Laurent HEBENSTREIT Chief Executive Officer Yann ALBRAND Chief - PowerPoint PPT Presentation

Laurent HEBENSTREIT Chief Executive Officer Yann ALBRAND Chief Financial Officer Laura PENNINO Investor Relations & CSR 2017 Italian Stock Market Opportunities Paris, May 17, 2017

INDEX Group presentation page 3 Q1 Achievements page 9 Performance levers page 19 2017 Italian Stock Market Opportunities – May, 17 2017 2

GROUP PRESENTATION

SOGEFI CUSTOMERS 3 WHEELERS PARTS 2 WHEELERS CARS TRUCKS 2017 Italian Stock Market Opportunities – May, 17 2017 4

3 BUSINESS UNITS Suspensions Filtration Air & Cooling  Stabilizer bars,  Oil filters  Manifolds heavy stab bars &  Diesel filters  Airducts stabilinkers  Air filters  Cooling  Coil springs  Coil filters (waterpumps, Products  Torsion bars transmission water outlet  Leaf springs  Canisters housing,  Precision springs waterducts) 2016 Sales € 562.8m € 535.1m € 480.2m € 1,574.1m (36%) (34%) (30%) 2017 Italian Stock Market Opportunities – May, 17 2017 5

5 TOP CLIENTS EACH REPRESENTING MORE THAN 10% OF TOTAL SALES Ford Renault/Nissan FCA/CNH Industrial PSA GM Daimler Volkswagen/Audi BMW Toyota 5% 10% 15% Volvo 2016 2015 WELL BALANCED CLIENTS MIX GM EXPERIENCED A 35.6% GROWTH IN 2016 2017 Italian Stock Market Opportunities – May, 17 2017 6

2016 RESULTS – P&L HIGHLIGHTS € m 2015 % 2016 % YoY TOTAL NET SALES 1,499.1 1,574.1 5.0% CONTRIBUTION MARGIN 420.0 28.0% 453.9 28.8% 8.1% GROSS INDIRECT COSTS 294.0 19.6% 295.2 18.8% 0.4% EBITDA 115.5 7.7% 152.7 9.7% 32.2% EBIT 50.7 3.4% 74.5 4.7% 46.8% Financial expense (income) (32.8) 2.2% (27.9) 1.8% PRE-TAX INCOME (LOSS) 17.9 1.2% 46.6 2.9% Income Tax (12.9) 0.9% (32.6) 2.1% Minority Interest (3.9) 0.2% (4.7) 0.2% NET INCOME (LOSS) 1.1 0.1% 9.3 0.6% CAPITALIZATION - AMORTIZATION INTANGIBLE 3.2 0.2% 0.9 0.1% 2017 Italian Stock Market Opportunities – May, 17 2017 7

2016 RESULTS – FCF HIGHLIGHTS 2015 2016 € m OPERATING CASH FLOW 54.2 67.3 Restructuring (20.0) (9.4) SM Warranty Claims (18.0) 9.6 Tax withholdings 0.0 5.7 Other 3.7 3.5 Non recurring items (34.3) 9.4 € 31.2m FCF generation Taxes (16.1) (18.3) Interests (28.6) (27.1) in 2016 vs a cash burn of FREE CASH FLOW (24.8) 31.2 € 24.8m in 2015 Without items of non- ordinary nature, FCF of FREE CASH FLOW w/o Non 9.4 21.9 Recurring items € 21.9m in 2016 Net financial debt reduced NET DEBT ( € m) 322.3 299.0 by € 23,3m in 2016 2017 Italian Stock Market Opportunities – May, 17 2017 8

Q1 2017 ACHIEVEMENTS

Q1 HIGHLIGHTS Strong revenue growth with revenues up by 12.6% at € 439.1m. Positive performance of all three business units and all geographical areas EBITDA at € 45.1m, i.e. 10.3% on sales  Further improvement in the contribution margin (from 28% to 28.5%)  Reduced impact of indirect costs Net debt improved by € 31.2m to € 291.4m vs end March 2016 Continuous actions on performance levers to support profitable growth On track in its turnaround plan 2017 Italian Stock Market Opportunities – May, 17 2017 10

ALL GEOGRAPHICAL AREAS AND ALL BUSINESS UNITS CONTRIBUTED WITH SIGNIFICANT GROWTH Constant weight reported reference €m Q1 2017 Q1 2016 exchange based on change market rates Q1 2017 Outperformed Europe 274.0 253.2 8.2% 9.5% 62.4% 4.2% reference markets North America 81.2 70.3 15.4% 10.8% 18.5% 2.5% South America 48.9 37.5 30.6% 14.1% 11.1% 19.1% including in Europe Asia 39.5 31.3 26.4% 25.7% 9.0% 6.8% Intercompany eliminations -4.5 -2.2 -1.0% Total 439.1 390.1 12.6% 11.0% 100.0% 5.8% Source: Sogefi and IHS data Constant reported €m Q1 2017 Q1 2016 exchange change rates Suspensions 153.2 143.1 7.1% 6.0% Filtration 149.2 131.1 13.8% 12.1% Air & Cooling 137.9 117.0 17.8% 15.7% Intercompany eliminations -1.2 -1.1 Total 439.1 390.1 12.6% 11.0% 2017 Italian Stock Market Opportunities – May, 17 2017 11

