bulten capital markets day · 2017-09-22 · production sales logistics ... lmc automotive reports...
TRANSCRIPT
AGENDA
2
13:00‐14:30
Introduction Kamilla OresvärdSenior Vice President Corporate Communications
Corporate Presentation Tommy AnderssonPresident and CEO
Strong financial platform Helena WennerströmExecutive Vice President and CFO
Full Service Provider to the international automotive industry & Highlights region West
Neal ThomasSenior Vice President Marketing and Sales region West
Technology leader meeting future demands & Highlights region East
Magnus CarlungerSenior Vice President Marketing and Sales region East
Becoming the industry’s most cost effective producer of fasteners
Jörg NevelingSenior Vice President Production
Hallstahammar operation Juha KauppinenManaging Director, Bulten Hallstahammar
14:30‐16:30
Factory tour including coffee
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
4
BULTEN DEVELOPMENT 2011‐2017
2011FinnvedenBultenlisted at Nasdaq Stockholm
2012Established in Russia, JV with GAZ
2014Focus on fasteners for the automotive industry• Divestment of
Finnveden Metal Structures
• New Management• Name change to
Bulten
2016Bulten AB (publ) moved up to Nasdaq Stockholm’s Mid Cap segment
2017Established in the US, JV with Ramco
DIVESTMENT OF FINNVEDENMETAL STRUCTURES
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN DEVELOPMENT 2011‐2017
3094 2972 3061
24142693 2676 2760
0
500
1000
1500
2000
2500
3000
3500
2011 2012 2013 2014 2015 2016 2017 12 m rolling
5
Sales
CAPTURE FUTURE GROWTH
DIVESTMENT OF FINNVEDENMETAL
STRUCTURES
ALL FINANCIAL TARGETS REACHED
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
6
SUSTAINABLE BUSINESS
SEK 17 million/yearStarted late 2016
SEK 130 million/year Started late 2015 with slow ramp up, full pace in 2020. FSP
SEK 60 million in totalContract period 2017‐2019. China
EUR 20 million/year Starts late 2017, full pace in 2019. FSP
EUR 700 thousand/year Starts 2017, full pace in 2018. Russia
USD 5.5 million/yearStarts 2018, full pace in 2019/2020.Bulten part USD 5.0 million/year
EUR 30 million/yearStarts 2018, full pace in 2020. FSP
RAMP UP OF NEW CONTRACTS NEW SIGNED CONTRACTS, NOT YET STARTED
EUR 56.2 MILLION/YEAR OF LONG TERM SUSTAINABLE BUSINESS
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FOUNDATION
The strategy moving forward is based on continuing to strengthen our core values and success factors with a strong FSP offering.
7
TECHNOLOGY LEADER
GEOGRAPHIC PROXIMITY
FINANCIAL PLATFORM
QUALITY LEADER
EXPERIENCED MANAGEMENT &
EMPOWERED EMPLOYEES
FULL SERVICE PROVIDER
(FSP)
PROFESSIONAL
DEDICATED
INNOVATIVE
EMPOWERED
SUCCESS FACTORS CORE VALUES Bulten’s core values originate in the company’s history and are
the foundation of our corporate culture They define the way we work and behave and inspire and
support us in our efforts to continue building a successful and sustainable business
Important partners and suppliers share our core values
Bulten has exceeded the growth of the automotive industry in Europe thanks to a strong business model based on our important success factors
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
TECHNOLOGY LEADER
Looking into every possible way to reduce weight on cars and powertrain
Technology Board established
8BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
GLOBALIZATION
Bulten is the only automotive fastener company that can support with local content in Europe, Russia, Asia and NAFTA
9
SWEDEN ●●●●●●
GREAT BRITAIN ●●●
USA ●●●
POLAND ●●●
GERMANY ●●●
RUSSIA ●●●●
CHINA ●●●●
HEAD OFFICE
PRODUCTION
SALES
LOGISTICS
PRE DEVELOPMENT
PRODUCT DEVELOPMENT
●●●●●●
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FINANCIAL PLATFORM
We have a strong financial platform and a position to support further growth
Strong organic growth – LMC forecast a market growth of 2.1% for 2017
Increased capacity
Strong financial position
All financial targets reached Q2 2017
Secured financing with good headroom
Strong balance sheet with an equity ratio of 69.4%
Flexible organisation with proven track record
11BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
12
ALL FINANCIAL TARGETS REACHED IN Q2, 2017
Q2
R12
Profitable organic growth more strongly than the industry average
Operating margin of at least 7%
At least 15% At least one third of net earnings after tax
3.0%
3.2%
7.9%
7.6%
Na15.0%17.4%
excl. goodwill
ROCEMargin
✔
Growth
✔
Dividend
2.01 SEK
7.93 SEK
EPS
4.50 SEK
(3.50 + 1.00SEK /share)62% for 2016
EPSdevelopment
✔ ✔
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
RISK FACTORS
The aim of the risk management is to identify risk and prevent risk arising as well as limiting any damage that arises from risks.
