Ride Control Europe
Technology Update & Media Drive
June 21-22, 2011
MIRA Technology Park, Nuneaton, UK
Agenda
• 17:00 Welcome & Introduction – Margie Pazikas, Executive
Director Communications, International
• 17:05 – 17:20 Tenneco Overview – Josep Fornos, Senior Vice
President & General Manager, Europe, South America & India
• 17:20 – 17:40 Ride Control Europe Strategy – Sandro
Paparelli, Vice President & General Manager
• 17:40 – 18:00 New Ride Control Technologies – Koen
Reybrouck, Global Ride Control Technology Director
• 18:00 – 18:10 Aftermarket – Alex Gelbcke, Vice President &
General Manager, Aftermarket Europe
• 18:10 – 18:30 Q&A
Josep Fornos
Senior Vice President & General Manager, Europe, South America & India
TENNECO OVERVIEW
Global Supplier –
Emission and Ride Control Systems
2010 Revenues – $5,937MM
41%
48%
North
America
Europe,
S. America
& India
11%
Asia
Pacific
2009 Revenues – $4,649MM
2010
2009
Emission Control / Ride Control
64 / 36
63 / 37
Original Equipment / Aftermarket
80 / 20
78 / 22
Product, Market and Geographic Balance
4
Tenneco Global Operations
Approximately 22,000 employees serving customers globally from more than
80 manufacturing facilities and 14 engineering and technical centers
Headquarters
Emission Control Manufacturing
Ride Control Manufacturing
Emission Control Engineering
Ride Control Engineering
55
Largest Customers
As a % of Total 2010 Revenues
Original Equipment
19.0%
Aftermarket
General Motors
13.3%
Ford Motor
7.5%
NAPA
1.6%
Advance Auto Parts
1.4%
Volkswagen Group
5.0%
2.1%
Temot Autoteile GmbH
1.1%
Toyota Motor
O’Reilly Automotive
4.3%
Daimler AG
1.0%
3.3%
SAIC Motor Corp.
0.9%
3.1%
BMW
0.3%
GAU (Group Auto Union)
2.1%
Chrysler
0.3%
Pep Boys
2.0%
PSA Peugeot Citroën
0.3%
Rede Presidente
2.0%
First Auto Works (FAW)
0.2%
N. America
Europe, S. America & India
Asia Pacific
Uni-Select Inc.
ADI (Autodistribution Int.)
ATR (Auto Teile Ring GmbH)
N. America
Europe, S. America & India
Balanced Customer Mix
6
Diversified Light Platform Mix
Top 10
Platforms
28%
• Products on
252 platforms
• 6 out of 10 top
platforms are
European
• Average annual
platform revenue
$15MM
EC – Emission Control
RC – Ride Control
EL – Elastomers
5%
GMT900
X
X
X
5%
Ford P131
X
X
X
3%
GM Epsilon/Epsilon 2
X
X
X
3%
Ford T1
X
3%
Ford C1
X
X
2%
BMW L2
X
X
2%
VW PQ35
X
X
2%
GM Lambda
X
2%
GM Delta 2
X
X
1%
Daimler NCV3
X
X
X
X
X
X
7
2010 Financial Results
$ Millions, except as noted
Revenues
5,937
4,649
1,288
28%
Gross Margin (%)
17.5%
16.6%
0.9%
5%
SGA&E (% of Sales)
9.0%
9.5%
0.5%
5%
Adjusted EBIT †
306
118
188
159%
Adjusted EBITDA *†
517
335
182
54%
Adjusted Net Income †
96
(29)
125
NM
Adjusted EPS ($) †
1.57
(0.59)
2.16
NM
Cash Flow From Operations
244
241
3
1%
Net Debt / Adjusted EBITDA *†
1.9x
3.1x
1.2x
39%
* Including noncontrolling interests.
† Adjusted for restructuring activities, pension charges, charges related to refinancing, environmental reserve and tax adjustments. See reconciliations to U.S. GAAP at end of presentation.
8
Strategic Initiatives
Invest in growing
markets with
proprietary
technologies
Advance
operational
excellence
Improve
financial
strength
•
•
•
•
•
•
Leading emission control technologies to meet regulations
Adjacent markets for new revenue opportunities
Advanced technology for improved ride performance
BRIC+T markets for rapid growth
Enhance customer mix
Leverage aftermarket premium brands and distribution strength
• Continuous productivity improvements with
Tenneco Manufacturing System
• Standardized global processes and capabilities
• Optimize global footprint
• Improvements in safety and quality
• Capitalize on cash flow and EVA discipline
• Focus on reducing leverage
• Target net debt/adjusted mid-cycle EBITDA* ratio of 2.0X
* Including noncontrolling interests
9
Regulatory-Driven Growth Opportunities
Global Emissions Regulation Timeline
2008
U.S.
