Investor site visit UK Couplings, Cardiff 27 th April 2017 www.renold.com
Introductions • Robert Purcell Chief Executive • Ian Scapens Group Finance Director • Matt Taylor Global Managing Director – Chain • Andy Harbidge Managing Director – Couplings • Paul Richards Engineering Director Investor Visit – UK Couplings , 27 April 2017 2
Highlights from Trading Update Key highlights from the Trading Update issued on 11 April 2017: • “….underlying revenue is expected to be broadly flat.” • “Underlying revenue growth of approximately 3.1% for the second half of the year is a significant improvement over the 4.0% decline reported for the first half.” • “Net debt finished the year at £17.4m” • “We…expect to report results for the full year in line with market expectations.” • “The order book at 31 March was 9.0% higher than at the prior year end…” Investor Visit – UK Couplings , 27 April 2017 3
UK Couplings Andy Harbidge Managing Director - Couplings Paul Richards Engineering Director 27 th April 2017 www.renold.com
Renold Structure Renold Plc Torque Chain Transmission 20% of Group Sales 80% of Group Sales UK Business Units Industrial Couplings Couplings Hi-Tec Couplings Clutches 20% of TT Sales Gears 20% of TT Sales International 60% of TT Sales Note:- Sales % based on external sales Investor Visit – UK Couplings , 27 April 2017 5
Couplings History 1996 Renold acquire the Holset couplings business in Halifax and renames the 1914 company Renold Hi- Hans Renold Ltd. Tec Couplings. design and patent their flexible chain coupling. A product that is 1852 1964 still used Hans Renold Renold Group 2017 worldwide today born on July acquire John Cardiff factory moved Manufacturing of the 31 st in Aarau, a Holroyd and Co to a new premises on Renold Hi-Tec coupling small town in Ltd Newlands Road range relocates to Cardiff Switzerland factory 1900 1943 1972 2015 On May 2 nd after a Hans Renold Renold Ltd. Step2020 strategic plan Co. design and period of failing Acquire Ajax, announced. Renold manufactures a health Hans Renold USA employs around 2,200 Coning Machine passed away at the people in almost 20 age of 90 countries around the world 1903 Hans Renold Ltd. formed Factory Acquired at Cardiff by Renold and Coventry Chain Co. Ltd 1947 The manufacture of Couplings begins at Cardiff Investor Visit – UK Couplings , 27 April 2017 6
Couplings – The Basics Coupling Functionality • Mechanical device for connecting two rotating shafts • Transmits torque from one shaft to another • Allows for different types of misalignment • Creates flexibility and can reduce shock loads Classifications of Couplings Torsionally Flexible Torsionally Rigid Torsionally Rigid Vibration Absorbing Zero backlash Renold Range Spiderflex/Jaw/Wrap Gearflex Hydrostart Renoldflex Pinflex Chainflex Hi-Tec HTB Rigid Crownpin Hi-Tec DCB Tyreflex Hi-Tec RB / RBI Disclex Hi-Tec VF Investor Visit – UK Couplings , 27 April 2017 7
Products Industrial Couplings Product Range • Gear couplings • Fluid couplings • Pin & buffer couplings • Spider couplings • Tyre couplings • Disc couplings Competitive Differentiators • Industry leading range • On-site engineering support • Bespoke product design • UK manufacture • Standard product range stock • Brand & reputation Investor Visit – UK Couplings , 27 April 2017 8
Products Industrial Couplings – Applications • Quarrying & mining • Cement production • Steel production • Material handling • Water industry • Pulp & paper • Energy production Hydrastart in a Crusher Application Pinflex in a Conveyor Application • Food & drink manufacturing • Mixers/crushers • Escalators • Plus many more Gearflex in a Rotary Screen Investor Visit – UK Couplings , 27 April 2017 9
Products Hi-Tec Couplings Product Range • HTB Range (High Temp Blind Assembly) • RB Range (General Purpose) • DCB-GS Range (Diesel / Gas Engines/ Compressors • PM Range (Heavy Industry – severe shock & vibration) • MSC Range (Diesel Drive & Compressors) • Spares Competitive Differentiators • Rubber in compression – Reduced vibration / vibration tuning – Failsafe mechanism – Maintenance free • Industry leading range • On-site engineering support • Bespoke product design • UK manufacture • Brand & reputation Investor Visit – UK Couplings , 27 April 2017 10
