“Firm steps towards Globalization” - investor...

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“Firm steps towards Globalization” March, 2017

Transcript of “Firm steps towards Globalization” - investor...

Page 1: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

“Firm steps towards Globalization”

March, 2017

Page 2: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

This presentation and discussion may contain forward-

looking statements, which are subject to risks, and

uncertainties that could cause the Company’s actual results

to differ materially from management’s current

expectations. Those risks and uncertainties include,

without limitation: new product development and

commercialization; demand and acceptance for the

Company’s products; competitive products and pricing;

economic conditions in the Company’s product and geographic

markets and foreign currency fluctuations.

FINANCIAL FORECAST

The financial forecasts and forward-looking statements

discussed during this presentation reflect the current belief of

the Company as of the publication of this presentation and the

Company undertakes no obligation to update these forecasts

and forward-looking statements for events or circumstances

that occur subsequent to such date.

| SAFE HARBOR STATEMENT

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PROFILE &

EVOLUTION

Page 4: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

Iron and Aluminum auto parts for brake,

engine, suspension and transmission

systems for the Automotive industry.

Ceramic and porcelain floor tiles, water

heaters and plastic and ductile iron pipe

fittings.

Diverse products for tableware,

kitchenware and electronic appliances.

GIS is a Mexican company,

with over 8 decades of experience in 3 sectors:

| ¿ WHO ARE WE ?

AUTO PARTS CONSTRUCTION HOUSEWARES

FOCUSED DIVERSIFICATION

Page 5: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

| STRATEGIC REPOSITIONING…

2010 2012 2014-2015

2011 2012-2013 2015

million

San Luis Potosi

Auto Parts facility

Acquisition

USD $50million

to double the installed

capacity of SLP Plant

USD $65million

JV Fagor Ederlan for iron

auto parts machining

USD $50

Up to

million

Capacity expansion

Auto Parts

Saltillo e Irapuato

USD $30million

JV ZF-TRW for iron foundry

and machining of auto parts

for brake system

USD $120 USD $93million

Acquisition of ACE

Facilities in Spain, Poland and Czech

Republic. Iron casting and Aluminum

casting and machining. Top brake system

player in European Market

million

Divestiture Iron

Blocks and Heads

Business Unit

USD $439

From 2010 to 2016 Foundry Capacity Expansion:

78 to 525 K Annual Tons

2016

million Infun Acquisition

design, foundry and machining of

engine, transmission and suspension

components for the automotive industry

Plants: Spain, Italy and China

USD $308

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| GLOBAL FOOTPRINTAmericas Europe Asia

Pre Infun Acquisition Pro-forma

Revenue per geography (2016) Income per currency (2016)

Europe

17%

Americas83%

66%

30%

Americas

Asia

4%

Europe

EUR

MXN

44%

17%

USD

39%

RMB

32%EUR

4%USD

30%

34%

MXN

Pre Infun Acquisition Pro-forma

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* Joint Venture - ZF TRW

** Joint Venture - Fagor EderlanH

A

M

Horizontal Iron

Aluminum

Machining

H Vertical Iron

H Horizontal & Vertical Iron

*

**M

H

HH

H M

**

H

M

MA

H

H

H

M

H

H

| STRATEGIC ACQUISITION RATIONALE

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| REPOSITIONED FOR GROWTH

44%

46%

AUTO PARTS

HOUSEWARES

10%

CONSTRUCTION

34%

HOUSEWARES

CONSTRUCTION

8%

58%

AUTOPARTS

Pre Infun Acquisition Pro-forma

Revenue per Sector (2016)

• Operations in México, Spain, Czech Republic, Poland, Italy and China. Trading presence in US.

• Oriented to design and generate comfort and safety solutions for our consumers in the world.

• Over 8,000 associates in 25 production facilities.

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BUSINESS

PORTFOLIO

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AUTO PARTSSECTOR

With 5 Business Units and facilities in Mexico, Spain,

Italy, Poland, Czech Republic and China, we supply

iron and aluminum components to our customers at

the most important regions in the world.

Mexican and European leaders in the production of calipers for brake systems and engine

crankshafts.

