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Sig — SIG Combibloc Group — Investor Presentation (November 2020)
36 slides from Sig's investor presentation, November 2020
Slide 1: SIG Combibloc Investor Presentation
SIG COMBIBLOC INVESTOR PRESENTATION SAMUEL SIGRIST, CFO NOVEMBER 2020
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is not for use within any country or securities of SIG in any state or jurisdiction in which, or to any person to whom such EBITDA to adjusted EBITDA and the estimated tax impact of the foregoing jurisdiction or by any persons where such use
Slide 3: Business Overview
BUSINESS OVERVIEW
Slide 4: Leading Systems & Solutions Provider for Aseptic Packaging
LEADING SYSTEMS & SOLUTIONS PROVIDER FOR ASEPTIC PACKAGING #2 system Razor/razor- 1,233 fillers in the GLOBAL FOOTPRINT1 WITH INTEGRATED SUPPLY CHAINS provider globally blade business field in resilient, growing model with long- end-markets term customer relationships Core revenue Adj. EBITDA Track
Slide 5: Secular Trends Driving Robust Growth
SECULAR TRENDS DRIVING ROBUST GROWTH PROCESSED FOOD GROWING 2X RATE OF GLOBAL POPULATION Population with access to Global spend for Global population processed food processed food 7.6B people 7.3B people €2.4T GROWTH OF PROCESSED FOOD Size 2018 AND DEMANDING CONSUMERS +1.1B people by 2030 Growth +2.
Slide 6: Aseptic Carton Packaging Shows Highest Growth Rates
ASEPTIC CARTON PACKAGING SHOWS HIGHEST GROWTH RATES 579B 533B 229B 92B kg of packaged food Litres of beverages Litres of ambient packaging Litres of aseptic carton Additional categories1 3B Additional 579B KG OF geographies2 22B PACKAGED FOOD Packaged food Other substrates 137B 579B Other 220B Core
Slide 7: SIG Ideally Positioned to Meet Market and Consumer Trends
SIG IDEALLY POSITIONED TO MEET MARKET AND CONSUMER TRENDS SAFE AND AFFORDABLE PACKAGING DIFFERENTIATING PACKAGING AND FILLING SOLUTIONS SOLUTIONS FOR PREMIUM CATEGORIES ▪ Filling flexibility for customers to adjust to shifts in market ▪ Format/filling flexibility to cater for SKU proliferation deman
Slide 8: We Are at the Heart of Our Customers' Operations
WE ARE AT THE HEART OF OUR CUSTOMERS' OPERATIONS Raw Milk Raw Milk Raw Milk Milk Milk Tanks UHT Filling Line Sleeves & Outbound Consumer Reception Storage Pasteuriser Closures Logistics Raw Material Reception Processing Packaging Systems Distribution & Retail Filling and packaging operations Our ser
Slide 9: Building on Long-Term Customer Partnerships
BUILDING ON LONG-TERM CUSTOMER PARTNERSHIPS WITH GLOBAL AND REGIONAL LEADERS TOP 10 CUSTOMERS % OF 2019A LENGTH OF CUSTOMER SLEEVES RELATIONSHIP REVENUE 1 8% >15 YEARS 2 6% >10 YEARS 3 4% >40 YEARS 4 4% >35 YEARS 5 3% >30 YEARS 6 3% >30 YEARS 7 2% >35 YEARS 8 2% >10 YEARS 9 2% >5 YEARS 10 2% >15 YEA
Slide 10: Sleeve & Filling Technology Platform
SLEEVE & FILLING TECHNOLOGY SIG PLATFORM ENABLES A BROAD AND FLEXIBLE OFFERING Rapid switching to cater for changing needs while keeping asset utilisation high VOLUME AND ▪ Up to 16 product variants possible on one FORMAT filler FORMAT FLEXIBILITY FLEXIBILITY ▪ Range of fill volumes from 80ml to 2,0
