Sig Group Ag · SIX:SIGN
Sig — SIG Combibloc Group — FY2020 Earnings Presentation
28 slides from Sig's earnings presentation, Feb 23, 2021
Slide 1: SIG Combibloc FY 2020 Results
SIG COMBIBLOC FY 2020 RESULTS CEO SAMUEL SIGRIST CFO FRANK HERZOG 23 FEBRUARY 2021
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: 2020 Overview Key Points
2020 OVERVIEW RESILIENT KEY POINTS BUSINESS PROFILE SIG BUSINESS PROVED ITS COVID-19: A HEADWIND GEOGRAPHIC DIVERSIFICATION RESILIENCE OVERALL UNDERPINS REVENUE GROWTH ONGOING DEMAND FOR FOOD LOWER THAN EXPECTED GROWTH GAINS IN EUROPE AND AMERICAS AND BEVERAGES IN APAC, NEGATIVE CURRENCY OFFSET APAC
Slide 4: Recent Management Changes
RECENT MANAGEMENT CHANGES JOSÉ MATTHIJSSE FRANK HERZOG PRESIDENT & GENERAL MANAGER EUROPE CFO • Previously a Managing Director with • Previously CFO at VFS Global FrieslandCampina • Finance leadership positions at • International experience with Heineken Dematic Group and KION • Extensive investment
Slide 5: 2020 Financial Highlights
2020 FINANCIAL PERFORMANCE HIGHLIGHTS IN LINE WITH GUIDANCE CORE REVENUE ADJUSTED FREE CASH ADJUSTED NET ROCE2 € 1.80 BILLION EBITDA FLOW INCOME +5.5% € 498 € 233 € 232 29.5% AT CONSTANT MILLION MILLION MILLION (2019: 22.8%) CURRENCY (2019: € 485m) (2019: € 267m) (2019: € 217m) CORE REVENUE ADJUSTED
Slide 6: Sustainability Milestones
SUSTAINABILITY RESPONSIBLE CULTURE MILESTONES SUSTAINABLE INNOVATION ASI CERTIFIED PAPER STRAWS PARTNERSHIP WITH ALUMINIUM ADOPTED BY NESTLE AND OTHER AVAILABLE IN ALL CUSTOMERS IN ALL INDUSTRIAL PARTNERS REGIONS REGIONS TO SUPPORT STANDARD IN EUROPE BREAKTHROUGH RESEARCH ON SUSTAINABLE MATERIALS AT
Slide 7: Operating Through COVID-19 Crisis Business Impact
OPERATING THROUGH COVID-19 CRISIS BUSINESS IMPACT EARLY IMPLEMENTATION RIGOROUS NUMEROUS SUPPLY CHAIN OF PANDEMIC PRECAUTIONARY AND LOGISTICS CHALLENGES PREPAREDNESS PLAN MEASURES IMPLEMENTED AT WELL MANAGED PRODUCTION PLANTS GLOBAL AND REGIONAL HIGH LEVEL OF SERVICE TO TASK FORCES ESTABLISHED ALL P
Slide 8: Regional Summary: EMEA
REGIONAL SUMMARY: EMEA FY CORE REVENUE AT CONSTANT CURRENCY: +5.6% CONSTANT CURRENCY Large part of business is litre packs, YOY GROWTH suitable for at-home consumption €MILLION 3.1% 12.2% 2.5% 4.5% European factories achieved record production levels in April 217 206 194 181 Expanding in new categor
Slide 9: Regional Summary: APAC
REGIONAL SUMMARY: APAC FY CORE REVENUE AT CONSTANT CURRENCY: +1.2% CONSTANT CURRENCY Sales broadly flat in China in H1 YOY GROWTH Recovery starting in September €MILLION Lockdowns lasted longer in South East Asia 6.2% 7.7% -2.0% -4.4% Reduction in on-the-go consumption Tourism and school milk progra
Slide 10: Regional Summary: Americas
REGIONAL SUMMARY: AMERICAS FY CORE REVENUE AT CONSTANT CURRENCY: +14.7% CONSTANT CURRENCY Q1: low base of comparison YOY GROWTH €MILLION COVID-19 positive in Brazil and Mexico – higher at-home milk and food consumption 34.2% 5.0% 24.1% 5.3% Increased welfare payments in Brazil Catering to basic and
