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ITW Global AutomotiveRoland Martel, Executive Vice President
Juan Valls, Executive Vice President
December 11, 2009
Today’s Topics
• ITW Global Automotive Overview
• Automotive Industry Overview
• ITW Core Product Lines
• ITW Growth Strategies
ITW Global Automotive
• A strong ITW business
• Above average margins and ROI
• Admittedly difficult market space
• But it’s manageable…
• Very seasoned management team
• Focused on value-added niche products
• ITW is comfortable with an automotive
OEM/tier presence in the range of +/- 10%
of ITW total revenues
ITW Global Automotive
• Design and manufacture metal and plastic
fasteners and components for worldwide
OEM automotive and tiers
– 2009(F) revenues: $1.3 billion (9% of
ITW’s revenues)
– Businesses in 17 countries
20
3
4
26
3
6
1
1
1
ITW Global Automotive Business Units
North America
South America
Africa
Asia
Europe
Australia
$0
$350
$700
$1,050
$1,400
$1,750
$2,100
2008 2009
$749$559
$699
$559
$129
$139
North America Europe Asia Pacific/Other
ITW Global AutomotiveBase Business Revenues (in millions)
$1577
$1257
Automotive Industry
Current State
• Industry severely impacted by global economic crisis
• 2009 global builds of 55 million:- 18% vs. 2008
– NA -32% and Europe -25%
– Japan -32% and Korea -15%
– China 35% and India 6%
• NA and Europe forecasted to account for 45% of the worldwide production in 2009 vs. 50% in 2008
• New Domestic OEMs forecasted to continue to “grab” market share in NA and Europe; now represents 44% and 13% respectively
• OEMs and tiers increasingly seeking financially stable global suppliers like ITW
Automotive Industry
2010 Forecast
• Worldwide production forecasted to
increase 11% vs. 2009: 61 million builds in
2010
• North America at 10.5 million builds
forecasted to grow 22%, but still down 17%
from 2008 builds
– ITW forecast at 9.5 to 10 million builds
• Europe forecasted to modestly grow
compared to 2009 as a result of the strong
build rates of the second half of 2009,
propelled by the government stimulus plans
• All other markets expected to grow an
average 13% from 2009
• ITW global automotive revenues expected
to increase 13% vs. 2009
Source: CSM
Automotive Industry2008-2010 Auto Builds by Region (in millions)
12.68.5
10.5
21.1
15.916.2
33.0
30.4
34.0
2008 2009 2010(F)
Asia Pacific/Other
Europe
North America
Source: CSM
Total
Builds 66.7 54.8 60.7
Automotive Industry2008-2010 Auto Builds by OEM (in millions)
16.6
11.8 13.3
18.6
15.916.9
21.1
17.5
19.9
10.4
9.6
10.6
2008 2009 2010(F)
Other (China/India)
Japan/Korea OEMs
EU OEMs
Detroit 3
60.754.866.7
Total
Builds
Source: CSM
ITW Core Product LinesBody/Exterior Products
www.ford.com
ITW Core Product LinesInterior Products
www.hyundai.com
ITW Core Product LinesElectrical/Safety Products
www.mercedesbenz.com
ITW Core Product LinesEngine/Powertrain Offerings
www.vw.com
ITW Core Product LinesChassis Products
www.toyota.com
ITW Growth Strategies
• Global automotive business and related
penetration is growing in three ways:
– Current Products, New Markets
– Innovation
– Strategic Acquisitions and Alliances
• As the automotive industry evolves, we are
able to evolve with it and deliver what
customers demand
2006 2007 2008 2009
Average ITW
$ per vehicle$35.95 $37.42 $39.90 $40.14
Percent change
(y/o/y)-- 4% 7% 1%
Current Product,
New Market – India
• ITW Automotive India started operations in
2005 with 2009(F) revenues of
approximately $4 million
• Our major customers are Tata, Mahindra &
Mahindra, Suzuki and Hyundai
• 2013 revenues are projected to be in a
range of $35 to $40 million, which represents
a CAGR of 200%
Current Product,
New Market – China
