Viscofan, S.a. · BME:VIS
Viscofan — FY2021 Earnings Presentation
69 slides from Viscofan's earnings presentation, Feb 25, 2022
Slide 1: January – December 2021
January – December 2021 25 February 2022 1
Slide 2: Disclaimer
Disclaimer This document may include statements This circumstance must be taken into account about intentions, expectations or forecasts mainly for all persons or entities that may have to of the Company additional to the take decision, develop or spread opinions relative mandatory financial reporti
Slide 3: Agenda
1 MORE TO BE 2016-2021 strategy assessment 2 2021 results 3 Beyond 25 strategy 3
Slide 4: MORE TO BE 2016-2021 strategy assessment
1 MORE TO BE 2016-2021 strategy assessment 2 2021 results 3 Beyond 25 strategy 4
Slide 5: MORE TO BE 2016-2021 transformation period
MORE TO BE 2016-2021. Transformation period for the Viscofan Group with growth, investment, diversification and a solid balance sheet €476Mn €465Mn Shareholders´ Capex remuneration 1 €43Mn €2Mn Net bank EV debt Dec21 aquisitions 1 Shareholders´remuneration: Dividend + AGM attendance premium + Redemp
Slide 6: MORE TO BE. Best results outperforming guidance
MORE TO BE. The best results of our history outperforming the guidance for the year Reported figures vs. Guidance (€ million) Revenue EBITDA Net profit 969.2 950 935 246 246.7 912.2 242 130 133.0 127 234.4 122.5 2020 2021 2020 2021 2020 2021 US$/€ = 1,18 vs. 1,20 BRL/€ = 6,38 vs. 6,25 6
Slide 7: Increasing shareholder remuneration
MORE TO BE. Increasing shareholder remuneration Ordinary remuneration (€ per share) +36.3% 2021 vs. 2015 Protection against market volatility +8.2% 2021 vs. 2020 1.84 1.70 1.60 1.62 1.55 1.45 ▪ 1.40 €/ share paid on 1.35 22 December 2021 ▪ 0.43 €/share to be paid on 2 June 2022 ▪ 0.01 €/ share. AGM
Slide 8: 2021 results
1 MORE TO BE 2016-2021 strategy assessment 2 2021 results 3 Beyond 25 strategy 8
Slide 9: Strong growth driven by volume and price mix
Strong growth driven by volumen and price mix Revenue 2021 Growth contribution (€ million) +7.4 -15.5 +65.1 969.2 912.2 +6.3% 2021 vs. 2020 +7.2 p.p. +0.8 p.p. -1.7 p.p. € Like-for-like 1 Like-for-like 1 Forex casings co-generation 2020 2021 1 Like-for-like: Comparable growth excludes the impact of
Slide 10: Like-for-like growth in all reporting areas
Like-for-like growth in all reporting areas driven by the strength in China, Southeast Asia, and the recovery in Europe 2021 FY revenue Breakdown by geographical area1 (€ million) €969.2 Mn 57.1% 29.6% 13.3% VISCOFAN EUROPE AND NORTH SOUTH GROUP ASIA PACIFIC AMERICA AMERICA + 6.3% + 8.0% +9.9% + 9.8
Slide 11: New all-time high in quarterly revenue
New all-time high in quarterly revenue Revenue Viscofan Group 2020 2021 Casings sales 2020 2021 (€ million) 245.4 233.6 231.6 257.8 227.6 218.6 215.7 216.3 245.6 211.7 237.5 240.3 228.4 224.9 224.9 222.1 + 6.0% vs. 4Q20 1Q 2Q 3Q 4Q Co-generation sales 2020 2021 7.3% + 12.0 12.4 vs. 4Q20 10.4 9.8 9.9
