Belysse Group NV · EURONEXT:BELYS
Belysse Group NV — Balta Group — FY2017 Earnings Presentation
28 slides from Belysse Group NV's earnings presentation, 2018
Slide 1: Full Year 2017
Yabalta Full Year 2017
Slide 2: Disclaimer
Disclaimer Certain details included in this presentation are subject to updating, revision, further verification and amendment. Balta Group NV (the "Company") is not under any obligation to update or keep current the information contained in this presentation. In considering any performance informat
Slide 3: Business Update – Tom Debusschere CEO
Business Update – Tom Debusschere CEO Confidential 2
Slide 4: Introduction
Introduction Tom Debusschere CEO Tom Gysens CFO ▪ Our Strategy and Progress ▪ Financial Review ▪ Update on Residential and Bentley ▪ 2018 Outlook ▪ Six Key Priorities in 2018 3
Slide 5: Full Year Financial Headlines
Full Year Financial Headlines +4.5% organic • Organic performance driven by growth of Rugs +8.1% and +18.6% Commercial +8.0% (1.4%) FX impact yoy sales growth (consolidated) • Strong contribution from Bentley acquisition +15.4% M&A(1) (5.8)% organic +3.7% • Organic growth impacted by raw material pr
Slide 6: Our Strategy
Our Strategy Our vision: “To bring beautiful design at affordable prices to mid-segment mass markets” Our goal is to be the: Global innovation and design leader in machine-made rugs Growing challenger in the North American and European commercial carpet and tiles segment Leading carpet manufacturer
Slide 7: Strengthen Our Leading Positions Across Core Segments
Strengthen Our Leading Positions Across Core Segments • Rugs full year organic revenue growth 8.1% versus last year – 2017 investment to increase our US sales and distribution infrastructure, including a new warehouse in Georgia • Commercial has doubled in revenue and EBITDA versus last year – Comme
Slide 8: Continue to Focus on Operational Excellence
Continue to Focus on Operational Excellence • Completed the full automation of the commercial tile plant in Zele, Belgium – Increased capacity and cost competitiveness – 2017 Q3 supply issue temporarily constrained sales • Expanded production capacity in Turkish plants by 10% in 2017 – Expect this t
Slide 9: Update on Optimising the Residential Operational Footprint
Update on Optimising the Residential Operational Footprint • Consultation and social negotiation process completed, we will be: – Absorbing Oudenaarde factory into two existing vertically integrated factories in Belgium – Closing the rented warehouse in Sint-Niklaas, Belgium • Project expected to fi
Slide 10: Bentley Mills Acquisition
Bentley Mills Acquisition 1. Cross-selling opportunities • modulyss styles available in the US • Bentley products showcased for European market at Domotex Jan 2018 Feb • Major national US retailer contract won for modulyss in Q4 2017 2017 2. Know-how transfer Jun • 100% of Bentley’s sales force trai
Slide 11: A Strong H1 Offset by a Challenging H2
A Strong H1 Offset by a Challenging H2 H1 H2 • H2 margins impacted by significant increase in raw material cost that we did not fully offset by compensating actions • FX negatively impacted full year EBITDA by 7% +15.1% +22.4% • In addition yoy sales growth yoy sales growth (consolidated) (consolida
Slide 12: Six key Priorities for 2018
Six key Priorities for 2018 Grow Profitable Revenue: Deliver increased level of cost savings: 1. Continue to grow Rugs sales in North America 4. Deliver the full benefits of the restructuring of • by increasing channel penetration and broadening the operational footprint in Residential our channel r
Slide 13: Financial Review – Tom Gysens CFO
Financial Review – Tom Gysens CFO 12 Confidential
Slide 14: Group Full Year Revenue Performance
Group Full Year Revenue Performance +0.6% +8.0% (1.4%) +15.4% +8.1% Strong organic performance in Start-up issues in Belgium tile factory held back Rugs +8.1% and Commercial +8.0% Commercial performance - All divisions grew organic revenue 13
