Grupo Rotoplas Sab De Cv · BMV:AGUA
Grupo Rotoplas Sab De Cv — Q3 2020 Earnings Presentation
37 slides from Grupo Rotoplas Sab De Cv's earnings presentation, 2020
Slide 1: Corporate Presentation Third Quarter 2020
Grupo Rotoplas S.A.B. 4 ‘ _ Corporate Presentation { dy, _ Third Quarter 2020, a — NG
Slide 2: Forward-looking statements
= soplas:. Forward-looking statements /potoplas The contents of this presentation, including text, graphics, images and other materials (“Content”), here contained, is for general information purposes only. While we endeavor to keep the information up to date and correct, Grupo Rotoplas, S.A.B. de C
Slide 3: Investment Considerations
Investment Considerations 6) | WATER A nascent industry of opportunities PROVIDING SOLUTIONS Market leaders WITH A CLEAR PURPOSE 3 Sustainable long-term model “more and better water” 4 5 6 WHERE WE ARE GOING Growth and value opportunities STRONG FINANCIALS Sustainable focus WHY OWN AGUA? Momentum Do
Slide 4: Water: A nascent industry of opportunities
WATER A nascent industry of opportunities
Slide 5: Population Growth
Population Growth 2020 2050 Urban,4.0B.....7,0B Total 7.0B 10.0B for non-agricultural uses increases than the population General population will grow by an average of Water Suppl E pply /potop! Imbalance in water distribution ] O countries control 6 O% of the global fresh water supply nana PPR he wo
Slide 6: Water Challenges for Sectors of interest
Water Challenges for Sectors of interest Humanity for Rotoplas: people worldwide of the world’s population Water scarcity & live without access to live in areas that have water scarcity adequate sanitation services at least once a month quality Water management & Market Size & Dynamics recycling bil
Slide 7: Case Study — Mexico City
Case Study — Mexico City ior “Nowadays, 40% of inhabitants have problems Awl regarding water access and quality” Poor quality i.e. Nowadays in Tlalpan neighborhood the local government spends US$7M annually in water trucks CDMxX International Airport * The city's water system provides 8% of the supp
Slide 8: Water situation in Mexico
Water situation in Mexico | 8 Apotopls Country Mexico Guatemala Peru USA El Salvador Argentina Costa Rica Brazil Honduras Nicaragua Source: World Resources Institute (WRI) Ranking Risk 24 3.86 2.36 2.05 185 1.66 131 0,92 0.78 0.27 0.21 5049 49 48 48 6 General water risk! iin nie the percenta: of con
Slide 9: Providing Solutions: Market leaders
PROVIDING SOLUTIONS Market leaders
Slide 10: The Company
The Company Compared to 1994. 2.CAGR 2014 ~ LTM20 6 1994 Storage Products () | country 800 direct clients 500 employees 3,000 points of sale 2 product lines 8 plants 1 innovation and development center Sales MXN 500mm EBITDA MXN 70mm Ce 3Q20 Water Market Leader 0 14 countries (14x)! 37,500+ points o
Slide 11: Key metrics 2014 — LTM September
Key metrics 2014 — LTM September 202 $6,552 ©). $8,230 26% Sales 40% >5% A-35% Government sales 42,000+ A 42,000+ Treatment & purification units EBITDA 2,703 3,324 A621 Employees 13% 4% A9% Client concentration 13.1% 18.2% ASIpb EBITDA Margin 23,000+ 27,500+ A 4,S00+ Points of sale 10.9% (6) 15.1% A
Slide 12: Decentralized Water Solutions | Business Model
y Decentralized Water Solutions | Business Model /potop!5:. TODAY ----------------------------------------------- > EVOLUTION B2D @ Water Purifying e-commerce _ Products Services “e Residential e Commercial e Schools Storage @ Water flow ® “e Treatment & heating eo Water treatment B2B and recycling
Slide 13: Portfolio | Products and Services
Portfolio | Products and Services PRODUCTS SERVICES STORAGE Sales by soluton ttm -f)- Services 8% F - tees elt iF Water Tanks —_—_Cisterns Industrial Other WATER FLOW i ss le 296 : = Products 92% Pipes Valves Pumps Catch Pits PURIFICATION Residential Institutional [" 4a Drinking Water Fountains TREA
Slide 14: Favorable Growth Drivers | Tailwinds
Zc Favorable Growth Drivers | Tailwinds /potoplas:. Storage Rapid urban growth = supply interruption > higher demand for water storage products Water demand > centralized system capacity (old infrastructure and poor city planning) a Growing trend of circular economy - use of recycled resins in water
Slide 15: Strategy by country | region
Strategy by country | region 6 Country demographics 0-14 y.o. 13% 3 15-24 y.o. 8% o% 25:54y.0. 21% 2 0%. 55-64 y.o. 4% Hex 65+ y.o. 4% Bs% Rotoplas Strategy: * Maintain product leadership * Boosting services (PTARs, bebbia, drinking water Country demographics 0-14 y.o. 9% Mo” 18-24 y.o. 6% 25-54y.0.
