Tecnoglass Inc. · NYSE:TGLS
Tecnoglass — Q3 2023 Earnings Presentation
24 slides from Tecnoglass's earnings presentation, Nov 6, 2023
Slide 1: Third Quarter 2023 Earnings Conference Call
Third Quarter 2023 Earnings Conference Call November 6, 2023 – TECNOGLASS INC. (NYSE: TGLS) www.tecnoglass.com
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are bas
Slide 3: Summary & Highlights
300 Third Avenue Waltham, Massachusetts l Summary & Highlights www.tecnoglass.com
Slide 4: Q3 2023 Key Takeaways
Q3 2023 Key Takeaways • Record Q3’23 all-organic revenue increased 4.4% to $210.7 mm Sales by Geography Q3’23 • Solid growth in the multi-family and commercial activity, up 6.0% year-over-year to $122.9 mm as we 5% continue to execute on our growing backlog • Single-family revenues up 2.4% to an all
Slide 5: U.S. Growth Driving Resilient Backlog
U.S. Growth Driving Resilient Backlog Backlog Overview Backlog as of Q3’23 by End Market • Backlog expanded 20% YoY to a record $836 mm Multifamily / Residential Related • Track record of successfully delivering high profile projects and maintaining consistent lead times has earned us an increasing
Slide 6: Demonstrated History of Converting Backlog to Revenue
Demonstrated History of Converting Backlog to Revenue Provides Strong Visibility for the Following 18 Months Backlog to Revenue Conversion $ 750 130% $ 700 114% 110% $ 650 106% 108% 104% 106% 107% 110% 98% 95% 100% 92% 90% 89% 93% $ 600 87% 86% 88% 88% 90% $ 550 $ millions 69% 73% 72% 71% 73% 70% $
Slide 7: Single-Family Residential Business Expanding
Single-Family Residential Business Expanding Geographic Exposure End Market Exposure Q3’23 Operational Showrooms 35% Total SF R&R Expected Operational 2023 EOY Residential New Residential Expected Openings Revenue $87.8 mm Significant presence (~70% of U.S. 65% Backlog) Developing Presence (~10% of
Slide 8: Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market
Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market Significant Addressable Market Potential1 Operational Update • Completed installation of 2 full lines, with a third one expected to be completed within the next couple of weeks 3% 2% Vinyl • Production has commenced for f
Slide 9: Financial Update
l Aston Martin Miami, Florida l Financial Update www.tecnoglass.com
Slide 10: Revenue Bridge Q3 2023 vs. 2022
Revenue Bridge Q3 2023 vs. 2022 Q3 2023 Revenue Bridge (US$M) • All organic revenue growth of 4.4% to $210.7 mm in Q3’23 driven by market share gains in single family and multi-family / commercial revenues • Single-family residential revenues increased $2.0 mm, or 2.4%, to $87.8 mm in Q3’23 on marke
Slide 11: Adjusted EBITDA Bridge Q3 2023 vs. 2022
(1) Adjusted EBITDA Bridge Q3 2023 vs. 2022 Adjusted EBITDA margin Q3 2023 Adjusted EBITDA Bridge (US$M) 38.9% 33.8% • Third quarter year-over-year impacts: • Negative non-cash FX impact of 660 bps as inventories purchased during Q2 at weaker Colombian Peso (COP) ran through P&L during Q3 at steeply
Slide 12: FX Impact on Gross Margins Q3 2023 vs. Q3 2022
FX Impact on Gross Margins Q3 2023 vs. Q3 2022 Gross Margin • Excluding the non-cash impact of unfavorable FX on inventories (660bps) 175 bps and the FX impact on COP denominated costs and expenses (150-200pbs) 660 bps gross margin was more in line versus the comparable 2022 period • Majority of the
Slide 13: Strong Cash Flow & Balance Sheet
Strong Cash Flow & Balance Sheet Strong Cash Flow Generation ($ in Millions) • Strong cash conversion of adj. EBITDA(1) driving $51.3 mm of cash 160.0 141.9 144.2 flow from operations in Q3’23 140.0 117.3 120.0 • Strong free cashflow expected to continue through year end 100.0 71.3 86.6 51.5 given a
Slide 14: Track Record of Strong Returns Above Peers
Track Record of Strong Returns Above Peers 3 Year Average ROE 3 Year Average ROIC 32% 18% 14% 8% TGLS U.S. Building Products Peers 1 TGLS U.S. Building Products Peers 1 Stronger profitability and significant improvement in working capital driving strong returns Notes: 1. U.S. Building Products Peers
Slide 15: Outlook Update
205 Race Street Philadelphia, Pennsylvania l OUTLOOK UPDATE www.tecnoglass.com
Slide 16: Evolution of Revenue & Adjusted EBITDA
Evolution of Revenue & Adjusted EBITDA Key Milestones Revenue & Adj. EBITDA Delivering Double-Digit Organic CAGR 2013 Became public 900.0 600.0 2015 Investment in top-class manufacturing facility to produce high-spec insulated glass 842 800.0 2017 Entered into the single-family residential market in
Slide 17: 2023 Double-Digit Growth Outlook
2023 Double-Digit Growth Outlook ▪ Based on YTD results and the timing of orders through year end, we expect another record year of organic double digit revenue and Adjusted EBITDA growth Revenue $835-$848 MM ▪ Adjusting revenue outlook to 18% all-organic growth at the mid point, accounting for Q4 p
Slide 18: Appendix
3Eleven 601 Hudson Yards New York City, New York l APPENDIX www.tecnoglass.com
Slide 19: Vertically-Integrated & Well-Situated Operations Create Structural Advantages
Vertically-Integrated & Well-Situated Operations Create Structural Advantages Suppliers JV & Long Term Sales, Raw Production Final Suppliers Supply Distribution Materials Process Product Relationships & Installation Tecnoglass integration across the architectural glass and window value chain provide
Slide 20: ESG Strategy
ESG Strategy Outstanding Achievements Environmental Social Governance Enhancing Our Environment Promoting Continuous, Ethical and Responsible Leading Eco-Efficiency and Innovation Growth National Carbon Neutrality Employee Training and Ethics and Compliance Program Education Programs Program +15,000
Slide 21: ESG Strategy
ESG Strategy Our Sustainability Strategy contains the Company’s guidelines and value propositions to meet the expectations of our stakeholders Environmental Social Governance Enhancing Our Environment Promoting Continuous, Ethical and Responsible Leading Eco-Efficiency and Innovation Growth Encourag
Slide 22: Leading Eco-efficiency and Innovation
Leading Eco-efficiency and Innovation Over 85% of Tecnoglass’ total revenues are considered Green Revenues, including low emissivity and impact-resistant glass and windows, contributing to reducing global emissions and mitigating climate change effects 68% 65% 84% of our revenues are Impact of our r
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation1 Adjusted EBITDA and adjusted net (loss) income attributable to parent reconciliation Three months ended Nine months ended Figures in U.S. $k Sept 30, Sept 30, 2023 2022 2023 2022 Net (loss) income 46,095 46,922 147,032 101,288 Less: Income (loss) attributable to non-controll
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation1 Net Debt, Leverage and Total Investment Reconciliations Figures in U.S. $k As of September 30, 2022 2023 Short Term Debt and Current Portion of Long Term Debt 434 3,127 Long Term Debt 168,255 166,699 Gross Debt 168,689 169,826 Cash at the end of the period 84,434 118,973 Net