Pyxus International, Inc. · OTC:PYYX
Pyxus International — Alliance One International — Investor Presentation (September 2015)
26 slides from Pyxus International's investor presentation, Sep 29, 2015
Slide 1: September 2015 Investor Presentation
September 2015 - Investor Presentation Exhibit 99.1
Slide 2: Legal Disclosures
2 Legal Disclosures Forward-Looking Statements . This presentation may include “forward - looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations of future events. Such statements may include, but are not limited to,
Slide 3: Industry & Company Overview
3 Industry & Company Overview
Slide 4: Company Facts
4 Company Facts Company Name Alliance One International, Inc Headquartered Morrisville, North Carolina, USA Website www.aointl.com Stock Exchange NYSE Ticker AOI Annual Revenues $2.1 billion Stock Price $23.84 Shares Outstanding 8.9 million 1 - Data as of March 31, 2015, shares outstanding adjusted
Slide 5: Our place in the Industry
5 Our place in the Industry Tobacco Growers Tobacco Growers Tobacco Leaf Merchants (e.g. AOI) Tobacco Leaf Merchants (e.g. AOI) Cigarette Manufacturers Cigarette Manufacturers Key Services Provided Contracting Agronomy Segregating Blending Processing Re-drying Packaging Shipping Key Services Provide
Slide 6: Global Footprint
6 Global Footprint 6 We source tobacco in over 35 countries Source: Internal AOI data, estimated market share excludes manufacturers’ vertically integrated volumes *New AOI origin
Slide 7: Global Footprint
Global Footprint 7 We are strongly positioned in core or flavor markets 30% - 40% 50 %– 55%* 20% - 25% 30% - 35% 30% - 40% Source: Internal AOI data, estimated market share excludes manufacturers’ vertically integrated volumes *New AOI origin
Slide 8: Customer Base
8 Customer Base Manufacturer World Market Share (2014) 1 Top 5 Total Market Share 83.1% China National Tobacco Corp (CNTC) 44.2% Philip Morris International Inc 14.6% British American Tobacco Plc 10.7% Japan Tobacco Inc 8.9% Imperial Tobacco Group Plc 4.7% Our customer base includes the world’s larg
Slide 9: Cigarette Consumption
9 Cigarette Consumption 2,111 2,396 2,155 China (Sticks in Billions) RoW (Sticks in Billions) China Dom Crop Source: Euromonitor and TMA 1,949 2,317 2,543 3,646 3,449 3,119 2006 2007 2008 2009 2010 2011 2012 2013 2014 45% 40% 35% China Dom Crop (Green kilos in millions) RoW Consumption (Sticks in bi
Slide 10: Total Value of Tobacco Market
10 Total Value of Tobacco Market Retail Retail Retail Manufacturer Manufacturer Manufacturer Leaf Leaf Leaf $835 Billion Retail value of World Tobacco Market in 2015 Includes tax (excise or other) $319 Billion $43 Billion Assumption: tax represents 55% of retail value and retailer margins of 15% Ass
Slide 11: Reversal of Partial Vertical Integration
11 Reversal of Partial Vertical Integration JTI adds sourcing leaf directly in the USA, Malawi and Brazil PMI commences self sourcing in Brazil in addition to purchases from dealers PMI moves to 100% dealer sourcing for US & Canadian leaf BAT exits leaf growing in Uganda, AOI enters on their behalf
Slide 12: Sustainability and Regulation
12 Sustainability and Regulation Customer Requirement AOI Competitive Advantage Compliant, High-Quality Tobacco AOI has farmer education and monitoring programs in all of the origins from which we source tobacco. Our agronomists provide educational support to growers to help them produce a high-qual
Slide 13: Value Added Services
13 Value Added Services Cut Rag Maker Packer • Capital requirements for equipment make it cost prohibitive for smaller manufacturers to produce their own cut rag • Cut rag is also used in cigar, pipe and roll your own tobacco products • AOI currently has two new factories to meet global business req
Slide 14: E-Liquids
14 E-Liquids Purilum is a 50/50 joint venture established in April 2014 between Alliance One’s subsidiary, AOSP Investments, LLC, and an affiliate of IOTO International. Its primary business activity is the formulation and production of e-liquids used in the electronic cigarette market (cig-a-like a
Slide 15: Brazilian Joint Venture
15 Brazilian Joint Venture China Brasil Tabacos (“CBT”) is a 49/51 joint venture between Alliance One’s Brazilian subsidiary, Alliance One Brasil Exportadora de Tabacos and China Tobacco International’s Brazilian subsidiary, China Tabaco Internacional do Brasil CBT is China Tobacco International’s f
Slide 16: Financials
16 Financials
Slide 17: Financial Data - Income Statement
17 Financial Data - Income Statement 1 ) Non USGAAP measure, please see appendix for calculation 2) Total debt less cash and cash equivalents, please see appendix for calculation 3) Includes reserves for doubtful customer receivables, please see appendix 4) Net Debt divided by Adjusted EBITDA, value
Slide 18: Financial Data - Free Cash Flow
18 Financial Data - Free Cash Flow USD Millions FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Adjusted EBITDA Less: Cash Interest Cash Tax CapEx FCF before in W/C (9) Core operations provide sufficient free cash flow to reduce long term debt AOI finances working capital requirements with short term bank l
Slide 19: Cost Savings Program
19 Cost Savings Program Global restructuring program announced in March 2015 anticipated to provide between $30 and $35 million in annual recurring cost savings Total cost of approximately $11.6MM ($1.8MM cash) recorded through June 30, 2015 The initial phase is anticipated to be principally complet
Slide 20: Stock Price
20 Stock Price Brazil VI reversal, cost savings and announced reverse stock split Out of compliance with NYSE and S&P Downgrade Regained NYSE Compliance Approval of stock split and FY15 YE results Removed from Russell Q3 FY15 results & removed from S&P Small Cap 600 & Moody’s downgrade Q1 FY16 Resul
Slide 21: FX Rates and Green Prices
21 FX Rates and Green Prices Tobacco is primarily sold to our customers in US dollars, except in Europe The strengthening of the US dollar versus multiple local currencies has resulted in lower tobacco and operating costs Inflationary adjustments to local green buying prices offset some of the cost
Slide 22: Conclusion
22 Conclusion AOI is strongly positioned in core leaf tobacco sourcing markets Highly efficient, low-cost supply chain Strong, long-term customer relationships AOI’s sustainable and traceable grower base are key to future growth opportunities Manufacturer’s continued VI reversal strategies present o
Slide 23: Nia
Nia TODAY. TOMORROW .TOGRERHER thr~ ALLIANCEOne
Slide 24: Appendix
24 Appendix
Slide 25: Detailed Income Statement
25 Detailed Income Statement The earnings per share data in the table above reflects the outstanding shares at the respective reporting date and does not take into consideration the reverse stock split that occurred at the end of June 26, 2015. (in thousands, except per share amounts) 2011 2012 2013
Slide 26: Adjusted EBITDA (Annual) and Net Debt
26 Adjusted EBITDA (Annual) and Net Debt (in thousands) 2011 2012 2013 2014 2015 U.S. GAAP - Net Income (loss) (71,551) $ 29,451 $ 24,013 $ (86,659) $ (15,425) $ Plus: Interest expense 102,696 106,804 114,557 116,798 113,355 Plus: Income tax expense 107,460 25,039 27,992 38,942 22,939 Plus: Deprecia
Alliance One International — Investor Presentation (September 2015) on 6ix