Aquafil Spa · MIL:ECNL
Aquafil Spa — Investor Presentation (September 2020)
52 slides from Aquafil Spa's investor presentation, Sep 14, 2020
Slide 1: Corporate Presentation - Industrial Day
AQUAFIL Corporate Presentation Industrial Day 14th September 2020
Slide 2: Aquafil at a Glance
Aquafil at a Glance • Pioneers of circularity with ECONYL®: - An unique Regeneration System to produce sustainable fiber and polymers from nylon 6 waste; - High barriers to entry for technology and reverse supply chain; - Turnover of product branded ECONYL® equal to ca 38% of fiber turnover - signif
Slide 3: Index
Index 1. AQUAFIL AT A GLANCE 4 2. AQUAFIL MARKET 10 3. ECONYL® 14 4. 2020 OUTLOOKS AND 1° HALF 2020 FINANCIAL RESULTS 20 5. ANNEXES 24 3
Slide 4: Aquafil at a Glance
A@UAFIL synthetic fibres and polymers AQUAFIL AT A GLANCE
Slide 5: Product Lines and Key Applications
Product Lines Contribution to Key Applications 2018 European PA Market Shares (1) Revenues FY19 A Contract Fiber for carpet flooring Residential 72,9% BCF Product Automotive B Clothing & Fashion Fiber for fabric Swimwear ca. 19,6% NTF Product Sportswear High-tech clothing C Polymers EP Product ca. 7
Slide 6: Aquafil's Value Chain
Aquafil’s Value Chain Raw materials Production Distribution Clients Final Application BCF Flooring Solutions Selected Manufacturers Application Users Production and finishing of Standard Caprolactam premium synthetic yarns, Direct sale / Contract • Nylon 6 monomer principally Nylon 6, for agents (bu
Slide 7: Aquafil Worldwide
Global Footprint with proximity to Clients AQUAFIL WORLDWIDE USA UK CROATIA CHINA Cartersville (Georgia) Kilbirnie Oroslavje Jiaxing Aquafil USA 1 & 2 Aquafil UK Aquafil CRO Aquafil Jiaxing Phoenix (Arizona) Aquafil Carpet Recycling SLOVENIA THAILAND ACR#1 Ljubljana Rayong AquafilSLO Sacramento (Cal
Slide 8: More than 50 Years of Growth Key Milestones
More than 50 Years of Growth Key Milestones Acquisition of O’Mara Incorporated In US Acquisition of Invista BCF Business in Listing in Italian Asia Pacific Stock Exchange Doubling of Production Capacity in China Acquisition of Xentrys from Domo Chemicals The ECONYL® plant in Slovenia begins producin
Slide 9: Key Financial
Key Financial Revenues (€m) EBITDA (€m) and Margin on Revenues (%) 10,9 13,2 13,8 14,5 14,0 15.3 14.0 13.6 12,6 12,1 % % % % % % % % % % 9 (1) Defined as EBITDA minus D&A, impairments and provisions.
