Business and Financial Review • Feb 26, 2019
Business and Financial Review
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WE HAVE BEEN DESIGNING INNOVATION FOR FIFTY YEARS, DRIVEN BY AN INCREDIBLE ENGINE, POWERED BY PEOPLE, PASSION AND PRECISION.
1.3 BUSINESS MODEL
2.1 CONTEXT
2.5 #CONNECTED COMPANY
3.1 OUR FUTURE IN FIGURES
1
1.1 OUR IDENTITY1.2 EXCELLENCE1.3 BUSINESS MODEL
1.3 BUSINESS MODEL
OUR VALUES
1.1
WITH OUR PEOPLE
3 -Year Business Plan
Biesse Group is a global leader founded in Pesaro in 1969 by Giancarlo Selci. listed on the Borsa Italiana since 2001 – STAR segment. The Group has a strong Italian identity and strongly believe in:
7
Biesse Group's vision is embodied by the word THINKFORWARD:
We manufacturetechnology for processing wood, glass, stone, advanced materials and metalthrough specialisedbusiness units and 12 manufacturing sites in Italy and worldwide. We operate worldwide with our own key brands: Biesse, Intermac, Diamut, HSD.
PRODUCTION SITES
8
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.
SUBSIDIARIES AND REPRESENTATIVE OFFICES
39
9
+300
DISTRIBUTORS
SELECTED
Customers in 120 Countries. Manufacturers of furniture, design items and door/window frames, producers of elements for the building, nautical and aerospace industries. 120
COUNTRIES
4400*
11
We acknowledge that Peopole are essential to our development, because the ability to innovate and pursue excellence in the realisation of products isthe consequence of the passion and dedication of all those are part of the Biesse family.
1.2
15
3 -Year Business Plan
1.1 WHO WE ARE1.2 EXCELLENCE1.3 BUSINESS MODEL
1.3
We design, manufacture and distribute a comprehensive range of machinery and technologies for processing wood, glass, stone, metal and advanced materials
02
We create engineered solutions, from plant design to production, implementation, installation and maintenance
03
We design, manufacture and deliver high-tech mechanical and electronic components for machinery INDUSTRY 4.0 ready.
We manufacture tools for the processing of glass, stone and ceramic. Its synergy with Intermac has enabled it to develop a range of tools, which in terms of reliability, have become a benchmarkin the market.
05Through dedicated personnel, we provide professional pre-sale consulting services, and continuous after sales assistance to ensure the correct installation and startup of machinery, software and Systems.
06
05We have developed our software solutions by closely observing the work carried out by the customer every day, with simple interfaces, designed to make everyday use of the machine practical.
a wide and fragmented customer base with no risk of concentration
2.5 # CONNECTED COMPANY
THE TIME OF UNCERTAINTY
China - U.S.A. (decoupling & custom duties)
Russia - Turkey – Iran - Venezuela
Worldwide slowdown and downgrade in economic growth (i.e. China)
Internal Conflicts
(i.e. "Yellow Vest" protest)
Change of economic Strategy
Source:Extract from Eurasia Group, Top Risk 2019
In the Global Risks Perception Survey, nearly 1,000 decision-makers assess the risks facing the world.Nine out of 10 respondents expect worsening economic and political confrontations between major powers.
Economic confrontation / frictions between major powers
Erosion of multilateral trading rules
Political frictions between major powers
Cyber-attack: Theft of data-money
Cyber-attack: Disruption of operations and infrastructures
Loss of confidence in collective security alliances
Populist and nativist agenda
Media echo chambers and "fake news"
Domestic political polarization
Source:World Economic Forum Risk Perception Survey 2019
79
85
76
%
%
%
NEW DIGITAL PARADIGM
What will impact Business Model over next years?
Digital channels and technologies will significantly improve our interactionswith business customer
Digital will provide significantopportunities to reduce cost
Digital will help us engage our partnerlike never before
3 -Year Business Plan
How, When, What will impact our business
27
3 -Year Business Plan
What are the top technologies that will drive business disruption over the next three years?A survey to 750 Global Industry Leaders (C-Level).
