2003
STAR
COMPANY
Milan, 2004 february 26th
RESULTS
Contents
1. COMPANY PROFILE
•
•
Emak Group Structure
Introduction
2. STRATEGIC GUIDELINES
• 2003 International Scenario
• Market Targets
• Strategic Guidelines
• Investment Policy
3. FINANCIAL DATA
• Turnover breakdown
• Economic and Financial data
• Projections
Introduction
Emak is a European leader in
Design, Engineering,
Manufacturing, Marketing of
outdoor power equipments
-3-
DATA
BRANDS
Euro 153 million of sales in
2003, more than 80% in
Europe
POSITION
Oleo-Mac and Efco for
dealer network and
Dynamac/private labels
for retail chains
Among top five in
Europe
CORE BUSINESS
Focused on gardening,
landscaping and forestry
equipments
STRUCTURE
PRODUCT
2 plants in Italy and 1 in China,
5 commercial branches in
Europe, 120 distributors in 70
countries, 17,000 dealers
Wide range and well balanced
product mix
-4-
Emak Group structure
as of December 31, 2003
EM AK
S.p.A.
COMAG Srl
(I) 99,4%
EM AK SUM INIST ROS ESPANA SA
(E) 90%
EM AK U.K. LTD
(UK) 100%
KENS INTERNATIONAL SA
(B) 99,8%
E M AK BE NE L UX N.V.
( B) 83 ,2%
EM AK DEUT SCHLAND GmbH
(D) 80%
EM AK FRANCE SAS
(F) 100%
JIANGMEN EMAK
OUT DOOR POWER EQUIPM ENT Co. Ltd.
(CHINA) 60%
-5-
Emak Group
Emak UK
Emak Bx
Emak F
Emak E
Emak D
Emak I
(Headquarter)
Comag
-6-
Emak Group
Emak China
-7-
2003 International scenario
Europe and Usa:
• 80% ÷ 85% of total world market
• Demand mostly for replacement products, driven by GDP
growth
• Hot and dry weather during summer 2003 in Europe causing
a high stock level of lawnmowers and brushcutters on the
shelves
-8-
2003 International scenario
Developing countries:
• Increasing demand in East Europe and Far East
South America:
• Demand influenced by local political and economic situations
(Argentina, Venezuela) but now recovering
Other Areas:
• Competitiveness problems due to US $ weakness vs € in
USA, Far East, Russia, South America and Middle East
-9-
Market Challenge
• Increasing importance of DIY channel generally
everywhere
• More and more demanding end users
• Tougher and tougher competition by consolidated
group
• Competition for premium price products by new
manufacturers from China
• More and more stringent emission regulations in
USA and Europe
- 10 -
Emak targets
Growth of sales turnover higher
than market increase
Growth of operative
profitability
- 11 -
Strategic Guidelines
To reach these objectives EMAK has developed a focused strategy for the
achievement of excellence on five points
Product Innovation
Competitiveness
Quality
Distribution Network
Organization and Resources
- 12 -
Product Innovation
• Better understanding of
customer needs
• Engineering with style
- 13 -
Product
Product Innovation
Innovation
…..a new generation of clean engines
• Product Lifecycle Management
- 14 -
Competitiveness
• Product cost reduction plans
• New plant in China for “price sensitive” products
 Plant:20,000 mq
 Start up: Q4 2004
• Extensive use of ICT to re-engineer corporate
organization and process
- 15 -
Quality
Fit for
use
concept
Reliability
Measurement
of customer
satisfaction
- 16 -
Distribution Network
Focus on markets directly controlled by Emak
Acquisition of
STAUB brand in
France
Consolidation of leadership
position in Italy
Increase of market shares
of Emak subsidiaries in F, D,
UK, E, BLX
- 17 -
Distribution Network
Marketing activities:
 Higher Oleo-Mac and Efco brand awareness through a selected dealer network
Improvement of after sale service through:
 ICT product support
 WEBCAT spare parts process management
Development of OEM business:
 Specific products lines
Development of business opportunities through:
 Sales increase in modern distribution channel also thanks to more
competitive products (China plant)
- 18 -
Organization & Resources
• Higher efficency in company processes/costs reduction
• Better service (added value for customers)
• Indicators for the monitoring of company’s process
performances
• Focus on human resources value
• Plan for working capital optimisation
• Investments: focus on ROI
- 19 -
Investment Policy
2001/2003
2004/2006
24
31
4,9%
5,2%
Investments in million Euro
% on Turnover/yearly
2001/2003
2004/2006
8%
25%
33%
22%
12%
R&D/New
Product
Production
Equipments
ICT
Buildings
Other
Intangibles
- 20 -
31%
38%
12%
19%
Contents
3. FINANCIAL DATA
- 21 -
Turnover breakdown
Sales distribution by geographical area
Area
2003
2002
Italy
38,6
25,3%
36,6
24,9%
Europe
- Western Europe
- Other European
Countries
90,5
66,9
23,6
59,3%
43,8%
15,5%
84,3
64,9
19,4
57,3%
44,1%
13,2%
6,5
4,2%
7,6
5,2%
17,1
6,0
1,7
9,4
11,2%
3,9%
1,1%
6,2%
18,5
8,0
2,0
8,6
12,6%
5,4%
1,4%
5,9%
152,7
100%
North America
Rest of the world
- South Americ a
- Far East
- Others
Total
Million Euro
- 22 -
147,0 100%
Turnover breakdown
Sales distribution by product line
Product
2003
%
2002
%
Brushcutters
31,8
20,8%
32,0
21,8%
Chainsaws
33,1
21,7%
30,1
20,5%
Lawnmowers
22,9
15,0%
18,8
12,8%
Garden Tractors
12,7
8,3%
13,3
9,0%
Others (pumps
blowers,hedge
trimmers,electric
products)
35,1
23,0%
34,8
23,7%
Spare parts and
accessories
17,1
11,2%
18,0
12,2%
152,7
100%
147,0
100%
Total
Million Euro
- 23 -
Economic and financial data
Consolidated P&L Accounts
Million Euro
Estimated
- 24 -
Economic and financial data
Consolidated assets and liabilities
2003
2002
25,7
24,2
60,5*
54,3
86,2
78,5
64,5*
58,9
Minority interests
0,6*
0,5
Net financial debt
21,1
19,1
Debt/Equity
0,32
0,32
Emak Group
Million Euro
Net fixed assets
Net current assets
Total invested capital
Net Equity
* Estimated
- 25 -
Financial Performance
Main Ratios Analysis 2002-2003
ROE > 15%
ROCE > 20%
PAY OUT > 43%
- 26 -
Emak Share: index performance
170
150
EMAK
130
MIB
STAR
MIBTEL
110
90
70
50
11/2/02
11/2/03
Fonte: Company Profile di Borsa Italiana
- 27 -
11/2/04
Estimated Growth Projections
CAGR 2004/2006
Turnover
12,2%
Ebitda
16,9%
Ebit
19,1%
- 28 -
TECNOLOGIA PER IL VERDE
In collaboration with
BORSA ITALIANA S.P.A. - Divisione STAR