Vidrala Sa · BME:VID
Vidrala Sa — Investor Presentation (June 2016)
36 slides from Vidrala Sa's investor presentation, June 2016
Slide 1: Company Presentation June 2016
COMPANY PRESENTATION June 2016
Slide 2: Disclaimer
DISCLAIMER This presentation includes or may include representations or estimations concerning the future about intentions, expectations or forecasts of VIDRALA or its management. which may refer to the evolution of its business performance and its results. These forward looking statements refer to
Slide 3: Index
INDEX - General overview - Acquisition of Encirc - Business fundamentals - Financials 3
Slide 4: Vidrala Group - Overview
VIDRALA GROUP - Overview Vidrala is Western Europe’s fourth glass container manufacturer through eight complementary sites located in five countries (Spain, Portugal, Italy, Belgium and the United Kingdom). Vidrala supplies glass containers for a wide variety of products in the beverage and food ind
Slide 5: Our History: Key Milestones
OUR HISTORY: KEY MILESTONES 1985 – IPO 2003– 2007– 2015– Madrid and Acquisition of Acquisition of Acquisition of Bilbao stock one plant in one plant in Encirc exchanges Portugal Belgium 1965 1985 1989 2003 2005 2007 2015 1965 – 1989 – Vidrala 2005 – Acquisition of two Vidrala begins second greenfiel
Slide 6: Vidrala in Brief: Main Figures in 2015
VIDRALA IN BRIEF MAIN FIGURES IN 2015 803 6,114 million euros in sales million glass containers sold 1,560 161 customers million euros in EBITDA
Slide 7: Operating Profile
OPERATING PROFILE SALES (EUR in millions) OPERATING MARGINS (EBITDA over sales) 40,0% 800 700 35,0% 600 30,0% 500 25,0% 400 20,0% 300 15,0% 200 10,0% 100 5,0% 0 0,0% 2005 2010 2000 2000 2001 2002 2003 2004 2006 2007 2008 2009 2011 2012 2013 2014 2015 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 8: Cash Profile
CASH PROFILE EBITDA (EUR in millions) FREE CASH FLOW (EUR in millions) EBITDA 2011-2015: EUR 587,5 mm FREE CASH FLOW 2011-2015 EUR 315,3 mm 100 160 150 90 140 130 80 120 70 110 100 60 90 50 80 70 40 60 50 30 40 20 30 20 10 10 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 CASH CASH CONVERSION
Slide 9: Earnings
EARNINGS EARNINGS PER SHARE (EUR per share) 3,00 2,50 2,00 1,50 1,00 0,50 0,00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 10: Shareholder Remuneration
SHAREHOLDER REMUNERATION CASH DIVIDENDS (INCLUDES AGM ATTENDANCE BONUSES) EUR in millions 10
Slide 11: Business figures – FY 2015 Key Figures
Business figures – FY 2015 KEY FIGURES EUR in millions FY 2015 Change (yoy) Sales 802.6 +71.4% EBITDA 161.3 +48.6% EBIT 86.3 +24.1% Net income 60.9 +18.0% EPS (EUR/share) 2.46 +18.0% Free cash flow * 88.2 +22.0% Debt ** 404.3 -15.0% * Free cash flow ex-acquistion of Encirc, as detailed in this docum
Slide 12: Business figures – FY 2015 Sales
Business figures – FY 2015 SALES YEAR OVER YEAR CHANGE EUR mm YoY +5.0% FX GBP/EUR FX GBP/EUR 2014: 2015: 0.8061 0.7258 12
Slide 13: Business figures – FY 2015 Operating Profit (EBITDA)
Business figures – FY 2015 OPERATING PROFIT (EBITDA) YEAR OVER YEAR CHANGE EUR mm YoY -2.6% FX GBP/EUR FX GBP/EUR 2014: 2015: 0.8061 0.7258 13
