Presentation is loading. Please wait.

Presentation is loading. Please wait.


Similar presentations

Presentation on theme: "WABCO CORPORATE OVERVIEW 2010"— Presentation transcript:

© 2010 WABCO Holdings Inc. All rights reserved.

Comments in this document contain certain forward-looking statements, which are based on management’s good faith expectations and beliefs concerning future developments. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the risks and uncertainties described in the “Risk Factors” section and the “Forward Looking Statements” section of WABCO’s Form 10-K, as well as in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information Concerning Forward Looking Statements” section of WABCO’s Form 10-Q Quarterly Reports. WABCO does not undertake any obligation to update such forward-looking statements. All market and industry data are based on Company estimates. This presentation contains certain non-GAAP financial measures as that term is defined by the SEC. EBIT and sales excluding the effects of foreign exchange are non-GAAP financial measures. Additionally, gross profit, gross profit margin, operating income, operating income margin, EBIT, EBIT margin, net income and net income per diluted share on a "performance basis" are non-GAAP financial measures that exclude separation and streamlining costs, one-time impact from the Indian joint venture transactions, discrete and other one-time tax items, as well as a one-time transitional impact from a new accounting standard (ASC topic 805, formerly known as SFAS No. 141(R)) that WABCO adopted in 2009, as applicable. Lastly, "free cash flow" presents our net cash provided by operating activities less purchases of property, plant, equipment and computer software. These measures should be considered in addition to, not as a substitute for, GAAP measures. Management believes that presenting these non-GAAP measures is useful to shareholders because it enhances their understanding of how management assesses the operating performance of the Company's business.  Certain non-GAAP measures may be used, in part, to determine incentive compensation for current employees. Reconciliations of the non-GAAP financial measures to the most comparable GAAP measures are available in WABCO’s quarterly results presentations posted on the company’s website.

3 ABOUT WABCO GLOBAL TECHNOLOGY LEADER in commercial vehicle industry
Sales of $1.5 BILLION in 2009 Sales of $2.6 BILLION in 2008 Over 8,100 EMPLOYEES in 31 countries; 1,250 ENGINEERS 16 MANUFACTURING LOCATIONS in 10 countries Listed on NYSE with the stock symbol WBC

4 Supporting fleet and truck owners over vehicle lifetime
MARKET FOCUS AUDI BMW DAIMLER GENERAL MOTORS PSA PEUGEOT CITROEN SSANGYOUNG among others CAR Products, systems, services and support for vehicle manufacturers and aftermarket customers CIMC GREAT DANE TRAILERS KÖGEL KRONE SCHMITZ CARGOBULL WABASH among others TRAILER TRUCK CNHTC DAIMLER HINO Motors MAN PACCAR SCANIA TATA Motors VOLVO among others AFTERMARKET Supporting fleet and truck owners over vehicle lifetime Distributors Workshops Fleets BUS EVOBUS MAN NISSAN YUTONG among others


Traction Control System New Generation Air Disc Brake Air System Protector Hydraulic Transmission Automation System Electronic Stability Control Adaptive Cruise Control ECAS for automotive OnGuard™ Collision Mitigation System RSSplus™ Roll Stability Support Trailer System Pneumatic Transmission Automation System Electronically Controlled Air Suspension (ECAS) ESCsmart™ Trailer OptiTurn™ Trailer OptiLoad™ C-comp clutch compressor Trailer Electronic Braking System > Trailer Telematics Transmission Automation System OnGuardMaxTM Autonomous Emergency Braking System High Output Compressor Integrated Vehicle Tire Monitoring Electronic Braking System Two Stage Compressor Trailer EBS - E Roll Stability Support for trailers Anti-Lock Braking System

Generates and pressurizes the air to be used in the braking system and other air-based applications Dries, cleans, stores and distributes the compressed air to enable proper system operation under all conditions AIR COMPRESSION AIR MANAGEMENT AIR APPLICATION MECHANICAL Service brakes, Parking brakes Actuators Foundation brakes ELECTRONIC/ ELECTRO-MECHANICAL Anti-lock Braking Systems Electronic Braking Systems Transmission Automation Electronic Suspension Control

