TECHNOLOGY PRESENTATION Milano – November 28th, 2017
Laurent HEBENSTREIT Chief Executive Officer
Agenda 1 Introduction 2 Technology 3 Profitable Growth Strategy 3 I
Introduction
Who is Sogefi? o Young automotive company created in 1980 by Carlo De Benedetti o Listed in Milano Stock Exchange since 1986 o Strong Entrepreneurship DNA o Developed through: • a series of strategic moves • tight cost control o Joined the best automotive suppliers in 2005 o Generated 31M€ of Cash in 2016 5 I
3 Business Units Suspensions Filtration Air & Cooling o Stabilizer Bars o Oil Filters o Manifolds o Coil Springs o Engine Air Filters o Coolant Pumps MAIN PRODUCTS o Fuel Filters o Coolant Outlet o Cabin Air Filters Housings € 563M € 535M € 480M € 1,574M 36% 34% 30% 2016 Sales Main Competitors 6 I
Sogefi Customers CARS AFTERMARKET TRUCKS 2 WHEELERS 3 WHEELERS MAIN BRANDS 7 I
Well balanced clients mix Sogefi Top 10 Clients – In % of Total Sales 2015 Ford Renault/Nissan 2016 FCA/CNH Industrial PSA GM Daimler Volkswagen/Audi BMW Toyota Volvo Geely/Volvo 10% 5% 8 I
Supplying premium customers & models FERRARI 599 PORSCHE CAYENNE AUDI A6 MASERATI QUATTROPORTE BMW 5-serie MERCEDES GLK JAGUAR F-PACE VOLVO XC90 CORVETTE 9 I
Technology
Current Trends CO 2 Emissions Air Quality Weight Reduction Fine Particles Reduction Fuel Consumption Reduction Reduction Higher technology requirements Filtration Filtration Filtration Air & Cooling Air & Cooling Suspensions 11 I
Stabilizer Bar content Weight Content Suspensions reduction by vehicle Variable wall High 24€ 45% thickness Tube TECHNOLOGY Middle 20 € Tube 35% LEVEL Indicative weight by vehicle: Solid Bar Entry 16 € ~6 kg 12 I
Coil Spring content Weight Content Suspensions reduction by vehicle Composite High 50€ 50% Steel TECHNOLOGY Middle 23 € + high performance 25% LEVEL process Indicative weight by vehicle: Steel Entry 20 € ~10 kg 13 I
4 Disruptive Future Trends 1 CONNECTIVITY 2 o AUTONOMOUS Connected, Autonomous and Shared trends have limited direct DRIVING impact for Sogefi 3 SHARED MOBILITY o Powertrain electrification is a key trend for Filtration and Air & Cooling ELECTRIFICATION o Sogefi developed with Mc Kinsey support a detailed world data base and model to create alternative powertrain scenarios Higher technology requirements 14 I
Different types of powertrains New Energy Vehicle (NEV) Internal Combustion Engine (ICE) Electric Vehicle (EV) Hybrid Battery Fuel Cell Pure ICE Electrification 15 I
Different types of powertrains Pure ICE Hybrid BEV FCEV MHEV FHEV PHEV Electrification o ICE : Internal Combustion Engine vehicle, operating on fuel. o MHEV : Mild-Hybrid Electric Vehicle , 48V system. (e.g. New Renault Scenic dCi 110 ). o FHEV : Full Hybrid Electric Vehicle , operating on fuel, assisted by a battery. Non rechargeable (e.g. Toyota Prius ). o PHEV : Plug-in Hybrid Electric Vehicle , operating on fuel, assisted by a battery. Rechargeable (plugged in to grid) (e.g. New Golf GTE ). o BEV : Battery Electric Vehicle , i.e., pure EV, with no ICE content (e.g. Renault ZOE, Nissan LEAF, Tesla ). o FCEV : Fuel Cell Electric Vehicle (e.g. Toyota Mirai ). 16 I
2017 Powertrain by region 90% EUROPE 54% 41% 87% CHINA 3% 1% NAFTA 6% 3% 2% 19.9 7% 6% 1% 72% 28.0 Rest of 81% Asia 20.8 Rest of 22% the World 6% 78% 1% WORLD 12% 6% 1% 14.9 Type of engine 8.7 17% 4% 2% EV Hybrid Diesel Gasoline LV sales (M units) 92.3 Source: Sogefi and Mc Kinsey Estimated volume, including Passenger Car (PC) and Light Commercial Vehicle (LCV) < 3.5T (LCV > 3.5T excluded) 17 I
Diesel/Electric disruption trends 1 Diesel disruption mainly affecting Europe due to o More stringent regulations o Consumers turning away from Diesel o Politics • Diesel circulation restrictions in large cities Diesel share in Europe: from 41% in 2017 to 25% in 2027 in Base case scenario ( 20% in Strong case) 2 Electrified powertrain evolution o Technology improvements o Politics • France & UK to ban Diesel/Petrol cars from 2040 • China to significantly increase EV WW EV + Hybrid share: from 6% in 2017 to 30% in 2027 in Base case scenario ( 33% in Strong case) 18 I
2022 Sogefi Forecast All scenarios predict a reduction of ICE from 98% in 2017 to 93% in Base Case and 89% in Strong Case in 2022 Share of 2022 sales per type of engine, LV 1 global 68% 64% 60% Scenario EV High Base case 17% 13% 13% 13% 13% 11% 11% 11% 9% Strong case 75% 71% 66% Type of engine EV scenarios 18% 14% 10% 9% 9% 9% 7% 7% 7% EV Hybrid Diesel Gasoline 75% 71% 67% EV Low 18% 10% 14% 10% 10% 10% 6% 6% 6% Diesel Low Diesel High Diesel scenarios Source: Sogefi and Mc Kinsey 1 including PC and LCV (<3.5 tons) 19 I
