1st - 2nd december 2020 · 2020. 11. 25. · comer industries property 221 192 1h19 1h20 s net...

COMER INDUSTRIES PropertyCOMER INDUSTRIES Property

Mid & Small in Milan Virtual Conference

1st - 2nd December 2020

COMER INDUSTRIES Property

2

DISCLAIMERThis document has been prepared by Comer Industries S.p.A (“Comer Industries”) for use during meetings with investors and

financial analysts and is solely for information purposes. The information set out herein has not been verified by an independent audit

company. Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the “Group”), as well as any of

their directors, officers, employees, advisers or agents (the “Group Representatives”) accepts any responsibility for/or makes any

representation or warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or

any other related information regarding the Group, whether written, oral or in visual or electronic form, transmitted or made available.

This document may contain forward-looking statements about the Company and/or the Group based on current expectations and

opinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group.

These forward-looking statements are subject to significant risks and uncertainties (many of which are outside the control of the

Company and/or the Group) which could cause a material difference between forward-looking information and actual future results.

The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws and

regulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements. Under no

circumstances shall the Group and/or any of the Group Representatives be held liable (for negligence or otherwise) for any loss or

damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the

aforesaid forward-looking statements. This document does not constitute an offer to sell or a solicitation to buy or subscribe to

Company shares and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to

conclude any legal act of any kind whatsoever. This document may not be reproduced or distributed, in whole or in part, by any

person other than the Company. By viewing and/or accepting a copy of this document, you agree to be bound by the foregoing

limitations.

COMER INDUSTRIES SPA

www.comerindustries.com

[email protected]

http://www.comerindustries.com/

mailto:[email protected]

COMER INDUSTRIES PropertyCOMER INDUSTRIES Property

AG

EN

DA

01 Comer Industries

in a nutshell

02

03 Market and

strategy

05 Shareholders structure

& Corporate Governance

06 Appendix

Business model

Key 1H20 financials04


01 COMER INDUSTRIES IN A NUTSHELL


5

VISION, MISSION AND VALUES

VISION

MISSION

We run vertical innovative solutions for agriculture and

industrial business.

We boost our strong global leadership position.

Aware of our roots and challenging in depth our identity,

we attract talents and encourage disruptive mindset.

OUR VALUES

✓HONESTY AND TRANSPARENCY

✓COURAGE AND PASSION

✓ PEOPLE AT THE CENTER

✓ TEAMWORK

✓COMMITMENT TO STAKEHOLDERS

Creating an easy world through sustainable food, streets,

houses and energy.


6

CORPORATE SOCIAL RESPONSIBILITY

In 2019 Comer Industries has launched a new project:

OUR BRIGHT IMPACT.

An important responsibility towards the environment

and the society.

The courage to take on a strong commitment, starting

from adherence to the Global Goals for the

sustainable development.

The ambition to leave our positive mark and to create

something new, making “bright” the world around us.

The promise we make to ourselves and to the

environment in which we act.

In 2019 has been voluntarily issued the first Sustainably

report, available on the company website.


221

192

1H19 1H20

€ i

n m

ilio

ns

NET REVENUES

342

379

405

2017 2018 2019

€ i

n m

ilio

ns

NET REVENUES

30

39

45

2017 2018 2019

€ i

n m

ilio

ns

EBITDA (adjusted)

7

HISTORICAL & 2020 TRADING RESULTS+8,8%CAGR

17-19

+10,8%

YoY

+6,7%

YoY

+22,5%CAGR

17-19

+28,5%

YoY

+16,7%

YoY

8,8%

10,2%11,1%

Note:

EBITDA [adjusted] excludes the impacts from the application of IFRS 2 standard for stock grant plans, listing costs and IFRS 16 standard for lease contracts.

Net cash/(debt) [adjusted] excludes the impacts from the application of IFRS 16 standard for lease contracts.