Slide 11: Full Year Sales Evolution
FULL YEAR GROWTH IN SALES EVOLUTION ALL REGIONS € MILLION Core revenue growth at constant currency +5.5%; reported +1.7% Positive contribution from 41 2 consolidation of Visy Cartons -17 20 -64 42 8 Core revenue growth at constant currency ex Visy 2.9% CONSTANT CURRENCY 1’784 1’767 GROWTH RATE 1’796
Slide 12: Fourth Quarter Performance
FOURTH QUARTER SIGNIFICANT REDUCTION PERFORMANCE IN YEAR END RALLY Q4 CORE REVENUE BRIDGE GROWTH AT CONSTANT CURRENCY +1.4% € MILLION -4 -30 -9 5 2 6 9 535 531 CONSTANT CURRENCY GROWTH 508 514 RATE +4.5% -4.4% +5.3% Q4 2019 Non-core Core revenue FX EMEA APAC Americas Other Core revenue Non-core Q4 2
Slide 13: Full Year Adjusted EBITDA Bridge
FULL YEAR SUSTAINING HIGH PROFITABILITY ADJUSTED EBITDA BRIDGE IN A CHALLENGING YEAR ADJUSTED EBITDA € MILLION ADJUSTED -4 EBITDA 5 2 -4 -42 35 21 MARGIN 485 443 498 27.4% (2019: 27.2%) 2019 FX NET OF FX TOP-LINE RAW MATERIAL PRODUCTION JV DIVIDENDS SGA MISC. 2020 IMPACT COSTS EFFICIENCIES ▪ Adjuste
Slide 14: Currency Impact
CURRENCY IMPACT EXCEPTIONAL VOLATILITY IN FIRST QUARTER FY EBITDA EUR/BRL EUR/THB CURRENCY IMPACT EXCHANGE RATE EXCHANGE RATE € MILLIONS FY 2020 FY 2020 38.00 7.00 9 37.00 6.50 21 36.00 6.00 35.00 12 5.50 5.00 34.00 Brazilan Real Thai Baht 4.50 33.00 other 4.00 32.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14 23 FE
Slide 15: Adjusted EBITDA Margin Development by Region
ADJUSTED EBITDA MARGIN DEVELOPMENT BY REGION EMEA APAC AMERICAS ▪ Lower sourcing costs ▪ High margin despite difficult ▪ Impact of Brazilian Real depreciation ▪ Production efficiencies operating environment ▪ Higher dividend from Middle East ▪ Currency headwind notably Thai joint venture compared wi
Slide 16: EBITDA Reconciliation
EBITDA RECONCILIATION 2020 2019 EBITDA 450 480 Main adjustments in 2020: Adjustments to EBITDA: Replacement of share of profit of joint ventures with • Impairment losses (+) cash dividends received from joint ventures 5 5 • Gains on derivatives (-) Restructuring costs, net of reversals 6 2 Unrealise
Slide 17: Adjusted Net Income
ADJUSTED NET INCOME €m 2020 2019 PROFIT FOR THE PERIOD 68 107 Non-cash FX impact of non-functional currency loans and realised exchange impact due to refinancing 25 (1) Amortisation of transaction costs 3 3 Net change in fair value of derivatives - 1 Net effect of early redemption of notes - - Net e
Slide 18: Free Cash Flow
FREE STRONG CASH CASH FLOW FLOW GENERATION €m 2020 2019 NET CASH FROM OPERATING ACTIVITIES 426 438 Dividends received from joint ventures 23 21 Acquisition of property, plant and equipment and intangible assets (199) (182) Payment of lease liabilities (16) (10) FREE CASH FLOW 233 267 CASH CONVERSION
Slide 19: Working Capital