Risk can be categorized as business cycle and external risks operational risk financial risk sustainability risks
13BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
MARKET DEVELOPMENT
LMC Automotive reports for automotive production in Europe, 2017: Production of LV in 2017 up by 1.8% compared to 2016 Production of HCV (>15 t) in 2017 up by 4.0% compared to 2016 For Bulten’s mix, up 2.1%
• LV stands for ~87% of sales • HCV stands ~13% of sales
ACEA reports for LV sales in Europe for January ‐ August 2017, up 4.5% compared to 2016
14
Source: LMC Automotive Q2, 2017. ACEA eight months, 2017
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
LMC AUTOMOTIVE REPORTS FOR AUTOMOTIVE PRODUCTION IN EUROPE
LMC Automotive (Q2 2017 report) has not changed its forecast level on LV production 2017 compared to the Q1 2017 report. LMCA forecast an increase of 1.8% compared to 2016.
LMC Automotive (Q2 2017 report) has increased its forecast of HCV production 2017 compared to the Q1 2017 report with 1.1%, to an increase of 4.0% compared to 2016.
15
PRODUCTION GROWTH RATE (YEAR ON YEAR) LIGHT VEHICLES EUROPE
2,9%
2,0%
4,1%
2,7%
1,8% 1,9%
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
2014E 2015E 2016E 2017E 2018E 2019E
Q1 2017 Q2 2017
PRODUCTION GROWTH RATE (YEAR ON YEAR) HEAVY COMMERCIAL VEHICLES (>15t) EUROPE
-12,5%
4,6%
7,3%5,1% 4,3%4,0%
‐15%
‐10%
‐5%
0%
5%
10%
2014E 2015E 2016E 2017E 2018E 2019E
Q1 2017 Q2 2017
Source: LMC Automotive Q2 2017
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN MARKET SHARE DEVELOPMENT
Management estimates*: Market share 17% of the
European market of fasteners for the automotive industry 2016, flat versus 2015.
Market share of FSP contracts for the same market to be 60% 2016, flat versus 2015.
