Sonae Indústria S.G.P.S — Sonae Indústria — Investor Presentation (November 2007)
54 slides from Sonae Indústria S.G.P.S's investor presentation, November 2007
Slide 1: Investor Presentation 2007
INVESTOR PRESENTATION 2007 INVESTOR PRESENTATION 1
Slide 2: Overview
INVESTOR PRESENTATION 2007 SONAE INDÚSTRIA OVERVIEW 2
Slide 3: One of the largest wood panel producers in the world
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • WE ARE ONE OF THE LARGEST WOOD PANEL PRODUCERS IN THE WORLD. • WITH 34 PLANTS LOCATED IN 9 COUNTRIES AND SPREAD ACROSS 4 CONTINENTS. • OUR BUSINESS IS COMPLETELY FOCUSED ON THE PRODUCTION OF WOOD BASED PANELS. 3
Slide 4: Overview
INVESTOR SONAE INDÚSTRIA INVESTOR PRESENTATION PRESENTATION OVERVIEW 2007 2007 4
Slide 5: Over 90% of rawboard capacity is PB and MDF
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • OVER 90% OF OUR RAWBOARD CAPACITY IS TO MANUFACTURE PB & MDF. PB MDF OSB VERY VERSATILE EXCELLENT SUBSTITUTE SUITABLE FOR SOLID WOOD FOR STRUCTURAL SUITABLE AND NON-STRUCTURAL FOR ALL GENERAL IDEAL FOR REQUIREMENTS APPLICATIONS IN THE USES IN FUR
Slide 6: More than 50% transformed into value added products
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • AND WE TRANSFORM MORE THAN 50% INTO VALUE ADDED PRODUCTS • SOME EXAMPLES: MELAMINE HIGH PRESSURE LAMINATE FLOORING FACED BOARD LAMINATE ACOUSTIC BOARD 6
Slide 7: Rawboard capacity by region
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • 60% TOTAL CAPACITY (RAWBOARD) IS 10 MILLION M , AROUND OF WHICH IS LOCATED IN CENTRAL EUROPE. 3 SONAE INDÚSTRIA RAWBOARD CAPACITY Thousands of m3 7.000 5.845 6.000 585 5.000 1.530 4.000 3.000 2.400 1.805 2.000 3.730 500 450 1.000 1.830 1.355 0 Ce
Slide 8: Capacity growth and acquisitions since 1993
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 1993 ACQUISITION OF 24,9% STAKE IN TAFISA • BETWEEN 1999 AND 2006 SONAE INDÚSTRIA’S INSTALLED CAPACITY GREW INCREASED GRADUALLY TO 94% IN 2004 … PERIOD OF INVESTMENT IN GREENFIELD PLANTS IN BY 91%, THROUGH BOTH ACQUISITIONS BRAZIL, SOUTH AFRICA AND
Slide 9: One of the largest wood based panel manufacturers
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • TO BECOME ONE OF THE LARGEST GLOBAL MANUFACTURERS OF WOOD BASED PANELS IN EUROPE AND WORLDWIDE EUROPE Thousands of m3 WORLDWIDE Thousands of m3 Kronospan - M&P Kaindl 10.600 Kronospan - M&P Kaindl 10.800 Sonae Indústria 8.245 Sonae Indústria 10.0
Slide 10: More than 80% of sales generated in Europe
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • MORE THAN 80% OF OUR SALES ARE GENERATED IN EUROPE SALES BY MARKET (ORIGIN) SALES BY PRODUCT OTHERS; 9% GERMANY; FLOORING; PB; 19% 39% 2% CANADA; 4% UK; 5% T&G; 5% BRAZIL; 7% CTS; 11% S.AFRICA; 5% MDF; 21% FRANCE; 15% HB; 1% IBERIAN P.; MF; 25% 2
