Investor Presentation • Mar 27, 2018
Investor Presentation
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MILAN, MARCH 27-28
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.
1.1 WHO WE ARE 1.2 OUR VALUES 1.3 BUSINESS MODEL
"…back when we were simply producing machines,
I was talking with a dear friend, and realised that the rough, imprecise way he was working was ineffective, and above all, dangerous to his personal safety. At that moment, I recognised a need for change, and immediately understood that we could do something - we could introduce innovative new ways of working, automate processes, and above all, create safer working conditions.
A new kind of machine was about to be born".
Who we are
We believe in challenging standards, in thinking forward and in acting differently.
OUR
BELIEFS
Creating advanced technologies and beautifully -designed solutions is the key to transforming our beliefs into real value.
1 5 12
10
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.
Who we are
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.
HOW
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.
Who we are
WITH
Manufacturers of furniture, design items and door/window frames, producers of elements for the building, nautical and aerospace industries.
More than 4,000 employees throughout the world (temporary workers included) are our Human Capital Value
1.1 WHO WE ARE 1.2 OUR VALUES 1.3 BUSINESS MODEL INNOVATION RELIABILITY EXCELLENCE
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:
Our Values
02
Cash
01
Revenue
1.1 WHO WE ARE 1.2 OUR VALUES 1.3 BUSINESS MODEL
1.3
02
STONE
PLASTIC
We create engineered solutions, from plant design to production, implementation, installation and maintenance
04
We design,
distribute a
manufacture and
comprehensive range of machinery and technologies for processing wood, glass, stone and advanced materials
05
We manufacture custom made blends of diamonds and alloy tools for glass, stone and synthetic materials processing, which have been developed and field tested to meet customer requirements.
We offer technical service and machine/component spares anywhere in the world on-site and 24/7 on-line with our global network and highly specialised team even using the SOPHIA platform
03
We design, manufacture and deliver high-tech mechanical and electronic components for machinery INDUSTRY 4.0 ready.
Business Model
GLASTRÖSCH
GRUPPO LUBE
PACCALINI
PEDINI
WOOD BUILDING COMPANIES AND MANUFACTURERS
GLASS WORKERS
Business Model
BUSINESS PLAN UPDATE
Strategy & Results
2.1 STRATEGY & RESULTS
2.3 SOLUTIONS
2.4 CUSTOMER EXPERIENCE
2.4 CUSTOMER EXPERIENCE
EXCEEDING TARGETS
39
IoT remote assistance On Line parts ordering
The single, integrated platform to manage all machine processes has been fully implemented on machines.
2.4 CUSTOMER EXPERIENCE
EXCEEDING TARGETS
Differentiation Take Over
2017
Results
Revenues in ASIA in 2017 +24.3mln/€
1,800 SOPHIA presentation
in 2017
3-Year Business Plan
Customer Experience
Revenues in Western Europe in 2017
+28.5 mln/€
10,000 Demos in 2017
The new era of digitisation for small and medium-sized companies
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
Smart for all
Customer Experience
| 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
Customer Experience
Biesse supports its customers, offering technological connectivity, sharing of expertise, professional consulting services, training and ongoing assistance.
SOPHIA helps to prevent problems that could damage customer production. Biesse takes proactive steps to contact customers, reducing machine downtime and inefficient wasted time.
The information gathered and analysed is transformed into useful indications for optimising customer production and product quality, providing extremely opportunities for growth.
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
Discovering our factories
HSD: 4.0 factory
Training Academy
3.1 CONTINUOUS GROWTH 3.2 MORE PRODUCTS 3.3 MORE SOLUTIONS 3.4 MORE CUSTOMER EXPERIENCE
3.1 CONTINUOUS GROWTH
2018 - 2020 PERSIST IN OUR STRATEGY
| "∕∼ |
|---|
| ----- |
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
5%
Market Estimated CAGR 2018-2020
6%
Market Estimated CAGR 2018-2020
Continuous Growth
3.2
More Products
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*).
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
More Products
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.
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
More Products
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
02
Expand our offering in new product segments
Increase our market share in the stone segment, reinforcing our leadership in 03 this area
More Products
Tooling Division 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
6%
Market Estimated CAGR 2018-2020 vs 2017
03
Increase our market share in the stone segment, reinforcing our leadership in this area
Our mechatronics division is currently the leader in the WAP (Wood Advanced Materials*. Plastic) spindles sector. We entered the metal spindles sector. Our main competitors are from Germany. They are KESSLER. IBAG. GMN. WEISS (Siemens). FISHER and STEPTEC.
Estimated worldwide market share 2017 Whole market potential €0.7bn 2017 Market Size
12.9%
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
More Products
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
Ballistics
Packaging
Renewable Energy
| ewable | |
|---|---|
| nerav |
3.1 CONTINUOUS GROWTH 3.2 MORE PRODUCTS
3.3 MORE SOLUTIONS
3.4 MORE CUSTOMER EXPERIENCE
BSUITE
More Solutions
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:
More Solutions
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.
