Investor Presentation • Jun 21, 2018
Investor Presentation
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Biesse Group is a global leader in the technology for processing wood, glass, stone, advanced materials and metal. Founded in Pesaro in 1969 by Giancarlo Selci, the company has been listed on the Italian Stock Exchange (Star) since June 2001. Starting from October 2015 Biesse is included in the Mid-Cap segment.
We believe in challenging standards, in thinking forward and in acting differently.
Creating advanced technologies and beautifully -designed solutions is the key to transforming our beliefs into real value.
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We manufacture machines and components for wood, glass, stone, advanced materials and metal processing through specialised business units and 12 manufacturing sites in Italy and worldwide.
Growing investments in R&D have enabled us to create technological solutions that have simplified the management of CNC machines, improving our customers' processes revolutionizing market standards.
We support our colleagues everywhere in the world, using the most advanced management, sales and support system. Our global network enables us to be always close to our customers.
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Manufacturers of furniture, design items and door/window frames, producers of elements for the building, nautical and aerospace industries.
More than 4,100 employees throughout the world (temporary workers included) are our Human Capital Value
Innovation is the driving force for the way we do business, continuously striving for excellence to support our customers' competitiveness.
Innovation is hard-wired in our DNA. Past, present and future.
Our main principles:
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03
Cash
01
Revenue
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FRISIA
GRUPPO LUBE
……B2B companies will need a completely different approach to driving growth…..
what will impact our business over the next years:
| Customer Insights & Analytics | ||
|---|---|---|
| Collect data across all touchpoints | 81% | |
| for a single view of customers | 67% | ←14% |
| Translate customer data into actions | 80% | |
| leveraging advanced customer analytics | 69% | —11%→ |
| Extract and translate customer | 73% | |
| insights from new technologies | 61% | +12%→ |
| Customer Experience Operations & Performance | ||
| Monitor and predict Sales/ | 80% | |
| Service performance | 67% | —13%→ |
| 78% | ||
| Enable workforce through efficient tools | 67% | ∉11% |
| 79% | ||
| Deal with complexity | 68% | —11‰ |
how Biesse is facing this phase:
•remain ahead of customer expectations •leverage digital technologies •sales and marketing organization fit
The single, integrated platform to manage all machine processes has been fully implemented on machines.
Our goal is to identify 4.0 Industry - oriented Customers in order to provide them with a new business model focused on software and integration.
In the smart factory of tomorrow, each component is traced and identifiable enabling automatic feedback and process statistics to be generated.
30%
Super Systems
70%
Smart for all
| E R V I C E S |
P T I M I Z A T I O N |
R E D I C T I V I T Y |
U M A N |
N N O V A T I O N |
N A L Y S I S |
|
|---|---|---|---|---|---|---|
SOPHIA is the IoT platform, created by Biesse in collaboration with Accenture, which enables its customers to access a wide range of services to streamline and rationalise their work management processes.
Smart Products
Smart Services
New Customer Experiences
Connected machines by 2020
With its new IIOT platform, Biesse is transforming itself from product-oriented manufacturer to a digital business offering to its customers value added services
| "∕∼ |
|---|
| ----- |
12%
40%
14%
A.M. Division Estimated
Tooling Division Estimated
Mechatronics Division Estimated
CAGR 2018-2020
CAGR 2018-2020
Wood Division Estimated CAGR 2018-2020
G&S Division Estimated
CAGR 2018-2020
CAGR 2018-2020
12.9%
4%
Market Estimated CAGR 2018-2020
7% Market Estimated CAGR 2018-2020
5%
Market Estimated CAGR 2018-2020
6%
Market Estimated CAGR 2018-2020
The competition in the current market is consolidated. We are the second leading company in the sector. Main competitors are located in Germany and in Italy. The most important of these (easily comparable) are HOMAG in Germany (30.5% estimated market share) and SCM in Italy (7,5% estimated market share*).
Estimated worldwide market share 2017 Market Size
2017
Whole market potential €3.6bn
Wood division Estimated CAGR 2018-2020 vs 2017
Improve product reliability, renew existing product range 8%
Renovation and completion of the range of machines
Market Estimated CAGR 2018-2020 vs 2017
03
Enhance R&D for innovative solutions (technologies and new materials)
Expand the product range of woodworking machines for the housing market
The competition in the market is consolidated. Main competitors are located in Germany and in Italy. The most important of these are Hundegger (the Market Leader), HOMAG and Weinmann in Germany and SCM, Essetre in Italy.
