Sonae Indústria S.G.P.S — Sonae Indústria — Investor Presentation (November 2009)
58 slides from Sonae Indústria S.G.P.S's investor presentation, November 2009
Slide 1: Sonae Indústria Investor Presentation
SONAE INDÚSTRIA INVESTOR PRESENTATION November 2009 1
Slide 2: Overview
OVERVIEW MG SONAE i INDUSTRIA
Slide 3: Shareholder Structure
OVERVIEW SONAE INDÚSTRIA SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE AT 5th NOVEMBER 2009 EFANOR FREE FLOAT 51.356% 48.644% Sonae Indústria SGPS 3
Slide 4: One of the largest wood panel producers in the world
OVERVIEW SONAE INDÚSTRIA WE ARE ONE OF THE LARGEST WOOD PANEL PRODUCERS IN THE WORLD. WORLD. WITH 29 PLANTS LOCATED IN 8 COUNTRIES AND SPREAD ACROSS 3 CONTINENTS. CONTINENTS. OUR BUSINESS IS EXCLUSIVELY FOCUSED ON THE PRODUCTION OF WOOD BASED PANELS. PANELS. 4
Slide 5: Our Operations
OVERVIEW SONAE INDÚSTRIA OUR OPERATIONS 29* * As of 5th November 2009 5
Slide 6: Our Products: PB, MDF, OSB
OVERVIEW SONAE INDÚSTRIA OUR PRODUCTS OVER 90% OF OUR RAWBOARD CAPACITY IS TO MANUFACTURE PB & MDF. PB MDF OSB Very versatile Excellent substitute for Suitable for structural and solid wood non-structural applications Suitable for all general in the construction uses in furniture and Ideal for furni
Slide 7: Our Products
OVERVIEW SONAE INDÚSTRIA OUR PRODUCTS WITH VARIOUS APPLICATIONS KITCHEN / OFFICE / HOME FURNITURE CONSTRUCTION FLOORING DECORATION PACKAGING 7
Slide 8: Sales
OVERVIEW SONAE INDÚSTRIA SALES IN 2008*, APPROXIMATELY 80% OF OUR SALES WERE GENERATED IN EUROPE WE TRANSFORM MORE THAN 50% INTO VALUE ADDED PRODUCTS SALES BY MARKET SALES BY PRODUCT PB S.AFRICA FLOORING 18% 7% 1% CANADA IBERIAN P. OTHERS 8% 25% 12% T&G 6% UK 5% CTS MDF 10% 18% FRANCE 17% HB 1% OSB
Slide 9: Our History
OVERVIEW SONAE INDÚSTRIA OUR HISTORY Acquisition and SONAE (Sociedade modernization of Nacional de AGLOMA – the largest Estratificados, SARL) domestic Particleboard was established to Starting the producer in Portugal international manufacture decorative High expansion with the Pressure laminates ac
Slide 10: Our History
OVERVIEW SONAE INDÚSTRIA OUR HISTORY SINCE 1993 SONAE INDÚSTRIA’S INSTALLED CAPACITY GREW THROUGH BOTH ACQUISITIONS AND ORGANIC GROWTH. 2005: JV with 2008 and 1997: Investment period in Tarkett 2009: 1999- 1999-2004: (Germany) Restructuring Greenfield plants in Brazil, Restructure of Glunz Phase; So
Slide 11: Wood Based Panel Players
OVERVIEW SONAE INDÚSTRIA WOOD BASED PANEL PLAYERS WE ARE ONE OF THE LARGEST GLOBAL MANUFACTURERS OF WOOD BASED PANELS IN EUROPE AND WORLDWIDE EUROPE WORLDWIDE Thousands of m 3 Thousands of m 3 M&P Kaindl (Kronospan) 13.800 M&P Kaindl (Kronospan) 13.200 Sonae Indústria 6.940 Sonae Indústria 8.355 Swi
Slide 12: Capacity Production
OVERVIEW SONAE INDÚSTRIA CAPACITY PRODUCTION TOTAL CAPACITY (RAWBOARD) IS 8,4 MILLION M3, APPROXIMATELY 80% OF WHICH IS LOCATED IN EUROPE. SONAE INDÚSTRIA RAWBOARD CAPACITY SONAE INDÚSTRIA RAWBOARD CAPACITY BY REGION BY PRODUCT Thousands of m 3 Thousands of m 3 7.000 6.055 1) 6.000 6.000 5.150 1) 1.