Slide 12: Sound volume evolution in 4Q21
Sound volume evolution in 4Q21 together with higher price mix, the contribution of energy sales and forex, compared to the best quarter of 2020 Quarterly revenue Growth contribution (p.p.) 4Q21 +7.3% +4.1% vs. 4Q20 Like-for-like1 +10.5 p.p. +9.2p.p. +6.7p.p. +2.6p.p. +3.2p.p. +1.5p.p. +1.5p.p. +1.0p
Slide 13: High energy cost inflation offset by operating leverage
High inflation in energy costs is offset by the operating leverage of higher volumes, commercial discipline and production efficiencies … P&L 2021FY Increase in energy Year-on-year change costs +26.2% vs. 2020 +14.8% +8.0% +8.9% +7.0% +6.3% +5.2% +3.9% +3.8% 1.1% Revenue Revenue Consumption Personne
Slide 14: EBITDA growth and slight margin improvement
…leading to EBITDA growth and to a slight improve in like-for-like EBITDA margin of the year EBITDA 2021 EBITDA margin 2021 Growth contribution (in percentage) (€ million and p.p.) -0,3p.p. +0,2p.p. +21.0MN -8.7MN vs. 2020 vs. 2020 246.7 25.7% 25.9% 25.4% 234.4 +5.2% 2021 vs. 2020 +8.9 p.p. -3.7 p.p
Slide 15: 4Q results eroded by energy and transport costs
4Q results are eroded by the sharp increase in energy and transportation costs Quarterly EBITDA Reported (€ million) 2020 2021 64.1 65.5 63.8 61.1 57.6 58.3 58.7 52.0 - 6.6% vs. 4Q20 1Q 2Q 3Q 4Q 15
Slide 16: All-time high in net profit
All-time high in Net profit driven by operational and financial strength EBIT to NET PROFIT Reported (€ million) € million 2021 2020 % y-o-y EBIT 174.4 162.9 +7.0% Financial result +2.0 -3.3 c.s. Effective tax rate 24.6% 23.3% Tax -43.4 -37.1 +16.9% 2021 2020 Net profit 133.0 122.5 +8.6% 16
Slide 17: Acceleration in investment projects
Acceleration in investment projects in the last quarter to meet the increase in demand CAPEX. Breakdown by type (€ million) Beyond25 advanced projects o Collagen casings capacity increase in several plants 92.0 o Investment to improve the technology in Acceleration Danville (EEUU) in Capex o Hydroly
Slide 18: Cash generation and debt evolution
Sound cash generation allows to speed up investment projects, increase shareholders´remuneration and to strengthen the balance sheet Debt evolution (€ million) +82.4 38.2 -246.7 +36.7 +38.5 +15.0 1.8 Net bank debt +78.3 Net bank debt1 IFRS 16 and Net financial Net financial Dec’20 Forex and Dec’21 d
Slide 19: Guidance 2022
Guidance 2022 US$/€: 1.15 € million Amount % y-o-y Revenue 1,047-1,065 +8% / +10% EBITDA 257-263 +4% / +6% Net profit 139-144 +5% / +8% Capex ≈100 19
Slide 20: 25
25 20
Slide 21: Beyond 25
New purpose New “route to market” Beyond25 Operational transformation New organization 2025 targets 21
Slide 22: New purpose
Well Food New purpose being New “route to market” Operational transformation 22
Slide 23: Reshaping food and wellbeing. For many, for long.
Vis ci) fan Reshaping food and wellbeing. For many, for long.