16
BULTEN MARKET SHARE DEVELOPMENT
45%56% 60% 60%
0%10%20%30%40%50%60%70%
Market share of European fastener FSPcontracts
2013
2014
2015
2016
* Based on data from EIFI (European Industrial Fasteners Institute)
11%14%
17% 17%
0%
5%
10%
15%
20%
Market share of total European fasteners
2013
2014
2015
2016
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FINANCIAL GUIDELINES
NWC lower than guidelines
Capex in line with our guidelines investments in new plating lines in Germany and Poland in 2017 (€ 8.8m) Investment in an additional production and logistic plant in Poland (SEK 177m)
Tax rate in line with our guidelines
17
THE GROUP12 M ROLLING
Q2FULL YEAR
2016 GUIDELINES
Average net working capital as % of sales 19.4 18.8 20
CAPEX as % of sales 3.5 3.1 2‐3
Depreciation as % of sales 2.8 2.7 2‐3
Tax rate 24.6 24.9 24‐28
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
NO SEASONALITY IN BULTEN’S UNDERLYING DEMAND – QUARTERLY VOLUMES AND SIGNIFICANT RESULTS ARE AFFECTED BY THE NUMBER OF PRODUCTION DAYS AND BY MODEL SHIFTS
18
57
7.9%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
0
10
20
30
40
50
60
70
Q114
Q214
Q314
Q414
Q115
Q215
Q315
Q415
Q116
Q216
Q316
Q416
Q117
Q217
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
19 20
23
20 1921
10
16
22 21 22
17
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Q1: 62 days Q2: 60 days Q3: 48 days Q4: 60 days
AVG. NUMBER OF PRODUCTION DAYS PER MONTHQUARTERLY VOLUMES
EBITEBIT margin
SHAREHOLDER INFORMATION
Listed on Nasdaq Stockholm since 20 May 2011
On September 1, 2014 the company formally changed name from FinnvedenBulten AB to Bulten AB (new ticker BULTEN)
Among the largest shareholders we have Volito and Öresund and they are also representative in the board
Bulten is among the top ten owners
19
TEN LARGEST SHAREHOLDERS, 31 AUGUST 2017 Total number of Shareholders 7 075
Source: Euroclear Sweden AB
Shareholder No. of shares Share of votes and capital (%)
Volito AB 4 450 000 21.2
Lannebo fonder 2 812 795 13.4
Öresund Investment AB 2 263 535 10.8
Spiltan Fonder AB 967 312 4,6
JP Morgan 723 383 3.4
BULTEN AB 680 500 3.2
SKANDINAVISKA ENSKILDA BANKEN S.A.
471 834 2.2
Sjöbergstiftelsen 400 000 1.9
CBNY‐DFA‐INT SML CAP V 339 418 1.6
CLIENTS ACCOUNT‐DCS 309 849 1.5
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN DEVELOPMENT
0
500
1000
1500
2000
2500
3000
3500
2013 2014 2015 2016 2017 12 m rolling
20
6.0%
5.5%6.1%
7.5%
7.6%
50 SEK
67 SEK
82 SEK
89 SEK
120 SEK
GROUP STRUCTURE GROWTH AND DIVESTMENT
CONSOLIDATION GROWTHCONSOLIDATION
SalesShare development
Operating margin
Bulten part of FinnvedenBultenGroup.
Divestment of FinnvedenMetal Structures. Several new FSP contracts.
Executing new FSP contracts.
Focus on operation/optimization program
Investments for the future and executing new contracts
+34% growth
+12% growth
Flatdev.
CAPTURE FUTURE GROWTH
+3% growth
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FULL SERVICE PROVIDER TO THE INTERNATIONAL AUTOMOTIVE INDUSTRY & HIGHLIGHTS REGION WEST Neal ThomasSenior Vice President Marketing and Sales region West
WHAT IS FSP (FULL SERVICE PROVIDER)?
22
• Multiple suppliers feeding into the customer site, leading to complex and time consuming handling for the customer
• Multiple suppliers managed and supplying into Bulten, leading to only Bulten feeding into the customer’s site
TRADITIONAL SETUP BULTEN FSP SETUP
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
WHAT IS FSP (FULL SERVICE PROVIDER)
TRADITIONAL LOGISTICS SOLUTION
23BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN’S LOGISTICS SOLUTION ‐ FSP
Jaguar E‐Pace, Jaguar I‐Pace Electric Magna‐Steyr Graz (Contract with JLR)• 420 active articles• 2,450 tons/year
24
FULL SERVICE PROVIDER ‐ PROVEN TRACK RECORD
Autoliv• 80 active articles• 500 tons /year
Nissan SunderlandBulten runs limited FSP to market‐place
EuCD Ford Mondeo / Galaxy / S‐MAX in Genk and worldwide• 630 active articles• 6000 tons /year
EuCD Volvo• 430 active articles• 8,500 tons /year
Ford B‐MAX Romania (BBB) • 480 active articles• 1,300 tons/year
Ford Fiesta Cologne and worldwide• 400 active articles• 10,000 tons/year
Range Rover Evoque Halewood (D8 Platform)• 400 active articles platform• Annual Halewood 5,800 tons
Land Rover Discovery SportHalewood (D8 Platform)• 400 active articles platform• Annual Halewood 5,800 tons
Ford Sigma Engine Bridgend (BBB)• 80 active articles• 1600 tons/year
Land Rover AJ200 Engine • 100 active articles• 1700 tons/year
20152014201120072006200520011998 2016 2017
Land Rover Discovery , Land Rover Defender • 525 active articles• 4,560 tons/year
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
SALES REGION WEST
Sales Units:
26
SWEDEN
GREAT BRITAIN
USA
POLAND
GERMANY
RUSSIA
CHINA
Sales units:
Bulten Ltd.
