Viscofan, S.a. · BME:VIS
Viscofan — FY2015 Earnings Presentation
47 slides from Viscofan's earnings presentation, Mar 1, 2016
Slide 1: Results 2015
| io Visc)fan The casing company Results]2015 2016, 1st March
Slide 2: Disclaimer
Disclaimer This document may include statements about intentions, expectations or forecasts of the Company additional to the mandatory financial reporting whose sole purpose is to provide information more accurately about the perspectives of future behaviours. Such intentions, expectations or foreca
Slide 3: Be MORE conclusions
( : , 2015 MORE TO BE Be MORE conclusions 2015FY Results New strategic plan, from Be MORE to MORE TO BE
Slide 4: Transforming the company from integration to growth
Transforming the company from integration to growth BE MORE: THE NEW STRATEGY TO TACKLE THE GROWTH OPPORTUNITY... 2012-2015 Be MORE The growth opportunity 2009-2011 Vischfan Main characteristics of the plan: * Long-term vision: Greenfield plants * Commitment to collagen globalization * Viscofan as m
Slide 5: High operational activity to transform the Group
@ High operational activity to transform the Group commeal Footprint in main casing markets 14 production centres in 9 countries, commercial offices in 14 countries and sales in more than 100 countries Vischfan Y New collagen plant in China Y New collagen plant in Uruguay v New plastics plant in Mex
Slide 6: Focus on growth and profitability in our core business
@ Focus on growth and profitability in our core business commeal Vischfan Be MORE evolution (MM€) M Casings 2 IAN Group me a —- 649.2 660.2 6871 564.5 Revenue ‘ie [ onEe! 4 185.4 ie 170.6 153.6 EBITDA 971 101.2 96.8 103.6 Net profit 2011 2012 2013 2014 740.8 213.8 120.0 2015 10% CAGR Be MORE casings
Slide 7: Returning value creation to our shareholders
@ Returning value creation to our shareholders a Remuneration per share (€) | +/8% +14.4% 2015 vs. 2014 CAGR Be MORE Share price at year end(€) 28,7€ 4 Pay-out(%) 46% — 49% 51% 52% 1.35 € 2011 Vischfan 2012 2013 2014 0.82€ final dividend (payment date 9th June 2016) + 0.01€ Attendance premium AGM (0
Slide 8: Strong principles to be more leader
@ Strong principles to be more leader MORE © Assets © Sound =) Risk Balance sheet EE _ Ovatue for shareholders O strength to deal with new challenges Visc)fan results 2015 [EW
Slide 9: 2015 FY Results
MORE TO BE Be MORE conclusions 2015FY Results New strategic plan, from Be MORE to MORE TO BE
Slide 10: Highlights
Gy” Highlights Viscofan ended the period of the Be MORE 2012-2015 plan reaching all- time highin Revenue, EBITDA and Net Profit commen Consolidated revenue growth to €740.8MM +7.8% 1 5 3 Cumulative EBITDA increases to €213.8MM, improving the EBITDA + oI % margin by +1.9 p.p. to 28.9%. Net profit fro
Slide 11: 2015 Keeping our principles for profitable growth
v Vischfan 2015 Keeping our principles for profitable growth Building a plastic facility in Mexico = M Nanopack acquisition Market growth Growth and commercial discipline Energy in Germany Better speed production in centres of excellence Advanced converting production process in Brazil and the Czech
Slide 12: 2015 Double digit growth in Net profit
v 2015 Double digit growth in Net profit thanks to significant Operational margin improvement Selected financial data (MM €) | 2015 %y-oy %y-o-y | 4Q15 %y-oy %hy-o-y Like-for-li Like-for-like? Revenue 740.8 +78% +2.7% 184.9 42.3% -1.9% EBITDA 213.8 +15.3% +6.3% 55.0 +11.9% +0.8% EBITDAMargin 28.9% +
Slide 13: Guidance analysis 2015
Guidance analysis 2015. MME 478% +9%-10% GB % > cesssssssessnecsnessnensaet 740.8 Y —| ma Revenue EBITDA Net profit from continued L] 2014 HM 2015) «+++ Guidance. % Change operations Vischfan results 2015
Slide 14: Growth driven by volume and forex
( : _2015 Growth driven by volume and forex Group Revenue ( MME) and growth contribution ( p.p.) +7.8% 2015 vs.2014 +55 pp. 740.8 4+2.6Pp. (6871 6871 ex-forex casings Co-generation Forex 2014 sols Vischfan results 2015
Slide 15: Revenue breakdown by geographical area
) 2015 Like-for-like growth thanks to Viscofan’s global footprint offseting higher commercial activity in the USA... ( ») Revenue breakdown by geographical area’ (MM €) | GROUP 418% GA vs. 2014 Like-for-like2 ) EUROPE AND ASIA NORTH AMERICA LATAM Disa Ad +8.9% +5.1% (mee vs. 2014 Like-for-like® vs.
