Investor Presentation • Oct 23, 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.
1 5 12
6
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.
IN
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.
Manufacturers of furniture, design items and door/window frames, producers of elements for the building, nautical and aerospace industries.
More than 4,200 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.
Our main principles:
Cash
02
01
Revenue
03
18
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‰ |
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | ||
| Performance Importance |
1 - REMAIN AHEAD OF CUSTOMER EXPECTANTIONS
2 – LEVERAGE DIGITALE TECHNOLOGIES
3 – SALES AND MARKETING ORGANIZATION FIT
The single, integrated platform to manage all machine processes has been fully implemented on machines.
The new era of digitalisation for small and medium-sized companies
70% Smart for all
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.
30%
Super Systems
In the smart factory of tomorrow, each component is traced and identifiable enabling automatic feedback and process statistics to be generated.
Know-How, expertise and resources
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 Services
With its new IIOT platform, Biesse is transforming itself from product-oriented manufacturer to a digital business offering to its customers value added services.
2020
Targets
8%
12%
Wood Division Estimated CAGR 2018-2020
4% Market Estimated CAGR 2018-2020
26 mln€
Metal
2020 Target
Advanced Materials
40 mln€
2020 Target
12.9% Mechatronics Division Estimated CAGR 2018-2020
14%
Tooling Division Estimated CAGR 2018-2020
G&S Division Estimated
CAGR 2018-2020
40% A.M. Division 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 evaluate to be the second leading company in the sector. Main competitors are located in Germany and in Italy. The most important ones are: in Germany belonging the (30.5% estimated market share) and in Italy (7,5% estimated market share*) not listed yet.
Estimated worldwide market share 2017
Market Size
2017
Wood division Estimated CAGR 2018-2020 vs 2017
Market Estimated CAGR 2018-2020 vs 2017
Improve product reliability, renew existing product range 8%
of machines
02 Renovation and completion of the range
Enhance R&D for innovative solutions (technologies and new materials)
03
01
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 ones are (the Market Leader), ( ) in Germany and , in Italy.
Estimated worldwide market share 2017
Whole market potential €.0,5bn
15 €/mln
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 (structural wood) 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:
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: ( ), , and .
Estimated 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
Increase our market share in the stone segment, reinforcing our leadership in 03 this area
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
Mechatronics Unit Estimated CAGR 2018-2020 (vs 2017)
2020 target in metal sector
Market Estimated CAGR 2018-2020 (vs 2017 )
5%
01 Maintain and reinforce our leading positioning in the Wood- Aluminum-Plastic (WAP) sector
02 Enlarge our product offering for metal working machines
03 Continue to strengthen its sales organization especially in Asian and Western Europe Market
The advanced material* processing machinery market is highly fragmented worldwide, main competitors are , , , , ( ), , and .
*Advanced materials Carbon Fiber Foam Composite Alluminium Titanium
Care Model 1:1 Clay block 41
40
mln/€
2020 target In advanced material segment
*Advanced materials
Foam Plastics Composite Alluminium Titanium
Carbon Fiber
Expand our plastic working machineries in order to 01 meet the needs of the market.
02
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
application
Packaging
Energy
Renewable
Defense and Ballistics
4242
21% 2020 Target incidence on Net Sales Our network supports our customers worldwide. Through Biesse service and Biesse parts. we offer technical services and machine/component spares parts anywhere in the world on-site. as well as on-line - 24/7.
Predictive: 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 worldwide recognised.
The guiding strategy of the Biesse Systems team is based on the following clear key concepts:
Potential Software Fees contribution to Net Sales (to be invoiced)
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.
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 support our expansion in selected areas
03 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 trend
Optimize our production costs
Invest in human resources and capabilities as growth driver, controlling their incidence on net sales
Optimize Overhead costs
(plan approved Feb 28th 2018)
Control our Operative Net Working Capital.
continue our growth trend through focused investments.
tangible: € 27.4mln intangible: € 17.6mln
main investments drivers:
*potential growth strategy through M&A not included
India: 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 trend through focused investments
ASSETS
Mechatronics Italian plant (HSD S.p.A.) components production machines (rotary tables) and production plant expantion TANGIBLE
Metal working (internal phase): improvement of the components production – durable goods investments
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2020e | Targets | |
|---|---|---|---|---|---|---|---|---|
| Net sales -1 year |
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%
| % net sales | 13.6% | 13.0% | 12.2% | 10.8% | 5.6% | 7.7% | ||
|---|---|---|---|---|---|---|---|---|
| Operating Net Working Capital |
51.4 | 55.6 | 63.4 | 66.9 | 38.7 | 70.2 | ||
| Payables % net sales |
29.4% | 28.8% | 29.5% | 31.1% | 32.4% | 31.4% | DPO 120 days |
|
| Receivables % net sales |
20.1% | 18.9% | 20.3% | 20.8% | 17.3% | 19.2% | DSO 55 days |
|
| Inventories % net sales |
22.8% | 23.0% | 21.5% | 21.1% | 20.8% | 20.0% | <22% | |
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2020e | Targets |
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 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% |
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% |
13.8 2.2% |
36.2 5.2% |
44.7 4.9% |
| dividends | -4 8 share 0 18 per |
-9 8 0 36 share per |
-9 8 0 36 share per |
-9 8 share 0 36 per |
-16 6 of profit 30% net |
|
| Δ Net Debt |
12.7 | 11.3 | 4.0 | 26.4 | € 28.1 vs 2019e |
|
| Net Debt | -23.9 | -11.3 | 0.0 | 4.0 | 30.4 | 104.7 |
61
GDP
Biesse % of sales per macro-sectors:
(plan approved Feb 28th 2018)
SHAREHOLDERS – B.O.D. STRUCTURE
(plan approved Feb 28th 2018)
€/MIL service growth: increase the installed base to growth a profitable service business
market position: more than 50% of the daily business from the non-mature economies markets
technological leadership: Biesse mission is to enable customers (in all divisions) to reduce costs and increase production efficiency "looking into the future"
Industry 4.0 & smart factory: intelligent solutions already completed (SOPHIA platform and BAvant software products family)
value creation: ROCE in 2013 0.2% - ROCE in 2017 40.3% (ROCE=EBIT/capital employed)
Biesse performance indicators (most used ones)
| €/mln | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Incoming orders sales |
|---|---|---|---|---|---|---|---|
| INCOMING ORDERS |
302.3 | 312.7 | 375.6 | 442.6 | 507.9 | 596.8 | EBITDA/EBIT ROCE (EBIT/capital employed) |
| NET SALES | 383.1 | 378.4 | 427.1 | 519.1 | 618.5 | 690.1 | free cashflow |
| EBITDA | 25.0 | 34.3 | 39.6 | 64.1 | 75.8 | 89.5 | (non – financial) |
| EBIT | 0.3 | 18.1 | 24.8 | 43.7 | 55.1 | 63.6 | employee and customer satisfaction training |
| ROCE | 0.2% | 12.7 | 18.4% | 30.9% | 35.6% | 40.3% | sustainability innovation |
Biesse B.o.D.:
Giancarlo Selci (Founder - President)
Roberto Selci (C.E.O.)
