Recticel SA · EURONEXT:RECT
Recticel SA — KBC Small Cap Conference 2015
43 slides from Recticel SA's conference presentation, Dec 10, 2015
Slide 1: KBC Small Cap Conference
KBC SMALL CAP CONFERENCE Brussels, 10 December 2015 Olivier Chapelle – CEO Recticel Jean-Pierre Mellen – CFO Recticel Michel De Smedt – IRO Recticel KBC Small Cap Conference – Brussels, 10 December 2015 1
Slide 2: Agenda
Agenda 1 Introduction to the Recticel Group 2 Strategy 3 Key highlights 9M2015 4 Financial situation 5 Outlook Full Year 2015 6 9M2015 Comments per Business Line KBC Small Cap Conference – Brussels, 10 December 2015 2
Slide 3: Recticel at a glance
Recticel at a glance ► Recticel is an important innovator in the industry, being the European #1 & Worldwide #2 in polyurethane applications ► Its activities are concentrated in Europe (94% of sales) and growing in Asia and USA ► Recticel generates, on a combined basis, sales of €1.28bn and REBITDA
Slide 4: Leading player offering specific polyurethane solutions to global customers
Leading player offering specific polyurethane solutions to global customers Global polyurethane markets¹ ► Global PU applications market of €50bn 17% ► Worldwide annual PU raw materials consumption of ~13.5 28% million tons Furniture ► Highly attractive PU applications market: Construction 12% Bro
Slide 5: Production process serving all 4 business lines
Production process serving all 4 business lines ► Type and characteristics of final products depend on the manufacturing process: 1 Laminated foaming resulting in rigid foam panels 2 Traditional foaming of raw materials resulting in flexible foam blocks or moulded parts 3 Sprayed raw materials fo
Slide 6: Significant synergies within the Group
Significant synergies within the Group 1 Strong technology synergies throughout the organization ► Centralized R&D as a platform for innovations in multiple segments ► Sharing of experience and know-how in both foam manufacturing and converting leading to cross-fertilization throughout the organizat
Slide 7: Agenda
Agenda 1 Introduction to the Recticel Group 2 Strategy 3 Key highlights 9M2015 4 Financial situation 5 Outlook Full Year 2015 6 9M2015 Comments per Business Line KBC Small Cap Conference – Brussels, 10 December 2015 7
Slide 8: Strategy focused on being the leading provider of high value added solutions
Strategy focused on being the leading provider of high value added solutions in its core markets… ► The building blocks of the Group’s strategy are illustrated as follows: Business Line Strategy Innovation Simplification International Expansion Sustainability ► Overall group wide strategic prioritie
Slide 9: Implemented through a thorough business line assessment
…implemented through a thorough business line Innovation Business Line Strategy Simplification International Expansion assessment… Sustainability Improve profitability ► The strategic plan prioritizes resource allocation through efficiency + Selective growth based on the relative attractiveness of t
Slide 10: Leading to differentiated business line strategies
Business Line Strategy International Innovation Simplification Expansion …leading to differentiated business line strategies Sustainability ►Growth ► Strong growth through driven by: international expansion, innovation and the Growth through international expansion, innovation Innovation and and t
Slide 11: Recent innovations and product launches in Insulation
Large number of recent innovations and product Innovation Business Line Strategy Simplification International Expansion launches in the Insulation business line Sustainability ► Product line Home® (all-in-one isolation ► Iso-finish® (external insulation concept) system for DIY) ► Lambda-21 Eurowall
Slide 12: Launch of GELTEX inside in Bedding
Launch of GELTEX® inside, the largest and most Innovation Business Line Strategy Simplification International Expansion important innovation of the last decade in Bedding Sustainability ► GELTEX® inside combines optimal pressure distribution, ideal support and maximum permeability/climate control pr
Slide 13: New generation of foams in Flexible Foams
New generation of foams launched within the Innovation Business Line Strategy Simplification International Expansion Flexible Foams business line Sustainability ► New acoustic foams leading to new contracts ► Development of new comfort foams: for Boeing and SpaceX GELTEX® and angelpearl® for the bed
Slide 14: Launch of Colo-sense Lite in automotive
Launch of Colo-sense® Lite, a new high Innovation Business Line Strategy Simplification International Expansion performance skin, in the automotive business line Sustainability ► Colo-sense® Lite high performance skin allows for a 25% weight reduction, responding to the OEM’s constant search for lig
