Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Commercial Vehicle Group, Inc. | d790284d8k.htm |
 Exhibit 99.1 |
| pg | 1
FORWARD LOOKING STATEMENT
This presentation contains forward-looking statements that are subject to risks and
uncertainties. These statements often include words such as "believe,"
"expect," "anticipate," "intend," "plan," "estimate," or similar expressions. In particular, this press release may contain forward-
looking statements about Company expectations for future periods with respect to its plans to
improve financial results and enhance the Company, the future of the Company’s end
markets, Class 8 North America build rates, performance of the global construction equipment
business, expected cost savings, enhanced shareholder value and other economic benefits of the
consulting services, the Company’s initiatives to address customer needs, organic
growth, the Company’s economic growth plans to focus on certain segments and markets and the
Company’s financial position or other financial information. These statements are
based on certain assumptions that the Company has made in light of its experience in
the industry as well as its perspective on historical trends, current conditions, expected future developments and other
factors it believes are appropriate under the circumstances. Actual results may differ
materially from the anticipated results because of certain risks and uncertainties,
including but not limited to: (i) general economic or business conditions affecting the markets in which the Company
serves; (ii) the Company's ability to develop or successfully introduce new products; (iii)
risks associated with conducting business in foreign countries and currencies; (iv)
increased competition in the medium and heavy-duty truck, construction, aftermarket, military, bus, agriculture
and other markets; (v) the Company’s failure to complete or successfully integrate
strategic acquisitions; (vi) the impact of changes in governmental regulations on the
Company's customers or on its business; (vii) the loss of business from a major customer or the discontinuation
of particular commercial vehicle platforms; (viii) the Company’s ability to obtain future
financing due to changes in the lending markets or its financial position; (ix) the
Company’s ability to comply with the financial covenants in its revolving credit facility; (x) the Company’s ability to
realize the benefits of its cost reduction and strategic initiatives; (xi) a material
weakness in our internal control over financial reporting which could, if not
remediated, result in material misstatements in our financial statements; (xii) volatility and cyclicality in the commercial vehicle
market adversely affecting us; and (xiii) various other risks as outlined under the heading
"Risk Factors" in the Company's Annual Report on Form 10-K for fiscal year
ending December 31, 2013. There can be no assurance that statements made in this presentation relating to future events
will be achieved. The Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by such cautionary statements.
|
 AGENDA
pg | 2
Wednesday, September 17, 2014
8:00 to 9:00 AM
BREAKFAST
9:00 to 9:20 AM
STRATEGY
9:20 to 9:40 AM
FINANCIAL
9:40 to 9:50 AM
Q&A
9:50 to 10:05 AM
GLOBAL BUS & TRUCK
10:05 to 10:20 AM
GLOBAL CON | AG | MIL
10:20 to 10:30 AM
BREAK
10:30 to 10:40 AM
ASIA-PACIFIC
10:40 to 10:50 AM
EUROPE, MIDDLE EAST & AFRICA
10:50 to 11:00 AM
PRODUCT INNOVATION
11:00 to 11:15 AM
MARGIN ENHANCEMENT
11:15 to 11:20 AM
TALENT | CULTURE
11:20 to 11:25 AM
WRAP-UP
11:25 AM
Q&A
|
 PRESENTERS
pg | 3 |
 pg | 4
|
 •
CVG was founded in 2000 as a privately-held company providing
trim, wiper, mirror, and seating for medium and heavy duty trucks
•
IPO in 2004
•
Over the past 14 years, CVG pursued growth largely through
acquisition of companies providing commercial vehicle
components, on and in the cab
STRATEGY
Our Background
pg | 5 |
 Our
Executive Leadership Team STRATEGY
pg | 6 |
 Our
Global Footprint pg | 7
STRATEGY |
 2013
Sales Product
End-Market
Customers
Region
STRATEGY
pg | 8 |
 CVG has about 5% share of the addressable market –
significant opportunity to
drive profitable organic growth across our end markets and penetrate our
addressable market with current products
$5M
$3.5B
$3.5B
$3.2B
$5.6B
$5.6B
Truck
$5.0B
$416M
Construction
$176M
$2.6B
$2.6B
$2.8B
Bus
$1.2B
$1.2B
$2.9B
Agriculture
2013 Sales
3
Addressable Market
White Space
$32M
•
Available Market
1
| $27B
•
Addressable Market
2
| $13B
Source:
Company data, LMC + Millmark research reports
1
Available market = Universe of applications / platforms available for product
portfolio 2
Addressable market = Subset of available market for which products are currently
