Forward-Looking Statement This presentation contains forward-looking - - PowerPoint PPT Presentation

Forward-Looking Statement

This presentation contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar

• expressions. In particular, this presentation contains forward-looking statements about Company estimates

for future periods with respect to cost savings restructuring charges revenues or other financial information for future periods with respect to cost savings, restructuring charges, revenues or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to: (i) CVG’s ability to develop or successfully introduce new products; (ii) risks associated with conducting business in foreign t i d i (iii) l i b i diti ff ti th k t i hi h CVG countries and currencies; (iii) general economic or business conditions affecting the markets in which CVG serves; (iv) increased competition in the heavy-duty truck and construction markets; (v) CVG’s failure to complete or successfully integrate additional strategic acquisitions; (vi) the impact of changes in governmental regulations on our customers or on our business; (vii) the loss of business from a major customer or the discontinuation of particular commercial vehicle platforms; and (viii) various other risks as outlined in CVG’s SEC filings. There can be no assurance that statements made in this presentation relating to future events will be achieved. CVG undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to CVG or persons acting on behalf of CVG are expressly qualified in their entirety by such cautionary statements. For a complete description of risks please refer to our 2008 Annual Report on Form 10-K and current SEC For a complete description of risks, please refer to our 2008 Annual Report on Form 10-K and current SEC reports on file.

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Welcome

Good Afternoon and Welcome to Commercial Vehicle Group’s 2009 Annual Meeting of Stockholders 2009 Annual Meeting of Stockholders

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Agenda

Welcome Welcome Introductions Video 2008 i R i | T ki A ti 2008 in Review | Taking Action Financial Review Managing for the Future

• Cab Systems
• Electrical Systems
• Seating Systems
• Research and Development
• Purchasing

Closing Questions

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Introductions Chad M. Utrup, Chief Financial Officer Jerry Armstrong President Cab Systems Jerry Armstrong, President, Cab Systems Kevin Frailey, Executive Vice President, Electrical

Systems y

Milt Kniss, Executive Vice President, Seating Systems Bob Averitt, Vice President, Strategy and Business ,

, gy Development

Pat Miller, Executive Vice President, Purchasing John Hyre, Director, Investor Relations

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VIDEO

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2008 in Review

Industry downturn began in 2007 and lasted throughout 2008 throughout 2008 2008 was a difficult and challenging year as markets and economies continued to slide markets and economies continued to slide CVG has taken steps in 2008 and early 2009 to better position ourselves for economic and market recovery

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2008 in Review

Depressed commercial vehicle market was complicated by spikes in commodity prices Crude oil peaked at $147 a barrel The rise in oil prices, along with its rippling p g pp g effects, was particularly difficult for those in our industry to manage All ti hi h il i th f ll d b All-time high oil prices were then followed by a near collapse of the global credit markets April issue of Transport Topics reported that a April issue of Transport Topics reported that a significant number of fleet failures took place

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2008 in Review

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2008 in Review Taking Action

Reduced our hourly workforce to meet changing customer needs and lower market

g

g g demands

• We also need to keep a skilled workforce ready

to be competitive for the future Rationalized facilities to gain efficiencies and bt i t i

• btain cost savings
• Consolidated facilities reducing our

f t i f t i t b th 250 000 manufacturing footprint by more than 250,000 square feet

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2008 in Review Taking Action

Approximately 20% salaried workforce reduction 10% salaried furlough and wage reduction where

g

10% salaried furlough and wage reduction where possible Increased controls on inventory management Increased controls on inventory management Reduced capital expenditures R d h i i l i ti d Renewed emphasis on managing logistics and transportation cost Developed cost containment teams to uncover Developed cost containment teams to uncover additional cost reduction opportunities

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2008 in Review Taking Action

Sought full recovery of material / commodity cost increases from our customers

g

Continued to explore alternate supply resources Tightened cash management policies with customers and suppliers O ti i d l b fit t i Optimized employee benefit programs to gain savings Temporarily suspended the Company’s Temporarily suspended the Company s match on contributions to our 401(k) savings plans

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2008 in Review Taking Action

CVG continued to make strategic investments in exciting new products,

g

investments in exciting new products, such as the new GSX 3000 Global Truck Seat The GSX 3000 was introduced at the IAA Truck Show in Hanover Germany in September Well received by customers and distributors Additional developments displayed in Research and Development section

