Sonae Indústria S.G.P.S — Investor Presentation (May 2011)
57 slides from Sonae Indústria S.G.P.S's investor presentation, May 2011
Slide 1: Investor Presentation May 2011
INVESTOR PRESENTATION May 2011 1
Slide 2: Overview
OVERVIEW " Hi a it
Slide 3: Shareholder Structure
OVERVIEW SONAE INDÚSTRIA SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE AT 31st MARCH 2011 EFANOR FREE FLOAT 51.356% 48.644% Sonae Indústria SGPS 3
Slide 4: One of the largest wood panel producers in the world
OVERVIEW SONAE INDÚSTRIA WE ARE ONE OF THE LARGEST WOOD PANEL PRODUCERS IN THE WORLD. WITH 27 PLANTS LOCATED IN 7 COUNTRIES AND SPREAD ACROSS 3 CONTINENTS. OUR BUSINESS IS EXCLUSIVELY FOCUSED ON THE PRODUCTION OF WOOD BASED PANELS. 4
Slide 5: Our Operations
OVERVIEW SONAE INDÚSTRIA OUR OPERATIONS * * As of 31st March 2011 5
Slide 6: Our Products: PB, MDF, OSB
OVERVIEW SONAE INDÚSTRIA OUR PRODUCTS OVER 90% OF OUR RAWBOARD CAPACITY IS TO MANUFACTURE PB & MDF. PB MDF OSB Very versatile Excellent substitute for Suitable for structural and solid wood non-structural applications Suitable for all general in the construction uses in furniture and Ideal for fur
Slide 7: Our Products
OVERVIEW SONAE INDÚSTRIA OUR PRODUCTS WITH VARIOUS APPLICATIONS KITCHEN / OFFICE / HOME FURNITURE CONSTRUCTION FLOORING DECORATION PACKAGING 7
Slide 8: Sales
OVERVIEW SONAE INDÚSTRIA SALES IN 2010, APPROXIMATELY 77% OF OUR SALES WERE GENERATED IN EUROPE WE TRANSFORM MORE THAN 50% INTO VALUE ADDED PRODUCTS SALES BY MARKET SALES BY PRODUCT S.AFRICA OTHERS 11% FLOORING 8% 2% PB IBERIAN P. 21% CANADA 25% T&G 12% 5% CTS UK 9% 5% MDF FRANCE 17% 11% MF HB 2
Slide 9: Our History
OVERVIEW SONAE INDÚSTRIA OUR HISTORY Acquisition and SONAE (Sociedade modernization of Nacional de AGLOMA – the largest Estratificados, SARL) domestic Particleboard was established to Starting the producer in Portugal international manufacture decorative High expansion with the Pressure laminates ac
Slide 10: Our History
OVERVIEW SONAE INDÚSTRIA OUR HISTORY SINCE 1993 SONAE INDÚSTRIA’S INSTALLED CAPACITY GREW THROUGH BOTH ACQUISITIONS AND ORGANIC GROWTH. 2005: JV with 2008 and 1997: Investment period in Tarkett 2009: 1999-2004: (Germany) Greenfield plants in Brazil, Restructuring of Glunz Restructuring South Afric
Slide 11: Wood Based Panel Players
OVERVIEW SONAE INDÚSTRIA WOOD BASED PANEL PLAYERS WE ARE ONE OF THE LARGEST GLOBAL MANUFACTURERS OF WOOD BASED PANELS IN EUROPE AND WORLDWIDE EUROPE Thousands of m 3 WORLDWIDE Thousands of m 3 M&P Kaindl (Kronospan) 14.613 M&P Kaindl (Kronospan) 14.370 Sonae Indústria 7.455 Sonae Indústria 6.040 P
Slide 12: Capacity Production
OVERVIEW SONAE INDÚSTRIA CAPACITY PRODUCTION TOTAL CAPACITY (RAWBOARD) IS 7.5 MILLION M3, APPROXIMATELY 80% OF WHICH IS LOCATED IN EUROPE. SONAE INDÚSTRIA RAWBOARD CAPACITY BY REGION SONAE INDÚSTRIA RAWBOARD CAPACITY BY PRODUCT * Thousands of m 3 Thousands of m 3 6.000 4.250 5.155 4.500 5.000 4.00
