Sonae Indústria S.G.P.S — Sonae Indústria — Investor Presentation (June 2010)
58 slides from Sonae Indústria S.G.P.S's investor presentation, Jun 14, 2010
Slide 1: Sonae Indústria Investor Presentation
SONAE INDÚSTRIA INVESTOR PRESENTATION 14th June 2010 1
Slide 2: Overview
OVERVIEW MG SONAE i INDUSTRIA
Slide 3: Shareholder Structure
OVERVIEW SONAE INDÚSTRIA SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE AT 31st MARCH 2010 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 28 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 * * As of 13th May 2010 5
Slide 6: Our Products
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 2009*, APPROXIMATELY 82% OF OUR SALES WERE GENERATED IN EUROPE WE TRANSFORM MORE THAN 50% INTO VALUE ADDED PRODUCTS SALES BY MARKET SALES BY PRODUCT FLOORING PB S.AFRICA 1% 20% 8% IBERIAN P. OTHERS CANADA 25% T&G 11% 10% 5% UK CTS 6% 9% MDF 17% FRANCE 14% HB 1% MF O
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: 2004: (Germany) Greenfield plants in Brazil, Restructure of Glunz Restructuring Sou
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 Thousands of m 3 WORLDWIDE Thousands of m 3 M&P Kaindl (Kronospan) 14.350 M&P Kaindl (Kronospan) 13.750 Sonae Indústria 7.455 Sonae Indústria 6.040 Pfl
Slide 12: Capacity Production
OVERVIEW SONAE INDÚSTRIA CAPACITY PRODUCTION TOTAL CAPACITY (RAWBOARD) IS 7.5 MILLION M3, APPROXIMATELY 80% OF WHICH IS LOCATED IN EUROPE. SONAE INDÚSTRIA RAWBOARD CAPACITY BY REGION SONAE INDÚSTRIA RAWBOARD CAPACITY BY PRODUCT Thousands of m 3 Thousands of m 3 6.000 4.250 5.155 4.500 5.000 4.000 46
Slide 13: Overview Figures
OVERVIEW SONAE INDÚSTRIA OVERVIEW FIGURES FY 09 CONSOLIDATED TURNOVER OF 1.3 BILLION EUROS RECURRENT EBITDA OF 46 MILLION EUROS; MARGIN OF 4% TOTAL EBITDA OF 104 MILLION EUROS, WHICH INCLUDES THE CAPITAL GAIN OF TAFISA BRASIL OF 84 MILLION EUROS AND APPROX. 31 MILLION EUROS OF RESTRUCTURING COSTS; T
Slide 14: Geographical Regions
OVERVIEW SONAE INDÚSTRIA GEOGRAPHICAL REGIONS 800 TURNOVER & RECURRENT EBITDA IBERIA WITH VARYING LEVELS OF 700 € Mn PROFITABILITY BETWEEN OUR 3 600 533 MAIN GEOGRAPHICAL REGIONS: 500 459 453 400 341 18% 300 15% 200 10% 10% € RoW Turnover & Recurrent EBITDA Margin 100 0 347 346 362 FY06 FY07 FY08 FY
Slide 15: Highlights of 1Q10 Results
HIGHLIGHTS OF 1Q10 RESULTS 15
Slide 16: Consolidated Operational Review
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW 1Q10 Highlights Markets recovering albeit from a low level Production efficiency improved 17%, as a result of the restructuring program Prices following a positive trend Extreme winter conditions in Central Europe led to prod
Slide 17: Consolidated Operational Review: Restructuring
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Regarding our restructuring process Beginning of this year, we close Duisburg plant. Additionally, a voluntary social plan for a further 57 employees at our Horn plant was agreed. During 1Q10, like-for-like, we were able to d
Slide 18: Consolidated Operational Review: Volumes and Utilization
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW In 1Q10, sales volume were affected by adverse weather conditions and by the closure of Kaisersesch plant. Capacity utilization from 4Q09 to 1Q10 increased. CONSOLIDATED VOLUME SALES WITHOUT BRAZIL Millions of m3 Capacity Uti
Slide 19: Price and Cost Evolution
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA PRICE AND COST EVOLUTION CONSOLIDATED QUARTERLY AVERAGE COSTS * (eur/m3) BASE 100:1Q07 During 1Q10, chemical prices moved slightly up and wood prices 1,4 increased sharply, led by seasonal 1,2 factors and market demand 1,0 recovery. Additionally, consumptio
Slide 20: Chemicals: Urea and Methanol
