Vidrala Sa · BME:VID
Vidrala Sa — Investor Presentation (July 2020)
35 slides from Vidrala Sa's investor presentation, July 2020
Slide 1: Company Presentation July 2020
COMPANY PRESENTATION JULY 2020
Slide 2: Disclaimer
DISCLAIMER This presentation includes or may include representations or estimations concerning the future about intentions, expectations or forecasts of VIDRALA or its management. which may refer to the evolution of its business performance and its results. These forward looking statements refer to
Slide 3: Index
INDEX 1. GENERAL OVERVIEW 2. BUSINESS FUNDAMENTALS 3. FINANCIALS 4. TARGETS 5. ANNEXES
Slide 4: Vidrala, at a glance
VIDRALA, AT A GLANCE SUPPLIER OF REFERENCE IN THE PACKAGING INDUSTRY Vidrala manufactures glass containers for a wide variety of products in the OVER 48% food and beverage industry. 3,500 USE OF RECYCLED EMPLOYEES GLASS We are one of the main glass container manufacturer in Western Europe, leaders i
Slide 5: Main figures FY 2019
MAIN FIGURES FY 2019 SALES EARNINGS 1,010.8 EUR million 5.27 EUR per share +5.5% YoY organic +24.0% YoY EBITDA FREE CASH FLOW 274.6 EUR million 121.1 EUR million 27.2% EBITDA margin 12.0% FCF over sales CREATING VALUE AND FUTURE IN A SUSTAINABLE WAY 5
Slide 6: Our history
OUR HISTORY 1965 The origin of Vidrala 1965 - Vidrala begins operations in Alava (Spain) 1975 Vidrala goes public 1985 1985 - IPO Madrid and Bilbao stock exchanges Domestic expansion 1989 - Second greenfield in Albacete (Spain) 1995 Internationalisation 2003 - Acquisition of one plant in Portugal 20
Slide 7: Operating profile
OPERATING PROFILE NET SALES. EBITDA MARGIN. Since 2000, EUR million. Since 2000, as percentage of sales. 1.200 30% 1.000 25% 800 20% 600 15% 400 10% 200 5% 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2000 2001 2002 2003 2004 2005 2006 2007
Slide 8: Cash profile
CASH PROFILE EBITDA. FREE CASH FLOW. Since 2011, EUR million. Since 2011, EUR million. 300 140 250 120 100 200 80 150 60 100 40 50 20 0 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019 51% CASH CONVERSION OF EBITDA 2011-2019 VALUE CREATION, MATERIALISED IN
Slide 9: Financial profile
FINANCIAL PROFILE FINANCIAL SOLVENCY. Year-over-year evolution of debt since 2015, EUR million and times EBITDA. 800 3x 2.5x 2.2x 600 1.9x 1.7x 2x Acquisition of 400 1.2x Santos Barosa EUR 252.7 million (EV) 1x 487 200 404 411 322 335 0 0x Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 ON THE BASIS OF A SOLVENT
Slide 10: Earnings profile
EARNINGS PROFILE EARNINGS PER SHARE. Since 2011, EUR per share. 6,0 4,0 2,0 0,0 2011 2012 2013 2014 2015 2016 2017 2018 2019 10
Slide 11: Dividend policy
DIVIDEND POLICY CASH DIVIDENDS. Since 2000, EUR million. 40 +15% 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 A DIVIDEND POLICY FOCUSED ON LONG TERM STABILITY ANNUAL GROWTH, COHERENT WITH PREVAILING BUSINESS CONDITIONS 11
Slide 12: Shareholder remuneration
SHAREHOLDER REMUNERATION EXPECTED 2020 DIVIDEND PAYMENTS SHAREHOLDER REMUNERATION Proposed FY 2019 results distribution Since 2018, EUR million Dividend* Share buy-back February 14th, 2020 70 Interim dividend EUR 84.30 cents per share 60 50 July 14th, 2020 40 Complementary dividend 30 EUR 32.09 cent
Slide 13: Business fundamentals
BUSINESS FUNDAMENTALS Understanding the european glass packaging industry
Slide 14: Industry fundamentals
INDUSTRY FUNDAMENTALS 1 LOGISTICS. Local sales nature. Natural characteristics of hollow glass containers limit logistics. Customers’ packaging activity demands service on time and supply flexibility. Proximity to the customer and service quality determines sales capabilities. 2 CONTINUOUS PROCESS.
