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Wendel — Constantia Flexibles — Investor Day (2018)
24 slides from Wendel's investor day presentation, 2018
Slide 1: Constantia Flexibles
Constantia Flexibles 2018 LONG-TERM INVESTOR 1 Wendel Investor Day 2018 | Constantia Flexibles
Slide 2: Wendel acquisition and transformation of Constantia Flexibles
Constantia Flexibles 2015 - WENDEL ACQUIRED TRANSFORMATION NEW CONSTANTIA FLEXIBLES CONSTANTIA FLEXIBLES Initial investment: €640m / c.73% • New management team • Long-term single digit resilient growth • 6 bolt-on acquisitions in Europe, business Africa and Asia representing c. • #2 in Europe / #4
Slide 3: Alexander Baumgartner – CEO of Constantia Flexibles
Alexander Baumgartner – CEO of Constantia Flexibles • Constantia Flexible’s CEO since June 2015 • 20+ years of packaging industry experience • Extensive experience in sales & marketing activities, plant operations, restructuring and growth strategies • Before joining Constantia Flexibles in October
Slide 4: Constantia Flexibles
Constantia Flexibles Alexander Baumgartner, CEO LONG-TERM INVESTOR 4 Wendel Investor Day 2018 | Constantia Flexibles
Slide 5: The NEW Constantia Flexibles
The NEW Constantia Flexibles #2 #3 39 in Europe globally production sites in 18 countries Headquarters 2 business segments ~ 9,100 in Austria Consumer (~75%) employees (Vienna) Pharma (~25%) + 16.5% stake in MCC 46% Film-based Shareholders Sales by region Wendel (~61%) 65% Europe 52% AREPO Foundatio
Slide 6: Success story to continue
Success story to continue From a leading … to a global player… … and now a global European supplier… pure play flexible • A group with a mission • Network of medium-sized and a clear strategy packaging group companies • Realizing global growth • After sale of Labels • Business focus on Europe opport
Slide 7: Total Flexible Packaging Market: Size & Growth by Region
Total Flexible Packaging Market: Size & Growth by Region Global flex. Packaging market CAGR (2017 - 2022) ROW Europe India 11.5% Oceania ROW 7.0% China 7.0% India Mid. East & Africa 4.9% ≈ € 79 bn North America 3.8% South America 3.1% China Europe 2.4% North Oceania 2.1% America Japan 1.5% Japan Mid
Slide 8: Unique opportunity for Constantia to augment portfolio
Fragmented Flexible Packaging industry (201) Sales €bn 6.9 Top 5 Remaining 5 ≈ 18% market share ≈ 6% market share 2.2 1.5 1.2 1.2 1.0 0.9 0.9 0.8 0.8 New Sealed Constantia Dai Toppan Mondi Huhtamaki Printpack ProAmpac Wipak/ Amcor Air Nippon Printing Winpak Unique opportunity for Constantia to augme
Slide 9: FOCUS21 strategy
FOCUS21 strategy Defend and Greater Three extend leading Acquisitions ambitions pillars positions Manufacturing & G&A optimization Supply Chain opt. IT strategy Complexity Procurement reduction Workstreams optimization Commercial Innovation excellence leadership 9 Wendel Investor Day 2018 | Constant
Slide 10: FOCUS21: Defend and Extend Leading Positions
FOCUS21: Defend and Extend Leading Positions Europe North America Rest of the world 1 Dairy yoghurt 1 Confectionery foil 1 Dairy yoghurt lidding foil & film lidding foil & film Consumer (Russia) 1 Confectionery foil 1 Processed meat foil Processed meat foil 1 Confectionary foil 1 1 Snacks (Mexico) (
Slide 11: FOCUS21: Develop promising positions through investments worldwide
FOCUS21: Develop promising positions through investments worldwide Europe North America Rest of the world • Confectionery film • Dairy yoghurt lidding • Confectionery film • Processed food foil • Processed food film Consumer coffee foil • Dairy yoghurt lidding • Snacks film • Processed food dry/ fil
Slide 12: M&A track record: since 2015, €265 MN added sales
M&A TRACK RECORD: since 2015, €265 MN added sales IPO & Trade Sale Labels Sale Spear Afripack Folding Bucharest Globalpack Pemara Lamp Creative Oai Hung Alucap Parikh Polypack Printer Labels 2013 2014 2015 2016 2017 2018 OEP WendelGroup Acquisition Divesture/Closure 12 Wendel Investor Day 2018 | Con
