Aquafil Spa · MIL:ECNL
Aquafil Spa — Geneva Mid Cap Conference 2020
53 slides from Aquafil Spa's conference presentation, Dec 1, 2020
Slide 1: Corporate Presentation – Geneva Mid Cap Conference
AQUAFIL Corporate Presentation Geneva Mid Cap Conference 1st December 2020
Slide 2: Aquafil at a Glance
Aquafil at a Glance • Pioneers of circularity with ECONYL®: - An unique Regeneration System to produce sustainable fiber and polymers from nylon 6 waste; - High barriers to entry for technology and reverse supply chain; - Turnover of product branded ECONYL® equal to ca 38% of fiber turnover - signif
Slide 3: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 34 3
Slide 4: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 33 4
Slide 5: Product Lines
Product Lines Contribution to Key Applications 2018 European PA Market Shares (1) Revenues FY19 A Contract Fiber for carpet flooring Residential 72,9% BCF Product Automotive B Clothing & Fashion Fiber for fabric Swimwear ca. 19,6% NTF Product Sportswear High-tech clothing C Polymers EP Product ca. 7
Slide 6: Aquafil’s Value Chain
Aquafil’s Value Chain Raw materials Production Distribution Clients Final Application BCF Flooring Solutions Selected Manufacturers Application Users Production and finishing of Standard Caprolactam premium synthetic yarns, Direct sale / Contract • Nylon 6 monomer principally Nylon 6, for agents (bu
Slide 7: Global Footprint with proximity to Clients
Global Footprint with proximity to Clients AQUAFIL WORLDWIDE USA UK CROATIA CHINA Cartersville (Georgia) Kilbirnie Oroslavje Jiaxing Aquafil USA 1 & 2 Aquafil UK Aquafil CRO Aquafil Jiaxing Phoenix (Arizona) Aquafil Carpet Recycling SLOVENIA THAILAND ACR#1 Ljubljana Rayong AquafilSLO Sacramento (Cal
Slide 8: More than 50 Years of Growth Key Milestones
More than 50 Years of Growth Key Milestones Acquisition of O’Mara Incorporated In US Acquisition of Invista BCF Business in Listing in Italian Asia Pacific Stock Exchange Doubling of Production Capacity in China Acquisition of Xentrys from Domo Chemicals The ECONYL® plant in Slovenia begins producin
Slide 9: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 9 5. ANNEX 33 9
Slide 10: Competitors – Fiber for carpet flooring
Fiber for carpet flooring A Fiber for carpet flooring - BCF Product 2018 PA Market Shares1 Integrated Players Competitors 10 (1) Aquafil on Wood Mackenzie market data - Based on volume
Slide 11: Competitors – Fiber for Fabric
Fiber for Fabric B Fiber for Fabric - NTF Product 2018 Market Shares1 Textile mass production is in APAC, with A leading player with limited competition. Europe’s core focus is on high-end Only 3 suppliers capable of offering products production. Fast fashion needs lead to starting from monomer and
Slide 12: EP Solutions
EP Solutions C EP Description Engineering Plastic Compounders Aquafil manufactures nylon 6 and raisin pellet polymers for compounders. Once the polymer has been transformed into a techno- polymer, compounders sell the semi-finished product to the industrial Industrial molding companies, which model
Slide 13: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 19 5. ANNEX 33 13
Slide 14: ECONYL® regenerated nylon
• 100% regenerated & regenerable nylon • Unique proprietary technology • Ca 38 % of Aquafil Fiber 2019 Revenues WWW.ECONYL.COM 14
Slide 15: STEP 1: RESCUE
STEP 1: RESCUE The ECONYL® Regeneration System starts with rescuing waste, like fishing nets, fabric scraps, carpet flooring and industrial plastic from landfills and oceans all over the world. That waste is then sorted and cleaned to recover all of the nylon possible. 15