Slide 16: With a Clear Purpose: Sustainable long-term model
WITH A CLEAR PURPOSE Sustainable long-term model “more and better water”
Slide 17: Competitive Advantages
Competitive Advantages - Value - Quality - Social Responsibility + Over 27,500 points of sale in America - Over 37,500 points of treatment, recycling and purification Source: Rotoplas. Information as of December 2018. ER OVATION /potoplas bt + Focus on ESG (Environmental, Social & Governance) - Oper
Slide 18: ESG focus
ESG focus /potopls:. sy Q QQ +19,000 hrs! training collaborators on human rights, processes, health and safety, among other topics 53% independent By Board Members Audit, Compensation and Corporate -& Practices Committees chaired by independent Board Members GOVERNANC 8 +5,700! oy plumbers trained a
Slide 19: Sustainability Organizational Structure
y Sustainability Organizational Structure potoplas.. It has a multidisciplinary structure and reports to the Board of Directors through the Corporate Prac Committee Human Capital Investor Government Sysesa Relations Relations Quality Strategy Institutional Purchasing Rdettons Drgperianncraé Marketin
Slide 20: Climate Change Strategy
Climate Change Strategy Seeks to mitigate risks and capitalize on opportunities raised by climate change for Rotoplas and its stakeholders i é &® aa | End user Reducing Greenhouse Gas Emissions (GHG) Rotoplas measures its GHG emissions scope 1,2,3 as well as its water footprint Reduce vulnerability
Slide 21: Climate Change Strategy
Climate Change Strategy / ie) « Renewable energy supply - solar panels - Main initiatives| energy & materials circularity oS Ba Incorporation of recycled resins (own and third party) y= +--+ Development of blow-molding process for the manufacture of water tanks, more efficient in terms of energy and
Slide 22: Best Corporate Governance Practices
Best Corporate Governance Practices /n ie) Board of Directors Our board of directors: Audit Compensation Committee Ck Committee Transparency = > 53% Independent Members =J Diversity == > 5 international Board Members c 1 5@x Innovation = > Represented by 4 different generations @ Equality == >> Gend
Slide 23: Where We Are Going: Growth and value opportunities
WHERE WE ARE GOING Growth and value opportunities
Slide 24: Flow's program kick off quote from CEO
“.throughout this transformation effort, Rotoplas should achieve a ROIC greater than WACC in less than 18 months” Carlos Rojas | CEO Flow’s program kick off August 2019
Slide 25: Flow | Transformation Program
Flow | Transformation Program - RO! top!as aS... A. Enhance performance of current portfolio * Revenue levers 1) Price & volume optimization * Cost levers 1) Procurement of materials 2) Manufacturing efficiency 3) Distribution costs optimization * Working capital levers 1) Inventory levels optimizat
Slide 26: --- --- --- --- --- --- --- --- --- --- --- --- --- ---
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Slide 27: Strategy per country or region
Strategy per country or region /\ Y ~\ ( e@ MEXICO ( 1) PERU oplas. * Grow service platform bebbia. ri * Maintain leadership in storage and improvement * Maintain products leadership a * Develop and grow water flow and control segment * Explore new business opportunities Sytesa. + Maintain growth an
Slide 28: Water-as-a-Service Platform
Water-as-a-Service Platform Mega Trends 8 Building and H 4 _fes)_ 7-10 years Apotopls- Tal leasing : wwTP ] ie ire contract => { Wastewater treatment . and recycling plants ’ Syltesa.w oy \ a Treated \ Water Teuse & q wastewater We coe Operation and maintenance Water discharge to sewage On-site trea
Slide 29: Smart agricultural water management
| smart agricultural water management 6 Tailor-made, one-stop-shop, full-service irrigation solutions, including design, build, operate, maintain and digitize * 50/50 JV with Renewable Resources Group Value proposition * Efficient water management in fields (save up to 30% in water) * Improve perfor
Slide 30: Improve discipline in Capital Allocation
‘potoplas Improve discipline in Capital Allocation Resource allocation for: ie a ® Organic growth Inorganic growth Share buybacks Dividend Payment Debt Payment Coherence matrix approach ) Process: 9 —- p— Project proposal Evaluation IRR > WACC Validation and Quarterly status authorization update Sup
Slide 31: Strong Financials with a sustainable focus
STRONG FINANCIALS With a sustainable focus
Slide 32: Track Record of Growth and Profitability
Track Record of Growth and Profitability MXN mm Revenue by Country MXN mm CAGR: 12.2%. \ $7,777 $7,790 $8,230 | $6,660 | $5,353 ' 24% i \ ' 58% i ! | 2018 2017 208 LT Adjusted EBITDA by Solution MXN mm CAGR: 20.9% 1,502 $1286 % $1004 *% $738 2% 2% 2016 2017 2018 2019 mexico MH other Argentina $2,003
Slide 33: Sound Financials
Sound Financials /poto 91aS... MXN mm Debt amortization calendar S Bal: Sh h Prior to second reopening trong Balance Sheet to support growt! 80% September 2020 20% $2,400 $600 || Cash and Equivalents $3,394 oe Other Assets $9,580 2019 2020 2027 Total As: Debt $4,151 After second reopening Other Liab
Slide 34: ROIC vs Cost of Capital
ROIC vs Cost of Capital /potoplas Improvement in ROIC through the 23.3% Flow transformational pr Greater discipline in Allocation (Control Tower). on of working +89 bp ed production efficiency in “ manufacturing process. Divestment strategy for low return SPTETEBRBB2ReVPeereeseEwemwmwmragaeecssg oO
Slide 35: Why Own AGUA? Momentum
6 WHY OWN AGUA? Momentum
Slide 36: Business Model Resilience, Sales and EBITDA
Jas. Business Model Resilience Sales RotoP 4.7x CAGR: 11.8% v 7.859 7,790 °.230 )) Continuous growth 6.551 8,660 ~ 5,399 8.700 5,353 ©) Double digit margins 4080 2,659 3,049 (O)Strong Management 1,769 I ‘ I l | | 2006 2007 2008 2009 2010 201 2012 2013 20M 2015 2016 2017 2018 2019 LTM Mexico — 41 yea
Slide 37: Thank you
Thank you ‘NX | INVESTOR RELATIONS as \ Mariana Fernandez x mfernandez@rotoplas.com ~+52 (55) 5201-5000 ext. 50163 q q
Grupo Rotoplas S.A.B. de C.V. — Q3 2020 Earnings Presentation on 6ix