EUROPE
2009
Locomotive
& Marine
Tiers 0-2
Euro-5 CVS
Euro-5 LVS*
2010
US-10 CVS
On-Highway
Motorcycle Rule
Tier 2
US Off-Road
Tier 4i*
NL Marine
OE / Retrofit
EU Off-Road
Stage 3B*
EU CO2 / GHG
120g
PM # LVS
PM 2.5 & NO2
limits
CHINA
JAPAN
Euro-3
Two-Wheel
Beijing
Euro-4 LVS
Beijing CVS
Yellow Label
Cold-start
restrictions
LVS
Japan-09
LVS / CVS
2011
Euro-4 LVS
INDIA
2013
R.I.C.E.
Locomotive &
Stationary
Marine Tier 3
CA CVS Retrofit* Locomotive &
Marine Tier 4*
Motorcycle
Euro 4†
Euro-6 CVS*
EU Sound
regulation
Beijing Euro-5
CVS
* Phased in
** Estimated date
2014
US Off-Road
Diesel Tier 4f *
†
Pending
2015
US Fed Tier 3
LVS*
CA LEV III
EU Off-Road
Stage 4
Euro-6 LVS*
Moped Euro 4†
Euro-5 CVS**
Tier 4 non-road
Major cities**
NOx reductions
LVS
JP-16 CVS*
JP-13 CVS
Euro-5 CVS
Motorcycle
Rule*
RUSSIA
2012
Euro-4 CVS
Euro-5 LVS*
US Tier 2 LVS*
BRAZIL
CVS - Commercial Vehicle Systems
LVS - Light Vehicle Systems
Euro-3 LVS
Euro-4 LVS /
CVS
Euro-4 LVS*
Motorcycle
Rule*
Euro-5 CVS
Euro-4 CVS
11 Cities
10
New Market Opportunties
Significant Growth Opportunities
in BRIC+T Markets
Well-positioned with manufacturing and engineering facilities to capture growth
India
China
Since 1995
Since 1995
EC JIT
Brazil
RC JIT
Since 1997
EC Plant
RC Plant
Thailand
Elastomer Plant
Since 2001
Russia
Since 2003
Engineering
Facility
Regional
Headquarters
First emission control supplier
CAGR: Projected 5-year Compounded Average
Growth Rate through 2015 for industry light vehicle
production in the applicable country
Source: IHS Automotive, January 2011
12
China Growth
• Emission Control
– Six majority-owned JVs,
including recently announced
JV with FAW Sihuan for
commercial and light vehicles
– New wholly-owned emission
control manufacturing in
Guangzhou
– Advanced emission control
engineering center in Shanghai
• Ride Control
– One majority-owned JV
production facility in Beijing
– Wholly-owned elastomer
production facility for domestic
and export business
Tenneco serves global OEMs as well as
domestic manufacturers in China
Five Year OE Revenue Growth
Global Aftermarket
Tenneco Strengths
• Strong global brands
• Premium products
• Distribution capabilities
TM
Growth
• Maintaining premium brand position and
growing market share with
core products
• Expanding core product offerings
• Leveraging brands and distribution for
non-core product lines –
brake pads,
steering Profitability
and suspension and Cash Generation
Excellent
• BRIC+T markets
15
Sandro Paparelli, Vice President & General Manager, Ride Control Europe
RIDE CONTROL EUROPE STRATEGY
Ride Control Europe Footprint & Market Share
Well Balanced Presence
Close to OEM Customers
2,723 Hourly Employees
736 Salaried Employees
Seven Plants
1 JIT
Two Engineering Centres
$462 million OE sales in 2010
Leading market share (units) 2010
28 Million Dampers in 2010
Customer Mix – The Full Range
From volume platforms…
to luxury vehicles and…
Two-Wheeler Suspension with Marzocchi
Entry to Two-Wheeler Market
• Acquired Marzocchi in 2008
– Proprietary front fork technology
– #2 fork producer globally
(>250cc)
– Enables Tenneco to offer full
motorbike suspension systems
• Front forks/rear shocks
• Leverages light vehicle
suspension knowledge
• Transfers lightweight and
advanced materials expertise
to passenger car
New Technology
• World’s first fork with
alloy stanchion tubes
• Active and semi-active
suspension for front
fork and rear shock
• Magnesium sliders
Ride Control Technology Roadmap
Technology Roadmap
2009
2010
2011
Multi Tunable
Valve (Global
Valve)
Plastic Spring
Seat
Variable Tube
Thickness
····························
····························
····························
Kinetic H2 CES
Combo
Velocity
Progressive
Seat Dampers
Hollow Piston
Rod
····························
Blow Off Disc
Spring Valve
····························
BOCS Valve
····························
····························
Lightweight
Aluminum Tube
····························
Kinetic H2
for ATV