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA CHEMICALS: UREA AND METHANOL CHEMICAL COSTS HAVE A SIGNIFICANT IMPACT IN OUR COST STRUCTURE (AROUND 30% VARIABLE COSTS) UREA AND METHANOL ARE THE MAIN CHEMICALS USED TO PRODUCE RESINS USED IN OUR PRODUCTION NWE ICIS Methanol Prices - Out. 2003_2010 480 Euro
Slide 21: Consolidated Operational Review
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA CONSOLIDATED OPERATIONAL REVIEW Consolidated operational figures: Consolidated Turnover in 1Q10 increased to 320 million Euros, and recurrent EBITDA decreased from 16 to 7 million Euros, when compared to 4Q09; But comparing to last year, like-for-like, recu
Slide 22: Geographic Review of Operations: Iberia
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA GEOGRAPHIC REVIEW OF OPERATIONS TURNOVER & RECURRENT EBITDA € Mn IBERIA IBERIA 140 30,0% Iberia continue to suffer from tough 120 25,0% market conditions. 100 93 92 84 20,0% 84 80 Compared to 1Q09, Iberia recovered, 80 15,0% with both volumes sold and Turno
Slide 23: Geographic Review of Operations: Central Europe
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA GEOGRAPHIC REVIEW OF OPERATIONS CENTRAL EUROPE (Germany, France and the UK) TURNOVER & RECURRENT EBITDA € Mn CENTRAL EUROPE In Germany, during 1Q10 comparing 260 30,0% to 4Q09, variable cost increased by 240 220 25,0% 15% and price increases did not 200 193
Slide 24: Geographic Review of Operations: Rest of the World
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA GEOGRAPHIC REVIEW OF OPERATIONS REST OF THE WORLD (Canada and South Africa) In Canada, our capacity utilization € Mn Turnover & Recurrent EBITDA Margin RoW continue to increase (8pp from 4Q09 to 1Q10), and turnover increases by 21% to 34 million 79 Euros. N
Slide 25: Consolidated Financial Review
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA CONSOLIDATED FINANCIAL REVIEW Additions to Fixed Assets in 1Q10 were 4 million Euros, mostly related to investments in essential maintenance, Health & Safety and Environmental improvements. Working Capital increased by 35 million Euros during 1Q10 due to th
Slide 26: Scheduled Loan Repayments
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA SCHEDULED LOAN REPAYMENTS SCHEDULED LOAN REPAYMENTS * (as of 31st March 2010) 250 240 230 220 210 200 190 180 170 160 150 140 130 120 110 100 90 184 80 150 70 60 130 50 114 40 30 68 20 38 10 15 0 1H10 2H10 2011 2012 2013 2014 ≥2015 In May 2010, we refinance
Slide 27: Profit & Loss Account
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA PROFIT & LOSS ACCOUNT (euro millions) 1Q09 1Q09* FY09 4Q09 1Q10 Turnover 346 319 1.283 312 320 Other Operational Income 11 11 162 59 20 EBITDA 4 (2) 104 27 (6) Recurrent EBITDA 6 0 46 16 7 Recurrent EBITDA Margin % 1,7% 0,1% 3,6% 5,1% 2,2% Depreciation and
Slide 28: Balance Sheet
HIGHLIGHTS OF 1Q10 RESULTS SONAE INDÚSTRIA BALANCE SHEET (euro millions) 1Q09 1H09 9M09 FY09 1Q10 Non Current Assets 1.384 1.413 1.250 1.233 1.237 Tangible Assets 1.198 1.224 1.098 1.083 1.083 Goodwill 104 107 92 92 93 Deferred Tax 55 57 36 33 36 Other Non Current Assets 26 25 24 24 25 Current Asset
Slide 29: Looking Forward
LOOKING FORWARD 29
Slide 30: Looking Forward
SONAE INDÚSTRIA LOOKING FORWARD We expect a continuing recovery in the wood based panels industry over the coming quarters both in terms of sales volumes and sales prices. Variable costs are expected to level out, or even decline, as a result of the seasonality of wood prices. Fixed costs should con
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: Short Term Strategy: 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 210 202 180 58 WORKING CAPITAL: 2007 - 1Q 2010 150 € Mn 120 53 110 500 90 31 400 23 300 25 60 200 16 68 28 30 4 10