Slide 16: STEP 2: REGENERATE
STEP 2: REGENERATE Through a radical regeneration and purification process, the nylon waste is recycled right back to its original purity. That means ECONYL® regenerated nylon is exactly the same as virgin nylon. 16
Slide 17: STEP 3: REMAKE
STEP 3: REMAKE ECONYL® regenerated nylon is processed into carpet yarn and textile yarn for the fashion and interior industries. 17
Slide 18: STEP 4: REIMAGINE
STEP 4: REIMAGINE Fashion brands and carpet producers use ECONYL® regenerated nylon to create brand new products. And that nylon has the potential to be recycled infinitely, without ever losing its quality. 18
Slide 19: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 19 4.1. 2020 OUTLOOK 20 4.2. 3Q2020YTD FINANCIAL RESULTS 23 5. ANNEX 33 19
Slide 20: Clear path ahead
Clear path ahead STRONG GROUP REACTION CONFIDENT IN GROUP FUTURE EXTRAORDINARY EFFORTS OF ALL OF US CLEAR PATH AHEAD “CIRCULARITY” IN OUR DNA BUSINESS CONTINUITY, IN OUR STRATEGY 2019 SAVINGS PLAN AND AND DRIVING OUR FUTURE PROMPLY ADOMPTED COUNTERMISURES MINIMISED FLOW THROUGH LEVERAGE OUR PEOPLE N
Slide 21: Recent evolution consistent with 3Q trends
Recent evolution consistent with 3Q trends • Volumes: recovery undergoing with ASIA BCF and North America NTF accelerating • Prices: most recent prices in line with 3Q end • Until now no significant impact from partial lockdowns in some European countries «FIRST GRADE PRODUCT» REVENUES (1) 1Q2020 2Q
Slide 22: As of today, on track to deliver 2020 guidance
As of today, on track to deliver 2020 guidance • High attention on Europe where uncertainty and low visibility increased again • EBITDA: ready to enhance countermeasures to protect profitability • NFP: ongoing CAPEX discipline and NWC efficiency SALES 20% reduction 2020 GUIDANCE (1) EBITDA 20% reduc
Slide 23: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 19 4.1. 2020 OUTLOOK 20 4.2. 3Q2020YTD FINANCIAL RESULTS 23 5. ANNEX 33 23
Slide 24: Volume improvement enhanced Group actions
Volume improvement enhanced Group actions REVENUES EBITDA NET PROFIT NFP 2019 2020 ∆% 2019 2020 ∆% 2019 2020 ∆% 31.12.2019 30.09.2020 ∆% 3QUARTER YTD 419.5 327.9 (21.8%) 3QUARTER YTD 54.9 40.1 (27.0%) 3QUARTER YTD 9.5 (2.9) n.s. 249.6 246.8 (1.1%) % on net s a l es 13.1% 12.2% % on net s a l es 2.3%
Slide 25: Volumes improvement, higher prices adjustment
Volumes improvement, higher prices adjustment • 3Q volumes: improvement with different speed in the different regions - Asia and North America recovery much stronger compared to Europe • 3Q prices: BCF and Polymers product lines more impacted by prices adjustment (1) - in 2Q2020 caprolactam price de
Slide 26: Volumes: stronger recovery in Asia Oceania and N.A.
Volumes: stronger recovery in Asia Oceania and N.A. • Asia Oceania: BCF volumes even above 2019 driven by automotive and residential • North America: closing the gap thanks to NTF application • Europe: the slowest restart due to contract weakness VOLUMES QUARTERLY VARIATION 0% 0.0% (50.0)% (50)% EME
Slide 27: Revenues: volumes improvement, higher prices adjustment
Revenues: volumes improvement, higher prices adjustment 3QUARTER BCF NTF POLYMERS TOTAL 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% EMEA 46.6 33.3 (13.2) (28.4%) 19.6 14 (5.7) (28.9%) 8.0 6.2 (1.8) (22.5%) 74.1 53.5 (20.7) (27.9%) North America 26.8 20.6 (6.1) (22.9%) 7.1 7.8 0.7 10.
Slide 28: Revenues: stronger recovery in Asia Oceania and N.A.
