5137-corp-9/10 (1) - tenneconew ces business – volvo v70, xc70, s80, xc60, s60, v60 – audi a6,...
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The foregoing presentation contains forward-looking statements that involve risks and uncertainties which could cause the company’splans, actions and results to differ materially from its current expectations. Such risks and uncertainties include, but are not limited to, thefollowing: (i) the general political, economic and competitive conditions in markets and countries where the company operates, including currency fluctuations; (ii) governmental actions, including the ability to receive regulatory approvals and the timing of such approvals; (iii) changes in capital availability or costs, including increases in the company’s costs of borrowing, the amount of the company’s debt, the ability of the company to access capital markets and the credit ratings of the company’s debt; (iv) changes in consumer preferences and changes in automotive manufacturers’ production rates and their actual and forecasted requirements for thecompany’s products; (v) the overall highly competitive and cyclical nature of the automotive parts industry; (vi) the company’s ability torealize the sales represented by its book of business which is based on a number of factors, including, but not limited to, the original equip-ment manufacturers’ programs that have been formally awarded as well as programs where the company is highly confident that it will beawarded business based on informal customer indications, the company’s status as a supplier on the existing program, and the relationshipwith the customer, and anticipated pricing for the applicable program over its life; (vii) the cyclical nature of the global vehicular industry,including the performance of the global aftermarket sector; (viii) the cost and outcome of existing and any future legal proceedings, andcompliance with changes in regulations; (ix) workforce factors such as strikes or labor interruptions; (x) increases in the costs of rawmaterials and our ability to procure needed goods and services; (xi) the company’s continued success in cost reduction and cash manage-ment programs; (xii) the company’s ability to develop and profitably commercialize new products and technologies, and the acceptance of such new products and technologies by the company’s customers and the market; (xiii) changes in the distribution channels for the company’s aftermarket products, further consolidations among automotive parts customers and suppliers, and product warranty costs; (xiv) changes by the Financing Accounting Standards Board or other accounting regulatory bodies of authoritative generally accepted accounting principles or policies; (xv) changes in accouting estimates and assumptions, potential impairment of our long-lived assets and goodwill and volatility in our effective tax rate; (xvi) acts of war, riots or terrorism, including, but not limited to the events takingplace in the Middle East; and (xvii) the timing and occurrence (or non-occurrence) of transactionsand events which may be subject to circumstances beyond the control of the company.
SAFE HARBOR
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GLOBAL SUPPLIER OF EMISSION AND RIDE CONTROL SYSTEMS
Revenues (Millions) $4,649 $5,916
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- Customers - Markets - Geographies - Products
- Solutions to meet emissions regulations - Vehicle ride & handling performance
- Executing with discipline - Continuous cost reductions and competitive advantage improvements
- Strong alignment globally - Talented and dedicated - Passion for winning
TENNECO STRENGTHS
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TENNECO GLOBAL FOOTPRINT
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GLOBAL ENGINEERING NETWORK
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2010-2011 COMMERCIAL VEHICLE BUSINESS GROWTH
Launching programs with 11 commercial vehicle customers from the end of 2009 through 2011 to meet new diesel emissions requirements– Deutz– Caterpillar/Perkins– John Deere– Navistar– FAW
Supply ride control components to a number of commercial vehicle customers including– Volvo Global Trucks– Scania– Iveco– Navistar
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Percent of Tenneco OE revenue generated by commercial vehicle business* See slide 23 for a discussion of key assumptions on which our revenue projections are based.