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: 121 million Euros Net Debt + contingencies: 38 million Euros Enterprise Value: 159 million Euros Multiple of 7.8x (adding 60 million Eur
Slide 36: Increasing Profitability: Adapting Capacity
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 28* • As of 2010 • Coleraine continues to have a MF line • Kaisersesch continu
Slide 37: Increasing Profitability: Capacity Closed
OUR SHORT TERM STRATEGY – FOCUS ON P&L SONAE INDÚSTRIA INCREASING PROFITABILITY IN TOTAL, WE HAVE CLOSED 1.455.000 m3 CAPACITY. 2008 2009 We closed 5 plants: We stopped two lines: Coleraine in the UK – 100.000 m3 PB MDF Line 1 in Meppen – Topan I – 110.000 m3 George in S.A.- 60.000 m3 PB PB Line in
Slide 38: Geographic Review of Operations
GEOGRAPHIC REVIEW OF OPERATIONS 38
Slide 39: Iberia
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA IBERIA Sonae Indústria Iberian Capacity Thousands m 3 IBERIA COMPETITIVE LANDSCAPE MDF 500 PB 1.220 HB 70 PARTICLEBOARD MDF FLOORING HARDBOARD HPL CHEMICALS OTHERS (FURNITURE, COMPONENTS, WOOD VENEER) Source: Sonae Indústria (May 2010) 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 12 Finsa/Utisa 3,15 CAPACITY Sonae Indústria 1,79 1,79 Million m3 CAPACITY UTILIZATION 1Q10 Interbon 0,97 64% Losan 0,38 Tablicia 0,37 Source: So
Slide 41: Central Europe
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA CENTRAL EUROPE CENTRAL EUROPE Sonae Indústria Central Europe Capacity Thousands m 3 COMPETITIVE LANDSCAPE MDF 1.200 PB OSB 2.590 460 UK GERMANY FRANCE PARTICLEBOARD MDF HPL CPL OSB Source: Sonae Indústria (May 2010) 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 12 CAPACITY Sonae Indústria 4,25 4.25 Million m3 Egger 3,79 CAPACITY UTILIZATION 1Q10 Kronospan M&P Kaindl 3,40 74% 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 1Q10 76% INSTALLED RAWBOARD CAPACITY IN NORTH AMERICA (PB+MDF) - TOP PLAYERS M Flakeboard 2,74 Roseburg 2,44 Pfleiderer 1,90 Templ
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 (May 2010) 44
Slide 45: Rest of the World: South Africa Competitive Landscape
GEOGRAPHIC REVIEW OF OPERATIONS SONAE INDÚSTRIA SOUTH AFRICA REST OF THE WORLD SOUTH AFRICA COMPETITIVE LANDSCAPE PLANTS 2 CAPACITY INSTALLED RAWBOARD CAPACITY IN SOUTH AFRICA - TOP PLAYERS 0,52 Million m3 Millions m3 CAPACITY UTILIZATION 1Q10 75% PG Bison 0,71 Sonae Indústria 0,52 Source: Sonae Ind
Slide 46: Corporate Governance
CORPORATE GOVERNANCE Source: Sonae Indústria (May 2010) Source: Sonae Indústria (May 2010) 46
Slide 47: Board of Directors
CORPORATE GOVERNANCE SONAE INDÚSTRIA BOARD OF DIRECTORS Belmiro de Azevedo [Chairman] BOARD OF Álvaro Cuervo García DIRECTORS Paulo Azevedo Per Knuts Thomas Nystén Carlos Bianchi de Aguiar [CEO] EXECUTIVE Rui Correia [CFO] Christophe Chambonnet [CM&SO] COMMITTEE João Paulo Pinto [CI&TO] Carlos Bianc
Slide 48: Board Committees
CORPORATE GOVERNANCE SONAE INDÚSTRIA BOARD COMMITTEES 48
Slide 49: More on Sonae Indústria
MORE ON SONAE INDÚSTRIA 49
Slide 50: Human Resources
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA HUMAN RESOURCES Approximately 5.4 thousand Employees at the end of 2009 South Africa The Number of Employees & Productivity 345 Netherlands Canada Number of Employees 1) Productivity 19 BASE 100: 2002 318 Iberia 1.787 10000 195,0 181,0 7.805 167,0 166,3 8000 1
Slide 51: 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 Environmental Resources and Efficiency Code of Conduct People in the Org
Slide 52: Our Values
MORE ON SONAE INDÚSTRIA SONAE INDÚSTRIA OUR VALUES 52
Slide 53: 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 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
Slide 58: Sonae Indústria
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