SOLLERS COMPANY OVERVIEW
SOLLERS’ INVESTMENT CASE
CORPORATE HISTORY AND BUSINESS STRUCTURE
SOLLERS’ FINANCIAL AND OPERATING RESULTS
RUSSIAN AUTOMOTIVE MARKET: MAJOR TRENDS AND FUTURE PROSPECTS
SOLLERS’ BUSINESS OVERVIEW
CORPORATE GOVERNANCE AND SHAREHOLDER EQUITY
SHARE PERFORMANCE
2
SOLLERS’ INVESTMENT CASE
•
ONE OF THE KEY PLAYERS ON THE FAST GROWING RUSSIAN AUTOMOTIVE MARKET WITH THE
OVERALL MODERN PRODUCTION CAPACITY OVER 550 K UNITS P.A.
•
STRATEGY BASED ON COOPERATION WITH LEADING INTERNATIONAL OEMS
•
SUCCESSFUL TRACK RECORD OF INDEPENDENTLY MANAGED BUSINESSES AND JOINT
VENTURES
•
STRONG FINANCIAL POSITION: SOUND PROFITABILITY AND LOW DEBT
•
BEST CORPORATE GOVERNANCE IN THE INDUSTRY
3
CORPORATE HISTORY
2012-2013
2009-2011
2008
2006-2007
2005
• IPO
2000-2005
• acquisition of UAZ
and ZMZ
• restructuring of
UAZ and ZMZ
• acquisition of ZMA
• strategic partnership
with SsangYong for
SUV production
established
• strategic partnership
with ISUZU for truck
production
• strategic partnership
with FIAT for production
of passenger cars
and LCVs
• launch of SOLLERSElabuga plant for
production of LCVs
• JV with ISUZU
established
• launch of SOLLERSISUZU plant for truck
production
• launch of Far East
plant (Vladivostok) for
SsangYong production
• JV with Sovkombank
established for
development of leasing
services
• JV with Mazda for
production of cars in
Vladivostok launched on
September 06, 2012
• JV with Mitsui for
production of Toyota LC
Prado in Vladivostok
launched on February 18,
2013
• new major strategic
partnership with Ford:
50:50 Ford Sollers JV
launched on October
01, 2011
• exit from strategic
partnership with FIAT
4
BUSINESS ORGANIZATION
Production* &
Distribution
of SsangYong vehicles
Production &
Distribution
of UAZ vehicles and
parts
Production site:
Vladivostok
Production sites:
ZMZ & UAZ
50/50 JV
50/50 JV
50/50 JV
50/50 JV
50/50 JV
JV with
Sovkombank offers
a full range of car
leasing services
Production &
Distribution
of Ford vehicles
Production &
Distribution
of Isuzu trucks
Production
of Toyota vehicles
Production
of Mazda vehicles
Production sites:
Vsevolozhsk,
Naberezhnye
Chelny, Elabuga
Production site:
Ulyanovsk
Production site:
Vladivostok
Production site:
Vladivostok
Partnerships are equity-accounted under IFRS
* In 2013 the production of SsangYong vehicles was transferred to MAZDA-SOLLERS JV
5
COMPANY PRODUCTION FACILITIES
FORD SOLLERS VSEVOLOZHSK
•
•
•
SOLLERS-ISUZU
Location – St. Peterburg region
Product line – Ford Focus, Ford
Mondeo
Capacity – up to 160 K units
p.a.
•
•
•
•
•
•
Location – Nizhniy Novgorod
region
Product line – petrol and diesel
engines
Capacity – up to 300 K units
p.a.
UAZ
•
•
•
550 K units per annum
Location – Ulyanovsk
Product line – ISUZU trucks, Nseries
Capacity – up to 5 K units p.a.
Relaunch: June, 2012
MOSCOW
ZMZ
•
Overall SOLLERS capacity (directly owned
or through JVs) exceeds
Location – Ulyanovsk
Product line – UAZ SUVs and
LCVs
Capacity – up to 110 K units
p.a.
FORD SOLLERS ELABUGA
•
•
•
Location – Elabuga,
the Republic of Tatarstan
Product line –Transit, Explorer,
Kuga, S-MAX, Galaxy
Capacity – up to 75 K units p.a.