Slide 13: Overview Figures
OVERVIEW SONAE INDÚSTRIA OVERVIEW FIGURES FY 2008 CONSOLIDATED TURNOVER OF 1.8 BILLION EUROS RECURRENT EBITDA OF 100 MILLION EUROS, WHICH INCLUDES THE NEGATIVE EFFECT OF AN INCREASE IN CHEMICAL COSTS CLOSE TO 55 MILLION EUROS; MARGIN OF 6% TOTAL EBITDA OF 139 MILLION EUROS TURNOVER & RECURRENT EBITD
Slide 14: Geographical Regions
OVERVIEW SONAE INDÚSTRIA GEOGRAPHICAL REGIONS WITH VARYING LEVELS OF PROFITABILITY BETWEEN OUR 3 MAIN GEOGRAPHICAL REGIONS: TURNOVER & RECURRENT EBITDA TURNOVER & RECURRENT EBITDA TURNOVER & RECURRENT EBITDA IBERIA CENTRAL EUROPE REST OF THE WORLD Millions of Euros 800 Millions of Euros 1.400 Millio
Slide 15: Highlights of 9M09 Results
HIGHLIGHTS OF 9M09 RESULTS 15
Slide 16: Consolidated Operational Review
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Strengthening our Balance Sheet On August 26, we sold Tafisa Brasil, SA to a company owned by Celulosa Arauco Y Constitución, SA of Chile. This decision was in line with our strategy of strengthening our balance sheet and was
Slide 17: Consolidated Operational Review
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Restructuring process underway: Measures to reduce fixed costs already resulted in a like-for-like saving of 35 million Euros in 9M09, when compared to 9M08. For the coming quarters we expect further fixed costs decrease as a
Slide 18: Consolidated Operational Review
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Volumes sold and EBITDA margin are increasing: Despite weak demand, volumes sold excluding Brazil, increased by 2% Despite seasonality (holiday period in 3Q09), recurrent EBITDA, excluding Brazil, increased from 2% to 4% of T
Slide 19: Price and Cost Evolution
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA PRICE AND COST EVOLUTION CONSOLIDATED QUARTERLY AVERAGE COSTS (eur/m3) BASE 100:1Q08 Chemical and wood 1,3 costs were maintained 1,1 during this quarter 0,9 0,7 0,5 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Wood Chemicals CONSOLIDATED QUARTERLY AVERAGE PRICES (eur
Slide 20: Chemicals: Urea and Methanol
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA CHEMICALS: UREA AND METHANOL CHEMICAL COSTS HAVE A SIGNIFICANT IMPACT IN OUR COST STRUCTURE (AROUND 35% VARIABLE COSTS) UREA AND METHANOL ARE THE MAIN CHEMICALS USED TO PRODUCE RESINS USED IN OUR PRODUCTION NWE ICIS Methanol Prices - Out. 2003_2009 480 Euro
Slide 21: Consolidated Operational Review
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Consolidated operational figures, excluding Brazil: Consolidated Turnover in 3Q09, when compared to 2Q09, decreased by 2% to 290 million Euros, particularly due to the negative seasonal effect; Recurrent EBITDA increased from
Slide 22: Geographic Review of Operations: Iberia
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA GEOGRAPHIC REVIEW OF OPERATIONS IBERIA Iberia is still experiencing an € Mn economic slowdown and this quarter IberiaTurnover & Recurrent EBITDA Margin was additionally affected by the seasonality. Nevertheless, in July 105 102 and September we had the 84 8
Slide 23: Geographic Review of Operations: Central Europe
