Bewi Asa · OSL:BEWI
Bewi Asa — Q2 2023 Earnings Presentation
23 slides from Bewi Asa's earnings presentation, Aug 17, 2023
Slide 1: Results for the second quarter of 2023
Results for the second quarter of 2023 CEO Christian Bekken, CFO Marie Danielsson 17 August 2023
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This presentation, prepared by BEWI ASA (the "Company"), may contain statements about future events and expectations that are forward-looking statements. Any statement in this presentation that is not a statement of historical fact including, with
Slide 3: Highlights
Second quarter of 2023 Highlights 1
Slide 4: Q2 2023: Solid results in challenging markets
Q2 2023: Solid results in challenging markets Activity in building & construction (B&C) industry continues to decline, impacting volumes • Challenging B&C markets with low visibility o Activity in B&C continues to decline, impacting volumes for RAW and I&C o Stable demand for food packaging, increas
Slide 5: Diversification remains a key competitive advantage
Diversification remains a key competitive advantage Diversified across segments1) Diversified across end-markets2) Diversified across countries3) Iceland; 2% Circular Other; 8% Automotive Baltics; 3% 5% Norway 5 % Food packaging Belgium; 3% RAW Other, incl. HVAC 17% 20 % 26 % 15 % France; 4% P&C 31
Slide 6: Financial overview second quarter of 2023
Financial overview second quarter of 2023 EBITDA margin improvement from Q1 for downstream, despite challenging markets Net sales Adj. EBITDA EUR million EUR million (6.9) 79.5 (76.3) (17.0) (0.6) (4.8) 21.2 7.3 Q2 2023 289.6 277.0 40.3 (0.4) 1.7 217.1 31.5 Q2 2022 Organic Acquisitions Divestments J
Slide 7: Successful integration of acquired companies
Successful integration of acquired companies On track to realise synergies of EUR ~30 million from Jackon transaction by 2024 • Integration of Jackon progressing well UniPIR panels – here used for roof insulation at o Established improved organisational structure construction project in Lithuania. E
Slide 8: Organic growth initiatives
Organic growth initiatives Selected key investment projects RAW Insulation & Construction • New twin screw extrusion line in Etten- • Investment in new production line for Leur increasing capacity by ~30 to 50kt construction boards in Belgium (Jackon), o Increase capacity of recycled grades and expe
Slide 9: Delivering on key priorities for long-term growth
Delivering on key priorities for long-term growth Securing a robust platform for sustainable profitable growth 1 Adjusting capacity – and costs to market 4 Increasing collection and consumption of conditions recycled material -> improving profitability -> becoming circular -> positioning for long-te
Slide 10: Financials
Second quarter of 2023 Financials 1
Slide 11: RAW
RAW Solid, but lower GAP. Volumes impacted by reduced demand from B&C Second quarter of 2023 Net sales Internal sales EUR million External sales • Net sales of EUR 85.5 million, down 32% o Acquisition of Jackon contributed with EUR 20.9 million (60.8) o Reduced demand from B&C resulted in lower volu
Slide 12: Insulation & Construction
Insulation & Construction Solid results and margin improvement from Q1 in challenging markets Second quarter of 2023 Net sales EUR million (1.0) • Net sales of EUR 124.8 million, up 46% o Growth from acquired companies 60.3 o Reduced demand from B&C resulted in 20-50% lower volumes (32.5) (4.8) 17.6
Slide 13: Packaging & Components
Packaging & Components Stable demand for food packaging, increasing volumes of HVAC and automotive components Second quarter of 2023 Net sales EUR million • Net sales of EUR 99.7 million, up 8% o 15% growth from acquisitions, 6% negative impact from (5.6) 10.6 currencies (0.9) 3.2 o Existing busines
Slide 14: Circular
Circular Improved volumes from acquisitions Second quarter of 2023 Net sales Internal sales EUR million External sales • Net sales of EUR 16.5 million, down 9% (3.1) (0.4) o Acquired company Berga added growth of 10% 1.8 3.1 o Negative organic growth due to lower prices 18.2 o Significant increase i
Slide 15: Financials: Consolidated P&L
Financials Consolidated P&L Amounts in EUR million Q2 2023 Q2 2022 1H 2023 1H 2022 2022 Second quarter of 2023 Net Sales 289.6 277.0 586.0 507.2 1 050.4 • Net sales of EUR 289.9 million, up by 5% Total operating income 289.6 277.0 586.0 507.2 1 050.4 o 28% negative organic growth from reduced volume
Slide 16: Financials: Cash flow and CAPEX
Financials Positive cash flow, maintenance CAPEX in line with target Cash flow from operations Second quarter of 2023 EUR million • Operating cash flow of EUR 26.0 million (25.0) o Working capital build-up of EUR 4.4 million (-1.3) 0.3 1.4 31.2 34.5 25.0 16.8 13.2 7.4 26.0 • CAPEX of EUR 16.2 millio
Slide 17: Financials: Capital structure
Financials Capital structure Leverage: Net debt/ EBITDA ratio(1) Leverage increased and ROCE reduced following EUR million recent acquisitions • Net debt EUR 558 million, EUR 360 million excl. IFRS 16 • Credit facility of EUR 150 million, of which EUR 1.5 2.5 1.8 2.6 1.5 2.2 1.3 1.9 1.2 1.7 1.2 1.6
Slide 18: Summary and outlook
Second quarter of 2023 Summary and 1 outlook
Slide 19: Outlook
Outlook Reduced visibility short-to-medium term, well positioned for long-term growth Markets • Styrene and EPS prices have increased since June, solid GAP maintained • Activity in building and construction industry expected to remain low in the second half of 2023, impacting volumes for RAW and I&C
Slide 20: Conclusions
Conclusions A diversified industrial group - positioned to accelerate growth across end markets • Solid results despite challenging markets • Integrated and diversified business model remains a key competitive advantage • Proven track record of adjusting prices, capacity and cost to current market •
Slide 21: Set to continue growth journey next five years
Set to continue growth journey next five years >2x ~20% <2.5x 30-50% Adj. EBITDA ROCE1 NIBD/Adj. EBITDA Dividend Through organic growth Increase towards 20% Leverage target Of underlying net profit and acquisitions by 2026 unchanged going forward Second quarter and first half of 2023 21
Slide 22: Growth strategy for divisions
Growth strategy for divisions Investing to position for growth from megatrends • Invest in new extrusion capacity to increase recycled capacity RAW • Increase capacity to maintain “raw material balance”, through strategic partnerships • Continue consolidation of the EPS/EPP recycling market Circular
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