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OVERVIEW

FINANCIAL

14

Fi i l O i Financial Overview

OEM Truck Growth - 130%

Since 2001, we have:

Grown our OEM Truck market revenues 130% (Class 8 market has only grown 40% during this period)

OEM Construction Growth – 447%

this period) Grown our OEM Construction market by 447%

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market by 447% Grown our “Other” markets by 168%

Other 1 Growth - 168%

168%

1 Bus, Agriculture, Military, Specialty,

Aftermarket, OEM Service and Other Markets 15 15

Financial Overview Since 2001, we have:

Grown our revenues by approximately 184% with our top five y pp y p customers In 2007, we added a key customer in MAN through the PEKM acquisition – (Our 8th largest customer in 2008) acquisition (Our 8th largest customer in 2008)

Major Customers 2001 % Total Revenues 2008 % Total Revenues Paccar $ 44.4 16.4% $ 90.5 11.9%

$ in millions

Daimler Trucks 56.9 21.0% 82.1 10.7% International 21.2 7.8% 117.6 15.4% Volvo / Mack 23.3 8.6% 72.7 9.5% Caterpillar 10.9 4.0% 82.7 10.8%

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Financial Overview

Historical Operating Performance

C lass 8 Units (1) 146 181 182 269 341 378 212 205 (Units and $ in thousands) 2001 2002 2003 2004 2005 2006 2007 2008 R 271 226 $ 298 678 $ 287 579 $ 380 445 $ 754 481 $ 918 751 $ 696 786 $ 763 489 $ Revenues 271,226 $ 298,678 $ 287,579 $ 380,445 $ 754,481 $ 918,751 $ 696,786 $ 763,489 $ % C hange from Prior Year 10.7% 10.1%

• 3.7%

32.3% 98.3% 21.8%

• 24.2%

9.6% O perating Income (2) 16,044 $ 25,423 $ 25,229 $ 41,657 $ 89,528 $ 97,474 $ 20,254 $ 16,137 $ % of Revenues 5.9% 8.5% 8.8% 10.9% 11.9% 10.6% 2.9% 2.1% Depreciation & A mortization 12,833 $ 8,682 $ 8,106 $ 7,567 $ 12,064 $ 14,983 $ 16,425 $ 19,062 $ % of Revenues 4.7% 2.9% 2.8% 2.0% 1.6% 1.6% 2.4% 2.5%

(1) AC

T Publications

(2) E

xcludes restructuring costs, 2004 share-based compensation expense and 2008 goodwill and intangible asset impairment - for comparative purposes only g , p p g g p p p p y

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Financial Overview

Revenues Operating Income (1)

(1) Excludes restructuring costs, 2004 share-based compensation

expense and 2008 goodwill and intangible asset impairment - for comparative purposes only. * In thousands * In thousands

Market and economic conditions, commodity pricing and currency events impacted us h h 200 d 2008 through 2007 and 2008 We are positioned to remain strong and viable

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Financial Overview

Variable Variable Costs Costs

Reduce Material and Freight Costs Adjust Hourly Labor Costs in Line with Revenues

V xed xed

• sts
• sts

Kent, WA Statesville, NC (Seating Facility ONLY) Lake Oswego, OR

Facility Closures

Fix Fix Co Co

Concord, NC Seneffs, Belgium Vancouver, WA

Reductions in Salaried Workforce

Cash Cash

Capital Spending Minimization Inventory and Working Capital Management Management

Cash generation and elimination of costs is

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• ur number one priority through the down

cycle

Financial Overview

($ in thousands) 2001 2002 2003 2004 2005 2006 2007 2008 Q 1 2009 Total A ssets 263,754 $ 204,217 $ 210,495 $ 225,638 $ 543,883 $ 590,822 $ 599,089 $ 354,761 $ 299,363 $ Working C apital (1) 10,908 $ 8,809 $ 28,216 $ 41,727 $ 119,104 $ 135,368 $ 117,172 $ 102,469 $ 65,702 $ Total Debt 140,191 $ 127,202 $ 127,474 $ 53,925 $ 191,009 $ 162,114 $ 159,725 $ 164,895 $ 165,551 $ Net Debt (2) 137,046 $ 125,565 $ 123,988 $ 52,529 $ 150,368 $ 142,293 $ 149,858 $ 157,585 $ 160,201 $ Total Stockholders Investment 72,913 $ 27,025 $ 34,806 $ 111,046 $ 202,077 $ 264,905 $ 265,335 $ 43,942 $ 23,718 $ C apital E xpenditures, Net 4,898 $ 4,937 $ 5,967 $ 8,907 $ 20,669 $ 22,389 $ 17,274 $ 12,523 $ 1,690 $ % of Revenues 1.8% 1.7% 2.1% 2.3% 2.7% 2.4% 2.5% 1.6% 1.6%

