500 million

Smaller M&A DealsPurchase price< € 100 million

Smaller M&A DealsPurchase price< € 100 million

1

2

GRAMMER’s M&A radar focused on smaller/midsize targetsto strengthen regional and innovative position

Adequate firepower of approx. € 150-250 m. for M&A strategy w/o deterioration in credit metrics & covenant breachAdditional financial headroom due to proceeds from Ningbo Jifeng’s investmentAdequate firepower of approx. € 150-250 m. for M&A strategy w/o deterioration in credit metrics & covenant breachAdditional financial headroom due to proceeds from Ningbo Jifeng’s investment

2011 EiA Electronics, Belgium

2012 Nectec, Czech Republic

2013 JV Jiangsu Yuhua, China

2015 Reum Group, Germany & Poland

2016 JV Shaanxi, China

2011 EiA Electronics, Belgium

2012 Nectec, Czech Republic

2013 JV Jiangsu Yuhua, China

2015 Reum Group, Germany & Poland

2016 JV Shaanxi, China

Commercial Vehicles (Offroad)

Automotive (Headrest)

Commercial Vehicles (Truck)

Automotive (Consoles)


Commercial Vehicles (Offroad)

Automotive (Headrest)


Automotive (Consoles)


Expansion of electronic know-how

Additional safety technologies

Entry into Chinese truck market

Expansion of product & technology

Secure growth in Chinese truck market

Expansion of electronic know-how

Additional safety technologies

Entry into Chinese truck market

Expansion of product & technology

Secure growth in Chinese truck market

GRAMMER GROUP – DRIVING CORPORATE DEVELOPMENTFocused M&A strategy to enhance product portfolio, technology & profitability

2

GRAMMER Group growth, revenues and profitability roadmapGRAMMER Group growth, revenues and profitability roadmap


GRAMMER GROUP – DRIVING PROFITABLE GROWTHHigher profitability based on cost optimization & active portfolio management

2

Commercial Vehicles: Recovery of profitable market segments. Higher value due to functional (e.g. electronics) integration

Automotive : Higher maturity of plants & products. Higher R&D efficiency and higher value due to functional integrationOngoing consequent cost optimization & production transfers. Plus: active portfolio management (JV / M&A)

Commercial Vehicles: Recovery of profitable market segments. Higher value due to functional (e.g. electronics) integration

Automotive : Higher maturity of plants & products. Higher R&D efficiency and higher value due to functional integrationOngoing consequent cost optimization & production transfers. Plus: active portfolio management (JV / M&A)

FutureEBITDrivers

EB

IT M

argi

n by

Pro

duct

Seg

men

t

2% -

4%5%

-7%

8% -

10%

GRAMMER today: EBIT ~5% GRAMMER’s future potential: EBIT ~7%

Revenue€450 MMRevenue€450 MM

CommercialVehicles

AutomotiveCommercial

VehiclesAutomotive

Revenue€1,250 MMRevenue

€1,250 MM

NewSegment

New Segment€300 MM

New Segment€300 MM

M&A+

Portfolio Management

Revenue€700 MMRevenue€700 MM

Revenue€1,200 MMRevenue

€1,200 MM

2017 AGM SummaryandPost-AGM Events


GRAMMER AG – AGM & NEW SHAREHOLDER STRUCTUREStrong endorsement of GRAMMER’s successful strategy by the recent AGM

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Annual General Meeting Summary

� All motions proposed by GRAMMER's management were supported by an impressive and large majority of shareholders

� Additionally, our shareholders rejected all resolutions & countermotions proposed by a minority shareholder

� Change-of-control intended by a minority shareholder could be fully averted

� GRAMMER continues in full independence the implementation of the Group’s successful strategy

GRAMMER AG’s strategy for profitable growth and val ue generation was confirmed andstrongly supported by shareholders with a massive v ote of confidence at the AGM

Post-AGM major developments

� JAP Capital Holding GmbH, an associated company of our strategic partner Ningbo Jifeng has increased its stake in GRAMMER to more than 20% and is the largest shareholder of GRAMMER AG

� Based on new shareholder structure, an “unfriendly” influence or change-of-control is nearly impossible

� GRAMMER’s request to appoint Prof. Dr.-Ing. Birgit Vogel-Heuser to the Supervisory Board, replacing Dr. Hans Liebler, who stepped down from the supervisory board effective June 30, 2017 has been accepted by the local court of Amberg

New shareholder structure

The impressive AGM results were not just an importa nt milestone, but even more a strong signalthat GRAMMER is continuing as a trusted and reliabl e partner to our customers

Investor in %* Source

JAP Capital Holding** 20.01% WpHG 07-2017

Cascade*** 13.41% AGM 05-2017

Halog*** 9.18% AGM 05-2017

Dimensional 4.58% WpHG 10-2016

Own treasury shares 2.62%

Free Float (<3%) 50.02%*) Percentage based on 12,607,121 total voting rights**) Associated company of GRAMMER’s strategic partner Ningbo Jifeng***) Companies owned by Hastor family