– China National Heavy Duty Truck Company– Shanghai Diesel Engine Company– Weichai Power– Three others to be announced
– Paccar– John Deere– AM General
STRATEGIC INITIATIVES
* Including noncontrolling interests
• Emission control technologies to meet emissions 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
• Low-cost country strategy
• Continuously improve productivity and shrink asset base with Lean/Six Sigma
• Optimize global footprint
• Capitalize on cash flow and EVA discipline
• Focus on reducing leverage
• Target net debt /adjusted EBITDA* ratio of 2.0X
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REGULATORY-DRIVEN GROWTHOPPORTUNITIES
* Phased in** Estimated date
CVS - Commercial Vehicle SystemsLVS - Light Vehicle Systems
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† Pending
COMMERCIAL VEHICLE TECHNOLOGIES TO MEET STRICTER EMISSION REGULATIONS
2008 2010 2011 2013 2014
Regulation EU – Euro-5 CVS U.S. (US-10 CVS) U.S. (Tier 4i) EU Euro-6 CVS U.S. (Tier 4f)
China (Euro-4 LVS/CVS) Europe (EU Stage 3B) Europe (EU Stage 4)
Vehicles On-Road: On-Road: Off-Road: On-Road: Off-Road:
medium and heavy Class 4-7 trucks Construction, farm, medium and heavy Construction, farm, duty trucks Class 8 trucks mining, forestry duty trucks mining, forestry
equipment equipment
Emissions NOx NOx Diesel particulates Diesel particulates NOx
Tenneco Urea SCR, Urea SCR, DPF, DOC, DPF, DOC, Urea SCR, Technology Dosing and Dosing and T.R.U.E.-Clean® T.R.U.E.-Clean® NOx adsorber,
injection injection, Hydrocarbon LNC,NOx adsorber Solid SCR
TEN estimates that the original equipment emission control after treatment opportunity in North America, Europe and China for on- and off-road
commercial vehicles will be up to $8 billion by 20145137-CORP-9/10 (10)
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REGULATORY-DRIVEN EMISSION CONTROL PRODUCT PIPELINE
T.R.U.E.-Clean®
& DPF
Retrofit NOxAftertreatment (ProductionReady)
MultiwrapConverter
Gasoline Particulate Filter
Integrated Manifold/TurbochargerHousing
Turnkey SCRSystem
Urea Injectionand Dosing Module
RetrofitLocomotiveAftertreatment
Stationary EngineAftertreatment
Urea Qualityand PM Sensors
Enhanced 32 bit ECU
CVS Vaporizer
Low PressureEGR
Fuel Vaporizer
Hydrocarbon Injector
Aftertreatment ECU
Retrofit MarineAftertreatment
Electronic Exhaust Valve
Gen 3 Urea SCR
NextGeneration Manifold(3 layer)
HydrocarbonLean NOxCatalyst
Low BackpressureValve Muffler
Solid SCR
Air AssistDosing System
Exhaust GasHeat Exchanger
Off-Road Diesel Oxidation Catalyst & DPF
Off-Road Emissions Module
Internet BasedRetrofit DataLogger
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• Full suite provider of emission control systems– Hot end + dosing systems + electronics + software + OBD– Packaged and delivered as a module– EU Stage 3 to Stage 4 final with minimal to no engine modifications
• Innovative value enhancing technologies– Urea SCR System (DEF), HC-LNC, and Solid SCR– T.R.U.E.-Clean® and DOC/ DPF with HC Injection– Low pressure EGR– Vaporizer, passive and electrically actuated valves– Heat exchanger and lightweight systems
• Global applications engineering support
• Industry leading predictive and empirical design tools– CFD, thermal modeling, spray modeling, uniformity, durability
STRATEGIES TO LEAD THE INDUSTRY IN EMISSION CONTROL SYSTEMS
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FULL SUITE OF NOx ABATEMENT SOLUTIONS
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Globally preferredNOx abatementtechnology for light duty and onroad commercialvehicles
Innovative alternativeNOx reduction technology thatfunctions quicklyand effectively even at very low temperatures
Proprietary highperformance NOxaftertreatment
Utilizes no PlatinumGroup Metals
Alternative exhaustaftertreatment forNOx reduction forsmall displacementengines
Fully variable backpressure control valve enables low pressure EGR system for efficientNOx reduction
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UREA SELECTIVE CATALYTIC REDUCTION SYSTEM
Up to 95 % NOx reduction
Airless & return flow cooled PWM injector
Adaptable control strategy
Designed for OE and retrofit applications
Single sourcing for perfect integration
In series production since 2009
Globally unique turnkey solution for NOx abatement; Combines exhaust, controls, dosing and exhaust system integration
HC-LEAN NOx CATALYST TECHNOLOGY
Collaborative effort to develop proprietary high performance NOx aftertreatment that requires no driver refilling of reductant
Utilizes no platinum group metals, replaces DOC
Advantages of HC-LNC Technology:- Use of existing reductant infrastructure- E85 is readily available- Lower operating cost- Resistance to thermal and sulfur aging- Improved low temperature NOx conversion- Superior cold climate performance- Reduced electrical demand- Easier packaging; shorter mixing length- Lower cost materials
Developed for both on-road and non-road applications
Engine Evaluation Conditions: ULSD fuel, C:N = 5 (200ppm NOx), 7% H2O, 9% O2,50K/hr Space Velocity. 50 hours thermally aged at 650C; E85 reductant.
All trademarks shown are the property of their respective owners.
