Lentex Sa · GPW:LTX
Lentex Sa — Investor Presentation (September 2007)
42 slides from Lentex Sa's investor presentation, September 2007
Slide 1: Lentex
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Slide 2: Agenda
Agenda Company’s Introduction Lentex Activities Product Markets Financials 2005 - 2007 Investments and Strategy September 2007 2
Slide 3: Company’s Introduction
Company’s Introduction September 2007 3
Slide 4: Historical Background
Historical Background 1911 founding of Union Textiles S.A. (LENTEX predecessor), specialising in the production of worsted yarn 1974 Lentex started producing PVC flooring 1975 - 76 the plant started up a production line for warming fabrics made of synthetic fibres 1995 LENTEX was transformed from a
Slide 5: Shareholders Structure
Shareholders Structure Moska Krzysztof 14,1% OPERA TFI 9,9% Fijałkowski Krzysztof 9,7% M os ka Krzys ztof (with P RY M U S s p. z o.o.) free float O P E RA T FI 48,5% ALICO USA 7,5% Fijałkows ki Krzys ztof (with P RO FI s .j.) A LI C O U SA (indirec tly, through A mplic o ING TFI S.A. 5,3% Life and
Slide 6: Activity and Product Groups
Activity and Product Groups September 2007 6
Slide 7: Company’s Activity
Company’s Activity Lentex is the biggest PVC flooring producer in Central Europe and significant producer of nonwovens in Polish market. Main products made by Lentex are: ¾ PVC floor coverings ¾ nonwovens (interlinings, waddings, needle-punched and spunlaced) ¾ silicone down (Lentex Ball) ¾ quilted
Slide 8: Product Applications
Product Applications Floor coverings Nonwovens ¾ for household use ¾ automotive (residential) ¾ contract floorings (offices, ¾ hygiene industry schools, hospitals) - ¾ textile and shoe industry commercial ¾ furniture industry (upholstery) ¾ civil engineering Technical textiles ¾ filtration ¾ road co
Slide 9: Floor Coverings
Floor Coverings September 2007 9
Slide 10: Floor Coverings
Floor Coverings September 2007 10
Slide 11: Nonwovens
Nonwovens ¾thermobonded (for stitching, coating) ¾chemobonded ¾hydro-entangled – spunlace ¾needle-punched ¾laminated (anti-slip mats, packaging materials) ¾PES Balls September 2007 11
Slide 12: Nonwovens
Nonwovens LENTEX offers wide range of nonwovens for automotive industry: ¾ spunlace ¾ thermobond ¾ needle-punched Automotive nonwovens are becoming the strategic branch in production and sales of Nonwovens Plant. September 2007 12
Slide 13: ISO Certificates
ISO Certificates September 2007 13
Slide 14: Product Markets
Product Markets September 2007 14
Slide 15: European Floor Coverings Market
European Floor Coverings Market Ukraine 7% Great Britain Holland 4% 11% Poland 4% Lithuania, Latwia, Italy 3% Estonia 1% Hungary 1% France Turkey 3% 13% Romania 1% others 8% Czech Republic 1% Germany 15% Sweden 3% Russia 33% Estimated European flooring market - app. 410 mln sqm, including: ¾ Western
Slide 16: Floorings Market in Poland
Floorings Market in Poland flexible floor coverings fitted carpets 12% 14% The market volume in synthetic Poland (app.) 126 mln sqm resins 7% laminates 20% concrete floors 6% Market volume in Poland for wood elastic floorings 15 mln sqm 3% including: ceramic tiles 37% others household floorings 11 m
Slide 17: Nonwovens Market in Europe
Nonwovens Market in Europe 1,6 mln ton Produkcja włóknin European w Europie nonwovens w latach production 1995-2005 1995 – 2005 Y 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 The nonwovens world market volume is estimated for over 5 mld tons (app. 112 miliar
Slide 18: Nonwovens According to Applications