Slide 10: Aquafil Market
A@UAFIL synthetic fibres and polymers AQUAFIL MARKET 10
Slide 11: Competitors - Fiber for carpet flooring
Fiber for carpet flooring A Fiber for carpet flooring - BCF Product 2018 PA Market Shares1 Integrated Players Competitors 11 (1) Aquafil on Wood Mackenzie market data - Based on volume
Slide 12: Competitors - Fiber for Fabric
Fiber for Fabric B Fiber for Fabric - NTF Product 2018 Market Shares1 Textile mass production is in APAC, with A leading player with limited competition. Europe’s core focus is on high-end Only 3 suppliers capable of offering products production. Fast fashion needs lead to starting from monomer and
Slide 13: EP Solutions
EP Solutions C EP Description Engineering Plastic Compounders Aquafil manufactures nylon 6 and raisin pellet polymers for compounders. Once the polymer has been transformed into a techno- polymer, compounders sell the semi-finished product to the industrial Industrial molding companies, which model
Slide 14: ECONYL
A@UAFIL synthetic fibres and polymers ECONYL® 14
Slide 15: ECONYL: 100% regenerated and regenerable nylon
• 100% regenerated & regenerable nylon • Unique proprietary technology • Ca 38 % of Aquafil Fiber 2019 Revenues WWW.ECONYL.COM 15
Slide 16: Step 1: Rescue
STEP 1: RESCUE The ECONYL® Regeneration System starts with rescuing waste, like fishing nets, fabric scraps, carpet flooring and industrial plastic from landfills and oceans all over the world. That waste is then sorted and cleaned to recover all of the nylon possible. 16
Slide 17: Step 2: Regenerate
STEP 2: REGENERATE Through a radical regeneration and purification process, the nylon waste is recycled right back to its original purity. That means ECONYL® regenerated nylon is exactly the same as virgin nylon. 17
Slide 18: Step 3: Remake
STEP 3: REMAKE ECONYL® regenerated nylon is processed into carpet yarn and textile yarn for the fashion and interior industries. 18
Slide 19: Step 4: Reimagine
STEP 4: REIMAGINE Fashion brands and carpet producers use ECONYL® regenerated nylon to create brand new products. And that nylon has the potential to be recycled infinitely, without ever losing its quality. 19
Slide 20: 2020 Outlooks and 1° Half 2020 Financial Results
2020 OUTLOOKS AND 1° HALF 2020 FINANCIAL RESULTS 20
Slide 21: Clear path ahead
Clear path ahead STRONG GROUP REACTION CONFIDENT IN GROUP FUTURE EXTRAORDINARY EFFORTS OF ALL OF US CLEAR PATH AHEAD “CIRCULARITY” IN OUR DNA BUSINESS CONTINUITY, IN OUR STRATEGY 2019 SAVINGS PLAN AND AND DRIVING OUR FUTURE PROMPLY ADOMPTED COUNTERMISURES MINIMISED FLOW THROUGH LEVERAGE OUR PEOPLE N
Slide 22: Summer recovery driven by Asia-Pacific region
Summer recovery driven by Asia-Pacific region • Asia and Oceania driving recovery thanks to “Fiber for carpet” (BCF) • NTF demand stronger than last year in North America • ECONYL® demand recovering gradually «FIRST GRADE PRODUCT» REVENUES (1) 1Q2020 2Q2002 July-August 0,0% (4,3%) -10,0% (23,2%) -20
Slide 23: Profitability recovery in 2H2020
Profitability recovery in 2H2020 Assuming no COVID-19 resurge and no further lockdowns in 2H2020: • Revenues: summer trend substantially confirmed • EBITDA: on-going benefits from 2019 savings plan, COVID-19 countermeasures (1) and moreover a positive evolution of sales mix both in term of regions a
Slide 24: 1° Half 2020 Financial Results
1° HALF 2020 FINANCIAL RESULTS 24
Slide 25: Effectively minimising negative flow through
Effectively minimising negative flow through REVENUES EBITDA NET PROFIT NFP 2019 2020 ∆% 2019 2020 ∆% 2019 2020 ∆% FY2019 1H2020 ∆% HALF 286,8 222,7 (22,3%) HALF 39,1 26,9 (31,2%) HALF 10,7 (1,9) n.s. 249,6 242,2 (2,90%) % on net sales 13,6% 12,1% % on net sales 3,7% n.s. QUARTER 141,3 82,0 (42,0%)
Slide 26: All region and product lines severely impacted
