Essentra Plc · LSE:ESNT
Essentra — Investor Day (November 2014)
30 slides from Essentra's investor day presentation, Nov 20, 2014
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY Vision 2015 and “Drive for 2020” 20 NOVEMBER 2014
Slide 2: Agenda
AGENDA 1. Vision 2015 and “Drive for 2020” - Vision 2015 progress report Colin Day - Next steps and “Drive for 2020” Colin Day - M&A strategy Stefan Schellinger - Summary Colin Day 2. Drive for 2020 – SBUs - Distribution Scott Fawcett - Filter Products PT Sreekumar - Specialist Technologies Colin Da
Slide 3: Vision 2015 Progress Report
VISION 2015 PROGRESS REPORT Colin Day Chief Executive 3
Slide 4: Vision 2015 – Our Key Platforms
VISION 2015 – OUR KEY PLATFORMS Above industry Continued Disciplined Unified average margin use of capital culture revenue improvement growth • Focus on volume • Operational • Net Working • Leverage talent gearing Capital across divisions • Improve go-to- prioritisation market • Gross and • Appropri
Slide 5: Vision 2015 – Our Financial Objectives
VISION 2015 – OUR FINANCIAL OBJECTIVES Progressive dividend ≥100% profit conversion to cash Volume leverage to drive GM expansion c. 50% conversion to OM LFL revenue growth: ≥ mid single-digit CAGR A “virtuous cycle” organic model … At constant exchange and adjusted to exclude intangible amortisatio
Slide 6: Vision 2015 – We Will Deliver Our Targets
VISION 2015 – WE WILL DELIVER OUR TARGETS … 20% 16% 12% 8% 4% 0% LFL Revenue Operating Profit EPS Growth DPS Growth NWC Growth 2005-2010 2010-2014E NOTES: 2014E are the latest analyst consensus estimates 6 Net working capital ratio is as at 31 December 2010 and 31 December 2013A
Slide 7: Vision 2015 – Our M&A Objectives
VISION 2015 – OUR M&A OBJECTIVES PEOPLE • Introduce new expertise to PRODUCT & talent pool MARKETS • Expand range • Accelerate entry into new markets and PLACE segments • Reinforce & • Bring new strengthen existing technologies positions • Enter into new geographies … complemented by value-creating
Slide 8: We Have Complemented Our Organic Growth
WE HAVE COMPLEMENTED OUR ORGANIC GROWTH … Acquisitions in the last c. three years 12 Total transaction value c. £660m Incremental revenue c. £530m Employees added >4,500 Divisional business markets entered 16 Additional sites c. 60 A complement to our balanced organic growth strategy NOTE: Based on
Slide 9: We Have Rebranded
WE HAVE REBRANDED … Essentra: a vibrant single corporate identity 9
Slide 10: We Have Reorganised
WE HAVE REORGANISED … 1 Commercial: Category management, KAM, innovation 2 Operational: Footprint, best practice, excellence 3 HR: Talent development, talent import / export 4 Finance & IT: Common platform 5 Legal: Policy deployment, risk, compliance Specialist Health & Personal Filter Products Dist
Slide 11: … And We Have Strengthened the Bench
… AND WE HAVE STRENGTHENED THE BENCH Colin Day CEO Matthew Gregory Jon Green Malcolm Waugh Gavin Leathem Group Finance Director Company Secretary & Group Commercial Director / Group Human Resources General Counsel Director MD H & PC Packaging Alan Richards Joanna Speed Stefan Schellinger Brett York
Slide 12: Next Steps – "Drive for 2020"
NEXT STEPS – “DRIVE FOR 2020” Colin Day Chief Executive 12
Slide 13: From "Vision 2015" to "Drive for 2020"
FROM “VISION 2015” TO “DRIVE FOR 2020” • Essentra plc evolved its 3-year strategic planning process in 2014: – Focus on a market and customer-led approach – Review of key strategic drivers, market segments and strategic gaps – Develop a portfolio of prioritised strategic initiatives, to be implement
Slide 14: Evolving Our Vision Statement
EVOLVING OUR VISION STATEMENT Vision 2015 “Drive for 2020” “A leading international supplier of “Building a leading global provider speciality plastic, fibre, foam and of essential components and packaging products” solutions” Changes to reflect: • “Building”: we are on a journey, and our objective
Slide 15: Considerations for "Drive for 2020"