Slide 11: Turnover and recurrent EBITDA margin
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • GENERATING CONSOLIDATED TURNOVER OF 1.7 BILLION EUROS, AND A RECURRENT EBITDA MARGIN OF 13% IN FULL YEAR 2006 AND OF 1.6 BILLION EUROS AND 15% RESPECTIVELY IN 9M07. TURNOV ER & RECURRENT EBITDA M ARGIN RECURRENT EBITDA M illions of M illions of 2
Slide 12: Profitability across three main geographies
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • WITH VARYING LEVELS OF PROFITABILITY BETWEEN OUR 3 MAIN GEOGRAPHIES: TURNOV ER & RECURRENT EBITDA TURNOV ER & RECURRENT EBITDA TURNOV ER & RECURRENT EBITDA IBERIA CENTRAL EUROPE REST OF THE WORLD 800 1400 600 M illions of M illions of Euros M ill
Slide 13: Healthy balance sheet
SONAE INDÚSTRIA INVESTOR PRESENTATION OVERVIEW 2007 • AND MAINTAINING A HEALTHY BALANCE SHEET. BALANCE SHEET (MILLIONS OF EUROS) 2006 9M2007 NON CURRENT ASSETS 1.360 1.519 CURRENT ASSETS 796 707 TOTAL ASSETS 2.156 2.226 TOTAL SHAREHOLDERS’ FUNDS 548 614 MLT FINANCIAL DEBT 802 740 ST FINANCIAL DEBT 1
Slide 14: Our Strategy
INVESTOR PRESENTATION 2007 SONAE INDÚSTRIA OUR STRATEGY 14
Slide 15: Strategic guidelines: to be a global leader
STRATEGIC GUIDELINES INVESTOR PRESENTATION TO BE A GLOBAL LEADER 2007 • A MULTIREGIONAL WOOD BASED PANEL PRODUCER • WITH SOUND CORPORATE GOVERNANCE RULES • WITH ENVIRONMENTAL AND PEOPLE SAFETY CONCERNS • ORIENTED TOWARDS INNOVATION AND CONTINUOUS IMPROVEMENT OF OPERATIONAL PERFORMANCE • WITH THE AMB
Slide 16: Portfolio strategy: first priority is profitability
PORTFOLIO STRATEGY INVESTOR PRESENTATION FIRST PRIORITY IS PROFITABILITY 2007 • PROTECT MARKET SHARE AND PROFITABILITY IN IBERIA • ACQUISTION OF A PB PLANT IN LINXE, FRANCE CONSOLIDATED AS FROM 30 SEPTEMBER 2006 • EUROPE INCREASE PROFITABILITY AND STRENGTHEN MARKET POSITION IN CENTRAL • ACQUISITION
Slide 17: Highlights of 9M07 Results
INVESTOR PRESENTATION 2007 SONAE INDÚSTRIA HIGHLIGHTS OF 9M07 RESULTS 17
Slide 18: 9M07 Highlights
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • WE CONTINUE TO DELIVER STRONG OPERATING PERFORMANCE: • SUPPORTED BY SOLID COMPETITIVE POSITIONS IN OUR MAIN MARKETS • AND DESPITE THE CONSTRUCTION SLOWDOWN FELT PARTICULARLY IN NORTH AMERICA, GERMANY AND SPAIN AND THE VOLATILITY CAUSED BY
Slide 19: 9M07 Highlights: turnover and EBITDA
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • LED BY OUR FOCUS ON DELIVERY OF PROFITABLE GROWTH IN THE REGIONS WHERE WE HAVE OPERATIONS : • CONSOLIDATED TURNOVER INCREASED 32% TO 1.6 BILLION EUROS; • RECURRENT EBITDA INCREASED TO 240 MILLION EUROS, REPRESENTING AN EBITDA MARGIN OF 15.
