Sonae Indústria S.G.P.S — Sonae Indústria — Investor Presentation (November 2014)
29 slides from Sonae Indústria S.G.P.S's investor presentation, November 2014
Slide 1: Investor Presentation
Sonae Indústria Investor Presentation Together, creatingTogether, creating the future the future November 2014
Slide 2: Disclaimer
INVESTOR PRESENTATION | SONAE INDÚSTRIA DISCLAIMER THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES AND ACCORDINGLY IT IS PROVIDED FOR INFORMATION PURPOSES ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO SONAE INDÚSTRIA, S.G.
Slide 3: Meeting Objectives
INVESTOR PRESENTATION | SONAE INDÚSTRIA MEETING OBJECTIVES Purpose of presentation Present Sonae Indústria management team Present the “Investment case” Describe the transaction 3
Slide 4: Presenting Team
INVESTOR PRESENTATION | SONAE INDÚSTRIA PRESENTING TEAM Rui Correia [CEO] Chris Lawrie [CFO] • CEO since February 2013 • CFO since April 2013 • CFO 2005-2013 • With Efanor/Sonae Group since 2001 • With Efanor/Sonae Group since 1994 • CFO of Sonaecom 2001-2009 • Head of Finance Department of Sonae •
Slide 5: Investment Case
INVESTOR PRESENTATION | SONAE INDÚSTRIA INVESTMENT CASE Investment Case Inflection point: cycle turning with high operational leverage Strong market player: geographical and product diversification with world class assets in our major markets Execution delivery: strategic plan with relevant be
Slide 6: A major player in the wood-based panel sector
INVESTOR PRESENTATION | SONAE INDÚSTRIA OVERVIEW A major player in the wood-based panel sector • Full range of wood based panel products: o Particleboard o Oriented Strand Board (OSB) o Medium Density Fibreboard (MDF) o Melamine Faced Boards • Presence in major markets: Germany, Iberia, France, Nort
Slide 7: With a diversified industrial footprint
INVESTOR PRESENTATION | SONAE INDÚSTRIA OVERVIEW … with a diversified industrial footprint (as of November 2014) Sonae Indústria Installed Production Capacity: 5.8 million m3 # 21 sites (of which 14 are board plants) 7
Slide 8: A top player in each of our markets
INVESTOR PRESENTATION | SONAE INDÚSTRIA OVERVIEW | COMPETITION … a top player in each of our markets (as of November 2014) • Estimated wood based panels production capacity per region ‘000 m3 0 500 1,000 1,500 2,000 2,500 3,000 ‘000 m3 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Iberian Peninsula Nort
Slide 9: And one of the top 5 world players
INVESTOR PRESENTATION | SONAE INDÚSTRIA OVERVIEW | COMPETITION … and one of the top 5 world players (as of November 2014) TOP 15 world wood based panels players, in terms of production capacity ‘000 m3 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Kronospan M&P Kaindl (1) Egger
Slide 10: With world class assets
INVESTOR PRESENTATION | SONAE INDÚSTRIA OVERVIEW … with world class assets Nettgau Oliv. do Hospital Linares In Germany In Portugal In Spain PB: 650 k m3 PB: 450 k m3 PB: 430 k m3 OSB: 460 k m3 MFC: 20.1 M m2 MFC: 11.1 M m2 MFC: 17.5 M m2 Paper Impregnation Paper Impregnation Year: 2001 Year: 2000*
Slide 11: And a full range of wood based products
INVESTOR PRESENTATION | SONAE INDÚSTRIA OVERVIEW … and a full range of wood based products PARTICLEBOARD (PB) Strong range of high value added products • Very versatile • Mainly melamine products, veneer faced, laminates • Suitable for all general uses in furniture and and flooring for decorative so
Slide 12: Generating a diversified revenue mix
INVESTOR PRESENTATION | SONAE INDÚSTRIA PERFORMANCE … generating a diversified revenue mix (2013 sales) • Diversified market base and value added product portfolio • Higher value added products represent circa 50% of sales • Circa 70% of sales generated in Europe By market(1) By product(1) Iberian O
Slide 13: Sustaining turnover through a challenging phase of the market cycle
INVESTOR PRESENTATION | SONAE INDÚSTRIA PERFORMANCE Sustaining turnover through a challenging phase of the market cycle Turnover and 2,500 Recurrent EBITDA margin 30.0% GDP(1) (constant prices, annual percent change) 2,066 6% 25.0% 2,000 1,769 4% 20.0% 2% 1,283 1,293 1,352 1,321 1,232 1,500 15.0% 14
Slide 14: With improving demand in construction and furniture sectors
INVESTOR PRESENTATION | SONAE INDÚSTRIA PERFORMANCE | MARKET With improving demand in construction and furniture sectors 105.0 Western Europe (EC-15) • Decline in construction output Construction (1) 100.0 95.0 reached a trough last year 90.0 • Sector expected to grow by 85.0 1.8% per annum in 2014-
Slide 15: Profitability: LTM Recurrent EBITDA
