Bewi Asa · OSL:BEWI
Bewi Asa — Q4 2022 Earnings Presentation
28 slides from Bewi Asa's earnings presentation, Feb 16, 2023
Slide 1: Results for the fourth quarter and full year of 2022
Results for the fourth quarter and full year of 2022 CEO Christian Bekken, CFO Marie Danielsson 16 February 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
Fourth quarter and full year of 2022 Highlights 1
Slide 4: Continue to deliver solid results in challenging times
Continue to deliver solid results in challenging times Strong price management, combined with high M&A activity 1800 EUR 1 513 million 1600 • Continue to deliver solid results 1400 463 • Increase in raw material prices first 1200 102% 1000 9 months, then significant decrease resulting 800 in shift i
Slide 5: Growth and margin improvement for downstream
Growth and margin improvement for downstream Variations across segments and regions, margin dilution from acquired entity Highlights for the fourth quarter • Markets: o Reduced activity in building and construction, especially in the Nordics, impacting volumes for RAW and Insulation o Stable demand
Slide 6: Financial highlights
Financial highlights Solid results driven by good price management and high M&A activity Fourth quarter of 2022 300 Net sales Adj. EBITDA 40 EUR million EUR million 14% • Net sales of EUR 276 million, up 32% 250 12.7 % 12% 30 o Organic growth for all segments except RAW, which was impacted by 200 8.
Slide 7: Completed acquisition of Jackon Holding
Completed acquisition of Jackon Holding Strengthening BEWI’s market positions and adding well-known brands Highlights of the transaction Net sales (EUR million) • Transaction completed 19 October 2022, >1 year after acceptance of bid 500 1 400 0.8 • Jackon complements BEWI very well, by 300 0.6 o St
Slide 8: Key priorities for successful integration
Key priorities for successful integration Well underway for synergy extraction and other initiatives for improved profitability 1 2 3 Cost reductions for Insulations in Adjust capacity to current demand Extracting synergies of more than Nordics, to improve profitability EUR 15 million • Reduce cost
Slide 9: Sale of real estate portfolio for up to NOK 2 billion
Sale of real estate portfolio for up to NOK 2 billion Divesting properties provides BEWI with strengthened financial flexibility • Ongoing sale of real estate portfolio up to NOK 2bn o First phase of completed in November, incl. 11 properties and one land plot in Norway and Sweden, valued at NOK ~90
Slide 10: Organic growth initiatives
Organic growth initiatives Selected key investment projects Packaging RAW Insulation • Completed development of new fish box • Investment in new twin screw extrusion • Investment in new production line for facility at Senja under long-term supply line at RAW production facility in Etten- constructio
Slide 11: Adding close to EUR 600 million in sales
Adding close to EUR 600 million euro in sales Strategic and transformative acquisitions Period Company Annual sales Annual EBITDA Region Key offering Strategic rationale EUR million EUR million Trondhjems Broaden offering with complimentary ~15.5 ~3.4 Norway Paper packaging Eskefabrikk materials Q2
Slide 12: Increased diversification from acquisitions
Increased diversification from acquisitions Providing robust and solid results in volatile and turbulent markets Salg Salg Diversified across countries Diversified across segments1) Diversified across end-markets2) Circular Other incl. HVAC Other 9% 6% Norway 15 % Food packaging Baltics 3% 18 % RAW
Slide 13: Strong European player
Strong European player ..with broad local footprint • Delivering strong and profitable growth, combined with decreased leverage • Strengthening market positions, expanding geographically and broadening product offering • Integrated and diversified business model a key competitive advantage – both in
Slide 14: Financials
