IRCE Group STAR 2007 IRCE. Presentation of IRCE Group

Transcription

1 IRCE Presentation of IRCE Group 1

2 IRCE Group Highlights IRCE is a leading European Group operating in the industries of magnet wires and cables IRCE began its activity in Imola (Italy) with the production of magnet wires. The company launched the production of PVC insulated low voltage cables. The Group was listed on the Stock Exchange Consolidated sales 389 m Number of employees 730 Winding wire production t/a Cables production t/a 2

3 IRCE Group The Businesses The Group is engaged in two business areas: Magnet Wire 65% of total; Energy and Data Cables 35% of total. Magnet wires, also known as winding wires or enamelled wires, have multiple applications such as electric motors, generators, transformers, compressors, inductors, relays, solenoid valves, etc. The wire is insulated through the application of many layers of enamels by means of highly sophisticated processes and machines, which demand high levels of investments and large scale of productions. Cables produced by the Group encompass the complete range of LowVoltage and Medium Voltage building and industrial cables, data cables (copper cables for LANs) and Power Cords with plugs. Cables can be insulated with PVC, rubber, polyethylene, etc. They are used for the construction of electricity plants in residential and industrial buildings and for the wiring and cabling of electrical appliances. The principal final industry sectors are the construction industry, housing and industrial applications, and consumer durables industries (vehicles, domestic appliances and other electrical appliances) 3

4 IRCE Group Magnet wires Magnet wires can be segmented pursuant to the raw material used, their shape, the wire gauge, and the characteristics of the insulating materials. - Raw material: magnet wire can be distinguished between copper wires and aluminium wires. Copper wires form the greater part of the market. Aluminium wires offer less conductibility. They are, however used in products for which it is important to minimise the weight. - Shape: the wires may be round or rectangular. - Wire gauge: pursuant to their gauge, magnet wires are classified into: - ultra-fine (diameter < 0,05mm); - fine (0,05mm < diameter < 0,15mm); - medium (0,15mm < diameter <2mm); - big (diameter > 2mm). Fine and ultra fine wires finds their most frequent applications in the electronic sectors. The medium size wires are mostly destined to the industries of White Goods, Automotive, Lighting, Mechanical Tools, etc. Big wires are mainly used by the industries of the transport and of the generation of energy.. - Insulating materials: the main characteristics of these materials (polyurethanes, polyesterimide, polyimide) are connected to the degree of their heat resistance that may vary from 130 to 220 degrees centigrade. Geographically the market is divided in major areas: Europe, South America, North America, Far East, etc), with limited trade among the areas. [1] In the cables business, IRE is the fourth Italian producer. 4

5 IRCE Group Market Share In the Magnet Wire business IRCE manufactures and sales the complete range of products, and is mainly engaged in the segments of the fine and medium wires. It mainly operates in Europe, where it is second by size, with an estimated 13% market share Sales breakdown by industry Sales breakdown by size 11% 12% Electromechanical/Electronics White goods Automotive Lighting 41% 26% 2% 8% % 44% 20% 5

6 IRCE Group Major customers by sectors White Goods Invensys Electrolux / Embraco Merloni Siemens-Bosch Gillette Ana Imep Automotive Denso Bosch G. Cartier Technologies Federal Mogul Trico Iskra Avtoelectrica EBM Tyco Lighting Tridonic Osram Vossloh Schwabe Erc Other Siemens Legrand Normandie Schneider Electric Newage Makita 6

7 IRCE Group Production Plants 1. Imola Italy Magnet Wire (round), Industrial and Data cables Covered Area: 52,000 Sqm Employees: Umbertide Italy Copper and aluminum Wire (Round) Covered Area: 19,400 Sqm Employees: Blackburn UK Round and Rectangular Wire Covered Area: 20,000 Sqm Employees: 45 Umbertide Plant 4. Nijmegen Netherl. Wire (rectangular and CTC) Covered Area: 9,800 Sqm Employees: Guglionesi - Italy LV/MV Energy Cables Covered Area: 44,000 Sqm Employees: Miradolo - Italy Power Cords with Plugs Employees: 42 Capacity: up/a Miradolo Plant Netherland Plant Imola Plant The largest plant in Europe for Magnet Wire production Guglionesi Plant 7

8 IRCE Group - Commercial Offices IRCE Imola (I) Isolveco Padova (I) Isomet (CH) DMG (D) FD Sims (UK) Smit Draad (NL) IRCE Spain (E) Milan Office (I) Agents and Distributors in the main countries 8

9 IRCE Group Strategic Priorities KEY levers Technical leadership Market Leadership Priorities Innovation High Value Businesses Cost leadership Growth 9

10 IRCE Group KEY levers Technical Leadership 1) Development of IRCE technology in fine wires all over the process (spoolers, drawing devices, enamelling) 2) Turning from vertical to horizontal enamellings in the process of big wires production Market Leadership 1) Complete range of products ( fine, ultra-fine wires, halogen free cables) 2) Worldwide presence (New plants in South America, Asia, East Europe) 10

