Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ACCURIDE CORP | acw12-8kjan11.htm |
Page | 1
Investor Presentation
January 11, 2012
January 11, 2012
Page | 2
Imperial
Gunite
Brillion
Accuride
Fuel Tank Straps
Fuel Tank Assemblies
Windshield
Frames
Hood
Tops and
Skins
Battery/Tool Boxes
Grill
Assemblies
Bumpers
Fuel Tank Ends
Crown
Assemblies
Sunvisors
Engine
Castings
Steel and Aluminum
Wheels
Chassis &
Suspension
Brackets
Fenders
Brake Drums, Disc Wheel
Hubs, Spoke Wheels, Rotors
Exhaust Stacks
& Assemblies
Steel wheels
#1
Aluminum wheels
#2
Brake drums
Disc wheel hubs
#2
Metal bumpers #2
Note: Market defined as North American commercial truck market.
(1) Bostrom & Fabco
Company Products & Key Brands
Accuride Business Units
Leading Brands
% 2011
Revenues
through Q3
Revenues
through Q3
42%
26%
13%
15%
Divested
Units
Units
4%
(1)
Top Ten NA
Casting Operation
Page | 3
End Markets & Customers
YTD Q3 2011 Revenue by End Market
YTD Q3 2011 Revenue by Customer
Heavy-Duty Truck (Class 8)
Heavy Conventional
Transit Bus
Tandem-Axle Van
Medium-Duty Truck (Class 5-7)
Stake
Walk-In Van
School Bus
Flat Bed
Tanker
Light Truck (Class 3-4)
Pick-Up
Trailer
Note: Includes revenue from divested business units.
Page | 4
2011 - A Year of Transformation
Ø Upgraded, Co-located & Focused Senior Leadership Team
• New President & CEO
• 70% of Senior Leadership team replaced or reassigned
• Revised compensation plan for 2012 - ROA and FCF
Ø Revised Strategic Plan Developed & Implementation Initiated:
• New Vision, Mission, Values
• “Fix & Grow” Strategy Developed
• International Expansion delayed 12-18 months
Ø “Core” vs. “Non-Core” Focus Established:
• Fix & Grow: Accuride Wheels, Gunite
• Divested: Bostrom Seating, Fabco
• TBD: Imperial, Brillion Iron Works
Ø Commitment to Restore Operating Excellence & Technological Leadership:
• Rebuilt “Core” skills & team: MFG, Product Engineering, Quality, Supply Chain
• Two-year CAPEX plan (2011-12) to update manufacturing capability & expand/rationalize capacity:
• $55M investment in Accuride Wheels business
• $55M investment in Gunite Wheel-end business
• Three-year Product Portfolio plans developed to ensure industry benchmark technology
Ø Re-established Commercial Discipline:
• Gunite price increases in both OEM and Aftermarket Segments
• Brillion Iron Works price increases
• Successfully pursuing anti-dumping campaign for Steel Wheels
Page | 5
Strategic Objectives
Ø #1-2 globally in wheel-end systems
Ø ROIC > 20% through a cycle
Ø >80% of revenue from CORE products
Ø Balanced geographical revenues:
• 40% North America
• 30% Asia
• 20% Europe
• 10% South America
Ø >95% retention of personnel
Ø Maximize ACW share price
Share
Price
Grow Globally
Create a Competitive
Cost Structure &
LEAN Operating Culture
Divest Non-Core Assets
Fix Core Business & Operations
Customer Centric, Technology Leadership
Ethical People, Selfless Leaders, Team Oriented
Accuride Vision: Accuride will be the premier supplier of wheel-end system
solutions to the global commercial vehicle industry
solutions to the global commercial vehicle industry
Our Focus
Page | 6
2012 - A Year of Execution
Ø Complete the operational turn-around of our “Core” assets:
• Complete Aluminum wheel capacity expansion
• Complete rationalization study for Steel Wheel Capacity (4Q)
• Upgrade capability and consolidate Gunite manufacturing footprint:
• Quality, Delivery, Daily production stability (1Q)
• Install & launch 2.1M/year drum machining capacity (2Q/3Q)
• Install new & transfer existing capacity while selectively outsourcing hub machining (4Q)
• Repair & Selectively upgrade foundry and facility at Rockford (2012-13)
• Complete consolidation of Imperial assets (1Q)
• Implement common LEAN Manufacturing systems (2012-13)