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA GEOGRAPHIC REVIEW OF OPERATIONS CENTRAL EUROPE (Germany, France and the UK) In Central Europe, despite € Mn Central Europe Turnover & Recurrent seasonality, we were able to EBITDA Margin maintain our turnover and 231 recurrent EBITDA. 192 193 168 163 In Ger
Slide 24: Geographic Review of Operations: Rest of the World
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA GEOGRAPHIC REVIEW OF OPERATIONS REST OF THE WORLD (Canada and South Africa) In Canada, demand is still € Mn weak but we are gaining RoWTurnover & Recurrent EBITDA Margin market share (from 27% 9M08 to 35% 9M09). 104 In S.A., the macroeconomic 83 79 71 envir
Slide 25: Consolidated Financial Review
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA CONSOLIDATED FINANCIAL REVIEW In 3Q09, the fixed assets increase was 7 million Euros, which includes mainly essential investments in maintenance, Health & Safety and Environmental issues. In 9M09, additions to fixed assets totalled 24 million Euros. Working
Slide 26: Scheduled Loan Repayments
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA SCHEDULED LOAN REPAYMENTS * SCHEDULED LOAN REPAYMENTS (as of 30th September 2009) 250 240 230 220 210 200 190 From which 0 180 170 EUR 80M 160 150 already repaid 140 in October 130 0 120 110 100 0 90 80 100 0 168 70 60 0 112 0 50 105 40 82 30 65 20 42 36 10
Slide 27: Profit & Loss Account
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA PROFIT & LOSS ACCOUNT (euro millions) 9M'08 2008 1Q'09 2Q09 3Q'09 9M'09 Turnover 1.396 1.769 346 325 301 971 Other Operational Income 90 114 11 14 78 103 EBITDA 143 139 4 9 64 78 Recurrent EBITDA 98 100 6 13 12 30 Recurrent EBITDA Margin % 7,1% 5,7% 1,7% 3,
Slide 28: Balance Sheet
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA BALANCE SHEET (euro millions) 9M'08 2008 1Q'09 1H09 9M'09 Non Current Assets 1.476 1.386 1.384 1.413 1.250 Tangible Assets 1.296 1.203 1.198 1.224 1.098 Goodwill 107 104 104 107 92 Deferred Tax 52 54 55 57 36 Other Non Current Assets 21 26 26 25 24 Current
Slide 29: Looking Forward
LOOKING FORWARD 29
Slide 30: Looking Forward
HIGHLIGHTS OF 9M09 RESULTS SONAE INDÚSTRIA LOOKING FORWARD We expect a slow recovery to continue in the wood based panels industry over the coming quarters, supported by volume and price increases; Variable costs should increase in 4Q09, due to methanol and seasonal wood price increases; Fixed cost
Slide 31: Our Strategy
OUR STRATEGY 31
Slide 32: Our Focus
OUR STRATEGY SONAE INDÚSTRIA OUR FOCUS Our PORTFOLIO STRATEGY: Protect market share and profitability in Iberia Increase Profitability and improve competitiveness in Central Europe Grow in our most profitable markets But… our SHORT TERM STRATEGY during the crisis has been focused on: Balance Sheet:
Slide 33: Managing for Cash
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA MANAGING FOR CASH WORKING CAPITAL HAS BEEN REDUCED INVESTMENTS HAVE BEEN MINIMIZED Additional Fixed Assets Million Euros WORKING CAPITAL: 2007 - 2009 120 110 € Mn 31 90 500 400 25 300 60 9M08: 200 16 79 mil. € 100 30 24 38 7 9M09: 0 7
Slide 34: Strengthening Our Balance Sheet: Reasons to Sell Tafisa Brasil
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA STRENGTHENING OUR BALANCE SHEET REASONS TO SELL TAFISA BRASIL BRAZIL RAWBOARD CAPACITY PLANS (PB+MDF) Thousands m 3 2,500 we wanted to strengthen our balance 2,040 1,750 sheet 8. million m3 2,000 (2012) 1,474 800 400 Capacity has been