2522

1H19 1H20

€ i

n m

ilio

ns

EBITDA (adjusted)

-12,8%

YoY

11,5% 11,6%

-13,2%

YoY

(3)

6

31Dec19 30Jun20

€ i

n m

ilio

ns

ADJUSTED NET CASH/(DEBT)

[…]% represents EBITDA [adjusted] margin

+€9m

Dec19-Jun20

20

17

-20

19

1

H 2

02

0


02 BUSINESS MODEL


9

BUSINESS OVERVIEW

BUSINESS AREA PRODUCTS LINES TECHNOLOGYREGIONS STRUCTURE

AG

RI

IND

US

TR

IAL

Gearboxes

Planetary drives

Powertrain systems

Wheel drives

Driveshafts

23% NAM

23% APAC

50% EU

4% LATAM

Mechanical

100%

Hydraulic

0%

Electric

0%

Electronic

0%

✓ 10 legal entities;

✓ 6 trading

companies;

✓ 7 production

areas;

✓ C. 1.300 employees.

Note: the […]% represents 1H20 net revenues breakdown.

53% (58% in 1H19)

31% (28% in 1H19)

16% (14% in 1H19)


10

PRODUCT LINES AND APPLICATIONSP

RO

DU

CT

LIN

ES

AP

PL

ICA

TIO

NS

GEARBOXES WHEEL DRIVESPLANETARY DRIVES POWERTRAIN SYSTEMS DRIVESHAFTS

TRACTORS

COMBINED HARVESTERS &

SELF PROPELLED MACHINES

AGRICULTURAL MACHINERY &

GARDEN EQUIPMENT

MINING MACHINERY

CRANES

CONSTRUCTION EQUIPMENT

WIND TOWER

GENERATORS

CONSTRUCTION EQUIPMENT

TELEHANDLERS

ROAD CONSTRUCTION MACHINERY

COMBINED

HARVESTERS & SELF PROPELLED

MACHINES

AGRICULTURAL & GARDEN

EQUIPMENT


11

EXAMPLES OF AGRI APPLICATIONS

• Land preparation

machines

• Soil tillage machines

• Crop treatment machines

• Forage and hay

machines

• Biogas systems

• Corn and grain headers

• Combines and forage

harvesters

• Forage mixing and

distribution machines

• Tractors

AGRI


12

EXAMPLES OF INDUSTRIAL APPLICATIONS

• Construction machines

• Road construction machines

• Forestry machines

• Mining machines

• Material handling Renewable Energy

• Water treatment machines

INDUSTRIAL


13

USA

Charlotte, North Carolina

Italy

Gearboxes, Planetary

Drives & Axles

Reggiolo (RE)

Italy

Matera (MT)Assembly capability

Manufacturing plant

India

Bangalore, Karnataka

China

Pinghu, Zhejiang

7Production

areas

R&D

Center

GLOBAL OPERATIONS FOOTPRINT

Italy

Driveshafts

Pegognaga (MN)


14

AG

RI

OEM Construction

OEM Energy

Tier 2 raw material

suppliers

Tier 1 supplier

Original Equipment

Manufactures (OEM)

Customers

Farmers

Oil & GasConstruction playersMining

Wind plants owners

WHERE WE ARE IN THE VALUE CHAIN

IND

US

TR

IAL


15

OUR MAIN CUSTOMER

OUR CUSTOMERS

Top 10 customers generated approximately 50% of total revenues.


03 MARKET AND STRATEGY


17

CURRENT ADDRESSABLE MARKET

3+ €b 5+ €b 0.2 €b

STRATEGY PILLARS

✓ Maintain leadership in the Agri

Business

✓ Size growth driving economies of scale

✓ Increase margins

✓ Simplification and digitization


18

DRIVERS & MEGATRENDS

Climate Change

Green house

Gas reduction

Healthcare

Emissions

reduction

Demography

Growing population

Aging societies

Urbanisation

Growing number

of mega-project

Sustainability

Congestion

infrastructures

Digitization

Connected world

Consequences

Renewable

Boost

Mkt shifting to

Emerging

economies &

Migration to

Megalopolis

Increased

Efficiency and

Productivity

Increase

Safety &

Comfort

Automation&

robotics

Big Data

Expansion,

Automation,

IoT & AI

MEG

A T

REN

DS

Off

Hig

hw

ay

Tre

nd

In 10 years the world may not be able to feed itself according to World Economic Forum.