Revenues: stronger recovery in Asia Oceania and N.A. SALES BREAKDOWN by MACRO AREA 120% 120% 100% 17.2% 16.8% 17.2% 20.6% 100% 16.8% 16.7% 80% 80% 26.6% 28.1% 23.2% 26% 60% 60% 40% 40% 20% 55.9% 50.8% 20% 59.8% 56.9% 0% 0% 3Q2019 3Q2020 3Q2019YTD 3Q2020YTD EMEA N.A. ASIA-OCEANIA 120% SALES BREAKDOWN
Slide 29: A different path for ECONYL®
A different path for ECONYL® • Sales: a decline of 31.3% in the quarter drove to a 19.9% reduction YTD - Pandemic fully impact shifted to 3Q due to the end markets later reaction • % on net sales: 38.1% as of September end ECONYL® DETAILS – INCIDENCE ON NET SALES 120% 120% 100% 100% 37,4% 46,2% 40,9
Slide 30: Group actions are paying off
Group actions are paying off • 3Q: EBITDA margin improvement, from 11.9% to 12.5% - Impact of Group actions strengthened by better volume - On going focus on “shift” management to maximise labour efficiency - Persistent attention on discretionary spending EBITDA EVOLUTION 9.1 2.5 34.8 8.9 10.8 3.8 1
Slide 31: Depreciation material increase influenced net result
Depreciation material increase influenced net result QUARTER 3QUARTER YTD 2019 2020 ∆% 2019 2020 ∆% REVENUES 132.9 105.2 (20.8%) 419.5 327.9 (21.8%) EBITDA 15.8 13.2 (16.7%) 54.9 40.1 (27.0%) Margin % 11.9% 12.5% 13.1% 12.2% EBIT (0.2) 0.2 n.s. 17.0 0.2 n.s. Margin % (0.1%) % 0.2 4.0% 0.0% • Depreci
Slide 32: NFP evolution consistent with expectation
NFP evolution consistent with expectation • Efficient inventories management and CAPEX discipline mitigated quarterly trend - CAPEX: - 48.8% to € 23.7m, focus on operating CAPEX (almost 90%) • 2 new medium long-term for a total amount of € 25 million - € 150.9m of liquidity as of 30 September NFP EV
Slide 33: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 33 5.1. DISCLAIMER AND DEFINITIONS 34 5.2. 3Q2020YTD FINANCIAL DATA DETAILS 36 5.3. SECTOR DATA 44 5.4. HISTORICAL FINANCIAL DATA 46 5.5. CORPORATE GOVERNANCE AND OWNERSHI
Slide 34: Disclaimer
Disclaimer This presentation and any material distributed in connection herewith (together, the “Presentation”) prepared by Aquafil S.p.A. (“Aquafil” or “Company”) do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer t
Slide 35: Definitions
Definitions “First choice revenues” are revenues generated by the sale of fibers and polymers, gross of any «FIRST CHOICE adjustments (for example, discounts and allowances), but excluding revenues generated by “non-first REVENUES» choice products”, revenues generated by Aquafil Engineering GmbH and
Slide 36: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 34 5.1. DISCLAIMER AND DEFINITIONS 34 5.2. 3Q2020YTD FINANCIAL DATA DETAILS 37 5.3. SECTOR DATA 44 5.4. HISTORICAL FINANCIAL DATA 46 5.5. CORPORATE GOVERNANCE AND OWNERSHI
Slide 37: Consolidate Income Statement
Consolidate Income Statement CONSOLIDATED INCOME STATEMENT September of wich September of wich Third of wich Third of wich €/000 2020 non- 2019 non- Quarter 2020 non- Quarter 2020 non- Revenue 327,930 current 287 419,537 current 105,197 current 120 132,870 current of which related parties 80 29 53 -
Slide 38: Consolidate Income Statement – EBITDA Adjusted
Consolidate Income Statement – EBITDA Adjusted September September Third Quarter Third Quarter RECONCILIATION FROM NET PROFIT TO EBITDA €/000 2020 2019 2020 2019 Net Profit (Including Portion Attr. to Minority ) (2,899) 9,533 (964) (1,120) Income Taxes (68) 3,714 (439) 77 Amortisation & Depreciation
Slide 39: Consolidate Balance Sheet
Consolidate Balance Sheet CONSOLIDATED BALANCE SHEET At September 30, At December 31, €/000 2020 2019 Intangible Assets 22,551 21,101 Goodwill 12,502 13,029 Tangible Assets 237,559 251,492 Financial Assets 630 765 of which related parties 318 313 Other Assets 1,336 2,189 Deferred Tax Assets 11,538 1
Slide 40: Debt overview – Outstanding gross debt