Bulten GmbH
Bulten North America Inc. and Ram‐Bul LLC
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FUTURE AND POTENTIAL FOR FSP BUSINESS
As a leading FSP to the automotive market, the focus is to promote the knowledge, competence and experience Bulten possesses to global automotive OEMs
Whilst it is often a long term project to develop a full FSP project, Bulten has initiated discussions and continues to look to develop not only FSP but also further “traditional” business with major OEMs
27BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN IS ONE OF FEW THAT CAN OFFER LOCAL CONTENT AS WELL AS FSP SOLUTIONS IN NORTH AMERICA
USA automotive sales market is the second largest in the world
Bulten has major opportunity to develop the FSP concept in USA
Local production and support are seen as key to supporting globalization of the key OEMs
Globalization is pushed by the customers as the requirement for all major suppliers
Bulten already supply parts through FSP to Volvo Powertrain in USA
Ford is US based
Volvo Car is building a plant in the USA and JLR is planning to do the same
Renault/Nissan has a global strategy for its preferred suppliers including USA
Further opportunities at other OEMs
28
COUNTRY NEW CAR SALES 2016
CHINA 23,693,000
USA 17,465,000
EU 14,641,000
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
JV WITH RAMCO IS THE MOST COST EFFECTIVE AND FASTEST WAY FOR BULTEN TO ENTER INTO THE US MARKET
Michigan and Ohio area is an automotive based economy close to customers and with a readily available supply base
Ram‐Bul JV 50/50 between Ramco and Bulten is the optimum solution on the basis that: The two companies complement each
other and share the same core values Many years of partnership prior to the JV Strengthens both Bulten and Ramco
This JV will create a base for production as well as logistics with possibilities for future expansion
29BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN NA, THE PRODUCTION COMPANY IN USA
Wholly owned Bulten production company in USA
Production for the USA market only
Start of production Q2 2018
Production based on Bulten Production System (BPS) as used in all the other plants globally
31BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
MARKET – HIGHLIGHTS USA
Establishing in North America has broadened Bulten’s market and have created further opportunities for growth among both new and existing companies
Ram‐Bul signed a contract in July with a major vehicle manufacturer The annual order value is of approximately USD 5.5 million
• a delivery value of USD 5 million to Bulten and USD 0.5 million to Ramco Deliveries will continue over a number of years, with start and ramp up during 2018. Full
volumes are expected to be reached in 2019/2020
Prospects for continuing winning new contracts are good RFQs from electrical vehicle manufacturer Vendor code ready from major car manufacturer and waiting for a several more Several technical presentations conducted
32BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
TECHNOLOGY LEADER MEETING FUTURE DEMANDS & HIGHLIGHTS REGION EAST
Magnus CarlungerSenior Vice President Marketing and Sales region East
A TECHNOLOGY IN CONTINUOUS EVOLUTION
The thread form traced back to year 400 B.C still in the 21st century developed to optimize the utilization of the fastener
Today the thread form and purpose of the product usage is clearly defined
However the knowledge how to optimize the utilization and assembly is pushed forward.