Slide 24: Reshaping food and wellbeing
Reshaping food and wellbeing New purpose Strategic implication Our technology and our global presence allow us to be in a position to shape a better world. We contribute to improving access to food around the world, and we can also help through nutrition and our knowledge the well-being of human bei
Slide 25: For many…
For many… New purpose Strategic implication If something characterizes us, it is that we have always wanted to be relevant, to generate an impact, that is why our scope of action is the world, “for many”, the more people can enjoy our products, services or solutions, the better for our purpose. New
Slide 26: For long
For long New purpose Strategic implication And of course, we generate an impact that remains, a project for the future, a project that intends to be forever, "for long“. It is an impact for everyone, for life, for the well- being of all. This is our sustainable proposal. Sustainability as a transver
Slide 27: Our strategic track record
Our strategic track record New purpose MORE TO BE Be MORE Be ONE 2006-2011 2012-2015 2016-2021 “A strategy to benefit from our “A strategy to tackle the “A strategy to be the economies of scale” growth opportunity” authentic global leader, the casing company” Cost Technology Service Strategic pillar
Slide 28: New plan: Profitable growth
New plan: Profitable growth New purpose Sustainability as a strategic pillar Viscofan Group revenue* * Excludes revenue from divestments +7.0% +4.6% ≈8% +6.3% CAGR CAGR CAGR CAGR 416 565 741 969 1,300 2006 2011 2015 2021 2025e Be ONE Be MORE MORE TO BE Beyond25 Cost Technology Service Sustainability
Slide 29: New route to market
New purpose New “route to market” Operational transformation New organization 29
Slide 30: Viscofan's value proposal
Viscofan´s value proposal Route to market Value chain Food Ingredients & casings Food Retailer Consumer company 30
Slide 31: Positioning products in our purpose
Positioning products in our purpose Route to market Bioengineering High added Season trasnfer value Collagen Satiating casings Edible films Hydrolyzates Functional ingredients Bags, films Veggie Cellulose casings casings Fibrous casings Interleavers Tubular plastic Developed Co-extrusion More to be
Slide 32: New segmentation with two strategic approaches
New segmentation with two strategic approaches Route to market Traditional Business (TB) New Business (NB) €809 Mn* €116 Mn* Edible films Bioengineering Veggie Hydrolyzates casings Collagen Satiating casings Netting Functional ingredients Tubular Interleavers Fibrous plastics Season trasnfer casings
Slide 33: New segmentation with two strategic approaches
New segmentation with two strategic approaches Route to market Traditional Business (TB) New Business (NB) Strengthen leadership Grow and gain size 20% 2% 33
Slide 34: TB. Strengthen leadership
Route to market TB. Strengthen leadership 34
Slide 35: Traditional Business €4,000 million market
Route to market Cellulose Fibrous +5%/+7% Viscofan´s expected growth CAGRe 2022-2025 Traditional Collagen Business €4,000 million Emerging markets Market size Developed markets 35
Slide 36: A market with strong growth fundamentals
A market with strong growth fundamentals TENDENCIAS DE Route to market CRECIMIENTO Casings anual growth rate. volume +2%/+4% Collagen €1.0Bn FEEDING FOOD POPULATION HABITS Animal INDUSTRY gut Higher protein consumption Sophistication Population growth €2.1Bn More vegans and vegetarians Ensure the se
Slide 37: Collagen
Collagen Route to market ✓ New collagen extrusion and Viscofan: converting capacity to meet Tarjet in 2025 ✓ Natur casing promotion in expected demand Replace 5%-7% ✓ R&D: Development of new markets ✓ Investments in a technology of the animal gut new products to replace ✓ Specific projects by geogra
Slide 38: Fibrous
Fibrous Route to market Viscofan: Target in 2025 ✓ Spread growth to other emerging areas Market leadership in ✓ Installed capacity to be ✓ Portfolio adaptation in Europe this technology the world's largest and in the US ✓ Evolution of the new producer of fibrous technology Adapting portfolio Sharing
Slide 39: Cellulose
Cellulose Route to market Viscofan: ✓ Service and product improvement with the new Target in 2025 ✓ Installed capacity for a fast technology in Danville Cellulose adoption in response to growth ✓ Great opportunity to ✓ Learning and improvement new markets access protein in ✓ Global footprint, proxim
