Slide 1: Specialist Components Strategy Review
INVESTOR PRESENTATION Specialist Components Strategy Review 03 AUGUST 2018
Slide 2: Agenda
AGENDA 1. Recap / context 2. Our Specialist Components Businesses 3. Summary 4. Q&A © 2013 ESSENTRA PLC 2
Slide 3: Recap / Context
RECAP / CONTEXT Paul Forman Chief Executive © 2013 ESSENTRA PLC
Slide 4: Rationale for Separate Division
RATIONALE FOR SEPARATE DIVISION WHAT WE SAID IN JULY 2017 • We decided to create a fourth separately managed division, “Specialist Components" for five reasons: 1. Very limited synergy with previous host divisions 2. Management teams of three larger global divisions can focus entirely on delivering
Slide 5: What is Specialist Components?
WHAT IS SPECIALIST COMPONENTS? SIX SMALLER BUSINESSES WITH STRONG POSITIONS IN NICHE MARKETS 2017 Business unit revenue Product Customers Geography (c. £m) Pipe Protection Oil Country Tubular Goods Americas 29 Pipe protection Technologies (“OCTG”) (mainly US) Point of Purchase (“POP”), Extrusion 32
Slide 6: Our Specialist Components Businesses
OUR SPECIALIST COMPONENTS BUSINESSES Tim Wilson President – Specialist Components © 2013 ESSENTRA PLC
Slide 7: Pipe Protection Technologies (PPT)
PIPE PROTECTION TECHNOLOGIES (“PPT”) © 2013 ESSENTRA PLC
Slide 8: Who We Are & What We Do
WHO WE ARE & WHAT WE DO We specialise in the manufacture of high performance innovative thermoplastics and Overview polymer alloys, and serve customers around the world • The most extensive line of pipe and thread protection products in the OCTG market - “One-stop shop” range of engineered Products
Slide 9: Market Backdrop & Trends
MARKET BACKDROP & TRENDS Oil price vs. PPT NA external revenue North America rig count vs footage drilled (January 2014 – June 2018) PPT NA NA total rig NA footage Oil price revenue count drilled $120 $10,000 2,500 600 $100 500 $8,000 2,000 $80 400 $6,000 1,500 $60 300 $4,000 1,000 $40 200 $2,000 50
Slide 10: Path to Further Value Creation
PATH TO FURTHER VALUE CREATION Strategy & opportunities • Benefit from strong industry fundamentals and gain market share – More linear feet of piping needed to extract the same amount of oil – Benefit from strong customer relationships, extensive product capabilities and skilled, experienced employ
Slide 11: Extrusion
EXTRUSION © 2013 ESSENTRA PLC
Slide 12: Who We Are & What We Do
WHO WE ARE & WHAT WE DO We are one of Europe’s most advanced Overview suppliers of technical co-extrusion and tri- extrusion to all branches of industry • A complete design, production and technical support service: - Engineered vs commodity profiles Kitchen plinths Ticket rails - Rapid response too
Slide 13: Market Backdrop & Trends
MARKET BACKDROP & TRENDS Building & Waste water Point of Ventilation & End-market Conservatories Furniture construction bio treatment Purchase climate Predominantly Geography Europe US & Europe Europe Europe Europe UK Larger Market growth characteristics⁽¹⁾ Broad exposure to a rang
Slide 14: Path to Further Value Creation
PATH TO FURTHER VALUE CREATION Strategy & opportunities • Continue to drive operational excellence, eg: – Tooling lead times / cost – Scrap – Set-up time – Raw material savings / substitution • Gain share through new market entry / innovation, eg: – Engineering plastics, lighting (LED), reinforced p
Slide 15: Tear Tapes
TEAR TAPES © 2013 ESSENTRA PLC
Slide 16: Who We Are & What We Do
WHO WE ARE & WHAT WE DO We are a global business manufacturing and marketing narrow width pressure sensitive Overview adhesive coated tapes, which allow the easy opening of a product’s packaging • Comprehensive range of high quality, filmic- based narrow tapes, designed to meet specific customer req
Slide 17: Market Backdrop & Trends
MARKET BACKDROP & TRENDS End-market Food & beverage Transit packaging Tobacco Global Geography Global Global (ex-China) Market size Larger Smaller Existing market Low Low High share Market growth characteristics⁽¹⁾ Global leader (ex-China) in tobacco & well-positioned to capitalise on grow
Slide 18: Path to Further Value Creation
PATH TO FURTHER VALUE CREATION Strategy & opportunities • Improve business mix – Develop innovative new reclose product offerings based on existing technology • New applications and sustainable solutions – Maximise regulatory-driven opportunities for authentication solutions in Tobacco – Expand curr
