Vidrala Sa · BME:VID
Vidrala Sa — Investor Presentation (November 2018)
37 slides from Vidrala Sa's investor presentation, November 2018
Slide 1: Company Presentation November 2018
COMPANY PRESENTATION NOVEMBER 2018
Slide 2: Disclaimer
DISCLAIMER This presentation includes or may include representations or estimations concerning the future about intentions, expectations or forecasts of VIDRALA or its management. which may refer to the evolution of its business performance and its results. These forward looking statements refer to
Slide 3: Index
INDEX 1. GENERAL OVERVIEW 2. BUSINESS FUNDAMENTALS 3. FINANCIALS 4. TARGETS 5. ANNEXES
Slide 4: Vidrala, at a glance
VIDRALA, AT A GLANCE Vidrala manufactures glass containers for a wide variety of products in the food and beverage industry. We are one of the main glass container manufacturer in Western Europe, leaders in the Iberian market, co-leaders in the British market and supplier of reference in Italy, Fran
Slide 5: Main figures FY 2017
MAIN FIGURES FY 2017 2017 REPORTED SALES EBITDA EARNINGS FREE CASH FLOW 822.7 195.4 3.61 108.5 EUR million EUR million EUR per share EUR million +2.4% like-for-like +10.5% like-for-like +31.9% +5.8% SALES EBITDA UPDATED PROFORMA FIGURES ACCUMULATED LAST 12 MONTHS TO SEPTEMBER 2018 941.1 231.4 EUR mi
Slide 6: Our history
OUR HISTORY 1965 The origin of Vidrala 1965 - Vidrala begins operations in Alava (Spain) 1975 Vidrala goes public 1985 1985 - IPO Madrid and Bilbao stock exchanges Domestic expansion 1989 - Second greenfield in Albacete (Spain) 1995 Internationalisation 2003 - Acquisition of one plant in Portugal 20
Slide 7: Operating profile
OPERATING PROFILE NET SALES. EBITDA MARGIN. Since 2000, EUR million. Since 2000, as percentage of sales. 1.000 30% 800 20% 600 400 10% 200 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017pf 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 8: Cash profile
CASH PROFILE EBITDA. FREE CASH FLOW. Since 2011, EUR million. Since 2011, EUR million. 250 120 100 200 80 150 60 100 40 50 20 0 0 2011 2012 2013 2014 2015 2016 2017 2017pf 2011 2012 2013 2014 2015 2016 2017 55% CASH CONVERSION OF EBITDA 2011-2017 VALUE CREATION, MATERIALISED IN A SUSTAINED CASH GENE
Slide 9: Financial profile
FINANCIAL PROFILE FINANCIAL SOLVENCY. Six-monthly evolution of debt since 2015, EUR million and times EBITDA. 2.9x 750 3x 2.5x 600 2.2x 2.2x 1.9x 2x 450 1.6x Acquisition of Santos Barosa EUR 252.7 300 million (EV) 474 487 1x 404 370 150 322 299 0 0x jun-15 dec-15 jun-16 dec-16 jun-17 dec-17 ON THE B
Slide 10: Earnings profile
EARNINGS PROFILE EARNINGS PER SHARE. Since 2011, EUR per share. 4,0 3,0 2,0 1,0 0,0 2011 2012 2013 2014 2015 2016 2017 10
Slide 11: Shareholder remuneration
SHAREHOLDER REMUNERATION CASH DIVIDENDS. Since 2000, EUR million. 30 +20.5% 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 A DIVIDEND POLICY FOCUSED ON LONG TERM STABILITY ANNUAL GROWTH, COHERENT WITH PREVAILING BUSINESS CONDITIONS 11
Slide 12: 2017 results distribution
2017 RESULTS DISTRIBUTION EXECUTED DIVIDEND PAYMENTS FOR 2018. EUR cents per share. February 14th, 2018 Interim dividend EUR 69.67 +20% cents per share YoY change July 14th, 2018 Complementary dividend EUR 26.52 +20% cents per share YoY change + EUR 4.00 cents per share as attendance bonus to the sh
Slide 13: Business fundamentals
BUSINESS FUNDAMENTALS Understanding the european glass packaging industry
Slide 14: Industry fundamentals
INDUSTRY FUNDAMENTALS 1 LOGISTICS. Local sales nature. Natural characteristics of hollow glass containers limit logistics. Customers’ packaging activity demands service on time and supply flexibility. Proximity to the customer and service quality determines sales capabilities. 2 CONTINUOUS PROCESS.
