Sig Group Ag · SIX:SIGN
Sig — SIG Combibloc — FY2019 Earnings Presentation
21 slides from Sig's earnings presentation, Feb 25, 2020
Slide 1: SIG Combibloc FY 2019 Results
SIG COMBIBLOC FY 2019 RESULTS CEO ROLF STANGL CFO SAMUEL SIGRIST 25 FEBRUARY 2020
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is not for use within any country or securities of SIG in any state or jurisdiction in which, or to any person to whom such EBITDA to adjusted EBITDA and the estimated tax impact of the foregoing jurisdiction or by any persons where such use
Slide 3: 2019 Financial Performance Highlights in Line with Guidance
2019 FINANCIAL PERFORMANCE HIGHLIGHTS IN LINE WITH GUIDANCE CORE REVENUE ADJUSTED FREE CASH ADJ. NET ROCE3 € 1.77 BILLION EBITDA FLOW INCOME +5.2% € 485 € 267 € 217 22.8% AT CONSTANT MILLION MILLION MILLION (2018: 20.6%) CURRENCY1 (2018 € 462m) (2018: € 68m) (2018: € 149m) ADJUSTED PROPOSED CORE REV
Slide 4: 2019 Performance Key Points
2019 PERFORMANCE RESILIENT KEY POINTS BUSINESS PROFILE ASIA PACIFIC AND AMERICAS IMPROVED MIDDLE EAST PRODUCTION CONTINUE TO DRIVE GROWTH PERFORMANCE EFFICIENCIES AND LOWER RAW FAVOURABLE MARKET BETTER ECONOMIC MATERIAL COSTS FUNDAMENTALS ENVIRONMENT AND MARKETING INCREASE IN SGA EXPENSE SUCCESSES R
Slide 5: Sustainability Milestones
SUSTAINABILITY RESPONSIBLE SOURCING MILESTONES RESPONSIBLE PRODUCTS LAUNCH OF FIRST ASI1 MORE THAN 10X INCREASE IN CIRCULARITY LABELLED PACKS SIGNATURE PACK SALES FIRST TO OFFER CARTONS WITH STRICT STANDARDS FOR ECOPLUS SALES REACH 1 BILLION RECYCLED POLYMERS MADE FROM ALUMINIUM SUPPLY CHAIN PACKS P
Slide 6: Full Year Sales Evolution
FULL YEAR GROWTH IN SALES EVOLUTION ALL REGIONS € MILLIONS Core revenue growth at constant currency +5.2%; actual +7.5% 29 0 17 35 21 38 -32 EMEA: Growth in Europe, higher sales in Middle East 1767 1784 1676 1644 APAC: Performance driven by China, Thailand and Indonesia CONSTANT CURRENCY GROWTH RATE
Slide 7: Fourth Quarter Performance
FOURTH QUARTER ACCELERATION IN PERFORMANCE EMEA REVENUE GROWTH Q4 CORE REVENUE BRIDGE € MILLIONS +4.3% 12 12 5 7 -3 4 -5 CONSTANT CURRENCY 531 535 503 498 GROWTH RATE +6.2% +2.4% +6.5% Q4 2018 Non-core Core revenue FX EMEA APAC Americas Other Core revenue Non-core Q4 2019 Q4 ADJUSTED EBITDA BRIDGE €
Slide 8: Full Year Adjusted EBITDA Bridge
FULL YEAR MID-TERM MARGIN TARGET ADJUSTED EBITDA BRIDGE ~29% ADJUSTED EBITDA € MILLIONS ADJUSTED EBITDA 4 7 -3 15 19 -21 2 MARGIN 462 477 485 +27.2% (2018: 27.5%) 2018 FX NET OF FX TOP-LINE RAW MATERIAL PRODUCTION JV DIVIDENDS SGA MISC. 2019 IMPACT COSTS EFFICIENCIES ▪ Raw material costs benefit fro
Slide 9: Middle East Joint Venture Strong Cash Generation and Refinancing
MIDDLE EAST JOINT VENTURE 2019 DIVIDEND PAYOUT STRONG CASH GENERATION EXCEEDS EXPECTATIONS AND REFINANCING DIVIDEND PAYMENTS TO SIG OPERATIONAL REFINANCING 10 PERFORMANCE ▪ Concluded in Q4 2019 9 FY 2018: € 23.7m FY 2019: € 20.7m ▪ Recovery in several ▪ Existing facilities re- 8 markets financed, ad
Slide 10: Adjusted EBITDA Margin Development by Region
ADJUSTED EBITDA MARGIN DEVELOPMENT BY REGION EMEA APAC AMERICAS ▪ Lower dividend from Middle East joint ▪ Strong revenue growth ▪ Impact of Brazilian Real depreciation venture compared with 2018 ▪ Currency tailwinds ▪ Costs relating to combismile ramp-up ▪ Unfavourable mix effects in USA ▪ High frei
Slide 11: Adjusted Net Income