8 PRODUCT PORTFOLIO Air Compressors 13% Anti-Lock Braking Systems 11%
Air Processing 11% Conventional Brake Controls 13% Actuators 10% Foundation Brakes 6% Suspension Control 6% Others 6% % 2009 Sales Anti-Lock Braking Systems 11% Car Products 4% Transmission Automation, Clutch Control 11% Electronic Braking and Stability Control Systems 9%

9 CUSTOMER VALUES WABCO is working on global TECHNOLOGY trends relevant to our customers We have a clear path to enhance VEHICLE EFFICIENCY and ENVIRONMENTAL SUSTAINABILITY by 20% Our vision is to improve ADVANCED SAFETY and DRIVER EFFECTIVENESS, and reduce the number of commercial vehicle accidents by 50% by 2020 We are involved in developing PRODUCTS and FUNCTIONALITIES to better meet these needs

Service centers Diagnostics solutions Sales, promotion and marketing WABCO University SUPPORTING FLEET AND TRUCK OWNERS OVER VEHICLE LIFETIME Global distributor network Services, customer support Customer partner program Extensive range of products and systems Regional customer teams Universal customer hotline

LARGE VOLUMES, LONG CYCLES 30+ Customers TRAILER MANUFACTURERS SMALL VOLUMES, SHORT CYCLES 2,000+ Customers Few, large, consolidating, globalizing Use technology to meet regulation, comfort, safety and economics Need for global suppliers and development partners with system expertise Very many, small, local or regional Closely follow truck and bus technology Dependent on suppliers for product and technical support, services and knowledge AFTERMARKET SMALL VOLUMES, SHORT CYCLES 3,000+ Customers CAR MANUFACTURERS VERY LARGE VOLUMES, LONG CYCLES ~10 Customers Small, many, local/regional; dependent on suppliers for product, services and knowledge Multiple step distribution: distributors, repair shops, and fleet operators 2 channels: independent aftermarket and original equipment supply Few, large, global, sophisticated Many competitive suppliers for most technologies Very high expectations for quality, program management and supplier support

(over 6 tonnes Gross Vehicle Weight) 100% = 2,749K 100% = 2,734K India 10% 9% 100% = 2,089K China 31% 32% 10% Japan/Korea 10% 10% 49% S. America 7% 8% N. America 14% 12% 9% 7% Europe 28% 29% 10% 15%

13 GLOBALIZATION Local Supply Chain Product Development Local Market
Connectivity Local Manufacturing Local Supply Chain Product Development All regions managed by local teams No expats in key leadership positions 9 Nationalities from 4 continents in leadership team Took over JV in India #1 Position in all Asia countries, especially in China and India #1 Position at Kamaz 4 factories in China - Benchmark Lean processes - 2 new factories opened in 2010 3 factories in India - Multiple Award Winning 1 Factory in Brazil - Lean transformation under way Local strategic sourcing teams connected to global commodities Strong supply base covering core commodities Local supplier management Leveraging BCC capabilities for global manufacturing sites 2nd Product Development pillar in India to address emerging countries specificity and conventional product design (150 engineers) Software development center in Chennai (85 engineers) Test & design center in Poland to support Hanover (100 engineers)

$ Estimated content per vehicle based on total applicable market $K Typical heavy truck price in market NORTH AMERICA <$1,000 $80K SOUTH AMERICA <$1,500 $65K Less advanced technology vs.Western Europe Large OEMs: Daimler, Volvo, PACCAR, ITE Large fleets, able to influence OEM design Less advanced technology – mostly from Brazil Main OEMs: Daimler, VW, Volvo, Scania WESTERN EUROPE >$3,000 $130K JAPAN & KOREA <$1,000 $80K Advanced technology, high electronics penetration 6 OEMs: Daimler, Volvo, MAN, Iveco, PACCAR, Scania Few large, pan European fleets Technology moving towards Western Europe Main OEMs: Hyundai, Hino, Isuzu, ND Targeting global market EASTERN EUROPE <$500 $70K CHINA & INDIA <$300 $30K Expected to Return to Fast growing production in the Future Improving quality and safety Global and local OEMs: KamAZ, MAZ, Basic technology; advanced technology penetration under 10% of total market Large OEMs: FAW, DFM, CNHTC in China; TATA Motors & Ashok Leyland in India