Slide 15: Overall simplification of the Group
Overall simplification of the Group leading to Innovation Business Line Strategy Simplification International Expansion increased efficiency and reduced fixed costs Sustainability Realized streamlining 2010-2015 Future actions 2016-2017 ► # Locations: ► The Group is committed to continue its efforts
Slide 16: International expansion strategy
International expansion strategy backed by strong Innovation Business Line Strategy Simplification International Expansion market positions in Europe Sustainability ► Recticel is a true international group pursuing further growth through international expansion inside and outside Europe Recently rea
Slide 17: Embracing sustainability to create value for all stakeholders
Embracing sustainability to create value for all Innovation Business Line Strategy Simplification International Expansion stakeholders Sustainability Embracing sustainability creates a significant competitive edge, reduces cost, fosters innovation and thus creates value for all stakeholders ► Priori
Slide 18: Agenda
Agenda 1 Introduction to the Recticel Group 2 Strategy 3 Key highlights 9M2015 4 Financial situation 5 Outlook Full Year 2015 6 9M2015 Comments per Business Line KBC Small Cap Conference – Brussels, 10 December 2015 18
Slide 19: Key highlights 9M2015
Key highlights 9M2015 1 Successful capital increase of € 75.9 million (13 May 2015) 2 Divestment of 50% participation in joint venture KTII (Insulation) (February 2015) 3 Sales (9M2015) +5.1%, driven mainly by Insulation (+9.2%) and Bedding (+6.7%) 4 Operational issues in Flexible Foams (cfr 4Q2014)
Slide 20: Key market developments 9M2015
Key market developments 9M2015 ► Tailwinds • € depreciation vs $ (-11%), £ (-9%) and Yuan (-8%), together with increasing volatility, • Oil price decreased to 40$/bl leads to average raw material price reduction • No inflation, except on labor ~2% ► Macro-environment • Automotive : solid growth in A
Slide 21: European building markets development
New residential building markets have been negative in 2012 & 2013, stabilised in 2014, and expected to grow slightly in 2015 Development of building market in Europe 2011-2017F (%)* Total building Total New Reno Forecast 2011 2012 2013 2014 2015 2016 2017 Austria 3,2 2,9 -2,0 0,1 0,6 0,6 0,5 1,1 1,
Slide 22: European Bedding markets shrunk in 2013 and 2014
European Bedding markets have shrunk in value in 2013 and 2014. Data only partially available for 2015, but slight growth expected Bedding market (mattresses and bases), value development vs previous period, % Country 2013 2014 2015 H1 DE * -7% 7% 4% BE 0% -2% n/a AT -3% -8% n/a CH ** -7% -1% -17% N
Slide 23: Automotive – EU28 new passenger car registrations
Automotive – EU28 new Passenger car registrations increased by 8.2% yoy in 2015, but remained ~20% below 2007 October October %Change Jan - Oct Jan - Oct %Change '15 '14 15/14 '15 '14 15/14 AUSTRIA 25,149 26,945 -6.7 262,342 264,308 -0.7 BELGIUM 39,474 38,115 +3.6 431,996 426,210 +1.4 BULGARIA 1,941
Slide 24: Automotive – China new passenger car registrations
Automotive – China new Passenger car registrations increased by 4% in 2015 Monthly passenger car sales in China from January 2014 to October 2015, by country of brand origin (in 1,000 units) China Germany Japan United States South Korea France 2500 2000 Sales in 1,000 units 1500 1000 500 0 Jan '14 F
Slide 25: 1H2015: Sales +4.7%, REBITDA +15.7%, REBIT +29.1%
1H2015 : Sales +4.7%, REBITDA + 15.7%, REBIT +29.1% 1H2014 in million EUR 1H2015 D (restated)1 Flexible Foams 16,6 20,4 23,1% Bedding 3,3 6,0 79,9% Insulation 12,4 16,1 29,9% Automotive 12,8 9,5 -25,3% Corporate ( 8,0) ( 9,2) 14,1% TOTAL COMBINED REBITDA 37,0 42,9 15,7% 1 Restated for IFRIC 21 and e
Slide 26: 3Q2015 and 9M2015 Trading Update
3Q2015 and 9M2015 Trading Update ► Restated like-for-like1 3Q combined sales have increased by +5.9%; and 9M combined sales have increased by +5.1%. ► All business lines have grown KBC Small Cap Conference – Brussels, 10 December 2015 26
Slide 27: Agenda
Agenda 1 Introduction to the Recticel Group 2 Strategy 3 Key highlights 9M2015 4 Financial situation 5 Outlook Full Year 2015 6 9M2015 Comments per Business Line KBC Small Cap Conference – Brussels, 10 December 2015 27
Slide 28: Financing of the Company in 2 steps
Financing of the Company in 2 steps 1. Successful placement of a rights offering with subscription rights of EUR 75.9 million • 86.1% take up of the rights offering • 3.6x more demand than offer during the subsequent private placement • Share price increased by 1€ (5.25€) on top of theoretical post
Slide 29: Use of proceeds of the net 73m€ rights issue
