Tecnoglass Inc. · NYSE:TGLS
Tecnoglass — FY2023 Earnings Presentation
25 slides from Tecnoglass's earnings presentation, Mar 1, 2024
Slide 1: Fourth Quarter and Full Year 2023 Earnings Conference Call
Fourth Quarter and Full Year 2023 Earnings Conference Call March 1, 2024 – TECNOGLASS INC. (NYSE: TGLS) www.tecnoglass.com
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are bas
Slide 3: Highlights
300 Third Avenue Waltham, Massachusetts l Highlights www.tecnoglass.com
Slide 4: FY 2023 Key Takeaways
FY 2023 Key Takeaways • Record FY’23 revenues, gross profit, operating income, Adj. EBITDA, and Adj. Net Income Sales by Geography FY’23 • Total revenues of $833.3 mm, up 16.3% YoY 5% • Solid growth in multi-family and commercial activity, up 21.4% YoY to $497.9 mm as we Total U.S. execute on our gr
Slide 5: U.S. Growth Driving Resilient Backlog
U.S. Growth Driving Resilient Backlog Backlog Overview Backlog as of Q4’23 by End Market • Backlog expanded 20% YoY to a record $870.1 mm Project pipeline Multifamily / remains strong Residential Related Commercial • Favorable demographic trends in Florida and Southeast allow for 38% continued stren
Slide 6: Demonstrated History of Converting Backlog to Revenue Supports Double Digit Growth Expectation in 2024
Demonstrated History of Converting Backlog to Revenue Supports Double Digit Growth Expectation in 2024 Backlog to Revenue Conversion $ 950 130% 114% 111% $ 850 106% 108% 110% 106% 110% 104% 106% 104% 102% 98% 100% 99% 95% 92% 93% $ 750 90% 87% 86% 88% 88% 89% 90% 75% 70% $ millions 69% $ 650 73% 72%
Slide 7: Favorable Demographics in Key Regions Despite Macro Headwinds
Favorable Demographics in Key Regions Despite Macro Headwinds 2023 Population Growth: TGLS Markets Favorably Positioned1 US Housing Permits2 Year-over-Year Percent Change from July 1, 2022 to July 1, 2023 6% Year-over-Year Growth from December 31, 2022 to December 31, 2023 4% 3% 2% WeightedWeighted
Slide 8: Single-Family Residential Business Expanding
Single-Family Residential Business Expanding Geographic Exposure End Market Exposure Q4’23 Operational Showrooms 35% Total SF R&R Expected Operational 1Q 2024 Residential New Residential Expected 2024 Openings Revenue $77.1 mm Significant presence 65% Developing Presence Emerging Presence • Q4 2023
Slide 9: Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market
Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market Significant Addressable Market Potential1 Operational Update • Completed installation of 3 full vinyl window production lines with ability to serve the US and LatAm 3% 2% 20% Vinyl Current vinyl window • Began shipping vi
Slide 10: Financial Update
l Aston Martin Miami, Florida l Financial Update www.tecnoglass.com
Slide 11: Revenue Bridge 2023 vs. 2022
Revenue Bridge 2023 vs. 2022 Q4 2023 Revenue Bridge (US$M) FY 2023 Revenue Bridge (US$M) TGLS LTM revenue mix from U.S. +95%, compared to average of 84% for U.S.-based building product peers(1) Notes: 1. Peer average includes AMWD, APOG, AWI, AYI, AZEK, DOOR, FBIN, JBI, JELD, MBC, NX, PGTI, ROCK, SS
Slide 12: Adjusted EBITDA Bridge 2023 vs. 2022
Adjusted EBITDA(1) Bridge 2023 vs. 2022 Adjusted EBITDA margin Q4 2023 Adjusted EBITDA Bridge (US$M) 41.3% 31.8% 37.1% FY 2023 Adjusted EBITDA Bridge (US$M) 36.5% Notes: 1. Adjusted EBITDA excludes non-recurring and non-cash expenses mainly associated with our bond issuance and respective extinguish
Slide 13: FX Impact on Gross Margins Q4'23 vs. Q4'22
FX Impact on Gross Margins Q4’23 vs. Q4’22 Gross Margin • Approximately half of the unfavorable effect in gross margins YoY 360 was attributed to a much stronger Peso during the Q4 2023 vs. the 550 comparable period in 2022. The Currency appreciated approximately 15% YoY but has remained stable in t