CONSIDERATIONS FOR “DRIVE FOR 2020” Operate a global, integrated Essentra Group, generating Drive horizontality and regionalisation across the group to leverage size, scope, synergy across all regions, infrastructure and talent: Go to market by category, KAM, shared locations, shared functions and b
Slide 16: From Product to Market & Category Focused GTM
FROM PRODUCT TO MARKET & CATEGORY FOCUSED GTM Addressable market by Addressable market by category category (2010) (2014) Health & Personal Care Health & Personal Tobacco inc SND Care Tobacco inc SND Industrial Industrial Electronics Construction Electronics Food & Drink Construction POS, Paper & Fo
Slide 17: End-Market Exposure: Market Growth vs Essentra Relative Strength
END-MARKET EXPOSURE GLOBAL: MARKET GROWTH VS ESSENTRA RELATIVE STRENGTH Market growth rate (%) Bubble = Size of addressed Essentra relative strength PPT = NA, Brazil, CIS & Europe markets Extruded Plastics = Europe only Increasing relative strength Using categories to better align the Group & facili
Slide 18: Drive for 2020 M&A Strategy
DRIVE FOR 2020 M&A STRATEGY Stefan Schellinger Corporate Development Director 18
Slide 19: M&A – We Have Looked at 48 Projects
M&A – WE HAVE LOOKED AT 48 PROJECTS Targets by business Targets by country 20 20 18 17 16 15 16 12 12 Number of Companies 9 8 7 companies by country 6 8 7 5 5 4 3 4 3 0 0 Targets by type of acquisition Targets by size (sales) 30 16 28 25 £ 12 12 11 m 20 17 S Number of New leg 8 15 7 companies a 6 6
Slide 20: "Drive for 2020" – The Role of M&A
“DRIVE FOR 2020” – THE ROLE OF M&A COMMENTS • Build sizeable, globally leading businesses in attractive markets LARGER • Larger acquisitions in the “core” SCALE M&A TO of our activity, or sizeable BUILD adjacencies to complement LEADING existing businesses that form the STRATEGIC building blocks for
Slide 21: Essentra's Market Driven M&A Approach
ESSENTRA’S MARKET DRIVEN M&A APPROACH Essentra perspective • Sizeable attractive market • Multi £bn global market, growing low to mid-single digit • Robust sustainable growth drivers • Growing aging population; regulation MARKET • Ability to differentiate • Customer service, technical skills, qualit
Slide 22: "Drive for 2020" – The Role of M&A
“DRIVE FOR 2020” – THE ROLE OF M&A M&A remains a strategic priority to improve the portfolio over time and to complement organic strategy in regards to building leading global strategic platforms • Create and prioritise the M&A opportunities across the Group and the regions • Ensure disciplined proc
Slide 23: Drive for 2020 Summary
DRIVE FOR 2020 SUMMARY Colin Day Chief Executive 23
Slide 24: Drive for 2020 – The Direction of Travel
DRIVE FOR 2020 – THE DIRECTION OF TRAVEL £800m £2.4bn c. £1.6bn c. £400m c. £1.2bn 2014 PF Organic growth 2020 PF M&A 2020 E Double the size of the business in five years NOTE: Chart for illustrative purposes only, does not represent a financial forecast 2014PF based on latest consensus estimates pl
Slide 25: Drive for 2020 – Priorities & Objectives
DRIVE FOR 2020 – PRIORITIES & OBJECTIVES OUR STRATEGIC PRIORITIES OUR FINANCIAL OBJECTIVES INTEGRATION Like-for-like revenue of at least mid- Operate a global, integrated Essentra group single digit % generating synergy across all regions, – Consistent outperformance of our functions and business
Slide 26: Q&A
Q&A 26
Slide 27: Appendix
APPENDIX 27
Slide 28: Colin Day – Chief Executive
Colin Day – Chief Executive Colin Day was appointed Chief Executive Officer of Essentra plc on 1 April 2011, prior to which he was Chief Financial Officer of Reckitt Benckiser Group plc. Before joining Reckitt Benckiser he was Group Finance Director of Aegis Group plc, and previously held a number o
Slide 29: Stefan Schellinger – Corporate Development Director
Stefan Schellinger – Corporate Development Director Stefan Schellinger joined Essentra as Corporate Development Director in 2013, before which he was Finance Director - Emerging Markets at Gilbarco Veeder Root from 2011, having initially joined the Danaher Corporation as Director, Corporate Developm
Slide 30: Capital Markets Day
CAPITAL MARKETS DAY Vision 2015 and “Drive for 2020” 20 NOVEMBER 2014