Slide 13: Overview Figures
OVERVIEW SONAE INDÚSTRIA OVERVIEW FIGURES FY 10 CONSOLIDATED TURNOVER OF 1.3 BILLION EUROS RECURRENT EBITDA OF 71 MILLION EUROS; MARGIN OF 6% TOTAL EBITDA OF 53 MILLION EUROS, WHICH INCLUDES CHARGES FOR RESTRUCTURING COSTS AND 7 MILLION EURO GAIN FROM THE SALE OF THE LURE PLANT. TURNOVER & REC
Slide 14: Geographical Regions
OVERVIEW SONAE INDÚSTRIA GEOGRAPHICAL REGIONS WITH VARYING LEVELS OF PROFITABILITY BETWEEN OUR 3 MAIN GEOGRAPHICAL REGIONS: € Mn RoWTurnover & Recurrent EBITDA Margin 362 263 251 207 197 17,0% € Mn TURNOVER & RECURRENT EBITDA CENTRAL EUROPE 15,3% 14,1% 1.200 15,0% 13,7% 980 1.000 10,0% 6,7% 800 69
Slide 15: Highlights of 1Q11 Results
HIGHLIGHTS OF 1Q11 RESULTS 15
Slide 16: Consolidated Operational Review
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Comparing 1Q11 with 4Q10: Turnover increased 10%, reaching 352 million Euros Recurrent EBITDA recovered to 18 million Euros Net Loss reduced from 23 to 21 million Euros Comparing 1Q11 with 1Q10: Turnover increased 10%
Slide 17: Volumes Sold
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA VOLUMES SOLD 1Q11, volumes sold 3% above 1Q10* and 8% higher then 4Q10. CONSOLIDATED VOLUME SALES WITHOUT BRAZIL Millions of m3 1,60 1,37 1,35 1,39 1,39 1,40 1,27 1,29 1,25 1,19 1,19 1,20 1,00 0,80 0,60 0,40 0,20 0,00 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q
Slide 18: Capacity Utilization
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA CAPACITY UTILIZATION Capacity utilization in 1Q11 is 5pp higher when compared to 1Q10 and 9pp higher compared with 4Q10. Capacity Utilization (W/o Brazil) - Quarterly 110,0% 100,0% 90,0% 77,2% 77,4% 80,0% 72,0% 70,7% 70,0% 74,2% 75,0% 65,9% 68,1% 70,1% 67
Slide 19: Price and Cost Evolution
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA PRICE AND COST EVOLUTION CONSOLIDATED QUARTERLY AVERAGE PRICES * (eur/m3) BASE 100:1Q07 1,4 Prices have been moving 1,2 1,0 0,8 0,6 0,4 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 PB MDF OSB MFC CONSOLIDATED QUARTE
Slide 20: Chemicals: Urea and Methanol
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA CHEMICALS: UREA AND METHANOL CHEMICAL COSTS HAVE A SIGNIFICANT IMPACT IN OUR COST STRUCTURE (AROUND 30% VARIABLE COSTS) UREA AND METHANOL ARE THE MAIN CHEMICALS USED TO PRODUCE RESINS USED IN OUR PRODUCTION NWE ICIS Methanol Prices - Out. 2003_2011 480
Slide 21: Consolidated Operational Review
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Consolidated operational figures: Consolidated turnover in 1Q11 totalled 352 million Euros, representing a 10% recovery from 4Q10. However, high raw material cost, kept EBITDA recurrent margin at a similar level. Compar