36
Keep assembled parts from separating Keep assembled parts from sliding
The Mission
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
UTILIZE THE ULTIMATE STRENGTH
37
To be considered:
• Purpose of application• Material in components to be assembled• Surrounding environment• Vibrations• Assembly method (manual / automatic)• Design requirements• Fastener design• Head shape requirements• Maximum length• Maximum diameter• Thread type• Thread length• Friction• Corrosion• Surface treatment• Locking feature• Etc.
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
MULTIPLE FACTORS CAUSES COMPLEXITY
High complexity increases the number of used fasteners in an application
As a technology leader we are able to control the complexity
38
0
2
4
6
8
10
12
14
0 1 2 3 4 5 6 7
Need nu
mbe
rs of screw
s
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
TECHNOLOGY LEADER
The position as Technology Leader is important in automotive where trends are heading towards:
‐ Faster development cycles‐ Fewer “fastener experts” at our customers‐ Advanced tightening strategies‐ Automation‐ Digitalization
39
CommunalizationReduction of part number variety– More of the same = Win‐Win
Simplified AssemblyReduction of assembly cost
– IPC = Smarter fastener solutions
Weight reductionReduce emission
High tech fastener for the future
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
ELECTRIC POWERTRAIN IN AUTOMOTIVE
42
Electric cars are no new invention, already 1898 Porsche produced their first electric car
Electric cars were dominating the US market until the early 20th century when outcompeted by the combustion engine and petrol
Global warming and the focus in energy efficiency has lead to a revival of the electrification in automotive
Toyota with its model Prius was the first model on the market which gave the hybrid technology a breakthrough
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FORCES FOR A GROWING ELECTRIFIED AUTOMOTIVE INDUSTRY
Climate change, global warming and increasing emissions of greenhouse gases are the targeted factors that forces the development of electrification
The overall largest contributing cause of CO2 emissions worldwide is combustion of fossil fuels coal, oil and gas
43
Methane; 17%
Other gases; 11,90%
Nitrous oxide; 6,00%
Fluorinated gases; 0,80%
Carbon dioxide; 64,30%
MAJOR GREENHOUSE GASES FROM PEOPLE’S ACTIVITIES
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FORCES FOR A GROWING ELECTRIFIED AUTOMOTIVE INDUSTRY
Underlying forces that are expected to drive increased EV adoption:
Regulatory support in key markets; USA, Europe and China
Falling lithium‐ion battery prices and production methods
Clean production of electricity
Increased EV commitments from automakers
Growing consumer acceptance, driven by competitive priced EV´s across all vehicle classes
The growing role of car sharing, ride hailing and autonomous driving ”Intelligent Mobility”
44BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
0,00
5,00
10,00
15,00
20,00Petrol
Diesel
Petrol + hybrid
Diesel + hybridEV Year 2017
EV Year 2020
EV Year 2025
TOTAL COST OF OWNERSHIP / 100 KM (EUR)
IMPORTANT FACTOR FOR EV BREAKTHROUGH
45
Source: IHSBULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
STUDY – ELECTRIFICATION EFFECT PIECES
46
05001000150020002500300035004000
Exterior Trim BodyConstruction
Interior Trim SafetyComponents &
Seats
Chassis Electrical Engine SVO
Combustion vs Electrified
Usage area Combustion Electric Difference Reason
Exterior Trim 583 547 ‐36
Body Construction 893 3776 2883 Aluminimum body
Interior Trim 258 379 121 Electrification
Safety Components & Seats 71 56 ‐16
Chassis 282 259 ‐23
Electrical 175 265 91 Electrification
Engine 164 53 ‐111 Engine removal
SVO 11 7 ‐4
Total fasteners 2437 5342 2905Source Bulten
Delivery value per car approx. 40%
higher!
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
47
A PARADIGM OR A TREND
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
Européconservative
Européaggressive
Chinaconservative
China aggresive Koreaconservative
Koreaaggressive
NAFTAconservative
NAFTAaggressive
BEV conser. BEV aggr. PHEV conserv. PHEV aggr.