Customer Experience
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
Live the Experience at the Biesse Group booth during exhibitions:
Continue to improve our Campus, increase the number of the Inside and one-to-one events and measure their impact on the local market.
Continue to invest in exhibitions taking part in shows for all sectors including composites.
| EBIT % |
18.1 4.8% |
24.8 5.8% |
43.7 8.4% |
55.1* 8.9% |
63.6* 9.2% |
|
|---|---|---|---|---|---|---|
| EBITDA % |
34.3 9.1% |
39.6 9.3% |
64.1 12.4% |
75.8 12.3% |
89.5 13.0% |
|
| overhead | 81.8 21.6% |
91.0 21.3% |
104.7 20.2% |
124.5 20.1% |
136.1 19.7% |
|
| Labour cost |
112.7 29.8% |
128.2 30.0% |
148.2 28.6% |
176.6 28.6% |
199.1 28.9% |
|
| Value added % |
147.0 38.8% |
167.8 39.3% |
212.4 40.9% |
252.4 40.8% |
288.6 41.8% |
|
| Cost of good sold |
155.9 41.2% |
177.6 41.6% |
206.1 39.8% |
245.1 39.6% |
270.1 39.1% |
|
| Net sales year -1 |
378.4 -1.2% |
427.1 +12.9% |
519.1 +21.5% |
618.5 +19.1% |
690.1 +11.6% |
|
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 |
*after non recurring items tax rate 29.6%
Our Future in Figures
current taxes:
deferred taxes:
still not "used" as deductions China previous losses (Korex – BTS) impacting for the 3% of the total tax rate
Our Future in Figures
| 2007 | 2017 | |
|---|---|---|
| net sales | 466.0 | 690.1 |
| 17.5% | 11.6% | |
| labour cost |
-103.9 | -199.1 |
| -22.3% | -28.9% | |
| EBITDA | 79.1 | 89.5 |
| 17.0% | 13.0% | |
| EBIT | 65.4 | 63.6 |
| 14.0% | 9.2% | |
| net result | 41.7 | 42.8 |
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 |
|---|---|---|---|---|---|
| Inventories % net sales |
22.8% | 23.0% | 21.5% | 21.1% | 20.8% |
| Receivables % net sales |
20.1% | 18.9% | 20.3% | 20.8% | 17.3% |
| Payables % net sales |
29.4% | 28.8% | 29.5% | 31.1% | 32.4% |
| 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% |
Our Future in Figures
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|---|
| Gross Cashflow % net sales |
52.0 13.8% |
38.3 9.0% |
46.3 8.9% |
46.7 7,5% |
74.4 10.8% |
|
| Investments % net sales |
-19.8 5.2% |
-20.8 4.9% |
-25.2 4.9% |
-32.0 5.2% |
-39.2 5.7% |
|
| Net Cashflow % net sales |
32.2 8.5% |
17.5 4.1% |
21.1 4.1% |
14.7 2.4% |
35.2 5.1% |
|
| 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 |
||
| Δ Net Debt |
12.7 | 11.3 | 4.9 | 25.4 | ||
| Net Debt | -23.9 | -11.3 | 0.0 | 4.9 | 30.3 |
delta operating net working capital
5.1 OUR FUTURE IN FIGURES 5.2 OTHER FIGURES 5.3 ANNEX 5.4 THE SHARE
5.4 THE SHARE
Continue our growth path
9.5%
Net sales
< 39%
Target COGS
< 30%
Target Labor Cost
incidence on Net Sales
< 20%
Target Overhead Cost on Incidence on Net Sales
CAGR 2018-2020 vs 2017
incidence on Net Sales
Optimize our production cost
Invest in human resources and capabilities as growth driver, controlling incidence on net sales
Optimize Overhead cost
€/mln
Our Future in Figures
control our Operating Net Working Capital.
