Sonae Indústria S.G.P.S — Sonae Indústria — Investor Presentation (March 2015)
37 slides from Sonae Indústria S.G.P.S's investor presentation, March 2015
Slide 1: Investor Presentation March 2015
SONAE INDÚSTRIA Investor Presentation March 2015 1
Slide 2: Contents
SONAE INDÚSTRIA Contents 1. Overview 2. Performance 3. Capital Increase 4. Strategy execution 5. Conclusion Appendixes 2
Slide 3: Overview
SONAE INDUSTRIA Overview Dasa 3
Slide 4: Highlights: We are delivering
SONAE INDÚSTRIA OVERVIEW Highlights Significantly improved capital structure (capital increase + refinancing) Final stages of completing the planned re-dimensioning of industrial footprint Delivered 3 consecutive quarters of improved LTM Recurrent EBITDA YE 2014 balance sheet adjusted to ref
Slide 5: With a diversified industrial footprint
SONAE INDÚSTRIA OVERVIEW (as of December 2014) … with a diversified industrial footprint Sonae Indústria Installed Production Capacity: 5.8 million m3 Continued operations: 5.1 million m3 # 21 sites (of which 14 are board plants) 5
Slide 6: A top player in each of our markets
SONAE INDÚSTRIA OVERVIEW (as of December 2014) … a top player in each of our markets • Estimated wood based panels production capacity per region ‘000 m3 0 500 1,000 1,500 2,000 2,500 3,000 ‘000 m3 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Iberian Peninsula North America Finsa/Utisa (1) Arauco & Fla
Slide 7: One of the top 5 world players
SONAE INDÚSTRIA OVERVIEW (as of December 2014) … and one of the top 5 world players TOP 15 world wood based panels players, in terms of production capacity ‘000 m3 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Kronospan M&P Kaindl (1) Egger (1) Swiss Krono Group (1) Sonae Indús
Slide 8: With world class assets
SONAE INDÚSTRIA OVERVIEW … with world class assets Nettgau Oliv. do Hospital Linares In Germany In Portugal In Spain PB: 650 k m3 PB: 450 k m3 PB: 430 k m3 OSB: 460 k m3 MFC: 20.1 M m2 MFC: 11.1 M m2 MFC: 17.5 M m2 Paper Impregnation Paper Impregnation Year: 2001 Year: 2000* Year: 2001 Lac-Megantic
Slide 9: A full range of wood based products
SONAE INDÚSTRIA OVERVIEW … and a full range of wood based products PARTICLEBOARD (PB) Strong range of high value added products • Very versatile • Mainly melamine products, veneer faced, laminates • Suitable for all general uses in furniture and and flooring for decorative solutions construction MED
Slide 10: Generating a diversified revenue mix
SONAE INDÚSTRIA OVERVIEW … generating a diversified revenue mix (2014 sales) • Diversified market base and value added product portfolio • Higher value added products represent circa 50% of sales • Circa 70% of sales generated in Europe Turnover by market Sales by product Other European countries Ot
Slide 11: Performance
Performance Performance ® a Dasa
Slide 12: Sustaining turnover through a challenging phase of the market cycle
SONAE INDÚSTRIA PERFORMANCE Sustaining turnover through a challenging phase of the market cycle Turnover and Recurrent EBITDA margin GDP(1) (constant prices, annual percent change) 2,500 16.0% 6% 14.6% 14.0% 4% 2,000 12.0% 2% 10.0% 1,500 9.4% 0% 7.9% 7.5% 8.0% 1,000 6.5% -2% 6.0% 5.7% 5.5% 4.0% -4%
Slide 13: Improved outlook for the construction and furniture sectors
SONAE INDÚSTRIA PERFORMANCE Improved outlook for the construction and furniture sectors 105.0 Western Europe (EC-15) • Decline in construction output Construction (1) 100.0 95.0 reached a trough last year 90.0 • Sector expected to grow by 85.0 1.8% per annum in 2014-2016 80.0 2009 2010 2011 2012 201