available or product plans are in place 3
Does not include approximately $118M in sales of complementary products
$10.6B
$6.7B
$4.1B
$5.4B
STRATEGY
Our Opportunity is Significant
pg | 9 |
 Our
Focus is to Drive Profitable Organic Growth •
We intend to achieve sales and earnings targets
commensurate with companies delivering top-quartile
total shareholder returns
•
We will invest in products and capabilities that will
strengthen our right-to-win with our core products in our
end markets
•
We will consider opportunistic acquisitions to address
gaps in our core product portfolio and to enhance
serving our end markets & customers
STRATEGY
pg | 10 |
 Wire Harnesses
CVG
2020
|
Region
|
Product
|
End-Market
Diversification
Sales Breakdown
Region
Product
End-Market
2020
67%
67%
16%
16%
17%
17%
2013
72%
72%
16%
16%
12%
12%
NALA
EMEA
APAC
2020
2013
Seats
Trim
Structures
Wipers
7%
7%
10%
20%
20%
21%
21%
47%
47%
20%
20%
22%
22%
7%
4%
4%
42%
42%
STRATEGY
Agriculture
Truck
Other
Bus
Construction
55%
24%
24%
16%
1%
4%
pg | 11
2020
2013 |
 REGIONS
REGIONS
END-
MARKETS
CORE
PRODUCTS
COMPLEMENTARY
PRODUCTS
NA
NA
Seats
Trim
Wire
Harnesses
Mirrors
Office Seats
Structures
Wipers
Truck
X
X
Construction
X
X
X
Agriculture
X
X
X
Bus
X
X
Aftermarket
X
X
EMEA
EMEA
Truck
X
Construction
X
X
Agriculture
X
X
Bus
X
Aftermarket
X
APAC
APAC
Truck
X
X
Construction
X
X
Agriculture
X
X
Bus
X
X
Aftermarket
X
•
Focus on core, value accretive
businesses
•
Prioritize investment in core products
•
Hire and develop difference-making
talent across the product lines
–
Product line management
–
Engineers
–
Sales
–
Manufacturing management
•
Build / enhance our right to win
–
Design and engineer innovative products
–
Next generation product plans
–
Global supply chain management
–
Operational excellence / Lean Six Sigma
•
CVG Sales Playbook
–
OEM coverage / participation / closure plans
at customer product family, product, and
program level
–
“Sell the House”
•
Better support our customers
globally
Prioritized Opportunities | Focused on Core
Products | Driving Disciplined Execution
CVG Business Portfolio
Regions, End-Markets and Products
Action Plan for Core Products
STRATEGY
pg | 12 |
 STRATEGY
pg | 13 |
 What
You’re Going To See •
A compilation of plans that we believe will deliver
top-quartile EBITDA performance
•
A pure organic growth strategy
Revenue and EBITDA growth driven by differentiated,
customer focused product designs
Sales capabilities that extend our reach and deepen our
penetration across OEMs
Operational excellence across the organization that drives
improved productivity and enables margin expansion
An engaged and empowered team, laser focused on
executing our plans and delivering our commitments
STRATEGY
pg | 14 |
 pg | 15 |
 Sales
and Operating Income Margin FINANCIAL
Q1
Q2
Q3
Q4
Q1
Q2
Sales
(millions)
OI
Margin
2014
2013
(0.2)%
1.1%
2.3%
(1.8)%
2.1%
4.4%
4.2%
5%
4%
3%
1%
2%
0%
(1)%
(2)%
(3)%
2.8%
3.3%
See
appendix
for
reconciliation
of
GAAP
to
non-GAAP
financial
measures
–
adjusted
OIM
pg | 16
Sales
OIM
Adjusted OIM |
 An
operational
and
financial
roadmap
–
by
regions
|
end-markets
|
products
-
to
guide
resource
allocation
and other decision making to achieve our 2020 goals
•
A six month, bottom up process
•
Interviews of Directors, senior management and certain mid-
level management gave rise to Imperatives
An Imperative is a collection of opportunities we intend to
seize or risks that must be mitigated
•
Portfolio of twelve Imperatives
Four
enterprise
enablers
–
Product
Innovation
/
CVG Sales
Playbook / Culture & Talent / Financial Management
Eight Product Line Manager (“PLM”) Imperatives
CVG 2020 –
The Process
FINANCIAL
pg | 17 |
 •
PLM Imperatives –
e.g., improve the core, grow share,
new / adjacent markets, new geographies
•
Collection of about 60 PLM initiatives and associated
financial modeling –
sales, costs and investments –
for
the years 2015 to 2020
•
Product portfolio map based on market opportunity
and right to win –
PLM initiatives distilled into a
collection of those associated with core products
FINANCIAL
An operational and financial roadmap –
by regions |
end-markets | products -
to guide resource allocation
and other decision making to achieve our 2020 goals
CVG 2020 –
The Process
pg | 18 |
 Top
Quartile Total Shareholder Return Correlation to ~13% EBITDA CAGR
1
Stock Appreciation & Dividends
EBITDA Growth
Multiple
We intend to achieve sales and earnings targets
commensurate with companies delivering top-quartile
total shareholder returns
1
Sample
of
360
Fortune
500
companies
for
some
part
of
the
period
2004
–
2014
for
which
share
prices
are available
FINANCIAL
pg | 19 |
 1
2014 to 2020
2
EBITDA as may be adjusted from time-to-time for special items (such as
asset impairments, restructuring, etc.)