All region and product lines severely impacted HALF BCF NTF POLYMERS TOTAL 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% EMEA 108,7 82,4 (26,3) (24,2%) 48,7 37,4 (11,4) (23,3%) 19,2 13,5 (5,8) (29,9%) 176,7 133,3 (43,4) (24,6%) North America 55,8 41,9 (13,8) (24,8%) 2,9 10,4 7,6 n.a. 3
Slide 27: A different path for ECONYL
A different path for ECONYL ® • Sales: reduction of 14,7% in 1H2020 and of 28% in 2Q2020 - end markets impacted later in the period • % on net sales: 40,9% in 1H2020 - 2Q incidence peak influenced by demand evolution 120,0% INCIDENCE on NET SALES INCIDENCE on NET SALES 120,0% 100,0% 100,0% 80,0% 37,
Slide 28: Prompt and effective actions to mitigate Covid-19
Prompt and effective actions to mitigate Covid-19 Sites: prompt adoption stricter safety measures, including new sites protocol and working practice BUSINESS CONTINUITY HQs progressive adoption of remote working Customers: on-going support and services PROFITABILITY Activation of Government social s
Slide 29: Business continuity and labour efficiency
Business continuity and labour efficiency • Delivery of 2019 saving plans almost in line with expectations • Group strong efforts to minimize sales decline are paying off - Business continuity - Exceptional effort in labour efficiency EBITDA EVOLUTION 6,6 (25,7) 39,1 7 26,9 Data in € million 29
Slide 30: Net Result influenced by depreciation too
Net Result influenced by depreciation too QUARTER HALF 2019 2020 ∆% 2019 2020 ∆% REVENUES 141,3 82,0 (42%) 286,8 222,7 (22%) EBITDA 20,0 8,7 (57%) 39,1 26,9 (31%) • Depreciation: +€ 5,2m driven Margin % 14,1% 10,6% 13,6% 12,1% by 2018-2019 CAPEX peak and O’Mara consolidation EBIT 8,1 -5,3 n.s. 17,1
Slide 31: Prompt and effective actions to mitigate Covid-19
Prompt and effective actions to mitigate Covid-19 NWC Proactive and efficient inventories management CASH CAPEX Focus on operating CAPEX GENERATION M&A Temporary suspension of M&A process NEW LOANS € 40 million new medium-long term loans DEBT FINANCIAL Extension of all medium-long term facilities MA
Slide 32: NFP decreasing trend
NFP decreasing trend 100,0 CAPEX EVOLUTION (1) 75,0 50,0 69 55 25,0 34,3 15,6 0,0 2017 2018 2019 1H2020 NFP EVOLUTION CASH GENERATION: € 7.4 (249,6) 22,7 4,2 (4) (15,6) (242,2) Data in € million – (1) Excluding cash out for M&A activities 32
Slide 33: Further enhancement of liquidity
Further enhancement of liquidity • 2 new medium long-term for a total amount of € 40 million - Further increase of liquidity • Extended all medium-term facilities • “Covenant holiday” on 30 June 2020 150 GROSS DEBT MATURITY (1) 150 LIQUIDITY EVOLUTION 125 125 133 100 100 103 75 99 100 98 90 75 50 66
Slide 34: Annexes
A@UAFIL synthetic fibres and polymers 34
Slide 35: Disclaimer
Disclaimer This presentation and any material distributed in connection herewith (together, the “Presentation”) prepared by Aquafil S.p.A. (“Aquafil” or “Company”) do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer t
Slide 36: Definitions
Definitions “First choice revenues” are revenues generated by the sale of fibers and polymers, gross of any adjustments «FIRST CHOICE (for example, discounts and allowances), but excluding revenues generated by “non-first choice products”, REVENUES» revenues generated by Aquafil Engineering GmbH and
Slide 37: Corporate Governance and Ownership Structure
CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE 37
Slide 38: Ownership Structure
Ownership Structure A capital structure with 3 type of Shares (a) Ordinary Share, (b) share B: dedicated to Giulio Bonazzi family with the same economic right of ordinary share but with 3 voting right for any share and (c) share C: no transferable, no economic and voting right but at certain conditi
Slide 39: Corporate Governance