Nonwovens According to Applications construction furniture 13% rugs and cloths 6% 15% filtration 6% earthwork 5% hygiene automotive 33% 4% others 18% * nonwovens production in Europe September 2007 18
Slide 19: Lentex Distribution Network in Poland
Lentex Distribution Network in Poland Nonwovens: distribution via: ¾ wholesalers wholesalers of Lentex floorings ¾(textile industry) ¾ B to B ¾manufacturers of automotive accessories ¾construction companies ¾furniture plants ¾the army nonwovens wholesalers Floorings: distribution via the network of:
Slide 20: Lentex Export Sale Destinations
Lentex Export Sale Destinations Russia 20% Ukraine 15% * 1-2Q 2007 Germany 12% as a percent of total export sales United States 12% Holland 5% Turkey 5% others 31% export sale is directed to 38 countries all over the world September 2007 20
Slide 21: Sales
Sales All annual data are converted into EUR using the average annual exchange rate: ¾in 2005: 4,0589 PLN / EUR ¾in 2006: 3,9738 PLN / EUR ¾in 1st half of 2007: 3,8455 PLN / EUR All quarterly data are converted using quarterly exchange rates September 2007 21
Slide 22: Increase of Total Sales Revenues
Increase of Total Sales Revenues 50 Sales revenues a year 30 Total sale revenues 1-2 Q [EUR [EUR mln] mln] 45 25 + 21% + 4% 40 + 10% 20 24,3 35 15 44,9 20,1 19,3 30 10 40,9 25 5 20 0 2005 2006 2005 2006 2007 September 2007 22
Slide 23: Products Sale Revenues
Products Sale Revenues Products sale revenues [EUR mln] 2005 2006 change 06/05 1-2 Q 2007 floor coverings 19,3 18,2 -6,1% 9,7 nonwovens 20,8 22,6 8,8% 12,2 technical fabrics 0,0 3,2 x 1,8 other sale 0,2 0,6 148,9% 0,3 Total products sale 40,3 44,6 10,4% 24,0 30 [EUR mln] 24,0 24,7 25 21,3 20 19,0 19
Slide 24: Products Sale Results
Products Sale Results 12 15 3 nonwovens sales [EUR floor coverings sales [EUR technical textiles sales mln] [EUR mln] mln] + 15% 8 10 2 + 18% + 50% 1,8 9,7 12,2 10,6 4 7,8 5 1 1,2 0 0 0 1-2Q 2006 1-2Q 2007 1-2Q 2006 1-2Q 2007 1-2Q 2006 1-2Q 2007 September 2007 24 *in I/06 TT was incorporated by Lent
Slide 25: Sales Structure
Sales Structure 1-2 Q 2007 technical nonwovens textiles 50% 8% other sales 1% Nonwovens consist of: floor coverings ¾ interlinings 41% ¾ waddings ¾ technical nonwovens ¾ spunlace ¾ ready-made goods September 2007 25
Slide 26: Sale Revenues 2006 and 2007
Sale Revenues 2006 and 2007 Y 50 Sale revenue [EUR mln] 2006 - accumulated 2007 - accumulated Monthly sale revenues 2006 and 2007 2006 5 40 [EUR mln] 2007 4 30 3 20 2 10 1 0 0 VIII VII IV VI XII V IX XI X III II I I II III IV V VI September 2007 26
Slide 27: Seasonal Trends in Revenues
Seasonal Trends in Revenues 16 2005 2006 2007 trend [EUR mln] 14 12 10 8 6 11 10 12 11 13 11 12 4 9 10 12 2 0 IQ II Q III Q IV Q Despite of seasonal trends growth of quarterly sales revenues can be observed September 2007 27
Slide 28: Domestic and Export Sales
Domestic and Export Sales Products sale revenues [EUR mln] 2005 2006 change 06/05 1-2 Q 2007 total 40,3 44,6 + 8% 24,0 domestic 25,4 26,1 + 1% 14,5 export 14,9 18,5 + 21% 9,5 50 Products sale break-down [EUR mln] 40 2005 18,5 14,9 2006 30 37% 20 41% 59% 25,4 26,1 63% 10 0 2005 2006 domestic domestic
Slide 29: Sales Destinations
Sales Destinations Nonwovens are exported to: Germany USA Russia Belorussia Hungary Floorings are exported to: nonwovens - Switzerland Russia domestic United Kingdom Ukraine sales Holland Turkey Slovakia 32% Lithuania Czech Republic floorings - Romania others Latvia exports China 21% Slovakia Czech
Slide 30: Export Dynamics
