Business Overview. October 7, 2015 Steve Rennie, Enerpac President

Transcription

1 Business Overview October 7, 2015 Steve Rennie, Enerpac President

2 Safety First - Briefing Emergency Phone Assign a Caller Identify First Aiders AED and fire extinguisher - Assign someone to retrieve Evacuation Route Take Cover Route Signals Continuous Siren Intermittent siren with flashing Lights 2

3 Meeting Agenda Business Overview Overview/Products/Applications Market Drivers/Competition/Differentiators Growth Strategy Columbus Facility Overview Plant Tour / Demonstrations Final Q&A 3

4 Business Overview First choice provider of high force products and solutions that increase productivity and make work safer and easier to perform $400M+ revenue globally Globally recognized brand name Leading market share in industrial tools Broad product offering - over 3,000 SKUs Industry standard catalog - translated in 17 languages Global distribution & service network >2,000 distributors 400 service centers Industrial Tools ( IT ) Integrated Solutions ( IS ) Precision Hayes 4

5 Facilities Worldwide Sales by Geography Europe 25% ROW 20% North America 55% Global Breadth of Assembly / Sales Offices 5

6 Various Distributor Types Worldwide Significant Geographic Coverage 6

7 Sample Markets Served Safety and Productivity Are Key Market Drivers Selling through distribution - Connect with End Users Petro chem Power Gen- Renewable Power Gen-Nuclear Power Gen- Fossil Shipbuilding Rail Resi Aerospace Civil, Infrastructure Construction - Commercial - Working with Distribution Oil & Gas-On Shore Significant diversity in markets / applications Oil & Gas-Off Shore Mining Paper Mill Gen Industrial Focus on penetrating higher long-term growth markets Marine Gen Mfg Leverage traditional Industrial MRO strength Heavy Equipment Approximate sales by end market, independent distribution limits specificity 7

8 Industrial Tool (IT) Customer Diversification OEMs National Accounts Customers by Channel (excluding IS and PH) Direct Specialty Distributors General Distributors National Accounts include catalog and online customers such as Grainger, AIT, FAST, etc. Specialty Distributors focus on verticals such as oil & gas, mining, power gen, etc. General Distributors include fluid power and other independent shops OEM examples include Gates and Parker-Hannifin Direct includes Siemens and Cat Dealer Service Network 8

9 Standard Industrial Tools (IT) Hydraulic Pumps Hydraulic Lifting Cylinders Other Hydraulic Tools 9

10 Standard Applications - MRO Power Gen Infrastructure Mining Oil / Gas 10

11 Integrated Solutions (IS) Project based and standardized heavy lifting solutions formed formal business with 2010 tuck-in acquisitions Other Industrial 85% IS ~15% Segment Sales Why we like it Builds brand equity Technology leadership Customer intimacy Improved processes (quoting through delivery) Linking with vertical market initiatives Standardizing product lines 11

12 IS Project Examples 12

13 IS Standard Gantry Program Program established to standardize Gantry designs to lower costs and improve ease of applications, driving incremental sales at higher margins Results: Change from made to order to made to stock - decreased lead times provides advantage Introduction of new models to fill out product line offering Leading market position in large gantries (500-1,000 ton), opportunity in smaller sizes ( ton) Leveraging of Enerpac global reach Product capability and quality Primary Market Applications: Power generation Civil Construction Industrial Oil and Gas Sales Growth from $4M in 2011 to $16M Today 13

14 Venice Mose Video 14

15 Concrete Tensioning Commercial and resi construction focused Tensioning benefit - stronger slab utilizing less material Capitalizing on code changes encapsulation technologies Participation in governing bodies Enhance design to meet evolving standards Leverage into international markets 15

16 Concrete Tensioning Corrosion Resistant Anchorage Systems Pre-Stressed Elevated Structures - Slabs - T-Sections - Walls - Beams Resi Slab on Grade Construction Mining Anchorage Systems 16

