Teraplast Sa · BVB:TRP
Teraplast Sa — Frontier Investors Day 2020
34 slides from Teraplast Sa's conference presentation, Sep 3, 2020
Slide 1: Frontier Investors Day
Frontier Investors Day September 3-4, 2020
Slide 2: Disclaimer
DISCLAIMER This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, constituting or forming part of, any actual offer to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares issued by the TeraPlast SA or any o
Slide 3: Table of Contents
TABLE OF CONTENTS GROUP OVERVIEW BUSINESS MODEL STEEL DIVISION TRANSACTION FINANCIAL PERFORMANCE SUSTAINABLE DEVELOPMENT IR CONTACT 3
Slide 4: TeraPlast Group Structure
GROUP OVERVIEW TERAPLAST GROUP STRUCTURE The largest Romanian construction materials manufacturer. BBG Ticker TRP RO BSE symbol: TRP Piping, fittings and other products made of PVC, PE and PP | PVC Compounds | PVC window profiles #1 on the exterior sewage market in Romania #1 on the PVC compounds ma
Slide 5: Short History
GROUP OVERVIEW SHORT HISTORY Long history marked by pioneering, significant research & investment projects. TeraPlast Group invested over the years in research too, having 3 patents and 3 in progress. TeraSteel DOO – the Serbian TeraPlast is founded as a TeraPlast goes public on the factory is inaug
Slide 6: Product Portfolio Covers All Construction Market Segments
GROUP OVERVIEW PRODUCT PORTFOLIO PRODUCT PORTFOLIO COVERS ALL CONSTRUCTION MARKET SEGMENTS Installation Window profiles Compounds Rigid PVC Windows & Doors recycling Complete systems for: 3 window profiles systems: • Rigid PVC compounds • Granulated PVC • PVC Windows • Exterior sewage • 4 chambers •
Slide 7: Product Portfolio Covers All Construction Market Segments
GROUP OVERVIEW PRODUCT PORTFOLIO . PRODUCT PORTFOLIO COVERS ALL CONSTRUCTION MARKET SEGMENTS Sandwich Galvanized Self-supporting Complete panels steel purlins trapezoidal sheet roof systems • Polyurethane foam • 5 metallic roof tiles profiles • Z, C, U & Sigma • Corrugated sheet of sandwich panels •
Slide 8: Highlights
GROUP OVERVIEW HIGHLIGHTS Shareholder Structure Key Business performance 2018-2020B Teraplast SA | TRP RO Stock Price Performance (last 12 months as at Sep 2, 2020) *Market Cap (Sept. 2nd): 130 mn. EUR 8
Slide 9: Geographical Footprint
GROUP OVERVIEW GEOGRAPHICAL FOOTPRINT TeraPlast Group’s exports represent 23% of its turnover in 2019 ➢ Which means around EUR 47 million in 2019 ➢ To over 25 countries ➢ Cover a population of 19.5 million in Romania and 66 million in core CEE countries Assets ➢ 11 factories that sum up over 75 200
Slide 10: Construction Sector in Romania
GROUP OVERVIEW CONSTRUCTION SECTOR IN ROMANIA¹ Evolution of construction works in RO Monthly evolution of construction works by construction objects 300 In the first half of 2020, the Romanian 250 construction works’ volume rose by 21% 200 compared to the first half of 2019, in spite of a slight dec
Slide 11: Romania
GROUP OVERVIEW ROMANIA Country highlights Main macro parameters¹ ➢ Full EU member since 2007 with a strategic positioning Key figures 2016A 2017A 2018A 2019F 2020F ➢ The 8th largest European country by population and GDP (€ bn) 170.4 187.5 202.1 223 235.0 2nd in CEE Population (m) 19.8 19.6 19.5 19.
