Sig Group Ag · SIX:SIGN
Sig — SIG Combibloc Group — Non-Deal Roadshow (August 2020)
35 slides from Sig's roadshow presentation, August 2020
Slide 1: SIG Combibloc Roadshow Presentation
SIG COMBIBLOC ROADSHOW PRESENTATION CEO ROLF STANGL CFO SAMUEL SIGRIST AUGUST-SEPTEMBER 2020
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is not for use within provided in this presentation and we disclaim any liability for the use structure. They may not be comparable to other similarly titled any country or jurisdiction or by any persons where such use would of it. Neither SI
Slide 3: 28 July 2020 H1 2020 Results
3 28 JULY 2020 H1 2020 RESULTS
Slide 4: H1 2020 Results
H1 2020 RESULTS
Slide 5: H1 2020 Financial Highlights
H1 2020 FINANCIAL STRONG HIGHLIGHTS TOP LINE GROWTH CORE REVENUE ADJUSTED EBITDA ADJUSTED NET FREE CASH FLOW ROCE (LTM) €849.7 MILLION INCOME +8.6% €215.7 €79.6 €28.1 24.5% AT CONSTANT MILLION (H1 MILLION MILLION CURRENCY 2019: €205.5m) (H1 2019: (H1 2019: €36.8m) €80.5m) CORE REVENUE ADJUSTED ADJUS
Slide 6: Q2 2020 COVID-19 Overview: Business Continuity During Lockdowns
Q2 2020 COVID-19 OVERVIEW BUSINESS CONTINUITY DURING LOCKDOWNS JAN FEB MAR APR MAY JUN JUL PRODUCTION CONTINUED AT ALL FACTORIES GERMANY Start of lockdown POLAND Infection peak Lockdown ease OFFICES BEGAN TO RE-OPEN RUSSIA IN MAY BUT REMAIN CLOSED SPAIN IN THE AMERICAS FRANCE CHINA POSITIVE IMPACT F
Slide 7: EMEA Summary
EMEA EUROPE SUMMARY • Consumer buying surge in March followed by supply chain and retail re-stocking DAIRY WEEKLY SALES • Significant acceleration of factory output Variation vs. PY (%) • Demand remained strong in April-May with 100% Spain increased at-home consumption 80% Germany 60% France • Dairi
Slide 8: APAC Summary
APAC CHINA SUMMARY • Dairy consumption sharply down during Chinese New Year • Loss of on-the-go business during lockdown • Significant customer safety stock-building in Q1: stocks consumed in Q2 SOUTH EAST ASIA • Lockdowns continued into May/June • Most SIG business is single-serve packs often consu
Slide 9: Americas Summary
AMERICAS LITTLE EFFECT FROM COVID-19 IN Q1 SUMMARY UNINTERRUPTED PRODUCTION AT CURITIBA PLANT DESPITE DIFFICULT CONDITIONS IN BRAZIL BUOYANT SALES TO DAIRY CUSTOMERS IN MEXICO; SOME STOCK-BUILDING IN Q2 US FOOD SERVICE SALES LOWER IN Q2 DEPLOYMENT AND RAMPING UP OF NEW FILLERS IN BRAZIL ADVERSE FX A
Slide 10: Summary Outlook Full Year 2020
SUMMARY OUTLOOK FULL YEAR 2020 STOCK OVERHANG YEAR END RALLY LIKELY TO ASIA PACIFIC HAS AT CUSTOMER AND BE REDUCED HISTORICALLY BEEN RETAIL LEVEL EXPECTED FASTEST GROWING REGION TO AFFECT H2 PERFORMANCE BUT GEARED TO STRONG Q3 2019 ON-THE-GO CONSUMPTION BASE OF COMPARISON CORE REVENUE GROWTH ADJUSTE
Slide 11: Revenue Evolution Half Year and Q2
REVENUE EVOLUTION BROAD GEOGRAPHIC SPREAD HALF YEAR AND Q2 ENABLING ROBUST GROWTH H1 2020 +8.6%1 Q2 2020 +8.8%1 € MILLIONS € MILLIONS 21 -1 10 -8 28 20 -12 850 860 802 794 4 -1 7 -4 -12 22 12 CONSTANT CURRENCY CONSTANT CURRENCY 460 467 GROWTH RATE 439 112 435 GROWTH RATE 120 +7.8% +7.0% +16.4% +12.2
Slide 12: Adjusted EBITDA Evolution Half Year and Q2
ADJUSTED EBITDA EVOLUTION H1 ADJ EBITDA MARGIN 26.9% HALF YEAR AND Q2 EXCLUDING CURRENCY IMPACT H1 2020 25.1%1 Q2 2020 28.3%1 € MILLIONS € MILLIONS 3 0 -11 28 9 0 -19 4 4 0 -4 -1 0 9 206 216 187 112 120 120 132 120 FX NET OF FX TOP LINE RAW PRODUCTION JV SGA MISC 2020 H1 FX NET OF FX TOP LINE RAW PR
Slide 13: Currency Update: EBITDA Neutral in Q2