17 Leading Market Shares Hydraulic Tools ($1 billion market ex bolting) Integrated Solutions ($600 million market) Enerpac Others Enerpac #2 #3 #4 Cranes #4 Others #3 #2 Concrete Tensioning ($300 million market) Bolting ($500 million market) Others Enerpac and Hydratight Others Precision Hayes #2 #4 #3 #2 #4 #3 17

18 Key Strategic Themes 18

19 Strategic Growth Themes Overview Markets / Customer Focus New Product Development Operational Excellence Strategic Acquisitions 19

20 ENERPAC Brand Study 20

21 Channel Development Distribution Differentiator Targeted end user plans Bolting vans Sales/Service/Support Enerpac Maintenance Program (EMP) Authorized Service Centers Webinars product sales training Academy Product user & repair training Safety training 21

22 G+I Process Continuously Improving Process changes Organization Changes in Marketing and Engineering NPD engineering alignment with Project Management Regional marketing leaders Leadership review of all phase gates NPD improvements Ideation: (2X ideation value into program phase) VOC standardization and improvement Phase Gate Velocity: (improve by 25%) Improved pressure testing of product concepts Management process improvements Monthly NPD gate and G+I reviews Cross functional engagement Processes to Increase Focus, Visibility, Urgency 22

23 New Product Development Core Product Upgrades Line Extensions Vertical Market Focused S&W X-Series Update Pneumatic Torque Wrench Pow R Lock Split Flow Pump Electronic Torque Wrench Level Lift General Purpose Cylinders SL400 Gantry Engine Tensioner Multi-Generation Product Plans Developed 23

24 Smart Technology Current State Integration of software/hardware controls and displays to monitor and control the hydraulic function. Future State Additional software to wirelessly communicate to record critical work functions to the cloud Electronic Torque Wrench Improved performance and productivity with automated features Heavy Duty Diesel Engine Tensioner Remote monitor to: Enhance the value of the asset Track compliance with work standards 24

25 Industrial Acquisition Criteria Profitability Key Selection Criteria Growth Rates Differentiated Solutions End Markets Leverage the Enerpac Brand Second Brand Expansion Bolting and Rail Vertical Market Intimacy HGM Focus Specialty Tools Rotational Prismatic (LP&HP) Manual HGM Expansion - China Strategic Fit Gantry Expansion Bespoke Integrated Systems Offshore Deck Equipment Winches Self Propelled Trailers Offshore Tensioners Utility Infrastructure Safety Specialty Tooling Condition Monitoring Coatings, Lubricants and Sealants 25

26 Hayes Acquisition Year 1 Financial Results Revenue: Approximately 5% higher than expectations EBITDA: Increased nearly 300 bps, 30% higher than expectations $3 million working capital reduction Significant operational synergies and cost-downs achieved Production rationalization Purchasing coordination/leverage Commercial activities successful Branding Pricing initiatives Technology leverage (encapsulation) Organization structure, training and cultural assimilation Great Example of Strategic Tuck-In Strategy 26

27 LEAD - Operational Excellence Safety: Goal Zero Three year target to improve safety metric by 70% Proactive measures Focus on ergonomics Utilize safety committee structure Quality Improve Customer Quality metric by 20%/year Reduce costs associated with defects Improvements in supplier quality Delivery Fill rates above 96% Institute Global Sales &Operations Planning process Optimize scheduling system Cost Drive 2%/year reduction in Manufacturing and Sourcing costs Global Sourcing DPATS model Flow Manufacturing 27

28 Columbus Facility Overview Old Building: 167,000 ft2 Shifts: 1 to 2 - flexible workforce Number of associates: 200 Functions: Design and Process Engineering New Product Development Teams Procurement Manufacturing Quality Distribution Tech Services New 28

29 Tour / Product Demo Five tour groups number on name badge 1. David Martin 2. Vince Clark 3. Chris David 4. Jeremy Christian 5. Tiffany Moore Stop at five key stations around facility brief remarks and Q&A One of those five stops is product demo must put on steel toe shoe covers to operate product Before we depart, watch safety video put on vests and safety glasses 29

30 Safety Video 30