Source:The changing landscape of disruptive technologies 2018e, KPMG
2.2
2.1 CONTEXT2.2 CONTINUOS GROWTH2.3 # PRODUCTS2.4 # SOLUTIONS2.5 # CONNECTED COMPANY
2.3
Movetro and Montresor
CAGR 2015-2018
We are among leaders in our reference markets: Wood, Glass, Stone working machinery and Tooling
3%
Wood Estimated CAGR 2019-2021
Market Estimated CAGR 2019-2021 03
We defined guidelines of the Action Plan to achieve our targets:
01
Expand our product offering to meet Customers needs for more automation, more flexibility andeasy-use machines
02
Enlarge our offering of Full Liner products and machines integrated with our handling and storage solutions
Strength our R&D on innovative solutions to process furnishing (new materials)
G&S Division Estimated CAGR 2019-2021
Market Estimated CAGR 2019-2021
We defined guidelines of the Action Plan to achieve our targets:
01
Expand our offering in Automation and Full Liner.
02
Focus on the new product range for space, storage and handling needs of Ceramic working Factories
Protect our leading position in the stand- 03alone machines segment.
We defined guidelines of the Action Plan to achieve our targets:
In 2018 Biesse Group made its debut in the Ceramic sector. The Group approached this new segment through an innovative range of tools and solutions dedicated to the squaring, lapping and polishing of all ceramic materials. In next three years we want to enlarge our offering of tooling products for ceramic CNC machines.
02
01
Expand our presence in the U.S. market, through a dedicated production line inside the Biesse America Campus.
11%
Tooling Division Estimated CAGR 2019-2021
Market Estimated CAGR 2019-2021
38
We defined guidelines of the Action Plan to achieve our targets:
Estimated CAGR 2019-2021
Expand our offering, introducing new products both in high–end and mid-end segment: RC and CLT series
02
0
3
0
1
Empower our salesforce team especially in Key Markets
Increase our production capacity (Italy)
MarketEstimated CAGR 2019-2021
metal spindle sales estimated CAGR 2019-2021
We defined guidelines of the Action Plan to achieve our targets:
Introduce a new product category: rotary tables, that allows a more effective metal working process.
02
1
0
Enlarge our product offering for metal working machines.
Expand abroad, especially in Asian (Taiwan) and Western Europe Market
Increase our production capacity (Italy)
30%
Estimated CAGR 2019-2021
We defined guidelines of the Action Plan to achieve our targets:
Advanced Materials Machines
Invest in Commercial development, empowering our sales organization worldwide with special focus on the American market
02
3
0
1
0
Enlarge our product offering for Advanced Materials working also in Full Liner solutions
Invest to increase our production capacity
*Advanced materialsCarbon FiberFoamPlastics
42
of
New thermoforming machine.
Development of System for Advanced Material working.
Expansion and complete renewal of the Rover and Materia product lines.
New projects based on additive manufacturing from 2021.
2.4
PARTS
We increased our market share becoming a leading companyin the engineering solutions sector.
The guiding strategy of the Biesse Systems team is based on clear key concepts:
Systems SalesEstimated CAGR 2018-2021
We defined guidelines of the Action Plan to achieve our targets:
1
2
3
4
Automaction: strong focus on Industry 4.0 oriented solutions
Introduce and integrate new software solution (MES - Manufacturing Execution System) to manage the entirefactoryproduction processes
Becoming leader in the engineering solutions sector, focusing also on small and medium Clients
Approach the market with Global Key Accounts for large manufacturing companies
Automaction is a Biesse's new concept that represents the concreteness of the new technological innovations developed by the company.
The company's spirit of innovation takes a huge step forward in the evolution of robotic systems for panel handling
Automated supervisor (software) for the integrated and efficient management of all production flows according to machining requirements.
2.4
%
to net sales
We will focus on Services development, increasing coveringand efficiency.
We defined guidelines of the Action Plan to achieve our targets:
Increase services sales using SOPHIA and Predictive Maintenance Services
1
0
0
Services market place development: Parts
21.5
Contribution
Expected Service
in 2021
<1h
Target of Spare Parts Orders made with Sophiain 2021
2021 target response time on machine down for Sophia Customers
3
Establish the Academy Service in Headquarter (Italy), Asia and America
Integration of Self Diagnostic Systems on machines
Empower corporate culture to achieve greater results.
3 -Year Business Plan
"One Service" wants to be the way to work well and efficiently together and with Lean processes.
Training, through the Biesse Academy we intend to manage the skills of the Services resources and to increase knowledge about products and processes.
After the successful experience of the CRM project for the Commercial Area, Biesse has also activated Salesforce teams to support the Service processes.
