Rieter Automotive Systems Presentation by Erwin Stoller CEO Rieter Automotive Systems Sept. 30 / Oct. 1, 2004 Presse- und Finanzanalystenreise 30.9.04 1 Rieter Automotive Systems
Agenda 1. Market Development • Markets, Products, Customers, Competitors 2. Strategic Intent • Innovation • Cost Competitiveness • Global presence / External Growth Presse- und Finanzanalystenreise 30.9.04 2 Rieter Automotive Systems
Global Light Vehicle Production: 2007 Forecast vs. ’03 World Production 2003: 58.4 Mio 4.6 3.2 17.3 2007: 66.6 Mio 16.4 16.7 E. Europe 9.5 15.8 6.5 9.9 3.9 W. Europe China Japan 4.6 3.0 3.1 3.3 NAFTA 2.6 Rest of the Asia S. Korea 1.9 S. America 1.0 1.5 DRI-WEFA Forecast Report, June 2004 Rest of the World Presse- und Finanzanalystenreise 30.9.04 3 Rieter Automotive Systems
Drivers for Demand Eight Key Market Trends in the Acoustic & Thermal Systems Demand Drivers Effect 1. Price pressure – 2. Fuel efficiency / lightweight construction – 3. Increase in global vehicle production + 4. Growing demand for more comfort within car + (interior enhancement) 5. Shift toward premium brands + 6. Increasing share of diesel powered cars + (+9% package/car) 7. Regulatory changes / noise reduction + 8. Technological innovations = Source: Mercer Mgt Consulting Presse- und Finanzanalystenreise 30.9.04 4 Rieter Automotive Systems
Worldwide Automotive Acoustic Market 2001-07, in bn. CHF Current Rieter market share approx. 10% * 13.8 Total (CAGR: 4.2%) 13.4 12.8 12.2 11.6 0.6 Vibration Cushing (CAGR: 2.9%) 11.3 0.6 10.8 0.9 Underfloor (CAGR: 2.5%) 0.6 0.9 0.6 0.9 0.6 0.6 0.9 0.5 0.8 0.8 0.8 4.8 Engine (CAGR: 4.7%) 4.7 4.4 4.2 3.9 3.8 3.6 Interior (CAGR: 4.3%) 7.5 7.2 6.9 6.5 6.2 6.3 6.0 2001 2002 2003 2004 2005 2006 2007 *Rieter market share estimate on acoustic and thermal products Source: Mercer Management Consulting, 2002 Presse- und Finanzanalystenreise 30.9.04 5 Rieter Automotive Systems
Product Portfolio Division Automotive Cross Vehicle Under Floor Trunk Interior Floor Interior Engine Headliner & Trim Compartment • Acoustic & Thermal package integrated in 6 Product lines Presse- und Finanzanalystenreise 30.9.04 6 Rieter Automotive Systems
Our Customers Presse- und Finanzanalystenreise 30.9.04 7 Rieter Automotive Systems
Automotive Sales: Strong and Balanced Customer Base Other Other Toyota Renault Toyota Renault 5% Honda 5% Honda 9% VW Group 8% VW Group 4% 4% 5% other 6% 6% 7% Daimler- other Daimler- Japanese 3% 3% Chrysler Japanese Chrysler carmarkers 6% 6% carmarkers BMW BMW 6% 6% 12% 13% Group Group GM GM 8% 8% Fiat Fiat 13% 14% 11% 11% 11% 10% Ford Group Ford Group PSA PSA Commercial Commercial vehicles vehicles Sales HY1 2004 Sales 2003 Presse- und Finanzanalystenreise 30.9.04 8 Rieter Automotive Systems
Number of OEMs and Automotive Suppliers 1900–2015 Further supplier consolidation expected Suppliers OEMs Source: Mercer & Fraunhofer, 2003 Presse- und Finanzanalystenreise 30.9.04 9 Rieter Automotive Systems
Automotive Systems: Strategic Intent Expansion of the automotive business with the following priorities: � Organic growth through innovative products � Good cost position through permanent productivity enhancement and exploitation of low-cost locations � External growth only in order to close strategic gaps (regional, product, know-how) Presse- und Finanzanalystenreise 30.9.04 10 Rieter Automotive Systems
DA Current Strategy Product vision so far: from Acoustic Integrator into living cell Value added / Complexity Living Cell (CHF/car) Fiber reinforced Integrated thermoplastic carpet composite structure integrating damping & Supplier of acoustic functions 1'000 Embedded bacteria soft surfaces for odor control advanced structural Ducts and openings for heat circulation molded into ……... the structure Intelligent fibers Advanced air conditioning (optical fibers,conductive system including ducts modules polymers, etc) integrated network and embedded into the structure automatic micro-valves # 1 Acoustic & Thermal 300 Integrator of modules (e.g. Interior Floor system + Underfloor) # 1 Acoustic 200 Integrator of parts / components Time 2006 2003 2010/20 Presse- und Finanzanalystenreise 30.9.04 11 Rieter Automotive Systems
Innovation TM principle RIETER ULTRA LIGHT Until 1999: INSULATION NOISE ABSORPTION Presse- und Finanzanalystenreise 30.9.04 12 Rieter Automotive Systems
Innovating the Last Frontier: Underfloor Today Tomorrow COMPONENTS MODULE Presse- und Finanzanalystenreise 30.9.04 13 Rieter Automotive Systems