Slide 14: Improved operational performance (LTM Recurrent EBITDA)
SONAE INDÚSTRIA PERFORMANCE ... beginning to translate into improved operational performance (LTM Recurrent EBITDA) • Positive EBITDA despite overcapacity, the economic crisis and pressure on wood prices and other variable costs • Operational leverage makes the business well positioned to benefit fr
Slide 15: Positive recurrent EBITDA margin trends post inflection point
SONAE INDÚSTRIA PERFORMANCE … and positive recurrent EBITDA margin trends post inflection point % Turnover 10.0% Recurrent EBITDA margin • Recurrent 9.0% 8.0% 7.9% 8.3% 9.4% EBITDA margin 7.5% 7.0% 6.0% 5.7% 5.5% of 9.4% • Best since 5.0% 4.0% 3.6% 3.0% 2.0% 1.0% 2007 0.0% 2008 2009 2010 2011 2012 2
Slide 16: Driven by performance in Germany and North America
SONAE INDÚSTRIA PERFORMANCE … mainly driven by performance in Germany and North America LTM 45 Recurrent 40 EBITDA 35 per region 30 (million euros) 25 20 15 10 FY13 1Q14 1H14 9M14 FY14 Southern Europe Northern Europe Rest of the World Southern Europe: Values for “continued operations”. 16
Slide 17: Better average capacity utilization index
SONAE INDÚSTRIA PERFORMANCE … with better average capacity utilization index % Average 85% 85% 83% Capacity 80% 79% 80% 78% Utilization 81% 74% 75% 74% Index 75% 75% 71% 77% 75% 70% 73% 70% 71% 71% 70% 65% 65% 60% 60% 55% 55% 4Q13 4Q13 1Q14 1Q14 2Q14 2Q14 3Q14 3Q14 4Q14 4Q14 FY13 FY13 FY14 All opera
Slide 18: Reduced fixed costs
SONAE INDÚSTRIA PERFORMANCE … and reduced fixed costs impacted by restructuring and on-going streamline of support costs % Fixed Costs in % of turnover 23.0% 22.0% 21.0% All operations 20.0% 20% 19.0% 19% Continued operations 18.0% Recurrent Fixed Costs 17.0% (continued operations) 16.0% 15.0% 4Q13
Slide 19: Net debt reduction with lower cost of debt
SONAE INDÚSTRIA PERFORMANCE Net debt reduction with lower cost of debt Million € -111M€ Net Debt 750 675 701 696 689 9.0 x 700 and 8.5 x 650 8.4 x Leverage 8.0 x 600 7.9 x 564 7.5 x 7.8 x 564 550 7.4 x 7.0 x 500 6.5 x 450 6.0 x 400 5.9x 5.9 x 5.5 x 350 300 5.0 x FY13 1Q14 1H14 9M14 FY14 Net Debt Lev
Slide 20: Capital increase
SONAE INDÚSTRIA Capital increase 20
Slide 21: Significant capital increase despite challenging Portuguese capital markets backdrop
SONAE INDÚSTRIA CAPITAL INCREASE Significant capital increase despite challenging Portuguese capital markets backdrop • Gross proceeds of c. 112 M€ to Sonae Indústria • 11,210,757,417 shares subscribed (74.7% of total) • Share Capital • Controlling shareholder (Efanor) stake increased increase in an
Slide 22: Allowing for a much improved debt profile
SONAE INDÚSTRIA CAPITAL INCREASE Allowing for a much improved debt profile… 319 M€ of debt refinanced with two main banks, providing significant improvements in terms of maturity profile: Extended maturities: 6 to 8 years Min. grace period: 3 years for principal repayments Securitisation facilit
Slide 23: With a minimum 3 year grace period
SONAE INDÚSTRIA CAPITAL INCREASE … with a minimum 3 year grace period 200 Scheduled as of 31 Dec. 2014 as of 31 Dec. 2013 150 loan 150 115 repayments* 104 100 Million € 52 50 22 12 10 9 8 0 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 2018 2019 ≥ 2020 31 December 2013 2013 31 December 2014 2014 Debt 21%
Slide 24: Much lower FCF breakeven level