Slide 22: Geographic Review of Operations: Iberia
HIGHLIGHTS OF 1Q11 RESULTS Geographic Review of Operations IBERIA Iberia continued to experience tough € Mn TURNOVER & RECURRENT EBITDA IBERIA market conditions, particularly due to the 140 30,0% macroeconomic situation and the consequent austerity measures which are 120 25,0% causing a very depre
Slide 23: Geographic Review: Central Europe
HIGHLIGHTS OF 1Q11 RESULTS Geographic Review of Operations CENTRAL EUROPE (Germany, France and the UK) € Mn TURNOVER & RECURRENT EBITDA CENTRAL EUROPE In Germany, during 1Q11, compared to 4Q10, volumes sold increased by 7% and the capacity 220 195 utilization jumped 10pp. Turnover moved 15% 200 18
Slide 24: Geographic Review: Rest of the World
HIGHLIGHTS OF 1Q11 RESULTS Geographic Review of Operations REST OF THE WORLD (Canada and South Africa) In Canada, our volumes sold in 1Q11 are € Mn 6% below 1Q10 although having recovered ROW TURNOVER & RECURRENT EBITDA 7% when compared to 4Q10. Turnover in local currency is 6% above 4Q10. On the
Slide 25: Capex, Working Capital and Net Debt
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA CAPEX, WORKING CAPITAL AND NET DEBT Additions to Fixed Assets in 1Q11 were 6 million Euros, mostly related to investments in essential maintenance, Health & Safety and Environmental improvements. Working Capital increased by 17 million Euros during 1Q11
Slide 26: Scheduled Loan Repayments
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA SCHEDULED LOAN REPAYMENTS SCHEDULED LOAN REPAYMENTS* (as of 31st March 2011) 160 140 50 million Euros thereof are already 120 refinanced 100 80 148 60 40 77 79 74 72 54 20 37 44 32 0 2Q11 2H11 1H12 2H12 1H13 2H13 2014 2015 ≥2016 As already announced in Ap
Slide 27: Profit & Loss Account
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA PROFIT & LOSS ACCOUNT (euro millions) 1Q11/ 1Q11/ 1Q10 4Q10 1Q11 1Q10 4Q10 Consolidated Turnover 320 320 352 10% 10% Other Operational Income 20 13 9 (58%) (34%) EBITDA (6) 10 17 370% 78% Recurrent EBITDA 7 14 18 153% 23% Recurrent EBITDA Margin % 2,2% 4,5%
Slide 28: Balance Sheet
HIGHLIGHTS OF 1Q11 RESULTS SONAE INDÚSTRIA BALANCE SHEET (euro millions) 2010 1Q11 Non Current Assets 1.135 1.103 Tangible Assets 984 953 Goodwill 94 93 Deferred Tax 40 38 Other Non Current Assets 17 19 Current Assets 351 383 Inventories 129 138 Trade Debtors 159 202 Cash & Investments 27 11 Other C
Slide 29: Looking Forward
LOOKING FORWARD 29
Slide 30: Looking Forward
SONAE INDÚSTRIA LOOKING FORWARD We expect our EBITDA margins to continue to improve, based on a stronger performance in Central Europe. Moreover, the optimization of our business operations, supported by the matrix organization we have implemented, is expected to bring further efficiency gains.