Slide 11: Two Distinct Aseptic Technologies
TWO DISTINCT ASEPTIC TECHNOLOGIES Production Filling H2O2 sterilisation Paperboard H2O2 drying Polyethylene (PE) Filling nozzle 1 Coating Longitudinal sealing SIG Printing Shipment Filling nozzle 2 Steam injection PE “Sleeve System” Aluminium Sealing PE Cutting in sheets Polyethylene (PE) Coating Cu
Slide 12: Consumer-Led Innovation
CONSUMER-LED INNOVATION: WE THINK CONSUMERS On-the-go breakfast Target new consumers milk with healthy cereals with rich protein drinks Premiumise Deliver nutritious soups juices through real fruit inclusions with food particulates New consumption Add perceptible value: occasions with drinkable snac
Slide 13: Fast Innovation Cycles Through Regional Test Centres
FAST INNOVATION CYCLES THROUGH REGIONAL TEST CENTRES WE TEST OUR CUSTOMERS WE LET THREE-FACETED TESTING CAN TEST CONSUMERS TEST ENHANCED BY NEW REGIONAL TECH CENTRE IN CHINA Innovative structures, new Upstream, downstream, product Consumer trials shapes, product formulations formulations Two Tech Ce
Slide 14: Combatting Climate Change and Increasing Recycling
COMBATTING CLIMATE CHANGE AND INCREASING RECYCLING RESPONSIBLE COMPANY RESPONSIBLE SOURCING RESPONSIBLE PRODUCTS Pursuing a net positive corporate footprint in Striving for certified sustainable supply of Innovating and delivering smarter solutions with the long run all materials, products and servi
Slide 15: Lowest Carbon Footprint: Cartons Win Every Time
LOWEST CARBON FOOTPRINT: CARTONS WIN EVERY TIME LIQUID DAIRY NON-CARBONATED FOOD kg CO2 equivalent per packaging required for 1,000L UHT milk SOFT DRINKS kg CO2 equivalent per packaging required for 1,000L food kg CO2 equivalent per packaging required for 1,000L non-carbonated soft drinks -45% -70%
Slide 16: Financial Performance
FINANCIAL PERFORMANCE
Slide 17: Razor / Razorblade Business Model Generating Stable Cash Flows
RAZOR / RAZORBLADE BUSINESS MODEL GENERATING STABLE CASH FLOWS FILLERS 6% SLEEVES & CLOSURES 87% SERVICE 7% (OF TOTAL REVENUE2) (OF TOTAL REVENUE2) (OF TOTAL REVENUE2) Key criteria for investment decisions Attractive IRR FILLER INSTALLED GROSS PROFIT DYNAMIC PAYBACK IRR BEFORE DEPRECIATION CUM. CASH
Slide 18: Generate Growth and Increase Profitability Through the Cycle
GENERATE GROWTH AND INCREASE PROFITABILITY THROUGH THE CYCLE 2007-19 2007-19 2007-19 ROCE: REVENUE CAGR: ADJ. EBITDA CAGR: ADJ. EBITDA MARGIN EXPANSION: 4% 6% ~700BPS 22.8%3 CONSTANT CURRENCY % CORE REVENUE1 GROWTH % TOTAL REVENUE (€M) 1.644 1.767 1.546 1.568 1.563 1.590 1.483 1.494 1.294 1.355 CORE
Slide 19: Increasing Focus on Growth Regions
INCREASING FOCUS ON GROWTH REGIONS 2008 2014 2019 Core revenue by region Core revenue by region Core revenue by region AMERICAS Non-EMEA 6% Non-EMEA Non-EMEA 23% 46% 57% AMERICAS AMERICAS ASIA PACIFIC 17% 19% 17% EMEA 43% EMEA ASIA PACIFIC 54% 29% ASIA PACIFIC 38% EMEA 77% Core revenue: €1,163m Core
Slide 20: Operating Through COVID-19 Crisis
