Iveco 2010-2014 Plan - Final - FIAT Industrial
Iveco 2010-2014 Plan - Final - FIAT Industrial
Iveco 2010-2014 Plan - Final - FIAT Industrial
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<strong>Iveco</strong><br />
Paolo Monferino<br />
April 21, <strong>2010</strong> Fiat Investor Day 1
Performance over last plan period<br />
Net revenues (€bn)<br />
Trading margin 3.7% 3.9% 6.0% 7.3% 7.7% 1.5%<br />
Net revenues (€bn)<br />
Trading profit (€mn)<br />
Net revenues 2003-2007<br />
CAGR +6.6%<br />
Trading margin 4.0-7.5% operating margin range<br />
* Pro-forma excluding FPT segment<br />
2004 * 2005 2006<br />
Balocco <strong>Plan</strong> Targets (Jul 2004)<br />
2007 2008 2009<br />
~9.0 ~9.0 ~9.5<br />
640-710 670-740 800-870<br />
7.1-7.9% 7.4-8.2% 8.4-9.2%<br />
Lingotto <strong>Plan</strong> Targets (Nov 2006)<br />
April 21, <strong>2010</strong> Fiat Investor Day 2<br />
Trading profit (€mn)
Competition benchmark<br />
<strong>Industrial</strong> Operating Result (€ mn)<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
-500<br />
-1000<br />
-1500<br />
FY 2006<br />
Return on <strong>Industrial</strong> Sales (%)<br />
Daimler<br />
Trucks<br />
Volvo<br />
Trucks<br />
Man CV<br />
(14) (12) (10) (8) (6) (4) (2) - 2 4 6 8 10 12 14<br />
Source: Internal elaboration on publicly available information. <strong>Iveco</strong> excluding FPT Segment<br />
Paccar<br />
Scania<br />
April 21, <strong>2010</strong> Fiat Investor Day 3
Competition benchmark<br />
<strong>Industrial</strong> Operating Result (€ mn)<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
-500<br />
-1000<br />
-1500<br />
Volvo<br />
Trucks<br />
Daimler<br />
Trucks<br />
FY 2009<br />
Man CV<br />
(incl. LA)<br />
Paccar<br />
Scania<br />
(14) (12) (10) (8) (6) (4) (2) - 2 4 6 8 10 12 14<br />
Return on <strong>Industrial</strong> Sales (%)<br />
Source: Internal elaboration on publicly available information. <strong>Iveco</strong> excluding FPT Segment<br />
April 21, <strong>2010</strong> Fiat Investor Day 4
Revenues by business area<br />
2006<br />
Net Sales: €9.1bn<br />
2008<br />
Net Sales: €10.8bn<br />
2009<br />
Net Sales: €7.2bn<br />
Light Medium Heavy Bus Special Vehicles<br />
Enlarged product portfolio providing resilience<br />
April 21, <strong>2010</strong> Fiat Investor Day 5
<strong>2010</strong>-<strong>2014</strong> <strong>Plan</strong><br />
4 Pillars<br />
Recovery of traditional<br />
markets in EU<br />
� New products<br />
� Efficient industrial footprint<br />
� Market and market share<br />
recovery<br />
International Operations<br />
Opportunities from leading<br />
position in China<br />
� Local profitability<br />
� Chinese products for export<br />
� Economies of scale and cost<br />
saving opportunities<br />
Trucks & Commercial Vehicles<br />
Achieving<br />
double-digit<br />
profitability<br />
Growing Latin American<br />
position<br />
� Brazil positive market trend<br />
� Complete product range<br />
� Extensive distribution system<br />
Strengthening Special<br />
Vehicles & Buses<br />
� Development of<br />
Special Vehicles<br />
� Bus re-organization<br />
“Other” products<br />
April 21, <strong>2010</strong> Fiat Investor Day 6
Product <strong>Plan</strong><br />
Trucks and Commercial Vehicles (EMEA markets)<br />
current<br />
model<br />
PRODUCT ACTIONS<br />
Light<br />
Light<br />
Imported<br />
Medium<br />
Medium<br />
Imported<br />
Heavy<br />
Major modification / Legal<br />
Refresh / Legal<br />
New model<br />
<strong>2010</strong> 2011 2012 2013 <strong>2014</strong><br />
� New Daily in 2013<br />
Euro 5 Light Duty Euro VI Heavy Duty<br />
� New Heavy line introduction in <strong>2014</strong> (modular & global product)<br />
� Chinese export products: PowerDaily & new cab over (“Leoncino” * )<br />
* Historical and successful cab over manufactured from 1950s to 1970s by OM (Officine Meccaniche),<br />
merged to create <strong>Iveco</strong> in 1975<br />
April 21, <strong>2010</strong> Fiat Investor Day 7
European market drivers<br />
Transport needs strongly<br />
correlated to GDP<br />
Road freight dominant<br />
Gradual need for replacement<br />
of existing fleet<br />
Emission legislation<br />
(Euro VI in 2013)<br />
Customer concentration<br />