CVG 2020 Financial Objectives
Sales
EBITDA
2
Compound
Annual
Growth
Rate
1
13% –
17%
6% –
8%
•
We serve cyclical industries
•
Many of our customers (the OEMs) have 2-3 year
program lead times for our products
•
2015 & 2016 will be building | investment years for us
FINANCIAL
pg | 20 |
 OPACC
is our Measure Operating Profit After Capital Charge
•
Positive OPACC = Value Creation
•
Negative OPACC = Value Erosion
•
Higher profit without corresponding
asset growth
•
Reduce assets without
corresponding profit drop
•
Invest when project OPACC
exceeds the ROC hurdle rate
•
Positive OPACC = Value Creation
•
Negative OPACC = Value Erosion
•
Higher profit without corresponding
asset growth
•
Reduce assets without
corresponding profit drop
•
Invest when project OPACC
exceeds the ROC hurdle rate
Operating Profit
(EBIT)
Less: Capital Charge
Operating
Asset Base
Cost of
Capital
x
FINANCIAL
pg | 21 |
 Managing Through the Cycle
•
Playbook for down and up cycles
•
Enhanced focus on shareholder value
•
Consistent execution lends to
credibility
•
Act strategically and opportunistically
What Does
That Mean
Objective
FINANCIAL
pg | 22 |
 Senior Secured Notes
Principal Balance
$ 250
Interest
7.875%
Due
Apr 2019
Asset Based Credit Facility
Commitment
$ 40
Availability
$ 37
Letters of Credit
$ 3
Accordion Option
$ 35
Agency Rating / Outlook
Moodys
B2 | Stable
S&P
B | Negative
LTM
2013
Q2 2014
Cash
$ 73
$ 70
Debt
250
250
Net Debt
$ 177
$ 180
EBITDA
$ 27
$ 40
Leverage:
Debt / EBITDA
9.3x
6.2x
Net Debt / EBITDA
6.6x
4.5x
Capital Structure / Leverage
($ in millions)
FINANCIAL
pg | 23
See
appendix
for
reconciliation
of
GAAP
to
non-GAAP
financial
measures
–
EBITDA
reconciliation |
 pg | 24 |
 37%
37%
APAC
NALA
54%
19%
$ 1.2B
21%
27%
27%
42%
$ 5.6B
EMEA
Region
42%
45%
44%
38%
EMEA
NALA
Seats
30%
28%
28%
$0.8B
Trim
Structures
APAC
Wipers
$ 3.3B
20%
35%
35%
$2.4B
37%
37%
$0.3B
33%
29%
29%
19%
Product
Addressable Market
Truck
Bus
GLOBAL TRUCK & BUS
•
GTB addressable
market is
approximately
$6.8B
•
Structures is
generally OEM
captive
•
Focus is on
seating, trim, and
aftermarket growth
pg | 25 |
 Product Strategy
Seats
Trim
Aftermarket
North America
•
Market shifting from soft to hard trim
•
Shape design and program management capabilities to shifting
market
•
Invest in new equipment in the right places to shift with market
•
Seize opportunity in North America and India
•
Top two seat brands | established distribution channels | attractive
margins
•
Derivative products to increase offering over same distribution
network
•
Leveraging OEM product design and infrastructure
•
Growing penetration in Canada, Mexico, and Latin America
•
Leverage strength in NA to grow w/ multi national OEMs
•
Best beach-head product to grow in emerging regions
•
Replicate knowledge and infrastructure in underserved segments to
grow
•
Product line refresh and customized by target segment or region
•
Product innovation
Growth and development resources will focus on core
products in targeted regions
GLOBAL TRUCK & BUS
pg | 26 |
 •
High growth focus
•
Design to market
expectations
•
Leverage global
OEM relationships
•
Expand domestic
OEM participation
•
Euro seat line
expansion
•
Initial focus –
mid
size Truck OEMs
•
Develop bus and
aftermarket
business
Global Market Strategy
•
Improve our market
leading seat and trim
positions
•
Grow Mexico base
•
Enhance margins –
product, process, and
capacity
GLOBAL TRUCK & BUS
pg | 27 |
 •
Investments | Margin enhancement
–
Next
Gen
seat
and
trim
programs
quoted
/
won
-
SOP
2017
/
2018
–
Proprietary headliner processing for current and next gen
platforms -
target launch 2015
–
India infrastructure –
Upgrade facilities, assembly cells, and seat
validation assets
•
Capabilities | Systems
–
System Upgrades –
CVG Operating System, ERP improvements
–
Expand hard trim design, tooling, and process capabilities
–
Upgrade aftermarket customer service tools, technical support,
new brand based web portals
•
Footprint actions underway
–
Reduce capacity in US plants
–
Re-align assets closer to customers for landed cost advantage
–
Expand Mexico and India operations
Operational Transformation
GLOBAL TRUCK & BUS
pg | 28 |
 •
We are only 5% of the global addressable market
•
Focused growth efforts on Seating, Trim, and
Aftermarket
•
Leveraging strength in North America with Global
OEMs in emerging markets
•
Enhancing margins with new products and processes
In Summary
GLOBAL TRUCK & BUS
pg | 29 |
 pg | 30 |
 Addressable Market
•
Addressable market
is approximately
$6.1B
•
Agricultural market of
$3.5B
•
Two global product
lines
•
Three regional
product lines
GLOBAL CON | AG | MIL
APAC
NALA
EMEA
Region
Wire
Harnesses
$0.1B
