Viscofan, S.a. · BME:VIS
Viscofan — FY2013 Earnings Presentation
34 slides from Viscofan's earnings presentation, Feb 28, 2014
Slide 1: January-December 2013 Results
January-December 2013 Results 28th February 2014 Results January - December 2013
Slide 2: Disclaimer
Disclaimer This document may contain additional non- non-compulsory forward- forward-looking statements on intentions or expectations of the Company as of the date of its publication whose only purpose is to provide further information on perspectives on future performance. Such forward- forward-loo
Slide 3: Consolidated results 2013: revenue, EBITDA and capex growth
Consolidated results 2013 Positive performance of Be MORE strategy. 752.8 765.3 666.8 Revenue +7.1%CAGR 2011 2012 2013 185.0 178.3 162.1 EBITDA +4.9%CAGR 2011 2012 2013 101.6 74.0 64.7 CAPEX +25%CAGR 2011 2012 2013 Results January - December 2013 3
Slide 4: 2013 Milestones
Consolidated results 2013 2013 Milestones Global collagen manufacturer with the start-up of China facility and the beginning of operations in Uruguay.. Furthermore the increase in volumes, volumes specially in collagen family, which grows at double digit rate. Consolidation of technological improvem
Slide 5: Weaker results than expectations
Consolidated results 2013 Weaker results than expectations… MM € 2013 Var % Guidance Revenue 765.3 +1.7% +5-6% x +5- EBITDA 178.3 -3.6% +4-5% x +4- EBITDA Margin 23.3% -1.3 p.p. Net Profit 101.5 -3.4% +2-3% x +2- DPS 1.12€ 1.12€ +1.8% Results January - December 2013 5
Slide 6: Excellent results in terms of organic growth
Consolidated results 2013 … however, internal operating has recorded excellent results in terms of organic growth… 2012 2013 Regulación Like- Like-for- for -like Like- Like-for- for -like Forex 1 cogeneración2 2013 3 %y- %y -o -y. Revenue 752.8 765.3 -24.9 -5.8 796.1 5.8% EBITDA 185.0 178.3 -7.3 -10
Slide 7: Expansion plans protected by a strong balance sheet
Consolidated results 2013 … provided by the anticipation in expansion plans, and protected by a strong balance sheet. +37.3% +30.8% 101.6 84.6 74.0 64.7 0.4x 0.5x EBITDA EBITDA CAPEX CAPEX Net bank Net bank 2012 2013 debt dic’12 debt dic’13 dic’13 • Building a new facility in Uruguay. • Expansion wi
Slide 8: Total remuneration per share
Consolidated results 2013 Expansion in our core business without requiring additional efforts to shareholders, who benefit from the structural improvement of Viscofan Group. Total remuneration per share1 (€) 1.10€ 1.12€ 1.12€ 0.704 € final dividend (payment 4th june 2014) 1.00€ +1.8% vs. 2012 +5.8%
Slide 9: New record level in revenue despite organic growth erosion
Consolidated results 2013 New record level in revenue, despite a backdrop that erodes organic growth by more than 4 p.p. Quarterly revenue growth (MM €) Revenue 2013 Like-for-like revenue 2013 1 796.1 765.3 752.8 2012 1Q 2Q 3Q 4TQ 2013 % Change +3.8% +5.1% -0.3% -1.8% +1.7% % Change like- like-for-
Slide 10: Organic growth and cost control against high inflation
Consolidated results 2013 Organic growth and cost control against a backdrop of high inflation on raw material prices and energy, weak forex and adverse energy regulation. % y- y-o-y +6.5% +5.0% (ex-forex) +3.0% +0.6% +0.3% +1.7% (ex-forex) -3.6% Cost of Personnel Other operating Revenue EBITDA cons
Slide 11: Like-for-like EBITDA growth in all quarters
Consolidated results 2013 Like-for-like EBITDA growth all quarters, speeding up in Q4 fostered by China performance. Quarterly EBITDA growth (MM €) EBITDA 2013. Like-for-like EBITDA 2013 1 195.9 185.0 178.3 2012 1Q 2Q 3Q 4Q 2013 % Change -1.1% +2.6% -8.7% -7.2% -3.6% % Change Like- Like-for- for-lik