IFP* TECHNOLOGY: Process Innovation CAR MODEL : CITROEN C2/C3 – PEUGEOT 1007 RIETER PRODUCTION : ONS EN BRAY (France), BARCELONA (Spain) INNOVATION • Low process cost • Acoustic performance • Recyclability *IFP = Injection Fibre Process Presse- und Finanzanalystenreise 30.9.04 14 Rieter Automotive Systems
PLASTIC INJECTION: Product Innovation (Acoustics) CAR MODEL: RENAULT MODUS/ NEW CLIO RIETER PRODUCTION : MOISSAC (France) INNOVATION • Plastic parts with integrated acoustic function (air and water box) Presse- und Finanzanalystenreise 30.9.04 15 Rieter Automotive Systems
Partnership: Toyota Avensis Benefits: • Sound package, 50% weight reduction • Best in class acoustics • Quality and aesthetics Presse- und Finanzanalystenreise 30.9.04 16 Rieter Automotive Systems
Renault forecasts highest Growth in ….. … Eastern Europe, S. Korea, Iran 1.88 1.815 0.37 2.44 mio vehicl. produced in 03 0.11 3.36 mio forecasted in 2011 0.32 0.74 S. Korea +15.7% CAGR +4.1% p.a. W. EU -0.4 % E. EU +10.8% 300000 veh 0.025 0.015 China +0% Not included NAFTA +6.6% 0.2 0.02 Japan +0% Iran 0.19 0.08 S. America +11.4% 2003 2011 Rest of Asia +0% Source: DRI-WEFA Forecast Report, March 2004 – LV production (million units) – Compounded annual growth in % Presse- und Finanzanalystenreise 30.9.04 17 Rieter Automotive Systems
Nissan sees Production shift from Japan into Asia … 3.05 mio vehicles produced in 2003 … and growth in NAFTA 3.65 mio forecasted in 2011 CAGR +2.2% p.a. S. Korea +0% 0.42 0.42 1.17 W. EU +0% 0.81 E. EU +0% 0.09 0.34 1.52 1.35 China +18% NAFTA +4.7% Japan –1.4% 0.26 0.025 0.01 0.15 0.1 S. America +12% 2003 2011 0.03 Rest of Asia +7% Rest of World +10.5% Source: DRI-WEFA Forecast Report, March 2004 – LV production (million units) – Compounded annual growth in % Presse- und Finanzanalystenreise 30.9.04 18 Rieter Automotive Systems
Automotive Systems: Strategic Intent Expansion of the automotive business with the following priorities: � Organic growth through innovative products � Good cost position through permanent productivity enhancement and exploitation of low-cost locations � External growth only in order to close strategic gaps (regional, product, know-how) Presse- und Finanzanalystenreise 30.9.04 19 Rieter Automotive Systems
Roadmap to Profitable Growth: Cost Competitiveness � Improvement of Productivity - further improvement and standardization of processes (benchmarking) - KAIZEN workshop in the plants Reduction of Procurement costs � - further product standardization to bundle volumes - short-term: countermeasure against higher market prices - mid-to-long-term: reduction of material costs and CAPEX � Decrease in the use of raw material - continuous process and product reengineering (better use of material input) - implementation of further recycling processes � Reduction of fixed costs - streamlining of the organizational structure in Europe � Extension of low-cost locations - Eastern Europe - Asia (China) Presse- und Finanzanalystenreise 30.9.04 20 Rieter Automotive Systems
Manufacturing Benchmark plant Plant with improvement potential Presse- und Finanzanalystenreise 30.9.04 21 Rieter Automotive Systems
Automotive Systems: Strategic Intent Expansion of the automotive business with the following priorities: � Organic growth through innovative products � Good cost position through permanent productivity enhancement and exploitation of low-cost locations � External growth only in order to close strategic gaps (regional, product, know-how) Presse- und Finanzanalystenreise 30.9.04 22 Rieter Automotive Systems
Growth Potential North/South Europe/ Asia Total America Africa in % in % in % CHF million Textile 11 28 61 1228 Systems Automotive 35 63 2 1876 Systems Rieter Group 25 49 26 3118 (Previous year) (31) (46) (23) (2976) Presse- und Finanzanalystenreise 30.9.04 23 Rieter Automotive Systems
Chinese Automotive Industry: Overview 2003: 390K 2006: 900 k 2003: 500K Changchun 2006: 1‘000 k VW/Audi Toyota Mazda Shengyang FAW BMW Beijing GM DXC Hyundai North Mitsubishi Tianjin Toyota 2003: 900K Wuhan Nanjing PSA Shanghai Chongqing 2006: 1‘900 k Fiat Nissan Location VW Suzuki Honda Central GM Wuhu Ford Ningbo Changan Chery Japanese JVs Geely Fuzhou Western JVs Mitsubishi Local Chinese South Guangzhou 2003: 450K 2003: 200K Honda Source: Finanz und 2006: 1‘000 k Hainan Nissan Wirtschaft, 13/3/2004 Mazda Toyota 2006: 400 k Presse- und Finanzanalystenreise 30.9.04 24 Rieter Automotive Systems
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