FAR EAST PRODUCTION SITE
FORD SOLLERS N. CHELNY
•
•
Location – Naberezhnye
Chelny, the Republic of
Tatarstan
Capacity – up to 115 K units
p.a.
•
•
•
Location – Vladivostok
Product line – SsangYong,
Mazda CX-5, Mazda6, Toyota
Prado
Capacity – approx. 100 K units
p.a.
6
6
FINANCIAL OVERVIEW, USD MLN.
On the back of strong financial performance in 2012 on April 11, 2013, SOLLERS’
Board of Directors recommended to resume a dividend payout and proposed a
dividend of RUB 52.52 per share, which implies 8% yield (as of 15.04.2013)
2008
2009
2010
2011
2012
CHANGE
%
Revenue
2,480
1,095
1,828
2,365
2,108
(257)
(11% )
EBITDA
220
8
142
213
246
33
15%
EBITDA margin
9%
1%
8%
9%
12%
3%
33 pp
Operating profit
160
(50)
75
155*
233
78
50%
Operating profit margin
6%
(5% )
4%
7% *
11%
4%
57 pp
Net profit/ (loss) for the period
(15)
(158)
(41)
160
189
29
18%
Net debt at the end of period
758
767
704
431
260
(171)
(40% )
* Operating profit for the year ended December 31, 2011 is adjusted for the oneoff item (net result on formation of the JV)
7
OVERVIEW OF SOLLERS OPERATING RESULTS 2012 (INCLUDING JOINT VENTURES)
SOLLERS CONSOLIDATED WHOLESALES
MODEL
2007
2008
2009
2010
2011
2012
CHANGE
%
70.8
70.8
35.1
57.0
63.7
70.3
6.6
10%
SUVs
31.1
29.5
16.7
25.7
30.2
32.1
1.9
6%
LCVs, MPVs
39.7
41.3
18.4
31.3
33.5
38.2
4.7
14%
SsangYong
11.2
15.8
7.9
14.3
24.8
32.8
8.0
32%
ISUZU
2.5
4.6
1.4
3.1
1.8
0.8
(1.0)
-56%
-
4.6
8.4
13.4
13.2
2.4
(10.8)
-82%
FIAT PC*
15.3
26.6
6.0
10.3
16.6
2.7
(13.9)
-84%
Total
99.8
122.4
58.8
98.1
120.1
109.0
(11.1)
-9%
UAZ
FIAT Ducato*
FORD SOLLERS SALES**
MODEL
2011
2012
CHANGE
%
Explorer
0.5
2.1
1.6
320%
Kuga
2.9
4.2
1.3
45%
Transit
7.4
11.5
4.1
55%
Mondeo
15.1
15.0
-0.1
-1%
Focus
82.5
92.2
9.7
12%
Others
9.7
5.9
-3.8
-39%
Total
118.1
130.9
12.8
11%
* Discontinuation of FIAT business
** Retail domestic sales, source– AEB (Association of
European Businesses)
8
RUSSIAN AUTOMOTIVE MARKET 2008-2012, K UNITS*
3 000
2,917
2 934
265
189
2 646
168
2 500
529
875
1 909
120
204
141
2 000
923
1 000
0
432
• B+ and C remain the largest and the most competitive
segments together accounting for 45% of the total PC market
320
141
67
711
770
104
68
• Ford is a leader in D segment and #2 foreign brand in C
segment
556
547
553
383
273
284
2008
B
B+
• Sollers’ market share (UAZ+SsangYong) amounted to 8% in the
SUV segment
189
92
438
571
• SUV is the fastest growing segment with the market share of
30%
183
84
1,461
108
1 500
500
670
MAJOR TRENDS IN 2012
150
210
283
266
2009
2010
2011
2012
C
D
LCV+MPV
SUV+Pickup
Others
CAR TYPE BY MARKET SEGMENTS
B
•
•
•
•
Ford Fiesta
Chevrolet Aveo (HB)
Hyundai Solaris (HB)
Volkswagen Polo (HB)
C
•
•
•
•
Ford Focus
Lada Priora
Chevrolet Cruze
Chevrolet Lacetti
SUV
•
•
•
•
SsangYong Actyon
UAZ Patriot
Ford Kuga and Explorer
Toyota LC Prado
LCV
•
•
•
•
Ford Transit
UAZ LCV
Fiat Ducato
GAZ Gazelle
* Retail domestic sales, source– AEB (Association of European Businesses)
9
RUSSIAN AUTOMOTIVE MARKET 2008-2012, K UNITS*
NEW PC MARKET 2008-2012
3 000
2 745
2 713
2 463
2 500
204
200
568
2 000
1 500
NEW LCV+MPV MARKET 2008-2012
1 768
1 460
1 357
685
0
2008
Russian brands
189
44
22
21
51
55
811
110
113
141
150
17
941
104
12
146
377
618
577
2009
2010