Slide 12: Lower exchange differences and fiscal optimization transferred to net profit
Consolidated results 2013 Lower exchange differences and fiscal optimization are transferred to Net profit. 178.3 -48.4 129.9 -3.3 -25.1* 101.5 EBITDA D&A EBIT Net financial results Taxes Net profit Net financial results (MM €) Effective tax rate: 0.7 0.5 21% 21% 19.8% 2013 -0.7 2012 -3.5-3.1 -4.2 F
Slide 13: Net bank debt evolution
Consolidated results 2013 Strong operations to finance the expansion plan, both capex and working capital, and also increases on shareholder’s remuneration. Net bank debt evolution (MM €) 51.5 -4.1 84.6 64.7 -178.3 14.6 Financial 101.6 leverage: Financial 16.2% leverage: 13.0% 34.6 Net bank debt EBI
Slide 14: Casings division
Casings division Results January - December 2013 14
Slide 15: Casings sales rise in line with market growth
CASINGS Casings sales rise in line with market growth… Evolution of revenue growth (%) Casings revenue Energy co-generation Like-for-like casings revenue 1 revenue 20.3% 14.5% 11.3% -6MM€ 6MM€ 6.8% 6.9% 5.3% regulation 4.8% 2.7% -9.8% 2011 2012 2013 2011 2012 2013 vs. 2010 vs. 2011 vs. 2012 vs. 2010
Slide 16: Driven by casings volumes, eroded by currencies and cogeneration
CASINGS … driven by casings volumes (specially in collagen family)… but eroded in the second half of the year by currencies and cogeneration… Revenue(MM €) +6.4 p.p. -0.8 p.p. -3.8 p.p. 660.2 649.2 Like-for-like Co-generation Forex1 +1.7% vs. 2012 2012 2013 1 For comparative purposes, growth excludi
Slide 17: Solid quarterly performance with acceleration in last quarter
CASINGS Solid quarterly performance, with the acceleration of year on year growth in last quarter… Contribution to growth. Quarterly evolution, in p.p. Like-for-like Forex Co-generation +6.7 +7.0 +5.9 +0.5 +5.8 +0.5 -1.9 -2.4 -5.3 -5.7 -0.9 -3.3 1Q 2Q 3Q 4Q 2013 % Var +3.9% +5.4% -0.8% -1.6% +1.7% R
Slide 18: Volume growth in all reporting areas
CASINGS … with volume growth in all reporting areas1, against an environment where all trade currencies have depreciated against the €... Revenue breakdown by geographic area (MM €) 354.9 339.5 30.8% North America 53.7% 209.0 203.2 Europe & Asia 100.7 102.1 15.5% Latam +4.5% -2.8% 2013 2012 +1.4% La
Slide 19: Cumulative EBITDA bridge for casings
CASINGS … and nevertheless, casings division robustness and operative improvements enable to partially offset external factors,… Cumulative EBITDA (MM (MM €) -10.2 Revenue growth 177.3 -7.3 170.6 +10.8 Improving productivity (-3.8%) 2012 Co-generation Forex Operative 2013 effect effect improvements
Slide 20: Costs scenario eroding margin evolution
CASINGS … in a costs scenario (start-up in China, collagen hide prices and new co- generation taxes) that erode margin evolution… +0.8 p.p. +9.8% 4Q13 like-for-like 1 vs. 4Q12 4Q13 like-for-like 1 vs. 4Q12 Quarterly EBITDA margin Quarterly EBITDA (MM €) 2013 like-for-like 1 2012 2013 2013 like-for-l
Slide 21: Vegetable Food: Carretilla brand and diversification
VEGETABLE FOOD Positive performance driven by Carretilla brand strength and diversification strategy, even despite the weakness of the domestic market, Spain. Revenue (MM €): EBITDA (MM €): Net profit (MM €): +1.5% -0.1% 21,0% 105.1 103.6 7.7 7.7 4.7 3.9 2012 2013 2012 2013 2012 2013 EBITDA margin 7
Slide 22: Context and Outlook 2014
Context and Outlook 2014 Results January - December 2013 22
Slide 23: Our world is still unbalanced