FURTHER PROFITABILITY INCREASE IN Q1 2017 € m / % sales +14.5% 28.5 % 28.0% Contribution margin 125 109.2 mostly driven by: Q1 2016 Q1 2017 Contribution margin improvement 10.3% +30.2% Control of indirect costs 8.9% EBITDA Reduction of total labour costs % 45.1 to sales from 21.7% to 20.5% 34.6 Q1 2016 Q1 2017 +67.5% 6.1% 4.1% EBIT 26.8 16 Q1 2016 Q1 2017 2017 Italian Stock Market Opportunities – May, 17 2017 12

CONTINUOUS EFFORT IN INDIRECT COSTS OPTIMIZATION IN Q1 2017 GROSS INDIRECT COSTS WERE 17.5% OF TOTAL SALES 1.4 points improvement vs Q1 2016  2.3 points improvement vs Q1 2015  19.8% in % of sales 18.9% 17.5% Q1 2015 Q1 2016 Q1 2017 Key levers for savings on indirect costs Structure costs reduction Cost rationalization New plants designed more efficiently Better sharing/ allocating functions 2017 Italian Stock Market Opportunities – May, 17 2017 13

Q1 2017 EBITDA REFLECTS TURNAROUND ACTIONS 45.1 34.9 34.6 20.9 Q1 2014 Q1 2015 Q1 2016 Q1 2017 2017 Italian Stock Market Opportunities – May, 17 2017 14

Q1 2017 RESULTS – P&L HIGHLIGHTS € m Q1 2016 % Q1 2017 % YoY TOTAL NET SALES 390.1 439.1 12.6% CONTRIBUTION MARGIN 109.2 28.0% 125.0 28.5% 14.5% GROSS INDIRECT COSTS 73.5 18.9% 76.8 17.5% 4.4% EBITDA 34.6 8.9% 45.1 10.3% 30.2% EBIT 16.0 4.1% 26.8 6.1% 67.5% 2.2% 1.4% Financial expense (income) -8.5 -6.4 PRE-TAX INCOME (LOSS) 7.5 1.9% 20.4 4.7% Income Tax -3.4 0.9% -7.7 1.8% Minority Interest -1.2 0.3% -1.1 0.3% NET INCOME (LOSS) 2.9 0.8% 11.6 2.6% CAPITALIZATION - AMORTIZATION INTANGIBLE 0.6 0.2% -1.3 -0.3% 2017 Italian Stock Market Opportunities – May, 17 2017 15

Q1 2017 RESULTS – FCF HIGHLIGHTS € m Q1 2016 Q1 2017 OPERATING CASH FLOW 13.7 18.9 Restructuring -4.2 -3.3 Warranty Claims 0.7 0.1 Non Ordinary items -3.5 -3.2 Taxes -3.0 -3.4 € 6.9m FCF generation Interests -7.4 -5.4 represents 1.6% of sales FREE CASH FLOW -0.2 6.9 Net financial debt reduced Net debt (end of period) 322.6 291.4 by € 31,2m versus end March 2016 2017 Italian Stock Market Opportunities – May, 17 2017 16

VALUE CREATION THROUGH ROCE INCREASE 16.9% 14.9% 12.8% 10.7% 9.1% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 +7.8 points ROCE increase versus Q1 2016 CE: Average Capital Employed (end of period) EBIT: 12 months rolling 2017 Italian Stock Market Opportunities – May, 17 2017 17

NFP/EBITDA RATIO CONTINUING TO IMPROVE 2.80 2.56 2.27 1.96 1.79 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 NFP: Net debt (end of period) EBITDA: 12 months rolling 2017 Italian Stock Market Opportunities – May, 17 2017 18

PERFORMANCE LEVERS

PERFORMANCE LEVERS KEY OBJECTIVES KEY LEVERS To increase operational To join the best-in-class in efficiency, 5 performance terms of: levers: Safety Quality Purchasing excellence Sustainability Shopfloor excellence Customers’ satisfaction Program management excellence Profitability Indirect cost optimization Cash flow Competitive footprint Innovation 2017 Italian Stock Market Opportunities – May, 17 2017 20

PROFITABILITY LEVERS 5 performance drivers to increase operational efficiency 4 1 2 3 Program Indirect costs Shopfloor Purchasing Management reduction  Cost reduction  Scrap reduction  Polyvalence and  Price increases for through technical Polycompetence  Direct labor technical productivity modifications  Process redesign modifications - Higher  Pluriannual price  Systematic price automatization and productivity increases for 5 - Shorter reaction negotiations Competitive volume fluctuations times to footprint  Low Cost Country deviations  Development and sourcing tooling cash  Indirect labor productivity  Industrial payment increase excellence - Lean  Plant competitivity organizations plan 2017 Italian Stock Market Opportunities – May, 17 2017 21

PROGRAM MANAGEMENT EXCELLENCE Continuous price negotiation from first quotation to end of life to maximize pricing power. Renegotiation of the contract price 2017 Italian Stock Market Opportunities – May, 17 2017 22

COMPETITIVE FOOTPRINT: SOGEFI TO BUILD A NEW FACTORY IN MOROCCO Sogefi has already received new orders for both local and the European markets that will bring in additional annual sales of € 30 million from 2020 The plant, which will start operating at the beginning of 2018, will manufacture two different models of engine filtration systems for OEM and OES: metal diesel filter • oil filtration module • The 10,000 square-meters factory will be built in the free trade zone of Tangier and will employ 120 people. Potential new business initiatives currently under negotiation could increase annual sales to € 60 million in 2021, the plant size to 25,000 square-meters and the number of employees to 300. In a full scale scenario, the total investment could reach € 10 million 2017 Italian Stock Market Opportunities – May, 17 2017 23