Use of proceeds of the net 73m€ proceeds of the rights issue 1 Strengthening Recticel’s balance sheet structure and decrease the gearing ratio ► Initial proceeds will be fully used to repay the revolving credit facility (lines remaining available 50% until December 2016) in order to reduce the geari
Slide 30: Lower net financial debt as a consequence of the capital increase
Lower net financial debt*, as a consequence of the capital increase ► Combined versus Consolidated net financial debt* 350 300 317,5 300,5 in milliion EUR 250 267,0 261,1 200 194,5 150 189,7 172,6 165,1 157,6 168,3 149,6 100 137,7 138,2 123,1 95,5 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 31: Agenda
Agenda 1 Introduction to the Recticel Group 2 Strategy 3 Key highlights 9M2015 4 Financial situation 5 Outlook Full Year 2015 6 9M2015 Comments per Business Line KBC Small Cap Conference – Brussels, 10 December 2015 31
Slide 32: Outlook
Outlook In the first nine months of 2015, Recticel experienced a more favorable business environment which, supported by successful market initiatives and despite growing uncertainty and volatile global economic context, will lead to combined sales growth for the full year 2015. Combined REBITDA1 fo
Slide 33: Agenda
Agenda 1 Introduction to the Recticel Group 2 Strategy 3 Key highlights 9M2015 4 Financial situation 5 Outlook Full Year 2015 6 9M2015 Comments per Business Line KBC Small Cap Conference – Brussels, 10 December 2015 33
Slide 34: Insulation: #2 position in Europe backed by structural growth drivers
#2 position in Europe backed by structural growth drivers and innovation capacity Market dynamics Key strengths ► Structurally growing market for thermal insulation in ► #2 player in Europe in PUR/PIR with an estimated Europe market share in the European PUR/PIR segment of Driven by the EU regulat
Slide 35: Insulation: financial performance driven by product launches
Financial performance driven by recent product launches and expansion projects Key financials Recent developments in million € 1H2015 2014 2013 2012 ► Still relatively soft construction markets Sales 113.3 227.0 220.0 220.7 ► Price erosion in some of the most competitive REBITDA 16.1 27.1 27.7 36.0
Slide 36: Bedding: strong growth of PU foam market
Strong growth of PU foam market supporting further strengthening of Recticel’s leading position Market dynamics Key strengths ► Addressable market of €1.7bn ► #2 player in Europe with an average estimated Total European market of ~€3bn market share of ~17% in its key markets Total Global market
Slide 37: Bedding: GELTEX inside as platform for growth
Successful introduction of GELTEX® inside as a platform for future growth Key financials Recent developments in million € 1H2015 2014 2013 2012 ► Successful commercial performance of innovative Sales 143.5 281.6 283.0 276.5 GELTEX® inside products REBITDA 6.0 13.5 12.8 13.9 ► Improved product-mix du
Slide 38: Flexible Foams: #1 position in Europe
#1 position in Europe and recent innovations adding to the capacity to increase global reach Market dynamics Key strengths ► European market of ~5.9m tons ► #1 provider of comfort foams and technical foams in Expected volume CAGR ‘11-’18 of +5% Europe ► Very versatile material used in a wide varie
Slide 39: Flexible Foams: new generation of innovative foam products
New generation of innovative foam products leading to important contract wins Key financials Recent developments in million € 1H2015 2014 2013 2012 ► Improved product/market-mix (i.e. Technical Foams) Sales 305.9 593.0 583.4 588.3 ► Higher sales in non-European markets REBITDA 20.4 27.7 30.3 29.2 as
Slide 40: Automotive: unique technology serving a recovering industry
Unique technology and strong position serving a recovering industry Market dynamics Key strengths ► 2008-2010: Significant disruptions due to global Interiors economic crisis ► Unique patented Interiors technology (Colo-fast® Industry is recovering and resuming growth Spray and Colo-Sense® Lite) f
Slide 41: Automotive: recovering sales supported by strong order books
Recovering sales supported by strong order books Key financials Recent developments in million € 1H2015 2014 2013 2012 ► As expected, higher start-up costs due to newly Sales 142.9 264.0 258.4 289.7 acquired Interiors programs - with new production REBITDA 9.5 14.9 18.8 24.2 sites in China (Changchu
Slide 42: Thank you for your attention! Q&A
Thank you for your attention! Q&A KBC Small Cap Conference – Brussels, 10 December 2015 42
Slide 43: Contacts
Contacts Recticel International Headquarters Investor Relations Press 2, avenue des Olympiades/Olympiadenlaan, 2 Michel De Smedt Olivier Chapelle, CEO B-1140 Brussels Email: desmedt.michel@recticel.com Email: chapelle.olivier@recticel.com Tel: +32 (0)2 775 18 11 Tel: +32 (0)2 775 18 09 Tel: +32 (0)2