Estimated worldwide market share 2017
2020 Target in wood construction
Biesse Group will continue to extend its product range, increasing penetration in the high potential segment (actually forecasted the best one) yet highly-strategic industry of timber carpentry (beams and structural façades).
materials machines market 01 Expand our offering in other timber carpentry segments (minor complexity and higher volumes)
02 Leverage on Biesse capillarity to boost sales and after-sales worldwide
We are currently the industry leader in the glass processing market in which we operate. Main competitors are located in Italy and Germany, Austria:
they are CMS, Bottero, Lisec, Hegla
The competition in the current market is consolidated. We are among the leading companies in the sector and we intend to reinforce our positioning. Main competitors are located in France and in Italy and they are CMS, Breton,Denver and Thibaut,Comandulli
Estimated 2017 Stone Market Size
worldwide market share 2017
Whole market potential €650mln
G&S Division Estimated CAGR 2018-2020 vs 2017
Market Estimated CAGR 2018-2020 vs 2017
01
Maintain and reinforce our leading 12% position in the glass sector
Expand our offering in new product segments
Increase our market share in the stone segment, reinforcing our leadership in 03 this area
Tooling Division Estimated CAGR 2018-2020 vs 2017
6%
Market Estimated CAGR 2018-2020 vs 2017
01 Maintain and reinforce our leading position in the glass sector
02
Expand our offering in new product segments
03
Increase our market share in the stone segment, reinforcing our leadership in this area
Mechatronics Unit Estimated CAGR 2018-2020 vs 2017
Market Estimated CAGR 2018-2020 vs 2017
01 Maintain and reinforce our leading positioning in the Wood- Aluminum-Plastic (WAP) sector
Enlarge our product offering for metal working machines
2020 target in metal sector
03 Continue to expand abroad, especially in Asian and Western Europe Market
The advanced material* processing machinery market is highly fragmented worldwide, main competitors are Geiss, HG Grimme, Belotti CMS Industrie, Breton, Mecanumeric, Multicam and Flow Corporation
*Advanced materials Carbon Fiber Foam Composite Alluminium Titanium
2020 target In advanced material segment
Expand our plastic working machineries in order to 01 meet the needs of the entire market.
Extend our product range drawing on the expertise of Uniteam to enhance its range of products and applications for machining advanced composite materials for several industries
Packaging
Devices
Defense and Ballistics
Our network supports our customers worldwide. Through Biesse service and Biesse parts. we offer technical services and machine/component spares to businesses anywhere in the world onsite. as well as on-line - 24/7.
incidence on Net Sales Predicitve: leave "break-and -fix" service as is logics and anticipate the needs moving onto predictive services thanks .
Digital: Fully implement On Line Sophia Services platform to offer advanced remote assistance, Spare Parts purchasing, Intelligent Troubleshooting, software update distribution and machines connection to Customer ERP
Master in Competence: Structure Training Academy supporting product and process competence to our Customers and Service team
We increased our market share becoming a leading company in the engineering solutions sector.
The guiding strategy of the Biesse Systems team is based on clear key concepts:
Potential Software Fees contribution to Net Sales
01
Consolidation. reliability and rationalization. Superior technology for creating synergies in machine automation.
Technological superiority and sustainability. Ensuring advanced. sustainable know-how in order to develop intelligent machines.
Simple. smart software. Meeting growing technological needs through application software and smart apps.
04 Business software. Business-oriented software to enhance collaboration with our customers' businesses.
Subsidiaries
To expand our global presence to be close to our customers.
Continue to promote the "Roadmap to success" for our subsidiaries: moving from reactive to proactive, fostering entrepreneurship at all levels, defining market and customer-oriented strategies 01
02 Invest in new and innovative technological complexes, "Biesse Campus", to better contain our expansion in selected areas
Invest in human resources and capabilities as growth drivers
9.5% Net sales CAGR 2018-2020 vs 2017
< 39% Target COGS incidence on Net Sales
< 30% Target Labor Cost
incidence on Net Sales
< 20%
Target Overhead Cost on Incidence on Net Sales
Continue our growth path
Optimize our production cost
Invest in human resources and capabilities as growth driver, controlling incidence on net sales
Optimize Overhead cost
(approved Feb 28th 2018)
€/mln
Positive cash flow.
control our Operating Net Working Capital.