Corporate Governance Board of Statutory Auditors Stefano Poggi Longostrevi Chairman Board of Directors Giulio Bonazzi Chairman and CEO Fabio Buttignon Fabrizio Calenti Statutory Auditor Adriano Vivaldi Executive Director Executive Director Silvana Bonazzi Franco Rossi Director Executive Director Bet
Slide 40: Historical Cash Flow, Capex and Net Financial Position
HISTORICAL CASH FLOW, CAPEX AND NET FINANCIAL POSITION 40
Slide 41: Cash Flow from Operating Activities and Capex
Key Financial Cash Flow from Operating Activities (€m) and Cash Return(2) (%) 63,9 29,7 79,8 51,6 67,4 17,4 45,4 22,0 59,3 80,7 % % % % % % % % % % Capex (€m) 41
Slide 42: Net Financial Debt and Net Financial Debt / EBITDA
Key Financial Net Financial Debt (€m) and Net Financial Debt / EBITDA(1) 3,4 2,8 1,8 2,3 1,5 1,9 2,0 2,9 3,6 4,2 42 Note: (1) LTM EBITDA is used for Half Period (2) Cash return defined as period Cash Flow from Operating Activities / EBITDA
Slide 43: 1st Half 2020 - Financial Results
1ST HALF 2020 – FINANCIAL RESULTS 43
Slide 44: Consolidate Income Statement
Consolidate Income Statement CONSOLIDATED INCOME STATEMENT Half Year of wich Half Year of wich Second of wich Second of wich €/000 2020 non- 2019 non- Quarter 2020 non- Quarter 2019 non- Revenue 222.733 current - 286.667 current - 82.019 current 166 141.339 current - of which related parties 27 29 -
Slide 45: Consolidate Income Statement - Sales details - 2Q
Consolidate Income Statement – Sales details – 2Q 2QUARTER BCF NTF POLYMERS TOTAL 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% 2019 2020 ∆ ∆% EMEA 53,9 30 (23,9) (44,3%) 22,5 12,4 (10,1) (44,7%) 9,1 5,1 (4,0) (44,1%) 85,5 47,5 (38,0) (44,4%) North America 26,3 17,1 (9,2) (35,0%) 2,9 3,5 0,6 22,1% 2,
Slide 46: Consolidate Income Statement - EBITDA Adjusted
Consolidate Income Statement – EBITDA Adjusted RECONCILIATION FROM NET PROFIT TO EBITDA €/000 Half Year Half Year Second Second 2020 2019 Quarter 2020 Quarter 2019 Net Profit (Including Portion Attr. to Minority ) (1.935) 10.654 (6.012) 2.958 Income Taxes 371 3.637 (1.201) 1.757 Amortisation & Depre
Slide 47: Consolidate Balance Sheet
Consolidate Balance Sheet CONSOLIDATED BALANCE SHEET At June 30, At December 31, €/000 2020 2019 Intangible Assets 22.265 21.101 Goodwill 13.071 13.029 Tangible Assets 244.154 251.492 Financial Assets 677 765 of which related parties 313 313 Other Assets 1.336 2.189 Deferred Tax Assets 10.577 13.636
Slide 48: Net Financial Position
Net Financial Position NET FINANCIAL DEBT At June 30, At December 31, €/000 2020 2019 A. Cash 132.774 90.400 B. Other cash equivalents - - C. Securities held-for-trading - - D. Liquidity ( A + B + C) 132.774 90.400 E. Current financial receivables 853 1.637 F. Current bank loans and borrowing (72) (
Slide 49: Net Financial Position - Evolution and details
Net Financial Position – Evolution and details 400 300 NFP EVOLUTION 200 250 242 100 157 112 0 2017 2018 2019 1H2020 BREAKDOWN By CURRENCY BREAKDOWN by COUPON (1) 1% 58% 42% 99% Euro USD Fixed Floating Data in € million - (1) Excluding lease liabilities 49
Slide 50: Additional financial information
Additional financial information (1) AMOUT COVENANTS ( 2 ) BORROWINGS - 30 June 2020 ISSUE DATE CURRENCY COUPON ( 1 ) MATURITY Total Drawn Undrawn Parameters Reference Check Private Placement B Sept 2018 EUR 4,70% Sept 2028 50 50 0 EBITDA / Net financial charges > 3.5 Net Debt / EBITDA < 3.75 Privat
Slide 51: Cash Flow Statements
Cash Flow Statements CASH FLOW STATEMENT At June 30, At June 30, €/000 2020 2019 Operation Activities Net Profit (Including Portion Attr. to Minority ) -1.935 10.654 of which related parties -342 -360 Income Taxes 371 3.637 Income (loss) from Investments -197 -1.100 Other Financial Income 4.241 3.71
Slide 52: Investors Contact
Investors Contact: Karim Tonelli Investor Relations & Performance Management Director karim.tonelli@aquafil.com Mob: +39 348 60 22 950 52