Ascendum Profile

Ascendum Profile
April 2013
Ascendum Profile | April 2013
ASCENDUM Group Overview
ASCENDUM Group operates in various areas of the Automotive sector, having, recently
broaden its product portfolio by including infra structure equipment
Infrastructure
Equipments
TLD
Kone Crane
Solaris
Zephir
Mantsinen
Cars
Volvo
Land Rover
Jaguar
Mazda
Mitsubishi
Public works
Airports
Ports
Roads
Railways
Passenger cars
Commercial
vehicles
Industry
Construction
Mining
Recycling
Forestry
Building
Handling/Logistics
Construction
Equipment
VOLVO
Sennebogen
Chicago
Pneumatics
Sandvik Yale
High end
Medium range
Low end
Trucks
Volvo
Mitsubishi
page 2
Ascendum Profile | April 2013
ASCENDUM Group Overview
With operations starting in 1959, the Group undertook a number of decisive steps towards
growth, being nowadays one of the most important VCE independent dealers worldwide
1959
Incorporation of ASC – Launch of Volvo’s car and trucks dealership in the central region of Portugal
1970
Import and distribution of Volvo Construction Equipment (CE) in Portugal as a result of Volvo’s invitation
1999
International growth – Spanish Market (Volvo): First cross-boarder deal: acquisition to Volvo of Volmaquinaria de
Construcción España, SA (VMCE) – import and distribution of VCE products in Spain
2001
Start up of the rental activity – Incorporation of Volrent (Volvo)
2003
Business diversification – multi-brand car retail expansion (non Volvo):
Multi-brand car dealerships in addition to Volvo: Land Rover, Jaguar and Mazda
2004
International growth – United States Market (Volvo):
Acquisition of Volvo Construction Equipment assets which included a dealership distribution agreement in 5 regions of the
US (North and South Carolina, Georgia, Alabama and Tennessee) – ASC CONSTRUCTION EQUIPMENT USA, INC.
2009
Business diversification – aftermarket (non Volvo):
Acquisition of Tractorrastos, a company specialized in CE multi-brand parts (non Volvo) and aftermarket services
2010
International growth and business diversification – Turkish Market and Infra-structures equipment:
Acquisition of Air-Rail in Spain – equipment solutions for operation of airports, ports, railways and other infra-structures
Acquisition to Volvo of Volvo Otomotiv Turk – import and distribution of VCE products in Turkey
2011
International Growth and divestment – Mexico (Volvo)
Ascendum Group reorganization; Disposal of Alabama operation upon VCENA request and start up of the Mexican
operation for Volvo Construction equipment (December 2011/March 2012)
2012
Ascendum Group restructuring, rebranding and implementation of new HR management policies
2013
International growth – United States Market (Volvo): acquisition of Swanston – VCE dealer in North Dakota
page 3
Ascendum Profile | April 2013
ASCENDUM Group Overview
With nearly 70 branches and more than 1.100 employees, ASCENDUM Group operates
directly in the Iberian Peninsula, four American states, Turkey and Mexico…
Business
Areas: Construction,
industrial
and
infrastructure
equipments, cars & trucks
Business
Areas:
Construction,
industrial and infrastructure equipments
# CE branches: 4
# branches: 17
Business Areas: Construction and industrial
equipment (North and South Carolina, Georgia,
Alabama and Tennessee)
Business Areas: Construction, industrial
and infrastructure equipment's
# branches: 17
# branches: 14
Business Areas: Construction and
industrial equipment
# branches: 5 (18 until 2014)
page 4
Ascendum Profile | April 2013
ASCENDUM Group Overview
In 2009 the Group performed a strategic assessment, resulting in 2 main strategic axes –
(i) consolidation and growth of the CE business and (ii) product range diversification
I –Consolidation
and growth of
the
Construction
Equipment
business
Increasing optimization and efficiency;
Geographical diversification to complementary and high
growing markets, and
Broaden the core construction and industrial products
portfolio.
Broaden the supply coverage by including infra-structure
equipment's/machinery;
II – Products
portfolio
diversification
Strengthen the presence on the logistics equipment;
Develop the aftermarket (parts and service) business;
“Turnkey service” solutions – reinforce the client service
integrated approach.
Ambitious
target (2016)
Secure and consolidate ASCENDUM Group’s
traditional earnings base
Bn USD 1,3 consolidated revenue target
Strategic
Targets
Explore new business opportunities
page 5
Ascendum Profile | April 2013
ASCENDUM Group Overview
In accordance to the adopted strategy and the continuous Group growth, resulted the need
to adapt the Group’s structure to the present and arising challenges…
Operational management functions
Strategic management functions
Financial management functions
Operational Holding
Strategic Holding
Financial Holding
Operational and strategic
management:
Strategic planning;
Funding and control (strategic and
operational);
Corporate governance (eg.: HR);
Shared services (purchases,
logistics, HR, treasury,…);
Active role in the business
operational management.