INVESTOR PRESENTATION | SONAE INDÚSTRIA PERFORMANCE Profitability: LTM Recurrent EBITDA • Positive EBITDA despite overcapacity, the economic crisis and pressure on wood prices and other variable costs • Operational leverage makes the business well positioned to benefit from macro-economic upturn (mi
Slide 16: Strengthening our KPIs for future growth
INVESTOR PRESENTATION | SONAE INDÚSTRIA PERFORMANCE Strengthening our KPIs for future growth • In a solid position to perform in the future due to the operational restructuring plan and strategic investments 2007 2009 2013 9M 2014 Turnover (million euros) 2,066 1,283 1,232 856 Recurrent EBITDA (mill
Slide 17: Majority of profitability improvement measures already under way
INVESTOR PRESENTATION | SONAE INDÚSTRIA STRATEGY EXECUTION … with a majority of profitability improvement measures already under way Industrial footprint • Fix, sell or close underperforming assets optimization Operating • Improved capacity utilization index levels and specific improvements consumpt
Slide 18: Industrial footprint optimization and operating improvements
INVESTOR PRESENTATION | SONAE INDÚSTRIA STRATEGY EXECUTION Industrial footprint optimization and operating improvements • Closure/sale of non performing assets executed over last three years, with capacity Restructuring reduction in Germany and Iberian Peninsula and divestment in UK activities Dives
Slide 19: Improved product mix and fixed costs reduction
INVESTOR PRESENTATION | SONAE INDÚSTRIA STRATEGY EXECUTION Improved product mix and fixed costs reduction • Target higher value added products in sales mix (e.g. melamine through our Innovus® brand in Europe and Tafilam® in North America) 60% Improved Sonae Indústria 50% >45% 47% Leverage strategic
Slide 20: Investing in key strategic areas
INVESTOR PRESENTATION | SONAE INDÚSTRIA STRATEGY EXECUTION … investing in key strategic areas • Investing for the growth of the business: Improve consumption levels of recycled wood and increase sales volumes of Melamine Faced Boards • New recycling equipment to increase recycled wood consumption CA
Slide 21: Securing refinancing of the majority of our debt
INVESTOR PRESENTATION | SONAE INDÚSTRIA REFINANCING Securing refinancing of the majority of our debt 300-325 M€ of debt refinanced with SCHEDULED LOAN REPAYMENTS (million euros) two main banks, providing significant Extended maturities improvements in terms of maturity profile and costs Securiti
Slide 22: Envisaged share capital increase
INVESTOR PRESENTATION | SONAE INDÚSTRIA CAPITAL INCREASE Envisaged share capital increase Share capital increase of up to 150 million euros Commitment of controlling shareholder, Efanor, to subscribe a minimum amount of 75 million Type euros Rights issue + Use of proceeds: Private Placement Is
Slide 23: Transaction outline
INVESTOR PRESENTATION | SONAE INDÚSTRIA CAPITAL INCREASE Transaction outline Offer size Up to 150 million euros Global Coordinators Ratio 107.1428571428571 Subscription price 0.01€ per share Key issues BPI Agent Bank BPI BESI Listing Venue Euronext Lisbon Caixa BI Millennium IB Others Minimum 77 mil
Slide 24: Annexes
INVESTOR PRESENTATION | SONAE INDÚSTRIA Annexes 24
Slide 25: 9M14 results overview
INVESTOR PRESENTATION | SONAE INDÚSTRIA ANNEXES 9M14 results overview • Turnover affected by the reduced industrial footprint; Consolidated Turnover (million euros) Recurrent EBITDA mg (% Turnover) • Recurrent EBITDA up by 27% against last year, with recurrent 350 14.0% 1,000 915 EBITDA margin reach
Slide 26: Shareholding structure
INVESTOR PRESENTATION | SONAE INDÚSTRIA ANNEXES Shareholding structure • A stable shareholder structure, with a reference shareholder: Efanor, a Portuguese family holding company with other interests in food and non-food retail, shopping centres, telecoms, among other sectors Share capital FREE FLOA
Slide 27: Product innovation: Bio-materials, Woodforce
INVESTOR PRESENTATION | SONAE INDÚSTRIA ANNEXES Product innovation: Bio-materials, Woodforce® • Benefits of MDF wood fibres: GREAT GREAT GREAT PERFORMANCE INDUSTRIALLY ENVIRONMENTALLY • Bio-materials and market megatrends • Reduced gas consumption NON WOVEN MATS Smart • Reduce CO2 emissions mobility
Slide 28: Glossary
INVESTOR PRESENTATION | SONAE INDÚSTRIA ANNEXES Glossary Capacity Utilization Index Finished-Available Production (m3) / Installed production capacity (m3); raw boards only CAPEX Investment in Tangible Fixed Assets Earnings Before Interests and Taxes + Depreciations and Amortizations + (Provisions a
Slide 29: Investor contacts
INVESTOR PRESENTATION | SONAE INDÚSTRIA Investor contacts António Castro Sílvia Saraiva Phone: (+351) 220 100 655 investor.relations@sonaeindustria.com 29
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