0
1
2
3
New Global Organization, to simplify the relation with our Client introducing the Customer Care Manager
Parts Sophia is the easy, intuitive and personalized new tool for ordering Biesse spare parts
The main features of Parts services are:
2.5
With SOPHIA, Biesse is defining new standards in digital technologies that enable Smart Factory.
SOPHIA is Biesse's IIoT (Industrial Internet of Things) platform, developed with Accenture and Microsoft, that enable new services: long distance diagnostics, analysis and proactive maintenance, analysis of manufacturing events in order to optimize our Client's production.
SOPHIA is made up of two integrated areas: IoT and Parts. They're linked with two apps so that the customer can easily access the functions offered by the platform.
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.
Machines already sold having SOPHIA package
Digital innovation creates the future: an inevitable process, that is yet to be developed in machinery industry.SOPHIA paves the way for the future of Industry 4.0, starting now.
2000.0Number of Machines sold with SOPHIA Packages and average revenues per package 2018-2021
SOPHIA will connect
machines by 2021 and make them intelligent.
3.4 THE SHARE
STABILIZE THE PROFITABILITY
3.1
59
EBITDA
3 -Year Business Plan
3 -Year Business Plan
3 -Year Business Plan
63
3 -Year Business Plan
3 -Year Business Plan
3 -Year Business Plan
| l € / m n |
2 0 1 4 |
2 0 1 5 |
2 0 1 6 |
2 0 1 7 |
2 0 1 8 e |
2 0 2 1 e |
|
|---|---|---|---|---|---|---|---|
| l N t e s a e s 1 y e a r - |
4 2 7 1 2. 9 % + |
5 1 9 2 1. 5 % + |
6 1 8 1 9. 1 % + |
6 9 0 1 1. 6 % + |
7 4 0 7. 3 % + |
C A G R 2 0 0 9- 2 0 1 8e 1 1. 9 % |
8 8 2 |
| f d l d C t o s o g o o s s o |
8 4 1 7 % 1. 6 |
6 3 2 0 9. 8 % |
5 3 2 4 9. 6 % |
0 3 2 7 9. 1 % |
5 3 2 9 9. 8 % |
9 3 3 4 9. 6 % |
|
| l d d d V a u e a e % |
8 1 6 3 9. 3 % |
2 2 1 4 0. 9 % |
2 2 5 0. 8 % 4 |
2 8 9 1. 8 % 4 |
3 0 8 1. 6 % 4 |
3 7 0 2. 0 % 4 |
|
| b L t a o u r c o s |
8 3 1 2 0. 0 % |
8 2 1 4 8. 6 % |
7 2 1 7 8. 6 % |
9 2 1 9 8. 9 % |
5 2 2 1 9. 1 % |
2 5 6 2 9. 0 % |
|
| h d O v e r e a |
1 2 9 1. 3 % |
5 2 1 0 0. 2 % |
5 2 1 2 0. 1 % |
6 1 1 3 9. 7 % |
4 1 1 4 9. 5 % |
8 1 1 6 9. 0 % |
|
| E B I T D A % |
4 0 9. 3 % |
6 4 1 2. 4 % |
7 6 1 2. 3 % |
8 9 1 3 % |
9 2 1 2. 5 % |
1 1 4 1 3. 0 % |
|
| E B I T % |
2 5 8 % 5. |
4 4 8. % 4 |
5 5 8. 9 % |
6 4 9. 2 % |
6 4 * 8. % 6 |
8 0 9. 0 % |
*after non recurring items
before € 67.4 (9.1%)
in the previous plan
67
| l € / m n |
2 0 1 4 |
2 0 1 5 |
2 0 1 6 |
2 0 1 7 |
2 0 1 8 e |
2 0 2 1 e |
|---|---|---|---|---|---|---|
| h f l G C r o s s a s o w les % t s ne a |
3 8 9. 0 % |
6 4 8. 9 % |
4 7 % 7. 4 |
7 4 0. 9 % 1 |
3 5 % 7. 1 |
9 6 9 % 7. |
| I t t n v e s m e n s les % t s ne a |
-2 1 9 % 4. |
-2 5 9 % 4. |
-3 2 2 % 5. |
-3 9 % 5. 7 |
-4 5 % 6. 1 |
4 8 - 5. 4 % |
| h f l N C t e a s o w % les t s ne a |
1 7 4. 1 % |
2 1 4. 1 % |
1 5 2. 2 % |
3 5 5. 2 % |
8 1. 1 % |