(1) C rrent assetslessc rrent liabilities

Our focus on detailed planning and cash management has afforded us the opportunities to continue our growth

(1) C

urrent assets less current liabilities

(2) Total debt less cash and cash equivalents

afforded us the opportunities to continue our growth strategy

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Financial Overview

(1)

Operating Income

(1) Excludes restructuring costs, 2004 share-based compensation expense and 2008 goodwill and intangible asset impairment - for comparative purposes only. * In thousands * I h d

We are taking actions today in order to target historical levels of operating performance and

* In thousands

historical levels of operating performance and shareholder returns when our end markets rebound

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SYSTEMS

CAB

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Cab Systems Overview

Cab Structures and Structural Components, Interior Systems and Components 2008 Revenues of approximately $265 million 9 Primary Facility Locations Approximately 1 500 Employees Worldwide as of Approximately 1,500 Employees Worldwide as of 12/31/08 Flat Organizational Structure Flat Organizational Structure

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Cab Systems Significant “Wins”

Volvo Interior Trim - Takeover Business from Distressed Competitor

g

Engineered Innovative Process to Adapt Existing Equipment and Tooling A li d S l f A i t l $8 0 Milli Annualized Sales of Approximately $8.0 Million Products

Interior Trim – Interior Trim – Door Panel Assembly – Bunks & Tables

Transfer 95% Complete

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Cab Systems Significant “Wins” DTNA P3 Headliner Takeover g Annualized Sales of Approximately $6.0 Million Products - Headliners Start of Production April 2009 Start of Production April 2009 Transfer 95% Complete

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Cab Systems Significant “Wins” g Military Growth y

2008 CVG Military Sales Totaled Approximately $58 million

• Seats, Trim (and also Wiper Systems and Wire

Harnesses) CVG Continued to Secure Military Business in early 2009 Additional Military Awards Pending for 2009

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Cab Systems Interior Trim Business Awards

REAR STORAGE CABINETS OVERHEAD CONSOLE

Concept to Production Floor Annual Sales Expected to be within $8.0 to Annual Sales Expected to be within $8.0 to $10.0 Million Start of Production 2010

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Cab Systems Conquest of Distressed

CVG provides customer with quotes for current book of business

q Competitors

book of business Capacity planning process completed and a manufacturing plan developed Resource requirements identified to support aggressive relocation Concurrent engineering development Concurrent engineering development Proven program management capabilities Complete product capabilities Complete product capabilities

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SYSTEMS

ELECTRICAL

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Electrical Systems Overview

2008 Revenues of Approximately $232 million Wi i H El t i l P l A bli Wiring Harnesses, Electrical Panel Assemblies, Wiper Assemblies, Washers and Controls 10 Primary Facility Locations in 4 Countries 10 Primary Facility Locations in 4 Countries Approximately 3,000 Employees Worldwide as of 12/31/08 /3 /08

• 83% located in low-cost countries

Flat Organizational Structure Flat Organizational Structure

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Electrical Systems 2008 Significant “Wins” g Europe Successful harness launch f fi t C t ill d t i

• f first Caterpillar product in

Europe: C t d P i Compactors and Paving Equipment

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Electrical Systems

2008 Significant “Wins” North

Award for innovative molded harness for critical Caterpillar

America

p electric-drive interface Awarded new harnesses for d t l severe-duty snow removal Oshkosh equipment Additional market share gains in Additional market share gains in harnesses and wipers for line for the Heavy Expanded Mobility Tactical Trucks (HEMTT) at Tactical Trucks (HEMTT) at Oshkosh

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Electrical Systems

2008 Significant “Wins” Wiper Assemblies Awarded wiper system for Awarded wiper system for Mack low-entry series Dominant market share of U.S. military vehicle wiper systems systems

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Electrical Systems 2009 Highlights Consolidation of 2 facilities in Europe Organic and market share growth pending g g g g g for 2009

