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I N V E S T O R P R E S E N TAT I O N Wednesday, November 7 th 2018 - PowerPoint PPT Presentation

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I N V E S T O R P R E S E N TAT I O N Wednesday, November 7 th 2018 Fondazione Cariplo Milan 1 Todays Speakers Lorenzo Zaniboni Cesare Agrati Paolo Pozzi Andrea Costantini Giandomenico Sbaragli Group Operations Director President &

  1. I N V E S T O R P R E S E N TAT I O N Wednesday, November 7 th 2018 Fondazione Cariplo Milan 1

  2. Today’s Speakers Lorenzo Zaniboni Cesare Agrati Paolo Pozzi Andrea Costantini Giandomenico Sbaragli Group Operations Director President & CEO Group CEO Group CFO Group S&M Director Paolo Ceretti Pier Luigi Rossi Piero Galli CEO Board member Board member 2

  3. AGENDA • Introduction and investment highlights • Company overview • Positioning and perspectives • Key financials • Transaction overview • Appendix 3

  4. Introduction and investment highlights Our target of choice: Agrati Group Founded in the ‘ 30 in Veduggio, north of Milan, is a market leader in the development, production and distribution of fastening systems and advanced solutions mainly in the automotive market Special Bolts AFP Nuts Screws High and medium strength Advanced Formed Parts Interior Headliner Seating Interior Structures • World n. 7 manufacturer of automotive Trunk Airbag metallic fastening systems • Chassis Italian champion with a strong entrepreneurial history of continuous Powertrain and profitable growth Brake & Wheel • Leading company in technology and innovation Bumpers Seating • Mostly primary transaction : up to € 175M Safety Engine devoted to fund Agrati Group future Steering growth Axle Exterior Critical components 4

  5. Introduction and investment highlights Investment rationale • Top ranking on blue-chip OEMs and Tier 1 manufacturers • Global market leader State-of-the-art technology • 90% of revenues outside Italy • Complete product portfolio (depth and width) One-stop-shop for • High quality co-designed solutions fastening systems • Full Service Provider (FSP) proven capabilities • 12 production plants Global footprint • 5 logistic centers • 12 sales and application offices • “ Agrati Production System – APS” based on Lean Production High profitability and • High production efficiency (continuous costs control and working capital improvement) cash generation • Strong cash flow generation ( €30 -40 M per year), notwithstanding capex higher than peers • Extensive engineering and manufacturing expertise Strong management • Management with long tenure team • Proven M&A track record capabilities • Opportunities from a fragmented market (customer full potential, entry in adjacencies) Excellent global • Dynamic M&A market (avg. 40 transactions/year in the last 3 years) platform for growth 5

  6. Introduction and investment highlights Resilient revenues & EBITDA growth Growth not influenced by automotive market fluctuations • Significant organic growth thanks to proven management capabilities of M&A and integration processes • M&A strategy focused on business development in new strategic markets REVENUE CAGR +22,4% 15,5% 15,3% 16,3% 658 11,4% 9,8% 191 6,7% 489 5,8% 4,6% 61 9% 4,1% 6% 8% 362 12% 113 269 3% 467 428 80 405 376 102 337 327 62 80 131 249 43 189 33 22 16 15 6 09A 10A 11A 12A 13A 14A 15A 16A 17A Revenues M&A EBITDA Adj EBITDA Adj % Acquisition in France Acquisition in US Source: Company data Note: 2009 - 2015 ITA GAAP YoY organic growth 6

  7. AGENDA • Introduction and investment highlights • Company overview • Positioning and perspectives • Key financials • Transaction overview • Appendix 7

  8. Company Overview Agrati: the history Consistent development through business model evolution and organizational changes 8

  9. Company Overview Key highlights Management figures - 2017 A truly global leader in fastening systems with footprint in all key geographies 658 658 MILLION EURO Company data 9

  10. Company overview Global footprint Global platform with production plants and sales offices close to main automotive OEMs 12 Sales & Application Offices 12 Production Plants 3 Tech Centers 5 Logistic Centers ASIA 369 Employees 15.000 Tons/year 69 Equipment EU 37.000 sqm 1.738 Employees 99.000 Tons/year USA 600 Equipment 137.000 sqm 500 Employees 52.400 Tons/year 211 Equipment 74.000 sqm Source: Company data 10

  11. Company overview Global sales Global player with 90% of revenues outside Italy Global presence with focus on the most specialized markets with high growth potential 7.5% APAC 32% AMERICAS 60.5% EMEA Source: Company data 11