SONAE INDÚSTRIA CAPITAL INCREASE … and with much lower FCF “breakeven” level Net Debt reduction Lower cost of debt Lower interest costs going forward Completion during 2014 of strategic investments in efficiency Capex 2015 < 2014 Non-recurrent, Majority of the industrial footprint optimisation n
Slide 25: Strategy execution
SONAE INDÚSTRIA Strategy execution 25
Slide 26: Strategy execution status
SONAE INDÚSTRIA STRATEGY EXECUTION Industrial footprint optimization • Fix, sell or close underperforming assets Operating • Improved capacity utilization index levels and improvements specific consumptions Improve product • Increase share of value added products, mix namely melamine • Strong reduct
Slide 27: Strategic Investment: Recycling
SONAE INDÚSTRIA STRATEGY EXECUTION | INVESTMENTS Strategic Investment: Recycling Nettgau • 12M€ investment in recycling facilities 27
Slide 28: Strategic Investment: Melamine
SONAE INDÚSTRIA STRATEGY EXECUTION | INVESTMENTS Strategic Investment: Melamine Nettgau • 11M€ investment in melamine Oliveira do Hospital surfacing facilities • New EiR® Example of a EiR product technology in OH 28
Slide 29: Restructuring
SONAE INDÚSTRIA STRATEGY EXECUTION | RESTRUCTURING 2014 • Sale of Auxerre and Le Creusot plants • Closure of Pontecaldelas • Ussel, Linxe and Betanzos classifed at YE accounts as “discontinued operations” 1Q 2015 • Sale of Ussel plant and Betanzos business (conclusion subject to certain conditions)
Slide 30: Conclusion
SONAE INDÚSTRIA Conclusion 30
Slide 31: Conclusion
SONAE INDÚSTRIA CONCLUSION Conclusion Significantly improved capital structure Inflection point: cycle turning with high operational leverage Strong market player: geographical and product diversification with world class assets in our major markets Execution delivery: strategic plan with re
Slide 32: Appendixes
SONAE INDÚSTRIA Appendixes 32
Slide 33: History
SONAE INDÚSTRIA APPENDIX History • Founded in 1959, we have undergone, until 2007, an expansion process through a combination of organic growth and acquisitions • Over the last years we have been through a restructuring process, adapting to the low levels of demand since the 2008-2009 economic and f
Slide 34: Board of Directors
SONAE INDÚSTRIA APPENDIX Board of Directors • Experienced and committed management team Belmiro de Azevedo (Chairman) Paulo Azevedo 5 Non Albrecht Ehlers Executive Javier Vega Carlos Moreira da Silva Rui Correia (CEO) 3 Executive Chris Lawrie (CFO) Jan Bergmann (CITO) 34
Slide 35: Shareholding structure
SONAE INDÚSTRIA APPENDIX Shareholding structure • A stable shareholder structure, with a reference shareholder: Efanor, a Portuguese family holding company with other interests in food and non-food retail, shopping centres, telecoms, among other sectors Share capital FREE FLOAT OF Others ~812 millio
Slide 36: Glossary
SONAE INDÚSTRIA APPENDIX Glossary Capacity Utilization Index Finished-Available Production (m3) / Installed production capacity (m3); raw boards only CAPEX Investment in Tangible Fixed Assets Earnings Before Interests and Taxes + Depreciations and Amortizations + (Provisions and impairment losses -
Slide 37: Safe Harbour
SONAE INDÚSTRIA SAFE HARBOUR This document may contain forward-looking information and statements, based on management’s current expectations or beliefs. Forward-looking statements are statements that are not historical facts. These forward-looking statement are subject to a number of factors and un