*potential growth strategy through M&A not included
tangible: € 27.4mln intangible: € 17.6mln
main investments drivers:
Indian Manufacturing durable goods investments to meet the projected productive expansion improving the quality
Housing ( Uniteam Wood Division): improvement production plant – durable goods investments ,
continue our growth path
through investments
Mechatronics Italian plant (HSD S.p.A.) components production machines (rotary
Metal working (internal phase): improvement of the components production – durable goods investments ,
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2020e | Targets | |
|---|---|---|---|---|---|---|---|---|
| Net sales year -1 |
378.4 -1.2% |
427.1 +12.9% |
519.1 +21.5% |
618.5 +19.1% |
690.1 +11.6% |
CAGR 9.5% |
906.2 | |
| Cost of good sold |
155.9 41.2% |
177.6 41.6% |
206.1 39.8% |
245.1 39.6% |
270.1 39.1% |
348.1 38.4% |
||
| Value added % |
147.0 38.8% |
167.8 39.3% |
212.4 40.9% |
252.4 40.8% |
288.6 41.8% |
CAGR 10.8% | 393.1 43.4% |
|
| Labour cost |
112.7 29.8% |
128.2 30.0% |
148.2 28.6% |
176.6 28.6% |
199.1 28.9% |
266.0 29.3% |
< 30% incidence |
|
| overhead | 81.8 21.6% |
91.0 21.3% |
104.7 20.2% |
124.5 20.1% |
136.1 19.7% |
167.7 18.5% |
< 20% incidence |
|
| EBITDA % |
34.3 9.1% |
39.6 9.3% |
64.1 12.4% |
75.8 12.3% |
89.5 13.0% |
CAGR% 12.4% |
127.1 14.0% |
|
| EBIT % |
18.1 4.8% |
24.8 5.8% |
43.7 8.4% |
55.1* 8.9% |
63.6* 9.2% |
CAGR 14.6% |
95.7 10.6% |
*after non recurring items tax rate 29.6%
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2020e | Targets |
|---|---|---|---|---|---|---|---|
| Inventories % net sales |
22.8% | 23.0% | 21.5% | 21.1% | 20.8% | 20.0% | <22% |
| Receivables % net sales |
20.1% | 18.9% | 20.3% | 20.8% | 17.3% | 19.2% | DSO 55 days |
| Payables % net sales |
29.4% | 28.8% | 29.5% | 31.1% | 32.4% | 31.4% | DPO 120 days |
| Operating Net Working Capital % net sales |
51.4 13.6% |
55.6 13.0% |
63.4 12.2% |
66.9 10.8% |
38.7 5.6% |
70.2 7.7% |
| Net Debt | -23.9 | -11.3 | 0.0 | 4.0 | 30.4 | 104.7 59 |
|---|---|---|---|---|---|---|
| Δ Net Debt |
12.7 | 11.3 | 4.0 | 26.4 | € 28.1 vs 2019e |
|
| dividends | -4.8 0.18 per share |
-9.8 0.36 per share |
-9.8 0.36 per share |
-9.8 0.36 per share |
-16.6 30% of net profit |
|
| Net Cashflow % net sales |
32.2 8.5% |
17.5 4.1% |
21.1 4.1% |
13.8 2.2% |
36.2 5.2% |
44.7 4.9% |
| Investments % net sales |
-19.8 5.2% |
-20.8 4.9% |
-25.2 4.9% |
-32.0 5.2% |
-39.2 5.7% |
-50.5 5.6% |
| Gross Cashflow % net sales |
52.0 13.8% |
38.3 9.0% |
46.3 8.9% |
45.8 7.4% |
75.4 10.9% |
95.2 10.5% |
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2020e |
EBIT
post-non recurring items
116 116 113 128 148 177 199 222 244 266 29,7% 30,4% 29,8% 30,0% 28,6% 28,6% 28,9% 29,2% 29,3% 29,4% labour cost labour cost margin €/mln - % 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e
furniture consumption by countries
furniture world production
consolidated net sales Biesse
orders intake: +10.5% backlog: +24.2% group: nr. 4,161 (including temporary people) ebitda: € 19.8 (incidence on sales 12.2%) ebit: € 13.9 (incidence on sales 8.6%) net result: € 8,1 (incidence on sales 5.0%) net sales: € 162.3 (+0.5%) net financial position.: positive € 18.9