Source: IHSBULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FORECAST EV VOLUMES 2025
Total volume conservative forecast: 6.4 MPcs 5.6% of global volume
Total volume aggressive forecast: 17.8 MPcs 15.6%
SALES REGION EAST
Sales Units:
49
SWEDEN
GREAT BRITAIN
USA
POLAND
GERMANY
RUSSIA
CHINA
Sales units:
Bulten Sweden AB
Bulten Polska S.A
Bulten Rus LLC
Bulten Fasteners (China) Co Ltd
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
CHALLENGING MARKETS – RUSSIA AND CHINA
Automotive business is a challenge, and the markets in China and Russia are no exceptions
Market entry in two challenging markets driven by: Globalization in the automotive
industry with local supply demands Markets where qualified suppliers are
few Markets with growth potential
Markets where understanding in cultural differences and behavior is important. Similarities and differences in both
cultures compared to Swedes
50
0
10
20
30
40
50
60
70
80
90
100
6 DIMENSION ANALYSIS
Russia China Sweden
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
Source: Hofstede
BULTEN HAS A STRONG POSITION IN RUSSIA WITH OPPORTUNITIES IN A GROWING MARKET
Bulten started a JV with GAZ Group in 2014 for production, sales and logistics
Well positioned at the major Russian car makers
Wide customer base and growing stronger as the only renowned player in the country with poor competition from domestic players and no new market entrants
51BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
DEVELOPMENT IN RUSSIA
In 2016 and 2017 important customer contracts was signed with major Russian OEMs and Tiers, e.g. Autovaz, GAZ Group and Autoliv and many other discussions ongoing with several vehicle manufacturers
Creating the only quality fastener manufacturer in Russia with a market of more than 1 million cars and fast growing
2017 looks promising for the Russian Automotive industry with double‐digit growth for the third month in a row
52
0
500
1000
1500
2000
2500
3000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
CAR SALES FORECAST
Positive Normal Negative
From the top year 2013 with 3.1 million cars sold the market ended at the bottom rate in 2016 with 1.4 million cars sold. In 2017 a market recovery is noted with a growing forecast.
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN HAS A WIDE CUSTOMER BASE IN CHINA AND IS GROWING STRONGER
Bulten in China is a wholly owned subsidiary acquired already in 1996 handling production, sales and logistics
In the beginning it was focused on the electronic industry but was converted to automotive industry late 00’s
Bulten is well positioned in China supporting major European OEMs as well as local brands
Bulten’s market position today has a wide customer base and is growing stronger
53BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
DEVELOPMENT IN CHINA
Important customer contracts signed with major OEMs and Tiers e.g. Volvo Cars, Geely, CEVT and BAIC many other discussions ongoing with several vehicle manufacturers
China is now the world’s largest market in number of cars of approximately 24 million cars
2017 looks promising for the Chinese Automotive industry
54BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
20000
22000
24000
26000
28000
30000
32000
2014 2015 2016 2017 2018 2019 2020 2021 2022
CAR SALES FORECAST
Positive Normal Negative
BECOMING THE INDUSTRY’S MOST COST EFFECTIVE PRODUCER OF FASTENERSJörg NevelingSenior Vice President Production
BULTEN HAS A LEAN AND WELL POSITIONED LOGISTICS AND MANUFACTURING FOOTPRINT AND FLEXIBLE SUPPLY CHAIN
Global footprint Production, strong focus in Europe Russia and Asia well established North America production to start in 2018
Bulten produces most products in‐house and has a significant trading operation to optimize efficiency Trading ‐> flexibility