WORKING CAPITAL NET WORKING CAPITAL WELL CONTROLLED €m 2020 2019 INVENTORY 171 167 TRADE RECEIVABLES 102 162 TRADE PAYABLES (164) (180) NET WORKING CAPITAL 109 150 % REVENUE 6.0% 8.4% OTHER RECEIVABLES / PAYABLES1 (256) (226) OPERATING NET WORKING CAPITAL (1) Including accruals for volume bonuses to
Slide 20: Capital Expenditure
CAPITAL STRONG PLATFORM EXPENDITURE FOR FUTURE GROWTH €m 2020 2019 PROPERTY, PLANT & EQUIPMENT 77 58 GROSS FILLER CAPEX 122 124 UPFRONT CASH (54) (72) NET FILLER CAPEX 68 52 TOTAL NET CAPEX 145 110 TOTAL NET CAPEX AS % REVENUE 8.0% 6.2% NO. OF FILLERS IN THE FIELD1 1,266 1,233 Additions 59 75 Withdr
Slide 21: Leverage
LEVERAGE LEVERAGE GUIDANCE TOWARDS 2x MID-TERM €m 2020 2019 CASH1 355 261 TERM LOAN 550 1’561 NOTES ISSUES 1’000 - LEASE LIABILITIES 147 54 NET TOTAL DEBT 1’342 1’353 TOTAL NET LEVERAGE RATIO 2.7x 2.8x ▪ Increase in lease liabilities due to new APAC plant ▪ Debt refinancing in June 2020: shift to un
Slide 22: New APAC Plant
NEW APAC PLANT CONTINUED CONFIDENCE PRODUCTION COMMENCED IN APAC GROWTH OUTLOOK NEW PLANT 8 BILLION PACKS CONSTRUCTED PRODUCTION CAPACITY AT SUZHOU = ~70% INCREASE IN INDUSTRIAL PARK IN CHINA CAPACITY CHINA = ~35% INCREASE IN APAC OPERATIONAL AND CAPACITY OVERHEAD SYNERGIES WITH EXISTING PLANT PRODU
Slide 23: Planned Closure of Whakatane Paper Mill in New Zealand
PLANNED CLOSURE OF WHAKATANE PAPER MILL IN NEW ZEALAND ACQUIRED IN 2010 REASONS FOR TIMING FINANCIAL IMPLICATIONS FROM THE RANK CLOSURE PRODUCTION • IMPAIRMENT CHARGE OF €38 GROUP • NON-CORE EXPECTED TO STOP MILLION INCLUDED IN 2020 CONVERTED TO BUSINESS IN Q2 2021 FINANCIAL STATEMENTS LIQUID PAPER
Slide 24: Acquisition of Remaining 50% of Middle East & Africa JV
ACQUISITION OF REMAINING 50% TRANSACTION OF MIDDLE EAST & AFRICA JOINT VENTURE ON TRACK OPERATING PERFORMANCE TRANSACTION REPORTING IN 2020 RATIONALE IMPACT ▪ Consolidation of revenue after elimination of ▪ FY sales €266m (-3% at constant currency) ▪ Enhanced access to high growth region: SIG sales
Slide 25: Return on Capital Employed
RETURN ON CAPITAL EMPLOYED €m 2020 2019 • Increase in adjusted EBITDA INCOME STATEMENT ITEMS • Lower net working capital Adjusted EBITDA 498 485 • Whakatane asset impairments Depreciation of PP&E¹ (160) (177) (150bps benefit) Dividends received from joint ventures (23) (21) ROCE EBITA 315 288 ROCE a
Slide 26: Financial Guidance
FINANCIAL CONTINUING COVID-19 GUIDANCE UNCERTAINTY FY 2021E CORE REVENUE GROWTH 4 - 6% (CONSTANT CURRENCY) Lower half of range ADJ. EBITDA MARGIN 27 – 28% EFFECTIVE TAX RATE 27 - 28%1 NET CAPEX (% REVENUE) 8 - 10% DIVIDEND PAYOUT 50 - 60% OF ADJUSTED NET INCOME2 Mid-term CORE REVENUE GROWTH 4 - 6% (
Slide 27: Conclusion
CONCLUSION CONTINUING TRACK RECORD OF GROWTH AND CASH GENERATION TOP LINE BEST-IN-CLASS STRONG RETURN PERFORMANCE IN PROFITABILITY PROFILE: ROCE 29.5% 2020 DEMONSTRATES RESILIENCE OF BUSINESS INSTALLED FILLER FURTHER EXPANDING STRONG BUSINESS BASE IS A STRONG GEOGRAPHIC FUNDAMENTALS PLATFORM FOR FUT
Slide 28: Thank You
THANK YOU CEO SAMUEL SIGRIST CFO FRANK HERZOG 23 FEBRUARY 2021