Sig Group Ag · SIX:SIGN
Sig — Investor Presentation (May 2005)
38 slides from Sig's investor presentation, May 2005
Slide 1: SIG 2005+: Investors presentation
SIG 2005+: Investors presentation May 2005 Marco Haussener, CFO Th. Schneckenburger, IR SIG Holding page 1
Slide 2: Three key arguments for strong investment case
Three key arguments for strong investment case G roup portfolio: - Divestments finalized in 2005 - Holding structure lean and more efficient - Strong balance sheet - Free cash flow generation allows multiple options I f PLASMAX (PET bottle coating) will fly…!? - Unique technology with big market pot
Slide 3: Group portfolio & streamlining
Group portfolio & streamlining SIG Holding page 3
Slide 4: SIG Group 2005+: Organisation
SIG Group 2005+: Organisation SIG Combibloc SIG Beverages Sales, Equip- Corpo- Can- „Ventures“ Discontin. Sleeves R&D plast tec (PLASMAX) activities Service ment Strong Nr. 2 Opportunity: PLASMAX Divestment • Net sales ca. • Net sales ca. EUR Mio. 1’100 • Net sales ca. EUR Mio. 390 EUR Mio. 130 • Em
Slide 5: 2005: Divestment SIG Beverages Discontinuing
2005: Divestment SIG Beverages Discontinuing Simonazzi (complete filling lines) / Alfa (labelers): Buyer: Tetra Laval Group Signing: MAR 02, 2005 Closing: expected in Q3, after final approval by antitrust authorities Sales price: not disclosed, positive cash effect in 2005 Risks: covered adequately
Slide 6: Strategic focusing in 2004 lead to rigorous goodwill impairment of EUR 179 million
Strategic focusing in 2004 lead to rigorous goodwill impairment of EUR 179 million… SIG Beverages Goodwill as of 12 / 31 / 2003 230 in EUR million Thyssen Krupp Claim - 12 Ordinary Amortization - 20 Total 198 SIG Beverages (continuing) SIG Beverages Discont. Goodwill: 105 Goodwill: 93 Impairment: 86
Slide 7: Execution of divestment improves balance sheet substantially in 2005
… but execution of divestment in process improves balance sheet substantially in 2005 2004 Goodwill impairment of EUR 179 million lead to - Reduced equity - Temporarily lower equity ratio (29%) and higher gearing (49%) but: + cash neutral 2005 Settlement of sales price and deconsolidation of Simonaz
Slide 8: SIG 2005: More than 80% in materials and services
SIG 2005: More than 80% in materials and services Machines & Machines Systems 17% 38% Material 50% Service 7% Material Service 76% 12% SIG 2003 SIG 2005 (continuing business) SIG Holding page 8
Slide 9: Net sales SIG (continuing activities) in 2004: 80% of business in Europe
Net sales SIG (continuing activities) in 2004: 80% of business in Europe other countries Asia 1% (1%) 13% (14%) Germany Rest of Americas 31% (33%) 3% (2%) USA 3% (4%) Rest of Europe 10% (8%) Rest of EU 39% (38%) (2003 figures) SIG Holding page 9
Slide 10: If… Plasmax will fly!?