11 IRCE Group KEY levers Innovation High Value businesses 1) Development of IRCE products with higher margins 2) Investments Cost leadership 1) Efficiency on materials through buying policies centralization 2) Efficiency on process controls (laser controls on wires) 3) Outsourcing manufacturing (cables) 4) E-business platform 5) Delocalization in East Europe (cables) Growth 1) Strategy of Growth in Europe (5% per year) 2) Strategy of Growth outside Europe (10% Brazil,!0% Asia) 11

12 IRCE Group Profit and Loss uro/million Hollow turnover wires 55,6 58,9 60,8 61,8 Hollow turnover cables 23,1 28,8 29,2 33,5 Total hollow turnover 78,7 87,7 90,0 95,3 Total turnover (copper included) 164,2 223,0 259,3 410,3 Cost of material (94,6) (140,6) (181,6) (312,5) Personnel costs (28,3) (28,3) (27,8) (29,2) Other costs (26,5) (32,8) (33,9) (36,3) TOTAL EBITDA 14,8 21,3 16,0 32,3 Depreciation (11,2) (9,6) (16,1) (13,2) EBIT 3,6 11,7 (0,1) 19,1 Net financial charges (0,80) (0,8) (1,6) (12,8) RESULT BEFORE EXTR. ITEMS 2,8 10,9 (1,7) 6,3 extraordinary (1,1) (0,1) 0,0 0,0 RESULT BEFORE TAXES 1,7 10,8 (1,7) 6,3 TAXES (1,7) (6,30) 4,30 (4,20) NET RESULT 0,0 4,5 2,6 2,1 12

13 IRCE Group Quarterly Profit and Loss uro/million IQ 2007 IQ2006 diff % Hollow turnover wires 18,1 15,7 15,3% Hollow turnover cables 9,7 7,9 22,8% Total hollow turnover 27,8 23,6 17,8% Total turnover (copper included) 103,7 83,5 24,2% Cost of material (74,1) (58,1) 27,5% Personnel costs (7,5) (7,3) 2,7% Other costs (11,2) (9,5) 17,9% TOTAL EBITDA 10,9 8,6 26,7% Depreciation (2,6) (3,1) -16,1% EBIT 8,3 5,5 50,9% Net financial charges (6,99) (4,0) 74,8% RESULT BEFORE TAXES 1,3 1,5-12,7% TAXES (0,3) (0,75) -60,0% NET RESULT 1,01 0,75 34,7% 13

14 IRCE Group Balance sheet Euro/million Working capital 71,8 72,8 104,6 144,6 Fixed Assets 61,8 61,8 73,9 70,2 Othes -18,8-13,4-14,8-16,5 Invested Capital 114,80 121,20 163,70 198,30 Net Financial Debt 2,4 11,9 34,7 69,5 Net Equity 112,4 109, ,8 Sources 114,80 121,20 163,70 198,30 14

15 IRCE Group Quarterly Balance sheet Euro/million IQ 07 IQ 06 diff. % Working capital 160,59 118,59 35,4% Fixed Assets 70,88 72,38-2,1% Othes -15,85-13,92 13,9% Invested Capital 215,62 177,05 21,8% Net Financial Debt 85,84 46,83 83,3% Net Equity 129,78 130,22-0,3% Sources 215,62 177,05 21,8% 15

16 IRCE Group Copper prices trend 2003/2007 copper trend 8213, , , , ,36 USD/ton 4106, , , ,79 821,39 0,00 giu-03 ago-03 ott-03 dic-03 feb-04 apr-04 giu-04 ago-04 ott-04 dic-04 feb-05 apr-05 giu-05 ago-05 ott-05 dic-05 feb-06 apr-06 giu-06 ago-06 ott-06 dic-06 feb-07 apr-07 Period 16

17 IRCE Group - Business Strategy outside Europe (Brazil) IRCE s global strategy focus on two directions: - Grow geographically, expanding into markets with high growth potential: Brazil/South America India East Europe. - Sale growth of fine, ultra fine and big wire. Brazil. The project is articulated in different steps and targets. 1. Construction of the factory and beginning of the operation selling the production to a large customer on the basis of a long term supply agreement. In this phase the wire sold will be in the medium range of size. 2. Progressive penetration of the Brazilian market to achieve an initial target sufficient to assure a sustainable position. 3. Production of fine, ultra fine and large wire. - Fine and ultra fine wires are destined to the growing electronic sectors and have a global market. They will allow aggressive export targets. - Large wires are destined to the growing market of the energy generation. 17

18 IRCE Group - Business Strategy outside Europe (India) India. The project aim to : 1. Know the growing local market 2. With a small investment We acquired (April ) a plant in Kochi, the financial centre of Kerala State, in the south of India. The investment amounted to a total of 1 million of euro The plant employs about 50 workers. The production is concentrated in the ultra fine wires segment 18