Victoria Plc · LSE:VCP
Victoria — Merger or Acquisition (November 2021)
24 slides from Victoria's merger presentation, Nov 29, 2021
Slide 1: Carve-out and Acquisition of the Rugs & UK Carpet Business of Balta Group NV
29 NOVEMBER 2021 CARVE-OUT AND ACQUISITION OF THE RUGS & UK CARPET BUSINESS OF BALTA GROUP NV INVESTOR PRESENTATION
Slide 2: Disclaimer
Disclaimer • This presentation has been prepared by and is the sole responsibility of the directors of Victoria P.L.C. (the “Company”). This presentation has been prepared for information purposes only and does not constitute a recommendation or advice regarding the shares of the Company nor a repre
Slide 3: Table of contents
Table of contents 01 Victoria Investment Track Record 02 Transaction Overview 03 Soft Flooring (Carpets & Rugs) Industry 2 04 Division Overview 4a Balta Rugs Division 4b UK Polypropylene Carpet Business 4c Captiqs Non-woven Carpet Division
Slide 4: Victoria investment track record
Victoria investment track record
Slide 5: Victoria Investment Track Record
Victoria Investment Track Record In the 9 years since the current board was appointed by shareholders SHAREHOLDER RETURNS1 TOP LINE GROWTH OPERATING PROFIT2 £63.55 £662m £127m Current value of £1 invested in FY2021 Revenue FY2021 Underlying EBITDA October 2012 +6,255% +27% +39.6% Growth since 2012 C
Slide 6: Transaction Overview
Transaction Overview VICTORIA PLC
Slide 7: Transaction rationale
Transaction rationale • We are excited to announce the carve-out and acquisition of three attractive divisions of Balta’s: Rugs, UK PP Carpet, and Captiqs Non-Woven Carpet • Combined LTM Mar-21 revenue and EBITDA of c.€307m and c.€35m, respectively • Attractive and unique opportunity with compelling
Slide 8: Transaction overview
Transaction overview • Purchase price to be funded from the Group’s cash balances and new £150 million preferred equity commitment from Koch Equity Development • Victoria’s leverage will remain in line with its stated financial policy following completion, with the current ratio of net debt to pro-f
Slide 9: Target profile
Target profile • Listed on the Euronext since 2017, Balta is the largest producer of textile floor coverings in Europe with revenue of €562m in 2020 • Our acquisition perimeter includes three divisions: Rugs, UK PP Carpet, and Captiqs Non- Woven Carpet • Each of these divisions brings significant sy
Slide 10: Soft Flooring Industry Overview
SOFT FLOORING INDUSTRY OVERVIEW - Global rugs sector - UK carpet sector
Slide 11: Global Rugs Sector
Global Rugs Sector 2019 2024 2029 2019-24 CAGR Global Flooring Demand (sqm in millions) 19,425 20,950 25,840 2.6% Global Flooring Demand (USD millions) 232,440 282,520 356,780 4.0% Hard Flooring Demand (sqm in millions) 11,290 12,984 15,442 2.8% Demand driven by: ✓ Demand for rugs correlates to hard
Slide 12: UK Carpet Market
UK Carpet Market 2019 2024 2029 2019-24 CAGR UK Flooring Market (million square metres) 413 434 469 1.0% UK Carpet demand (millions square metres) 238 247 264 0.8% Carpet share of overall UK Flooring Market 58% 57% 56% Demand driven by: ✓Stable carpet share of overall flooring market @c.56-58% for t
Slide 13: Rugs Division - Growing demand in key markets
RUGS DIVISION - Growing demand in key markets
Slide 14: Balta Rugs Division Business Overview
Balta Rugs Division Business Overview Snapshot Leading positions Overview • Manufactures and distributes mechanically woven rugs since 1970 #1 Europe Route to • Strong global distribution capabilities with sales in more than 100 market countries across the world #2 Globally • Via a combination of ma
Slide 15: Global Production & Distribution Facilities
Global Production & Distribution Facilities Usak, Turkey: Production Surface: 68.000 m2, 27.000 m2 (covered area) Avelgem, Belgium: Offices, Showroom, Production Surface: 141.500 m2 Usak, Turkey: Production Surface: 273.000 m2, 86.520 m2 (covered area) Waregem, Belgium: Production Rome, GA. USA: US
Slide 16: Solid and Increasing Financial Performance
Solid and Increasing Financial Performance Key Financial Metrics – Earnings and Cash Flow Accretive 7.9% 9.6% 12.6% 24.4 16.8 17.5 FY2019 FY2020 LTM March 2021 Underlying EBITDA Underlying EBITDA margin 15
Slide 17: Synergies and Commercial Opportunity
Synergies and Commercial Opportunity • Victoria has identified material value-creating commercial synergies with its existing business Cross selling opportunities with existing Victoria hard flooring business (ceramic tiles or LVT) Customers tend to purchase rugs right after hard flooring installati
Slide 18: UK Carpet Business - Significant operating synergies
UK Carpet Business - Significant operating synergies
Slide 19: Business Overview
Business Overview Snapshot Overview • Manufacturer of polypropylene tufted carpet Route to • Via a diverse customer base of major retailers and market wholesalers Target • Stable residential renovation market like Victoria market • Mid-priced product ranges (highly complementary to Victoria’s existi
Slide 20: Solid Financial Performance
Solid Financial Performance Key Financial Metrics – Earnings and Cash Flow Accretive 7.6% 11.2% 11.2% 11.6 11.1 9.2 FY2019 FY2020 LTM March 2021 Underlying EBITDA Underlying EBITDA margin 19
Slide 21: Synergies with Victoria's existing UK carpet business
Synergies with Victoria’s existing UK carpet business will create substantial value for shareholders • Victoria has been manufacturing carpet in the UK for more than 125 years. It has high-quality and well-invested manufacturing facilities in Wales and Yorkshire, operated by an experienced and commi
Slide 22: Non-Woven Carpet Division
CAPTIONS DYNAMIC NONWOVENS Non-Woven Carpet Division TORIA PLC
Slide 23: Business Overview
Business Overview • Captiqs manufactures sustainable non-woven technical carpet for: • Event: practical expo carpets • Automotive: from molded structural parts to interior liners • Building: heat, cold, noise and moisture insulation • Geotex: geotextiles for water-draining and filtration purposes •
Slide 24: An earnings-accretive acquisition at an attractive valuation
“An earnings-accretive acquisition, at an attractive valuation, with very material, synergy-led earnings upside and deleveraging profile.”