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| DIFFERENTIATED VALUE PROPOSITION

Global

Platforms

Co-participation in

design solutions of

Engineering

Development

Strategic

Geographic

Location

(MEX-EUR-CHINA)

Product

Specialization (6

strategic

components)

Value Chain

Integration –

Machining Process

Competitive

Pricing through

Operations,

Product

Engineering and

Process efficiency

Customer-Focused

Page 12: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

| NAFTA - Cifunsa • 84% Sales to Tier 1 & 2 • 16% Direct Sales to OEMs

Clutch Plates

Transmission /

Gray and Ductile

Iron

Knuckles

Suspension /

Ductile Iron

Brackets

Brake / Ductile

Iron

Crankshafts

Engine / Ductile Iron

Calipers

Brake / Ductile Iron

Rotor Disk

Brake / Gray Iron

VW Tiguan Lincoln MKZ

Ford Focus Dodge Challenger

Chrysler RAM Mazda 2

Page 13: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

| Europe - ACE

Iron and Aluminum components for light vehicles braking systems.

Audi A4 & A6 Mercedes Benz

Clases A,B,C & E

Audi Q5Opel Astra

Ford Focus BMW Series 3,5 & 7 VW Passat

Page 14: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

| Europa / China - INFUN

Design, foundry and machining of engine, transmission and suspension components for

the automotive industry.

Engine Suspension

Land Rover Lincoln MKX Renault Megane Volvo Truck Renault Trafic Mercedes Truck

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• 70% GIS / 30% ZF-TRW

• Ductile Iron Foundry for brake system

components

• US$120 million Investment

• Annual Foundry Capacity of 52 K tons in 2 lines,

machining capacity up to 7 million units

• 2nd Line SOP (26K tns) in 1Q17

• Incursion in Machining process – Value added

• Successful SOP and positive EBIT since 4Q15

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• Feb-15 Sign of JV Agreement to establish

machining facility with Fagor Ederlan (50%

each partner)

• Up to US$52 million of Investment

• Iron components machining for the auto

industry

• Platforms from customers incoming

• 2017 - SOP in San Luis Potosi

Page 17: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

• Capture new projects and substitution of imports

• Define portfolio: product / systems / geography

• Consolidate ACE & Infun Acquisitions and

achieve synergies

• Vertical integration through machining

• Diversification to other processes / materials /

globalization

| STRATEGIC FOCUS

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CONSTRUCTIONSECTOR

Ceramic Tiles

60%

Water Heaters

40%

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VITROMEX

Manufacture and market ceramic and porcelain tiles for

residential and commercial sectors, sold mainly in Mexico &

US through distributors and home centers.

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• Customer and product portfolio segmentation

• Turn Around – EBITDA margin expansion

• Capacity transformation – larger formats,

strengthening product mix to luxury and premium

• Technological Update – Digital process for

decoration and design

| ENFOQUE ESTRATÉGICO

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WATER HEATERSCommercial and Residential solutions for water

heating, mainly in Mexico and US

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• Accelerated growth in US

• Continue our leadership in the Mexican Market

• Technological advances in our products

• Increasing speed of new product development and

launch (Speed to Market)

• Integration of Fluida pipe fitting business unit to

achieve commercial and administrative synergies, as

well as a lean structure

| STRATEGIC FOCUS

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HOUSEWARESSECTOR

Manufacture and market diverse cookware &

dinnerware products. Also trade kitchenware

accessories & appliances.

Page 24: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

• Improve profitability

• Growth Aluminum category

• Leadership in Enamel Steel and Ceramic,

through traditional channels

• Dynamic and profitable growth in US

| STRATEGIC FOCUS

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FINANCIAL &

STOCK

PERFORMANCE

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| SUSTAINED GROWTH

AUTO PARTS CONSTRUCTION HOUSEWARES

2013 2014 2015 2016

693 730 711

1,006

NET SALES

CAGR 2013 - 2016 + 13.2%$ USD

Million

2013 2014 2015 2016

EBITDA

CAGR 2013 - 2016 + 31.3%

74

8090

168

10.7% 10.9% 12.7% 16.7%EBITDA

Margin

INFUN

* *

2016 Proforma Basis:

2016 GIS + 2016 Infun*

780

113

14.5%

Page 27: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

| MARKETABILITY

• Double stock transactions from July 2016 to

February 2017

• “Market Maker” service signed on Dec-16

• Improving on Marketability Ranking (6 positions)

from November 2016 to February 2017

• Analyst Consensus 2017 Price Target $43

MXP/Share

GISSA

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Page 28: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

¿Why GISSA?• Auto Parts Differentiated Value Proposition

• Sustained Growth and EBITDA Margin Expansion

• Strategic Diversification to Europe & Asia

• Leading and Well-Known Trademarks

• Solid Corporate Governance

• GISSA’s share attractive valuation and potential upside (Infun Group Acquisition)

Page 29: “Firm steps towards Globalization” - investor cloudcdn.investorcloud.net/.../2017-InvestorPresentation... · This presentation and discussion may contain forward-looking statements,

“Firm steps towards Globalization”

March, 2017