Slide 20: Quarterly profitability by region
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • OUR QUARTERLY EVOLUTION IN PROFITABILITY WAS STRONG : TURNOVER & RECURRENT EBITDA TURNOVER & RECURRENT EBITDA TURNOVER & RECURRENT EBITDA IBERIA CENTRAL EUROPE REST OF THE WORLD 250 45% 450 20% 65% Millions of TURNOVER +46% Millions of TUR
Slide 21: Iberia
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 IBERIA • OUR EXCELLENT PERFORMANCE IN IBERIA CONTINUES SUPPORTED BY OUR STRATEGY TO: • DEVELOP OUR PRODUCT PORTFOLIO • EXCEL IN CUSTOMER SERVICE • CONSOLIDATE OUR PRESENCE IN STRATEGIC EXPORT MARKETS. • VOLUMES GREW 24% ALBEIT DARBO’S INTEGR
Slide 22: Central Europe
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 CENTRAL EUROPE (Germany, France, UK) • THE MACROECONOMIC ENVIRONMENT IN CENTRAL EUROPE WAS HELPED BY SOLID DOMESTIC DEMAND IN EASTERN EUROPEAN COUNTRIES HOWEVER THE CONSTRUCTION MARKET IS NOW WEAKER, PARTICULARLY IN GERMANY. IN FRANCE, THE N
Slide 23: Rest of the World
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 REST OF THE WORLD (Canada, Brazil, South Africa) • OUR PERFORMANCE IN ROW REFLECTS MIXED TRENDS: IN NORTH AMERICA THE PARTICLEBOARD INDUSTRY CAPACITY UTILISATION RATES IN NORTH AMERICA CONTINUE TO DECLINE (75% IN 3Q07) AND SOME REDUCTIONS IN
Slide 24: Industrial cost base
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • OUR INDUSTRIAL COST BASE WAS SIGNIFICANTLY HIGHER IN 9M07, COMPARED WITH 9M06 (+11%), AS A RESULT OF THE PRESSURE ON GLOBAL PRICES FOR OIL AND ON LOCAL WOOD COSTS; 9M07/ Contribution to 9M06 % Total 9M07 % Total 9M06 total increase VARIABL
Slide 25: Consolidated average prices
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • HOWEVER THE POSITIVE PRICE ENVIRONMENT HELPED US TO OFFSET THESE COST INCREASES. COMPARED WITH 3Q06, AVERAGE PRICES HAVE INCREASED BY 10%. CONSOLIDATED AVERAGE PRICES (eur/m 3) BASE 100:3Q06 1,25 1,20 OSB +18% 1,15 MDF + 13% 1,10 PB +15% 1
Slide 26: Growth in earnings and net debt
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • GIVEN OUR GOOD OPERATIONAL PERFORMANCE WE ACHIEVED SIGNIFICANT GROWTH IN EARNINGS: • OPERATING RESULTS (EBIT) INCREASED IN 9M07 TO 153 MILLION EUROS COMPARED WITH 84 MILLION EUROS IN 9M06. • THE HIGHER INTEREST RATE ENVIRONMENT TOGETHER WI
Slide 27: Increase in fixed assets
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • THE INCREASE IN FIXED ASSETS IN 9M07 WAS 144 MILLION EUROS, WHICH INCLUDED: • 62 MILLION EUROS OF INVESTMENT IN THE NEW LINE IN CANADA, THE MAJORITY OF WHICH WILL BE RECOVERED THROUGH OUR INSURANCE POLICY; • 26 MILLION EUROS RELATED WITH T
Slide 28: Tafisa buyout and working capital
SONAE INDÚSTRIA INVESTOR PRESENTATION 9M07 HIGHLIGHTS 2007 • IN ADDITION TO THE INCREASE IN FIXED ASSETS, WE BOUGHT OUT THE MAJORITY OF THE REMAINING MINORITY SHAREHOLDERS IN OUR SUBSIDIARY TAFISA IN MAY REPRESENTING A CASH OUTFLOW OF 50 MILLION EUROS. • WORKING CAPITAL INCREASED BY 80 MILLION EUROS
Slide 29: Looking Forward
INVESTOR PRESENTATION 2007 SONAE INDÚSTRIA LOOKING FORWARD 29
Slide 30: Looking forward
SONAE INDÚSTRIA INVESTOR PRESENTATION LOOKING FORWARD 2007 LOOKING FORWARD • OUR STRATEGIC FOCUS ON CONSOLIDATING OUR PRESENCE IN CORE MARKETS AND INCREASING THE PROFITABILITY OF OUR EXISTING ASSET BASE PROVIDES US WITH A PLATFORM FOR SUSTAINABLE GROWTH FOR THE FUTURE. • THERE IS STILL POTENTIAL FOR