····························
High-Velocity
Compression
Damping
····························
····························
Lightweight Rod
Guide
····························
2012
2013
2014
2015
Thin Wall
Lightweight
Monotube
FSD Valving
System
ACOCAR
Active System
Semi-active
Internal Valve
····························
····························
····························
····························
DRiV
Digital Valve
Integrated CVS
Regenerative
Damper
ENRES Energy
Recuperation
CES II
External Valve
····························
Green Shock
with Bio Oil
····························
TM
····························
Lightweight
Composite Strut
····························
Global Valve II
CVS CES Cab
Shock
····························
····························
Aluminum Dual
Tube Damper
Dual Stage
Electronic
Shock
····························
····························
····························
Motorbike
Electronic
Shock
····························
····························
CVS Double
Path Mount
····························
Hydraulic
Leveling
····························
Development / Production Contracts
Production Ready in 2012-2015
20
Product Complexity Adds Content
Electronic Damping Technologies
for Improved Ride Performance and Safety
Continuously Controlled Electronic Suspension (CES)
• Continue to win and launch new CES business
–
In production on 30 models
with multiple customers
European Electronic Dampers Market Evolution
including Volvo, Audi,
Ford Growth (In Millions of Units)
and Tenneco
Europe, Mercedes/AMG,
3,5
Tenneco CES Volume
Volkswagen, BMW 3
Total Semi-Active
In development with
2,5 9
Damping Market
additional models 2
–
• Selling price is about
4-6 times price for a
standard shock
1,5
1
0,5
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
IN PRODUCTION
DRiV TM Digital Valve
• Targeting substantial portion of CES benefits for
broader market
• Lower total system cost – no dedicated ECU
required
Kinetic + CES (H2CES)
• Combination of Kinetic and CES
Kinetic – Independent corner control with a more neutral steering behavior
CES – Semi-active body and wheel hop control with a better
compromise between handling and comfort
• Recently debuted on the McLaren MP4-12C
• Awarded “Supplier of the Year” from Vehicle Dynamics
International magazine for our Kinetic H2/CES
Semi-Active Suspension
• In testing and development
for another manufacturer
IN PRODUCTION
Actively COntrolled CAR (ACOCAR)
• Fully-active suspension
with ultimate comfort and
excellent handling
• In development with
• Improved packaging and reduced power
consumption
IN DEVELOPMENT
a global OEM
IN DEVELOPMENT
22
Advanced Ride Technologies Driving Growth
Lightweight Components
• Improves fuel economy and CO2 reduction
through reduced weight
–
–
–
–
Hollow rod
Aluminum tube
Variable tube thickness
Plastic spring seat
• In production or development with several
Elastomer Growth
• Highly engineered noise, vibration and
harshness solutions
• Continued growth in commercial vehicle
market
• Integration of EC and RC capabilities;
exhaust isolators
customers, including GM, Volkswagen,
Audi, Mercedes, PSA, BMW and another
high performance sports car
23
Launches 2010 – 2011
2010 Passenger Car
• Mercedes-Benz CLS (CES), AMG Eclass kombi (CES), SLK (CES &
conventional)
• Ford C-Max, C-Max Grand MAV
• Dacia Duster; Duster 4 x 4
• Volvo S60 (CES)
• Mazda 5
• GM Opel Insignia Hiper
• VW Polo (Russia), Sharan
• Audi A1, A6, S-Line, Q5
• BMW X3 (CES)
• Saab 9-5
• Peugeot 508
• Suzuki Swift
2010 Commercial Vehicle
• Daimler – Actros (Axle)
• DAF – CMP (Cabin)
• Scania – R& P (Axle)
2011 Passenger Car
• Mercedes-Benz AMG CLS (CES),
AMG SLK
• Ford Focus, Ford B-Max
• VW New Small Up
• Ford Transit Connect
• Suzuki Swift Sport
2011 Commercial Vehicle
• Volvo HD P 2685 (Cabin)
Koen Reybrouck, Global Ride Control Technology Director
NEW RIDE CONTROL
TECHNOLOGIES
Kinetic H2/CES History
• 1990-1999: The Kinetic idea
was born in the outback of