Slide 15: Demand fundamentals
DEMAND FUNDAMENTALS The glass packaging market in Europe Our key geographical regions SOLID AND STABLE STRATEGIC MARKETS FOR THE SECTOR Glass containers demand in Europe vs GDP. Glass packaging production vs GDP per capita. Annual variation (accumulated), base year 2000. 70 GLASS PACKAGING PRODUCTIO
Slide 16: Product fundamentals
PRODUCT FUNDAMENTALS GLASS, THE BEST OPTION Environmentally friendly Glass is a 100% recyclable material that can be shaped over and over again without losing any of its properties or advantages. The healthiest type of packaging It is a completely hygienic material, impervious to gases, vapour, and
Slide 17: Vidrala fundamentals
VIDRALA FUNDAMENTALS Vidrala’s commercial positioning is focused on geographic regions and product segments of long term strategic value. Vidrala sells its products to a strong customer base composed of a solid balance between blue chip customers, multinational brand owners and domestic packagers. 2
Slide 18: Competitive landscape
COMPETITIVE LANDSCAPE EVOLUTION OF MARKET SHARES IN WESTERN EUROPE. 2017 vs 1990. TOP 4 PLAYERS 1990 TOP 4 PLAYERS 2014 14% 20% 29% 13% 20,0% 58% 1990 2017 12% 29,1% 11,5% 15% 8% 12,0% AVIR 29% 8,0% 13,3% 2% 1,8% 28,6% TOP 4 PLAYERS: 41,8% TOP 4 PLAYERS: 82,6% A DYNAMIC ATTITUDE TOWARDS CONSOLIDATIO
Slide 19: Competitive landscape: location of production sites
COMPETITIVE LANDSCAPE LOCATION OF PRODUCTION SITES Internal sources. Some facilities, especially in Eastern Europe, are not identified in the map. 19
Slide 20: Financials
FINANCIALS Latest earnings release
Slide 21: 9M 2018 results. Sales
9M 2018 RESULTS. Sales. SALES. YoY change, EUR million. +19.3% YoY 750 +2.9% -0.4% +16.4% 730.5 700 712.6 650 600 612.2 550 500 450 9M 2017 Santos 9M 2017 Organic FX 9M 2018 reported Barosa like-for-like 9M 2017 21
Slide 22: 9M 2018 results. EBITDA
9M 2018 RESULTS. EBITDA. EBITDA. YoY change, EUR million. +24.6% YoY 200 +5.6% -0.3% 180 +18.3% 182.1 172.8 160 140 146.1 120 100 9M 2017 Santos 9M 2017 Organic FX 9M 2018 reported Barosa like-for-like 9M 2017 22
Slide 23: 9M 2018 results. EBITDA margin
9M 2018 RESULTS. EBITDA margin. EBITDA MARGIN. YoY change, as percentage of sales. 26% 24.9% 25% 24% 23.9% +100 bps 23% 22% 21% 20% 9M 2017 9M 2018 reported 23
Slide 24: 9M 2018 results. Earnings per share
9M 2018 RESULTS. Earnings per share. EARNINGS PER SHARE. YoY evolution since 2015, in EUR per share. +27.4% YoY 4 3.56 3 2.79 2.17 2 1.87 1 0 9 months 9 months 9 months 9 months 2015 2016 2017 2018 24
Slide 25: 9M 2018 results. Debt
9M 2018 RESULTS. Debt. NET DEBT. Quarterly evolution, in EUR million and times EBITDA. 550 2,4x 2.3x 2.2x 2.2x 2,2x 500 2.1x 1.9x 2,0x 450 508 503 487 478 1,8x 448 Acquisition of Santos Barosa 400 1,6x Oct 13, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 25
Slide 26: 9M 2018 main highlights