ADJUSTED NET INCOME €m 2019 2018 PROFIT/LOSS FOR THE PERIOD 107 (84) Non-cash FX impact of non-functional currency loans and realised exchange impact due to refinancing (1) (59) Amortisation of transaction costs 3 11 Net change in fair value of derivatives 1 7 Net effect of early redemption of notes
Slide 12: Free Cash Flow
FREE STRONG CASH CASH FLOW FLOW GENERATION €m 2019 2018 NET CASH FROM OPERATING ACTIVITIES 438 260 Dividends received from joint ventures 21 24 Acquisition of property, plant and equipment and intangible assets (182) (214) Payment of lease liabilities (10) (2) FREE CASH FLOW 267 68 CASH CONVERSION 1
Slide 13: Working Capital
WORKING CAPITAL NET WORKING CAPITAL WELL CONTROLLED €m 2019 2018 INVENTORY 167 144 TRADE RECEIVABLES 162 135 TRADE PAYABLES (180) (166) NET WORKING CAPITAL 150 114 % REVENUE 8.4% 6.8% % REVENUE EXCL VISY 7.5% OTHER RECEIVABLES / PAYABLES1 (226) (179) OPERATING NET WORKING CAPITAL (1) Including accru
Slide 14: Capital Expenditure
CAPITAL STRONG PLATFORM EXPENDITURE FOR FUTURE GROWTH €m 2019 2018 PROPERTY, PLANT & EQUIPMENT 58 57 GROSS FILLER CAPEX 124 157 UPFRONT CASH (72) (71) NET FILLER CAPEX 52 86 TOTAL NET CAPEX 110 143 TOTAL NET CAPEX AS % REVENUE 6.2% 8.5% NO. OF FILLERS IN THE FIELD* 1,210 1,180 Additions 75 85 Withdr
Slide 15: Leverage
LEVERAGE SIGNIFICANT REDUCTION IN LEVERAGE €m 2019 2018 CASH1 261 157 SENIOR SECURED TERM LOANS 1’561 1’592 LEASE LIABILITIES 54 26 NET TOTAL DEBT 1’353 1’462 TOTAL NET LEVERAGE RATIO 2.8x 3.2X ▪ Strong cash generation allows financing of Visy and reduction in leverage ▪ Cost of debt 2.2% at end Dec
Slide 16: Return on Capital Employed
RETURN ON CAPITAL EMPLOYED €m 2019 2018 INCOME STATEMENT ITEMS Adj. EBITDA 485 462 ROCE at adjusted Depreciation¹ Middle East Joint Venture Dividend (177) (21) (172) (24) effective tax rate: ROCE EBITA 288 265 24.1% BALANCE SHEET ITEMS Current Assets (excluding Cash and Cash Equivalents) 462 407 (1)
Slide 17: Financial Guidance
FINANCIAL 2020 KPIs INCLUDE GUIDANCE VISY CARTONS FY 2020E CORE REVENUE GROWTH 6 - 8% (CONSTANT CURRENCY) ADJ. EBITDA MARGIN 27 – 28% EFFECTIVE TAX RATE 28 - 29%1 NET CAPEX (% REVENUE) 8 - 10% DIVIDEND PAYOUT 50 - 60% OF ADJUSTED NET INCOME2 Mid-term CORE REVENUE GROWTH 4 - 6% (CONSTANT CURRENCY) AD
Slide 18: Acquisition of Visy Cartons in Australia and New Zealand
ACQUISITION OF VISY CARTONS IN AUSTRALIA AND NEW ZEALAND HIGHLIGHTS OPPORTUNITIES FOR GROWTH LEADING POSITION IN AUSTRALIA ANZ MARKET GROWING AT 3% CAGR OVER NEXT 5 YEARS1 23 ASEPTIC FILLERS IN THE FIELD DAIRIES INVESTING TO EXPORT MILK TO CHINA SIGNIFICANT SCOPE FOR SYNERGIES AND OTHER ASIAN COUNTR
Slide 19: Clear Priorities for Use of Funds
CLEAR PRIORITIES FOR USE OF FUNDS INVEST IN THE BUSINESS DIVIDEND PAYOUT DELEVERAGING State of the art production ~€112M (CHF 0.38 per Further progress in 2019 facilities to meet demand share) proposed for 2019 New filler placements Net capex to remain within Within planned payout ratio: Mid-term ta
Slide 20: Financial Summary
FINANCIAL CONTINUING TRACK RECORD OF SUMMARY GROWTH AND CASH GENERATION TOP LINE BEST-IN-CLASS HIGH RATE OF CASH PERFORMANCE IN PROFITABILITY CONVERSION 2019 DEMONSTRATES SUCCESS OF GROWTH STRATEGY AND RESILIENCE OF END MARKETS DISCIPLINED CAPEX STRONG RETURN STRONG BUSINESS TO DRIVE GROWTH PROFILE:
Slide 21: Thank You
THANK YOU CEO ROLF STANGL CFO SAMUEL SIGRIST 25 FEBRUARY 2020