CURRENCY UPDATE EBITDA NEUTRAL IN Q2 EUR/BRL EXCHANGE RATE EUR/THB EXCHANGE RATE Q1 EBITDA CURRENCY IMPACT H1 2020 H1 2020 €MILLIONS (YOY) 7,00 37,00 BALANCE SHEET ITEMS REVALUED AT END MARCH RATES 13 6,50 36,00 REALISED 6,00 CURRENCY IMPACT 6 5,50 35,00 5,00 H1 EBITDA CURRENCY IMPACT €MILLIONS (YOY
Slide 14: Adjusted EBITDA Margin Development by Region
ADJUSTED EBITDA MARGIN DEVELOPMENT BY REGION EMEA APAC AMERICAS ▪ Strong top line growth ▪ Negative impact from currencies ▪ Strong revenue growth ▪ Production efficiencies in Q2 ▪ Loss of high margin Chinese New ▪ Negative impact from Brazilian Year gifting business Real depreciation ▪ Dilution fro
Slide 15: Adjusted Net Income Stable Despite Higher Tax Rate
ADJUSTED NET INCOME STABLE DESPITE HIGHER TAX RATE €million 2020H1 2019H1 PROFIT FOR THE PERIOD 10 25 Financing costs and exchange rate impacts 7 (2) Net effect of early repayment of secured term loans 20 - PPA depreciation and amortisation 64 69 Adjustments to EBITDA 2 3 Of which: Share of profit o
Slide 16: Debt Refinancing Concluded June 2020
DEBT REFINANCING CONCLUDED JUNE 2020 PREVIOUS NEW STRUCTURE COST OF NEW DEBT SUSTAINABILITY- STRUCTURE OF DEBT LINKED LOAN OF DEBT TERM LOAN AND RCF: FACILITIES ONE UNSECURED EURIBOR +100bps TWO SECURED TERM TERM LOAN: • REDUCTION IN LOANS: ▪ €550M DUE JUNE 2025 2023 NOTES: 1.875% CARBON ▪ €1.25BN D
Slide 17: Leverage
LEVERAGE DIVIDEND PAYMENT IN Q2 €million 2020H1 2019A CASH1 160 261 TERM LOANS 550 1’561 NOTES ISSUES 1’000 - LEASE LIABILITIES 60 54 NET TOTAL DEBT 1’450 1’353 TOTAL NET LEVERAGE RATIO 2.9x 2.8x (1) Includes restricted cash Differences due to rounding 17 28 JULY 2020 H1 2020 RESULTS
Slide 18: Free Cash Flow
FREE CASH FLOW CASH GENERATION WEIGHTED TO H2 €million 2020H1 2019H1 NET CASH FROM OPERATING ACTIVITIES 128 121 Dividends received from joint ventures 7 7 Acquisition of property, plant and equipment and intangible assets (100) (87) Payment of lease liabilities (7) (4) FREE CASH FLOW 28 37 CASH CONV
Slide 19: Working Capital
WORKING CAPITAL WORKING CAPITAL REMAINS WELL CONTROLLED €million 2020H1 2019H1 2019A INVENTORY 190 194 167 TRADE RECEIVABLES 99 90 162 TRADE PAYABLES (176) (165) (180) NET WORKING CAPITAL 113 118 150 OTHER RECEIVABLES / PAYABLES1 (186) (121) (226) OPERATING NET WORKING CAPITAL (73) (3) (76) (1) Incl
Slide 20: Capital Expenditure
CAPITAL NEW PLANT IN CHINA EXPENDITURE UNDER CONSTRUCTION €million 2020H1 2019H1 PROPERTY, PLANT & EQUIPMENT 31 20 GROSS FILLER CAPEX 69 66 UPFRONT CASH (20) (26) NET FILLER CAPEX 49 41 TOTAL NET CAPEX 80 61 TOTAL NET CAPEX AS % REVENUE 9.3% 7.6% ADJUSTED EBITDA - NET CAPEX MARGIN 15.8% 18.0% Differ
Slide 21: Financial Guidance
FINANCIAL SIGNIFICANT CASH FLOW GUIDANCE GENERATION FY 2020E CORE REVENUE GROWTH 4 - 6% (CONSTANT CURRENCY) Previously 6 – 8% ADJ. EBITDA MARGIN 27 – 28% Lower end of range EFFECTIVE TAX RATE 28 - 29%1 NET CAPEX (% REVENUE) 8 - 10% Mid/lower end of range DIVIDEND PAYOUT 50 - 60% OF ADJUSTED NET INCO
Slide 22: Proven Strategy to Drive Future Growth
PROVEN STRATEGY FUNDAMENTAL DRIVERS TO DRIVE FUTURE GROWTH REMAIN INTACT 2008 2014 2019 Core revenue by region Core revenue by region Core revenue by region AMERICAS Non-EMEA 6% Non-EMEA Non-EMEA 23% 46% 57% AMERICAS AMERICAS ASIA PACIFIC 17% 19% 17% EMEA 43% EMEA ASIA PACIFIC 54% 29% ASIA PACIFIC 3
Slide 23: Broad-Based Innovation and Geographic Expansion
BROAD-BASED INNOVATION AND GEOGRAPHIC EXPANSION 23 28 JULY 2020 H1 2020 RESULTS
Slide 24: Background
BACKGROUND
Slide 25: Aseptic Carton Packaging Shows Highest Growth Rates