Export Dynamics 7 [EUR mln] 6 5,8 5,0 5 4,8 4,6 4,5 4,2 4,2 3,9 4,1 4,1 4 3,5 3,9 3,2 3,2 3 2 1 0 IQ II Q III.Q IV Q IQ II Q III Q IV Q IQ II Q III Q IV Q IQ II Q 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 September 2007 30
Slide 31: Sales Margin
Sales Margin nonwovens average price floorings average price nonwovens sales margin floorings sales margin 1 6% 4 5% 4% 3 + 4% 0 4% 3% + 1% 3 2% + 8% 0 2% 1% 2 0% 0 0% 2 + 5% -1% 1 -2% 0 -2% -3% 1 -4% 0 -4% 0 -5% 2005 2006 1-2Q 2007 2005 2006 1-2Q 2007 despite of almost constant prices, sales margin
Slide 32: Financials
Financials All annual data are converted into EUR using the average annual exchange rate: ¾in 2005: 4,0589 PLN / EUR ¾in 2006: 3,9738 PLN / EUR ¾in 1st half of 2007: 3,8455 PLN / EUR All quarterly data are converted using quarterly exchange rates September 2007 32
Slide 33: Financial Results
Financial Results change change 1-2 Q [EUR thousand] 2005 2006 06-05 06/05 2007 EBIT -1 948 520 2 468 x 781 EBITDA 973 3 848 2 876 395,6% 2 473 Gross profit -1 647 3 152 4 799 x 763 GP without the subsidiary acquisition effect -1 647 550 2 197 x x Net profit -1 383 2 996 4 379 x 741 NP without the s
Slide 34: Financial Results
Financial Results A significant improvement of result is caused by: 5 ¾ increase of the sales volume [EUR mln] ¾ increase of sales margins 4 ¾ increase of the average price ¾ decrease of the costs 3,8 ¾ production organizational improvement 3 3,0 It was also reached in 2006: 2 ¾ decrease of the over
Slide 35: Main Cost Ratios
Main Cost Ratios ¾ decrease of the share of manufacturing costs in revenues by 3,4% ¾ decrease of the share of sales costs in revenues by 0,2% ¾ decrease of the share of administrative costs in revenues by 3,5% change 2005 2006 1-2 Q 2007 06/05 manufacturing costs in the revenues 87,3% 83,9% -3,4% 8
Slide 36: 1-2 Q 2007 Summary
1-2 Q 2007 Summary 1-2 Q 2007 higher than in 1-2 Q 2006 Sale income 24,3 EUR mln + 4,2 EUR mln EBIT 0,8 EUR mln + 1,2 EUR mln EBITDA 2,5 EUR mln + 1,2 EUR mln Gross margin on the sale 16,7% + 1,0% Such a good results are achieved thanks to: ¾ very good sales results ¾ reaching of scale effect ¾ decr
Slide 37: Investments and Strategy
Investments and Strategy September 2007 37
Slide 38: Strategic Directions of Development
Strategic Directions of Development for 2008-2010Y cachievement of the key Polish producer position in the most perspective sectors of the nonwovens market dmaintaining the dominant position in the Polish floor coverings market and enlargement of the share in increasing markets in the world; finally
Slide 39: Capex
Capex ¾ purchasing the new spunlace nonwovens production line, one of the most modern in Europe: 3,2 EUR mln ¾ planned total investment outlays: 5,9 EUR mln ¾ effects: increase of sale revenues by almost 8 EUR mln finally ¾ civil engineering works connected with the construction of the new nonwovens
Slide 40: Capex
Capex The strategic investment task, concerned with the development of the production power of hydro-entangled nonwovens, is under realization. The deliveries of components from France have started in July. 55% total investment outlays were spent until end of August. The new nonwovens production hal
Slide 41: Strategy
Strategy c organizational changes ¾ separating The Floor Coverings Plant as a individual company. Main goals: activity segmentation, increasing of data transparency, possibility of potential alliances search ¾ changes in sales departments organization ¾ technical services restructuring d financial i
Slide 42: Thank you for your attention
Thank you for your attention September 2007 42