2011
2012
Foreign brands assembled in Russia
35
30
50
561
New import
183
100
622
648
500
1 227
585
332
1 000
1 034
14
62
89
0
2008
2009
2010
2011
2012
Russian brands
New import
Foreign brands assembled in Russia
The continuous growth of local assembly is encouraged by the new industrial assembly regime**
* Source– AEB (Association of European Businesses)
** See slide 11
10
AUTOMOTIVE SECTOR: NEW GOVERNMENT POLICY 2011-2020
• To facilitate the development of large-scale industrial projects in Russia the Government announced a new industrial policy for the Russian automotive sector
till 2020. The Regulation 166 allows zero duty on imported components for local car assembly whereas the import duty on new imported cars varies from 20%
to 25%
• The contracts under the original Regulation 166 expire in 2014 – 2016
• The list of producers working under the new Regulation 166 is frozen, no entrance for new players
• All Sollers projects are Reg 166 compliant
• Under Reg 166 the regulative environment is supposed to remain unchanged after the WTO accession
REG 166 (AMENDED)
REG 166 (ORIGINAL)
CONTRACTUAL PERIOD
7 years
CAPACITY TO BE INSTALLED, UNITS P.A.
25,000
GREENFIELD
BROWNFIELD
8 years
300,000 within 4 years
350,000 within 4 years
30% - 4 year
35% in the first year of
operations,
40% - 5 year
60%- 6 year
5% annual increase until
60% reached
LOCALISATION LEVEL
≥30%
ENGINE LOCALISATION
n/a
30% of annual volume, 3 parts machined within 3 years
STAMPING
n/a
within 4 years
R&D
n/a
within 4 years
SKD
switch to CKD assembly
within 18-30 month
limit – no more than 5% of the total production capacity for
3 years
11
MARKET OUTLOOK
PC AND LCV MARKET FORECAST, MLN UNITS
2013 market growth forecast:
Optimistic scenario +5%
Basic scenario (most likely) - flat
Pessimistic scenario -5%
KEY DRIVERS FOR RUSSIAN AUTOMOTIVE MARKET GROWTH
• Low car density in Russia: 253 vehicles per 1000 capita (compared to
600 in Germany and 850 in USA)
• Old car park: average passenger car age in Russia is 12 years (every
car is older than 15 years)
ARGENTINA:
third
239
• The share of credit sales will grow to the pre-crises level of 46% as
macroeconomic situation stabilises
12
OUR MARKET PERFORMANCE
CURRENT MARKET SHARE BY SEGMENTS
MARKET SEGMENT
SOLLERS
FORD SOLLERS
TOTAL
SUVs, Pickup
7%
1%
8%
LCVs, MPVs
18%
7%
25%
C-class
-
12%
12%
D-class
-
16%
16%
CDVs
-
2%
2%
3.13%
4.46%
7.59%
Total car market
KEY DRIVERS FOR OUR SALES
• Launch of new products in the fastest growing market segments
• Global products of well-known brands
• Competitive price positioning as a result of localisation
• Wide dealership and service network
13
UAZ HOLDING
ULYANOVSK AUTOMOBILE PLANT is a leading Russian automobile producer
of 4х4 SUV and LCV vehicles, engines and spare parts
UAZ MODEL RANGE
UAZ PATRIOT
UAZ PICKUP
• UAZ holding also includes ZMZ engine plant, one of the largest Russian
producers of petrol and diesel engines and aluminum castings
• Manufacturing capacity – up to 110,000 vehicles and 300,000 engines per
annum
• Over 4.6 mln vehicles have been produced since 1941
• Over 14 mln ZMZ engines have been produced since 1958
• UAZ distribution network encompasses over 120 dealers in Russia
UAZ LCV
