Rieter Automotive Systems Presentation by Erwin Stoller CEO - - PowerPoint PPT Presentation

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30.9.04 Presse- und Finanzanalystenreise Rieter Automotive Systems 1

Presentation by Erwin Stoller CEO Rieter Automotive Systems

• Sept. 30 / Oct. 1, 2004

Rieter Automotive Systems

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30.9.04 Presse- und Finanzanalystenreise Rieter Automotive Systems 2

Agenda

• 1. Market Development
• Markets, Products, Customers, Competitors
• 2. Strategic Intent
• Innovation
• Cost Competitiveness
• Global presence / External Growth

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30.9.04 Presse- und Finanzanalystenreise Rieter Automotive Systems 3

Global Light Vehicle Production: 2007 Forecast vs. ’03

17.3 16.4 15.8 NAFTA

• W. Europe
• E. Europe

4.6 3.2 Japan 9.5 9.9 4.6 3.0 Rest of the Asia 3.3

• S. Korea

1.9 3.1 2.6

• S. America

1.0 1.5 Rest of the World

World Production 2003: 58.4 Mio 2007: 66.6 Mio

16.7 China 3.9 6.5

DRI-WEFA Forecast Report, June 2004

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Drivers for Demand

1. Price pressure – 2. Fuel efficiency / lightweight construction – 3. Increase in global vehicle production + 4. Growing demand for more comfort within car + (interior enhancement) 5. Shift toward premium brands + 6. Increasing share of diesel powered cars + (+9% package/car) 7. Regulatory changes / noise reduction + 8. Technological innovations = Demand Drivers Effect

Source: Mercer Mgt Consulting

Eight Key Market Trends in the Acoustic & Thermal Systems

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30.9.04 Presse- und Finanzanalystenreise Rieter Automotive Systems 5

Worldwide Automotive Acoustic Market 2001-07, in bn. CHF

*Rieter market share estimate on acoustic and thermal products Source: Mercer Management Consulting, 2002

6.0 6.2 6.3 6.5 6.9 7.2 7.5 3.6 3.8 3.9 4.2 4.4 4.7 4.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.5 0.6 0.6 0.6 0.6 0.6 0.6

2001 2002 2003 2004 2005 2006 2007

10.8 11.3 11.6 12.2 12.8 13.4 13.8

Vibration Cushing (CAGR: 2.9%) Underfloor (CAGR: 2.5%) Engine (CAGR: 4.7%) Interior (CAGR: 4.3%) Total (CAGR: 4.2%)

Current Rieter market share

• approx. 10% *

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Product Portfolio Division Automotive

Cross Vehicle Interior Headliner & Trim Engine Compartment Under Floor Trunk Interior Floor

• Acoustic & Thermal

package integrated in 6 Product lines

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Our Customers

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Sales 2003

Automotive Sales: Strong and Balanced Customer Base

5%

3%

13% 13% 10% 11% 8% 6% 6% 6% 4% 8% 7%

GM Fiat Ford Group Daimler- Chrysler Commercial vehicles BMW Group Other PSA VW Group Renault Toyota Honda

• ther

Japanese carmarkers

Sales HY1 2004

6% 9% 4% 5% 6% 6% 8% 11% 11% 14% 12%

3%

5%

GM Fiat Ford Group Daimler- Chrysler Commercial vehicles BMW Group Other PSA VW Group Renault Toyota Honda

• ther

Japanese carmarkers

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Number of OEMs and Automotive Suppliers 1900–2015

Source: Mercer & Fraunhofer, 2003

Further supplier consolidation expected

OEMs Suppliers

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Expansion of the automotive business with the following priorities: Organic growth through innovative products Good cost position through permanent productivity enhancement and exploitation

• f low-cost locations

External growth only in order to close strategic gaps (regional, product, know-how)

Automotive Systems: Strategic Intent

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DA Current Strategy Product vision so far: from Acoustic Integrator into living cell

Supplier of advanced structural modules # 1 Acoustic & Thermal Integrator of modules (e.g. Interior Floor system + Underfloor) # 1 Acoustic Integrator of parts / components 2006 Value added / Complexity (CHF/car) 2003 2010/20 Time

……... Ducts and openings for heat circulation molded into the structure Embedded bacteria soft surfaces for odor control Integrated carpet Advanced air conditioning system including ducts network and embedded automatic micro-valves Intelligent fibers (optical fibers,conductive polymers, etc) integrated into the structure Fiber reinforced thermoplastic composite structure integrating damping & acoustic functions

Living Cell 1'000 300 200

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Innovation

Until 1999: INSULATION NOISE ABSORPTION RIETER ULTRA LIGHT

TM principle

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Innovating the Last Frontier: Underfloor

Tomorrow MODULE Today COMPONENTS

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IFP* TECHNOLOGY: Process Innovation

CAR MODEL : CITROEN C2/C3 – PEUGEOT 1007 RIETER PRODUCTION : ONS EN BRAY (France), BARCELONA (Spain)

INNOVATION

• Low process cost
• Acoustic performance
• Recyclability

*IFP = Injection Fibre Process

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PLASTIC INJECTION: Product Innovation (Acoustics)

CAR MODEL: RENAULT MODUS/ NEW CLIO RIETER PRODUCTION : MOISSAC (France)

INNOVATION

• Plastic parts with integrated

acoustic function (air and water box)

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Partnership: Toyota Avensis

Benefits:

• Sound package, 50% weight reduction
• Best in class acoustics
• Quality and aesthetics

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Renault forecasts highest Growth in …..