Slide 35: Impacts from Selling Tafisa Brasil
OUR SHORT TERM STRATEGY – FOCUS ON BALANCE SHEET SONAE INDÚSTRIA STRENGTHENING OUR BALANCE SHEET IMPACTS FROM SELLING TAFISA BRASIL Total Value of the transaction: 116 million Euros Net Debt + contingencies: 43 million Euros Enterprise Value: 159 million Euros Multiple of 7.8x (adding 60 million Eur
Slide 36: Increasing Profitability
OUR SHORT TERM STRATEGY – FOCUS ON P&L SONAE INDÚSTRIA INCREASING PROFITABILITY WE HAVE BEEN ADAPTING OUR CAPACITY TO THE MARKET DEMAND, BY CLOSING OUR LESS EFFICIENT PLANTS AND/OR LINES IN ORDER TO INCREASE PROFITABILITY 29* * As of 5th November 2009 36
Slide 37: Increasing Profitability: Capacity Closed
OUR SHORT TERM STRATEGY – FOCUS ON P&L SONAE INDÚSTRIA INCREASING PROFITABILITY IN TOTAL, WE HAVE CLOSED 1.085.000 m3 CAPACITY. 2008 2009 We stopped two lines: We closed 5 plants: MDF Line 1 in Meppen – Topan I – 110.000 m3 Coleraine in the UK – 100.000 m3 PB PB Line in Valladolid – 160.000 m3 Georg
Slide 38: Geographic Review of Operations
GEOGRAPHIC REVIEW OF OPERATIONS 38
Slide 39: Iberia
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA IBERIA IBERIA Sonae Indústria Iberian Capacity Thousands m 3 COMPETITIVE LANDSCAPE MDF 500 PB 1.220 HB 70 PARTICLEBOARD MDF FLOORING HARDBOARD HPL CHEMICALS OTHERS (FURNITURE, COMPONENTS, WOOD VENEER) Source: Sonae Indústria (Nov.2009) 39
Slide 40: Iberia: Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA IBERIA IBERIA COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN IBERIA - TOP PLAYERS Millions m3 PLANTS Finsa/Utisa 3,33 12 CAPACITY Sonae Indústria 1,79 1,79 Million m3 Interbon 0,97 CAPACITY UTILIZATION 9M09 61% Losan 0,38 Tablicia 0,37 Source: So
Slide 41: Central Europe
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA CENTRAL EUROPE CENTRAL EUROPE COMPETITIVE LANDSCAPE Sonae Indústria Central Europe Capacity Thousands m 3 MDF 1.200 PB 3.490 OSB 460 UK GERMANY FRANCE PARTICLEBOARD MDF HPL CPL Source: Sonae Indústria (Nov.2009) 41
Slide 42: Central Europe: Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA CENTRAL EUROPE CENTRAL EUROPE COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN CENTRAL EUROPE - TOP PLAYERS Millions m3 PLANTS 13 Sonae Indústria 5,15 CAPACITY 5.15 Million m3 Egger 3,62 CAPACITY UTILIZATION 9M09 65% Kronospan M&P Kaindl 3,40 Pflei
Slide 43: Rest of the World: North America
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA NORTH AMERICA PLANTS REST OF THE WORLD 1 NORTH AMERICA CAPACITY COMPETITIVE LANDSCAPE 0.9 Million m3 CAPACITY UTILIZATION 9M09 65% INSTALLED RAWBOARD CAPACITY IN NORTH AMERICA (PB+MDF) - TOP PLAYERS M Flakeboard 2,74 Roseburg 2,44 Temple Inland 1,74 Pf
Slide 44: Rest of the World: South Africa
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA SOUTH AFRICA REST OF THE WORLD Sonae Indústria S.A. Capacity Thousands m 3 SOUTH AFRICA COMPETITIVE LANDSCAPE PB 445 MDF 70 SOUTH AFRICA PARTICLEBOARD MDF Source: Sonae Indústria (Nov.2009) 44
Slide 45: South Africa: Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA SOUTH AFRICA REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE INSTALLED RAWBOARD CAPACITY IN SOUTH AFRICA - TOP PLAYERS Millions m3 PLANTS 2 PG Bison 0,71 CAPACITY 0,57 Million m3 CAPACITY UTILIZATION 9M09 Sonae Indústria 0,57 62% Source: Sonae Ind