UAZ SALES 2008-2012, K UNITS*
80
70
60
50
40
73
27
30
20
10
68
64
13
55
7
7
6
39
4
33
31
25
• UAZ retail domestic sales grew by 6% in 2012 and outperformed the precrises level
17
33
18
24
26
28
2010
2011
2012
0
2008
2009
UAZ LCV+MPV
MARKET PERFORMANCE IN 2011-2012
UAZ SUV+Pickup
Export
• UAZ maintained 4% share of the Russian SUV+Pickup market
• UAZ is the second largest player on the Russian LCV + MPV market with
18% market share
* UAZ retail domestic sales + export
14
SSANGYONG BUSINESS
SOLLERS has been the exclusive producer and distributor of SsangYong vehicles in
Russia since 2005. In 2009 SOLLERS launched the first automobile plant in the Far
East for production of SsangYong vehicles
SSANGYONG MODEL RANGE
SSANGYONG ACTYON
SSANGYONG ACTYON SPORTS
SSANGYONG KYRON
SSANGYONG REXTON
• In 2013 the SsangYong production was transferred to MAZDA – SOLLERS JV to
benefit from the economy of scale and investment sharing
• SsangYong vehicles distribution in Russia remains under SOLLERS’ control
• SsangYong distribution network encompasses over 110 dealers in Russia
SSANGYONG RETAIL SALES 2008-2012, K UNITS
31
35
30
23
25
20
18
MARKET PERFORMANCE IN 2011-2012
13
15
9
10
• SsangYong retail sales grew by 37% in 2012, the growth is mainly
driven by the sales of Actyon crossover
5
• SsangYong SUV+Pickup market share is 4%
0
2008
2009
2010
2011
2012
SsangYong SUV+Pickup
15
FORD SOLLERS JV: FIRST FULL YEAR RESULTS
FORD SOLLERS SALES UP 11% IN 2012
PROJECT HIGHLIGHTS
FORD SOLLERS is a 50:50 joint venture, which exclusively produces and
distributes Ford vehicles in Russia.
• Project target: to become one of the leaders in the Russian passenger car
and LCV market
• Manufacturing capacity – 350,000 vehicles per annum
FORD SOLLERS SALES 2008-2012, K UNITS*
200
150
70**
131
• 10-year project financing of RUB 39 billion at a subsidised interest rate was
signed in September 2011 between Ford Sollers and VEB
• Project financing covers all long-term investment programmes
187
100
10
13
91
82
FORD SOLLERS MARKET POSITION
50
• The third largest market player on the Russian C-class car segment with
12% market share
• The overall market share to grow with the launch of new vehicles
94
17
6
7
52
8
5
11
67
118
12
12
8
15
15
83
12
92
0
2008
2009
C-class
2010
D-class LCV
2011
Other
2012
* Retail domestic sales, source– AEB (Association of European Businesses)
** Includes Ford Fusion - a compact minivan based on B-class platform
16
FORD SOLLERS JV: FIRST FULL YEAR RESULTS
FORD SOLLERS LOCALISED MODEL RANGE
FINANCIAL OVERVIEW 2012
USD MLN.
Sales
106
Operating profit margin
3.6%
FORD FOCUS
FORD TRANSIT
FORD EXPLORER
FORD S-MAX
64
Assets
1,849
Liabilities
1,019
Debt
FORD KUGA
2,926
Operating profit
Net profit
FORD MONDEO
447
FORD SOLLERS MARKET PERFORMANCE 2012
C-segment:
• Focus sales were up by 12%, making it the best-selling foreign model in Csegment
SUV-segment:
• Kuga sales up 45%
• Explorer sales grew 4 times
SUV-segment:
• Transit sales up 55%
December 2012 marked a record of monthly sales for: Kuga, Transit, Focus III
17
MAZDA-SOLLERS JV: FIRST RESULTS
FINANCIAL OVERVIEW 2012
PROJECT HIGHLIGHTS AND TARGETS
• 50:50 joint venture with Mazda located in Vladivostok
USD MLN.