1.88

NAFTA +6.6%

• W. EU -0.4 %
• E. EU +10.8%

0.32

Japan +0% Rest of Asia +0%

• S. Korea +15.7%

0.08

• S. America +11.4%

China +0%

… Eastern Europe, S. Korea, Iran

2.44 mio vehicl. produced in 03 3.36 mio forecasted in 2011 CAGR +4.1% p.a.

1.815 0.74

0.02 Iran 0.2 0.19

Source: DRI-WEFA Forecast Report, March 2004 – LV production (million units) – Compounded annual growth in % 0.015 0.025 0.11 0.37

300000 veh Not included

2003 2011

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3.05 mio vehicles produced in 2003 3.65 mio forecasted in 2011 CAGR +2.2% p.a.

Nissan sees Production shift from Japan into Asia …

0.42

NAFTA +4.7%

• W. EU +0%
• E. EU +0%

Japan –1.4% Rest of Asia +7%

• S. Korea +0%

0.01

• S. America +12%

0.03 China +18% Rest of World +10.5%

0.42

0.1 0.025

Source: DRI-WEFA Forecast Report, March 2004 – LV production (million units) – Compounded annual growth in % 0.81 1.17 1.52 1.35 0.09 0.34 0.15 0.26

2003 2011

… and growth in NAFTA

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Expansion of the automotive business with the following priorities: Organic growth through innovative products Good cost position through permanent productivity enhancement and exploitation

• f low-cost locations

External growth only in order to close strategic gaps (regional, product, know-how)

Automotive Systems: Strategic Intent

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Roadmap to Profitable Growth: Cost Competitiveness

• Improvement of Productivity
• further improvement and standardization of processes (benchmarking)
• KAIZEN workshop in the plants
• Reduction of Procurement costs
• further product standardization to bundle volumes
• short-term: countermeasure against higher market prices
• mid-to-long-term: reduction of material costs and CAPEX
• Decrease in the use of raw material
• continuous process and product reengineering

(better use of material input)

• implementation of further recycling processes
• Reduction of fixed costs
• streamlining of the organizational structure in Europe
• Extension of low-cost locations
• Eastern Europe
• Asia (China)

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Manufacturing

Benchmark plant Plant with improvement potential

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Expansion of the automotive business with the following priorities: Organic growth through innovative products Good cost position through permanent productivity enhancement and exploitation

• f low-cost locations

External growth only in order to close strategic gaps (regional, product, know-how)

Automotive Systems: Strategic Intent

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28 63 49 Textile Systems Automotive Systems Rieter Group 11 35 25 Europe/ Africa in % Asia in % Total CHF million 61 1228 2 1876 26 3118 (46) (Previous year) (31) (23) (2976) North/South America in %

Growth Potential

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30.9.04 Presse- und Finanzanalystenreise Rieter Automotive Systems 24 Beijing

DXC Hyundai Mitsubishi

Changchun

VW/Audi Toyota Mazda FAW

Shengyang

BMW GM

Tianjin

Toyota

Shanghai

VW GM

Nanjing

Fiat

Guangzhou

Honda Nissan Toyota

Wuhan

PSA Nissan Honda

Chongqing

Suzuki Ford Changan

Hainan

Mazda

Fuzhou

Mitsubishi

Wuhu

Chery

Ningbo

Geely

North Central South

Japanese JVs Local Chinese Western JVs

Location

2003: 500K 2006: 1‘000 k 2003: 900K 2006: 1‘900 k 2003: 200K 2006: 400 k 2003: 390K 2006: 900 k 2003: 450K 2006: 1‘000 k Source: Finanz und Wirtschaft, 13/3/2004

Chinese Automotive Industry: Overview

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JV China South – Status

11.2003 04.2004 01.2004

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DA-44-2002

Rieter Automotive Systems

Worldwide Leadership in Acoustics

Nihon Rieter Automotive Acoustics Co Ltd. (Joint Venture) Shizuoka Nihon Tokushu Toryo Tokyo (Nittoku) Rieter Automotive Systems Rieter Automotive North America UGN United Globe Nippon

50% Rieter Automotive NA 30% Nittoku 20% Hirotani/Fujiyoshi

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Argentina

• Córdoba
• Buenos Aires

Canada

• Tillsonburg,

Ontario

• London,

Ontario

• Bloomsburg,

Pennsylvania USA • Farmington Hills, Michigan

• Chicago Heights, Illinois
• Valparaiso, Indiana
• Lowell, Indiana
• Oregon, Ohio
• Aiken, South Carolina

China

• Fuzhou

China

• Changchun

Malaysia

• Shah Alam

Thailand

• Samutprakarn

Japan

• Shizuoka

Japan

• Tokyo

Japan

• Aichi

Japan

• Hiroshima City

Rieter Automotive Joint Ventures Licensees

• Sao Bernardo do Campo

South Africa

• Rosslyn

Spain *

• Terrassa

Portugal

• Setubal

France *

• Aubergenville

Belgium

• Genk

Netherlands

• Weert

Czech Rep.

• Chocen

Switzerland

• Winterthur
• Sevelen

Turkey

• Bursa

Italy *

• Leini
• Moncalieri

Poland

• Katowice

India

• New Dehli

Germany

• Rossdorf-Gundernhausen
• Bebra
• Gr. Britain
• Halesowen
• Heckmondwike

France: + 5 plants Italy: + 5 plants Spain: + 2 plants

*

Automotive Systems: Worldwide Locations

China

• Guangzhou
• Shreveport, Lousiana
• St. Joseph, Michigan

Brazil

• Betim
• Taubaté
• Jackson, Tennessee
• Chicago, Illinois

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"Roadmap to Profitable Growth"

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Rieter Football Tournament in the Czech Republic 2004 One Team – "Riealizing" our potential