Slide 46: Corporate Governance
CORPORATE GOVERNANCE 46
Slide 47: Board of Directors
CORPORATE GOVERNANCE SONAE INDÚSTRIA BOARD OF DIRECTORS Belmiro de Azevedo [Chairman] BOARD OF Álvaro Cuervo García Paulo Azevedo DIRECTORS Per Knuts Thomas Nystén Carlos Bianchi de Aguiar [CEO] Rui Correia [CFO] Christophe Chambonnet Carlos Bianchi de Aguiar [CEO] EXECUTIVE Rui Correia [CFO] Christ
Slide 48: Board Committees
CORPORATE GOVERNANCE SONAE INDÚSTRIA BOARD COMMITTEES 48
Slide 49: Code of Conduct
CORPORATE GOVERNANCE SONAE INDÚSTRIA CODE OF CONDUCT In 2008, Sonae Indústria implemented a renewed CODE OF CONDUCT, which contains a set of standards based on our shared values that govern the activities of the Sonae Indústria Group; applies to everyone employed by the Group sets out guidance on th
Slide 50: More on Sonae Indústria
MORE ON SONAE INDÚSTRIA 50
Slide 51: Human Resources
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA HUMAN RESOURCES Approximately 6.5 thousand Employees at the end of 2008 Number of Employees & Productivity N. Employees 1) Productivity Turnover/Pax BASE 100: 2002 South Africa; The 450 Netherlands; 10,000 195.0 18 181.0 Brazil; 362 Iberia; 2,097 167.0 166.3 8
Slide 52: Sustainability Report of Sonae Indústria
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA SUSTAINABILITY SUSTAINABILITY REPORT OF SONAE INDÚSTRIA Strategic formalisation to approach sustainability reporting and process in the coming years Vision, Mission, Values and Principles Code of Conduct Environmental Resources and Efficiency Communication Str
Slide 53: Our Values
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA OUR VALUES 53
Slide 54: Sustainable Use of Wood and Recycling
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA SUSTAINABLE USE OF WOOD AND RECYCLING Wood- Wood-based panels incorporate a high percentage of sawmill co- co-products and wood residues as raw materials: materials: forestry residues pallets old or used wood based panels old or used furniture 54
Slide 55: Sustainable Use of Wood and Recycling
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA SUSTAINABLE USE OF WOOD AND RECYCLING Wood- Wood-based panels play a key role in the sustainable use of forestry resources as they: represent the natural alternative to solid wood, replacing it in an increasing number of applications allow significant dimensio
Slide 56: CO2 Emissions Mitigation
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA CO2 EMISSIONS MITIGATION Wood- Wood-based panels help to mitigate climate change: forests are a recognised carbon sink (through photosynthesis) forestry products are CARBON STORES wood-based panels are actually long-term carbon stores if used in construction a
Slide 57: Cogeneration (CHP)
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA COGENERATION (CHP) Energy is produced in Combined Heat and Power (CHP) plants non-recyclable waste wood (biomass) is used as fuel for thermal energy production to be used in industrial processes surplus heat is used to additional produce electricity to supply
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