Sig Group Ag · SIX:SIGN
Sig — SIG Combibloc Group — Octavian Films Conference 2019
34 slides from Sig's conference presentation, Jan 19, 2019
Slide 1: Octavian Films Conference
OCTAVIAN FLIMS CONFERENCE 19 JANUARY 2019
Slide 2: Disclaimer
Disclaimer This presentation may contain “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about us and our industry. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply futu
Slide 3: SIG Combibloc returns to SIX Swiss Exchange
SIG Combibloc returns to SIX Swiss Exchange Listing and first day of trading 28 September 2018 New shares issued 105m ▪ Priced at CHF 11.25 per share Existing shares sold 46.8m ▪ Offering size including greenshoe CHF 1.7 bn ▪ Net proceeds to SIG of CHF 1.1bn for debt reduction Total number of shares
Slide 4: Defining SIG
Defining SIG Differentiated business model with attractive industry characteristics Resilient long-term growth due to non-discretionary end markets Attractive margins, cash conversion and ROCE Well-invested and well-positioned to capitalise on market growth and opportunities in new markets and categ
Slide 5: Experienced team with a successful track record of execution
Experienced team with a successful track record of execution 6 12 15 14 Lawrence Fok Martin Herrenbrück Ricardo Rodriguez President & General President & General President & General Manager, APAC Manager, Europe Manager, Americas 13 14 1 Rolf Stangl Chief Executive Officer # Years with SIG Samuel Si
Slide 6: Business Highlights
BUSINESS» , HIGHLIGHTS (: |
Slide 7: Leading Systems and Solutions Provider for Aseptic Packaging
Leading Systems and Solutions Provider for Aseptic Packaging Highly Attractive Business Model Highly Attractive Financial Profile #2 Globally with Track record of long- 2017 Revenue: #2 aseptic carton packaging player globally exposure to resilient and growing term growth, margin expansion and €1.7b
Slide 8: Complete Packaging System and Service Solutions to Customers
Complete Packaging System and Service Solutions to Customers Full suite of differentiated Increasing our portfolio of Long-term relationships solutions value-added services with blue chip customers Smart factory, supply chain Filling Lines NCSD and technical service solutions Joint product developme
Slide 9: Global Leadership with Local Infrastructure – Clear #2
Global Leadership with Local Infrastructure – Clear #2 >1,150 550+ 38+ 8 Locally integrated EMEA Installed filler base: ~645 Field service Sales & service Sleeve & closure Fillers in field Supply chain in each region engineers locations production facilities Service engineers: >260 SIG 25% Tetra Pak
Slide 10: Going way beyond good: combatting climate change and increasing recycling
Going way beyond good: combatting climate change and increasing recycling Responsible company Responsible sourcing Responsible products Pursuing a net positive corporate Striving for certified sustainable supply Innovating and delivering smarter footprint in the long run of all materials, products a
Slide 11: Aseptic Carton Packaging – What is it?
Aseptic Carton Packaging – What is it? How it Works SIG Sleeve Technology Amongst the safest methods of processing beverages and liquid food In our filling machine: Printed design — Products heated before filling/packaging for only 2-4 seconds at 130 - 150°C, protecting and Outer Polyethylene retain
Slide 12: Two Distinct Aseptic Technologies
Two Distinct Aseptic Technologies Production Filling H2O2 sterilisation Paperboard H2O2 drying Polyethylene (PE) Filling nozzle 1 SIG Coating Longitudinal sealing Filling nozzle 2 Printing “Sleeve PE Shipment Steam injection System” Sealing Aluminium PE Cutting in sheets Polyethylene (PE) Coating Cu
Slide 13: Proprietary Differentiated Technology
Proprietary Differentiated Technology Differentiated Unique Sleeve Technology and System Based Technical Know- Technology How Our aseptic filling lines are at the heart of our customers’ operations 12
Slide 14: Increased Flexibility to Customers
Increased Flexibility to Customers Filling capabilities enabling value growth Volume, format, design flexibility Meeting key consumer trends and growth beyond standard Up to 16 product variants possible segments due to unique sleeve and filling technology on one filler Range of fill volumes from 80m
Slide 15: Strong Services Capabilities Integrated with Customers’ Day to Day Operations
Strong Services Capabilities Integrated with Customers’ Day to Day Operations Raw Milk Raw Milk Milk Outbound Raw Milk Reception Storage Pasteuriser Milk Tanks UHT Filling Line Sleeves & Closures Logistics Consumer Raw Material Reception Processing Packaging Systems Distribution & Retail 550+ field
Slide 16: Long-Term Customer Partnerships
Long-Term Customer Partnerships Top 10 Customers Customer % of 2017 Sleeves Revenue Length of Relationship 1 6% >10 years 2 6% >15 years 3 5% >35 years 4 5% >40 years 5 3% >30 years 6 3% >30 years 7 2% >5 years 8 2% >35 years 9 2% >10 years 10 2% >35 years Total 36% >25 years on average Source: Comp
Slide 17: Increasing Growth Region Focus and More Diversified Portfolio
Increasing Growth Region Focus and More Diversified Portfolio… 2007 2014 2017 Core Revenue1 Contribution2 Non-EMEA Non-EMEA Non-EMEA 23% 46% 53% APAC 17% APAC APAC 29% 33% EMEA EMEA 47% Americas 54% 6% EMEA Americas 77% 17% Americas 20% EMEA FCF3 €144m €227m €208m4 Sources: Company information (1) C