• M-ATV prototypes (harness & wipers)
• Leading position for production win when M-ATV “winners”

selected by Department of Defense

• Market share expansion with Oshkosh
• JLG
• McNeilus
• Defense
• Pierce
• Market share expansion with BAE
• Targeting first “follow-source” harness wins in China

g g

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Legislative and Technological

Electrical Systems

Productivity Enhancing Features Tailwinds Productivity-Enhancing Features – Electric Drives – “Joystick Operator Joystick Operator Environments” – Example:

• New Caterpillar “Monarch” grader:

330 electronic/electrical devices

• Old series: 130 devices

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Legislative and Technological Electrical Systems

2011 Tier IV Interim/Stage 3B Off- Hi h E i i

g g Tailwinds

Highway Emissions – “Doubling” of electronic content i i t t in engine compartment

• Sensors, sensors, sensors -- NOx,

cylinder position pressure cylinder position, pressure differential for DPF regeneration, etc.

• More durable (heat-resistant, oil-

resistant) coverings

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SYSTEMS

SEATING

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Seating Systems Overview

2008 Revenues of Approximately $267 Million 6 Primary Facility Locations in 5 Countries – Northampton (UK) – Shanghai (China) T lli Pl i (USA) – Tellico Plains (USA) – Vonore (USA) CIEB (Czech Republic) – CIEB (Czech Republic) – Brisbane (Australia) Approximately 1,300 Employees Worldwide as of Approximately 1,300 Employees Worldwide as of 12/31/08 Flat Organizational Structure

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2008 Significant Business Won Seating Systems

Asian Truck OEM Business Award

OEM Business Award to CVG as a Result of:

g

• Superior design
• Cost competitiveness
• Global supplier strategy

Global supplier strategy

Production for Several Overseas Markets to Occur at CVG Shanghai Products Products

• Standard Seat (Driver and Passenger Seats)
• Center Seat
• Bunks

SOP Beginning 2009 with Staggered Launch into 2010

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Significant “Wins” Seating Systems Military Growth g y

Mine Resistant Ambush Protected (MRAP) (MRAP) 2008 CVG Military Revenue Growth Led by Seating Products Led by Seating Products New Military Award Pending in 2009 New Light Weight Aluminum Seat

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Significant “Wins” Seating Systems OEM Fleet Seat Sales

Received incremental new business from three

g

major fleet companies Increased North American fleet sales by y approximately 6% CVG award was based on fleet customer’s CVG award was based on fleet customer s preference for CVG seat comfort, quality and technology technology Includes Driver and Passenger Seats Start of production fourth quarter 2008 Start of production fourth quarter 2008

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Significant “Wins” Seating Systems g Construction and Industrial Seats

Asian Construction and Industrial Asian Construction and Industrial Seats:

• Replacement/new business awards

SOP i 2010

• SOP is 2010

European Construction and Industrial Seats:

• Replacement/new business awards
• SOP is late 2009

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Significant “Wins” Seating Systems School Bus Driver Seats g

A major school bus manufacturer awarded CVG new business from a seat competitor CVG award was based on product design and cost competitiveness Start of production estimated for second quarter 2009

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Seating Systems

Light Vehicle Suspension Seat New Office Chair

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Seating Systems

3 Point Integrated Reclining Bus Seat Asian Low Cost Suspension Seat and Static Passenger

3 Point Reclining Passenger Seat Asian Market Low Cost Suspension Driver and Passenger Seat Passenger Seat

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Seating Systems

MRAP Lightweight Aluminum Seat

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DEVELOPMENT

RESEARCH AND

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Research & Development

Universal Arm Rest (Patent Pending) Opportunity

De elop an armrest that can offer

• Develop an armrest that can offer

cost savings opportunities while improving driver comfort

Process

• Armrest design collaborated

through CVG global engineering

• Design improvements centered

around height and length adjustability to improve ergonomics

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Research & Development

Universal Arm Rest (Patent Pending) Process (cont.)