OPERATING THROUGH COVID-19 CRISIS RISK MANAGEMENT MEASURES EARLY IMPLEMENTATION GLOBAL AND REGIONAL RIGOROUS OF PANDEMIC TASK FORCES ESTABLISHED PRECAUTIONARY PREPAREDNESS PLAN MEASURES IMPLEMENTED AT ALL PRODUCTION PLANTS ALL PLANTS CONTINUED TO FOOD AND BEVERAGE: AN NUMEROUS SUPPLY CHAIN OPERATE E
Slide 21: Q3 2020 Financial Highlights
Q3 2020 FINANCIAL HIGHLIGHTS CORE ADJUSTED ADJUSTED ADJUSTED NET FREE CASH REVENUE EBITDA EBITDA INCOME FLOW MARGIN €438.6 €133.6 €77.4M €96.4M MILLION MILLION 30.2% (Q3 2019: (Q3 2019: (Q3 2019: €53.8 MILLION) €77.8 MILLION) (Q3 2019: 27.7%) +4.5% €123.8 MILLION) AT CONSTANT CURRENCY +7.9% -0.6% RE
Slide 22: Q3 2020 Performance Highlights
Q3 2020 PERFORMANCE EMEA AND AMERICAS HIGHLIGHTS DRIVE GROWTH EUROPE: ASIA PACIFIC: EXPANDED FOOTPRINT IN STOCK DEPLETION ACROSS SIGNS OF IMPROVEMENT IN BRAZIL DRIVES GROWTH SUPPLY CHAIN WITH CHINA STRONG MILK DEMAND CUSTOMER PRODUCTION COVID-19 AFFECTING IN MEXICO REMAINING HIGH CONSUMPTION IN SE A
Slide 23: 9 Months 2020 Financial Highlights
9 MONTHS 2020 FINANCIAL FULL YEAR GUIDANCE HIGHLIGHTS MAINTAINED CORE ADJUSTED ADJUSTED ADJUSTED NET FREE CASH REVENUE EBITDA EBITDA INCOME FLOW MARGIN €1,288 €349.3 €157.0M €124.5M MILLION MILLION 26.8% (9M 2019: (9M 2019: (9M 2019: (9M 2019: €134.3 MILLION) €114.6 MILLION) €329.3 MILLION) 26.4%) +
Slide 24: EMEA Core Revenue Development by Quarter
EMEA CORE REVENUE DEVELOPMENT BY QUARTER CONSTANT CURRENCY Q1: STOCKBUILDING BY CONSUMERS YOY GROWTH IN MARCH €MILLION 3.1% 12.2% 2.5% Q2: HIGH AT HOME CONSUMPTION 206 STOCKBUILDING ACROSS THE SUPPLY CHAIN 194 181 Q3: STOCK DEPLETION CUSTOMER PURCHASES ACCELERATED IN Q1 2020 Q2 2020 Q3 2020 SEPTEMBE
Slide 25: APAC Core Revenue Development by Quarter
APAC CORE REVENUE DEVELOPMENT BY QUARTER CONSTANT CURRENCY Q1: LOCKDOWNS IN CHINA YOY GROWTH €MILLION SALES SUPPORTED BY CUSTOMER STOCKBUILDING 6.2% 7.7% -2.0% Q2: LOCKDOWNS IN SE ASIA ON-THE-GO CONSUMPTION REDUCED; 169 STOCKBUILDING BY CUSTOMERS IN SE ASIA 160 137 Q3: ONGOING RESTRICTIONS IN SE ASI
Slide 26: Americas Core Revenue Development by Quarter
AMERICAS CORE REVENUE DEVELOPMENT BY QUARTER CONSTANT CURRENCY Q1: LOW BASE OF COMPARISON YOY GROWTH €MILLION NEW FILLER PLACEMENTS IN BRAZIL 34.2% 5.0% 24.1% Q2: BUSINESS GROWTH CONTINUED NEGATIVE IMPACT FROM COVID-19 IN THE US, NOTABLY FOODSERVICE 83 79 STOCKBUILDING IN MEXICO 68 Q3: HIGH AT HOME
Slide 27: Brazil: New Customer Wins
BRAZIL: NEW CUSTOMER WINS FILLER PLACEMENTS WITH SHEFA AND LIDER ACCELERATED VOLUME DEVELOPMENT RECORD 5/9 FILLERS cumulative volume INSTALLATION RE-USED mUnits TIME! Initial ramp-up plan 9 FILLING LINES OF WHICH 3 Actual IN 8 MONTHS OVERHAULED IN BRAZIL AVERAGE WASTE RATES EFFICIENCY RATES BELOW CO
Slide 28: Revenue Evolution 9 Months and Q3
REVENUE EVOLUTION BROAD GEOGRAPHIC PRESENCE 9 MONTHS AND Q3 SUPPORTING GROWTH 9M 2020 Q3 2020 +7.2%1 +4.5%1 € MILLION € MILLION -2 14 -13 -33 17 37 33 -5 -21 5 -3 15 2 3 1’249 1’236 1’288 1’302 CONSTANT CURRENCY 446 441 CONSTANT CURRENCY 439 442 GROWTH RATE 112 GROWTH RATE 120 +5.9% +3.7% +18.9% +2.
