EIFI AUTOMOTIVE GROUP Frankfurt - October 5th 2017
EIFI LEGAL COMMISSION Compliance with the AT Laws EIFI AUTOMOTIVE GROUP PURPOSE IS TO SUPPORT ITS MEMBERS WHO SHALL BE DRIVEN BY COMPETITIVE ASPIRATIONS AND TO PROMOTE PROFESSION INTERESTS SOLELY THROUGH LEGITIMATE MEANS ; EIFI AUTOMOTIVE GROUP ACTIVITIES AND ITS MEMBERS PARTICIPATION SHALL BE CONDUCTED AT ALL TIMES IN COMPLIANCE WITH APPLICABLE LAW ; EIFI AUTOMOTIVE GROUP SHALL NOT BE A FORUM/PLACE FOR ANTI-COMPETITIVE PRACTICES 2
AGENDA Market Outlook Legal Group External speech Conclusions 3
CONCLUSIONS LAST MEETING Positive economic climate and improved forecasts but volatility risks Protectionisms challenging world trade volumes Record volumes in the automotive sector but potential slowdown in NA and China Chinese fastener export to Europe Commodities and utilities price increase 4
MACROECONOMIC OUTLOOK 5
Macroeconomic Outlook Global GDP trend is improving Avg. Growth 3% 6 6
Macroeconomic Outlook Global GDP trend is improving 2016 2017 Sept June Sept 2,4 % 3,0 % 3,3% 7 7
Macroeconomic Outlook Business climate at highest level 8
AUTOMOTIVE MARKET OUTLOOK 9
Automotive Market Outlook Global light vehicle sales – YTD August 2017 10
Automotive Market Outlook Europe light vehicle sales – YTD August 2017 11
Automotive Market Outlook Europe light vehicle sales – YTD August 2017 12
Automotive Market Outlook European truck sales trend – H1 13
Automotive Market Outlook Global vehicle production 2017 Mexico, Japan and Brasil are supporting the growth in 2017 NA with the major negative contribution 14
Automotive Market Outlook Europe share in global vehicle sales 2017 15
Automotive Market Outlook Global light vehicle sales forecast 16
Automotive Market Outlook European light vehicle sales forecast 17
Automotive Market Outlook NA market: a pessimistic view 18
Automotive Market Outlook Global vehicle production forecast 19
Automotive Market Outlook Global vehicle production: the convergence 20
Automotive Market Outlook OEM performances – Highest levels since 10 years 21
Automotive Market Outlook Performances: OEM vs Suppliers 22
Automotive Market Outlook OEM performances – Efficiency improvement 23
Automotive Market Outlook OEM performances – High investment level Price pressure increase on suppliers in different ways 24
Automotive Market Outlook Powertrain Evolution 25
Automotive Market Outlook European diesel market share trend 26
Automotive Market Outlook 27
Automotive Market Outlook 28
Automotive Market Outlook 29
FASTENER MARKET OUTLOOK 30
Fastener Market Outlook Raw material Antidumping action/MES Main market events EIFI survey 2017 31
Fastener Market Outlook +110 Eur/ton Source: The Steel Index & Securecalc 32
Fastener Market Outlook Coking coal +220 Eur/ton 33
Fastener Market Outlook Iron ore +48 Eur/ton Source: The Steel Index 34
Fastener Market Outlook Basic Oxigen Furnace Steel – Formula price Price = (Carbon Coke x 0,6) + (Iron Ore x 1,5) + (Scrap x 0,1) USD EUR Price reduction expected on Q3/17 but did’nt happen 35
Fastener Market Outlook DSV Index +95 E/ton 36
Fastener Market Outlook DSV Index Wire Rod (Price Change Index - basis Oct 2010) Eur/ton 150 100 +90 Eur/ton 50 0 -6 -22 -50 -70 -75 -100 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 37
Fastener Market Outlook Electrodes issue Recent production reduction of graphite (-30%) due to pollution in China are causing shortages of material in the market Consequent high price increase of graphite from 2.000 USD/t to 38.000 USD/t (spot market) Impact both in EAF production (melting and refining) and in BOF production (refining): more or less 5 €/ton with price 2.000 USD/t, now more than 40 USD/t. Electrodes issues is expected to affect both the steel supply continuity and market prices 38
Fastener Market Outlook Electrodes issue 39
Fastener Market Outlook What next? Q4/17: increase on spot market and quarterly based negotiations 2018: further increases expected based on high market demand and commodities/utilities price change Strong impacts on P&L fastener manufacturers Develop and promote with the EIFI support an automatic index mechanism 40
Fastener Market Outlook AD525 26 February 2016: withdrawal by the EC after WTO sentence 2008: 650Ktons imported from China before the AD Chinese fastener production 2016: 75 bn RMB (10 bn Euro) - 7,5 mio tons – 10.000 companies 41