Slide 14: Business figures – FY 2015 Operating Margins
Business figures – FY 2015 OPERATING MARGINS (EBITDA/SALES) QUARTER BY QUARTER CHANGE As a percentage of sales 2014 PROFORMA 2015 25,0% 23,2% 22.0% 20.4% 20.4% 20.0% 20.2% 20,7% 19.9% 20,0% 15,0% 10,0% 5,0% 0,0% FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER 14
Slide 15: Business figures – FY 2015 Cash Allocation
Business figures – FY 2015 CASH ALLOCATION USE OF CASH FULL YEAR 2015 EUR in millions 88.2 408.6 ENCIRC ORGANIC FREE CASH 16.0 ACQUISITION FLOW DIVIDENDS CLOSED ON 2015 AND BUYBACKS 404.3 JANUARY 14, 2015 2015 DEBT AS AT DEC 2015 67.9 DEBT AS AT DEC 2014 2.51x LTM EBITDA 15
Slide 16: Business figures – FY 2015 Debt Evolution
Business figures – FY 2015 DEBT EVOLUTION QUARTER BY QUARTER CHANGE 2015 EUR in millions 500 490.7 480 473.9 460 440.2 440 420 404.3 400 380 360 340 320 300 AS AT MARCH 31,2015 AS AT JUNE 30,2015 AS AT SEPTEMBER 30,2015 AS AT DECEMBER 31,2015 DEBT/ 2.94x 2.87x 2.72x 2.51x EBITDA 16
Slide 17: Business figures – FY 2015 Earnings per Share
Business figures – FY 2015 EARNINGS PER SHARE SINCE 2004 EUR per share YoY 3,00 +18% 2,50 2.46 2.08 2,00 1,50 1,00 0,50 0,00 2004 2006 2008 2005 2007 2009 2010 2011 2012 2013 2014 2015 17
Slide 18: Index
INDEX - General overview - Acquisition of Encirc - Business fundamentals - Financials 18
Slide 19: Transaction Fundamentals: Encirc - Footprint
TRANSACTION FUNDAMENTALS ENCIRC - FOOTPRINT Encirc Glass is a glass packaging manufacturer for the food and beverage markets in UK and Ireland. It operates two sites: Derrylin in Northern Ireland and Elton in England. It is the sole player in Ireland and the second player within the UK (roughl
Slide 20: Transaction Fundamentals: Encirc – Quality of Assets
TRANSACTION FUNDAMENTALS ENCIRC – QUALITY OF ASSETS 1. Largest furnaces 2. Triple gob and quad 3. Highly modern in container gob inspection glass industry flexibility machines 4. Filling capabilities 5. Fully automated warehouse 20
Slide 21: Transaction Fundamentals: The UK and Ireland Market
TRANSACTION FUNDAMENTALS THE UK AND IRELAND MARKET SALES BY GEOGRAPHIC MARKET 2008-2014 (IN THOUSAND TONNES) Source: FEVE 2008 2014 +0.5% -4.0% -3.6% 3.755 3.775 3.774 3.639 2014/2008 3.548 3.406 -12.6% 3.326 MAIN GLASS +0.9% 2.908 PACKAGING 2.312 2.332 MARKETS IN EUROPE Market share (est.): 41%
Slide 22: Transaction Fundamentals: Encirc – Competitive Profile
TRANSACTION FUNDAMENTALS ENCIRC – COMPETITIVE PROFILE COMPETITIVE PROFILE. ESTIMATED COMPETITOR COST STRUCTURE . BASE 100 ENCIRC. 115 110 105 100 95 90 85 ENCIRC COMPETITOR A COMPETITOR B ENCIRC’S MARKET SHARE OVER TIME. 23% 27% 30% 30% 30% 31% 31% 32% 8% 9% 10% 10% 12% 17% 2001 2002 2003 2004 2005
Slide 23: Diversification: Sales by Geography (2014A)
TRANSACTION FUNDAMENTALS DIVERSIFICATION: SALES BY GEOGRAPHY (2014A) Rest of Ireland continental 23% Europe 34% Italy Iberia 54% + UK 12% 77% + Rest of continental Europe Iberia 22% 35% Italy 8% UK&Ireland 35% 23
Slide 24: Diversification: Sales by Product-Mix (2014A)
