Pro-pac Packaging Ltd · ASX:PPG
Pro-pac Packaging — Investor Presentation (February 2018)
21 slides from Pro-pac Packaging's investor presentation, Feb 16, 2018
Slide 1: Investor Presentation
Investor Presentation Results for the half ended 31 December 2017 February 2018
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. These forward-looking statements reflect Pro-Pac Packaging Limited’s current intentions, plans, expectations, assumptions and beliefs about f
Slide 3: Half Year Financial Metrics
Half Year Financial Metrics1 +30.0% +387% $9.55 m $14.5 m +35.8% EBITDA Cash from operating activities $158 m (underlying2.) Revenues +15.8% $5.95 m 1.0 cent PBT (underlying ) 2. Half year dividend (fully franked) 1. Results include two months of trading for Integrated Packaging following completion
Slide 4: Half Year Summary
Half Year Summary • On track for a pro forma underlying sustainable EBITDA of ~$36m (FY18F) and ~$38m (CY18F) (refer p. 20) • Merger completed with Integrated Packaging Group, established market leading Industrial & Flexible Packaging business • Despite soft 2017 agricultural market, integration und
Slide 5: Pro-Pac: An Industry Leader
PRO-PAC AN INDUSTRY LEADER Page 5
Slide 6: Merger - overview
Merger - overview ▪ The merger between IPG and PPG was Distribution completed on 6 November, 2017 ▪ The two businesses now operating under a single management structure, realisation of synergies is well underway ▪ PPG now an industry-leading integrated manufacturer and distributor of industrial Manu
Slide 7: New PPG Group
New PPG Group PPG’s strategy is to become market leader in the high growth industrial & flexible packaging segment PPG GROUP PRODUCT MIX/SALES % Rigid Industrial & Flexible ▪ A diversified distribution company, providing innovative, industrial, flexible ~ and rigid packaging solutions for a group of
Slide 8: Australian Packaging Industry Overview
Australian Packaging Industry Overview Pro-Pac is a leading player in the $2.2 billion Flexible Packaging segment Australian Packaging A$20-22 billion1 Flexible Packaging Fibre Packaging Metal Packaging Other Packaging ~$2.2 billion1 ▪ The Combined Group will be a segment leader across ▪ The Combine
Slide 9: Growth opportunities in Flexible Packaging
Growth opportunities in Flexible Packaging ▪ PPG’s future growth will largely be driven by the flexibles market: ▪ Demand expected to grow 47% over next 10 years (CAGR 4%)1. Underpinned by favourable consumer trends: ▪ Shift towards convenience packaging particularly (eg. pre-sliced carrots in bags)
Slide 10: Strategy for Growth
Strategy for Growth Post merger, PPG is a vertically integrated industry leader in industrial & flexible packaging Strong platform Target resilient Extended capability; Market for growth sectors greater efficiency consolidation • Flexible & Industrial • Key market sectors • Combination of PPG’s • Op
Slide 11: PPG Shareholder value creation
PPG Shareholder value creation Page 11
Slide 12: H1 2017 Financial Results
H1 2017 FINANCIAL RESULTS Page 12
Slide 13: Industrial & Flexibles segment
Industrial & Flexibles segment (includes Integrated Packaging Group) 1. ▪ Revenues up 48.1% to $127 million 1. ▪ EBITDA up 27.6% to $7.2m million ▪ Volumes up in food, industrial & FMCG ▪ Agricultural volumes impacted by unfavourable weather conditions ▪ Operating margins down with Ag stock producti
Slide 14: Rigid segment
Rigid segment ▪ Revenues stable at $30.9 million ▪ EBITDA up 16.8% to $4.4 million ▪ Operating margins expanded to 14.1% with improved efficiency and increased manufacturing ▪ Higher volumes in dairy and chemical ▪ Pharma and automotive markets remained flat ▪ Expanding market focus into personal ca
Slide 15: Merger synergies update
Merger synergies update • Integration synergies ahead of target – Phase 1 = $2.0 million annualised savings, includes best buy and optimisation opportunities. Achieved & implemented. – Phase 2 synergies, focusing on consolidation and rationalization has already identified additional $3.0 million pa
Slide 16: Reconciliation from underlying EBITDA to reported EBITDA
Reconciliation from underlying EBITDA to reported EBITDA. $000’s Underlying EBITDA 9,552 One off acquisition, rationalization & relocation costs: Surplus leases and exit costs 1,827 Redundancy costs 112 Fixed asset disposals and write offs 1,075 Discontinued and redundant stock lines 3,597 Third par
Slide 17: Underlying Profit & Loss
Underlying Profit & Loss 31 Dec 2017* 31 Dec 2016 For the 6 months ended % ($000’s) ($000’s) Sales Revenue: 157,969 116,286 +35.8% Industrial & Flexible 127,089 85,787 +48.1% Rigid 30,880 30,499 +1.2% EBITDA: 9,552 7,336 +30.2% Industrial & Flexible 7,160 5,613 +27.6% Rigid 4,353 3,728 +16.8% HO / C
Slide 18: Statutory Profit & Loss
Statutory Profit & Loss For 6 months ended: Consolidated Consolidated 31 December 2017 31 December 2016 ($000’s) ($000’s) Revenue Sales of goods 157,969 116,286 Interest income 52 88 Total Revenue 158,021 116,374 Expenses Raw materials and consumables used 101,626 77,419 Employee benefits expense 24
Slide 19: Balance Sheet
Balance Sheet As at: 31 Dec 2017 30 Jun 2017 ($00,000) ($00,000) • Balance sheet transformed following merger with IPG Cash & equivalents 9.9 12.3 • Expect leverage ratios to reduce to Trade & other receivables 85.9 37.7 targeted range of 1.5x – 2.3x in FY19 Inventories 86.9 35.1 (including full yea
Slide 20: Summary & Outlook
Summary & Outlook • On track for annualised pro forma sustainable EBITDA of ~$37.7 million • Now established a strong foundation in Industrial & Flexible market • Further synergy cost reductions 2. 2. anticipated 1 PPG & IPG combined EBITDA 2Annualised Pro-forma EBITDA, including synergies • Well po
Slide 21: Thank You
Thank You Pro-Pac Packaging (Aust) Pty Ltd Building 1, 147-151 Newton Road Wetherill Park, NSW, 2164 T: (02) 8781 0500 F: (02) 8781 0599 www.ppgaust.com.au Page 21
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