Debt overview – Outstanding gross debt AMOUT COVENANTS (2) BORROWINGS - 30 June 2020 ISSUE DATE CURRENCY COUPON ( 1 ) MATURITY (1) Total Drawn Undrawn Parameters Reference Check Private Placement B Sept 2018 EUR 4.70% Sept 2028 50 50 0 EBITDA / Net financial charges > 3.5 Net Debt / EBITDA < 3.75 Pr
Slide 41: Debt overview – Net financial position
Debt overview – Net financial position NET FINANCIAL DEBT At September 30, At December 31, €/000 2020 2019 A. Cash 150,921 90,400 B. Other cash equivalents - C. Securities held-for-trading - D. Liquidity ( A + B + C) 150,921 90,400 E. Current financial receivables 844 1,637 F. Current bank loans and
Slide 42: Debt overview – Net financial position – Details
Debt overview – Net financial position – Details 400 300 NFP EVOLUTION 200 250 250 100 157 112 0 2017 2018 2019 3Q2020YTD BREAKDOWN by CURRENCY BREAKDOWN by COUPON (1) 1% 46% 58% 54% 99% EURO USD FIXED FLOATING Data in € million - (1) Excluding lease liabilities 42
Slide 43: Cash Flow Statements
Cash Flow Statements CASH FLOW STATEMENT At September 30, At September 30, €/000 2020 2019 Operation Activities Net Profit (Including Portion Attr. to Minority ) -2,899 9,533 of which related parties -468 -484 Income Taxes -68 3,714 Income (loss) from Investments -353 -1,120 of which related parties
Slide 44: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 34 5.1. DISCLAIMER AND DEFINITIONS 34 5.2. 3Q2020YTD FINANCIAL DATA DETAILS 37 5.3. SECTOR DATA 45 5.4. HISTORICAL FINANCIAL DATA 46 5.5. CORPORATE GOVERNANCE AND OWNERSHI
Slide 45: Sector Data – Caprolactam price evolution
Sector Data – Caprolactam price evolution 2018-2020YTD PRICE EVOLUTION €/ton. 2.500 2018: 2.123 2019: 1.896 2.000 2020 YTD: 1.521 1.500 1.000 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. 2018 2019 2020 2019-2020YTD QUARTERLY PRICE VARIATION 30% 8% 73,6% 0% -30% 1Q2019 2Q2019 3Q2019 4Q2019
Slide 46: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 34 5.1. DISCLAIMER AND DEFINITIONS 34 5.2. 3Q2020YTD FINANCIAL DATA DETAILS 37 5.3. SECTOR DATA 45 5.4. HISTORICAL FINANCIAL DATA 47 5.5. CORPORATE GOVERNANCE AND OWNERSHI
Slide 47: Key Financial – Revenues and EBITDA
Key Financial Revenues (€m) EBITDA (€m) and Margin on Revenues (%) 10,9 13,2 13,8 14,5 14,0 15.3 14.0 13.6 12,6 12,1 % % % % % % % % % % 47 (1) Defined as EBITDA minus D&A, impairments and provisions.
Slide 48: Key Financial – Cash Flow and Capex
Key Financial Cash Flow from Operating Activities (€m) and Cash Return(2) (%) 63,9 29,7 79,8 51,6 67,4 17,4 45,4 22,0 59,3 80,7 % % % % % % % % % % Capex (€m) 48
Slide 49: Key Financial – Net Financial Debt
Key Financial Net Financial Debt (€m) and Net Financial Debt / EBITDA(1) 3,4 2,8 1,8 2,3 1,5 1,9 2,0 2,9 3,6 4,2 49 Note: (1) LTM EBITDA is used for Half Period (2) Cash return defined as period Cash Flow from Operating Activities / EBITDA
Slide 50: Index Page
Index Page 1. AQUAFIL AT GLANCE 5 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOK AND 3Q2020YTD FINANCIAL RESULTS 20 5. ANNEX 34 5.1. DISCLAIMER AND DEFINITIONS 34 5.2. 3Q2020YTD FINANCIAL DATA DETAILS 37 5.3. SECTOR DATA 45 5.4. HISTORICAL FINANCIAL DATA 47 5.5. CORPORATE GOVERNANCE AND OWNERSHI
Slide 51: Ownership Structure
Ownership Structure A capital structure with 3 type of Shares (a) Ordinary Share, (b) share B: dedicated to Giulio Bonazzi family with the same economic right of ordinary share but with 3 voting right for any share and (c) share C: no transferable, no economic and voting right but at certain conditi
Slide 52: Corporate Governance
Corporate Governance Board of Statutory Auditors Stefano Poggi Longostrevi Chairman Board of Directors Giulio Bonazzi Chairman and CEO Fabio Buttignon Fabrizio Calenti Statutory Auditor Adriano Vivaldi Executive Director Executive Director Silvana Bonazzi Franco Rossi Director Executive Director Bet
Slide 53: Investors Contact
Investors Contact: Karim Tonelli Investor Relations & Performance Management Director karim.tonelli@aquafil.com Mob: +39 348 60 22 950 53