Product
$2.1B
$1.0B
$1.5B
$1.4B
$2.6B
$3.5B
CON
AG
APAC
NALA
EMEA
Seats
Structures
Trim
Wipers
pg | 31 |
 Seats
Seats
Wire
Wire
Harnesses
Harnesses
Trim
Trim
•
Apply construction equipment know-how to agriculture
equipment market
•
Replicate construction model for energy generation market
•
Expand into high-voltage cabling with new product offering
•
Expand into China
•
Apply North American truck know-how to construction and
agricultural applications
•
Leverage construction / agriculture seat and wire harness
OEM relationships
•
Seize
opportunity
in
earth-moving
equipment
–
leverage
medium / heavy excavation construction equipment position
•
Launch new product for compact construction equipment
•
Launch new agriculture seat line, featuring semi-active
Invictus for premium and 4-tier Sentinel line for value
Product Strategy
GLOBAL CON | AG | MIL
pg | 32 |
 •
Enhance construction
equipment seat
offering and grow
market share
•
Penetrate the
agriculture market –
seating & wiring
•
Grow our construction
equipment seat market
share
•
Develop seats for
agriculture market
expectations
•
Establish a beach-
head –
wire harnesses
Global Market Strategy
•
Strengthen our wire
harness construction
equipment market
share
•
Grow our construction
equipment seat market
share
•
Penetrate the
agriculture market –
all
products
GLOBAL CON | AG | MIL
pg | 33 |
 Operational Transformation
•
Investments / Margin enhancement
•
Standardized, smart production lines for built-in-quality
•
Capabilities / Systems
–
System upgrades –
CVG Operating System, ERP
improvements
–
Momentum in building out PLM organization
•
Footprint actions underway
–
Extended value stream mapping
–
Continued optimization of wire harness footprint
GLOBAL CON | AG | MIL
pg | 34 |
 In
Summary •
An approximately $6.1B addressable market in which
we can credibly show right-to-win
•
A $3.6B agricultural playing field
–
With “familiar”
right-to-win prospects for CVG
–
As we fill out our seats product line, we address this
broader market
•
Logical opportunities exist for wire harnesses in
agricultural and energy generation space
•
Product and coverage plans aligned to succeed
GLOBAL CON | AG | MIL
pg | 35 |
 pg | 36 |
 Ag
Con
Wipers
Structures
Wire Harnesses
Trim
Seats
Bus
Truck
28%
28%
15%
15%
36%
36%
20%
20%
$ 2.4B
$ 1.2B
$ 0.7B
$ 1.3B
1%
3%
2%
3%
19%
19%
17%
17%
40%
40%
22%
22%
7%
7%
47%
47%
43%
43%
77%
77%
20%
20%
Addressable Market
APAC
•
Approximately a $5.6B
addressable market opportunity
•
As with any good strategy, it is
important we identify both
desired and undesirable
segments to participate in
•
Primary focus will be on seating,
and
wire
harness opportunities
pg | 37
ASIA-PACIFIC |
 Product Strategy
Seats
Wire
Harnesses
•
Establish joint venture or acquire wire harness business to
accelerate growth and achieve economy of scale
•
Leverage OEM construction equipment seat relationships
to penetrate the market
•
Develop truck seat market share
•
Penetrate the driver and passenger seat bus market –
leverage India know-how
•
Leverage established OEM relationships in heavy
excavator seating across OEM product lines
•
Design seats for the Chinese agriculture market
•
Develop the local supply base in China
•
Vertically integrate core process –
weld and paint
Aftermarket
•
Develop Australia and establish in China
•
Product offerings that are market driven in price point
configuration
•
Develop appropriate channel leveraging OEM
relationships, trading houses and online capabilities
pg | 38
ASIA-PACIFIC |
 CVG
Sales Playbook Participation
Closure
Retention
Recommendation
Address customer
key challenges
Increase the
closure rate
Develop Customer
Loyalty
Leverage existing
customer base
Online Lead
Generation
SMS Campaigns
Facility Visits
Customer Events
Product Launch
(awareness)
Customer Care Program
Referral Program
Build brand and
product awareness
Trade Shows
Social Media (iWOM)
Brand Promotion
(online, print)
Trade Associations
Product / Solutions
Seize Market Opportunity
Sense Of Urgency
Market Awareness
Game Plan
Execute
pg | 39 |
 In
Summary •
We have a vast addressable market opportunity to take
advantage of
•
Designing product that is in tune to the varying
requirements on durability, valued features and price
•
Execution of a process driven CVG Sales Playbook will
expand our ability to both grow and capture addressable
market share
pg | 40
ASIA-PACIFIC |
 pg | 41 |
 Ag
Con
EMEA Region
Wipers
Structures
Wire Harnesses
Trim
Seating
Bus
Truck
Addressable Market
$0.2B
$0.7B
$1.2B
$1.3B
52%
71%
16%
15%
1%
16%
10%
5%
26%
14%
19%
26%
31%
14%
46%
35%
•
Total addressable “white space”
of $3.4B,
over $1.3B of that in seating and wire
harnesses