Strategic & operational
coordination of the
business
ASCENDUM Group Presently
(Partially)
Strategic and financial management:
Strategic planning and control;
Financial and tax planning;
Identification and development of
synergies and best practices
amongst the group;
HR development;
Potential inclusion of shared
services.
Strategic coordination;
limited operational
intervention
Portfolio management and capital
allocation:
Business portfolio definition;
Financial and tax planning.
Decentralized
management; Full
operational autonomy
ASCENDUM Group in 2015
Holding role evolution in the ASCENDUM Group
page 6
Ascendum Profile | April 2013
ASCENDUM Group Overview
The Corporate Center structure is based on the aggregation of complementary functions
according to the Group’s specific reality
EC
ASCENDUM Corporate Center
Strategy &
Business
Development
Strategic
Planning
M&A
Organizational
Development
Special projects
Controlling
Business
control
Financial
Operations
Audit &
Accounting
Communication
& Image
Financial
Management
Treasury
management
Risk
Management
Accounting &
Consolidation
Internal audit
Tax planning
Communication
Image
Human
Resources
Talent
Management
Institutional
relations and assets
management
Institutional
relations
Assets
Management
page 7
Ascendum Profile | April 2013
ASCENDUM Group Overview
The creation of a strategic holding allows the perfect matching of the families’ ownership
vision and objectives and the executive drive of the management team, reinforcing the
implementation capability and ensuring the succession plan
Strategic Holding;
Strategic coordination;
…
1st Level
Group synergies;
Limited operational intervention;
Management support at a Group level;
Strategic development.
Geographical platforms;
…
…
Companies aggregating several businesses;
2nd Level
Shared services / support structure for
business development.
Operational logic;
…
…
…
…
…
3rd Level
Focus on business and operational processes;
Professional management.
page 8
Ascendum Profile | April 2013
ASCENDUM Group Overview
In terms of organizational structure, the Group is replicating its business model across its
current geographies. Our implementation plan is getting to the final big picture…
Auto-Sueco, Lda.
50%
50%
Ernesto Vieira &
Filhos, S.A.
HoldCo
ASCENDUM, S.A.
ESFG
BPI Bank
Corporate Center
Portugal
Spain
CIE
ASC MEI
Vehicles
(cars and
trucks)
ASC 2 Vehicles
CIE
VMCE
Rent
Volrent
Infrastructure
Air-Rail 50%
Rent
VMCE
Aftermarket
Tractorrastos
Handling /
Logistics
Infrastructure
Air-Rail 50%
USA
CIE
ASC USA
Turkey
Mexico
CIE
ASC Turk
Infrastructure
ART HAVA
50%
CIE
ASCENDUM
Mexico
Rent
Aftermarket
TRP
Rent
To be developed
page 9
Ascendum Profile | April 2013
ASCENDUM Group Overview
ASCENDUM Group growth strategy also pushed the need of the implementation of a new
governance model…
Shareholders Meeting
Board of Directors composition:
Chairman;
10 Board Members;
Holdco
Board of Directors
Non Executive
Directors
Executive Directors
Meetings every 2 months.
Executive Committee composition:
President;
5 Board Members;
Monthly meetings.
Board of Directors composition:
Geographic
platform /
Main
Investments
Board of Directors
Business Units
Management Council
President;
5 Board Members.
Limited liability Companies:
2 Business Units Managers.
page 10
Ascendum Profile | April 2013
ASCENDUM Group Overview
ASCENDUM Board of Directors is composed by 10 members – 5 executive and 5 nonexecutive. At the second level, there is a CEO accountable for each geographic platform
Ernesto Gomes Vieira : Chairman
Board of Directors
Carlos Vieira
Non Executive Directors
Tomás Jervell
Ricardo Mieiro: CEO
Paulo Mieiro
José Leite Faria
Executive Directors
Paulo Jervell
João Mieiro
Ângela Vieira
Brad Stimmel*
José L. Mendes
Mahir Hocaoglu*
Juan Ant. Zurera
Rui Faustino
Marco Liz*
Portugal
Spain
USA
Turkey
Mexico
Ângela Vieira:
Chairman
Rui Faustino: CEO
Ernesto S. Vieira
Paulo Mieiro
Rui Miranda
Ricardo Mieiro: Chairman
Juan Ant. Zureea: CEO
João Mieiro
Ernesto S. Vieira
Paulo Mieiro
João Jervell
Ricardo Mieiro:
Chairman
Brad Stimmel: CEO
João Mieiro
Paulo Mieiro
José Leite Faria
João Mieiro: Chairman
Mahir Hocaoglu: CEO
Ângela Vieira
Rui Faustino
Francisco Ramos
João Mieiro: Chairman
Marco Liz: CEO
Nuno Colaço
(*) Sounding board
page 11
Ascendum Profile | April 2013
ASCENDUM Group growth strategy and value creation track record
After a decade of strong growth, Ascendum Group strategy and its financial resilience
and robustness ensured a solid performance in an adverse economic environment
Turnover
EBITDA
Turnover (MUSD); CAGR(%)
EBITDA (MUSD); CAGR(%)
+23%
+11%
+3%
-2%
+20%
699
634
490
367
634
651
82
72
707
456
68
66
57
+24%
+12%
83
82
889
689
-12%
+30%
789
633
0%
74
58
52
40
38
322
25
125
10
8%
10%
9%
10% 12% 11%
8%
9%
13% 10%
9%
10%
9%
9%
1998 2004 2005 2006 2007 2008 2009 2010 2011 2011R 2012 2013F 2014F 2015F
1998 2004 2005 2006 2007 2008 2009 2010 2011 2011R 2012 2013F 2014F 2015F
Net Income
Net Debt / EBITDA
Net Income (MUSD); CAGR(%)
-1%
-34%
+31%
+23%
36
35
33
31
26
+25%
26
3,9x
3,2x
23
20
2,4x
1,9x
15
9
3,0x
2,4x
19
15
3,7x
3,1x
1,2x
1,6x
1,9x
2,6x
2,1x
1,7x
5
2% 5% 4% 2% 3% 3% 4%
1
0%
1998 2004 2005 2006 2007 2008 2009 2010 2011 2011R 2012 2013F 2014F 2015F
4%
5%
4%
4%
5%
Exchange rate EUR/USD: 1,3
3%
1998 2004 2005 2006 2007 2008 2009 2010 2011 2011R 2012 2013F 2014F 2015F
page 12
Ascendum Profile | April 2013
ASCENDUM Group growth strategy and value creation track record
In the future it is expected that the Group product and geographical portfolio will continue
to assure a stable and recurrent revenue and earnings base
Ascendum Group maintains the focus in the Construction Equipment business area (MUSD)…
889
09/12 average
789
699
633
689
634
490
272
265
252
265
307
367
651
Vehicles
12%
707
456
322
125
Construction
Equipment
88%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F
CE Portugal
CE Spain
CE USA
CE Turkey
CE Mexico
Vehicles
…and a strong international presence: 83% of Turnover (2009-12 average) and 91% of EBITDA (2009/12 average)
Turnover (MUSD)
633
699
689
634
490
367
651
707
789
889
456
Exchange rate EUR/USD: 1,3
82
57
83
58
52
68
74
82
40
25
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F
Spain
72
38
322
Portugal
EBITDA (MUSD)
USA
Turkey
Mexico
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F
Portugal
Spain
USA
Turkey
Mexico
page 13
Ascendum Profile | April 2013
ASCENDUM Group growth strategy and value creation track record
Moreover, Ascendum Group strong market position also supported the return to growth
Solid reputation anchored in the Volvo brand…
One of the most representative independent dealers in Europe and North
America
Ascendum share of Volvo CE Europe and USA sales increased over 10 years
Based on strong investment in Volvo (facilities and M&A MUSD
235) and…
… resilient financials and cash flow generation
Equity/Assets ratio of 34% in 2012 and Net Debt / Equity of 0,9x (2011-2012)
Well positioned to benefit from the recovery in its domestic
markets…
Market share increase during the crisis
…and exposed to emerging and high growing markets (Turkey
and Mexico)
“Strategic Vision 2016” focused on expansion
page 14
Ascendum Profile | April 2013
ASCENDUM Group growth strategy and value creation track record
The Portuguese operation has been the genesis of Ascendum Group in terms of culture
and business best practices/know how rolled out in past acquisitions…
Network development and management
Best practice generation in key
processes in sales and after sales (53
years of experience)
Fine tuned scorecard (metrics) and
controlling tools
CRM “is in the blood”
Absorption ratio above 1
Rational is: “An healthy business
makes healthy investments”
Continuous Investment in premises
/infra structure and operations
Volvolization of premises and brand
image
Inventory investments for easing sales
Payout is 30%: remaining 70% is to
continuously invest in the business
Historical
expertise in
retail
Culture
Financial
commitment
Management
focus
Long term perspective (family based)
Fighting spirit and passion for the business
Very fast decision making – “fix first,
discuss later”
Extended family relationships: cultural
engagement with local employees
Very commercially driven: “sell first, ask
later”
One company, one culture
Strong and experienced executive teams
Strategize but “implement, implement,
implement”
100% share of mind in Volvo distribution
Governance model leverages cross
experience between operations
page 17