Slide 40: Asia: China and South East Asia
Asia Route to market Growth driver China South East Asia Actions: Actions: 1,400 Mn 580 Mn population • Help the market in its population • Prepared to supply quest for productivity market growth 0.2 € casing and automation 0.2 € casing per capita per capita • Increase presence • Expansion of collag
Slide 41: Asia: India and Japan
Asia Route to market Growth driver India. Develop the market Japón. Gain presence 1,400 Mn Actions: 125 Mn Actions: population population Develop the market Gain presence 0.0 € casing 0.7 € casing per capita Product launch (veggie per capita Commercial office and cellulose) since 2021 n.s. Developme
Slide 42: South America
SAM Route to market Focus on volume South America 530 Mn population Actions: Supporting industry´s 0.4 € per capita sophistication process with more producto portfolio Number 1 Supporting our customers´productivity Growth potential in the region Production presence with the highest urban population
Slide 43: Developed markets
Developed markets Route to market Focus on value proposal North America Europe 500 Mn Actions: 750 Mn population population • Supporting customer 0.8 € casing 1.1 € casings automation and per capita per capita sustainability challenges Number 1 • Push and development of Number 1 snacking products Pr
Slide 44: NB. Grow and gain size
Route to market NB. Grow and gain size 44
Slide 45: NB. Grow and gain size
NB. Grow and gain size Route to market Approach to the use of collagen as Production process developed an ingredient in different based on technological leadership applications in casings and acquisitions Promotion of the value proposition Committed team with extensive to customers with new solution
Slide 46: Cutting edge solutions
Cutting edge solutions Route to market Edible films Collagen hydrolyzates Disruptive innovation to reach more markets Premium product Ingredients transfer Veggie casing Product to provide variety and help The only company in the world with efficiency a tubular product Industrialized process Applied
Slide 47: New Business >€5,000 million addressable market
Route to market Collagen hydrolyzates Veggie casing 15%/20% Viscofan´s expected growth CAGRe 2022-2025 New Edible film Business New generation plastics >€5,000 million Addressable market Bioengineering 47
Slide 48: Collagen hydrolyzates
Collagen hydrolyzates Route to market A Beyond25 growth opportunity Viscofan: ✓ Products release and ✓ Increase capacity in Germany Target in 2025. ✓ Production synergies with marketing Achieve 3% ✓ Extensive know-how on casings ✓ Strengthening commercial market share collagen ✓ Suppliers diversific
Slide 49: Veggie casing
Veggie casing Route to market A Beyond25 growth opportunity ✓ Currently less than 1% of sales Viscofan: although in more than 20 Target in 2025. ✓ Beyond. Set capacity in line countries. with market growth ✓ Beyond. Higher commercial 3% of Viscofan´s ✓ 2019-2021. Launch ✓ Seeking to industralize and
Slide 50: ediLEAF
ediLEAF Route to market A Beyond25 growth opportunity Ingredient. Edible film Product lines Application of herbs and/or spices in meat or fish Development: Product already developed and products. patented Transfer herbs and/or spices to dairy products, such as Operations: Planned investment in capac
Slide 51: Plastics
Plastics Route to market A Beyond25 growth opportunity Focus on circular economy Focus on added value eFAN Transfer casings Recycled or bio-based plastic casings helping A cost-effective alternative to conventional customers with their sustainability challenges smoking, frying or glazing of ham Cert
Slide 52: Bioengineering
Bioengineering Route to market Exploit our collagen know-how in the medical area Collagen gel Triankle Leading the for medical consortium applications Sales in the US and Italy Ardat Contribute to the development of advanced therapies GMP facility in Cardiomesh Germany Looking for patients 52
Slide 53: Operational transformation
New purpose New “route to market” Operational transformation New organization 2025 targets 53
Slide 54: A lot of transformation projects Beyond 25
A lot of transformation projects Operational transformation Capacity, efficiencies, digitalization y and sustainability as a basis Technology transfer Capacity and efficiencies “Driver to improve profitability” “Profitable growth” Beyond25 Digitalization Sustainability “As a source of competitive “S