Slide 16: Growth in casing and co-generation sales
results v 2015 ... leading to year-on-year growth in casings and co-generation sales. Casing sales (MM €) Viscofan Group Revenue (MM €) 178.6 169.9 169.1 1908 1569 160.6 185.1 184.9 152.1 180.0 180.8 3Q 4Q +2.3% Co-generation sales (MM €) vs.4Q1 — 15.2* mmm 12.2 5 11.5 n6l2.3 ‘aa a 2Q * The figures
Slide 17: Commercial discipline and cost control
results v 2015 Commercial discipline and cost control... 2015. Year-on-year changd +/,8% +6.7% +2.2% Revenues Revenues Cost of Personnel Other exforex consumption! costs operating expenses 1 Net purchases+/- changes in inventory Vischfan EBITDA EBITDA exforex D&A EBIT results 2015
Slide 18: EBITDA profitability improvement
results v 2015 ...is a double source of profitability improvement in current environment. EBITDA ( MM€) and growth contribution ( p.p.) +15.3% 2015 vs.2014 +8.9 p.p. 10.1 PP. +6.3 p.p. ( 185.4 ) Like-for-lik i ike-for-like Forex Non recurring casings impact? 2014 2015 1Non-recurring figure includes
Slide 19: Quarterly EBITDA
results v 2015 Improving profitability even in the most demanding quarters Quarterly EBITDA (MM €) 02014 2015 49.6 45.0 41.6 +29.7% +8.8% +13.0% vs. 1Q14 vs. 2Q14 vs. 3Q14 1Q 3Q 4Q m 2m Gr ad Like-for-like’ Like-for-like! Like-for-like’ Like-for-like! 1 For comparative purposes, like-for-like growth
Slide 20: Like-for-like EBITDA margin improvement
results v 2015 ... steady like-for-like margin improvement all quarters. Like-for-like’ EBITDA margin Reported EBITDA margin | +1.9p.p. 2015 vs.2014 28.1% 28.0% 28.9% 27.9% 270% 25.6% 1Q 2Q 3Q 4Q 2014 2015 m=— 2015 = 2014 For comparative purposes, like-for-like growth excludes the impact of the diff
Slide 21: Net Profit growth and EBIT-Net Profit bridge
results v 2015 Net Profit growth supported by operational profitability and sound balance sheet EBIT — Net Profit bridge (MM €) UW 4.53.4 -6.6 Financial Financial Exchange income expenses Differences 02014 @ 2015 -31.9 2014 =. 2015 Tax rate. % EBIT Net financial result Vischfan Taxes +0.4 Net profit
Slide 22: Invest in growth to improve long term position
( y 2015 Invest in growth to improve long term position. (— \ Capex (MM €) ' Capex breakdown. 2015 | (.. 2» eh. 98.0 Capacity Process j upgrade 70.7 62.3 61.0 ~ 18% Others a ll. Environment Health and \ Safety ; 2011 2012 2013 2014 2015 NO TS Vischfan results 2015
Slide 23: Net Bank Debt evolution
results ) 2015 Room for long term growth. Operational strength and leadership to focus on... Net Bank Debt evolution (MM €) 74.6 -213.8 8.2 48.6 -55.8 58.0 > Forex and others 4.0 Net bank Net bank debt Dec’14 34.4 debt dec’1s IAN sale Nanopack 3.2 Shareholders exIAN sale Collection Net cash remunera
Slide 24: MORE TO BE
( y 2013 MORE TO BE 2015FY Results New strategic plan, from Be MORE to MORE TO BE
Slide 25: Industry growth drivers remain solid
Industry growth drivers remain solid... _ More population ™ South America Oper * Annual growth 1%. io m Europe * Migration to cities ... albeit ina aa, a context of more uncertaint More meat y Economic growth? roduction (pouttry aie +3 %/+5% pr pork) er a Forex Casings market 9 ag) Raw materials ann
Slide 26: A more uncertain backdrop, we all want competitiveness