Slide 18: Multiple Drivers of Growth
Multiple Drivers of Growth A Resilient End-Markets B Strong Filler Base and Recent Investments C Continued Consumer-Led Innovation D Exploit White Space Opportunities E Accelerate Expansion in Fast Growing Niche Segments Product innovation, along with investments in commercial excellence and geograp
Slide 19: Secular Trends Driving Robust Growth
A Secular Trends Driving Robust Growth Global Food and Beverages Packaging Market Mega Trends Driving Resilient and Consistent Growth Expected CAGR 2017A – 2022E Europe MEA Americas APAC Favourable demographics 0.1% 5.7% 3.4% 6.5% Acting responsibly +3,6% Convenience & urbanisation +2,6% +2,8% Food
Slide 20: Strong Filler Base and Recent Investments Drive Growth
A B Strong Filler Base and Recent Investments Drive Growth Expected Growth in Aseptic Carton Production Volumes (bn litres)1 Strong Filler Investments2 Across All Regions ~55% of 17-22 SIG 109.4 Americas Sales 3.6% CAGR +10% fillers 91.9 ~140 fillers in field 24,8 Americas 20,9 34,9 APAC APAC 25,5 +
Slide 21: Expanded Product Portfolio
C Expanded Product Portfolio Key Trends Product Innovations – Selected Examples “Rising affluence and growing Premiumisation health awareness, we believe premiumisation will remain a key combismile and drinksplus theme… The change in China’s demographics supports the premiumisation trend as the rise
Slide 22: Expanding Our Footprint
D Expanding Our Footprint Recently Aseptic Carton CAGR Placed Fillers Demand 2017A 2017A-22E Building beyond Brazil; 61 2.8 bn L 3% no other player besides Tetra Pak 2nd largest Tetra Pak sales of over 7bn aseptic carton 2 2.4 bn L 17% packs; 110 customers; volumes in 320 fillers APAC 3rd largest Hi
Slide 23: Expanding beyond Traditional Categories
E Expanding beyond Traditional Categories Flavoured Non- Dairy Creamers Maple Water Pet Food Nutrition Co-packing solutions Broadening customer reach Tube Feeding Nutrition Oral Feeding Nutrition Nutrient Balance Patient nutrient drinks Primarily distributed through hospitals One Click Unique QR Cod
Slide 24: Financial Overview
FINANCIAL OVERVIEW 23
Slide 25: Resilient Financial Performance Over Time
Resilient Financial Performance Over Time 2007-17 Revenue CAGR: 2007-17 Adj. EBITDA CAGR: 2007-17 Adj. EBITDA Margin Expansion Estimated ROCE: 4%¹ 7% +700bps >20%5 Constant Currency % Core Revenue2 Growth % 1.721 1.724 1.664 1.616 1.677 1.629 1.390 1.464 Total 1.568 1.563 1.590 1.187 1.195 1.546 1.4
Slide 26: Significant increase in profitability
Significant increase in profitability 2007-17 Adj. EBITDA CAGR: 7% 2017 Adj. EBITDA: €455m 2007 Adj. EBITDA: €236m 2017 Supply Chain Adj. EBITDA: €474m1 2007-17 Adj. EBITDA Margin Expansion: +700bps 2007 Adj. EBITDA Margin: 20% 2017 Adj. EBITDA Margin: 27% Adj. EBITDA Margin Indices re-based to 100
Slide 27: Continued Execution on Margin Initiatives
Continued Execution on Margin Initiatives 2015 – 2017 Next Phase (2017+) Procurement Central negotiation with indirect suppliers and increased Regional sourcing (and indirect tendering for raw materials costs) New indirect spend management systems Long-term LPB purchasing contracts, hedging Manufact
Slide 28: Business Model and Cumulative Cash Flow
Business Model Sleeves & Closures 90% Service 5% Revenue from fillers deployed under lease accounting Fillers 5% (of Total (of Total Revenue2) (of Total Revenue2) Revenue2) Fillers sold under outright sales (primarily JV) After sales services Filler Installed Attractive IRR Capital decision taking i
Slide 29: Historical Free Cash Flow
Historical Free Cash Flow €m 2015 2016 2017 Net Cash from Operating Activities 239 239 247 Dividends received from joint ventures 15 19 25 Acquisition of property, plant and equipment and intangible assets (159) (186) (212) Payment of finance lease liabilities 0 0 (1) Free Cash Flow 95 72 58 Add-bac
Slide 30: Historical Capex and Cash Conversion
Historical Capex and Cash Conversion €m 2015 2016 2017 Net Capex 125 159 164 % Revenue 7.2% 9.2% 9.9% Net Filler Capex 55 86 104 PPE Capex 70 73 60 Cash Conversion1 71.4% 65.9% 63.9% Adj. EBITDA – Capex Margin1 18.1% 17.9% 17.5% Estimated ROCE 20.2%2 in 2017 Source: Company information Note: Margins
Slide 31: Leverage
Leverage Dec 31 Sept 30 Sept 30, € millions 2017 2018 pro forma1 Cash2 102 132 132 ▪ Term loans refinanced at attractive rates ▪ Cost of debt 2.00 - 2.25% Senior Secured Term Loans 1’939 1’957 1’600 ▪ New multi-currency RCF €300 million for 5 years Finance Lease Liabilities 12 24 24 ▪ Further reduct
Slide 32: Summary of our Financial Characteristics
Summary of our Financial Characteristics Multiple Levers for Growth — Favourable macroeconomic and end-market backdrop — Salesforce effectiveness measures that were started in 2016 expected to yield increasing results — New customer wins in 2016 and 2017; recent entry into large new geographies — Re
Slide 33: Key Investment Highlights
Key Investment Highlights 1 Global Leadership - Strong #2 Globally Attractive Industry Characteristics 2 Resilient Growing End Markets 3 Proprietary Technology and Engineering Know-How Winning Business 4 End to End Solutions with Value-Adding Support and Service Model Enabling Growth 5 Longstanding
Slide 34: Thank You
THANK YOU