Slide 12: Opportunities
GROUP OVERVIEW OPPORTUNITIES 69.4% 35% of Romania’s population is connected to a water network* of Romania’s population is connected to a gas network** 52.7% 9.8 billion € of Romania’s population is connected to a sewage network* of the total EU funds allocated for large infrastructure projects (POI
Slide 13: Management Team
GROUP OVERVIEW MANAGEMENT TEAM Board of Directors Alexandru Stanean Ioana Birta Ioana Borza CEO TeraPlast Group CFO TeraPlast Group Group Marketing Director ➢ CEO since July 2018 ➢ CFO since June 2017 ➢ Marketing Director since ➢ In his 2nd mandate ➢ ACCA & CAFR member May 2018 ➢ Within the Group ➢
Slide 14: Business Model: TeraPlast Group
BUSINESS MODEL TERAPLAST GROUP Suppliers structure – Group level The Group has good reputation among its clients and suppliers being recognized as a trustworthy, strategic business partner 11% Chemicals supplier 1 ➢ Tight credit risk monitoring internal & external (insurance) Steel supplier 1 ➢ Effe
Slide 15: Employees
BUSINESS MODEL EMPLOYEES Annual evolution of no. of employees* ➢ All Group companies have trade representatives that work closely with the companies’ management in all matters regarding collective agreements (except for the Serbian facility). 500 478 401 ➢ Aggressive sales incentive scheme, bonus sy
Slide 16: IT Infrastructure
BUSINESS MODEL IT INFRASTRUCTURE Integrated, flexible software solutions Integrated, flexible software solutions Highly reliable IT backbone creating operational and cost efficiencies ERP platforms main modules ➢ ERP multi module systems ▪ Most entities use SAP (integrated electronic invoicing syste
Slide 17: Steel Division Transaction: What It Means
STEEL DIVISION TRANSACTION WHAT IT MEANS ➢ Buyer: Kingspan Group ➢ Leader on the high-performance insulation market ➢ Listed on the London Stock Exchange Plastics ➢ 11 billion GBP market capitalization Division ➢ Estimated value of the Steel division (headline price): RON 410 million – net debt +/-
Slide 18: Transaction Details
STEEL DIVISION TRANSACTION TRANSACTION DETAILS - The Steel division generated 40% of the Group’s EBITDA in H1/2020 and represents 40% of the net assets - The final price will be set at the date of the registration of Kingspan’s stake at the Trade Register - The main elements of the final price calcu
Slide 19: 1H 2020 Estimates
FINANCIAL PERFORMANCE 1H 2020 - ESTIMATES 1H/2020 1H/2019 ESTIMATES RESULTS Evolution EUR, million STEEL Revenue 55 50 +13% DIVISION EBITDA 4,1 3,8 +11% EBITDA margin 7,7% 7,8% PLASTICS Revenue 44 38 +18% DIVISION EBITDA 5,6 3,6 +54% EBITDA margin 12,5% 9,6% TERAPLAST Revenue 99 88 +15% GROUP EBITDA
Slide 20: 1H 2020 Results
FINANCIAL PERFORMANCE 1H 2020 - RESULTS TERAPLAST GROUP H1/2020 TERAPLAST GROUP H1/2019 +17% +49% REVENUE EBITDA EBITDA REVENUE EBITDA EBITDA MARGIN MARGIN 100,8 11 87,8 7,4 Mil. EUR Mil. EUR 10,8% Mil. EUR Mil. EUR 8,5% ➢ Turnover above estimated → +17% compared to +15% ➢ EBITDA above estimated → +
Slide 21: 1H 2020 Results
FINANCIAL PERFORMANCE 1H 2020 - RESULTS EUR, million H1 2020 H1 2019 Evolution Turnover 41,2 35,3 19% TeraPlast EBITDA 6,5 3,2 105% Turnover 32,3 27,6 19% TeraSteel Romania & Serbia EBITDA 3,4 2,8 24% Turnover 24,1 22,2 11% Wetterbest EBITDA 1 1 2% Turnover 3,2 2,7 22% TeraGlass EBITDA 0,06 0,2 (76)
Slide 22: Net Sales by Segment
FINANCIAL PERFORMANCE NET SALES BY SEGMENT Teraplast (TRP): • [Instalation] – as a market leader in 2019 for PVC Pipes, Teraplast was in the best position to win in the growing infrastructure market; • [Compounds] – development plans includes HFFR (Halogen Free, Fire Resistant) production line for w