Ø Fully understand and revamp our supply chain (>55% of COGS):
• Scheduling systems integrated & coordinated
• Consolidate MRO buy for key commodities (tools, MRO, chemicals)
• Aggressively manage raw material pricing with both suppliers and customers
Ø Focused sales initiatives:
• Re-negotiate & extend LTAs with the “Big 4” Truck OEMs
• Dedicate & focus resources on specific fleets, trailer OEMs and key AM customers
• Use open capacity & “total wheel-end” product portfolio for “value selling”
• Fill-up open capacity at Imperial and Brillion
Ø Continue to explore opportunistic strategic opportunities
Page | 7
Aluminum Capacity Expansion
Ø Market penetration of aluminum
wheels continues to grow
wheels continues to grow
Ø Phase 1 complete:
• Mega-line at 1,000/day
• Mexico at 300+/day
• Acquisition & integration of Forgitron
Ø Phase 2 underway:
• $20M CAPEX
• Double capacity in MX and SC
Ø Key customers targeted:
• Truck OEMs: Volvo, Daimler, Paccar
• Trailer OEMs
Page | 8
Footprint Aligned w/ Customers
Kenworth
Peterbilt
Kenworth
Peterbilt
Navistar
Navistar
Mack
Daimler
Daimler
Kenworth
Please note that the circles
encompass 200, 400, and 600
miles from each Wheels facility.
encompass 200, 400, and 600
miles from each Wheels facility.
Navistar
Accuride
Page | 9
Gunite Operational Turn-Around
Note: Representative customer quality data
DEC
10,417
Page | 10
Gunite Financial Turn-Around
Ø Pricing Activity with customers (1Q)
• AM (Drums +3%, Spoke Wheels +30%, Other)
• OEM (8-18%)
Ø Increased hub pricing from Brillion (1Q)
Ø Eliminate CS2 (1Q) and CS1 (2Q) Inspection
Ø Improved daily production
Ø New Drum (3Q) & Hub (4Q) Machining:
• Scrap: 4.0% to 2.2%
• Tooling: 2.5% to 2.0%
• Labor/OT: 13.5% to 10.0%
• Freight: 3.5% to 3.0%
Ø Volume & Mix: TBD
Page | 11
Sales & Marketing Initiatives
• Numerous meetings with OEMs
• Completed branding survey
Ø Revised Organization:
• Reduction in headcount/operating
expense (>$1.25M)
expense (>$1.25M)
• Aggressive management of AR
• Order & Inventory management
Note: Market share based on company estimates
Page | 12
Sales & Marketing Initiatives
Note: Market share based on company estimates
Aftermarket (Cast) Drum Share
Trailer OEM (Cast) Drum Share
Truck OEM (Cast) Drum Share
Page | 13
Supply Chain Initiatives
Ø Key recent staff additions:
• MRO Buyer
• Metals Buyer
Ø Outside advisor engaged to help us fully understand “current”
situation and identify opportunities by 1Q12
situation and identify opportunities by 1Q12
Ø Concerted efforts to fix scheduling and inventory management
Ø Minimize steel economic headwind 1H12
Page | 14
Industry Forecasts
295,545
176,111
271,000
167,900
251,000
246,300
Page | 15
Initiatives to Improve Liquidity
Ø Aggressive Working Capital Management:
• Scheduling systems & inventory management
• AR collection (<5% past due >90 days)
• AP terms extension
Ø ABL expansion 1Q12
Ø Potential divestiture of non-core asset in 1H12
Ø Improved operating performance:
• Gunite (pricing, daily operations, eliminate CS1 & CS2 inspection)
• Imperial (capacity consolidation, SGA & premium reduction)
• Brillion (pricing, daily operations, capacity utilization)
Ø Execution of key CAPEX projects:
• Core business (<3 year payback at >15% IRR)
• Non-core business (<1 year payback only)
Page | 16
• “Fix & Grow” Strategy developed & being executed
• Experienced leadership team on-board & performing
• Resources focused on key priorities
• All major initiatives on-schedule and on-budget
• Market trends favorable heading into 2012
• Some headwind on steel pricing in 1H12
• Adequate liquidity and initiatives to improve it
• Strategic opportunities exist to “Fix & Grow” the company
• We are executing our plan!
Summary
Page | 17