Slide 31: Our Strategy
OUR STRATEGY 31
Slide 32: Our Focus
OUR STRATEGY SONAE INDÚSTRIA OUR FOCUS Our PORTFOLIO STRATEGY: Protect market share and profitability in Iberia Increase Profitability and improve competitiveness in Central Europe Grow in our most profitable markets But… our SHORT TERM STRATEGY during the crisis has been focused on: Bal
Slide 33: Managing for Cash
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA MANAGING FOR CASH WORKING CAPITAL HAS BEEN REDUCED INVESTMENTS HAVE BEEN MINIMIZED Additional Fixed Assets Million Euros 120 110 100 31 WORKING CAPITAL: 2008 - 2011 80 € Mn 25 60 500 16 400 40 28 300 22 4 200 20 7 38 7 7 7 100 6 10
Slide 34: Strengthening Our Balance Sheet: Reasons to Sell Tafisa Brasil
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA STRENGTHENING OUR BALANCE SHEET REASONS TO SELL TAFISA BRASIL BRAZIL RAWBOARD CAPACITY PLANS (PB+MDF) Thousands m 3 2,500 we wanted to strengthen our balance 2,040 sheet 8. million m3 2,000 1,750 (2012) 1,474 800 400 Capacity has
Slide 35: Impacts from Selling Tafisa Brasil
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA STRENGTHENING OUR BALANCE SHEET IMPACTS FROM SELLING TAFISA BRASIL Total Value of the transaction: 121 million Euros Net Debt + contingencies: 38 million Euros Enterprise Value: 159 million Euros Multiple of 7.8x (adding 60 m
Slide 36: Impacts from Selling Lure Plant
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA STRENGTHENING OUR BALANCE SHEET IMPACTS FROM SELLING LURE PLANT Production Capacity: 530.000 m3 PB Sold to Swedspan, a subsidiary of INGKA Group (which also owns IKEA Group) Total Net debt reduction: 68 million Euros Positive
Slide 37: Increasing Profitability
OUR SHORT TERM STRATEGY – FOCUS ON P&L SONAE INDÚSTRIA INCREASING PROFITABILITY WE HAVE BEEN ADAPTING OUR CAPACITY TO THE MARKET DEMAND, BY CLOSING OUR LESS EFFICIENT PLANTS AND/OR LINES IN ORDER TO INCREASE PROFITABILITY 27* As of 31st March 2011 • Coleraine continues to have a MF line • Kaiserse
Slide 38: Increasing Profitability: Capacity Closed
OUR SHORT TERM STRATEGY – FOCUS ON P&L SONAE INDÚSTRIA INCREASING PROFITABILITY IN TOTAL, WE HAVE CLOSED 1.455.000 m3 CAPACITY. 2008 2009 We closed 5 plants: We stopped two lines: Coleraine in the UK – 100.000 m3 PB MDF Line 1 in Meppen – Topan I – 110.000 m3 George in S.A.- 60.000 m3 PB PB Line i
Slide 39: Geographic Review of Operations
GEOGRAPHIC REVIEW OF OPERATIONS 39
Slide 40: Iberia
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA IBERIA Sonae Indústria Iberian Capacity Thousands m 3 IBERIA COMPETITIVE LANDSCAPE MDF 500 PB 1.220 HB 70 PARTICLEBOARD MDF FLOORING HARDBOARD HPL CHEMICALS OTHERS (FURNITURE, COMPONENTS, WOOD VENEER) Source: Sonae Indústria (April 2011) 40
Slide 41: Iberia Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA IBERIA IBERIA COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN IBERIA - TOP PLAYERS Millions m3 PLANTS Finsa/Utisa 12 3,15 CAPACITY Sonae Indústria 1,79 1,79 Million m3 CAPACITY UTILIZATION 9M10 Interbon 0,97 68% Losan 0,38 Tablicia 0,37 Source: So
Slide 42: Central Europe
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA CENTRAL EUROPE CENTRAL EUROPE Sonae Indústria Central Europe Capacity Thousands m 3 COMPETITIVE LANDSCAPE MDF 1.200 PB OSB 2.590 460 UK GERMANY FRANCE PARTICLEBOARD MDF HPL CPL OSB Source: Sonae Indústria (April 2011) 42
Slide 43: Central Europe Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA CENTRAL EUROPE CENTRAL EUROPE COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN CENTRAL EUROPE - TOP PLAYERS Millions m3 PLANTS 12 Sonae Indústria 4,25 CAPACITY Egger 3,79 4.25 Million m3 Kronospan M&P Kaindl CAPACITY UTILIZATION 9M10 2,60 73% Pflei
Slide 44: Rest of the World: North America