By 2027 we won’t have enough food to feed the planet. By 2050, the world’s population is expected to reach

9.1b and the United Nation’s Food and Agriculture Organization (FAO) predicts that at that point, the world

would need to produce 70% more food than today.


19

MAIN COMPETITORS BY MARKET

BUSINESS AREA MAIN COMPETITORS

AG

RI

IND

US

TR

IAL

(LISTED IN ITALY MTA) (LISTED IN US-NYSE)

AN

D IN

CU

BA

NT

CO

MP

ET

ITO

RS


04 KEY 1H20 FINANCIAL


Euro in millions 30June18 30June19 30June20 1H19 vs 18 1H20 vs 19

Net revenues 203,6 220,8 191,6 8,4% (13,2%)

EBITDA 21,5 26,9 21,4 24,8% (20,4%)

Margin 10,6% 12,2% 11,2% 1,6p.p. (1,0)p.p.

EBITDA [adjusted] 21,6 25,4 22,2 17,7% (12,8%)

Margin 10,6% 11,5% 11,6% 0,9p.p. 0,1p.p.

EBIT 15,0 17,6 12,3 17,7% (30,1%)

Margin 7,4% 8,0% 6,4% 0,6p.p. (1,6)p.p.

Net income 10,2 11,5 8,8 12,5% (23,1%)

Margin 5,0% 5,2% 4,6% 0,2p.p. (0,6)p.p.

TWC 84,7 93,1 91,3 8,4 (1,7)

TWC % of net revenues 23,3% 23,5% 24,3% 0,2p.p. 0,8p.p.

Net Equity 82,8 118,6 129,6 35,8 11,1

Net Debt / (cash) [adjusted] 40,0 10,1 (6,2) (29,9) (16,4)

Adjusted Net cash flow (0,7) (26,6) (9,1) (25,9) 17,5

Net Debt / EBITDA [adjusted] (*) 1,14x 0,24x n.a. (90,0)p.p. n.a.

Net Debt [adjusted] /Net Equity 0,48x 0,09x n.a. (39,8)p.p. n.a.

Var.% YoY

21

KEY CONSOLIDATED HALF YEAR RESULTS

(*) On EBITDA since 2018.

Source: Consolidated Statutory Financial Statements

To note that:

• EBITDA [adjusted] excludes the impacts from the application of IFRS 2 standard for stock grant plans and listing costs and

IFRS 16 standard for lease contracts.

• Net debt presented aside has been adjusted to exclude the impact of new IFRS 16 (€26.2m at 31Dec19)

MAIN COMMENTS

• 1H20 net revenues decreased by -13,2% vs

1H19, while adjusted EBITDA decline by -

12,8%.

• 1H20 [adjusted] EBITDA amounts to 11,6%

of net revenues, in line with 1H19 (11,5%)

and +50 bps vs FY19.

• At 30Jun2020 the Group presents a positive

[adjusted] net cash position, amounting to

+€6,2m.

• In 1H20 the net cash flow amounts to €9,1m

and reflects an operating cash flow

generation of c. €18,9m in 1H20 and also

the payment of FY19 dividends (€7,1m).


KEY COMMENTS

• AGRI sales decrease reflects both the impact of COVID-19 lockdown and downturn of tractors and combines markets.

• Industrial business benefited of growth of the APAC revenues, linked to mass production of the FY19 new products.

22

REVENUES BY BUSINESS AREAA

GR

IIN

DU

ST

RIA

L

Euro in millions 1H18 1H19 1H20 1H19 vs 18 1H20 vs 19

Net revenues 128,8 129,0 101,9 0,1% (21,0%)

As % of tot. Group revenues 63,3% 58,4% 53,2% (4,8)p.p. (5,3)p.p.

EBITDA [adjusted] 15,6 16,3 12,8 4,9% (21,4%)

Margin 12,1% 12,7% 12,6% 0,6p.p. (0,1)p.p.

