Tecnoglass Inc. · NYSE:TGLS
Tecnoglass — Q3 2023 Earnings Presentation
26 slides from Tecnoglass's earnings presentation, November 2023
Slide 1: Tecnoglass Investor Presentation
Tecnoglass (NYSE: TGLS) Investor Presentation Santiago Giraldo Chief Financial Officer www.tecnoglass.com
Slide 2: Disclaimer
Disclaimer Disclaimer This presentation (including any information which has been or may be supplied in writing or orally in connection herewith or in connection with any further inquiries, this “Presentation”) contains information regarding Tecnoglass Inc. and its subsidiaries, as applicable, where
Slide 3: Tecnoglass at a Glance
Tecnoglass at a Glance Key Stats Leading Position in U.S. Market U.S. End Market Mix U.S. LatAm/Other SF Residential Multi-Family/ Commercial Miami, FL ~9,000 $1.6 B 4% Global Headquarter Employees Market Cap At Q3’23 Total Total U.S. Revenues Revenues 42% LTM Q3’23 58% LTM Q3’23 96% $850 MM ~20% $8
Slide 4: Global Leader in Architectural Windows and Glass
Global Leader in Architectural Windows and Glass Supplying Architectural Glass Products to Landmark Properties in the U.S. and Latin America Leading global manufacturer, distributor and installer of high-spec TGLS Successful Geographic Expansion in the U.S. architectural windows and glass for reside
Slide 5: Built-to-Suit Innovative Products Pacing Ahead of Evolving Industry Trends
Built-to-Suit Innovative Products Pacing Ahead of Evolving Industry Trends Tecnoglass’ High-Quality Products and Exceptional Customer Service Allow it to Better Serve Customers and Support Organic Growth in Each of Our End Markets Multi-Family / Commercial Markets: Glass Technology Curtain Walls and
Slide 6: Evolution of Revenue & Adjusted EBITDA
Evolution of Revenue & Adjusted EBITDA Key Milestones Revenue & Adj. EBITDA Delivering Double-Digit Organic CAGR 2013 Became public 900.0 600.0 2015 Investment in top-class manufacturing facility to produce high-spec insulated glass 842 800.0 2017 Entered into the single-family residential market in
Slide 7: Why Invest in Tecnoglass
Why Invest in Tecnoglass Key Investment Highlights Seven Oaks East | Austin, Texas 1 | Strong Revenue Generating Track Record and Positive Outlook ➢ Impressive Track Record of Organic Revenue Growth in the U.S. Commercial and Residential Markets ➢ Effectively Positioned to Further Penetrate the Attr
Slide 8: Impressive Track Record of Organic Revenue Growth in the U.S.
Impressive Track Record of Organic Revenue Growth in the U.S. Multi-Family / Commercial and Residential Markets • U.S. revenues continue to represent the majority of sales, contributing ~95% of total TGLS Revenue by Country revenues and total backlog as of Q3’23 Total Sales 850 900 • The Company has
Slide 9: Penetrating the U.S. Market With History of Converting Backlog to Revenue
Effectively Positioned to Further Penetrate the Attractive U.S. Market With Demonstrated History of Converting Backlog to Revenue • Solid single-family residential growth trajectory not fully captured in backlog given shorter term “spot” duration of projects Backlog by End Market • Record Backlog of
Slide 10: Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market
Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market Significant Addressable Market Potential1 Operational Update 3% • Completed installation of 2 full lines, with a third one expected to be 2% completed within the next couple of weeks Vinyl Current vinyl window 20% operati
Slide 11: Vertically-Integrated, Well-Situated, Cutting-Edge Manufacturing Operations
Vertically-Integrated, Well-Situated, Cutting-Edge Manufacturing Operations Drive Industry Leading Margins Suppliers Raw Material Production Process Final Product Sales, Distribution & Installation Fully Vertically Integrated • Tecnoglass’ integration across the architectural glass and window value
Slide 12: Operational Efficiencies Resulting from Structural Competitive Advantages
Operational Efficiencies Resulting from Structural Competitive Advantages Competitive Structural Operational Benefits Advantage Lean Cost Structure Below Average High Quality Product Favorable Shipping Favorable ESG Lead Times Impact • Retain profit at every step of • Tight control over a short and
Slide 13: Best in Class Profitability and Cash Flow Generation