(change in distribution channel mix)<br />
Focus on network strengths<br />
and service level<br />
EU freight by mode<br />
Source: Automotive World – June 2009<br />
Our goal:<br />
Back to 2008 volumes in a "normalized" market<br />
April 21, <strong>2010</strong> Fiat Investor Day 8<br />
Billion tons/km<br />
18%<br />
30%<br />
52%<br />
16%<br />
24%<br />
60%<br />
13%<br />
18%<br />
69%<br />
12%<br />
14%<br />
74%<br />
12%<br />
12%<br />
76%<br />
12%<br />
11%<br />
77%<br />
11%<br />
11%<br />
78%
Trucks & Commercial Vehicles<br />
European market trend<br />
Western Europe<br />
Eastern Europe<br />
(ex Russia, CIS countries<br />
and Bulgaria)<br />
Western Europe<br />
Market ≥3.5T<br />
Eastern Europe<br />
Market ≥3.5T<br />
Market trend forecast in line with consensus<br />
April 21, <strong>2010</strong> Fiat Investor Day 9
Trucks & Commercial Vehicles<br />
European market share<br />
Western Europe<br />
Eastern Europe<br />
(ex Russia, CIS countries<br />
and Bulgaria)<br />
Light<br />
(3.5-6.0T)<br />
Medium<br />
(6.01-15.99T)<br />
Heavy<br />
(≥16.0T)<br />
April 21, <strong>2010</strong> Fiat Investor Day 10<br />
…<br />
…<br />
…<br />
…<br />
…<br />
…
Trucks & Commercial Vehicles – Africa & Mid-East<br />
Market and market share<br />
Market (k units)<br />
Market share<br />
Light<br />
+ Imported<br />
products<br />
(3.5-6.0T)<br />
Medium<br />
+ Imported<br />
products<br />
(6.01-15.99T)<br />
Heavy<br />
(≥16.0T)<br />
Increase dealer network coverage<br />
from 49 to ~80 points-of-sale by <strong>2014</strong><br />
April 21, <strong>2010</strong> Fiat Investor Day 11<br />
…<br />
…<br />
…<br />
…<br />
…<br />
…
Trucks & Commercial Vehicles<br />
<strong>Plan</strong>t utilization in Europe<br />
Vehicle/Year<br />
Return to near complete utilization of technical capacity<br />
with no additional investments required<br />
Note: Calculations based on Harbour definition<br />
191k<br />
April 21, <strong>2010</strong> Fiat Investor Day 12
Trucks & Commercial Vehicles<br />
<strong>Industrial</strong> flexibility in Europe<br />
Fixed industrial cost / Production volumes<br />
(Base 100 = 2009)<br />
7% average YoY efficiency improvement over the plan<br />
(mainly on the back of WCM program)<br />
April 21, <strong>2010</strong> Fiat Investor Day 13
Latin America<br />
Product plan<br />
Current<br />
model<br />
PRODUCT ACTIONS<br />
Major modification<br />
Refresh<br />
New model<br />
Light<br />
Light<br />
Imported<br />
Medium<br />
Imported<br />
Medium<br />
“Vertis”<br />
Chinese Platform<br />
Medium<br />
“Cavallino”<br />
Heavy<br />
<strong>2010</strong> 2011 2012 2013 <strong>2014</strong><br />
Euro V<br />
Fully updated product offering including<br />
Chinese vehicles<br />
April 21, <strong>2010</strong> Fiat Investor Day 14
Latin America<br />
Market and market share<br />
Significant growth opportunities leveraging on Brazil volumes<br />
Market (k units)<br />
Market share<br />
Light<br />
(2.8-7.9T)<br />
Medium<br />
(8.1-31.0T)<br />
Heavy<br />
(>31.0T)<br />
April 21, <strong>2010</strong> Fiat Investor Day 15<br />
…<br />
…<br />
…<br />
…<br />
… …
Brazil<br />
Network<br />
Dealer network development plan<br />
2006 2009 <strong>2010</strong>E <strong>2014</strong>E<br />
Hubs and spokes 44 74 90 ~120<br />
Authorized workshops 8 15 15 15<br />
TOTAL IVECO<br />
DEALERS<br />
…<br />
52 89 105 ~135<br />
Ongoing network restructuring,<br />
increasing presence<br />
April 21, <strong>2010</strong> Fiat Investor Day 16<br />
…
Special Vehicles<br />
Key objectives<br />
Keep on developing business by leveraging success of recent<br />
products and extending offering and geographical presence<br />
Defence<br />
• Consolidate technological leadership in Protection<br />
Systems and Mobility Performance<br />
• Multirole product range completion<br />
• Growth outside traditional markets (€2.5bn contract<br />
with Brazilian Ministry of Defence)<br />
Fire Fighting<br />
• Enlarge product range (Aircrash) to keep worldwide<br />
leadership<br />
Astra<br />
• Leveraging construction sector recovery<br />
Net revenues of ~ €1.4bn by <strong>2014</strong> (+40% vs. 2009)<br />
April 21, <strong>2010</strong> Fiat Investor Day 17