Australia:
– Citroën fan Chris Heyring has
the brilliant idea to improve
suspension performance using
a new hydraulic suspension
system
– The Kinetic system decouples
the roll, heave and articulation
stiffness in vehicle suspension
to simultaneously achieve
better handling and traction
– Chris starts a small company
and files patents
• 1999: Tenneco recognizes
the potential of the ideas and
acquires the Kinetic
company
Kinetic – Racing Success
Kinetic – Racing Success
Kinetic – Series Project
The Ideal Marriage Between
Kinetic and CES
• CES is a highly successful semiactive damping system
– Volvo S60, V70, S80, XC60, XC70
– Ford S-Max, Galaxy, Mondeo
– Mercedes-Benz C-, E-Class, CLS,
SLK
– VW Passat CC, Eos, Tiguan,
Scirocco
– BMW X3
• Kinetic technology transfer to
Belgium
– Use of high tech engineering
capabilities to further develop
Kinetic
– Introduction of CES technology and
smart control algorithms
• Succesful introduction of Kinetic
H2/CES at European OEMs
Kinetic H2/CES – Driver Advantages
• Superb traction both on- and
off-road
– Equal wheel loading
• Excellent handling
– High roll stiffness
• Improved steering
– Less influence of road
undulations
• Improved comfort
– Computer controlled adjustable
damping and roll stiffness
– No roll stiffness on straight roads
ACOCAR History
• 1997: Patented by Tenneco
• 1999-2003: In-lab development
– Concept proven
– Market not ready
• Enabling events:
– CES technology success
– Changing market: MercedesBenz, ABC, Bose
– R&D support: Flemish
government , Flanders Drive,
Tenneco Process of Innovation
– Growing customer
expectations
InAST/REVAS Flanders Drive Project 2008-10
Vehicle dynamics
server: state
estimator
Active safety demonstrator
Rapid prototyping
software platform
With the support of:
Active suspension
Innovative sensors
Simulations to Generate Ideal
Force-Velocity Working Points
Current situation
Defined heave, pitch and roll targets
for primary ride
Active Suspension Working Points
Normal Road
Average power active quadrants: 3W / corner
Rough Road
Average power active quadrants: 22W / corner
Actuator Performance – Force-Velocity
22/32; Q = 1 l/min
22/32; Q = 0 l/min
Pump flow 0 800
l/min
Pump flow 1 l/min
Semi-active damper characteristic
6000
600
Ipv = 1.6A
4000
Ibv = 0.3A
0
-2000
damper force [N]
2000
200
0
Ipv = 0.3A
-200
-4000
Ipv = 1.6A
4000
400
damper force [daN]
damper force [N]
Active damper characteristic
6000
2000
Ibv = 0.3A
0
Ipv = 0.3A
-2000
-4000
-400
Ibv = 1.6A
-6000
-1
-1
-0.8
-0.6
-0.4
-0.2
0 -600
0.2
0.4
0.6
0
damper velocity
[m/s]-2 0.5
-0.5
da mpe r velocity [m/s]
Ibv = 1.6A
0.8
1
-1.5 1
-6000
-1
-0.8
-1 1.5
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
-0.5 2 damper velocity
0
[m/s] 0.5
da mpe r velocity [m/s]
0.8
1
1
Actuator Performance – Force-Velocity
22/32; Q = 5 l/min
Pump flow 5800
l/min
Pump flow 8 l/min
22/32; Q = 8 l/min
Active damper characteristic
6000
Ipv600
= 1.6A
4000
Ibv = 0.3A
0
-2000
200
damper force [N]
2000
0
Ipv = 0.3A
-200
-4000
Ipv = 1.6A
4000
400
damper force [daN]
damper force [N]
Active damper characteristic
6000
2000
Ibv = 0.3A
0
Ipv = 0.3A
-2000
-4000
-400
Ibv = 1.6A
-6000
-1
-1
-0.8
-0.6
-0.4
-0.2
0 -600
0.2
0.4
0.6
0
damper velocity
[m/s]-2 0.5
-0.5
da mpe r velocity [m/s]
Ibv = 1.6A
0.8
1
-1.5 1
-6000
-1
-0.8
-1 1.5
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
-0.5 2 damper velocity
0
[m/s] 0.5
da mpe r velocity [m/s]
0.8
1
1
ACOCAR – Driver Advantages
Targets Future Luxury
Limousines, SUVs
and GTs
•
•
•
•
•
•
Unsurpassed body control
Low energy consumption
Low weight
Easy packaging versus
current active systems
Ultimate comfort
Excellent handling
Looking Further to the Future
Ongoing R&D Projects
• ENRES: Energy
recuperation in (semi)active suspension
systems
• Flanders Drive
VISION project
• Uses new vision
sensors
Confidential - ©2010 Flanders’ DRIVE all rights reserved
Alex Gelbcke, Vice President & General Manager, Aftermarket Europe
AFTERMARKET
Thank You!
Questions?