2 1 2. 4 % |
| d d D i i e n s v |
-4 8 0. 1 8 ha p er s re |
-9 8 0. 3 6 p ha er s re |
-9 8 0. 3 6 p ha er s re |
-9 8 0. 3 6 p ha er s re |
-1 3. 1 0. 4 8 p ha er s re |
-1 4. 0 f f 3 0 % i t p t o ne ro |
Without IFRS16 effects
7.4% O.N.W.C. incidence2018-2020 plan
90
| € l / m n |
2 0 1 4 |
2 0 1 5 |
2 0 1 6 |
2 0 1 7 |
2 0 1 8 e |
2 0 2 1 e |
|---|---|---|---|---|---|---|
| I i t n v e n o r e s % les t s ne a da s y |
2 3. 0 % 2 0 2 |
2 1. 5 % 1 9 7 |
2 1. 1 % 1 9 5 |
2 0. 8 % 1 9 4 |
2 2. 1 % 2 0 2 |
2 1 3 % 1 9 6 |
| b l R i e c e v a e s % les t s ne a da y s |
1 8. 9 % 6 6 |
2 0. 3 % 7 1 |
2 0. 8 % 7 2 |
1 7. 3 % 7 3 |
1 7. 7 % 6 1 |
1 9 0 % 6 6 |
| b l P a y a e s les % t s ne a da y s |
2 8. 8 % 1 5 5 |
2 9. 5 % 1 6 7 |
3 1. 1 % 1 7 6 |
3 2. 4 % 1 8 6 |
3 2. 5 % 1 8 5 |
3 1 2 % 1 8 0 |
| i N t t o p e r a v e e k i i l W C t o r n g a p a l % t n e s a e s |
5 6 3. 0 % 1 |
6 3 2. 2 % 1 |
6 7 0. 8 % 1 |
3 9 % 5. 6 |
5 3. 4 2 % 7. |
8 1 9 2 % |
3 -Year Business Plan
71
€/mln
main investments items:
3.4 THE SHARE
MACROECONOMIC CONTEXT
3.2
Source:Bloomberg, January 2019
World, Advanced Economies & EMDEs YoY Growth (%)
Source:Bloomberg, January 2019
3 -Year Business Plan
Furniture demand by countries
U.S.A. Germany Italy India Other
Furniture consumption. Countries grouped by geographical region, 2019. Forecast of yearly
Source:CSIL 2018e
China
Source: CSIL 2018eNote:(*) Preliminary; (**) Projected
3 -Year Business Plan
World trade of furniture and annual percentage changes.
| f f O i i i t r g n o u r n i t m p o r s |
u r e |
f f i i i D t t t e s n a o n o u r n u r e t e x p o r s |
|||
|---|---|---|---|---|---|
| l I t a y |
1 8, 8 % |
U S A |
3 6, 9 % |
||
| G e r m a n y |
8 % 1 4, |
J a p a n |
% 5, 6 |
||
| V i t e n a m |
8, 5 % |
U K |
4, 9 % |
||
| l d P o a n |
7, 0 % |
l A i t u s r a a |
3, 8 % |
||
| S U A |
6, 0 % |
G e r m a n y |
3, % 7 |
||
| J A P A N |
5, 7 % |
H K o n g o n g |
3, 3 % |
||
| h S K t o u o r e a |
4, 4 % |
h S K t o u o r e a |
3, 2 % |
||
| i T a w a n |
2, 9 % |
C d a n a a |
3, % 1 |
||
| C h i n a |
2, % 7 |
F r a n c e |
2, % 4 |
||
| U K |
2, 6 % |
S i n g a p o r e |
2, 2 % |
81
3.3
3 -Year Business Plan "…..IFRS 16 is an International Financial Reporting Standard (IFRS) providing guidance on accounting for leases. IFRS 16 was issued in January 2016 and will be effective for most companies that report under IFRS in 2019. Upon becoming effective, it will replace the earlier leasing standard, IAS 17. ….The new standard will provide much-needed transparency on companies' lease assets and liabilities, meaningthat off balance sheet lease financing is no longer lurking in the shadows. It will also improve comparability between companies that leaseand those that borrow to buy……"
€/mln
84
best scenario without changes
3.1 OUR FUTURE IN FIGURES3.2 OTHER FIGURES3.3 ANNEX3.4 THE SHARE
3.4
87
89
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