The world has changed, we live in a more uncertain backdrop... we all want competitiveness... +3%/+5% Casings market annual growth Vischfan GDP. % Change 2012 2013 2014 2015 2016-2020 World 3.4% 3.3% 3.4% 3.1%| 42-3% Advancedecon. 12% 11% 18% 2.0%] +1-2% Emerging econ. 5.4% 5.0% 4.6% 40%| 43-5% e@ H
Slide 27: 2016-2020 A new vision
2016-2020 A new vision In 2020 we strive to be an authentic global leader “THE CASING COMPANY”. “MORE TO BE” vision means that... Vischfan THE CASING COMPANY focuses its efforts to create value for SHAREHOLDERS in a SUSTAINABLE way. THE CASING COMPANY is the GLOBAL LEADER in all meat casings familie
Slide 28: Backed by our track record
... backed by our track record The global casing leader The casing The efficient company producer MORETO BE Be #1 or #2 Re-structure Y Achieving : new scale in core markets the business © service + tp) technplogy (tp) technplogy + + @ chst @ cpst @ chst 2009 2011 2015 2020 Visc)fan results 2015
Slide 29: Being closer to the customer
An increasingly sophisticated world means to be closer to the customer... Meat processor's Casings producer’s market view, market view Available market Customised casings”, Animal gut Plastics and specialities 2.3Bn€ we 21Bn€ Cellulose €0.6Bn Collagen Fibrous €0.9Bn €0.3Bn ( Other costs 30-40 Bn € j
Slide 30: Viscofan's unique positioning
...and Viscofan’s positioning is unique to take advantage of all the market opportunities. Casings producer’s market view Total costs 35-45 Bn€ j Vischfan Customised casings Animal gut 2.3 Bn€ 21Bn€ Other costs 30-40 Bn € \ — Market view for Visc)fan ME Z Personalization: >10,300 references in 2015
Slide 31: Know-how, technology and market risk diversification
Across-the-board know-how and technology and also better market risks diversification... Gut Viscy»fan M. Devro Kalle Viskase Visko Shenguan Teepak Atlantis Pak Nippi O | OOu! Ma BM AV HE cut Mi collagen MM Cellulose MM Plastics Ml Fibrous \ ‘an results 2015
Slide 32: Growth opportunities from unique global positioning
... expose to more growth opportunities thanks to a unique positioning in a global market... Available market Distribution (%) Expense on casing per capita (€) | Bir \ 7 | €0.0 oo Africa / | 3 | €0.1 Vv eos Y . 5 " 710% Latam mB. & », Europe 29% \ m- < NW North America €0.3 Average Vischfan Collagen
Slide 33: Be MORE matrix to MORE TO BE matrix
Growth in emerging areas and market share in technology niches means to include service in our continous improvement matrix BE MORE MATRIX LOW COSTS HIGH COSTS Vischfan Technology p improvement, Low cost centres Production centres (developed transfer countries) Technology transfer Inflation’ Matured
Slide 34:
Slide 35: North America
North America Focus on added value improvement @& service * Plastics in Mexico ¢ Improve facilities reliability ¢ Fibrous. Free capacity for the local market & technlogy ¢ New products: BTC plastics, specialities ° Upgrade fibrous technology @ cpst ¢ Union agreement * Cruise speed in the new plastic
Slide 36: Latam
Latam Leaders and committed with an area of outstanding market dynamism © service ¢ Product development. New concepts to replace animal gut * Stability in Brazilian plants Lat a “ Gp iccinploay = ¢ New extrusion machinery in collagen * Converting technology Market size @ chst ° Higher capacity in Ur
Slide 37: Europe
Europe R&D in the four technologies as competitive advantage spearhead @& service * Greenfield fibrous plant in Caseda (Spain) ¢ Nanopack acquisition ¢ Support centre for new products. “specialities” an EApiccinboay ¢ Upgrade cellulose technology Europe ¢ Fibrous technology in a centre of excellence