ASEPTIC CARTON PACKAGING SHOWS HIGHEST GROWTH RATES 579B 533B 229B 92B kg of packaged food Litres of beverages Litres of ambient packaging Litres of aseptic carton Additional categories1 3B Additional 579B KG OF geographies2 22B PACKAGED FOOD Packaged food Other substrates 137B 579B Other 220B Core
Slide 26: Shaping the Future of Aseptic Carton Across Regions
SHAPING THE FUTURE OF ASEPTIC CARTON ACROSS REGIONS AMERICAS EUROPE 3.4% 0.1% 33 33 33 25 26 21 2017 2022 2023 2017 2022 2023 MEA APAC 5.7% 6.5% 35 38 25 17 18 13 2017 2022 2023 2017 2022 2023 CAGR '17-'22 Source: Company information 26 AUGUST 20 SIG COMBIBLOC - CMD
Slide 27: Two Distinct Aseptic Technologies
TWO DISTINCT ASEPTIC TECHNOLOGIES Production Filling H2O2 sterilisation Paperboard H2O2 drying Polyethylene (PE) Filling nozzle 1 Coating Longitudinal sealing SIG Printing Shipment Filling nozzle 2 Steam injection PE “Sleeve System” Aluminium Sealing PE Cutting in sheets Polyethylene (PE) Coating Cu
Slide 28: Key Role in Food & Beverage Value Chain
KEY ROLE IN FOOD & BEVERAGE VALUE CHAIN Proprietary differentiated technology Essential role in preserving food quality and safety Long term customer relationships Serving non-discretionary food and beverage categories Complete solutions offering enabling customers to maximise efficiency and product
Slide 29: Sleeve & Filling Technology
SLEEVE & FILLING TECHNOLOGY SIG PLATFORM ENABLES A BROAD AND FLEXIBLE OFFERING Rapid switching to cater for changing needs while keeping asset utilisation high VOLUME AND ▪ Up to 16 product variants possible on one FORMAT filler FORMAT FLEXIBILITY FLEXIBILITY ▪ Range of fill volumes from 80ml to 2,0
Slide 30: Building on Long-Term Customer Partnerships
BUILDING ON LONG-TERM CUSTOMER PARTNERSHIPS WITH GLOBAL AND REGIONAL LEADERS TOP 10 CUSTOMERS % OF 2019A LENGTH OF CUSTOMER SLEEVES RELATIONSHIP REVENUE 1 8% >15 YEARS 2 6% >10 YEARS 3 4% >40 YEARS 4 4% >35 YEARS 5 3% >30 YEARS 6 3% >30 YEARS 7 2% >35 YEARS 8 2% >10 YEARS 9 2% >5 YEARS 10 2% >15 YEA
Slide 31: Razor / Razorblade Business Model Generating Stable Cash Flows
RAZOR / RAZORBLADE BUSINESS MODEL GENERATING STABLE CASH FLOWS FILLERS 6% SLEEVES & CLOSURES 87% SERVICE 7% (OF TOTAL REVENUE2) (OF TOTAL REVENUE2) (OF TOTAL REVENUE2) Key criteria for investment decisions Attractive IRR FILLER INSTALLED GROSS PROFIT DYNAMIC PAYBACK IRR BEFORE DEPRECIATION CUM. CASH
Slide 32: Cyclical Resilience in Capital Investment
CYCLICAL RESILIENCE IN CAPITAL INVESTMENT CORE REVENUE1 GROWTH % ▪ Co-investment opportunities limited in years when CONSTANT CURRENCY % customers trim investment 8% 5% budgets ▪ Lower filler capex in one year does not impair future TOTAL REVENUE (€M) 1.767 1.568 1.563 1.590 1.644 1.546 growth 1.483
Slide 33: Combatting Climate Change and Increasing Recycling
COMBATTING CLIMATE CHANGE AND INCREASING RECYCLING RESPONSIBLE COMPANY RESPONSIBLE SOURCING RESPONSIBLE PRODUCTS Pursuing a net positive corporate footprint in Striving for certified sustainable supply of Innovating and delivering smarter solutions with the long run all materials, products and servi
Slide 34: Lowest Carbon Footprint: Cartons Win Every Time
LOWEST CARBON FOOTPRINT: CARTONS WIN EVERY TIME LIQUID DAIRY NON-CARBONATED FOOD kg CO2 equivalent per packaging required for 1,000L UHT milk SOFT DRINKS kg CO2 equivalent per packaging required for 1,000L food kg CO2 equivalent per packaging required for 1,000L non-carbonated soft drinks -45% -70%
Slide 35: Thank You
THANK YOU
SIG Combibloc Group — Non-Deal Roadshow (August 2020) on 6ix