Buses<br />
Key objectives<br />
Product range rationalization<br />
• Product standardization and cost reduction<br />
• Overlapping vehicles to be discontinued<br />
• New entry-level coach to gain additional<br />
volumes<br />
Re-balancing industrial footprint<br />
• <strong>Industrial</strong> cost optimization<br />
• WCM to improve efficiency<br />
Entering new markets<br />
• New Citybus versions to compete in non-domestic markets<br />
• Direct distribution in major markets<br />
April 21, <strong>2010</strong> Fiat Investor Day 18
Buses<br />
Western Europe market and market share (≥ 3.5T)<br />
Market (k units)<br />
Market share<br />
Minibus<br />
Citibus<br />
Intercity<br />
& Coach<br />
Net revenues of ~ €1.6bn by <strong>2014</strong> (+30% vs. 2009)<br />
April 21, <strong>2010</strong> Fiat Investor Day 19<br />
…<br />
…<br />
…<br />
…
China<br />
<strong>Iveco</strong> presence and product offer<br />
• A single partner<br />
• 3 JVs: NAVECO, SAIC-IVECO HONGYAN (SIH), SAIC-IVECO FPT<br />
HONGYAN (SFH)<br />
• Full localized range, including engines<br />
Fiat Group share: 60%<br />
(Consolidated line-<br />
by-line in FPT)<br />
SFH<br />
Engines<br />
Nanjing�<br />
(<strong>Iveco</strong> Share: 50%)�<br />
Chongqing�<br />
(<strong>Iveco</strong> Share: 33.5%)�<br />
NAVECO (Heimoying)<br />
Daily Range<br />
NAVECO (Jiangning)<br />
Yuejin Range<br />
SIH<br />
Heavy Range<br />
(GENLYON, TAMPA, T/T8)<br />
April 21, <strong>2010</strong> Fiat Investor Day 20
China<br />
Strong platform for growth<br />
Serving domestic market<br />
Increasing Network territory<br />
coverage<br />
Hongyan<br />
Yuejin<br />
Power Daily<br />
1,632<br />
Exporting to international markets<br />
Leveraging supplier base for global sourcing<br />
Sales volumes by segment<br />
1,923 2,154<br />
(k units)<br />
<strong>Iveco</strong> estimates<br />
2,576<br />
Targeting €300mn Annual Purchase Value in <strong>2014</strong><br />
2009 <strong>2014</strong>E<br />
JV Exports (units)* 1 k 24 k<br />
*Included in <strong>Iveco</strong> consolidated sales<br />
2,581<br />
3,293<br />
CAGR<br />
(2006-<strong>2014</strong>E)<br />
April 21, <strong>2010</strong> Fiat Investor Day 21<br />
…<br />
…<br />
…<br />
11.5%<br />
9.2%<br />
7.1%
China<br />
JV performance<br />
Wholesale units<br />
(k units)<br />
TOTAL JVs<br />
Net Revenue<br />
(€ bn)<br />
TOTAL JVs<br />
Net Profit<br />
(€ mn)<br />
IVECO Interest<br />
2006 2007 2008 2009 <strong>2010</strong>E <strong>2014</strong>E<br />
20 95 92 107 130 235<br />
0.3 1.0 1.0 1.2 ~1.5 ~3.2<br />
9 6 13 4 10 80+<br />
<strong>Iveco</strong> interest recognised under equity method<br />
April 21, <strong>2010</strong> Fiat Investor Day 22<br />
…
Looking at <strong>Iveco</strong> from a wider perspective<br />
<strong>Iveco</strong> + Chinese JVs consolidated volumes (pro-forma)<br />
<strong>2014</strong>E<br />
…<br />
…<br />
k units<br />
Common components and product<br />
investments fully supported by total size<br />
April 21, <strong>2010</strong> Fiat Investor Day 23
Financials<br />
Capex<br />
DAILY 2011<br />
MEDIUM & HEAVY Euro 6<br />
NEW LINE HEAVY<br />
DAILY 2013<br />
April 21, <strong>2010</strong> Fiat Investor Day 24
<strong>2010</strong>-14 Financial targets<br />
April 21, <strong>2010</strong> Fiat Investor Day 25
Our roadmap to double-digit profitability<br />
• Market<br />
� Western & Eastern European markets restored to “normalized” level, but<br />
still below 2007 peak<br />
� Strengthening our position in Latin America with significant market growth<br />
in Light & Medium segments and share gains across range<br />
� Full exploitation of Chinese platforms for export to Africa & Mid-East and<br />
Latin America<br />
• Substantially overhauled portfolio across all product ranges<br />
and geographies including Chinese trucks to complement<br />
range<br />
• Major efficiency gains in manufacturing with ~90% capacity<br />
utilization by <strong>2014</strong><br />
• Significant growth in Special Vehicles and realignment of<br />
product portfolio in Buses resulting in manufacturing<br />
efficiencies<br />
April 21, <strong>2010</strong> Fiat Investor Day 26
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