Financial Highlights H1-2017andOutlook 2017


Group – Revenues & Operative EBIT [in € million]Group – Revenues & Operative EBIT [in € million]

Commercial Vehicles – Revenues & Operative EBIT [in € million]Commercial Vehicles – Revenues & Operative EBIT [in € million]Automotive – Revenues & Operative EBIT [in € million]Automotive – Revenues & Operative EBIT [in € million]

Highlights 1st half-year 2017

� Revenue and operating EBIT well up on the previous year

� Operative EBIT reached 44.0 € million and operative EBIT margin increased to 4.8% (+0.7% vs. prev. year)

� IFRS results impacted by FX-valuation and exceptional expenses in connection with the change-of-control attempt

� GRAMMER firmly in its target corridor for FY 2017 operative EBIT and well on track for further sustained increase in revenue and profitability

� Order intake still weak due reluctance of main customers to award new business. Strong pickup in H2-17 necessary to secure mid-term growth expectations

Highlights 1st half-year 2017

� Revenue and operating EBIT well up on the previous year

� Operative EBIT reached 44.0 € million and operative EBIT margin increased to 4.8% (+0.7% vs. prev. year)

� IFRS results impacted by FX-valuation and exceptional expenses in connection with the change-of-control attempt

� GRAMMER firmly in its target corridor for FY 2017 operative EBIT and well on track for further sustained increase in revenue and profitability

� Order intake still weak due reluctance of main customers to award new business. Strong pickup in H2-17 necessary to secure mid-term growth expectations

H1 2017H1 2016

44.035.7

4.8%

4.1%

H1 2017H1 2016

908861

+6%

H1 2017H1 2016

22.718.6

8.5%7.4%

H1 2017H1 2016

267251

+7%

H1 2017H1 2016

28.221.3

4.3%

3.4%

H1 2017H1 2016

662635

+4%

GRAMMER GROUP – KEY FIGURES H1-2017Strong operative performance confirms successful development

4

+23%

+32% +22%

September 21, 2017Copyright 2017 GRAMMER AG – BAADER INVESTMENT CONFERENCE 2017 Page 17

1st HY Automotive order intake for new projects [life-time* revenues in € million]1st HY Automotive order intake for new projects [life-time* revenues in € million]

715

485

Plan H1-17 Act H1-17

Full-year Automotive order intake for new projects[life-time revenues* in € million]Full-year Automotive order intake for new projects[life-time revenues* in € million]

1,500

485

230

785

Plan FY-17 Act/Plan 17

To achieve order intake-plan FY-17:785 € m. order intake in H2 requiredTo achieve order intake-plan FY-17:785 € m. order intake in H2 required

H1 Act

H2 Plan

German premiumOEM

575 170

*) life-time: projected revenues generated over the entire project life-cycle (ave. 6-7 years)

Order intake H1 with German Premium OEMs**Order intake H1 with German Premium OEMs**

Deviation-405 € m. Deviation-405 € m.

Plan H1-17575 € m.

Act H1-17170 € m.

GermanPremiumOEM

*) life-time: projected revenues generated over the entire project life-cycle (ave. 6-7 years)**) German Premium OEMs: BMW, Daimler, Volkswagen Group

H1 Gap

-230 € m.

GRAMMER AUTOMOTIVE – ORDER INTAKE SITUATION 2017Order intake still weak due to reluctance of main customers

4


GRAMMER Group – Outlook:

� At Group level GRAMMER forecasts an increase in revenue of around 5% over the previous year in 2017

� As communicated, a Group operative EBIT-margin of around 5% is expected in 2017

� The attempted change-of-control sought by a minority shareholder continues to have adverse effects on order intake for future projects and a full compensation might not be possible. Therefore it will be important that GRAMMER is able to win major new projects to be awarded by the premium OEMs in the second half year 2017

GRAMMER Group – Outlook:

� At Group level GRAMMER forecasts an increase in revenue of around 5% over the previous year in 2017

� As communicated, a Group operative EBIT-margin of around 5% is expected in 2017

� The attempted change-of-control sought by a minority shareholder continues to have adverse effects on order intake for future projects and a full compensation might not be possible. Therefore it will be important that GRAMMER is able to win major new projects to be awarded by the premium OEMs in the second half year 2017

GRAMMER GROUP – COMPANY OUTLOOK 20175% operative EBIT target for full year 2017 confirmed

4

Gérard CordonnierCFO GRAMMER AGBAADER INVESTMENT CONFERENCE

September 21, 2017

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GRAMMER AG Presentation Cordonnier Baader … · copyright 2017 grammer ag –baader investment conference 2017 september 21, 2017 page 14 grammer ag – agm & new shareholder structure