5.1 OUR FUTURE IN FIGURES 5.2 OTHER FIGURES 5.3 ANNEX 5.4 THE SHARE
*potential growth strategy through M&A not included
tangible: € 27.4mln intangible: € 17.6mln
main investments drivers:
Housing ( Uniteam Wood Division): improvement production plant – durable goods investments ,
continue our growth path
through investments
ASSETS
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% |
| €/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% |
|
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2020e |
|---|---|---|---|---|---|---|
| Gross Cashflow % net sales |
52.0 13.8% |
38.3 9.0% |
46.3 8.9% |
46.7 7,5% |
74.4 10.8% |
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% |
-50.5 5.6% |
| Net Cashflow % net sales |
32.2 8.5% |
17.5 4.1% |
21.1 4.1% |
14.7 2.4% |
35.2 5.1% |
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 |
-16.6 30% of net profit |
|
| Δ Net Debt |
12.7 | 11.3 | 4.9 | 25.4 | € 28.1 vs 2019e |
|
| Net Debt | -23.9 | -11.3 | 0.0 | 4.9 | 30.3 | 105.3 102 |
Others Figures
EBIT
€/mln - %
Others Figures
| FY 2010 |
FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | ||
|---|---|---|---|---|---|---|---|---|---|
| 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% |
|
| Service & After sale % of total people |
568 24% |
577 21% |
574 21% |
613 22% |
628 22% |
690 22% |
803 22% |
894 23% |
|
| R&D % of total people |
293 12% |
316 12% |
338 12% |
321 12% |
361 13% |
383 13% |
436 12% |
479 12.5% |
|
| Sales & Marketing % of total people |
340 13% |
361 13% |
364 13% |
351 13% |
439 15% |
495 15% |
587 16% |
641 17% |
|
| G & A % of total people |
202 9% |
233 9% |
242 9% |
235 9% |
252 9% |
273 9% |
310 8.5% |
338 8.8% |
|
| 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% |
|
| 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% |
|
| TOTAL | 2.368 | 2.737 | 2.782 | 2.695 | 2.881 | 3.176 | 3.618 | 3.846 | 106 106 |
Others Figures
| FY 2010 |
FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | |
|---|---|---|---|---|---|---|---|---|
| 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 57% |
| 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 43% |
| TOTAL | 2.368 | 2.737 | 2.782 | 2.695 | 2.881 | 3.176 | 3.618 | 3.846 |
vs Dec 2016: +228 ( 6.3%) vs Dec 2016: +670 (18.5%) vs Dec 2014: +965 (26.7%)
interim people at the end of Dec 2017: 196 (181 at the end of 2016) 4,042
| FY 2016 | FY 2017 | % | |
|---|---|---|---|
| Production | 1,482 | 1,494 | +0.8 |
| Service & After sale |
803 | 894 | +11.3 |
| R&D | 436 | 479 | +9.8 |
| Sales & Marketing | 587 | 641 | +9.2 |
| G & A |
310 | 338 | +9.0 |
| ITALY | 2,009 | 2,176 | + 8.3 |
| OUTSIDE ITALY | 1,609 | 1,670 | + 3.8 |
| TOTAL | 3,618 | 3,846 | +6.3 |
the labour cost increase is EURO 23.9 mln vs 2016 (29.0% the 2017 incidence against net sale vs 28.6% in 2016)
Others Figures
People outside Italy: nr. 1,670 People in Italy: nr 2,176
People outside Italy: nr. 2,021 People in Italy: nr 2,497
5.1 OUR FUTURE IN FIGURES 5.2 OTHER FIGURES 5.3 ANNEX 5.4 THE SHARE
Annex
May 11th
Biesse Board of Directors IQ 2018 approval
August 3 rd
Biesse Board of Directors IH 2018 approval
within the 2018 first half
HSD debut (STAR segment)
Source: Bloomberg January 2018 statistics
WORLD
Annex
Global economic activity continues to firm up
Source: Bloomberg January 2018 statistics
Annex
Annex
Source: CRESME
furniture consumption by countries
where Biesse is insisting…:
consolidated net sales Biesse
Annex
«During the year that has just ended. we saw an increase in production of 11.6% with a strong impact of the domestic sector (+13%).
With regard to the expectations for 2018, Acimall anticipates a prudent growth between 3-5%. Conditioned, as ever, by the results of the planned policies of incentivation».
Italian woodworking machineries & tools manufacturers association «Excellent results for the year 2017 with a global increase for the production of 10.1%. This result has been mainly due by the uptrend in the domestic market (+ 13.8%) that is therefore beating the pre-crisis level. The expectations for the 2018 are for a general increase of 8.2% still mainly driven and supported by the incentives (fiscals and economics) and the Industry 4.0 development».
Italian machines tools. robots and automation manufactures association
Verband Deutscher Maschinen- und Anlagenbau, Mechanical Engineering Industry Association
«The woodworking machinery production totally rised again in 2017specially with the domestic market overlapping (+20%) the export portion (+12%). The expectations for the 2018 are still positive with a general 3% growth rate. In particular the woodworking segment is seen growing with a 8% rate.».
(XYLEXPO 2018 PRESENTATION EXTRACT) ACIMALL FOCUS
Annex
19.6%
17.5%
Trade of woodworking machines …
Joinery
5.1 OUR FUTURE IN FIGURES 5.2 OTHER FIGURES 5.3 ANNEX 5.4 THE SHARE
5.4
The Share
Alberto Amurri Investor Relator Manager 0039 - 0721439107 0039 - 3351219556
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