Grupo Rotoplas Sab De Cv · BMV:AGUA
Grupo Rotoplas Sab De Cv — Q2 2019 Earnings Presentation
32 slides from Grupo Rotoplas Sab De Cv's earnings presentation, August 2019
Slide 1: Corporate Presentation Second Quarter 2019
Corporate Presentation Second Quarter 2019
Slide 2: Forward-looking statements disclaimer
/potopl2s: This presentation contains certain forward-looking statements and information relating Grupo Rotoplas S.AB. de C.V. and its subsidiaries (collectively, “ROTOPLAS”) that are based on its knowledge of present facts, expectations and projections, circumstances and assumptions about future ev
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 Humanity
Water Challenges for Humanity people worldwide live without access to adequate sanitation services of the world’s population live in areas that have water scarcity at least once a month trillion market opportunity by 2028 Source: The UN World Water Development Report. UN Water. Progress on sanitatio
Slide 7: Case Study — Mexico City
Case Study — Mexico City Shortages Poor quality ie. Nowadays in Tlalpan neighborhood the local government spends US$7M annually in truck water Source: Sacmex, KPMG. SS bade Bringing water in and out of tt Renewable water in in 4 3
Slide 8: Providing Solutions: Market leaders
PROVIDING SOLUTIONS Market leaders
Slide 9: The Company
The Company 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 Compared to 1994 2018 Water Market Leader 0 14 countries (14x)! 10,800+ points of service 3,300+ employees
Slide 10: Decentralized Water Solutions | Business Model
. . . Ze soplas... Decentralized Water Solutions | Business Model /potoplas TODAY > EVOLUTION B2C Cites Services B2D : @ Water Purifying e-commerce “e Residential e@ Commercial e Schools Storage @ Water flow a _e Treatment & heating ) @ Water treatment B2B and recycling 828: Business to Business 82C
Slide 11: Portfolio | Products and Services
Portfolio | Products and Services PRODUCTS SERVICES . STORAGE PURIFICATION Revenue by Solution emis ee Services 6% r ies ae he, ) DSS sn Water Tanks Cisterns Industrial Other / sw Residential Institutional WATER FLOW — ll, Bid S Products 94%, Pipes Valves Pumps Catch Pits Drinking Water Fountains .
Slide 12: 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 a Old infrastructure and poor city planning 2 8 Flow New technologies for cleaner and "zero leakage” water systems
Slide 13: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 14: With a Clear Purpose
WITH A CLEAR PURPOSE Sustainable long-term model “more and better water”
Slide 15: Competitive Advantages
Competitive Advantages - Value - Quality - Social Responsibility + Over 27,500 points of sale in America + Over 18,000 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 16: ESG focus
ESG focus /potopls:. 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 and
Slide 17: 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 18: Where We Are Going
WHERE WE ARE GOING Growth and value opportunities
Slide 19: CEO quote: 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 20: Flow | Transformational Program
3) . s. Flow | Transformational Program otoplas:. A. Profitability of B. Growth initiatives . current portfolio Innovation . Revenue levers a * Improve quality and execution on Talent development 1) Price & volume optimization growth opportunities ¢ ° . ities: °o Cost levers Clear set of opportuniti
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Slide 22: 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 23: 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 24: 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 25: Strong Financials
STRONG FINANCIALS With a sustainable focus
Slide 26: Track Record of Growth and Profitability
Track Record of Growth and Profitability /Apotoplas: aS... Revenue by Country Revenue by Solution MXN mm MXN mm CAG CAGR: 7.9% sao | $7,859 $8016 | 7 T% H / rT] ™ ' 56.860 : Mexico $6,660 : ME Products : Brazil ‘ 1™% H - $5,700 sass = ! $5,700 gs.55 | I Services 1% : ~ MI other 2% co : a — ae Argent
Slide 27: Sound Financials
Sound Financials 2 /potop!as:. MXN mm Debt amortization calendar Strong Balance Sheet to support growth 80% June 2019 $2,400 Cash and Equivalents $752 Other Assets $10,911 20% 6 Debt $2,925 $600 Other Liabilities $2133 |_| Total Liabilities 3 2019 2020 2027 Equity $6,604 Liabilities + Equity Interes
Slide 28: Why Own AGUA? Momentum
6 WHY OWN AGUA? Momentum
Slide 29: 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 Sales Rotop2e 4.5x CAGR: 12.3% 7,859 Mi O16 6,551 6,680 5,399 5,700 5.959 4,680 3,049 2.659 2.415 2,1
Slide 30: Multiple compression and investment momentum
Multiple compression and investment momentum EV/EBITDA EV/EBITDA ,NTM 16.0x 14.0x Lay LM stem am im “2.0 9.3x 7.5xX 6.8x 61x 5.7x Ww 1.6x TSX 1.6x 1.6x m.9x 10.0x Other Water 2) . 12.5x 12.3x 12.5x 12.8x 13.0x . Other Comp: . 12.1x 1.3x 1.9x 1.9x 1.9x 8.0x Rotoplas trading at a ~5O% discount to peer
Slide 31: 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 32: Rotoplas contact
rotoplas: S rotoplas.com & Rotoplas ST py Rotoplas Mexico in Rotoplas 9 01800 506 3000
Grupo Rotoplas S.A.B. de C.V. — Q2 2019 Earnings Presentation on 6ix