Slide 38: Asia
Asia Wider offer and better service in the fastest growth region Qevric ° Asian self-sufficiency ¢ Availability, quality and sophistication in our offer ¢ Bethe benchmark in the market ¢ Push cellulose sales & techn)logy * Consolidate operations * Production flexibility Market size @ chst ¢ Raw Mate
Slide 39: Key projects in 2016: Plastics technology
fs) Key projects in 2016: Plastics technology ¥ Reinforce plastics position in North America... and also transform our value proposal in Europe Visc)pfan Plastics Spain Mexico Czech Republic WF ¢ Viscofan CAGR A” Capex’16e:€6MM 7 Capex’15: €1OMM ~Z Upgrade technology Be MORE +5.0% a Nanopack AZ Star
Slide 40: 2016 Key projects: Fibrous technology
2016 Key projects: Fibrous technology v Reinforce our fibrous position in North America... and also reducing the risk of production concentration v Improve service proposal in Europe and Asia v Leveraged on transversal know-how with the excellence centre in Spain Vischfan Fibrous Spain WF * Viscofan
Slide 41: A committed team focused on innovation
fs) A commited team focused on innovation to boost competitiveness ¥ Multidisciplinary teams with international profile Y Strengthening R&D in excellence centres Vv Proactive promotion of new products Y Costs analysis and target market Y Surveillance technology Visc)fan results 2015
Slide 42: Viscofan Bioengineering
Viscofan Bioengineering: Good progress, but results are expected beyond our strategic plan period ey “GMI P-facility = ‘sie Significant investment (€2MM 2016) Modular investment 2016-2020 A must for any clinical trial An opportunity for sales of other collagen- Develop based solutions concepts Trial
Slide 43: The best team in the market, a growing team
The best team in the market, a growing team... AVERAGE HEADCOUNT 2015 GROUP = 4,233 +3.4% CAGR Be MORE EUROPE AND ASIA 2,687 NORTH AMERICA 950 LATAM 596 persons age persons ae (Dorsx 72 ee. persons cma it 22.4% ee ¥ 141% @ ‘ 4 MORE TO BE 2016-2020. Commitment to attract and retain talent 7 Workforce
Slide 44: Organic investments to strengthen our leadership
macroeconomic and competition momentum to invest in the fs) Organic investments to strengthen our leadership. Good business Investment to support organic growth... Capex MM€ Capex breakdown 2016 e — 98 Process upgrade 71 26% 62 61 57 Capacity EHS 43% 2011 2012 2013 2014 2015 2016 e Others >, ...but
Slide 45: Investment effort to expand operating cash flows
The investment effort carried out in last years has set the pace to expand operating cash flows Operating Cash Flow (MM €) 222-227 4 142 75-80 2011 2012 2013 2014 2015 2016e H Operating Cash Flow (MM€)= i EBITDA - CAPEXO Vischfan results 2015
Slide 46: Guidance 2016
S GUIDANCE 2016 (me) USS$/€: 110 BRL/€: 4.20 €75/80MM €755/770MM €222/227MM €127/130MM +30%/40% J +2%/4% +4%/6% +6%/8% Capex Revenue EBITDA Net profit Continued Ops, Vischfan results 2015
Slide 47: To wrap up
To wrap up ¥ Viscofan successfully completed the Be MORE strategic plan with record Revenue, EBITDA and Net Profit. ¥Y Strength which led Viscofan to record very positive results outperforming main financial targets set out in our guidance and that have led the Board of Directors to propose a final