Grupo Rotoplas Sab De Cv · BMV:AGUA
Grupo Rotoplas Sab De Cv — Q4 2019 Earnings Presentation
33 slides from Grupo Rotoplas Sab De Cv's earnings presentation, 2020
Slide 1: Corporate Presentation Fourth Quarter 2019
Corporate Presentation Fourth Quarter 2019
Slide 2: Disclaimer
/potopl2s: The contents of this presentation, including text, graphics, images and other materials (“Content”), here contained, is for general information purposes only. While we endeavor to keep the information up to date and correct, Grupo Rotoplas, S.A.B. de C.V., makes no representations or warr
Slide 3: Investment Considerations
Investment Considerations WATER A nascent industry of opportunities Market leaders ? PROVIDING SOLUTIONS 3 WITH A CLEAR PURPOSE Sustainable long-term model “more and better water” 4 5 6 WHERE WE ARE GOING Growth and value opportunities STRONG FINANCIALS Sustainable focus WHY OWN AGUA? Momentum MEMBE
Slide 4: WATER: A nascent industry of opportunities
WATER A nascent industry of opportunities
Slide 5: Population Growth and Water Supply
Population Growth 2020 2050 Rural 3.0B 3.0B Total 7.0B 10.0B for non-agricultural uses increases than the population General population will grow by an average of Water Supply Imbalance in water distribution ] O countries control 6 O of the global fresh water supply nna ARPT Across the world, water
Slide 6: Water Challenges for Sectors of interest
Water Challenges for Sectors of interest for Rotoplas: Humanity people worldwide of the world’s population Water scarcity & live without access to live in areas that have water scarcity adequate sanitation services at least once a month quality Water management & Market Size & Dynamics recycling bil
Slide 7: Case Study — Mexico City
Case Study — Mexico City ior “Nowadays, 40% of inhabitants have problems Awl regarding water access and quality” Poor quality i.e. Nowadays in Tlalpan neighborhood the local government spends US$7M annually in water trucks CDMxX International Airport * The city's water system provides 8% of the supp
Slide 8: Providing Solutions: Market leaders
PROVIDING SOLUTIONS Market leaders
Slide 9: The Company
The Company Compared to 1994. 2.CAGR 2006 ~ LTMI9 1994 Storage Products () 1 country 800 direct clients 500 employees 3,000 points of sale 2 product lines 8 plants 1 innovation and development center Sales MXN 500mm EBITDA MXN 70mm 2019 Water Market Leader 0 14 countries (14x)! 18,800+ points of ser
Slide 10: Key metrics 2014 — 2019
Key metrics 2014 — 2019 $6,552 $8,086 A 23% Sales 40% 3% A-37% Government sales - 24,600+ A 24,600+ Treatment & purification units $860 OS) $1,413 A 64% EBITDA 2,703 3,299 A596 Employees 13% 4% A9% Client concentration 13.1% 17.5% A435pb EBITDA Margin 23,000+ 27,500+ A 4,S00+ Points of sale 41% (0)
Slide 11: Decentralized Water Solutions | Business Model
; . ; Apotoplas-. Decentralized Water Solutions | Business Model Rotor TODAY ------------------ 2-2-2022 22-22-55 --------- » EVOLUTION Products Services B2D @ Water Purifying e-commerce : mA - “e Residential e@ Commercial e Schools Storage @ Water flow ® “e Treatment & heating e Water treatment B2B
Slide 12: Portfolio | Products and Services
Portfolio | Products and Services Revenue by Solution 2019 Services 8% Products 92% EBITDA by Solution 2019 Services 3% Products 97% PRODUCTS STORAGE SERVICES 3 eh i : PURIFICATION nN Residential Institutional Drinking Water Fountains iF Water Tanks Cisterns Industrial Other WATER FLOW > ll. PHO Pip
Slide 13: Favorable Growth Drivers | Tailwinds
y Favorable Growth Drivers | Tailwinds /potoplas:. Storage Rapid urban growth = supply interruption > higher demand for water storage products Water demand > centralized system capacity (old infrastructure and poor city planning) a Growing trend of circular economy - use of recycled resins in water
Slide 14: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 15: With a Clear Purpose
WITH A CLEAR PURPOSE Sustainable long-term model “more and better water”
Slide 16: Competitive Advantages
Competitive Advantages - Value - Quality - Social Responsibility + Over 27,500 points of sale in America + Over 18,800 points of treatment, recycling and purification Source: Rotoplas. Information as of December 2018. ER OVATION /potopls bt + Focus on ESG (Environmental, Social & Governance) - Opera