Stefano Porcellini (Group Director)
Alessandra Parpajola
Giovanni Chiura (indipendent)
Federica Palazzi (indipendent)
Elisabetta Righini (indipendent)
orders intake +3.6%
backlog +10.8%
Group people nr. 4,290 (including temporary people)
net sales € 356
net financial position cash positive € 16.7
ebitda € 43.5 (incidence on sales 12.2%)
ebit € 30.3 (incidence on sales 8.6%)
net result € 17.2 (incidence on sales 5.0%)
| €/mln | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | IH 2017 |
IH 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% |
331 2 |
356 |
| Value added % |
143.5 37.3% |
163.1 33.6% |
212.4 40.3% |
252.4 40.8% |
288.6 41.8% |
139 42 0% |
150 3 42 2% |
| Labour cost % |
112.7 23.8% |
128.2 30.0% |
148.2 28.6% |
176.6 28.6% |
199.1 28.9% |
98 3 29 7% |
106 8 30 0% |
| EBITDA % |
30.3 8.2% |
40.3 3.6% |
64.1 12.4% |
75.8 12.3% |
89.5 13.0% |
40 8 12 3% |
43 5 12 2% |
| EBIT % |
18.1 4.8% |
26.5 6.2% |
43.8 8.4% |
55.1 8.9% |
63.6 9.2% |
29 6 8 9% , |
30 3 8 5% |
| tax rate |
37.2% | 35.8 % |
16,7
| €/mln | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 IH |
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% |
19.1 5.4% |
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% |
-19.7 5.6% |
-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% |
-0.6 -0.2% |
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 |
- 13.1 0.48 per share |
-16.6 30% of net profit |
|
| Δ Net Debt |
12.7 | 11.3 | 4.0 | 26.4 | -13,7 | ||
| Net Debt | -23.9 | -11.3 | 0.0 | 4.0 | 30.4 | 16 7 |
104.7 |
North America Asia
Wood Glass & Stone Mechatronics Tooling Components Elisions
| FY 2010 |
FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2016 | FY 2016 | FY 2017 | June 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% |
1.623 39% |
| Service & After % of total people |
sale 568 24% |
577 21% |
574 21% |
613 22% |
628 22% |
690 22% |
803 22% |
894 23% |
934 23% |
| R&D % of total people |
293 12% |
316 12% |
338 12% |
321 12% |
361 13% |
383 13% |
436 12% |
479 12.5% |
527 12.8% |
| Sales & Marketing % of total people |
340 13% |
361 13% |
364 13% |
351 13% |
439 15% |
495 15% |
587 16% |
641 17% |
700 17% |
| G & A % of total people |
202 9% |
233 9% |
242 9% |
235 9% |
252 9% |
273 9% |
310 8.5% |
338 8.8% |
331 8.0% |
| 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% |
2.398 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% |
1.717 42% |
| TOTAL | 2,368 | 2,737 | 2,782 | 2,695 | 2,881 | 3,176 | 3,618 | 3,846 | 115 4 , |
| FY 2010 |
FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | June 2017 |
June 2018 |
||
|---|---|---|---|---|---|---|---|---|---|---|---|
| ITALY % of total people |
1660 70% |
1656 61% |
1646 53% |
1547 57% |
1605 56% |
1780 56% |
2009 56% |
2176 56% |
2108 56% |
2296 58% |
|
| OUTSIDE ITALY** % of total people |
708 30% |
1081 33% |
1136 41% |
1148 43% |
1276 44% |
1336 44% |
1609 44% |
1670 44% |
1677 44% |
1672 42% |
|
| TOTAL | 2368 | 2737 | 2782 | 2695 | 2881 | 3176 | 3618 | 3846 | 3785 | 4115 | +8.7% |
interim people at the end of June 2016: 195 interim people at the end of June 2017: 193 Interim people at the end of June 2018: 175
June 2018: 4,290
Alberto Amurri Investor Relator Manager 0039 - 0721439107 0039 - 3351219556
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