Fastener Market Outlook Market Economy Status EC just approved the final proposal this week The proposal will be voted by the European Parlament within 2017 42
Fasteners Market – Main Events Nedschroef acquires CP Tech to broaden high-end engineering know-how (Aug. 17) • With the acquisition, Nedschroef intends to further develop from a specialist manufacturer of fasteners to a high-end engineering company capable of engaging in the development of early-stage automotive projects working jointly with OEMs. • CP Tech, established in 2006 and located in Büren, Germany, employs 175 experts in advanced engineering offering complete solutions to many of the world’s most prestigious car manufacturers. Würth B2B online procurement platform goes live in Germany (Apr. 17) • Wucato is an e-procurement solution and online procurement platform for the B2B sector. It enables customers to access a Group-wide product range consisting of more than 500,000 products from suppliers within the Würth Group, as well as third party suppliers. Wucato will serve as a pioneering sales channel, enabling the Würth Group to respond to the more complicated demands of its customers and react to new market conditions. 43
Fasteners Market – Main Events A.Raymond –Adds largest production site (Aug. 17) • The new German production site is based in Weil am Rhein close to the German-Swiss-French border. Five years in the making, the new production building cover 43,000m2 and includes the entire manufacturing chain for metallic. A.Raymond to invest $17.3 million, create 71 jobs in Rochester Hills (June 17) • A.Raymond Corp., a subsidiary of France-based A.Raymond Network, is planning to construct a new North American headquarters in Rochester Hills. • The company develops, manufactures and markets fastening and assembly solutions according to a release from the Michigan Economic Development Corp., with plans to house corporate offices on the new site as well as establish a new advanced engineering lab. • The $17.3 million investment will see a $600,000 performance-based grant from the Michigan Business Development Program. Rochester Hills won out over a competing site in Ohio for the development. The new headquarters is expected to create 71 new jobs over the next five years. 44
Fasteners Market – Main Events Bulten invests in Poland (Sept. 17) • Bulten AB has invested around PLN 80.5 million (approximately SEK 177 million) in a new strategically important production and logistics plant in Poland to meet future volumes. • The set-up, which is conditional upon obtaining the required permits, will start in 2017 and production is expected to start in the first half of 2019. • The additional plant will be built in Radziechowy-Wieprz, in the “Katowice Special Economic Zone”, about 30 km from the existing production plant in Bielsko-Biala. LISI Automotive acquires TERMAX LLC in the US (Sept. 17) • Lisi to acquire 51% of the share capital of TERMAX LLC, a leading manufacturing and engineering company specializing in metal and plastic fastening systems for automotive interiors 45
Fastener Market Outlook Survey 2017 <0% 0% 4 Turnover evolution 2017 VS >0% <10% 91% 2016 > 10% 9% Increase 38% 5 Profitability (EBIT) expectation Stable 56% 2017 VS 2016 Decrease 6% Increase 58% 6 CAPEX 2017 VS 2016 Stable 36% Decrease 6% 46
Survey 2017 Automotive suppliers challenges Result High 32% 1 Global localization process Medium 62% Low 6% High 21% 2 Emerging market Medium 74% investors/suppliers Low 6% High 62% 3 OEM/OES ambitious price Medium 35% reductions plans Low 3% High 18% 4 Powertrain electrification Medium 44% Low 38% High 15% 5 Industry 4.0 Medium 65% Low 21% 47
Survey 2017 Automotive suppliers priorities Result High 38% 1 Follow the OEMS globalization Medium 53% process Low 9% High 32% 2 Manage the asian challenge Medium 65% (competitors) Low 3% High 65% 3 Increase/maintain flexibility on Medium 32% the entire supply chain Low 3% High 62% 4 Counterbalance OEM price Medium 38% pressure Low 0% High 15% 5 Monitor possible market Medium 56% downturn Low 29% 48
Fastener Market Outlook 7,5 6,9 49
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