Slide 13: Recent acquisitions – Creative Polypack Case Study
Recent acquisitions – Creative Polypack Case Study Summary Deal structure • Creation of a top 3 player in India • Acquired 70% stake in March 2018 • One of fastest growing flexible packaging • Founding family will remain as shareholder for markets globally next two years (put/call options in place)
Slide 14: Outstanding financial structure
Outstanding financial structure Healthier balance sheet gives more room to maneuver for M&A Net debt to EBITDA ratio Before sale of Labels ~4.1x(1) After sale of Labels ~2.4x(2) Mid-term target range ~3.0 – 3.5x Cash conversion(3) ~60% 1 as of September 2017 2 estimate as of 30 Sept 2018 based on 30
Slide 15: Focused M&A in flexible packaging
Focused M&A in flexible packaging Film (high value added laminates, back and forward integration) North America & Europe (Top) Foil Russia (Top) Foil Foil (consolidation) China & SEA (Top) Foil (backward integration, large only) Europe (2nd) North America (Top) Foil India (Top) Film Non M&A prioriti
Slide 16: How we manage FX & raw materials volatility
How we manage FX & raw materials volatility FX volatility Raw material volatility • Typically, contractual agreements with customers allowing key raw material prices variations to be • Two main FX risks: 'passed-through' on a regular basis ▪ Translational (mainly USD, ZAR, RUB, INR, VND) • Aluminium
Slide 17: 9M 2018 – Despite difficult market environment, organic growth above prior year
9M 2018 – Despite difficult market environment, organic growth above prior year level Net Sales (€m) +2,4%1 ▪ Ongoing raw material volatility 921.4 876.7 ▪ Strong organic sales growth in emerging Consumer markets overall, in the US and in GMT cluster (German, Mexico, Turkey) in Consumer division ▪ C
Slide 18: Focus on innovation along key innovation themes
Focus on innovation along 9 key innovation themes…. with a longterm revenue potential of 550 Mio€ Total pipeline value 550 m€ Total pipeline volume 37% of sales Innovation KPIs Innovation Sales 4% of sales R&D spending 0.6% of sales Overarching Key Underlying packaging trends functionalities Technol
Slide 19: Striving towards 100% recyclability by 2025
Striving towards 100% recyclability by 2025 Sustainability Pledge Material Input in tonnage Other Materials 8% “Constantia Flexibles pledges that 100% of its Inks, Adhesives consumer and pharma packaging will be Plastics and other recyclable by 2025. As a global flexible 31% Chemicals packaging prod
Slide 20: Ready for a sustainable future
Ready for a sustainable future We will meet the future need for a more planet- friendly future by... • Promote existing and revolutionary sustainable packaging solutions developed by Constantia Flexibles under Ecolutions (focus on recycle-ready material) • Finalize construction of our Greenfield fac
Slide 21: Key takeaways
Key takeways PEOPLE PASSION PACKAGING Global Technology & Entrepreneurial Proven Growth Market Leader Innovation Culture Platform • #2 in Europe / #3 • Leader in foil with • Well-diversified loyal • History of Globally distinct competitive employee base outgrowing market • 60% of sales with #1 advan
Slide 22: Appendix
Appendix 22 Wendel Investor Day 2018 | Constantia Flexibles
Slide 23: Constantia Flexibles H1 2018 figures
Constantia Flexibles H1 2018 figures Sales, €m 759.1 +3.4% total growth: +3.0% organic growth, +4.1% scope, -2.7% FX +3.4% impact and -1.1% IFRS 15 impact ▪ Good organic growth driven by price/mix effect (+4.6%) overcompensating volume decrease (-1.6%) 734.3 ▪ Creative Polypack Ltd. (India) acquisit
Slide 24: Digital printing
Digital: Leveraging digital to enhance customer experience & improve products/processes Digital printing ▪ Pure Image recognition – no codes ▪ Augmented Reality consumer experience ▪ User-friendly content management ▪ Direct link to consumer ▪ Data management Ultrashort Runs 1. Download „Constantia