Slide 55: Technology transfer
Technology transfer Operational transformation Seeking to improve the profitability in North America Automation Danville. Installation of a new technology in cellulose casings €25Mn More output Capex Better cost More reliability Better handling Better product quality 55
Slide 56: Capacity increase
Capacity increase Operational transformation To strengthen our leadership in collagen casings USA Higher production output thanks to the technological update in New Jersey Collagen. China Prepared to capture 7% of Increase extrusion and converting capacity animal gut market Adapt supply chain German
Slide 57: Efficiencies
Efficiencies Operational transformation Improve our industrial base and our supply chain Cellulose and fibrous technology in Cáseda Technoloy evolution and capacity utilization A more solid production SAM model to face any Maximize extrusion capacity environment China Suppliers diversification Adapt
Slide 58: Digitalization
Digitalization Operational transformation Source of competitive advantage Industrial model 5G network installation in Cáseda, artificial vision, machine learning, lone worker safety, remote expert, big data Efficiency and productivity Simplicity, BBDD HR Global, automation (robotics), partners integ
Slide 59: Sustainability
Sustainability Operational transformation Innovation for growth Product, process and new business models meeting sustanibility requirements Lead the industry in sustainability More solid business model, mitigate risks and take advantage of opportunities from climate change, anticipate regulation Par
Slide 60: Sustainability
Sustainability Operational transformation Viscofan. Contribution and priorities Global challeges In In In To feed a growing Climate Human process product people population change rights Sustainability as a new pillar of our strategy Viscofan. Prioritary SGGs New 60
Slide 61: Sustainability
Sustainability Operational transformation Water Waste to landfill Reduction of water withdrawal in m3 over Reduction of tonnes of waste sent to million of extruded meters landfill over million of extruded meters 100 93 70 -30% 100 95 90 -10% 2018 2021 2030 2018 2021 2030 Climate change Accident rate
Slide 62: New organization
New “route to market” Operational transformation New organization 2025 targets 62
Slide 63: People
People People New organization Our value Our lines of action Pioneers Enjoyment Diversity Resolutive Team players Health and safety Talent management Agility, transversal teams Motivation and commitment 63
Slide 64: Organized to achieve our targets
Organized to achieve our targets New organization José Antonio Canales CEO Jesús Calavia M. Carmen Peña Iñaki Goñi Chief Operations Chief Financial Chief Commercial Officer Officer Officer Andrés Díaz Gabriel Larrea Juan Negri Luis Bertoli CEO EMEA CEO NAM CEO APAC CEO SAM Spain United States China
Slide 65: 2025 targets
Operational transformation New organization 2025 targets 65
Slide 66: A unique value proposal to achieve our Beyond25 ambition
A unique value proposal to achieve our Beyond25 2025 targets ambition Margin €1.3Bn 26% €425Mn Revenue EBITDA Capex 2022-2025e 2025e margin 2025e US$/€: 1.15 66
Slide 67: To wrap up
To wrap up • The MORE TO BE strategic plan has been completed in 2021 with the best results in Viscofan´s history, exceeding our expected guidance for the year. • Higher volumes, improvement in price mix, production efficiencies and cost control counteract an adverse inflation environment. • Cash ge
Slide 68: Appendix. Main financial figures 2021
Appendix. Main financial figures Like-for-like1 Like-for-like1 € million 2021 % y-o-y % y-o-y 4Q21 % y-o-y % y-o-y Revenue 969.2 +6.3% +8.0% 257.8 +7.3% +4.1% EBITDA 246.7 +5.2% +8.9% 61.1 -6.6% -13.0% EBITDA margin 25.4% -0.3 p.p. +0.2 p.p. 23.7% -3.5 p.p. -4.4 p.p. Operating profit 174.4 +7.0% 43.
Slide 69: Appendix. Alternative Performance Measures
Appendix. Alternative Performance Measures The Alternative Performance Measures included in this report are as follows: • The EBITDA, or operating profit before depreciation and • Net bank debt: This is calculated as non-current borrowings plus current amortization, is calculated excluding depreciat