Company - Milestones
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Company - Milestones 2007 Arcotronics acquisition pending 2007 Evox Rifa acquisition 2006 EPCOS tantalum acquisition 2005 Suzhou, China Plant II/Taiyo Yuden agreement 2004 TS16949 Certification 2003 Suzhou, China Plant I Start-up 2002 Warehousing in Hong Kong/Singapore 2001 First Solid Aluminum Capacitors (AO) 1999 Ciudad Victoria, Mexico/First Organic Polymer Capacitor (KO) 1997 1996 QS-9000 Certification Monterrey, Mexico, III 1994 ISO9000 Certification 1992 KEMET's IPO 1991 Monterrey, Mexico I & II, Plant Start-up 1987 Senior Manager Buy-out, becomes KEMET Electronics Corp. 1969 Multilayer Ceramic Capacitors added/Matamoros, Mexico, Plant Start-up 1963 Simpsonville, South Carolina, Plant Start-up 1959 First Solid Tantalum Capacitor 1930 1919 Vacuum Tube Getters KEMET Laboratories Founded by Union Carbide, in Cleveland, Ohio - Grid Wires 2 Worldwide Manufacturing Locations Today Towcester, Towcester, UK UK Weymouth, Weymouth, UK UK Heidenheim, Heidenheim, Germany Germany Landsberg, Landsberg, Germany Germany Suomussalmi, Suomussalmi, Finland Finland Greenville, Greenville, SC, SC, USA USA Granna, Granna, Sweden Sweden Monterrey Monterrey 11 & & 2, 2, Mexico Mexico Kyustendil, Kyustendil, Bulgaria Bulgaria Monterrey Monterrey 3, 3, Mexico Mexico Suzhou Suzhou 1, 1, China China Matamoros, Matamoros, Mexico Mexico Suzhou, Suzhou, 2, 2, China China Victoria, Victoria, Mexico Mexico Nantong, Nantong, China China Sasso Sasso Marconi, Marconi, Italy Italy Vergato, Vergato, Italy Italy Monghidoro, Monghidoro, Italy Italy Evora. Evora. Portugal Portugal Batam, Batam, Indonesia Indonesia Anting-Shanghai, Anting-Shanghai, China China 3 Products served by KEMET’s capacitors 927 ceramics 126 inductors 28 Polymers (KO) 8 Tantalums 1004 ceramics 49 inductors 48 Alum. Electro. 977 ceramics 180 inductors 102 Tantalums 673 ceramics 56 inductors 15 Tantalums 9 Polymers (KO) 250 ceramics 20-30 inductors 2-4 Tantalums/Polymers 123 ceramics 27 inductors 4 Tantalums 1 Polymer (KO) 223 ceramics 49 inductors 43 Tantalums 4 KEMET Revenue (1) F&E 12% Ceramic 30% Tantalum 58% Asia 39% Americas 30% (1) Based on June 2007 quarter results Distribution 52% Europe 31% Product Line OEM 30% Region EMS 18% Channel 5 Why Distribution? • Vital Link to a Broad Customer Base • • • • • Ability-to-Deliver Customized Materials Management Finance Customer Material Needs Support Customer Technical Requirements Develop Local Relationships All to a Customer Base KEMET Could Never Serve Cost Effectively Alone • Exploit Ability to Consolidate the Support of a Bill Of Material • Trend to Outsourcing • Lowest Cost Materials Management 6 Distribution to KEMET Is . . . • Our Most Profitable Channel • Our Largest Channel in North America ,Europe, and Asia • Our Channel of Choice for Material Asset Management Demands • Our Focus for Investment in Cost Savings Infrastructure Improvement 7 KEMET Global Distributor Revenue FY08 Apr. – Sept. 1% 2% 7% 31% Americas 36% Asia 38% Europe 26% 59% Ceramic Tantalum Film, Paper, Al Al. Polymer Inductors, SKD, Felco 8 Strategic Business Framework #1 Supplier KEMET Type Products Grow the Business Grow Faster than The market – systematic market share development Regional Business Strategies supporting Growth objectives Market Segment Strategy Military Medical Instrumentation Automotive 2nd tier EMS 2nd \ 3rd tier Operational Excellence Easiest to Do Business With Voice of the distributor RoHs – clear roadmap easy To get information Supply chain mgt. to include Rosetta Net, EDI for collaborative Forecasting Financial Profitable growth that is Mutual (many customers Across product segments) Differentiate – understand Performance metrics for Disty- share in the gain (GP$ Growth, ROII) Leadership Solid Channel Strategy User friendly policies And procedures Build