Slide 15: Demand fundamentals: glass packaging production
DEMAND FUNDAMENTALS The glass packaging market in Europe Our key geographical regions SOLID AND STABLE STRATEGIC MARKETS FOR THE SECTOR Glass containers demand in Europe vs GDP. Glass packaging production vs GDP per capita. Annual variation (accumulated), base year 2000. 70 GLASS PACKAGING PRODUCTIO
Slide 16: Product fundamentals
PRODUCT FUNDAMENTALS GLASS, THE BEST OPTION Environmentally friendly Glass is a 100% recyclable material that can be shaped over and over again without losing any of its properties or advantages. The healthiest type of packaging It is a completely hygienic material, impervious to gases, vapour, and
Slide 17: Vidrala fundamentals
VIDRALA FUNDAMENTALS Vidrala’s commercial positioning is focused on geographic regions and product segments of long term strategic value. Vidrala sells its products to a strong customer base composed of a solid balance between blue chip customers, multinational brand owners and domestic packagers. 2
Slide 18: Competitive landscape
COMPETITIVE LANDSCAPE EVOLUTION OF MARKET SHARES IN WESTERN EUROPE. 2019 vs 1990. TOP 4 PLAYERS 1990 TOP 4 PLAYERS 2014 14% 20% 29% 13% 20,0% 58% 1990 2019 12% 29,1% 11,5% 15% 8% 12,0% AVIR 29% 8,0% 13,3% 2% 1,8% 28,6% TOP 4 PLAYERS: 41,8% TOP 4 PLAYERS: 82,6% A DYNAMIC ATTITUDE TOWARDS CONSOLIDATIO
Slide 19: Competitive landscape
COMPETITIVE LANDSCAPE LOCATION OF PRODUCTION SITES Internal sources. Some facilities, especially in Eastern Europe, are not identified in the map. 19
Slide 20: Financials
FINANCIALS Latest earnings release
Slide 21: Q1 2020 results. Sales
Q1 2020 RESULTS. Sales. SALES. YoY change, EUR million. 300 +1.1% +1.4% +0.3% 250 200 243.7 240.3 150 100 50 0 Q1 2019 Organic FX Q1 2020 change effect 21
Slide 22: Q1 2020 results. EBITDA
Q1 2020 RESULTS. EBITDA. EBITDA. YoY change, EUR million. 80 +4.7% +4.4% +0.3% 60 59.9 57.2 40 20 0 Q1 2019 Organic FX Q1 2020 change effect 22
Slide 23: Q1 2020 results. EBITDA margin
Q1 2020 RESULTS. EBITDA margin. EBITDA MARGIN. YoY change, as percentage of sales. 28% 26% 24.6% 24% 23.8% +80 bps 22% 20% 18% 16% Q1 2019 Q1 2020 23
Slide 24: Q1 2020 results. Debt
Q1 2020 RESULTS. Debt. NET DEBT. YoY evolution, in EUR million and times EBITDA. 700 2,5x 2.2x 600 2,0x 1.7x 500 1,5x 400 1.1x 300 1,0x 503 200 426 313 0,5x 100 0 0,0x Mar-18 Mar-19 Mar-20 24
Slide 25: Targets
TARGETS Business profitability and cash generation
Slide 26: EBITDA margins
EBITDA MARGINS Capacity utilization. EBITDA margin 100% 75% 1. Operational 50% leverage 25% 27.2% 0% 2012 2013 2014 2015 2016 2017 2018 2019 Pack-to-melt ratio. 90% 23.0% Target 85% 2. Internal 80% efficiency 70% 20.1% Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Site 7 Site 8 EBITDA margins. 40% 20% 3
Slide 27: Sustained cash generation
SUSTAINED CASH GENERATION Historical cash profile. 5-year accumulated average rates (2015-2019), as percentage of sales. ≈24% ≈9% ≈2% >50% ≈1% ≈12% CASH CONVERSION OF EBITDA 2015-2019 EBITDA Capex WC & Financial FCF others expense CASH GENERATION MATERIALISATION OF VALUE 27
Slide 28: Return on capital employed
RETURN ON CAPITAL EMPLOYED 18% 15% 14.5% 13% 11.5% 11.9% 11.4% 10.3% 10% 9.4% 9.4% 7.9% 8% 5% 3% 0% 2012 2013 2014 2015 2016 2017 2018 2019 FOCUS ON BUSINESS PROFITABILITY RoCE is calculated as EBIT post-tax divided by capital employed. See used formula: [EBIT * (1-t)] / (equity + net debt) 28
Slide 29: Annexes
ANNEXES Other relevant information
Slide 30: Annex I. Acquisition of Encirc (2015)
ANNEX I. Acquisition of Encirc (2015). Encirc Glass is a glass packaging manufacturer for the food and beverage markets in UK and Ireland. It is the sole player in Ireland and the second player within the UK (market share ≈30%). The DERRYLIN plant (Northern Ireland), built in 1998, is the only glass
Slide 31: Annex I. Acquisition of Encirc (2015)
ANNEX I. Acquisition of Encirc (2015). QUALITY OF ASSETS High-scale facilities Triple gob and quad gob flexibility Highly modern inspection machines Filling capabilities Fully automated warehouse 31
Slide 32: Annex II. Acquisition of Santos Barosa (2017)
ANNEX II. Acquisition of Santos Barosa (2017). Santos Barosa manufactures and commercialises glass containers. It operates a major production facility located in Marinha Grande, Portugal. The company produces around 400,000 glass tons per year. The agreed transaction price amounts to an enterprise v
Slide 33: Annex III. Financing structure
ANNEX III. Financing structure. 350 313,1 300 250 223,0 200 150 100 50 0 Debt as at Immediately 1-12 13-24 25-36 37-48 Beyond March 31, available months months months months 48 months 2020 resources Debt maturity profile. Per year, EUR million. Current financing structure Debt / EBITDA ratio Average
Slide 34: Annex IV. 2020 outlook
ANNEX IV. 2020 outlook. BUSINESS UPDATE • Sales volumes during Q2 standalone down approx. -15%, as expected • Operating margins year-to-date consolidated at levels above 25% EBITDA over sales • Financial position remains solid, debt reduction approx. -25% year-on-year STRATEGIC GUIDELINES UNDER THE
Slide 35: Vidrala, S.A. Investor Relations
VIDRALA, S.A. Investor Relations Tel: +34 94 671 97 50 [email protected] www.vidrala.com