9M 2018 MAIN HIGHLIGHTS ORGANIC TOP-LINE GROWTH OF 2.9% Sales during the first nine months 2018 amounted to EUR 730.5 million, showing an organic growth of 2.9% on a like-for-like and constant currency basis. OPERATING MARGIN OF 24.9% Operating profit, EBITDA, was EUR 182.1 million representing an o
Slide 27: 2018 outlook
2018 OUTLOOK UPDATED 2018 GUIDANCE Last Twelve Months Trends at September 2018 Full Year 2018 +2.2% YoY organic Sales growth like-for-like Modest growth in organic sales, driven by prices 24.6% Moderate gradual expansion, FY 2018 margins in the Operating margins EBITDA/sales range of 24.5%-25.0% +80
Slide 28: Targets
TARGETS Business profitability and cash generation
Slide 29: EBITDA margins
EBITDA MARGINS Capacity utilization. EBITDA margin 100% 75% 1. Operational 50% leverage 24.5-25% 25% 0% 23.8% 2012 2013 2014 2015 2016 2017 23.0% Pack-to-melt ratio. 90% Target 85% 2. Internal 80% efficiency 20.1% 70% Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Site 7 Site 8 Site 9 EBITDA margins. 40%
Slide 30: Sustained cash generation
SUSTAINED CASH GENERATION Historical cash profile. 5-year accumulated average rates (2015-2019), as percentage of sales. 23-25% 7-9% <3% <1.5% >10% >50% CASH CONVERSION OF EBITDA 2015-2019 EBITDA Capex WC & Others Financial Expense FCF Replacement capex, excludes expansionary capex CASH GENERATION M
Slide 31: Return on capital employed
RETURN ON CAPITAL EMPLOYED 15% 12.0% 11.4% 11.5% 10.7% 10.3% 10% 9.4% 9.4% 7.9% 5% 0% 2012 2013 2014 2015 2016 2017 Sep 30, Target 2018 2019 FOCUS ON BUSINESS PROFITABILITY 31
Slide 32: Annexes
ANNEXES A general overview of the most recent acquisitions
Slide 33: Annex I. Acquisition of Encirc (2015)
ANNEX I. Acquisition of Encirc (2015). Encirc Glass is a glass packaging manufacturer for the food and beverage markets in UK and Ireland. It is the sole player in Ireland and the second player within the UK (market share ≈30%). The DERRYLIN plant (Northern Ireland), built in 1998, is the only glass
Slide 34: Annex I. Acquisition of Encirc (2015)
ANNEX I. Acquisition of Encirc (2015). QUALITY OF ASSETS High-scale facilities Triple gob and quad gob flexibility Highly modern inspection machines Filling capabilities Fully automated warehouse 34
Slide 35: Annex II. Acquisition of Santos Barosa (2017)
ANNEX II. Acquisition of Santos Barosa (2017). Santos Barosa manufactures and commercialises glass containers. It operates a major production facility located in Marinha Grande, Portugal. The company produces around 400,000 glass tons per year. The agreed transaction price amounts to an enterprise v
Slide 36: Annex III. Financing structure
ANNEX III. Financing structure. 508,1 500 448,8 400 300 200 100 0 Debt Debt as at 2019 2020 2021 2022 2023 Beyond Post-SB Sep 30, 2018 2023 Debt maturity profile. Per year, EUR million. Current financing structure Debt / EBITDA proforma Average maturity Estimated cost, all-in As at September 30, 201
Slide 37: Vidrala, S.A. Investor Relations
VIDRALA, S.A. Investor Relations Tel: +34 94 671 97 50 atencion_al_inversor@vidrala.com www.vidrala.com