€/mln
| €/mln | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | IQ 2017 |
IQ 2018 |
|---|---|---|---|---|---|---|---|
| Net sales year -1 |
378.4 -1.2% |
427.1 +12.3% |
513.1 +21.5% |
618.5 +19.1% |
690.1 +11.6% |
161.5 | 162.3 |
| Value added % |
143.5 37.3% |
163.1 33.6% |
212.4 40.3% |
252.4 40.8% |
288.6 41.8% |
69.7 43.2% |
69.7 43.0% |
| Labour cost % |
112.7 23.8% |
128.2 30.0% |
148.2 28.6% |
176.6 28.6% |
199.1 28.9% |
48.2 29.8% |
50.0 30.8% |
| EBITDA % |
30.3 8.2% |
40.3 3.6% |
64.1 12.4% |
75.8 12.3% |
89.5 13.0% |
21.6 13.4% |
19.8 12.2.% |
| EBIT % |
18.1 4.8% |
26.5 6.2% |
43.8 8.4% |
55.1 8.9% |
63.6 9.2% |
16.1 10.0% |
13.9 8.6% |
| tax rate | 36.8% | 37,2% |
70
IQ 2018 Group orders intake +10.5% (vs. IQ 2017) IQ 2018: Group backlog +24% (vs. IQ 2017)
NET DEBT
IQ 2009 IQ 2010 IQ 2011 IQ 2012 IQ 2013 IQ 2014 IQ 2015 IQ 2017 FY 2003 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 IQ 2016 FY 2016 FY 2017 IQ 2018
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | IQ 2018 |
2020e |
|---|---|---|---|---|---|---|---|
| Gross Cashflow % net sales |
52.0 13.8% |
38.3 9.0% |
46.3 8.9% |
45.8 7.4% |
75.4 10.9% |
-2.5 -1.6% |
95.2 10.5% |
| Investments % net sales |
-19.8 5.2% |
-20.8 4.9% |
-25.2 4.9% |
-32.0 5.2% |
-39.2 5.7% |
-8,9 5.5% |
-50.5 5.6% |
| Net Cashflow % net sales |
32.2 8.5% |
17.5 4.1% |
21.1 4.1% |
13.8 2.2% |
36.2 5.2% |
-11.4 -7.0% |
44.7 4.9% |
| dividends | -4.8 0.18 per share |
-9.8 0.36 per share |
-9.8 0.36 per share |
-9.8 0.36 per share |
0 | -16.6 30% of net profit |
|
| Δ Net Debt |
12.7 | 11.3 | 4.0 | 26.4 | -11.5 | ||
| Net Debt | -23.9 | -11.3 | 0.0 | 4.0 | 30.4 | 18.9 | 104.7 74 |
| FY 2010 |
FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2016 | FY 2016 | FY 2017 | IQ 2018 |
||
|---|---|---|---|---|---|---|---|---|---|---|
| Production % of total people |
965 41% |
1.250 46% |
1.265 45% |
1.175 44% |
1.201 42% |
1.335 42% |
1.482 41% |
1.494 39% |
1.550 39% |
|
| Service & After sale % of total people |
568 24% |
577 21% |
574 21% |
613 22% |
628 22% |
690 22% |
803 22% |
894 23% |
920 23.2% |
|
| R&D % of total people |
293 12% |
316 12% |
338 12% |
321 12% |
361 13% |
383 13% |
436 12% |
479 12.5% |
498 12.5% |
|
| Sales & Marketing % of total people |
340 13% |
361 13% |
364 13% |
351 13% |
439 15% |
495 15% |
587 16% |
641 17% |
654 16% |
|
| G & A % of total people |
202 9% |
233 9% |
242 9% |
235 9% |
252 9% |
273 9% |
310 8.5% |
338 8.8% |
346 8.7% |
|
| ITALY % of total people |
1.660 70% |
1.656 61% |
1.646 59% |
1.547 57% |
1.605 56% |
1.780 56% |
2.009 56% |
2.176 56% |
2.296 58% |
|
| OUTSIDE ITALY** % of total people |
708 30% |
1.081 39% |
1.136 41% |
1.148 43% |
1.276 44% |
1.396 44% |
1.609 44% |
1.670 44% |
1.672 42% |
|
| TOTAL | 2.368 | 2.737 | 2.782 | 2.695 | 2.881 | 3.176 | 3.618 | 3.846 | 3.968 | 76 |
Alberto Amurri Investor Relator Manager 0039 - 0721439107 0039 - 3351219556
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