•
Grow seat business from strong position
in construction to truck / bus and
agriculture
•
Deepen wire harness business,
especially in construction and agriculture
•
Pursue other segments opportunistically
3%
EUROPE, MIDDLE EAST & AFRICA
pg | 42 |
 Product Strategy
Seats
Wire
Harnesses
•
Build customer portfolio, especially with construction
equipment OEMs
•
Further strengthen design capabilities as a service offering
•
Truck / bus seat market size is attractive –
must meet
European standards and take on entrenched competitors
•
Expand range of truck / bus seat products to OEMs
•
Large Agriculture market –
now developing a full range of
agricultural seats to meet full range of customer needs
•
Further room to grow in construction equipment seat
market by extending product range and feature levels
Aftermarket
•
Room for further growth in European aftermarket
•
Further develop aftermarket sales force and distribution
channels across the region, building on existing footprint
EUROPE, MIDDLE EAST & AFRICA
pg | 43 |
 Manufacturing Footprint
•
Global demand patterns
and our product and
customer mix are shifting
and will continue to do so
•
Ensuring we have the right
global manufacturing and
distribution footprint is
vital to our overall success
•
We continually evaluate
our footprint to ensure
that it best allows us to
meet our growth and
profitability objectives
pg | 44
We will assess our footprint
in the context of our strategy,
including:
•
How and where we produce, by
product line and region
•
Ways we can improve our global
supply chain to ensure it
supports our growth, allows us to
meet our commitments to
customers, and achieves our
cost requirements |
 In
Summary •
EMEA holds a large amount of “white space”
for CVG, creating an
opportunity for a renewed phase of growth in the region
•
We will focus our resources on the most attractive growth
opportunities:
–
Seats for trucks / buses, agriculture and construction equipment
–
Wire harnesses for construction equipment and agriculture
•
Building on our solid foundation in the region, we will pursue further
initiatives including:
–
Broader range of products tailored to the region
–
More systematic sales processes
–
Continuous improvement in operations
EUROPE, MIDDLE EAST & AFRICA
pg | 45 |
 pg | 46 |
 PRODUCT INNOVATION
Strategy
Existing Customers
Existing Customers
Addressable Market
Available Market
Penetrate existing customers
Penetrate the addressable
market
Expand the addressable market
into available market
pg | 47 |
 Product Innovation at Work | The Sentinel Seat |
Penetrate Existing Customers
Target: Light Construction & Agriculture
Markets
Value proposition
•
Customer branding for the cab
•
Upgraded seat / less weight and cost
•
New features
–
Operator position sensor
–
Split trim levels to cover price points
–
ISO Compliant
Result
•
Awarded two compact equipment models
•
Opportunity to participate on two other models
PRODUCT INNOVATION
pg | 48 |
 Product Innovation at Work | The Sentinel Seat |
Expand the Addressable Market
Light Construction & Agriculture Available
Markets
PRODUCT INNOVATION
Traditional Suspension Seats –
Low Coverage
Currently in Market
Sentinel Seat Tier 1 | 2
Available 2014
Sentinel Seat Tier 3 | 4
Available Late 2015
pg | 49 |
 pg | 50 |
 MARGIN ENHANCEMENT
Global Engineering
Enhanced Processes and Discipline Through Centrally
Led Engineering
pg | 51 |
 MARGIN ENHANCEMENT
Global Purchasing & Logistics
Transition from Tactical / Transactional to Strategic
pg | 52 |
 •
Commercial Vehicle Group Operating System (CVGOS)
–
Team based activities focused on the elimination of waste
–
Increase plant-wide productivity in operations
–
Reduce work-in-process (WIP) inventory
•
Sample CVGOS model cell results :
–
Average productivity improvement of 30%
–
Floor space reduction of up to 25 to 50%
–
WIP inventory reductions of 35 to 90%
–
Delivery performance improvement of up to 10%
•
Process
–
Expand model cell focus incorporating CVGOS principles
–
Lean Six Sigma program, resources and training
•
Accelerate!
Accelerate Operational Excellence Program
MARGIN ENHANCEMENT
Operational Excellence
pg | 53 |
 Margin Enhancement Programs
pg | 54
In Summary
MARGIN ENHANCEMENT
•
Design to value
•
Modularity & parts rationalization
•
Supplier consolidation & cost targets
•
Global logistics strategy & third party logistics consolidation
•
CVGOS expansion & Lean 6 Sigma |
 pg | 55 |
 •
Leadership behavior defines the characteristics and actions
that support our Core Values
–
Help guide our decisions and interactions
–
Make the core values more meaningful and actionable
•
Values Oriented Leaders Drive & Deliver Better Results!