If… Plasmax will fly!? Microwave Gas supply Gas I O2 Vacuum / Gas II exhaust SIG Holding page 10
Slide 11: PLASMAX: very promising technology, industrialisation phase to come
PLASMAX: very promising technology Industrialisation phase to come Advantages: Machine plattform and bottle know-how from SIG Corpoplast Proven coating technology from JV partner Schott Best barrier properties (O2: >10x, CO2: >4x) Transparent bottles Fully recyclable Challenges: FDA approval (2003)
Slide 12: Roadmap PLASMAX feasibility: decision milestones
Roadmap PLASMAX feasibility: 3 decision milestones PLASMAX Feasibility pilots Go / No Go- Beer Customer advantages: Decision CO2 products: Carbonated Soft Drinks fizziness maintained Logistics flexibility Juices Extended shelf life Differentiation (marketing) 2003 2004 2005 2006 2007 time SIG Holdin
Slide 13: SIG Combibloc: Stable and sustainable carton business
SIG Combibloc: Stable and sustainable carton business SIG Holding page 13
Slide 14: SIG Combibloc: sustainable and strong growth
SIG Combibloc: sustainable and strong growth And: EBITA doubled in 5 years 1‘076 1‘058 Net Sales (in EUR millions) 939 854 786 g03-04 751 2% 711 648 554 CAGR93-04 491 g02-03 490 > 8% 13% CAGR02-04 7% CAGR01-04 8% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 SIG Holding page 14
Slide 15: Aseptic cardboard - high tech & high entry barriers
Aseptic cardboard - high tech & high entry barriers: Quality, safety, capital investment, know how Others SIG 15-20% Tetra Pak 80 - 85% estimated market growth: ca. 3-4 % p.a. SIG Holding 2812e page 15
Slide 16: SIG Combibloc: Razor blade business model
SIG Combibloc: „Razor blade“ business model Fillers „Sleeves“ (material) Closures Service Customer & CB: Material for aseptic Key differen- Reliability joint investment packaging tiating factor Systems (juice, milk, others) L.t. contracts performance for materials Recurring purchases CB support: fin
Slide 17: SIG Combibloc Production Facilities
SIG Combibloc Production Facilities Houghton- Linnich Wittenberg Saalfelden Le-Spring Rayong Suzhou Extrusion Finishing Germany Linnich (3 plants), XXX XXX Wittenberg X X Austria Saalfelden X X Great Britain Houghton-Le-Spring X Thailand Rayong X X China Suzhou (2004) X Saudi Arabia Riyadh (2005) X
Slide 18: Growth requires efficient use of capital invested
Growth requires efficient use of capital invested Extrusion Finishing Fillers Printing, cutting, Yearly capacity gluing (sleeves) ~ 3 bn ~ 1-2 bn ~ 15 mn Installed base (end 2005) 6 plants 9 plants ca. 900 fillers for > 13 bn units Investment / unit (EUR) ~ 1 mn ~ 35 mn ~ 35 mn Major investments beh
Slide 19: Environmentally advantageous: recyclable with best ratio of weight vs. content
Environmentally advantageous: recyclable with best ratio of weight vs. content Weight (%) Aluminium (Aroma and light 4% protection) Polyethylene (Liquid barrier) 21% Carton (Carrier material) 75% only 28g of package protect a 1l of beverage SIG Holding page 19
Slide 20: SIG Combibloc 2004: 7% organic growth
SIG Combibloc 2004: 7% organic growth Major growth outside Europe, Germany flat Germany: flat – market shares maintained Spain: strong growth – combishape successfully introduced USA/Canada: successful entrance in food market Joint venture Middle East: market position strengthened Eastern Europe: po
Slide 21: Mandatory deposit in Germany: Cardboard is only container without fee
Mandatory deposit in Germany: Cardboard is only container without fee Main facts and milestones: Mandatory deposit law in Gernany was anticipated for beginning 2004 Final decision only at end Oct. 2004 2003: 23 CB lines installed; not utilized in 2004 Carton judged as „environ- mentally advantageous
Slide 22: SIG Combibloc – Highlights 2004
SIG Combibloc – Highlights 2004 Differentiation through innovations combishape – shape the future: Successful market launch in Spain (milk) and France (juice) combifit opens new markets: expansion of product range New format combifitSmall for ‘on the go’: launch in Switzerland and Taiwan SIG Holding
Slide 23: SIG Combibloc 2004
SIG Combibloc 2004 Pressure through external factors decreased margin to 11.5% (before restructuring) External factors: - Consumer reluctance in Western Europe, especially Germany - Discounters and retailers: prices under pressure - Political discussions about mandatory deposit weaken growth in Germ
Slide 24: SIG Combibloc: EBITA Gap–Analysis 2003 to 2004