Technical capabilities similar to WABCO No position in transmission automation or cars Strong position in North America following BENDIX acquisition Trailing in emerging markets Challenger position Lower electronics capabilities compared to WABCO and KNORR Strong automatic slack adjuster business Entering into special products for diesel engines Strong low cost / low tech solutions Mainly mechanical capabilities Targeting specific markets with specific product ranges Low price strategy in Aftermarket WABCO KNORR HALDEX LCC competitors (2009 Estimated Commercial Vehicle Sales) ($1.5B ) (~$1.7B ) (~$0.4B) (All Under ~$0.1B) Anti-lock Braking Systems Electronic Braking Systems Conventional Products Transmission Automation Air Compressors Air Processing Actuators Suspension Control Foundation Brakes Complete Offering Partial Offering Niche Offering sources: KNORR-BREMSE website, HALDEX website

2009 SALES BY CUSTOMER TYPE 3% Other 32% Aftermarket South America 6% 55% Truck & Bus North America 8% 65% Europe 18% 9% Asia Trailer 4% Car SALES 5-YEAR CAGR* Percentage * Compound annual growth rate in local currencies from to 2009

OE TRUCK, BUS AND TRAILER INCREASING VALUE PER VEHICLE Air Disc Brakes Transmission Automation Controls Electronic Stability Control Driver Assistance Systems GLOBALIZATION China Eastern Europe / Russia India AFTERMARKET EXPANSION Enhanced Penetration 10% Year-of-year New Product Ranges New Services (e.g. Diagnostics, Training) East Europe, North America and Asia AUTOMOTIVE PENETRATION Electronic Air Suspension Vacuum Pumps ABOVE MARKET SALES GROWTH THROUGH 2014* CAGR 4 - 6% Cars Aftermarket Expansion OE Truck, Bus and Trailer 2009 2014 *Assumes commercial vehicle production flat at 2009 levels

SALES PROJECTIONS Indexed (2009 Sales = 100) CAGR 47% 688 NG22MAX New generation for heavy duty trucks and buses Patented reinforced single-piston technology delivers high performance at lowest weight Increased reliability, longer brake pad life, extended service intervals 427 100

SALES PROJECTIONS Indexed (2009 Sales = 100) CAGR 37% 473 Mandatory in EU in Nov. 2011 Includes yaw control to keep vehicle on steered course and avoid jack-knifing Roll Stability Support mitigates roll-over situations for coaches, trucks and trailers ESCsmart™: Industry’s first technology that uses computational simulation to certify ESC. Breakthrough homologation system approved in 27-country EU and in 20 other countries 292 100 2009 2012 2014

New OptiDriveTM Transmission Automation system SALES PROJECTIONS Indexed (2009 Sales = 100) CAGR 13% 182 Provides fuel savings, reduced clutch wear, improved serviceability, reduced driver training Developed modular version to meet requirements of new customers in emerging markets Standardized components provide improved cost position and reduced application engineering 145 100 2009 2012 2014

Indexed (2009 Sales = 100) CAGR 25% 300 2005 to 2008 sales grew at 70% CAGR Signed long term agreement with CNHTC through 2016 including sole supplier of transmission automation systems Joint venture with Fuwa, world’s largest maker of trailer axles, to produce air disc brakes in China Growing weight in WABCO’s global manufacturing network and an internal benchmark for Six Sigma Lean 190 100 2009 2011 2014

22 GLOBALIZATION: INDIA SALES PROJECTIONS Strongly anchored market leader
Indexed (2009 Sales = 100) CAGR 21% 214 Strongly anchored market leader Preferred supplier for all OEMs Nationwide sales and service network Extensive product & software development capabilities Lean and TPM driven manufacturing High record of industry awards 155 100 2009 2011 2014 22

The WABCO Operating System is our roadmap and one of the most advanced management environments in our industry We are globalizing constantly: growing, leveraging and optimizing our network of capabilities in manufacturing, sourcing and engineering WABCO OPERATING SYSTEM GLOBALIZATION

Pillars Vision Organizational Development Accountability and alignment across the value chain Six Sigma Lean Integrated supply chain supported by Lean processes from suppliers to customers Common Development Process Processes based on Design For Six Sigma driving speed and reliability Customer Partnership Establish partnerships as competitive differentiator Total Employee Involvement Hoshin-like management system in place © 2010 WABCO Holdings Inc. All rights reserved.