2027 Sogefi Forecast All scenarios predict a reduction of ICE to reach 86% in Base Case and 81% in Strong Case in 2027 Share of 2027 sales per type of engine, LV1 global Scenario 59% 56% EV High 53% Base case 19% 18% 18% 15% 15% 15% 14% 11% 7% Strong case 63% 60% 56% Type of engine EV scenarios 16% 16% 16% 14% 14% 15% 14% 11% 8% EV Hybrid Diesel Gasoline 66% 62% 59% EV Low 16% 16% 16% 15% 12% 10% 10% 10% 8% Diesel Low Diesel High Diesel scenarios Source: Sogefi and Mc Kinsey 1 including PC and LCV (<3.5 tons) 20 I
Powertrain Forecast by region (Sogefi Base Case) NAFTA EUROPE CHINA 2017 2022 2027 2017 2022 2027 EV 1% 5% 11% 2017 2022 2027 EV 1% 6% 13% Hybrid 6% 9% 15% EV 2% 8% 17% Hybrid 3% 7% 14% Hybrid 3% 11% 18% ICE Diesel 7% 6% 5% ICE Diesel 41% 32% 25% ICE Diesel 6% 5% 4% ICE Gasoline 87% 80% 69% ICE Gasoline 54% 55% 49% ICE Gasoline 90% 76% 61% Rest of Asia Rest of the World WORLD 2017 2022 2027 2017 2022 2027 EV 1% 5% 11% EV 1% 5% 11% 2017 2022 2027 Hybrid 6% 9% 15% Hybrid 6% 9% 15% EV 2% 6% 14% ICE Diesel 22% 21% 18% ICE Diesel 12% 10% 8% ICE Gasoline 72% 65% 56% ICE Gasoline 81% 76% 66% Hybrid 4% 9% 16% ICE Diesel 17% 14% 11% ICE Gasoline 78% 71% 60% Source: Sogefi and Mc Kinsey 21 I
Light Vehicles Sales Forecast (Sogefi Base Case) o Strong growth of Hybrid powertrains and Electric Vehicles (EV) o But total Internal Combustion Engine (ICE) remains flat 2017 2022 2027 CAGR 17/22 CAGR 22/27 Total Vehicles 92 99 110 1.4% 2.1% (M units) EV 1 6 15 35% 19% Hybrid 4 9 17 19% 14% ICE Diesel 15 14 12 -2% -2% ICE Gasoline 72 70 66 0% -1% Total ICE 91 93 95 0.4% 0.5% Source: Sogefi and Mc Kinsey Volume including Passenger Car (PC) and Light Commercial Vehicle (LCV) < 3.5T 22 I
Sogefi Filtration / Air&Cooling Main Products Filtration Air & Cooling OEM AFTERMARKET Oil Filter Manifold Engine Air Coolant Pump Fuel Filter European Car Park 10 years average age Coolant Outlet Housing Cabin Air Filter 23 I
Hybrid Powertrain Volume Effect New Product Air & Cooling VOLUME X2 Manifold Coolant Coolant Outlet Pump Housing Battery Pack Filtration Battery Pack coolant Manifold Thermal Pack Engine Air High performance Oil Filter Coolant Valve Fuel Filter Cabin Air Filter 24 I
BEV Powertrain Volume Effect New Product Air & Cooling Battery Pack Battery Pack Coolant Manifold Module Battery Thermal Pack Electric Cooling Module VOLUME X2 Filtration Coolant Electric Coolant Outlet High performance Valve Coolant Pump Housing Cabin Air Filter 25 I
FCEV Powertrain New Product Air & Cooling Electric Coolant Coolant Outlet Pump Housing Coolant Valve Filtration Fuel Cell Air Filter High performance Fuel Cell Water Filters Separator Cabin Air Filter 26 I
SOGEFI on Hybrid and Electric Powertrain TX5 MALIBU A8 3-serie PACIFICA S-CLASS PANAMERA 500 FORTWO B-CLASS ZOE 27 I
Sogefi Filtration / Air&Cooling products offer opportunities o Even if all scenarios predict an increase of EV, the total ICE powertrains could remain flat or a substantial part of the market until 2027. o Hybrid powertrain is a first step towards a world of multiple powertrains . o The rise of EV is depending on key evolving factors (vehicle range, battery costs, infrastructures development ,…) o The rise of Hybrid, BEV and FCEV offers opportunities for SOGEFI. More volume of Cooling products New Sogefi products Higher content for existing Sogefi products 28 I
Oil Filter content Filtration Content Oil Filter Module High 23€ + Oil Cooler + Valves TECHNOLOGY Oil Filter Element Middle 2€ LEVEL + Cap Oil Filter Entry 1€ Spin-on 29 I
Engine Air Filter content Filtration Content Engine High 28€ Air Intake System Filter Element TECHNOLOGY Middle 9€ + Box LEVEL Filter Element Entry 2€ 30 I
Air Cabin Filter content Filtration Content Anti-allergen High 3€ Synthetic media with activated carbon + anti-allergen properties + high performance TECHNOLOGY Particles and Middle 2€ LEVEL odours Synthetic media with activated carbon Entry 1€ Pollen Synthetic media 31 I
Aftermarket Pricing Power Filtration Price Index High 100 Premium TECHNOLOGY Middle 85 Mid Range LEVEL 80 Entry Private Label 32 I
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