EBIT 11,4 11,7 7,6 3,1% (35,6%)

Margin 8,8% 9,1% 7,4% 0,3p.p. (1,7)p.p.


Var.% YoY

Euro in millions 1H18 1H19 1H20 1H19 vs 18 1H20 vs 19

Net revenues 74,8 91,8 89,7 22,8% (2,2%)

As % of tot. Group revenues 36,7% 41,6% 46,8% 4,8p.p. 5,3p.p.

EBITDA [adjusted] 6,0 9,1 9,3 50,8% 2,7%

Margin 8,1% 9,9% 10,4% 1,8p.p. 0,5p.p.

EBIT 3,6 5,9 4,8 63,8% (19,0%)

Margin 4,8% 6,4% 5,3% 1,6p.p. (1,1)p.p.


Var.% YoY


121,9

50,0

23,58,2

EMEA NORTH AMERICA ASIA PACIFIC LATIN AMERICA

131,6

49,8

28,910,6

95,0

44,2

45,7

6,8

23

REVENUES BY GEOGRAPHY

KEY COMMENTS

• The 1H20 sale performance (-€29m) reflects the opposite trend of the growth in APAC (+€17m or +58% vs 1H19) and the

reduction in the other areas (-€46m or -24%).

• The 1H20 increase in APAC is primarily linked to the Industrial business.

• 1H20 APAC revenues include the mass production of the new products launched in June 2019.


1H18

€204m

1H19

€221m

1H20

€192m

-28%

YoY

-11%

YoY

+58%

YoY

-36%

YoY


24

TWC EVOLUTION

KEY COMMENTS

• TWC % at 30Jun2020 (24%) reflects the impacted of COVID-19, primarily for the 1H20 sales reduction.

• On average DSO are approximately 20-30 days lower than DPO.

• Stock rotation index (on LTM COGS) at 30Jun20 amounts to 3,00x slightly lower than at 30Jun19 (120

3,05x), impacted by the COVID-19.


69,5 77,4 96,2 77,3 80,5

85,693,0

88,485,5 84,6

(80,6) (86,1) (91,6) (77,7) (73,7)

21,8% 22,3%23,5%

21,0%24,3%

(30,0%)

(20,0%)

(10,0%)

0,0%

10,0%

20,0%

30,0%

(150,0)

(100,0)

(50,0)

-

50,0

100,0

150,0

200,0

31Dec17A 31Dec18A 30Jun19A 31Dec19A 30Jun20A

Eu

ro m

Evolution of TWC

Trade receivables Stock Trade payables TWC as % of net revenues


25

NET DEBT/(CASH) EVOLUTION


KEY COMMENTS

• At 30Jun2020 total credit lines available amount to some €160m, of which €80m refer to short term lines and the

remaining part to long term lines (e.g. the facility agreement signed in Jun19).

• Net debt [adjusted] excludes the impacts traceable to the application IFRS 16 standard in relation to lease contracts.

40,736,7

10,1

2,9

(6,2)

40,736,7 36,8

29,1

18,4

-10

0

10

20

30

40

50

31Dec17A 31Dec18A 30Jun19A 31Dec19A 30Jun20A

Eu

ro m

Evolution of Net Debt / (cash) [adjusted]

Net Debt / (cash) [adjusted] Net Debt / (cash)


05 SHAREHOLDERS STRUCTURE & CORPORATE GOVERNANCE


Nr. of shares % of share

capital

% of voting

rights

Lock up

shares

Lock up

duration

█ Eagles OAK S.r.l. 14.640.089 71,73% 71,73% 10.408.733 36 months (A)

█ Market (*) 5.769.191 28,27% 28,27% 659.911 36 months (B)

TOTAL ORDINARY SHARES 20.409.280 100,00% 100,00% 54,23%

Latest Update: 30 September 2020

71,7%

28,3%

27

SHAREHOLDERS’ STRUCTURE

WARRANT “COMER INDUSTRIES 2019-2021”

• Comer Industries SpA issued 300.000 warrants during the listing process on March 2019.