Global Manufacturing Strategy Share of Workforce By: High Cost Country Best Cost Country Supporting Local Markets from Local Factories Leveraging Manufacturing Capabilities in China and India to Lower Costs Accelerating Six Sigma Lean Deployment in all Facilities

Global Sourcing Strategy Share of Sourcing By: High Cost Country Best Cost Country Focusing Purchasing Strategy on 3 Main Regional Clusters - Western Europe, Central/Eastern Europe and Asia Consolidating Supply Base Driving Quality Improvement and Six Sigma Lean Implementation at Key Suppliers Leveraging Broad Internal and External Capabilities in India and China Performing Continuous Supplier Risk Management Analysis 10% 22% 30% 35% 40% 43% 90% 78% 70% 65% 60% 57% 2000 2002 2004 2006 2008 2010F

Global Engineering Strategy Engineering Workforce by: High Cost Country Best Cost Country WESTERN EUROPE CENTRAL EUROPE Growth in Resources (Indexed to 2002) Advanced products and Systems Connectivity to European OEM development Technology, Process, Data and Systems Conventional products Design Support Standards, material and Requalification Test Center 130 121 123 114 17% 31% 100 14% 27% AMERICAS ASIA 83% 96% 86% 73% 69% Connectivity to US and South American OEMs Regional variant development Application development Development of products for region specifics Software development Design and calculation support

Q1 Q1 vs. 2009 Reported Performance In Local Curr. Performance Drivers (In $ Millions except per share data) (2),(3) (1) Sales $491.1 $ % Gross Profit % 28.5% 28.6% +474 bps OPEX & Other (97.1) (96.0) (16.9%) (19.8%) (19.5%) +327 bps Operating Income ,250.0% 8.8% 9.1% 801 bps Equity Income EBIT $38.7 $42.2 7.9% 8.6% Taxes Net Income $30.7 $33.6 EPS $0.47 $0.51 +11% versus Q4 ’09 Order Book at $721M, Up 28% YoY Price: ($5.7) or (1.2%) Volume & Mix: $32.9 Productivity: Materials: $10.9 Conversion: $4.0 OH Absorption & Other: $9.3 OPEX & Other: ($12.9): Reinstate suspended costs: ($7.9) Labor inflation/India Opex: ($4.5) Bonus Accrual Above Target: ($3.2) Savings net of new investments: $2.7 Meritor WABCO JV Up $1.6M Versus Last Year Streamlining $0.1 vs. ($30.9) in ’09 Separation ($3.6) vs. ($2.9) in ’09 ~20% Performance Tax Rate Versus ’09 Reported of ($0.57) and Performance of ($0.08) (1) Adjusted for currency translation, streamlining and separation costs (2) Adjusted for streamlining and separation costs (3) Adjusted for streamlining and separation costs, and discrete and other one-time tax items © 2010 WABCO Holdings Inc. All rights reserved. Strong Financial Performance Generates 31% Incremental Margin

29 FY 2010 GUIDANCE Raising Full Year 2010 Guidance Updated 2010 Guidance
Key Inputs ($ Millions, except per share data) Price erosion level of 1.7% or better Maintaining strong levels of productivity Raw materials pricing expected to degrade margins by ~90 bps starting in Q2 Additional investments of ~$3M in new business opportunities Net interest expense at current rates Performance tax rate of ~20% Streamlining & separation cash payments: ~$50M Impact from EC fine not included Original Revised (1 EURO = 1.37 USD) Low End – High End Low End – High End Sales 15% - 20% $1,835 - $1,910 23% - 28% (1) (1) Performance Op Margin 5% – 7% 6.5% – 8.5% Structural Incremental Margin (2) 2010 Incremental Margin Performance EPS $ $1.40 $ $1.80 (3) Free Cash Flow Conversion 80% - 90% (Excluding Stream. & Separation) 80% - 90% (Excluding Stream. & Separation) (4) Note: Guidance as announced on May 5, Inclusion of this information in this presentation is not an update or reaffirmation of those financial assumptions (1) Adjusted for currency translation (2) Adjusted for streamlining and separation costs (3) Adjusted for streamlining and separation costs, and discrete and other one-time tax items (4) Net cash provided by operating activities less net cash used for the purchases of PP&E and computerware as a percentage of net income © 2010 WABCO Holdings Inc. All rights reserved. Raising Full Year 2010 Guidance

