Specialist
Former SVP at Cooper-Standard Holdings Inc
Agenda
- Trends and developments impacting the tier 1 auto supplier industry, highlighting semiconductor shortage and coronavirus impact
- Margin pressures across Cooper Standard’s (NYSE: CPS) product portfolio amid lower OEM (original equipment manufacturer) production environment
- Near-term material input inflation and supply chain headwinds
- Medium-to-long-term outlook, highlighting growth outside of North America and liquidity management
Questions
1.
What 2-3 key trends or developments have you been following in the tier 1 automotive supplier sector?
2.
What might happen when the semiconductor shortage ends? Could there be longer-lasting impacts? Do you expect OEMs’ [original equipment manufacturers’] volumes to recover to historic levels?
3.
Which tier 1 suppliers have the largest exposure to the SUV and pick-up truck platforms? Who’s well-positioned vs not to benefit from this higher-margin vehicle focus?
4.
What are your thoughts on Cooper Standard’s product portfolio, highlighting the company’s performance across key product segments?
5.
Have you noticed any change in competitive trends, given Cooper Standard’s difficulties in its end markets? Is it fair to say that the company’s underperformance vs peers predates coronavirus? What have been the historical drivers of that underperformance?
6.
What are your thoughts on Cooper Standard’s ability to sell its South American business? Do you think it would attract a good valuation? What might it be valued at?
7.
Are there any strategic suitors that would make sense to pick up the South American assets?
8.
You mentioned the long-term contracts and contract terms. How successful do you think Cooper Standard will be in its current negotiations around cost recoveries with some of its OEM customers? I think it’s trying to recapture USD 100m of costs from OEMs.
9.
How should we think about Cooper Standard’s ability to win new contracts, considering its significant customer concentration with OEMs? Can it diversify into non-auto businesses? Do you think the company has enough expertise to enter other markets? Does competition for these contracts mostly come down to pricing or are there other factors?
10.
How might Cooper Standard be approaching electrification?
11.
Cooper Standard says the content per vehicle uplift on EVs [electric vehicles] vs ICEs [internal combustion engines] is 20%-plus. Does that seem reasonable?
12.
Do you think the synthetic rubber vertical integration is an advantage or an unnecessary cost? You seem to think there’s an advantage there, but could the company source just as cheap and avoid the cost of plant and labour?
13.
Why do you think the indexed costs Cooper Standard can pass through seem low relative to other suppliers?
14.
Cooper Standard is working to increase its operational efficiency and trying to offset rising costs. How much more runway might the company have around managing OPEX? What levers can be pulled?
15.
What are your thoughts on Cooper Standard’s potential growth and profitability profile? What will it take for Cooper to be profitable outside of North America? Do you think it will ever be profitable there?
16.
How do you expect liquidity to be managed over the next few years? Do you think the company will be able to refinance its debt in 2022?
17.
What is your best- and worst-case scenario for Cooper Standard over the next 12-18 months?