• R&D produced a functional

p prototype for internal review

Result

Modern design that improves

• Modern design that improves

ergonomics through easy height and 4 position length adjustment to fit driver comfort needs Universal fit driver comfort needs. Universal fit allows use on the Global Seat, KAB and National Seating lines

Next Steps

Extended Position Extended Position

Next Steps

• Functioning prototype will be

presented for customer review

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Research & Development

High Performance Flooring (Patent Pending) Opportunity

• Address industry objectives to

y j reduce heat in the cab, saving fuel idling cost, improving driver comfort and reducing

Existing OEM floor mat: Thermal images from hot chamber testing Note the Existing OEM floor mat: Thermal images from hot chamber testing Note the

• verall costs

Process

• Analyzed acoustical and

from hot chamber testing. Note the temperatures and locations of the hot spots. from hot chamber testing. Note the temperatures and locations of the hot spots.

• Analyzed acoustical and

thermal performance of various combinations of cost- reduced PVC top goods and

New OEM floor mat: The temperatures l f t f th fl d th New OEM floor mat: The temperatures l f t f th fl d th

p g foam for flooring

• Identified primary cost savings

to be in the foam selection

are lower for most of the floor, and on the seats and instrument panel. are lower for most of the floor, and on the seats and instrument panel.

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Research & Development

High Performance Flooring (Patent Pending) Result

• Lower cost OE and

Aftermarket floor mat:

Impro es time to reach desired

• Improves time to reach desired

cab temperature

• Reduces operational costs
• Idle less and reduce emissions
• No loss in acoustical properties
• Major OEM approval for

Major OEM approval for production

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Research & Development

Over Molded Wiring Harness (Patent Pending) Opportunity

Develop a harness covering

• Develop a harness covering

that improves environmental performance and reliability, part-to-part consistency, y vehicle fit and aesthetics

Process

• Evaluated covering

Evaluated covering alternatives

• Prototyped tooling based on

a RIM process

• Validated samples in field

tests with customer

52

Research & Development

Over Molded Harness (Patent Pending) Result

• Launched with Caterpillar in

March

• CVG quoting on 3 additional

q g new programs for major OEMs

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PURCHASING

GLOBAL

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Global Purchasing Cash Improvements Cash Improvements Commodity Price Reductions Cost Reductions through Cost Reductions through Improvements Supplier Consolidation Supplier Consolidation

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Global Purchasing Cash Improvements p Payment Terms Improvements

• 11% improvement since Jan ’09 on top 500 direct suppliers

p p pp

Minimum Buy Improvements

• Decreased size of minimum buys by more than 25%

Changing pack sizes and using milk runs for deliveries

• Changing pack sizes and using milk runs for deliveries
• Suppliers are cooperating in difficult times

Inventory Reduction Through Purchasing y g g

• Freight consolidation from overseas
• Shortening chain and lead times

expected terms New sourcing only to suppliers that meet our expected terms

56 56

Global Purchasing

Commodity Inputs

Steel Copper Steel Resins PolyPro

Commodity input materials are down vs. 2008

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Global Purchasing Commodity Reductions y P i R l f All 2008 I Pursuing Reversal of All 2008 Increases

• Global benchmarking to validate market prices
• If supplier won’t comply, developing alternatives to re-source

Contracts Tied to Indices Where Possible

• ABS, Foam, Steel, Freight, Resins
• Automatic reductions
• Automatic reductions

Strategy to Align Supply Indices with Customer Contracts

58 58

Global Purchasing Cost Reduction Projects j Enhanced Cross Functional Teams During 2008 2008

• Teams organized by major product groups
• Currently tracking more than 400 active or completed projects

Typical Projects

• Reduce component variants

Optimize cost through design improvement

• Optimize cost through design improvement
• Remove less competitive suppliers

Auctions

• Average 15-20% overall price reduction
• Pallets, packaging, weld materials, hardware, etc.

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Global Purchasing Cost Reduction Examples p Bellows Consolidation

• Annualized savings: approximately $0 3 million per year

Annualized savings: approximately $0.3 million per year

• 13 variants today to one common version
• Eliminated costly adaptive structure

Reduced number of suppliers by 50%

• Reduced number of suppliers by 50%

Auction of Corrugated Packaging

• Annualized savings: approximately $0.6 million per year
• Reduced number of suppliers by 47%
• Improved payment terms
• Shorter lead times and lower minimum buys

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In Closing

61

Questions

Rules for the Annual Meeting

Questions will be directed to the Chairman, CEO and CFO Only one participant at a time can have the floor, and only after being recognized by the CEO Ch i f th ti CEO or Chair of the meeting Participants will be limited to three questions and 10 minutes of floor time

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