–
Set the Tone from the Top
•
Involve Everyone
–
Incorporate into onboarding & performance management
processes
CVG 2020 Core Values
Integrity | Continuous Improvement |
Innovation | Teamwork | Sense of Urgency
TALENT | CULTURE
pg | 56 |
 TALENT | CULTURE
•
Early focus on roles critical to the success of CVG 2020
–
Product line management, engineering, manufacturing
management
•
Build a sustainable talent pipeline
•
Provide training & development for current & future roles
•
Utilize best practice succession planning tools
–
Build bench strength
–
Competency gap analysis
–
Career development activities
•
Commitment to more robust CVG Human Resources
Information System
Effective Talent Management is Critical
to the Success of CVG 2020
pg | 57 |
 WRAP-UP
pg | 58 |
 APAC
NALA
EMEA
Seats
Trim
Structures
Wire Harnesses
Other
Wipers
$1.2 –
$1.3B
WRAP-UP
Revenue Roadmap by Region | Product |
End-Market
pg | 59 |
 What
You Can Expect 61
•
Top-quartile total shareholder return
•
Trusted strategic supply partner with major OEMs in all key
industries and best in class competitor
•
World class product design and introduction capabilities
•
Manufacturing and assembly facilities that set the industry
standard for quality, productivity and efficiency
•
Preferred employer with a reputation for values-based
leadership and merit-based development and compensation
•
Highly engaged and empowered employees who have the
freedom and resources to perform at the highest level
WRAP-UP
pg | 60 |
 QUESTIONS AND DISCUSSION
pg | 61 |
 APPENDIX
pg | 62 |
 Richard P. “Rich”
Lavin was appointed President and Chief Executive Officer of Commercial Vehicle
Group (CVG) effective May 28, 2013. He also serves as a member of
CVG’s board of directors. Rich comes to CVG with 28 years of global
experience with Caterpillar Inc., where he most recently served as Group
President of Construction Industries and Growth Markets. In this role, he was
responsible for Caterpillar’s Earthmoving, Excavation and Building
Construction Products Divisions and the development and deployment of
business strategies in China, India and elsewhere in the Asia-Pacific
region.
Rich began his career at Caterpillar as an attorney in the company’s Legal
Services Division. During his Caterpillar tenure, Lavin served in
numerous positions in the company’s Asian and Latin American
operations,
including
global
product
manager
in
the
company’s
Track-Type
Tractor
Division.
In
addition,
he
served
as
Director
of
Corporate
Labor
and
Human
Relations
and
Director
of
Compensation and Benefits. Before becoming a Group President, he was Vice
President of Manufacturing Operations for the Asia Pacific Division,
serving as Chairman of Shin Caterpillar Mitsubishi Ltd. (now Caterpillar
Japan Ltd.) and Chairman of Caterpillar (China) Investment Co., Ltd. Rich had
responsibility for manufacturing operations in the Asia-Pacific region,
including facilities in China, India, Thailand and Indonesia and for
developing and deploying Caterpillar’s emerging markets strategy.
Before joining Caterpillar, he served as an attorney at a subsidiary of W.R. Grace
& Co. Rich holds a Bachelor of Arts degree from Western Illinois
University, a Juris Doctor degree from Creighton
University
and
a
Master
of
Laws
degree
from
Georgetown
University.
In
addition
to
his role as
CEO of CVG, he serves as a Non-Executive Director for ITT Corporation (NYSE:
ITT) and USG Corporation (NYSE: USG).
He served as a member of the board of directors of the U.S. China Business
Council, the U.S. India Business Council and the U.S. Korea Business
Council. Lavin is currently a member of the Board of Trustees at Bradley
University. In 2010, he was appointed to serve on the APEC Business Advisory
Council (ABAC), which provides private sector input to the leaders of 21 economies
comprising the Asia- Pacific Economic Cooperation (APEC).
Richard P. Lavin
President & CEO
EXECUTIVE BIOGRAPHY
pg | 63 |
 C. Timothy “Tim”
Trenary joined CVG in October 2013 as Executive Vice President and Chief
Financial Officer with responsibility for Finance, Accounting, Planning &
Analysis, Internal Audit and Shared Services.
Tim
brings
35
years
of
finance,
accounting
and
operations
experience
to
CVG.
Prior
to
joining CVG, Tim served as the Senior Vice President and Chief Financial Officer
of ProBuild Holdings LLC, a North American supplier of building
materials. His work experience includes assignments as the Senior Vice
President & Chief Financial Officer
of
EMCON
Technologies
Holdings
Limited,
a
privately
held
global
automotive
parts
supplier, and prior to that as the Vice President & Chief Financial Officer of
DURA Automotive Systems, Inc., a publicly held global automotive parts
supplier. Tim holds a Bachelor of Arts Degree in Accounting from Michigan
State University and a Masters
of
Business
Administration
Degree
from
the
University
of
Detroit
Mercy.
He
is
a
Certified Public Accountant (registered status).
