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

2017 Italian Stock Market Opportunities – May, 17 2017

INDEX

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Group presentation page 3 Q1 Achievements page 9 Performance levers page 19

GROUP PRESENTATION

2017 Italian Stock Market Opportunities – May, 17 2017

SOGEFI CUSTOMERS

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CARS TRUCKS 2 WHEELERS 3 WHEELERS PARTS

2017 Italian Stock Market Opportunities – May, 17 2017

Air & Cooling

3 BUSINESS UNITS

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€ 480.2m

(30%)

2016 Sales

€ 1,574.1m

€ 535.1m

(34%)

€ 562.8m

(36%)

Filtration Suspensions Products

 Stabilizer bars,

heavy stab bars & stabilinkers

 Coil springs  Torsion bars  Leaf springs  Precision springs  Oil filters  Diesel filters  Air filters  Coil filters

transmission

 Canisters  Manifolds  Airducts  Cooling

(waterpumps, water outlet housing, waterducts)

2017 Italian Stock Market Opportunities – May, 17 2017

Volvo Toyota BMW Volkswagen/Audi Daimler GM PSA FCA/CNH Industrial Renault/Nissan Ford

2016 2015

5 TOP CLIENTS EACH REPRESENTING MORE THAN 10% OF TOTAL SALES

WELL BALANCED CLIENTS MIX GM EXPERIENCED A 35.6% GROWTH IN 2016

10% 15%

6

5%

2017 Italian Stock Market Opportunities – May, 17 2017

2016 RESULTS – P&L HIGHLIGHTS

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€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

2016 RESULTS – FCF HIGHLIGHTS

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€ 31.2m FCF generation in 2016 vs a cash burn of € 24.8m in 2015 Net financial debt reduced by € 23,3m in 2016

NET DEBT (€m) 322.3 299.0

Without items of non-

• rdinary nature, FCF of

€ 21.9m in 2016

FREE CASH FLOW w/o Non Recurring items 9.4 21.9 €m 2015 2016 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 Taxes (16.1) (18.3) Interests (28.6) (27.1) FREE CASH FLOW (24.8) 31.2

Q1 2017 ACHIEVEMENTS

2017 Italian Stock Market Opportunities – May, 17 2017

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

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2017 Italian Stock Market Opportunities – May, 17 2017

ALL GEOGRAPHICAL AREAS AND ALL BUSINESS UNITS CONTRIBUTED WITH SIGNIFICANT GROWTH

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Outperformed reference markets including in Europe

€m Q1 2017 Q1 2016 Europe 274.0 253.2 8.2% 9.5% 62.4% 4.2% 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% 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

weight based on Q1 2017 reported change Constant exchange rates reference market

€m Q1 2017 Q1 2016 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% Constant exchange rates reported change

2017 Italian Stock Market Opportunities – May, 17 2017 16 26.8 Q1 2016 Q1 2017 34.6 45.1 Q1 2016 Q1 2017 109.2 125 Q1 2016 Q1 2017

FURTHER PROFITABILITY INCREASE IN Q1 2017

Contribution margin EBITDA EBIT

28.0% 8.9% 10.3% 4.1% 6.1%

mostly driven by:

Contribution margin improvement Control of indirect costs Reduction of total labour costs % to sales from 21.7% to 20.5%

+14.5% +30.2% +67.5%

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€m / % sales

28.5%

2017 Italian Stock Market Opportunities – May, 17 2017

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

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in % of sales

19.8% 18.9% 17.5% Q1 2015 Q1 2016 Q1 2017

Structure costs reduction Better sharing/ allocating functions

Key levers for savings on indirect costs

Cost rationalization New plants designed more efficiently

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Q1 2017 EBITDA REFLECTS TURNAROUND ACTIONS

20.9 34.9 34.6 45.1 Q1 2014 Q1 2015 Q1 2016 Q1 2017

2017 Italian Stock Market Opportunities – May, 17 2017

Q1 2017 RESULTS – P&L HIGHLIGHTS

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€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% Financial expense (income)

• 8.5

2.2%

• 6.4

1.4% 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 16

Net debt (end of period) 322.6 291.4

€ 6.9m FCF generation represents 1.6% of sales Net financial debt reduced by € 31,2m versus end March 2016

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

Interests

• 7.4
• 5.4

FREE CASH FLOW

• 0.2

6.9

2017 Italian Stock Market Opportunities – May, 17 2017 17

VALUE CREATION THROUGH ROCE INCREASE

+7.8 points ROCE increase versus Q1 2016

CE: Average Capital Employed (end of period) EBIT: 12 months rolling 9.1% 10.7% 12.8% 14.9% 16.9%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

