Slide 1: FY2017 results and 2018 Outlook
FY2017 results and 2018 Outlook 19 February 2018
Slide 2: TeraPlast Group
7“ TeraPlast Bgl last Group www.teraplastro t= o) y t= | C=) t=) TERASTEEL DEPACO (Wetterbest) TERASTEEL TERAGLASS TERAPLAST TERAPLAST POLITUB SERBIA HUNGARIA KFT LOGISTIC XN TERAPLAST GRUP a :
Slide 3: Contents
Contents Overview and key figures Segment results and outlook TERASTEEL SA Main objectives to reach 2018 budget Investments and net debt 3
Slide 4: Overview and key figures
Overview and key figures mRON mRON % 2 0 40.8 426.6 9.6 1 7 EBITDA Net Sales EBITDA Margin mRON mRON % 2 0 101 970 10 1 8 EBITDA Net Sales EBITDA Margin The significant investments that TeraPlast made in 2017, will have a major influence to 4 the Group’s results in 2018.
Slide 5: Segment results and outlook
Segment results and outlook % % EBITDA Net Sales EBITDA EBITDA Net Sales EBITDA Segment 2017 2017 2017 2018b 2018b 2018b Sandwich Panels 18 175 11% 37 324 11% Roof systems Not included in consolidation 29 277 10% Installations & Decorations 10 115 9% 12 134 9% Compounds 6 52 12% 6 64 10% Window PVC
Slide 6: 2017 Details and strategic outlook
2017 Details and strategic outlook • General decrease of engineering projects and Poor absorptions of EU funds; Failure to start infrastructure projects generated poorer results than anticipated • Romcab insolvency impacted the sales of the compound division • Since 2015-2016 the Company estimated t
Slide 7: Main objectives to reach 2018 budget - Sandwich panels 1/7
Main objectives to reach 2018 budget - Sandwich panels 1/7 • The benefits of our market development initiatives from 2017 for this segment will be visible in full during 2018 when we expect to grow this business by 1.8x; • Increase of non residential sector by 4% in Romania and 10% in Serbia, Bulgar
Slide 8: Main objectives to reach 2018 budget - Sandwich panels markets 2/7
Main objectives to reach 2018 budget - Sandwich panels markets 2/7 TRS Market (sqm) - Romanian sandwich panel market: 100 mil. EUR, TeraSteel Romania being the largest producer with 21% market share Austria Muntenegro - Serbian sandwich panel market is 2.3 mil sqm (35 Kosovo mil. EUR), is dominated
Slide 9: Main objectives to reach 2018 budget - Installations & Decorations 3/7
Main objectives to reach 2018 budget - Installations & Decorations 3/7 • New product development; • Close monitoring of EU funding available for infrastructure projects: existing projects in amount of EUR 2.85 billion for POIM Priority axis 3 – Development of environment infrastructure under efficie
Slide 10: Main objectives to reach 2018 budget – Compounds 4/7
Main objectives to reach 2018 budget – Compounds 4/7 • New recipes developed to better serve existing and new customers who currently import these products from other countries; • New customers, especially exports to Bulgaria, Serbia, Moldova, Czech Republic, Ukraine, Hungary, Slovakia, Poland, Germ
Slide 11: Main objectives to reach 2018 budget - Window PVC Profiles 5/7
Main objectives to reach 2018 budget - Window PVC Profiles 5/7 • We will prepare in advance with finished products needed during the busy season; expected inventory increase during January- April 2018 of RON 4.3 mil in 2018 as compared to the same period in prior year; • Molds for new profiles, new
Slide 12: Main objectives to reach 2018 budget – Polyethylene 6/7
Main objectives to reach 2018 budget – Polyethylene 6/7 • In Q4 2017, Politub business was transferred to Teraplast SA and becomes the Polyethylene segment; • This segment manufactures tubes and pipes, of medium and high density PE for the transport and distribution networks of water, gas and teleco
Slide 13: Main objectives to reach 2018 budget – Roof Systems 7/7
Main objectives to reach 2018 budget – Roof Systems 7/7 • In 2017, TeraPlast acquired a majority shareholding in Depaco, the second largest roof tiles producer in Romania. • Expected synergies for sourcing of raw materials as well as parts of the distribution network; • Increase in production capaci
Slide 14: Investments and net debt 1/5
Investments and net debt 1/5 In 2017 investments in CapEx totaled 55.5 mil RON the main developments being: • Production plant in Serbia for RON 23.5 mil; • PVC recycling plant for RON 14.7 mil; • Power station equipment for RON 6.4 mil; In addition, we purchased the 67% shareholding in Depaco for 5
Slide 15: Investments and net debt 2/5
Investments and net debt 2/5 Breakdown of net debt as at Dec 31, Recycling 2017 31-Dec-17 • Commissioning of PVC recycling Net debt 122,559,653 production line in Nov 2017 - EBITDA 40,760,537 expected cost reduction for PVC raw Net debt to EBITDA 3.0 material with EBITDA impact of 1.5 mil EUR; Cash
Slide 16: Investments and net debt 3/5
Investments and net debt 3/5 Breakdown of net debt as at Dec 31, Depaco 2017 31-Dec-17 • In 2017, we purchased 67% of Depaco for Net debt 122,559,653 the amount of RON 58 mil and financed EBITDA 40,760,537 the acquisition partly through a loan of RON 33 mil; Net debt to EBITDA 3.0 • Total financial
Slide 17: Investments and net debt 4/5
Investments and net debt 4/5 Breakdown of net debt as at Dec 31, Terasteel Serbia 2017 31-Dec-17 • Budgeted EBITDA for TRS Serbia of RON 13 mil; Net debt 122,559,653 • Acquisition financed through an EBITDA 40,760,537 intercompany loan of RON 21 mil out of Net debt to EBITDA 3.0 which RON 15 mil wer
Slide 18: Investments and net debt 5/5
Investments and net debt 5/5 Breakdown of net debt as at Dec 31, Politub 2017 31-Dec-17 • As of Oct 2017, Politub becomes a Net debt 122,559,653 fully owned subsidiary of Teraplast; EBITDA 40,760,537 Net debt to EBITDA 3.0 • Transaction value was in amount of EUR 2.5 mil and was financed Cash 11,047
Slide 19: www.teraplast.ro