Slide 31: More About
INVESTOR PRESENTATION 2007 SONAE INDÚSTRIA MORE ABOUT 31
Slide 32: Iberia competitive landscape
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION IBERIA 2007 IBERIA COMPETITIVE LANDSCAPE IBERIA CAPACITY THOUSANDS M3 PB MDF 1.830 500 PARTICLEBOARD MDF FLOORING HARDBOARD HPL CHEMICALS OTHERS (FURNITURE, COMPONENTS, WOOD VENEER) 32
Slide 33: Installed rawboard capacity in Iberia
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION IBERIA 2007 IBERIA COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN IBERIA - TOP PLAYERS PLANTS MILLIONS M3 12 Sonae Indústria 2,40 CAPACITY 2.4 MILLION M3 Finsa 1,97 CAPACITY UTILIZATION 83% Utisa 1,42 Interbon 0,75 Losan 0,38 Tablicia 0,37
Slide 34: Central Europe competitive landscape
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION CENTRAL EUROPE 2007 CENTRAL EUROPE COMPETITIVE LANDSCAPE CENTRAL EUROPE CAPACITY THOUSANDS M3 UK MDF 1.530 GERMANY PB 3.730 FRANCE OSB 585 PARTICLEBOARD MDF OSB HPL CPL 34
Slide 35: Installed rawboard capacity in Central Europe
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION CENTRAL EUROPE 2007 CENTRAL EUROPE COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN CENTRAL EUROPE - TOP PLAYERS MILLIONS M3 PLANTS 16 Sonae Indústria 5,85 CAPACITY 5,8 MILLION M3 Egger 3,25 CAPACITY UTILIZATION 92% Pfleiderer 2,96 Kronospan
Slide 36: North America competitive landscape
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION NORTH AMERICA 2007 PARTICLEBOARD REST OF THE WORLD NORTH AMERICA COMPETITIVE LANDSCAPE CANADA INSTALLED RAWBOARD CAPACITY IN NORTH AMERICA (PB+MDF) - TOP PLAYERS MILLIONS M3 Roseburg 2,44 Flakeboard 2,40 Temple Inland 1,74 Pfleiderer 1,42 Sierra
Slide 37: Brazil competitive landscape
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION BRAZIL 2007 REST OF THE WORLD BRAZIL COMPETITIVE LANDSCAPE BRAZIL CAPACITY THOUSANDS M3 MDF BRAZIL 380 PARTICLEBOARD PB MDF 260 FLOORING 37
Slide 38: Installed rawboard capacity in Brazil
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION BRAZIL 2007 REST OF THE WORLD BRAZIL COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN BRAZIL - TOP PLAYERS MILLIONS M3 PLANTS 1 Duratex 1,37 CAPACITY Satipel 1,00 0,64 MILLION M3 CAPACITY UTILIZATION Berneck 0,66 88% Sonae Indústria 0,64 Masi
Slide 39: South Africa competitive landscape
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION SOUTH AFRICA 2007 REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE SOUTH AFRICA CAPACITY PB THOUSANDS 455 M3 SOUTH AFRICA PARTICLEBOARD MDF MDF 70 39
Slide 40: Installed rawboard capacity in South Africa
GEOGRAPHIC REVIEW OF OPERATIONS INVESTOR PRESENTATION SOUTH AFRICA 2007 REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN SOUTH AFRICA - TOP PLAYERS PLANTS MILLIONS M3 3 CAPACITY Sonae Indústria 0,53 0,525 MILLION M3 CAPACITY UTILIZATION 99% PG Bison 0,34 Magna Boar
Slide 41: What We Are Doing
INVESTOR PRESENTATION 2007 SONAE INDÚSTRIA WHAT WE ARE DOING 41
Slide 42: Protect market share and profitability in Iberia
PRIORITY TO PROFITABILITY INVESTOR PRESENTATION PROTECT MARKET SHARE AND PROFITABILITY IN IBERIA 2007 ACQUISITION OF A PB PLANT IN LINXE, DARBO FROM 30 SEPTEMBER 2006 • INVESTMENT OF 30 MILLION EUROS EQUITY, 3 MILION EUROS NET DEBT. • 450 3 THOUSAND M OF PB CAPACITY 2 AND 7 MILLION M OF MF CAPACITY.