SIG Combibloc: EBITA Gap–Analysis 2003 to 2004 EUR million 160 7 140 20 -13 120 1-time -16 -7 -18 0 100 all other 80 external, effects 139 difficult to 60 influence 112 40 20 0 1-time effects External effects all other effects EBITA EBITA Divestments Restructur. Material Volume Margins Internal 2003
Slide 25: SIG Combibloc – Outlook
SIG Combibloc – Outlook Positive growth potential despite difficult market conditions + Major projects outside Europe - consumer reluctance, price pressure (China, Saudi Arabia, US) on retailers, currency effects + Sales: double digit growth expected - Eastern Europe: prices converged (number of pac
Slide 26: Significant Polyethylene (PE) price increase
Significant Polyethylene (PE) price increase EBITA impact ca. EUR -20 million EUR / to Jan 2005: 1300 ca. 1200 ? 1200 1100 1000 ∅ price 2004: 950 900 800 PE Platt's low Europe [EUR] 600 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 .2 .2 .2 .2 .2 .2 .2 .2 .2 .2 .2 .2 .2
Slide 27: Chinese whisper in real life… CB in 2003 and 2004
„Chinese whisper“in real life… CB in 2003 and 2004 I'VE GOT SELL? A STOCK THAT REALLY COULD EXCEL? REALLY EXCEL! BUY? GOOD BYE? BYE? I CAN'T TAKE IT ANY MORE! GOOD BYE! GOOD BYE! I'VE GOT A STOCK ... Base effect: Good summer could be an „Upside“ Source: Economist SIG Holding page 27
Slide 28: Summary and outlook SIG Group
Summary and outlook SIG Group Strong improvement to 2004 as one-time effects disappear Simplified guidance: SIG Combibloc 5-10% growth, margin 2005 below mid-term target (PE increase) SIG Beverages: +/- 0 , earnings Corpoplast and Cantec invested into PLASMAX Corporate/Service costs: ca. EUR 12 mill
Slide 29: Shareholder information (May 2005)
Shareholder information (May 2005) CHF 65 mio. Share capital CHF 10.-- Nominal value per share 100 % Free float ~ 80 % Institutionals (mostly value investors) > 5%: Tweedy Browne, Baupost, SSH/Cheyne ~ 80 % Shareholders known to SIG ~ 20-30 % Target Pay-out ratio ~ CHF 1.65 bn Market capitalization
Slide 30: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward- looking statements This communication contains statements that constitute "forward-looking statements". In this communication, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations an
Slide 31: Financials FY 2004
Financials FY 2004 SIG Holding page 31
Slide 32: 2004: Portfolio adjustment causes substantially negative net profit
2004: Portfolio adjustment causes substantially negative net profit SIG Group in EUR million 2004 2003 % Order intake 1 631 1 860 -12% Net sales 1 694 1 896 -11% Operating profit (EBITDA) 181 173 +5% (EBITA) 82 48 71% (EBIT) -118 16 n.a. Financial profit -20 -16 n.a. Profit on divestments 0 -11 n.a.
Slide 33: Balance sheet: net debt further reduced
Balance sheet: net debt further reduced SIG Group in EUR million 12 / 31 / 2004 12 / 31 / 2003 Fixed assets 630 50% 843 47% thereof goodwill 19 2% 234 14% Current assets 633 50% 810 53% Total assets 1 263 100% 1 653 100% Shareholders‘ equity 368 29% 546 33% Long-term liabilities 428 34% 444 27% Shor
Slide 34: Positive free cash flow in 2004
Positive free cash flow in 2004 SIG Group in EUR million 2004 2003 Cash flow from operating activities 142 164 Cash flow from investing activities -119 -132 Free cash flow 23 32 in % of net sales 1.4% 1.7% Cash flow from financing activities -40 -31 Currency translation differences 0 -9 on cash and
Slide 35: Key figures SIG Group: Lower capital employed
Key figures SIG Group: Lower capital employed SIG Group in EUR million 2004 2003 EBITDA / net sales 10.7% 9.1% EBIT / net sales -6.9% 0.8% Net current assets (12/31) 147 182 Capital employed Ø 663 822 ROCE 12.4% 5.8% Equity ratio 29% 33% Gearing 49% 42% Interest coverage (EBITDA / Interest expense)
Slide 36: 2004: Continuing business remains strongly positive
2004: Continuing business remains strongly positive SIG Continuing in EUR millions 2004 2003 % Order intake 1 160 1 153 +1% • org. growth +6% Net sales 1 184 1 167 +1% • divestments -3% • currency -2% Operating profit (EBITDA) 173 193 -10% • org. growth -5% (EBITA) 84 98 -14% • divestments +7% • cur
Slide 37: SIG Combibloc: in good shape despite difficult market environment
SIG Combibloc: in good shape despite difficult market environment – organic growth of 7% in EUR million 2004 2003 Order intake 1067 1051 Net sales 1075 1058 EBITDA 189 226 EBITA 112 * 139 EBIT 111 137 Employees 4 061 3 923 2004: restructuring of EUR 13 million – payback already in 2005 * EBITA-% 11.
Slide 38: SIG Beverages (continuing): expectations met
SIG Beverages (continuing): expectations met in EUR million 2004 2003 Order intake 128 116 Net sales 133 135 EBITDA 6 3 EBITA 3 -1 EBIT -94 -12 Employees 670 705 SIG Holding page 38