Tim Trenary
Chief Financial
Officer
EXECUTIVE BIOGRAPHY
pg | 64 |
 Patrick Miller
Division
President, Global
Truck and Bus
Patrick Miller joined CVG in October, 2005 and currently serves as the President
of Global Truck & Bus. Prior to that, he served as the Vice
President and General Manager of Structures, Vice President of Operations,
Senior Vice President of Sales, and Vice President and General Manager of
the Aftermarket division. Prior to joining CVG, he served as
the Sr. Vice President of Sales and Engineering for Hayes Lemmerz, Vice
President and General Manager of Automotive Extrusions with Alcoa, and held
various leadership positions in operations, sales, and product engineering for
ArvinMeritor, supplying component systems to the light vehicle and heavy
duty truck OEMs. Pat holds an Industrial Engineering degree from Purdue
University and earned a Masters of Business Administration from the Harvard
Business School. Pat participates in various industry related organizations
including the Heavy Duty Manufacturers Association (HDMA), National
Association of Manufacturing, and the Technology and Maintenance Council
(TMC). He is also a member of the US-India Business Council.
EXECUTIVE BIOGRAPHY
pg | 65 |
 Kevin R.L. Frailey joined CVG in February, 2007 and currently serves as the
President of Global Construction, Agriculture & Military. Prior
to that, he served as President and General Manager of Global Electrical
Systems. His earlier leadership assignments with CVG included responsibility for
Business Development, Research & Development, Purchasing, and Mergers &
Acquisitions. Before joining CVG, Kevin served as Vice President and General
Manager for Joint Ventures & Business Strategy at ArvinMeritor’s
Emissions Technologies Group. He held several other key management
positions in engineering, sales and worldwide supplier development during his
tenure at ArvinMeritor. In addition, during that time he served
on the boards of various joint
ventures, most notably those of Arvin Sango, Inc. and AD Tech Co., Ltd.
Kevin holds a Bachelor of Arts Degree in Economics and Management from DePauw
University and a Masters of Business Administration from Harvard
University. Kevin is a member of the Heavy Duty Business Forum, the China
Business Council, the Innovation Executive Form, the OESA Sales and
Marketing Council and the National Association of Manufacturers.
Kevin Frailey
Division President,
Global
Construction,
Agriculture,
Military
EXECUTIVE BIOGRAPHY
pg | 66 |
 Ulf
Lindqwister Chief
Administrative
Officer
Ulf Lindqwister joined CVG in August, 2014 in the capacity of Chief Administrative
Officer. His portfolio of responsibilities includes Global IT, Global
Engineering, Global Supply Chain Management, Operational Excellence,
Mergers & Acquisitions, Corporate Business Development, Strategic
Planning and Government Affairs. Prior to joining CVG, Ulf was the Manager
of Strategy, Growth and M & A at Cat Electronics, a division of
Caterpillar. His earlier assignments with Caterpillar included Country Director of
Korea and Director of Strategy for the Asia-Pacific Group of Divisions.
Before Caterpillar, Ulf served as Director of Valuation for Huron Consulting and
at Arthur Andersen. His prior experience includes executive
leadership positions with several smaller, high technology companies,
including President, Vice President and Board of Directors. Early in his
career, he spent more than a decade with NASA developing their GPS program.
Ulf
holds
a
Masters
of
Business
Administration
from
The
Anderson
School
of
Business
at
UCLA
and a PhD in Physics from Princeton University. He is a member of the US-Korea
Business Council and the Chicago Council for Global Affairs.
EXECUTIVE BIOGRAPHY
pg | 67 |
 Laura Macias
Chief Human
Resource / Public
Affairs Officer
Laura
L.
Macias
joined
CVG
in
August,
2008
as
the
Vice
President
of
Corporate
Human
Resources. Her current responsibilities as Chief Human Resources Officer
include global human resources, corporate communications and public
affairs. Before joining CVG, Laura was with Dominion Homes, Inc. where she
served as the Senior Vice President of Human Resources & Administration
and Corporate Secretary, with responsibility for HR,
Marketing/Communication,
Corporate
Services
and
Governance.
She
also
has
prior
HR
and
communications leadership experience from assignments as the Vice President of
Human Resources
for
Broadband
Express
and
the
Assistant
Vice
President
of
Human
Resources
and
Marketing Communications for Banc One Leasing Corporation.
Laura is a graduate of Ohio University, where she earned a Bachelor of Science
Degree in Journalism with a Public Relations concentration.
She
is
a
member
of
the
Society
for
Human
Resource
Management
and
the
Human
Resources
Association of Central Ohio and holds an SPHR certification.
EXECUTIVE BIOGRAPHY
pg | 68 |
 Kevin Lane
Managing
Director, EMEA
Kevin joined CVG in April, 2014 in the capacity of Managing Director, European,
Middle East and African markets . He is based in Zurich, with
responsibility for our manufacturing facilities in the UK, Czech Republic,
Belgium, and the Ukraine and our sales organization across the region. Prior
to joining CVG, Kevin was a partner with McKinsey & Company. Initially based in Beijing,
then in London, Shanghai, Singapore and Zurich, he advised senior executives of
leading multinational corporations on strategic and organizational
challenges in nearly 30 countries across Asia, Europe, the Middle East, and
North America. Spending the bulk of his time working with clients in
manufacturing industries, he also served at various times as a leader of
McKinsey’s Advanced Industries Practice, Consumer Goods Practice, Marketing
Practice and Organization Practice, and led a major initiative to build
McKinsey’s Leadership Development Practice.