Slide 19: Speciality Tapes
SPECIALITY TAPES © 2013 ESSENTRA PLC
Slide 20: Who We Are & What We Do
WHO WE ARE & WHAT WE DO We are an industry leading manufacturer and Overview distributor of engineered, double-sided speciality tapes and adhesive coated products A wide range of premium quality adhesive products, including double-sided foam tapes, finger Products lift tapes, high bond tapes and adh
Slide 21: Market Backdrop & Trends
MARKET BACKDROP & TRENDS Point of Purchase End market Industrial Appliance Transit packaging display Geography North America North America Global North America Market size Larger Smaller Existing market Low Low Low High share Market growth characteristics⁽¹⁾ Enhancing our engineering cap
Slide 22: Path to Further Value Creation
PATH TO FURTHER VALUE CREATION Strategy & opportunities • Drive commercial excellence – Diversify tape technology into sizeable and growing Appliance and Industrial sectors, where current market share is low – Penetrate and win new customers / grow existing accounts – Enhance capabilities in smaller
Slide 23: Card Solutions
CARD SOLUTIONS © 2013 ESSENTRA PLC
Slide 24: Who We Are & What We Do
WHO WE ARE & WHAT WE DO We are a specialised ID solutions distributor Overview focused on the UK market, addressing the growing need for security and identification • A comprehensive range of smart cards, ID card printers, ID accessories and printer Printers Consumables consumables, available for ne
Slide 25: Market Backdrop & Trends
MARKET BACKDROP & TRENDS Education Smartcards, student ID, staff ID, visitor management Stable market, largest vertical, annual enrolment peaks between Jul-Sept Secure staff ID, access control, visitor management Banking & finance Mature market, Essentra growing market share – uncertainty due to Bre
Slide 26: Path to Further Value Creation
PATH TO FURTHER VALUE CREATION Strategy & opportunities • Gain market share – Continued expansion in events management and price tag segments – Grow accessories market through range expansion – Evaluate new product opportunities • Eg, “eco” cards (100% biodegradable) – Geographical expansion outside
Slide 27: Industrial Supply
INDUSTRIAL SUPPLY © 2013 ESSENTRA PLC
Slide 28: Who We Are & What We Do
WHO WE ARE & WHAT WE DO We are a distributor of branded manufactured Overview components to the small and medium OEM markets Bearings & power Clamps & workholding • Extensive range of clamping & work holding transmissions products, knobs, handles, tooling components Products and cutting tools • 73,0
Slide 29: Market Backdrop & Trends
MARKET BACKDROP & TRENDS •Speed and convenience, •Outsourced MRO low transaction sized procurement / store room distributors – multiple provider to large, multi-site competitors, targets manufacturing plants (SDI, primarily maintenance Wesco (formerly Bruckner, depts. (Amazon, Grainger, etc.) MSC, F
Slide 30: Path to Further Value Creation
PATH TO FURTHER VALUE CREATION Strategy & opportunities • Improve customer experience – Launch new digital platform – Re-brand the business back to Reid – Upgrade data analytics capabilities • Gain market share – Launch new products to leverage distribution infrastructure – Expand beyond US Mid-West
Slide 31: Summary
SUMMARY Paul Forman Chief Executive © 2013 ESSENTRA PLC
Slide 32: Our Specialist Components Businesses
OUR SPECIALIST COMPONENTS BUSINESSES • Six standalone niche industrial businesses • All are profitable market leaders in their industries • They were split off from the larger global Components and Packaging divisions because: – Not complementary to their strategies – Will achieve greater success in
Slide 33: Strategic Summary
STRATEGIC SUMMARY Mkt. Mkt. growth Current ST margin LT growth 3rd party Business unit position (3 year profitability improvement potential synergy CAGR) (2018 – 2020) potential PPT Extrusion Tear Tapes Speciality Tapes Card Solutions Industrial Supply An attractive but diverse portfolio of business
Slide 34: Specialist Components Strategy Review
INVESTOR PRESENTATION Specialist Components Strategy Review 03 AUGUST 2018