  12. Company overview Clients portfolio Automotive focused and balanced clients portfolio 90% OF SALES FROM AUTOMOTIVE MARKET 10 CLIENTS ACCOUNTING APPROX. 60% OF TOTAL SALES € 658 M 15% Other 4% 3% Industrial Other Commercial vehicle 2% Distribution 3% 30% Automotive 28% 11% TIER 1 Sales Top 5: 51% 1% 11% Automotive 60% each OEMs 2% 9% each 5% 3% each Sales 2017 Source: Company data 12

  13. Company overview High tech solutions Wide and diversified product portfolio: high volume critical parts Bolts 58% Other 8% Wheel nut Wheel bolt Hub bolt Bolts, screws, nuts 77% of revenues AFP 15% Special Safety belt Screws Nuts screw Gearbox 9% 10% Cam bolt Cilinder screw head bolt Source: Company data 13

  14. Company overview High tech solutions Wide and diversified product portfolio: high value engineered products APPLICATIONS Other 8% Braking systems Bolts AFP 58% AFP 15% of revenues Powertrain Special Screws 9% Nuts Safety and comfort 10% Source: Company data 14

  15. Company overview Co-design: a new way to find opportunities Ongoing Activities Acquired Activities 15

  16. AGENDA • Introduction and investment highlights • Company overview • Positioning and perspectives • Key financials • Transaction overview • Appendix 16

  17. Positioning and perspectives Value creation platform Five levers to support business development and market opportunities Stable & Attractive market Strong Platform for market growth positioning Value creation platform Efficient & Solid & profitable promising industrial client system portfolio 17

  18. Positioning and perspectives Fastener market structure Stable and Global fastener market value is ~€68B in 2017, with automotive as first attractive market industry & APAC as main geography GLOBAL INDUSTRIAL FASTENER MARKET SPLIT (B€, 2017) Split by geography Split by industry 67,5 Standard products 18,7 21,7 13,3 9,2 18,5 9,2 6,1 4,1 27,3 4,1 2,7 APAC Americas EMEA Total Motor Machinery Electric & MRO Metal Aerospace Construction Other OEM vehicles electronic products equipment % total market 27,4% 32,1% 100% 27,7% 19,7% 13,7% 13,6% 9,0% 6,1% 6,1% 4,0% 40,5% CAGR ‘17 -22 4,6% 2,9% 3,2% 3,7% 4,2% 3,6% 3,2% 2,7% 3,3% 4,8% 4,3% 3,2% Source: Freedonia; GIA Report, Management analysis 18

  19. Positioning and perspectives Vehicle fastener applications Stable and Every vehicle is equipped with around 3.000 assembly points attractive market CAR FASTENING PIECES KEY NUMBERS Average size car presents about 1.000 SKUs for a total of ~2-3.000 assembly points depending on car model Hybrid vehicles have 3-6% more pieces due to additional engine components Vehicle application Value of total vehicle (%) Electric vehicles have ~20-25% less pieces due to fewer engine components Engine & powertrain 27% Chassis/Suspension 20% Braking & wheels 10% VALUE Interior/exterior trim 12% ~ €230 per car Seating 8% ~ €600 per heavy truck vehicle Safety 7% Body and White 7% Other 9% Source: WRC Research; A2MAC1 19

  20. Positioning and perspectives Automotive industry faces relevant challenges Stable and Changes will impact the whole supply chain and the size/mix of fastener mkt attractive market TRENDS IMPACT Mobility Customers behaviors Vehicles production forecast Convenience / Urbanization Powertrain mix change loss of status symbol Impact on market size Fastener value increase Sustainability Shared Mobility Raw materials fluctuations Increased vehicle lifecycle Digitalization & Autonomous Connectivity driving Attention to safety & comfort Advanced driver aids Impact on Regulatory ability to win Electrification Mega platforms convergence City-region-govern. regulation Growing fastener reliability 20

  21. Positioning and perspectives Vehicle production forecast Stable and 2018 – 2022 expectations showcase stable growth rate at ~2,4% attractive market APAC fastest growing region at ~2,8% NUMBER OF VEHICLES PRODUCED BY GEOGRAPHY 2017-2022 (M) Vehicles production forecast CAGR 15-17 CAGR 18-22 3,5% 2,4% 107 Powertrain mix change 105 103 100 97 95 22,2 Fastener value increase 21,6 + 0,5% 21,4 20,9 21,1 NAFTA 20,5 - 0,4% Raw materials fluctuations 28,0 27,5 27,1 + 1,6% Increased vehicle 26,3 25,5 24,8 EMEA lifecycle + 4.0% Attention to safety & comfort Advanced driver aids 57,2 55,5 54,1 52,4 APAC 49,9 50,5 + 2,8% Mega platforms + 4,9% convergence Growing fastener 2017 reliability 2018F 2019F 2020F 2021F 2022F Source: LMC; Company data Note: Graphs include personal vehicles and LCV 21

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