LEAN AND WELL POSITIONED LOGISTICS AND MANUFACTURING FACILITIES
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017 57
SWEDEN ●●●●●●
GREAT BRITAIN ●●●
USA ●●●
POLAND ●●●
GERMANY ●●●
RUSSIA ●●●●
CHINA ●●●●
IN‐HOUSE VS. TRADING (SALES VALUE)
IN‐HOUSE
60%
LOGISTICS
2%
TRADING
38%
HEAD OFFICE
PRODUCTION
SALES
LOGISTICS
PRE DEVELOPMENT
PRODUCT DEVELOPMENT
●●●●●●
BERGKAMEN, GERMANY
Capacity: 13.5 k tonsDimension range: M10‐M16
BIELSKO‐BIALA, POLANDCapacity: 24 k tonsDimension range: M6‐M22
BEIJING, CHINACapacity: > 2.5 k tonsDimension range: M3‐M16
HALLSTAHAMMAR, SWEDENCapacity: 14 k tonsDimension range: M10‐M30
58BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
MANUFACTURING FOOTPRINT
NIZHNY NOVGOROD, RUSSIACapacity: 6 k tonsDimension range: M6‐M24
HUDSON/OHIO, AMERICACapacity > 500 tonsDimension range:M5‐M12
BULTEN CONTINUES TO GROW AND INVESTS IN A FURTHER PLANT IN POLAND
Bulten is taking another step towards becoming the industry's most cost‐effective fastener manufacturer and continues to strengthen Bulten’s market position
Bulten has decided to invest around PLN 80.5 million (about SEK 177 million) in a new production plant in Poland to meet future volumes approximately PLN 9.5 million is for around 78,000 m2 of land and PLN 71 million for the
building
Set‐up will start in 2017 and production is expected to start in the first half of 2019 Set up is conditional upon obtaining the required permits
Built in Radziechowy‐Wieprz, about 30 km from the existing production plant in Bielsko‐Biala In the “Katowice Special Economic Zone”
Move from the current Wilkowice logistics centre to the new building
59BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FLEXIBLE PRODUCTION BY KNOWLEDGE EXCHANGE
61
• SORT, SET IN ORDER, SHINE, STANDARDIZE, SUSTAIN
• 5 steps to maintain a visual workplace (visual controls and information systems.
• TS16949, ISO 14001, ISO 18001, ISO 50001
• the best, easiest and safest way currently known to achieve a task.
• i.e. PDCA, Ishikawa, 5Why
• using generally known methods, in an orderly manner, for finding solutions to the well‐defined problems.
• standardized audit performed on a regular, frequent basis by all layers of the organization, in order to verify the compliance of operational standards.
5S
STANDARDS
PROBLEM SOLVING STANDARDS
LPA (Layered Process Audit)
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
• Maximize value added work. To do this we must identify and eliminate all non‐value added work.
• Reduce setup and adjustment times by a systematic analysis of what is actually done and how much time it consumes.
WASTE ELIMINATION
SMED (Single Minute Exchange of Dies)
FLEXIBLE PRODUCTION BY KNOWLEDGE EXCHANGE
62
• Communicating information via using visuals to increaseclarity and efficiency .
VISUAL MANAGEMENT
• The most effective way of solving problems and achieving defined results.
TEAMWORK
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
• A systematic way of working on process and equipment with less waste. All employees taking responsibility for the machines in their area and performing basic maintenance work.
• Improving the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.
TPM (Total Productive Maintenance)
SIX SIGMA
• A systematic, proactive method for evaluating a process in order to prevent, eliminate or reduce failures.
FMEA (Failure Mode Effect Analyse)
• A method of achieving lean gains, by which the best current practices are documented in order to form the baseline for continuous improvement.
STANDARDIZED WORK
FLEXIBLE PRODUCTION BY KNOWLEDGE EXCHANGE
63
• Aligning processes with business goals, improving processes and establishing measurements to track and monitor performance for continuous improvement and optimization.