Our world is still unbalanced… 2008 2013 2020 CAGR 08- 08-13 16% 15% 15% World: World: +1.2% 84% 85% 85% 38% 36% 34% World: World: +2.0% 62% 64% 66% 25% 45% 75% 55% ? World: World: +6.6% Asia Latam Africa North America Europe Source: FAO, Viscofan Results January - December 2013 23
Slide 24: Artificial casings benefits
Artificial casings benefits: a natural evolution to meet the needs of a demanding market. Artificial Food Higher casing REQUIREMENTS security productivity CONSUMER More Costs range of savings products Less productive waste Africa Asia Latam North America Europa Natural Casing consumption per capita
Slide 25: From regional producer to global producer
Viscofan has had to make a titanic effort to adapt itself to this environment … but has led the change. Year 2011 From Regional producer To Global Year 2014 producer Results January - December 2013 25
Slide 26: New production plants in China and Uruguay
New production plants in China and Uruguay are now a real… Suzhou (Extrusion) Suzhou (Converting) Pando (Extrusion) Results January - December 2013 26
Slide 27: Casings market growing above historic average
In 2013, casings market continue growing above its historic average... 2013 +3% +1% Cellulose 2012 2012 Fibrous +5% Plastic Collagen Natural gut +10% … and Viscofan is the only one that benefits from its portfolio. Cellulose Collagen Fibrous Plastic Total range 27% Total Viscofan #1 market share Dev
Slide 28: Investment anticipated for expansion growth
… 2012 and 2013 have anticipated the investment to provide expansion growth in the coming years. Op CF performance (MM €) 185 182-185 178 162 154 107 97 109 76 >108 +40% vs. 2013 102 74 52 Capex 74 65 o n new 47 capacity 30 Capacity 40% Process 2010 2011 2012 2013 2014e 22% upgrade 20% Maintenance 1
Slide 29: Dynamic model combining long-term investment with volatile environment
A dynamic model that combines long term investment in fixed assets with volatile environment in a global world. Protfolio and footprint as sustainable competitive advantage. advantage. Centres of excellence: excellence: a dynamic management model. model. Skinless Collagen Plastics Fibrous Viscofan G
Slide 30: Operational improvement and commercial leadership
Focus on operational improvement and commercial leadership that nobody else in the market offers Viscofan Group COMPETITIVE ADVANTAGE matrix Technology improvement LOW Production + COSTS transfer Excellence Low cost centres centres (emerging (developed countries) countries) Technology transfer Infla
Slide 31: Casings main costs over sales
… That offset negative impact form a very tough environment. Casings. Main costs over sales. % Weigth Period Be MORE Negative impacts over sales% Raw material inflation (double digit on collagen Cos of consumption1 26.5% 29.8% x hides) hides) and taxes to the purchase of gas. gas. Energy 8.6% 8.6% 7
Slide 32: Optimization initiatives to improve margins
Specific “Optimization” initiatives that could help our business to improve margins despite the tough environment. Uruguay start- start-up and production improvement Raw material management Reduce production “waste” Automate processes (Brazil, USA) New team for “Process Engineering” Energy optimizat
Slide 33: Guidance 2014
Guidance 2014 US$/€ US$/€: 1.35 -6 MM € BRL/€: 3.20 BRL/€ REVENUE +2%/+4% EBITDA +2%/+4% NET PROFIT -6%/- %/-8% Results January - December 2013 33
Slide 34: To Wrap Up
To Wrap Up Viscofan Group has fulfilled main strategic milestones for 2013. Solid casings business growth in a market that remains growing faster than its historical average. Margin pressure due to raw material costs, co- co-generation taxes, and currency weakness (BRL y US$) that eroded like-for-li