• At the end of first two exercise periods, 59.280 warrants have been exercised, leading in July 2019 to the issue of

59.280 shares and the capital increase of c. €0,6m (fixed conversion rate: €10 per warrant).

• 240.720 warrants are currently outstanding on the AIM Italia market.

• As at today, there is a potential cash-in / maximum capital increase in 2021 of c. €2,4m deriving from the

outstanding warrants (fixed conversion rate: €10 per warrant).

SHARES AND RIGHTS

(A) From the business combination effective date. (B) From the approval date of 2019 statutory financial

statements. (*) Including Finregg (8,3% of share capital).


28

2020-2021 SHARE BUYBACK PLAN

APPROVAL

• On 22nd April 2020, Comer Industries’ Shareholders’ meeting authorized the purchase and disposal of own shares.

PURCHASE THRESHOLD

• 10 % of the share capital;

• Amount of distributable results of prior years and available reserves indicated in the latest available approved financial

statement at the time of each single purchase.

DURATION

• 18 months from the 22nd April 2020 (i.e. due date 22nd October 2021).

AIMS OF THE PLAN

• Retention for subsequent uses (e.g. extraordinary transactions, etc.);

• Regularization of negotiations and support to the shares’ liquidity (in compliance with the provisions in force);

• Support for future compensation and incentive plans dedicated to directors and employees;

• Base for free share assignment programs to shareholders.

PRICES AND DAILY LIMIT

• The purchase price must be between €1,00 and €20,00 per share.

• The limit of daily purchases is the 25% of the daily average volume of shares where the purchase is made.

CURRENT NUMBER OF OWN SHARES

• At the time of this document neither Comer Industries S.p.A. nor its subsidiaries have treasury shares.

For further details please refer to the Company web-site and the minutes of the 22nd April 2020 shareholders' meeting.


06 APPENDIX


30

50 YEARS OF HISTORY: MAIN MILESTONES

1970: The Storchi family founds CO.ME.R. (Costruzioni Meccaniche Riduttori) specialized in the manufacture of mechanical transmissions for agricultural machinery.

1985: Subsidiaries are set up in France, Germany, Great Britain and the United States.

1985-1980: Comer grows both organically and through acquisitions.

1996: Opening of the Mechatronics Research Centre, a state-of-the-art laboratory dedicated to the company’s R&D activities.

1998: Opening of the representative office in Beijing for the industrial partnership with local suppliers.

2007: The Comer Industries Components Operating Unit is officially inaugurated in Matera. Comer (Shanghai) Trading Co. Ltd., the new sales Subsidiary and the Operating Unit Comer Industries (Shaoxing) Co. Ltd are also opened in China.

2013: Opening of a new sales subsidiary “Comer Industries do Brazil”, in the state of São Paulo.

2015: Re-building Reggiolo Plant and start up Comer Industries India Pvt. Ltd. in Bangalore for axles production.

2017: New governance due to succession plan.

2018: Start up Comer Industries (Jiaxing) Co. Ltd.

2019: Listing on the Milan Stock Exchange (in the AIM Italia Market trading platform).


31

GROUP STRUCTURE

Comer Industries SpA

Reggiolo (RE) (Italy)

(Head Quarter)

Comer Industries

(Shaoxing) Co Ltd

Shaoxing (China)

Comer Industries

Components Srl

Matera (MT) (Italy)

Comer Industries

(Jiaxing) Co Ltd

Jiaxing (China)

Comer Industries India

Pvt Ltd

Bangalore (India)

Comer Industries UK

Ltd

Leicester (UK)

Comer Industries

Inc

Charlotte NC (US)

Comer

GmbH

Schermbeck (Germany)

(Sales Office)

Comer Industries Sarl

Serris (France)

(Sales Office)

Comer Industries

do Brasil EIRELI

Limeira SP, Brazil

100% 100%

95%34,2%

65,8%

100% 100%

99,9%100%

100%

Sales office legal entity

Trading company

Production company


Thanks for your attention

1st - 2nd december 2020 · 2020. 11. 25. · comer industries property 221 192 1h19 1h20 s net...

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