BUSINESS PROCESS MANAGEMENT
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
FLEXIBLE PRODUCTION BY STANDARDIZATION
65
Sweden
POLAND
SWEDENRUSSIA
GERMANY
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
Surface treatment
Patching
ONE SPECIFIC ITEM FROM ORDER TO DELIVERIES
+ Cologne / Engine Plant
+ Export
+ Export /
Far East +
+ + Export /
Craiova
Cologne / Car model
+
Sorting
Packing
Deliveries
Coldforging
Heat treatment
66BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
VALUE ADDED INVESTMENTS / PROJECTS
Surface treatment Galvanic surface treatment in Poland Zinc Flake surface treatment in Sweden, Germany and China
Heat treatment of high temperature parts in Sweden
Patching line for polyamide coating in Poland
Production cell for plug production in Poland
Injection molding for specific fastener / polyamide application
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017 68
SUMMARY AND GOING FORWARD
Bulten will continue to grow with sustainable contracts
Bulten is positioned to support future technology in the automotive industry EV, hybrids, autonomous cars
Opportunities to grow in emerging markets
Added value
Strong financial platform to support further growth
70BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
THE BEGINNING, BULTEN ESTABLISHED 1873 IN HALLSTAHAMMAR
The business idea was production of high quality nails, nuts and bolts Started with hot‐forging machines bought in England Driven by water power from the river beside the factory
Standardisation and high quality already from the beginning
72BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
VOLUME AND NUMBER OF EMPLOYEES OVER 140 YEARS IN HALLSTAHAMMAR
Ton 5.000Emp 200
73
Theold Bulten
HHR
Bulten today
1873
1930
1973
1991
2017
Ton 0,5Emp 20
Ton 60.000Emp 1.300
Ton 33.000Emp 2.200
Ton 14.000Emp 265
15 ton/emp
46 ton/emp
25 ton/emp
50 ton/emp
x 3
x 2
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
74
FACTS BULTEN HALLSTAHAMMAR, SWEDEN
Located: production, warehouse, engineering
Products: Fasteners with high demands, stainless, Taptitesand special fasteners
Facility: 48.000 m2
Capacity: 14.000 tonnes
Loading: 14.000 tonnes
Employees: 265
Dimensions: M10 to M30
Length up to: 300 mm
Stainless: M6 to M12
Certificates / awards• Quality ISO/TS 16949
• Environment ISO 14001
• VQE. Volvo Car
• Q1. Ford
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
BULTEN HAS BEEN AWARDED VOLVO CARS QUALITY EXCELLENCE AWARD
Bulten’s unit in Hallstahammar has been awarded Volvo Cars Quality Excellence (VQE) Award
Classified in accordance with the eleven VQE elements including product quality, delivery performance, logistics, LEAN and improvement work
75BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
HALLSTAHAMMAR PRODUCTION
76
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Pace 2017‐Q2
Yearly Ton
Low valuemix
High Value mix
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
STAINLESS DEVELOPMENT 2009 – 2017 HEAT RESISTANCE
Approx. 20 % yearly growth.
Major investments has ben done towards stainless the past years and continue coming year
77
0
100
200
300
400
500
600
700
2009 2010 2011 2012 2013 2014 2015 2016 Pace2017‐Q2
Tonnes
+ 20%
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017
WHAT IS DRIVING THE STAINLESS DEVELOPMENT
78.
As illustrated from the chart below. New and modern Petrol Engines run at high temperatures (blue).
Downsizing in combination with more power gives high temperature. Hence to secure the “hot” joints, a heat resistant fastener are often needed. Se photo to the right.
Bulten has been already awarded a number of FSP Engine programs, Petrol & Diesel. Many still in the ramp –up, especially for Petrol & Petrol Hybrid variants.
Typical glow in engine testing
BULTEN CAPITAL MARKETS DAY 21 SEPTEMBER 2017
BULTEN HALLSTAHAMMARBASIC MANUFACTURING STEPS WITH HIGH EFFICIENCY
81
Wire
Inspection
”Patch”Wax
Surface
treatment
TurningDrilling
Heat
treatment
Washer‐assembly
Threading
InductionThreading
Tooling
Coldforgin
Assembly
Straight.
Packing
Stocking
Extend operations =higher complexity = creates value
Alloyed materials =Special Properties = creates value
BULTEN CAPITAL MARKETS DAY, 21 SEPTEMBER 2017