2017 Italian Stock Market Opportunities – May, 17 2017 18

NFP/EBITDA RATIO CONTINUING TO IMPROVE

NFP: Net debt (end of period) EBITDA: 12 months rolling 2.80 2.56 2.27 1.96 1.79

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

PERFORMANCE LEVERS

2017 Italian Stock Market Opportunities – May, 17 2017

PERFORMANCE LEVERS

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To join the best-in-class in terms of: Safety Quality Sustainability Customers’ satisfaction Profitability Cash flow Innovation

KEY OBJECTIVES

To increase operational efficiency, 5 performance levers: Purchasing excellence Shopfloor excellence Program management excellence Indirect cost optimization Competitive footprint

KEY LEVERS

2017 Italian Stock Market Opportunities – May, 17 2017

PROFITABILITY LEVERS

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 Cost reduction

through technical modifications

 Pluriannual price

and productivity negotiations

 Low Cost Country

sourcing

Purchasing

1

 Scrap reduction  Direct labor

productivity

• Higher

automatization

• Shorter reaction

times to deviations

 Indirect labor

productivity increase

• Lean
• rganizations

Shopfloor

2

 Price increases for

technical modifications

 Systematic price

increases for volume fluctuations

 Development and

tooling cash payment

Program Management

3

 Polyvalence and

Polycompetence

 Process redesign

Indirect costs reduction

4

Competitive footprint

5

 Industrial

excellence

 Plant competitivity

plan

5 performance drivers to increase operational efficiency

2017 Italian Stock Market Opportunities – May, 17 2017

PROGRAM MANAGEMENT EXCELLENCE

Continuous price negotiation from first quotation to end of life to maximize pricing power.

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Renegotiation of the contract price

2017 Italian Stock Market Opportunities – May, 17 2017

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
• il 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

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COMPETITIVE FOOTPRINT: SOGEFI TO BUILD A NEW FACTORY IN MOROCCO

2017 Italian Stock Market Opportunities – May, 17 2017 24

WHY INVEST IN MOROCCO

Competitive footprint

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 Low Cost Country

sourcing

 Direct and Indirect labour

cost optimization

 Lean organization

Several international car and component suppliers have already invested or are planning to invest in the country, for which a production of 1 million vehicles per year is envisaged around 2025

 The company has

already received new

• rders

 Supporting future profitable

growth in OEM and OES, both locally and in Europe

 Leverage on Moroccan

plant to enter new business segments

Business

• pportunity

1

 Incentives on capex  Tax breaks for start up

phase

 Tangier Free Trade Zone for

import and export duties

 Euro-Mediterranean trade

agreement

Indirect benefits

3

2017 Italian Stock Market Opportunities – May, 17 2017

A new 8,000 square metres plant will be built in Wujiang (Shanghai area) on the existing industrial site that currently hosts a 15,000 square metres stabilizer bars factory, which started operating in 2014. The purpose of the initiative is to meet the increasing demand for coil springs in China, in view of the growth forecasts for the local car market, the gradual replacement of leaf springs and the higher technical standards required by local manufacturers. The start of the new production should ensure additional annual sales of € 20 million for the company from 2023. The investment for the new plant amounts to € 8 million. When the coil spring plant is fully operational, the Wujiang suspensions site will generate € 70 million in annual sales and employ 300 people.

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SOGEFI TO BUILD A NEW COIL SPRINGS FACTORY IN CHINA AT THE END OF 2018

2017 Italian Stock Market Opportunities – May, 17 2017

2017 OUTLOOK

For the automotive market, after a first quarter of sustained growth, the outlook for 2017 shows a positive trend, albeit at a slower pace. Concerning Sogefi, the positive performance recorded in the first quarter confirms the projected improvement in profitability for 2017.

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2017 Italian Stock Market Opportunities – May, 17 2017

PLANNED COMMUNICATION IN 2017

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CEO Conference – Milan – 27 June 2017 Roadshow in London – 5 July 2017 Roadshows in Paris and Frankfurt – Fall 2017

2017 Italian Stock Market Opportunities – May, 17 2017

CONTACTS

Yann Albrand, Group CFO Laura Pennino, Investor Relations and CSR SOGEFI Via Ciovassino, 1/a 20121 Milano – Italia Tel: 39 02 46750214 Fax: +39 02 43511348 Mail: ir@sogefigroup.com

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2017 Italian Stock Market Opportunities – May, 17 2017

DISCLAIMER

This document has been prepared by SOGEFI S.p.A. for information purposes only and for use in presentations

• f the Group’s results and strategies.

For further details on the SOGEFI Group. reference should be made to publicly available information. including the Annual Report. the Semi-Annual and Quarterly Reports. Statements contained in this document. particularly the ones regarding any SOGEFI Group possible or assumed future performance are or may be forward looking statements and in this respect they involve some risks and uncertainties. Any reference to past performance of the SOGEFI Group shall not be taken as an indication of future performance. This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

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