• ITW Automotive China started operations in 2005
• 2009 revenues $29 million, 170% up from 2008
• Our major customers are VW and General Motors
• Now penetrating Chery, Geely, Chang’an, SAIC,
Nissan and Honda
• 2013 revenue is projected to be approximately
$100+ million
Current Product,
New Market – Asia
Hot Melt Plugs
• Hot melt plugs provide chemical sealing
and 100% proved water tightness over the
car life
• ITW has developed this product range and
been successful over years, with multiple
patents, ITW is constantly refreshing this
product range, and continuously launching
improved solutions
• Used in GM, Ford, Chrysler, VW, Renault,
PSA and BMW and now penetrating
Japanese and Chinese OEMs
• We expect revenues to double over the
next 5 years from the current $17 million
Current Product, New Market – Seatbelt Components
2005-$20 million in sales 2013-Adds $13 to $15 million in sales (F)2009-Adds $5 million in sales
Tata
Nano
Renault
Logan
Suzuki, Chery, Brilliance….
Current Product, New MarketLow Cost Vehicles
Innovation – Capless Fuel System
Innovation – Capless Fuel System
Ford vehicles
2009 2013$2.13/vehicle $9.89/vehicle
Innovation – Powertrain and Braking
• Customer : Ford Motor Co.
• Model: Ecoboost Engine
• Part Name : Lower Intake Manifolds
• Revenues: Expected to generate $20 million of new revenues by 2012
• SOP : March 2010
– Status of project: Ready to launch
• Special comments:
– 2 part numbers, 1 for FWD and 1 for RWD
– Replaces existing aluminum parts
– Lowers part weight and reduces cost.
– Innovated the coolant cross tube into the manifold
Innovation – Powertrain and Braking
Green Innovation –Fasteners
Heartflex Clip
• The heart flex clip is a reusable
plastic fastener that installs easily,
holds well, and can be reused
• Over-molded sealing versions
provide complete water tightness
• Protected throughout the world by
8 unique patents
• 2009 Revenues: $13 million/year
• 2013 Revenues: expected to more
than double
• We sell to all OEMs
• We sell in all markets“Versatility: Superior Ergonomics,
Sealing Performance, and Reusable.”
Strategic Acquisitions
and Alliances:Daelim/AOC
• Daelim and AOC acquired since 2006
• Approved suppliers to Korean OEMs
• Manufactured products similar to ITW
• Provided entré to market previously closed
to ITW
Strategic Acquisitions
and Alliances:Hyundai
2005 $0/vehicle
2009 $13.60/vehicle
2013 $28.99/vehicle
Strategic Acquisitions
and Alliances:Japan
ITW & Aoyama
• Aoyama is the major cold headed fastener
supplier to Toyota
• ITW & Aoyama have agreed to jointly
develop and supply plastic fasteners to
Toyota
• ITW contributes technical expertise in plastic
fasteners and manufacturing base outside
Japan, particularly with Toyota
• Aoyama brings excellent customer access
and production capabilities in Japan
&
Future Developments – Technology
& Trends
• Through innovation and manufacturing
expertise, ITW automotive businesses can
respond quickly to industry trends and often
bring customers new products before they
even ask for it
• Plan process includes a review of future
trends and technologies
• Review the potential impact on current
business
• Begin product development activities to take
advantage of the opportunities
Future Developments – Electric “Fuel” Door
BMW X6 Chevrolet Volt
Key Takeaways
• ITW Automotive is a global business with
significant opportunity in emerging
markets
• We will grow the business and related
penetration through:
– Current products, new markets
– Innovation
– Strategic acquisitions and alliances
• The auto industry continues to evolve
and we are prepared and able to evolve
with our customers
Q & A
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