Slide 29: Adjusted EBITDA Evolution 9 Months and Q3
ADJUSTED EBITDA EVOLUTION OPERATING PERFORMANCE 9 MONTHS AND Q3 MORE THAN OFFSETS FX IMPACT 9M 2020 Q3 2020 MARGIN € MILLION 26.8%1 € MILLION MARGIN 30.2%1 15 7 0 -8 -1 -28 35 4 0 3 -1 -9 7 6 329 349 301 134 124 115 112 120 Q3 2019 FX IMPACTS NET OF FX TOP LINE RAW MATERIAL PRODUCTION JV DIVIDENDS S
Slide 30: Currency Update
CURRENCY UPDATE VOLATILITY MITIGATED BY HEDGING EUR/BRL EXCHANGE RATE EUR/THB EXCHANGE RATE EUR/USD EXCHANGE RATE 9M 2020 9M 2020 9M 2020 7,00 39,00 1,25 38,00 6,50 1,20 37,00 6,00 36,00 1,15 5,50 35,00 34,00 1,10 5,00 33,00 4,50 1,05 32,00 4,00 31,00 1,00 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 • 9 month curren
Slide 31: Adjusted Net Income Significant Increase
ADJUSTED NET INCOME LOWER TAX RATE SIGNIFICANT INCREASE € MILLION 9M 2020 9M 2019 PROFIT FOR THE PERIOD 56 52 Financing costs and exchange rate impacts 42 (3) PPA depreciation and amortisation 95 103 Adjustments to EBITDA (2) 8 Of which: Share of profit or loss of joint ventures, net of dividends di
Slide 32: Free Cash Flow and Capital Expenditure
FREE CASH FLOW WORKING CAPITAL AND CAPITAL EXPENDITURE WELL CONTROLLED € MILLION 9M 2020 9M 2019 NET CASH FROM OPERATING ACTIVITIES 262 242 Dividends received from joint ventures 12 12 Acquisition of PP&E and intangible assets (140) (133) Payment of lease liabilities (10) (7) FREE CASH FLOW 124 115
Slide 33: Progress on Deleveraging Alongside Major Capex Project
PROGRESS ON DELEVERAGING REFINANCING ALONGSIDE MA JOR CAPEX PROJECT IN JUNE 2020 € MILLION 9M 2020 9M 2019 FY 2019 CASH1 249 154 261 TERM LOANS 550 1’569 1’561 NOTES ISSUES 1’000 - - LEASE LIABILITIES 74 48 54 NET TOTAL DEBT 1’375 1’462 1’353 TOTAL NET LEVERAGE RATIO 2.7x 3.0x 2.8x (1) Includes rest
Slide 34: Financial Guidance
FINANCIAL SIGNIFICANT CASH FLOW GUIDANCE GENERATION FY 2020E CORE REVENUE GROWTH 4 - 6% (CONSTANT CURRENCY) ADJ. EBITDA MARGIN 27 – 28% Lower end of range EFFECTIVE TAX RATE 28 - 29%1 NET CAPEX (% REVENUE) 8 - 10% DIVIDEND PAYOUT 50 - 60% OF ADJUSTED NET INCOME2 Continuing COVID-19 uncertainty This
Slide 35: Longer Term Business Outlook
LONGER TERM WELL POSITIONED BUSINESS OUTLOOK FOR THE FUTURE FOCUS ON FOOD ENVIRONMENTAL SAFETY LIKELY TO CONCERNS WILL INCREASE REMAIN CORPORATE RESPONSIBILITY UPDATE 2019 PUBLISHED IN APRIL TARGETING STRONG CASH GAINING SHARE GROWTH IN ALL FLOW GENERATION IN AN ESSENTIAL REGIONS AFTER INVESTMENT IN
Slide 36: Thank You
THANK YOU NOVEMBER 2020
SIG Combibloc Group — Investor Presentation (November 2020) on 6ix