Fourth quarter and full year of 2022 Financials 1
Slide 15: Financial overview
Financial overview Continued organic growth following strong price management Net sales Adj. EBITDA EUR million EUR million (5.2) 53.9 (5.2) 1.5 0.1 27.5 1.7 (8.8) Q4 2022 275.7 26.4 24.4 208.2 Q4 2021 Organic Acquisitions & Jackon Currency Q4 2022 Q4 2021 Organic Acquisitions & Jackon Currency Q4 2
Slide 16: RAW
RAW GAP remained solid, volumes impacted from reduced demand from B&C Fourth quarter of 2022 Net sales Adj. EBITDA EUR million 20 EUR million 20% • Net sales of EUR 87.7 million, down 5.6% 15 16.8 % 15% o Acquisition of Jackon contributed with EUR 12.5 million (13.4%) 100 o Reduced demand from B&C r
Slide 17: Insulation
Insulation Stable demand & higher prices in Benelux, challenging in the Nordics Fourth quarter of 2022 Net sales 10 Adj. EBITDA 100 EUR million EUR million 14% • Net sales of EUR 106.5 million, up 114.1% 8 12% o 4.8% organic growth from higher sales prices 80 10% 6 8.7 % o Growth from acquired compa
Slide 18: Packaging & Components
Packaging & Components Improved EBITDA from increased prices, volumes at Senja and improved volumes to automotive and HVAC Fourth quarter of 2022 Net sales 20 Adj. EBITDA 20% 100 EUR million EUR million • Net sales of EUR 104.4 million, up 18.7% 15 15% 80 12.7 % o 0.6% organic growth from higher sal
Slide 19: Circular
Circular Improved volumes from acquisitions Fourth quarter of 2022 20 Net sales 1 Adj. EBITDA 10% EUR million EUR million • Net sales of EUR 15.2 million, up 75.4% 0.5 15 5% o 47.7% organic growth explained higher volumes and sales of packaging waste recovery notes in the UK 0 -0.1 10 Q4 2021 Q4 202
Slide 20: Consolidated P&L
Financials Consolidated P&L Amounts in EUR million Q4 2022 Q4 2021 2022 2021 Fourth quarter of 2022 Net Sales 275.7 208.2 1 050.4 748.2 • Net sales of EUR 275.7 million, up by 32.4% Total operating income 275.7 208.2 1 050.4 748.2 o Negative 4.2% organic growth from reduced volumes & prices in RAW o
Slide 21: Capital structure
Financials Capital structure Leverage: Net debt/ EBITDA ratio(1) • Net debt EUR 550.7 million, EUR 382.3 million EUR million excl. IFRS 16 • Credit facility of EUR 150 million, of which EUR 84.6 million unutilized on 31 December 2022 • Increased leverage and reduced ROCE following 1.5 2.5 1.8 2.6 1.
Slide 22: Positive cash flow, maintenance CAPEX of 2.6% of sales
Financials Positive cash flow, maintenance CAPEX of 2.6% of sales for 2022 EUR million Fourth quarter of 2022 • Operating cash flow of EUR 13.2 million (34.5) o Decline mainly related to working capital o Higher inventory in segment RAW and Circular in combination with timing of styrene payment • CA
Slide 23: Summary and outlook
Fourth quarter and full year of 2022 Summary and 1 outlook
Slide 24: Outlook
Outlook Well positioned in challenging markets • Experience mixed market development o Demand from building and construction (B&C) industry expected to be down by 10% in 2023 compared to 2022, with ~60% of business exposed (RAW and Insulation) o Packaging expected to remain stable, with continued po
Slide 25: 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 Fourth quarter of 2022 25
Slide 26: BEWI for a better everyday
BeW/ for a better everyday
Slide 27: Segment split for Jackon Holding
Segment split for Jackon Holding EUR million 2021 2022 Jackon Holding Net sales EBITDA EBITDA % Net sales EBITDA EBITDA % RAW 119.8 19.0 15.9% 125.7 18.0 14.3% Insulation 257.8 14.5 5.6% 308.1 1.8 0.6% Packaging 80.3 10.9 13.6% 58.3 5.8 9.9% Unallocated -0.9 -1.4 Elim -60.0 -69.1 Total 398.0 43.6 10
Slide 28: Growth strategy for divisions
Growth strategy for divisions Controlling the value chain yields operational and financial synergies • Invest in new extruders to increase recycled capacity RAW • Maintain “raw material balance” • R&D capabilities • Continue consolidation of the EPS/EPP recycling market Circular • Focusing on securi