Sales
84
Operating profit
4
Operating profit margin
• Activity: production of Mazda and SsangYong vehicles in Russia
(distribution is not covered by the joint venture agreement)
• SOLLERS remains the exclusive distributor of SsangYong vehicles in
Russia
5.1%
Net profit
• Model range: Mazda CX-5, Mazda 6, SsangYong SUVs
3
Assets
123
Liabilities
70
• Total investments from the launch till 2020 – RUB 10 bln.
• Funding – project financing provided on a non-recourse basis at a
subsidised interest rate in total amount of RUB 6 bln.
• Investment sharing will improve the efficiency of Mazda and SsangYong
SKD and CKD assembly operations at the Far East production site
MAZDA SALES 2008-2012, K UNITS*
70
• SOP of Mazda CX5 on September 06, 2012
• SOP of Mazda6 on April 12, 2013
73
MAZDA CX-5
60
50
40
40
31
30
44
25
20
10
0
2008
2009
2010
Mazda sales
2011
2012
* Retail domestic sales, source– AEB (Association of European Businesses)
18
SOLLERS-BUSSAN JV
TOYOTA SALES 2008 – 2012, K UNITS*
16
PROJECT HIGHLIGHTS AND TARGETS
17
16
12
12
• 50:50 joint venture with Mitsui
• Activity: production of Toyota SUVs in Russia
(distribution is not covered by the joint venture agreement)
12
• Location: Vladivostok
8
• Production capacity: up to 25 K units per annum
6
• Industrial cooperation with the global automotive leader; sharing Toyota’s
production experience
4
0
2008
2009
2010
2011
LC Prado
2012
• Initial investments up to RUB 1bln
• Funding – project financing provided by VEB on a non-recourse basis at a
subsidised interest rate
• SOP of Toyota Prado on February 18, 2013
TOYOTA LC PRADO
* Retail domestic sales, source– AEB (Association of European Businesses)
19
SOLLERS-ISUZU JV
MODEL RANGE
PROJECT
PROJECTHIGHLIGHTS
HIGHLIGHTS
SOLLERS-ISUZU – the first Russian-Japanese joint venture for production and
distribution of ISUZU vehicles launched in July 2007
• 50:50 joint venture
• Location: Ulyanovsk (UAZ production site)
• Target segment: Light Duty Trucks (LDT)
• Product line: ISUZU N-series trucks
• Production capacity: 5 K units per annum
NPR Chassis
20
CORPORATE GOVERNANCE AND SHAREHOLDER EQUITY STRUCTURE
PROFESSIONAL INDEPENDENT BoD MEMBERS
COMMITMENT TO CORPORATE GOVERNANCE
Extensive experience in automotive industry and
corporate governance
One of the authors of Russia’s economic reforms
in the 1990s
Mr David Herman – Chairman of the Board of
Directors and the Corporate Governance
Committee
Mr Evgeny Yasin – Member of the Board of
Directors
Over 30 years’ experience in international business,
best practice of successful M&As
The founder of the Investor Protection Association
Mr Patrick Gallagher – Chairman of the
Remuneration and Nomination Committee
‘The Best Independent Director’ by Investor
Protection Association
Mr Seppo Remes – Chairman of the Audit
Committee
Mr Alexander Ikonnikov – Member of the Board of
Directors
Shareholder equity structure
as of 31.12.2012
54%
46%
Extensive experience in corporate strategy,
corporate development, M&A and corporate
finance
Mr Richard Broyd – Chairman of the Strategy
Committee
V. Shvetsov
Free-float
21
SHARE PERFORMANCE AT MICEX RTS
TICKER: SVAV
30
18.04.2013
$21.0
25 18.04.2012
$17.5
20
15
13.04.2013
14.03.2013
12.02.2013
13.01.2013
14.12.2012
14.11.2012
15.10.2012
15.09.2012
16.08.2012
17.07.2012
17.06.2012
18.05.2012
5
18.04.2012
10
MARKET CAPITALISATION: UP 20% Y-o-Y
Stock exchange data at 18.04.2013
Stock exchange data at 18.04.2012
Market capitalisation ($ mln.)
Shares (mln.)
Price at 18.04.2012 ($)
600
34.27
17.5
Market capitalisation ($ mln.)
Shares (mln.)
Price at 18.04.2013 ($)
720
34.27
21.0
22
Thank you for attention!
Please, contact us:
Email: ir@sollers-auto.com
Website: www.sollers-auto.com
23