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Advantages:
Packaging– Lower volumes/mass source for NH3– Refill at maintenance interval
Lower complexity than liquid SCR– No sophisticated injector requirement– No thermolisis & hydrolysis reactions– Easier packaging; shorter mixing length
Functionality at very low temperatures
– Better performance for cold start response time
– No freeze / thaw concerns
High potential for better cost and function
Storage volume required for equal ammonia capacity
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In collaboration with
SOLID AMMONIUM CARBAMATE DOSING SYSTEM
THERMAL MANAGEMENT SOLUTIONS
Active heat management for DPF regeneration; used instead of a diesel oxidation catalyst
Works with EGR or SCR
Sulfur tolerant, cost effective alternative to DOC
On and off-road applications with exhaust temperatures < 300C
• HC secondary injection utilizes Tenneco’s injectorand vaporizer technology to promote reliable DPF regeneration
• Heat Exchanger to convert wasted energy into accessible on-board power
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RIDE CONTROL TECHNOLOGY ROADMAP
Multi TunableValve (GlobalValve)
Hollow Piston Rod
Blow Off Disc SpringValve
BOCS Valve
ENRES Energy Recuperation
ACOCAR Active System
DSI DiscSpring Intake
UpgradedCES I
Plastic SpringSeat
Kinetic H2CES Combo
LightweightAluminumTube
Kinetic H2 for ATV
LightweightRod Guide
FSDValvingSystem
DRiV TM
Digital Valve
CVS ActiveRegenerativeShock
LightweightCompositeStrut
CES for CVSAxle
Variable Tube Thickness
Velocity ProgressiveSeat Dampers
High-VelocityCompressionDamping
LightweightDamper
CES II External Valve
Green Shockwith Bio Oil
Global Valve II
IndependentCVS FrontSuspension
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Electronic Damping for Improved Ride Performance and Safety
• Continue to win and launch new CES business – Volvo V70, XC70, S80, XC60, S60, V60
– Audi A6, Allroad
– Ford S-Max, Galaxy, Mondeo
– Mercedes C-class, E-class and other models
– Volkswagen Passat, Golf and other models
– Additional launches in 2010 with existing and two more customers
ADVANCED RIDE CONTROL TECHNOLOGIES DRIVING GROWTH
• Combination of Kinetic and CES
Kinetic – Independent corner control
– Results in a more neutral steering behavior
CES – Semi-active body and wheel hop control
– Results in a better compromise between handling and comfort
• Fully-active suspension with ultimate comfort and excellent handling
• Results in better body control than H2CES
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Suspension management with full suite of ride control technologies and capabilities to address noise, vibration and harshness
ADVANCED RIDE CONTROL TECHNOLOGIES DRIVING GROWTH
Lightweight components– Hollow rod– Aluminum tube– Variable tube thickness– Plastic spring seat
High velocity compression damping
Market expansion– A/B vehicle segment growth– Growing in specialty markets including two-wheel market
Elastomer growth– Integration of EC and RC capabilities; exhaust isolators– Continued growth in commercial vehicle market
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DOING BUSINESS WITH TENNECO
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Full suite of advanced technologies
Full system integration, one-stop shopping
Global footprint with local engineering and manufacturing
Intense focus on high quality Six Sigma processes
Broad base of commercial and specialty vehicle customers
Experienced management team
Financially stable company
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In addition to the information set forth on slide 7, Tenneco’s OE revenue projections are based on the information set forth under “Outlook” in Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as setforth in Tenneco’s Annual Report on Form 10-K for the year ended December 31, 2009. Please see that disclosure for further information. Key additional assumptions and limitations described in that disclosure include:
• Tenneco’s revenue projections are as of February 2010. Tenneco provides revenue projections annually and does not intend to update these projections until February 2011.
• Revenue projections are based on original equipment manufacturers’ programs that have been formally awarded to the company; programs where the company is highly confident that it will be awarded business based on informal customer indications consistent with past practices; Tenneco’s status as supplier for the existing program and its relationship with the customer; and the actual original equipment revenues achieved by the company for each of the last several years compared to the amount of those revenues that the company estimated it would generate at the beginning of each year.
• Revenue projections are based on the anticipated pricing of each program over its life.
• Revenue projections assume a fixed foreign currency value. This value is used to translate foreign business to the U.S. dollar.
• Revenue projections are subject to increase or decrease due to changes in customer requirements, customer and consumer preferences, the number of vehicles actually produced by our customers, pricing and foreign currency.
TENNECO’S OE REVENUE PROJECTIONS
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