Slide 17: ESG focus
ESG focus /potopls:. sy Q QQ +24,000 hrs! training collaborators on human rights, processes, health and safety, among other topics 53% independent By Board Members Audit, Compensation and Corporate -& Practices Committees chaired by independent Board Members GOVERNANC 8 +7,800! aos plumbers trained
Slide 18: Best Corporate Governance Practices
Best Corporate Governance Practices Board of Directors =J Audit fl Compensation Committee Committee © ag CY) | Corporate Practices Committee Sustainability Committee Our board of directors: /potoplas:. Transparency Diversity Innovation Equality Experience 53% Independent Members 5 international Boar
Slide 19: Where We Are Going
WHERE WE ARE GOING Growth and value opportunities
Slide 20: Flow program kick off: ROIC greater than WACC
“.throughout this transformation effort, Rotoplas should achieve a ROIC greater than WACC in less than 18 months” Carlos Rojas | CEO Flow’s program kick off August 2019
Slide 21: Flow | Transformation Program
Flow | Transformation Program 3) otoplas:.. A. Enhance performance of current portfolio * Revenue levers 1) Price & volume optimization * Cost levers 1) Procurement of materials 2) Manufacturing efficiency 3) Distribution costs optimization + Working capital levers 1) Inventory levels optimization 2
Slide 22: --- --- --- --- --- --- --- --- --- ---
--- --- --- --- --- --- --- --- --- ---
Slide 23: Water-as-a-Service Platform
Water-as-a-Service Platform __ 740 years contract WWTP Wastewater treatment and recycling plants Mega Trends S Vy FF _, ‘rotoplas: 7 Sytesa.w \ a x Building and leasing Water reuse & money saving’ Operation and Treated ‘ e \ Water maintenance wastewater ‘ discharge to sewage On-site treatment & recy
Slide 24: E-commerce platform in the USA
E-commerce platform in the USA The platform: #1 online retailer of water storage products ©) Jr, . . . : (Access to a nationwide manufacturing footprint through Tank Co. strategic alliance Jr, (©) Innovation in the water space (storage, septic) to address the pressing needs Jr, (3 Order online and p
Slide 25: Improve discipline in Capital Allocation
Improve discipline in Capital Allocation Resource allocation for: & JZ Organic growth Inorganic growth Share buybacks Coherence matrix approach Geo [Fe Process: Y — £ Project proposal Evaluation /potoplas: Dividend Payment Debt Payment any] mel Validation and Quarterly status authorization update Su
Slide 26: Strong Financials
STRONG FINANCIALS With a sustainable focus
Slide 27: Track Record of Growth and Profitability
Track Record of Growth and Profitability Revenue by Country MXN mm CAG $8,086 $5,700 5.353 _ 1% 20% -_ 64% Cs 2015 ‘2016 2017 2018 2019 Adjusted EBITDA by Solution MXN mm CAGR: 12.9% $1413 $1,004 sm $738 13% m% 2015 2016 2017 2018 2019 $2,039 25% mexico Bi Brazil MH other Argentina $2108 29% 22% a..
Slide 28: Sound Financials
Sound Financials MXN mm ee Debt amortization calendar Prior to second reopening 80% 20% $2,400 $600 — | 2019 2020 2027 After second reopening 100% $1,600 f T 32,400 lll 2019 2020 2027 Interest coverage* 7.6x 7.2x 5.6x 5.7x 52x 2015 2016 2017 2018 2019 “Considers interest payments from interest beari
Slide 29: ROIC vs Cost of Capital
-E ROIC vs Cost of Capital /potoplas:. Improvement in ROIC generating 23.3% an inflection point derived from: Low return « et divestment strategy Optimization of working capital \ Greater productive efficiency in the manufacturing process \ Strict discipline in expenses ROIC: LTM NOPAT / Average inv
Slide 30: Why Own AGUA? Momentum
6 WHY OWN AGUA? Momentum
Slide 31: Business Model Resilience
Business Model Resilience ©) Continuous growth ©) uble digit margins (O)Strong Management Mexico — 41 years Central America — 23 years Peru — 21 years Argentina - 21 years Brazil — 20 years USA — 5S years 4.6x CAGR: 12.4% v 777 8:086 6,551 6,660 5,399 5.700 353 4,680 3,049 2eso % Itt I 1 [| 2008 200
Slide 32: EV/EBITDA to growth
EBITDA CAGR EV/EBITDA to (18e-22e) growth GEBERIT EV/EBITDA to growth AQUA VENTURES TORO FLOWSERVE XYLEM EVOQUA COWAY FLUIDRA AGUA 2018-2022 EBITDA CAGRe
Slide 33: rotoplas.com
~ rotoplas.com & Rotoplas SIPs Rotoplas Mexico nn) Rotoplas 9 01800 506 3000