30 WABCO SUMMARY Industry leader, we continue to be well prepared and sufficiently FLEXIBLE to take full advantage of increasing demand for new commercial vehicles in 2010, while maintaining our commitment to long term growth STRATEGY Power to remain THE TECHNOLOGY LEADER adding breakthroughs to portfolio of technologies and products for full connectivity to all markets WABCO Operating System, one of our industry’s most advanced management environments, delivers continuous OPERATIONAL improvements We drive PERFORMANCE by connecting with and adapting to CUSTOMERS everywhere in the world and continuing to anticipate and satisfy their needs

31 PASSION © 2010 WABCO Holdings Inc. All rights reserved.

Electronic Control Units Adaptive Cruise Control EBS Proportional Relay Valve Pedal Unit with EBS Brake Signal Transmitter ABS Modulator Valve Automatic Temperature Control Electronically Controlled Air Suspension Shock Absorber Front Air Disc Brake Steering Angle Sensor Transmission Automation Clutch Control Retarder Control Air Compressor Rear Air Disc Brake (Electronic-) Air Processing Unit Reservoir EBS Trailer Control Valve Electronic Stability Control Module EBS Axle Modulator 1 2 3 4 5 6 7 8 9 10 11 12 13 14 10 15 1 6 7 16 11 4 17 18 20 13 8 16 2 19 29 27 23 17 30 24 22 18 5 20 26 28 14 12 9 3 31 15 19 TRUCK AND TRAILER Brake Chamber Tristop® Cylinder Air Bellow Integrated Vehicle Tire Monitoring ECU IVTM Wheel Module Double Diaphragm Spring Brake 25 21 21 22 23 24 25 26 TRAILER Trailer Central Electronic SmartBoard Trailer Electronic Braking System Electronically Controlled Air Suspension Trailer Air Disc Brake EBS: Electronic Braking System ABS: Anti-Lock Braking System ECU: Electronic Control Unit 27 28 29 30 31

33 BUS PRODUCTS EBS Brake Signal Transmitter EBS Proportional Relay Valve
ABS Solenoid Modular Valve Electronic Stability Control Unit EBS Backup Valve EBS Axle Modulator Adaptive Cruise Control Module Hand Brake Valve IVTM Display IVTM Wheel Module IVTM Electronic Control Unit Automatic Traction Control Water Valve ATC Operating Console ATC Substation Electronic Control Units EBS, CVC ECAS Electronic Control Unit ECAS Solenoid valve ECAS Level Sensor Air Disc Brake Brake Chamber Tristop Cylinder (Electronic) Air Processing Unit Compressor MTS Sensor MTS Door Cylinder MTS Electronic Control Unit MTS Door Valve 1 2 3 4 5 6 7 8 26 24 9 27 10 25 11 12 11 14 13 13 9 14 16 8 15 16 15 1 17 2 18 4 3 12 5 20 17 7 19 6 20 23 21 10 18 22 19 21 22 23 24 25 26 27 EBS: Electronic Braking System ABS: Anti-Lock Braking System CVC: Central Vehicle Controller IVTM: Integrated Vehicle Tire Monitoring ECAS: Electronically Controlled Air Suspension MTS: Door Control for Bus

34 CAR PRODUCTS Air Bellow Electronic Control Unit for ECAS & ESAC
1 Air Bellow Electronic Control Unit for ECAS & ESAC Vacuum Pump Air Supply Unit Height Sensor Air Reservoir Solenoid Valve Block 1 2 2 3 7 4 5 6 7 3 6 5 ECAS: Electronically Controlled Air Suspension ESAC: Electronic Shock Absorber Control 4


Similar presentations

Ads by Google