Slide 15: Group Full Year EBITDA and Margins
Group Full Year EBITDA and Margins Adj. EBITDA margin (%) 14.6% 13.1% 12.8% +16.6% (7.1%) Raw material increases have materially Adverse currency movements have materially impacted our organic margins impacted our reported margins 14
Slide 16: Group Q4 Revenue Performance
Group Q4 Revenue Performance +2.4% (1.9%) +21.2% -2.4% +14.8% Rugs organic revenue decline of 2.4% - reduction in ‘share of wallet’ with two Commercial Europe back to full supply +14.8% US home improvement customers 15
Slide 17: Group Q4 EBITDA and Margins
Group Q4 EBITDA and Margins Adj. EBITDA margin (%) 14.4% 10.8% 11.2% (6.0%) +23.7% Commercial impacted by negative product mix Raw materials and FX have and cost associated with resupply, following impacted margins in Q4 temporary start-up issues in Q3 16
Slide 18: Non Recurring Items
Non Recurring Items €m 2016 2017 Profit for the period 25.3 3.0 Adjusted for non-recurring items: • Bentley acquisition fair value adjustment, mostly to inventory, impact on EBITDA of Purchase price accounting - 1.8 €2.9m, after-tax impact of €1.8m Integration and restructuring expenses 5.1 11.4 • €
Slide 19: From Adjusted EBITDA to Net Income
From Adjusted EBITDA to Net Income €m 2016 2017 Revenues 557.7 661.3 Adjusted EBITDA 81.4 84.4 • Pro Forma Adjusted EBITDA of €87.3m when including Q1 EBITDA of Bentley Mills Depreciation and amortisation (28.7) (32.5) Adjusted Operating Profit 52.7 51.9 Impact Purchase Price Accounting (2.9) • Fair
Slide 20: Operating Cash Flow and Cash Position
Operating Cash Flow and Cash Position €m 2016 2017 Adjusted EBITDA 81.4 84.4 Non-recurring expenses (net) -3.5 -11.4 Changes in provisions and FV -0.8 7.3 Of the 2017 €8.2m Residential restructuring expenses, €7.3m will be paid in 2018 of derivatives Cash generated before 77.0 80.3 changes in workin
Slide 21: YOY Reduction in Debt and Leverage
YOY Reduction in Debt and Leverage Acquisition of Bentley 385 Post deleveraging using primary IPO net proceeds 292 280 269 268 257 253.5 3.9x 3.5x 3.6x 3.3x 2.9x 2.9x 2.6x Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 20
Slide 22: Our Debt Funding Maturity Profile Provides Long Term Stability
Our Debt Funding Maturity Profile Provides Long Term Stability Debt Maturity Profile 300 15 250 1 200 €m 150 235 100 68 50 1 10 35 0 2 1 1 2018 2019 2020 2021 2022 2022+ Senior Secured Notes Senior Term Loan Financial Leasing RCF Commitment Bentley RCF Commitment 21
Slide 23: 2018 Outlook
2018 Outlook • Expect 2018 EBITDA to be between €82 and €87m – Trends of H2 2017 to continue in H1 2018 – Rugs H1 revenue down by mid-teens due to timing effect of gains and losses in customers ‘share of wallet’ – Strong action taken to deliver increased cost savings, leading to a significantly stro
Slide 24: Q&A Session
Q&A Session 23
Slide 25: Appendices
Appendices 24
Slide 26: Full Year Revenue and Adjusted EBITDA by Segment
Full Year Revenue and Adjusted EBITDA by Segment o/w % organic o/w o/w (€ million, unless otherwise stated) 2017 2016 change growth FX M&A Rugs 228.3 214.5 6.4% 8.1% (1.7)% 0.0% Commercial 171.7 80.1 114.5% 8.0% (1.0)% 107.6% Residential 234.8 236.8 (0.8)% 0.6% (1.4)% 0.0% Non-Woven 26.5 26.3 0.6% 0
Slide 27: Q4 Revenue and Adjusted EBITDA By Segment
Q4 Revenue and Adjusted EBITDA By Segment o/w % organic o/w o/w (€ million, unless otherwise stated) Q4 2017 Q4 2016 change growth FX M&A Rugs 50.7 53.9 (5.9)% (2.4)% (3.4)% 0.0% Commercial 52.7 20.5 157.7% 14.8% (1.5)% 144.4% Residential 59.3 58.3 1.6% 2.4% (0.8)% 0.0% Non-Woven 6.7 6.6 2.1% 2.1% 0
Slide 28: Our Disciplined Approach to Capital Allocation
Our Disciplined Approach to Capital Allocation Profitable Growth: • Mid-single digit top line growth & margin expansion Strong underlying FCF conversion: • Active working capital management 1 2 3 Disciplined and efficient Allow us to prioritise value Whilst maintain a balance sheet: accretive acquis