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA NORTH AMERICA PLANTS REST OF THE WORLD 1 NORTH AMERICA CAPACITY COMPETITIVE LANDSCAPE 0.9 Million m3 CAPACITY UTILIZATION 9M10 71% INSTALLED RAWBOARD CAPACITY IN NORTH AMERICA (PB+MDF) - TOP PLAYERS M Flakeboard 2,74 Roseburg 2,44 Pfleiderer 1,90 Templ
Slide 45: Rest of the World: South Africa
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA SOUTH AFRICA Sonae Indústria S.A. Capacity Thousands m 3 REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE PB 445 MDF 70 SOUTH AFRICA PARTICLEBOARD MDF Source: Sonae Indústria (April 2011) 45
Slide 46: South Africa Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA SOUTH AFRICA REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE PLANTS 2 CAPACITY INSTALLED RAWBOARD CAPACITY IN SOUTH AFRICA - TOP PLAYERS 0,52 Million m3 Millions m3 CAPACITY UTILIZATION 9M10 73% PG Bison 0,71 Sonae Indústria 0,52 Source: Sonae Ind
Slide 47: Corporate Governance
CORPORATE GOVERNANCE SONAE OQ INDUSTRIA
Slide 48: Board of Directors
CORPORATE GOVERNANCE SONAE INDÚSTRIA BOARD OF DIRECTORS BOARD OF Belmiro de Azevedo [Chairman] Álvaro Cuervo García DIRECTORS Paulo Azevedo Thomas Nystén Carlos Bianchi de Aguiar [CEO] EXECUTIVE Rui Correia [CFO] Christophe Chambonnet [CM&SO] COMMITTEE João Paulo Pinto [CI&TO] Carlos Bianchi de Agui
Slide 49: Board Committees
CORPORATE GOVERNANCE SONAE INDÚSTRIA BOARD COMMITTEES BAFC BOARD AUDIT AND THOMAS NYSTÉN (IND) FINANCE COMMITTEE ÁLVARO CUERVO GARCÍA (IND) PAULO AZEVEDO SREC BOARD SOCIAL RESPONSIBILITY COMMITTEES AND ENVIRONMENT COMMITTEE BELMIRO DE AZEVEDO THOMAS NYSTÉN (IND) BNRC BOARD NOMINATION AND BELMIRO DE
Slide 50: More on Sonae Indústria
MORE ON SONAE INDUSTRIA OE SONAE (Q) inoustain
Slide 51: Human Resources
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA HUMAN RESOURCES Approximately 4.8 thousand Employees at the end of December 2010 Number of Employees by country Number of Employees & Productivity 1) S.A. The Number of Employees Productivity 328 Netherlands BASE 100: 2002 Canada 16 313 10.000 195,0 181,0 Ib
Slide 52: Sustainability
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA SUSTAINABILITY SUSTAINABILITY REPORT OF SONAE INDÚSTRIA 2008 and 2009 report can be found on the website www.sonaeindustria.com Following issues were be included Vision, Mission, Values and Principles Code of Conduct Communication Strategy Sustainabi
Slide 53: CO2 Emissions Mitigation
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA CO2 EMISSIONS MITIGATION WOOD-BASED PANELS HELP TO MITIGATE CLIMATE CHANGE*: forests are a recognised carbon sink (through photosynthesis) forestry products are CARBON STORES wood-based panels are actually long-term carbon stores if used in construction
Slide 54: Sustainable Use of Wood and Recycling
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA SUSTAINABLE USE OF WOOD AND RECYCLING WOOD-BASED PANELS INCORPORATE A HIGH PERCENTAGE OF SAWMILL CO-PRODUCTS AND WOOD RESIDUES AS RAW MATERIALS forestry residues pallets old or used wood based panels old or used furniture for further details please see
Slide 55: Sustainable Use of Wood and Recycling
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA SUSTAINABLE USE OF WOOD AND RECYCLING Wood-based panels play a key role in the sustainable use of forestry resources as they: represent the natural alternative to solid wood, replacing it in an increasing number of applications allow significant dimensiona
Slide 56: Cogeneration (CHP)
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA COGENERATION (CHP) ENERGY IS PPRODUCED IN COMBINED HEAT AND POWER PLANTS (CHP) non-recyclable waste wood (biomass) is used as fuel for thermal energy production to be used in industrial processes surplus heat is used to additional produce electricity to su
Slide 57: Sonae Indústria
eC) SONAE INDUSTRIA
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