Bewi Asa · OSL:BEWI
Bewi Asa — Q3 2023 Earnings Presentation
28 slides from Bewi Asa's earnings presentation, Nov 7, 2023
Slide 1: Q3 2023 results
Q3 2023 results CEO Christian Bekken, CFO Marie Danielsson 7 November 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
Third quarter of 2023 Highlights 1
Slide 4: Solid results with strong operational cash flow despite continued challenging markets
Solid results with strong operational cash flow despite continued challenging markets Building a robust platform to deliver on long-term targets • Solid results for insulation and packaging segments o Successful profitability improvements implemented o Low activity in building and construction indus
Slide 5: Strong measures to adapt to market conditions
Strong measures to adapt to market conditions Capacity – and cost reductions provide margin improvement • Insulation & Construction segment Jackodur XPS panels – here used for roof insulation at the sports center in the French ski resort Val Thorens. o Strong measures to adjust capacity and cost hav
Slide 6: Group financials
Third quarter of 2023 Group financials 1
Slide 7: Financial overview third quarter of 2023
Financial overview third quarter of 2023 Sales in line with Q3 2022, weaker EBITDA mainly from lower GAP in RAW Net sales Adj. EBITDA EUR million EUR million (4.7) (6.0) EUR 12.5 million of the decrease from RAW 74.5 (64.7) Q3 2023 (15.7) 267.5 272.6 266.6 (0.3) (0.6) 34.4 6.3 24.0 Q3 2022 Organic A
Slide 8: Financials
Financials Consolidated P&L Amounts in EUR million Q3 2023 Q3 2022 9M 2023 9M 2022 2022 Third quarter of 2023 Net Sales 266.6 267.5 852.6 774.7 1 050.4 • Net sales of EUR 266.6 million, in line with Q3 2022 Total operating income 266.6 267.5 852.6 774.7 1 050.4 • EBIT of EUR 3.7 million Raw material
Slide 9: Strong cash flow from operations
Financials Strong cash flow from operations Cash flow from operations Third quarter of 2023 EUR million 34.5 19.9 • Operating cash flow of EUR 14.2 million (16.8) o Working capital reduction of EUR 3.5 million (-12.1) 0.3 1.4 31.2 25.0 16.8 13.2 7.4 26.0 14.2 • CAPEX of EUR 12.5 million (8.9) -14.2
Slide 10: Divestment of real estate to strengthen financial position
Financials Divestment of real estate to strengthen financial position Leverage: Net debt/ EBITDA ratio(1) Acquisition of Jackon, Aislenvas • Leverage increased and ROCE reduced following EUR million and Inoplast 2022 acquisitions • Credit facility of EUR 150 million, of which EUR 13.2 million unutil
Slide 11: Segment review
Third quarter of 2023 Segment review 1
Slide 12: RAW
RAW Well positioned, investing to increase capacity of recycled material • Challenging market conditions o Building and construction account for ~70% of external volumes o Cautious customers result in low visibility o Strong competition, suppliers running at reduced capacity • Strategic partnership
Slide 13: RAW
RAW Reduced GAP, volumes impacted by low activity in building & construction industry Third quarter of 2023 Net sales Internal sales EUR million External sales • Net sales of EUR 81.8 million, down 22% o Jackon contributed with EUR 17.3 million (40.0) 17.3 31.3 o Decrease in EPS raw material prices
Slide 14: Insulation & Construction
Insulation & Construction Adjusting capacity and cost to adapt to market conditions • Challenging market conditions o All markets experience reduced volumes with 20-50% o Nordics impacted the most, with Iberia and UK impacted least • Comprehensive capacity and cost adjustments o Facilities temporari
Slide 15: Insulation & Construction
Insulation & Construction Strong results in challenging market conditions Third quarter of 2023 Net sales EUR million • Net sales of EUR 113.1 million, up 42% (4.7) (0.8) o Q3 seasonally slow compared to Q2 65.4 o Growth from acquired companies (26.6) 113.1 o Lower volumes and prices resulted in neg
Slide 16: Packaging & Components
Packaging & Components Demand for food packaging and automotive remains solid • Demand for food packaging and automotive remains solid o Food packaging ~56% of sales for the quarter ▪ Slaughter volumes up from Q2 ▪ Volumes of traded products down Y-o-Y o Automotive ~18%, with 23% growth in volumes Y
Slide 17: Packaging & Components
Packaging & Components Solid results from sales of fish boxes and automotive components Third quarter of 2023 Net sales EUR million • Net sales of EUR 93.6 million, down 9% o Growth from acquired companies (12.9) (5.0) 8.2 o Negative organic growth from lower volumes of traded products and industria
Slide 18: Circular
Circular Steadily increasing collected volumes and consumption • Fragmented market, currently impacted by low activity in building and construction o Demand and prices correlate with prices of virgin raw material o Longer supply chain than virgin, i.e., more sensitive to volatile prices • Key priori
Slide 19: Circular
Circular Lower prices impacting sales and profitability Third quarter of 2023 Net sales Internal sales EUR million External sales • Net sales of EUR 13.6 million, down 26% o Growth from acquired companies Berga and Inoplast (6.4) 2.0 (0.3) o Negative organic growth due to lower volumes and prices 2.
Slide 20: Strategy recap and outlook
Third quarter of 2023 Strategy recap 1 and outlook
Slide 21: Uniquely positioned to capture growth
Uniquely positioned to capture growth.. .. from building efficiency opportunity and need for sustainable packaging SELECTED BEWI SOLUTIONS 40% INSULATION SOLUTIONS of Europe’s energy consumption are from buildings Protecting homes by insulating buildings, reducing the need for heating/ cooling and t
Slide 22: Creating high downstream value based on strong upstream positions
Creating high downstream value based on strong upstream positions Upstream Downstream Circular RAW Insulation Packaging & Automotive Components Currently part of P&C • Collection and recycling • Production of white, grey • Manufacturing of insulation • Manufacturing and trading • Manufacturing of an
Slide 23: Growth strategy for divisions
Growth strategy for divisions Investing to position for growth from megatrends Strategy Priorities • Increase portion of insulation solutions/systems √ Insulation Offer complete “suite” of insulation solutions • Increased focus on prefabricated elements and solutions √ • Broaden product offering to
Slide 24: Strengthening financial position through strategic partnerships
Strengthening financial position through strategic partnerships • Established divisional structure addressing key customer areas • Dedicated management teams responsible for operational excellence • Considering strategic partners for divisions • Strengthen financial – and cash position • Maintain be
Slide 25: Investments in line with strategy
Investments in line with strategy Supporting insulation as key growth driver throughout BEWI portfolio Diversified end-markets 1) Salg with insulation as the Key acquisitions and investments key growth driver Division Recent acquisitions Key investments Automotive 5% • Jablite Other incl. HVAC Food
Slide 26: Outlook
Outlook Low visibility short-to-medium term, well positioned for long-term growth Markets • GAP in RAW increased since the end of Q3 • Activity in building and construction expected to remain low in Q4 and into 2024 • Solid outlook for food packaging and automotive components EBITDA • Q3 EBITDA some
Slide 27: 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 markets 4 Increasing collection of recycled material -> improving profitability -> becoming circular -> positioning for long-term growth -> reducing CO2
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