Slide 43: Joint venture with Tarkett for laminate flooring
PRIORITY TO PROFITABILITY INVESTOR PRESENTATION STRENGTHEN MARKET POSITION IN CENTRAL EUROPE 2007 JOINT-VENTURE WITH TARKETT FOR THE PRODUCTION OF LAMINATE FLOORING IN EIWEILER • PRODUCTION STARTED IN OCTOBER 2006. • INVESTMENT WAREHOUSE. OF 60 MILLION EUROS TO ADD A FLOORING LINE AND AN AUTOMATIC •
Slide 44: Acquisition of Hornitex plants
PRIORITY TO PROFITABILITY INVESTOR PRESENTATION STRENGTHEN MARKET POSITION IN CENTRAL EUROPE 2007 AQUISITION OF HORNITEX PLANTS (BEESKOW, HORN, DUISBERG) FROM 1 JULY 2006 • 1.1 MILLION M3 PB CAPACITY, 300 THOUSAND M3 OF MDF CAPACITY, 38 MW OF ENERGY THROUGH BIOMASS COGENERATION. • 3TODAY PLANTS, HOR
Slide 45: New particleboard line in South Africa
PRIORITY TO PROFITABILITY INVESTOR PRESENTATION GROW IN OUR PROFITABLE MARKETS 2007 NEW PARTICLEBOARD LINE IN SOUTH AFRICA • INVESTMENT OF 52 MILLION EUROS IN WHITE RIVER; • A NEW PARTICLEBOARD LINE WITH CAPACITY TO PRODUCE UP TO 350 THOUSAND M 3 • FULL DEDICATION OF THE EXISTING LINE TO PRODUCE UP
Slide 46: New melamine line in Canada and PB line 2 reconstruction
PRIORITY TO PROFITABILITY INVESTOR PRESENTATION GROW IN OUR PROFITABLE MARKETS 2007 NEW MELAMINE LINE IN CANADA (#4) RECONSTRUCTION PB LINE 2 • LAC INVESTMENT OF 12 MILLION CAD (8 MILLION EUROS) IN FOURTH MELAMINE LINE IN MEGANTIC. PRODUCTION STARTED IN 4Q’06. • TO GROW FURTHER IN THE MELAMINE SURFA
Slide 47: Sustainability
STRATEGY INVESTOR PRESENTATION SUSTAINABILITY 2007 1ST SUSTAINABILITY REPORT OF SONAE INDÚSTRIA PUBLISHED IN THE 2ND QUARTER OF 2007 • STRATEGIC FORMALISATION TO APPROACH SUSTAINABILITY REPORTING AND PROCESS IN THE COMING YEARS. • SOME SHARED ITEMS: CORPORATE GOVERNANCE RISK MANAGEMENT OPERATIONAL P
Slide 48: Health & Safety
STRATEGY INVESTOR PRESENTATION HEALTH & SAFETY 2007 HEALTH & SAFETY POLICY APROVED BY EXCOM AND SIGNED BY MANAGERS ON JUNE 2006. • FROM JULY TO OCTOBER 2006 ROAD-SHOW IN 8 COUNTRIES: • COMUNICATE CORPORATE H&S POLICY AND STANDARDS • TRAINING AND RESPONSABILITIES DEFINITION • IDENTIFICATION OF MAJOR
Slide 49: Board of Directors
CORPORATE GOVERNANCE INVESTOR PRESENTATION BOARD OF DIRECTORS 2007 49
Slide 50: Executive Management Team
CORPORATE GOVERNANCE INVESTOR PRESENTATION EXECUTIVE MANAGEMENT TEAM 2007 50
Slide 51: Board Committees
CORPORATE GOVERNANCE INVESTOR PRESENTATION BOARD COMMITTEES 2007 51
Slide 52: More on Human Resources
MORE ON SONAE INDÚSTRIA INVESTOR PRESENTATION HUMAN RESOURCES 2007 52
Slide 53: Appendix: Environmental Policy Statement
MORE ON SONAE INDÚSTRIA INVESTOR PRESENTATION APPENDIX 2007 SONAE INDÚSTRIA ENVIRONMENTAL POLICY STATEMENT 53
Slide 54: INVESTOR
INVESTOR PRESENTATION 2007 54
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