bench strength Through central quoting Inside sales to respond To opportunities – Best In Class Proactive market pricing strategy • Execution • 9 Business Model Acquisition Strategy KEMET Going Forward KEMET’s strategy for continued growth and profitability is based on the foundation of becoming “The Capacitance Company! “ 11 Becoming— The Capacitance Company What does it means to be “The Capacitance Company”? Set the industry standard in product excellence— • Be the number one provider of capacitance, regardless of technology, chemistry, form factor or manufacturing process Set the industry standard in service excellence— • Work in partnership with customers to build the products & technologies of tomorrow while providing the service that differentiates us from the rest of the industry Becoming—The Capacitance Company •The Pyramid of Success — At the foundation are our 5 themes and 8 priorities that we established two years ago 5 Themes 8 Priorities The Math Must Work 1. Continue to Build the Organization 2. Technology Hear the Customer, Be Responsive Light the Fire and Show Care – LEAD Build What the Customer Wants Become The Capacitance Company -Develop what the customer wants -Focus on speed-to-market -Do it right the first time 3. Quality and Reliability 4. Short WIP and One-Roof 5. Low-Cost Locations Worldwide 6. The People at the Front Line Call the Shots 7. Brand “Global KEMET” 8. Easy-To-Buy-From Becoming—The Capacitance Company • Product Excellence Quality Technology Leadership Design Collaboration Innovation Product Excellence Quality Technology Leadership Design Collaboration Innovation 5 Themes 8 Priorities The Math Must Work 1. Continue to Build the Organization 2. Technology Hear the Customer, Be Responsive Light the Fire and Show Care – LEAD Build What the Customer Wants Become The Capacitance Company -Develop what the customer wants -Focus on speed-to-market -Do it right the first time 3. Quality and Reliability 4. Short WIP and One-Roof 5. Low-Cost Locations Worldwide 6. The People at the Front Line Call the Shots 7. Brand “Global KEMET” 8. Easy-To-Buy-From Becoming—The Capacitance Company • Service Excellence People Global Availability Customer Service On-Time Delivery Service Excellence People Global Availability Customer Service On-Time Delivery Product Excellence Quality Technology Leadership Design Collaboration Innovation 5 Themes 8 Priorities The Math Must Work 1. Continue to Build the Organization 2. Technology Hear the Customer, Be Responsive Light the Fire and Show Care – LEAD Build What the Customer Wants Become The Capacitance Company -Develop what the customer wants -Focus on speed-to-market -Do it right the first time 3. Quality and Reliability 4. Short WIP and One-Roof 5. Low-Cost Locations Worldwide 6. The People at the Front Line Call the Shots 7. Brand “Global KEMET” 8. Easy-To-Buy-From Becoming—The Capacitance Company • Focus on the Customer • Everything we do is focused on meeting the needs of our Customers. We cannot, and will not, forget that! Focus on the customer Service Excellence People Global Availability Customer Service On-Time Delivery Product Excellence Quality Technology Leadership Design Collaboration Innovation 5 Themes 8 Priorities The Math Must Work 1. Continue to Build the Organization 2. Technology Hear the Customer, Be Responsive Light the Fire and Show Care – LEAD Build What the Customer Wants Become The Capacitance Company -Develop what the customer wants -Focus on speed-to-market -Do it right the first time 3. Quality and Reliability 4. Short WIP and One-Roof 5. Low-Cost Locations Worldwide 6. The People at the Front Line Call the Shots 7. Brand “Global KEMET” 8. Easy-To-Buy-From The Capacitance Company Next Steps Forward • KEMET will strive to become the technology leader in our industry—capitalizing on innovative strategies as well as new technologies • KEMET will continue to grow both organically and strategically • KEMET will seek geographic balance in our sales: - 30% Americas—30% Europe—40% Asia • KEMET will target the following balance in our sales channels: - 50% Distribution—30% OEM—20% EMS 17 KEMET Organic Growth Through Technology KEMET is becoming a Leader in Capacitance Technology - This past year we had over 4050 new product releases with over 450 first to market A KEMET Record 18 KEMET Organic Growth through Service KEMET is known as a leader in Customer Service We pride ourselves on being the ETBF (Easy-To-Buy-From) Company We focus on this attribute to grow; we also bring it to our acquisitions 19 KEMET Inorganic Growth KEMET has grown through acquisitions - expanded product offerings, technologies and geographic footprint in key markets. Our initial acquisition strategy was: - Expand European presence - Balance revenue in our three sales regions - Expand our revenue from the industrial segment (minimize industry cycle impact) 20 Acquisition of Evox Rifa ► ► Facts Closed Transaction April 2007 Annual sales in CY06 $110M Evox Rifa manufactures plastic film, paper and aluminum electrolytic capacitors Strategy ► Focus Integration to bring expected accretion beginning third quarter FY ‘08 Specialized, designed-in products for familiar and new automotive, industrial, consumer electronic, and lighting customers Combine Evox Rifa’s strength in design and production of customized products with KEMET’s “Easy-to-Buy-From” system and philosophy 21 Acquisition of Arcotronics • Facts • Focus - Manufacturing - Strong market position in the Direct • Italy, Bulgaria, Germany, UK, China - Annual Sales CY06: $200 million • • • • • Film Capacitors: Tantalum Capacitors Filters Distribution Machines/Fuel Cell $144 million $7 million $7 million $12 million $30 million - Employees: 1,650 - Closing scheduled for October 2007 Current segment and presence in attractive market segments with Power and Wet Tantalum - Stable market share (volume and value): • Long-standing relationships with leading manufacturers in each market • High level of product customization • Strategy - Provides critical mass to Film & Electrolytic Group, especially in Europe 22 KEMET Size Milestone With the completion of the Arcotronics acquisition, we will have accomplished a size milestone - We will be a ~$1B company • We will have 21 plants: 10 in Europe (in 7 countries), 4 in Mexico, 4 in China, 2 in the United States, 1 in Indonesia • We will employ approximately 11,300 people 23 Segment Marketing: Mission ¾To understand the unique needs of each market segment and match and develop our strengths to these needs within our overall goal to be the preferred supplier - “The Capacitance Company” ¾To accomplish this we must become an essential part of the OEM’s design process ¾To support this our development activities must parallel those of the OEM’s development activities ¾To get there we must listen to the Voice of the Customer and be focused, aligned, urgent, and organized! Segment Marketing: Segment Value Propositions Low Cost Regions (Asia) Telecom/ Networks Automotive Higher Cost Regions (Americas/Europe) Military/Aerospace Computers Telecom/ Handsets Medical/Ind Consumer Goods Specialty Value-Added Commodity Price Low Margin High High Volume Low High Price Volatility Low Acceptable Quality High Low Service High Product Design Cycle Long Short Future Demand Picture • KEMET is positioned globally for real time access - Local production and infrastructure to support customer needs • Focus on highest value and fastest growing products - Organic Tantalum, Organic Aluminum, Hi-Cap Ceramics • Driving demand based on a higher value solutions - Product design begins at the concept stage • KEMET is moving from fast follower to Technology Leader • THE CAPACITANCE COMPANY 26 Thank You! October 8, 2007