TRANSACTION FUNDAMENTALS DIVERSIFICATION: SALES BY PRODUCT-MIX (2014A) PRODUCT-MIX BREAKDOWN (2014A) Others Others Soft Drinks 8% Soft Drinks Wine 6% Soft Drinks 8% 15% 15% 10% + = Wine Food 37% Food 10% Food Wine 15% 13% 49% Spirits Spirits Spirits 7% 16% 10% Beer Beer 45% 13% Beer 24% VIDRALA TOP
Slide 25: Index
INDEX - General overview - Acquisition of Encirc - Business fundamentals - Financials 25
Slide 26: Entry Barriers
INDUSTRY FUNDAMENTALS GLASS PACKAGING INDUSTRY: A COMPETITIVELY SOLID INDUSTRY NATURAL CHARACTERISTICS OF HOLLOW GLASS CONTAINERS LIMIT LOGISTICS. ENTRY BARRIERS LOGISTICS: CUSTOMERS’ PACKAGING ACTIVITY DEMANDS LOCAL SALES NATURE SERVICE ON TIME AND SUPPLY FLEXIBILITY. PROXIMITY TO THE CUSTOMER AND
Slide 27: Glass Packaging Market: A Mature and Stable Market
MARKET FUNDAMENTALS GLASS PACKAGING MARKET: A MATURE AND STABLE MARKET Evolution of demand for glass packaging in Western Europe (2000-2015) In percentage terms since 2000 The glass packaging market in Europe: a solid and stable market Glass packaging production vs. GDP per capita 70 PER CAPITA (KG)
Slide 28: Vidrala Positioning: Stable and Diversified
VIDRALA FUNDAMENTALS VIDRALA POSITIONING: STABLE AND DIVERSIFIED 2015 SALES BY GEOGRAPHICAL REGION Rest of GLASS PACKAGING MARKET: A STABLE MARKET: MATURE AND FEWLY continental Europe Iberia Glass DIFFERENTIATED MARKET, BUT 22% 35% STABLE AND MORE DEFENSIVE. containers demand, VIDRALA MARKET: Italy
Slide 29: European Glass Packaging Industry: Evolution of Market Shares
EUROPEAN GLASS PACKAGING INDUSTRY SUPPLY CONTEXT: EVOLUTION OF MARKET SHARES 2015 vs 1990 TOP 4 PLAYERS 1990 TOP 4 PLAYERS 2015 20,0% 29,1% 11,5% 12,0% AVIR 8,0% 13,3% 28,6% 1,8% TOP 4 PLAYERS: 41,8% TOP 4 PLAYERS: 82,6% 29
Slide 30: European Glass Packaging Industry: Location of Plants
EUROPEAN GLASS PACKAGING INDUSTRY LOCATION OF PLANTS 9
Slide 31: Index
INDEX - General overview - Acquisition of Encirc - Business fundamentals - Financials 31
Slide 32: Financials: Operating Margins and Capacity Utilization
FINANCIALS a. OPERATING MARGINS 1. CAPACITY UTILIZATION (EBITDA over sales) 100% 95% 1. OPERATING 90% LEVERAGE 90% 86% 87% 85% 85% 25,0% 80% 24,0% 2012 2013 2014 2015 23,0% 2. PACK-TO-MELT RATIO 22,0% 21,1% 95% 21,0% 89% 88% 88% 90% 87% 86% 86% 20,0% 2. INTERNAL 84% EFFICIENCY 85% 82% 19,0% 80% 18,0
Slide 33: Financials: Capex 2015-2019
FINANCIALS b. CAPEX 2015-2019 CAPEX PLAN <8% of sales on average MAXIMUM CAPEX IN 5 YEARS ≈ EUR 350 million * Capex over sales ratio to approximate depreciation rate 33
Slide 34: Financials: Cash Flow
FINANCIALS c. CASH FLOW As a percentage of sales 22-23% 8% TARGET EBITDA MARGIN <3% <1,5% >10% (5 YEAR CAPEX PLAN WORKING AVERAGE) FINANCIAL (5 YEAR CAPITAL FREE CASH AVERAGE) AND OTHERS EXPENSES CASH (5 YEAR CONVERSION (5 YEAR FLOW AVERAGE) AVERAGE) OVER >50% SALES OF EBITDA 34
Slide 35: Financials: Return on Capital Employed
FINANCIALS d. CONCLUSION: RETURN ON CAPITAL EMPLOYED 12,0% 11,4% 11,5% 12,0% 11,0% 10,3% 10,0% 9,7% 9,7% 9,0% 8,4% 8,0% 8,0% 7,0% 6,0% 5,0% 2009 2010 2011 2012 2013 2014 2015 POST TARGET ACQUISITION 2019 35
Slide 36: Vidrala
vidrala