Slide 14: Strong Cash Flow & Balance Sheet
Strong Cash Flow & Balance Sheet • Strong cash conversion of Adj. EBITDA(1) driving $138.8 mm of Strong Cash Flow Generation cash flow from operations in 2023 ($ in Millions) 160.0 141.9 138.8 • Exceptional free cash flow expected to continue through 140.0 117.3 2024, helped by expected decrease in
Slide 15: Track Record of Strong Returns Above Peers
Track Record of Strong Returns Above Peers 3 Year Average ROE 3 Year Average ROIC 38% 22% 16% 9% TGLS 1 U.S. Building Products Peers TGLS U.S. Building Products Peers 1 Stronger profitability and significant improvement in working capital driving strong returns Notes: 1. U.S. Building Products Peers
Slide 16: Outlook Update
205 Race Street Philadelphia, Pennsylvania l OUTLOOK UPDATE www.tecnoglass.com
Slide 17: Evolution of Revenue & Adjusted EBITDA
Evolution of Revenue & Adjusted EBITDA Key Milestones 900.0 Revenue & Adj. EBITDA 400.0 Delivering Double-Digit Organic CAGR 2013 Became public 833.3 800.0 350.0 2015 Investment in top-class manufacturing facility to produce high-spec insulated glass 700.0 716.6 2017 Entered into the single-family r
Slide 18: 2024 Outlook
2024 Outlook ▪ Expect double-digit revenue growth for full year 2024 ▪ Supported by record backlog, new vinyl initiative, showroom openings and geographical expansion ▪ Q1’24 revenue expected to be the seasonal low quarter and increase sequentially thereafter ▪ Based on the timing of projects, sched
Slide 19: Appendix
3Eleven 601 Hudson Yards New York City, New York l APPENDIX www.tecnoglass.com
Slide 20: Vertically-Integrated & Well-Situated Operations Create Structural Advantages
Vertically-Integrated & Well-Situated Operations Create Structural Advantages Supplier JV & Long Term Sales, Raw Production Final s Suppliers Supply Distribution Materials Process Product Relationships & Installation Tecnoglass integration across the architectural glass and window value chain provid
Slide 21: ESG Strategy
ESG Strategy Outstanding Achievements Environmental Social Governance Enhancing Our Environment Promoting Continuous, Ethical and Responsible Leading Eco-Efficiency and Innovation Growth National Carbon Neutrality Employee Training and Ethics and Compliance Program Education Programs Program +15,000
Slide 22: ESG Strategy
ESG Strategy Our Sustainability Strategy contains the Company’s guidelines and value propositions to meet the expectations of our stakeholders Environmental Social Governance Enhancing Our Environment Promoting Continuous, Ethical and Responsible Leading Eco-Efficiency and Innovation Growth Encourag
Slide 23: Leading Eco-efficiency and Innovation
Leading Eco-efficiency and Innovation Over 85% of Tecnoglass’ total revenues are considered Green Revenues, including low emissivity and impact-resistant glass and windows, contributing to reducing global emissions and mitigating climate change effects 68% 65% 84% of our revenues are of our revenues
Slide 24: 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 Twelve months ended Dec 31, Dec 31, 2023 2022 2023 2022 Net (loss) income 36,478 55,124 183,510 156,412 Less: Income (loss) attributable to non-controll
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation1 Net Debt, Leverage and Total Investment Reconciliations Figures in U.S. $k As of December 31, 2022 2023 Short Term Debt and Current Portion of Long Term Debt 504 7,002 Long Term Debt 168,980 163,004 Gross Debt 169,484 170,006 Cash at the end of the period 103,671 129,508 Net