Products Hi-Tec Couplings - Applications • Steel production • Mining & quarrying • Power generation • Cement production • Marine propulsion • Rail traction PM application – Grinding Mill • Pumps • Compressors DCB application – Military Vessel, Main propulsion & generator VF application – Luxury Yacht Investor Visit – UK Couplings , 27 April 2017 11
Products Clutches (Freewheels & Backstops) • One way drive mechanisms (like on a bicycle) used as a backstop or overrun in many industries. Type A – Spragg Freewheels • High torque transmission • Over-running • Typical applications:- Conveyors, feeders, large conveyors, pumps, engines & motors, theme park rides Type B – Trapped Roller • Smaller torque transmission • Over-running • Typical applications:- Fan drivers, blowers, small pumps, starter drives, small engines Investor Visit – UK Couplings , 27 April 2017 12
STEP 2020 – Before Project Cyclone Halifax Location Cardiff Location • Industrial couplings & clutch range production • Hi-Tec product range production • 4,200m 2 • 2,300m 2 • 14,500m 2 (3.6 acre) site 4,700m 2 (1.2 acre) site • • Site with space and room for expansion • Land locked no room for expansion • Key equipment • Key equipment - Ranges from 15-40 years old - Ranges from 9-20 years old - Average age of 24 years - Average age of 16 years • Headcount 62 • Headcount 41 Investor Visit – UK Couplings , 27 April 2017 13
STEP 2020 – Project Cyclone Pre and post project Halifax Cardiff Combined Post Sq Ft 35,663 45,000 80,663 45,000 Halifax Cardiff Combined Post Headcount 41 62 103 85 Average Age of Halifax Cardiff Combined Post key equipment 16 24 21 13 Hi Tech Product Industrial Product Average time 40% 52% saved Excluding transportation • Cardiff Factory Preparation (new concrete slab, warehouse changes, etc.) Capital • 3 x Medium Sized Machining Centres • 1 x Large Sized Machining Centre Investments • Additional Cranes • INFOR M3 ERP System implemented at both sites prior to project and Other Key combined during project • 23 new people hired in Cardiff Actions • 1700 man hours of cross training on transferred machines Investor Visit – UK Couplings , 27 April 2017 14
STEP 2020 – Project Cyclone Manufacture Process – Before & After Machine 2 At Halifax Site Step 7 Step 6 Step 5 Step 2 Step 3 Step 4 (Mill) (Mill) Machine 1 (Setup) (Turn) (Setup) (Turn) Step 1 Youji (Setup) Step 8(Setup) Dressing Booth Radial Arm Drill Steel Step 11 Casting Step 10 Step 9 (Dress) (Drill) (Fine Turn) Finished Part Now at Cardiff Site Step 3 (Side 2) Step 1 (Setup) Step 2 (Side 1) Large 5 Axis Mill Machining Centre – Mill / Drill / Turn – all operations 1 machine Investor Visit – UK Couplings , 27 April 2017 15
Couplings Summary Key Next Steps • Finalise Project Cyclone & realise project goals • Expand Hi-Tec product range to suit higher volume applications • Maximise returns from recent investment and continue to utilise new production technology to improve cost and service • Commercial focus through targeting key markets and customers Investor Visit – UK Couplings , 27 April 2017 16
Renold Chain Investor Day Presentation Matt Taylor Global Managing Director - Chain 27 th April 2017 www.renold.com
Chain Overview Renold Chain Revenue By Region • Global market for “industrial” chain in excess of £1.5bn Other, 20% • Sales in more than 100 countries worldwide • Global manufacturing capability Europe, 42% • Well represented in developed economies • Increasing presence in emerging nations – major growth opportunity • 1700 staff worldwide Americas, • Renold number two player globally by revenue 38% Renold Positioning Renold Differentiation • High performance chain solutions positioned at • Renold chain is an engineered product with the premium end of each market segment performance characteristics suited to specific applications : – Wear – Low Maintenance – Tensile Strength – Abrasion Resistance – Fatigue Performance – Chain Efficiency – Corrosion Resistance • Renold chain is engineered and manufactured in our own factories to levels above global norms and standards Investor Visit – UK Couplings , 27 April 2017 18
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