Best in Class Profitability and Cash Flow Generation Structurally Improved Gross Margin Industry-Leading Adjusted EBITDA Margin 60.0% 45.0% 38.8% 48.8% 49.2% 40.0% 37.1% 50.0% 35.0% 40.8% 30.2% 40.0% 37.0% 30.0% 25.9% 31.5% 25.0% 30.0% 21.4% 20.0% 20.0% 15.0% 10.0% 10.0% 5.0% 0.0% 0.0% 2019 2020 202
Slide 14: Best in Class Profitability and Cash Flow Generation
Best in Class Profitability and Cash Flow Generation Operating Cash Flow Bridge (2018 – LTM Q3’23) Improved Free Cash Flow 141.9 144.1 117.3 US$ millions 71.3 86.6 51.5 71.7 18.3 26.7 65.7 70.6 53.4 57.6 25.0 1.8 2019 2020 2021 2022 LTM Sep'23 Free Cash Flow CAPEX • Tecnoglass has established a stro
Slide 15: Disciplined Capital Allocation Supporting Leading Financial Returns
Disciplined Capital Allocation Supporting Leading Financial Returns Strong Balance Sheet and Leverage Profile To Execute Growth Liquidity of $289 million, including cash of $119 million and $170 million available under committed revolver and other working capital lines 1 High Return Strategic Capex
Slide 16: Disciplined Capital Allocation Supporting Leading Financial Returns (Cont'd)
Disciplined Capital Allocation Supporting Leading Financial Returns (Cont’d) Strong Balance Sheet and Leverage Profile To Execute Growth l 14 Lecount Place New Rochelle, New York 2 Dividend Payments • ~$45M of aggregate dividends paid since 2016 • In June 2023 the Company declared a quarterly cash d
Slide 17: Committed to ESG Principles
Committed to ESG Principles Leading Eco-Efficiency and Innovation Green Revenues Tecnoglass aims to become a certified carbon neutral company by the end of 2023. Already a carbon neutral company as of 2021 and expected to be carbon neutral company as of 2022 by the end of this year Proactively inves
Slide 18: Committed to ESG Principles
Committed to ESG Principles Enhancing our Environment | Ventana de Campeones Barranquilla, Colombia As of September 2023 +85% of our 9,000 employees have participated and benefited in social well- being programs offered by the Company Employee salaries are 15% above minimum wage in Colombia on avera
Slide 19: Committed to ESG Principles
Committed to ESG Principles Promoting Continuous, Ethical and Responsible Growth Ethical Governance and Board Composition Highly Experienced and Dedicated Management Team Board composition: 5 independent & 2 executive Diverse industry expertise, including broad experience in the construction industr
Slide 20: Q3 2023 Key Takeaways
Q3 2023 Key Takeaways • Solid growth in the multi-family and commercial activity, up Key Takeaways Sales By Geography Q3’23 6.0% YoY to $122.9 mm as we continue to execute on our growing backlog; Single-family revenues up 2.4% to an all time high $87.8 mm, through growth in dealer network, 5% $210.7
Slide 21: 2023 Double-Digit Growth Outlook
2023 Double-Digit Growth Outlook ▪ Based on YTD results and the timing of orders through year end, we expect another record year of organic double digit revenue and Adjusted EBITDA growth Revenue ▪ Adjusting revenue outlook to 18% all-organic growth $835-$848 MM at the mid point, accounting for Q4 p
Slide 22: Appendix
300 Third Avenue Waltham, Massachusetts l APPENDIX www.tecnoglass.com
Slide 23: Operational Review
Operational Review Vertically Integrated Operations Provide Low-Cost Base and Operational Flexibility Sales, Distribution & Suppliers Raw Material Production Process Final Product Installation 3rd Party Suppliers of Sheet Glass Architectural Glass Glass Transformation Glass Distribution End 3rd Part
Slide 24: Profit & Loss 2023 vs 2022
Profit & Loss 2023 vs 20221 Three months ended September 30, 2023 vs 2022 Nine months ended September 30, 2023 vs 2022 2023 % Sales 2022 % Sales $∆ %∆ 2023 % Sales 2022 % Sales $∆ %∆ Operating revenues 210,743 100.0% 201,780 100.0% 8,963 4.4% 638,662 100.0% 505,452 100.0% 133,210 26.4% Raw materials
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation1 Adjusted EBITDA and adjusted net (loss) income attributable to parent reconciliation Figures in U.S. $k Three months ended Nine months ended Sept 30, Sept 30, 2023 2022 2023 2022 Net (loss) income 46,095 46,922 147,032 101,288 Less: Income (loss) attributable to non-controll
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation1 Net Debt, Leverage and Total Investment Reconciliations Figures in U.S. $k As of September 30, 2022 2023 Short Term Debt and Current Portion of Long Term Debt 434 3,127 Long Term Debt 168,255 166,699 Gross Debt 168,689 169,826 Cash at the end of the period 84,434 118,973 Net