Kevin
served
for
two
years
as
Executive
Vice
President
of
Overstock.com.
He
was
also
a university professor for several years in the US and Hong Kong.
Kevin holds a BA from Dartmouth College and an MA and PhD from Harvard
University. He has conducted research at Peking University, National
Taiwan University, and the Chinese University of Hong Kong. He is a
two-time Fulbright Scholar and has published a book and numerous
articles.
Kevin is a member of the Board of Trustees for Zurich International School and has
served on the board of the Concordia International School in
Shanghai. EXECUTIVE BIOGRAPHY
pg | 69 |
 Geoff Perich
Managing
Director, Asia
Pacific
Geoff Perich joined CVG in August, 2013 in the capacity of Managing Director for
the Asia- Pacific markets. He is based in Shanghai with
responsibility for our manufacturing facilities and sales organization in
China, India, and Australia. Before
joining
CVG,
Geoff
held
a
number
of
leadership
positions
with
Caterpillar,
most
recently
as the Product Manager responsible for the hydraulic track type excavators in the
Asia Pacific theatre.
His earlier Caterpillar experience includes leadership positions
in service engineering and
commercial account management, and a US based assignment as the Product Manager
for mid-sized wheel loaders.
Geoff is a graduate of the West Australian Institute of Technology School of
Engineering and holds a degree in Mechanical Engineering.
EXECUTIVE BIOGRAPHY
pg | 70 |
 Terry joined CVG in October, 2004 and currently serves in the capacity of Vice
President of Tax and Treasury, which includes responsibility for Investor
Relations. Prior to that, Mr. Hammett served as the Corporate
Director of Finance. Terry has 15 years of prior finance leadership
experience at various companies including Invensys Controls, Nationwide
Insurance, and Cardinal Health. He is a graduate of The Ohio State
University, holds a Master’s in Taxation from Capital University Law
School, and a Master’s in Business Administration from Otterbein University.
Terry is a Certified Public Accountant and Certified Treasury Professional, and is
a member of the Tax Executive Institute and the National Investor Relations
Institute. Terry Hammett
Vice President,
Tax & Treasury,
Investor Relations
EXECUTIVE BIOGRAPHY
pg | 71 |
 John
Wehrenberg
Global
Product
Manager
John
Wehrenberg
joined
CVG
in
January,
2014
and
currently
serves
as
the
Vice
President
of
Seat Product Line Management for the Construction, Agriculture, and Military
business unit. Before joining CVG, John was a Vice President at
Nelson Global Products with responsibility for operations strategy.
Wehrenberg previously served as the Managing Director of the
Emissions
Business
in
Asia
Pacific
for
Arvin/ArvinMeritor,
where
he
established
seven
greenfield factories in the region and more than six joint venture
operations. At the same time he
served
for
many
years
on
the
Board
of
Directors
of
several
JV
companies
on
behalf
of
ArvinMeritor.
He
also
served
ArvinMeritor
as
the
Vice
President
of
Sales,
Asia
Pacific
and
Regional Director of Operations for the region. John has also held
leadership positions with Teleflex, where he managed five plants and
established a new joint venture operation in India and a greenfield entity
in China for their medical division. Wehrenberg is a graduate of DePauw
University with a Bachelor’s degree in Economics and received an MBA
from the Darden School of Business at the University of Virginia.
John serves on the board of directors of Contour Industries, a private
equity-backed glass tempering firm serving the appliance and building
products industries, the Chicago Sister Cities China
Committee,
and
the
DongFang
Chinese
Education
Institute
in
Chicago.
EXECUTIVE BIOGRAPHY
pg | 72 |
 RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES
Adjusted Operating Income Reconciliation
pg | 73
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
$ (000's)
Net Sales
177,822
198,909
187,942
183,045
198,071
215,996
Cost of Sales
159,737
176,035
169,852
162,364
173,767
187,811
Gross Profit
18,085
22,874
18,090
20,681
24,304
28,185
SGA
17,949
20,339
21,135
12,288
18,472
18,748
Amortization
409
404
383
384
384
390
Operating Income
(273)
2,131
(3,428)
8,009
5,448
9,047
Operating Income Margin
(0.2)%
1.1%
(1.8)%
4.4%
2.8%
4.2%
2013 Special Items
Employee Seperation Costs
(1,800)
McKinsey Consulting
(2,800)
Asset Impairment
(2,700)
CEO Change
(2,500)
2014 Special Items
Tigard / Dublin Closure
(500)
(100)
Loss on Sale of Building
(800)
Adjusted Operating Income
(273)
4,631
3,872
8,009
6,748
9,147
Adjusted Operating Income Margin
(0.2)%
2.3%
2.1%
4.4%
3.3%
4.2% |
 pg | 74
EBITDA Reconciliation
RECONCILIATION OF GAAP TO NON-
GAAP FINANCIAL MEASURES |