Slide 23: EBITDA Bridge 2017 – H1'2020
FINANCIAL PERFORMANCE EBITDA BRIDGE 2017 – H1’2020 mEUR The EBITDA increase of EUR 1.57 million (38% vs. 2017) is mainly driven by the overall increase in business (49% increase in net sales) with margins slitghly lower (10.1% in FY18 vs 10.9% in FY17). Wetterbest (Depaco) was consolidated starting
Slide 24: Profit & Loss Summary
FINANCIAL PERFORMANCE PROFIT & LOSS SUMMARY The main driver of group sales growth of 87% in 2018 was the acquisition of Wetterbest (Depaco) which was consolidated since January 1st, 2018, when Teraplast obtained control of the subsidiary. In 2019 we grew organically (by 18.6%) our customer base and
Slide 25: Balance Sheet Summary
FINANCIAL PERFORMANCE BALANCE SHEET SUMMARY Investments in 2019 • We focused our investments in 2019 on the segments in need for margin improvement but also aimed to increase the overall capacity with some of the results already visible in 2019; NWC • The significant increase in NWC in 2018 is mainl
Slide 26: Cash Flow Summary
FINANCIAL PERFORMANCE CASH FLOW SUMMARY Actuals High Level Estimate H1’20 H2’20 Among the main drivers of improved liquidity in 2019: • improved margins across the main segments (Instalation & Sadwich Panels); • continuous improvements year over year of working capital (see relevant section below);
Slide 27: Growth and Margins
GROWTH AND MARGINS NET SALES GROWTH (CAGR) / EBITDA MARGIN BY SEGMENT 2017 - 2019 2017 – 2020B 50.00% 50.00% 45.00% 45.00% Instalation 40.00% (TRP) 40.00% Instalation Sales CAGR 4Y - (2017 ** - 2020B) Sales CAGR 3Y - (2017 * - 2019) Roof (TRP) 35.00% 35.00% Sandwich Systems 30.00% panels (TRS) (WTB)
Slide 28: Net Working Capital and Cash Conversion Cycle
Working Capital Management NET WORKING CAPITAL AND CASH CONVERSION CYCLE FY 17 FY 18 NWC • The significant increase in NWC in 2018 is mainly driven by steel inventory purchases near the end of 2018 to support FY the increase in business at the beginning of 2019; • As a % of sales, NWC decreased each
Slide 29: Plastic: Net Sales and EBITDA Bridge H1 2020 vs H1 2019
BRIDGE PLASTIC | NET SALES AND EBITDA BRIDGE H1 2020 VS H1 2019 29
Slide 30: Steel: Net Sales and EBITDA Bridge H1 2020 vs H1 2019
BRIDGE STEEL | NET SALES AND EBITDA BRIDGE H1 2020 VS H1 2019 30
Slide 31: Sustainable Development: Products, Community & Corporate Governance
SUSTAINABLE DEVELOPMENT PRODUCTS, COMMUNITY & CORPORATE GOVERNANCE Efficient solutions for people and the environment ➢ Women senior managers represent 37% of the Executive Team and 20% of the Board of Directors ➢ The resource management KPIs aim at maintaining an equilibrated rate between the produ
Slide 32: Sustainable Development: Products, Community & Corporate Governance
SUSTAINABLE DEVELOPMENT PRODUCTS, COMMUNITY & CORPORATE GOVERNANCE ➢ Implementing corporate governance best practices in ➢ Photo-voltaic plant that will ensure cca 11.5% of the order to raise the company competitiveness on the necessary energy for the Saratel Industrial Park and will capital market
Slide 33: IR Contact
IR CONTACT Contact details: e-mail: investor.relations@teraplast.ro phone no.: +40 741 270 439 You can also subscribe to up to date information about our activity via the TeraPlast IR newsletter at: https://investors.teraplast.ro/newsletter/ 33
Slide 34: Contact details
Contact details: ©2020 TeraPlast SA. All rights reserved. IR Contact: Alexandra Sica TeraPlast Industrial Park investor.relations@teraplast.ro Saratel village, Sieu-Magherus commune +40 741 270 439 Bistrita-Nasaud county, DN15A km 45+500 www.teraplast.ro Bucharest Stock Exchange symbol: TRP 34