Belysse Group NV · EURONEXT:BELYS
Belysse Group NV — Balta Group — FY2019 Earnings Presentation
34 slides from Belysse Group NV's earnings presentation, 2020
Slide 1: 2019 Full Year Results
2019 Full Year Results Confidential
Slide 2: Disclaimer
Disclaimer In considering any performance information contained herein, you should bear in mind that past or projected performance is not necessarily indicative of future results, and there can be no assurance that any entity referenced herein will achieve comparable results or that illustrative ret
Slide 3: Introduction
Introduction Cyrille Ragoucy CEO Chairman of the Board FY 2019 headlines Jan-Christian Werner CFO Financial Review Emmanuel Rigaux CTO Update on NEXT 3
Slide 4: Full Year 2019 Financial Summary
Full Year 2019 Financial Summary +2.6% organic • FY2019 Consolidated Revenue of €671.2m +3.9% yoy sales growth • Solid top-line growth in Rugs (+7.4%) and Commercial (+9.7%), while (consolidated) +1.3% FX impact decline in Residential (-5.8%) (7.4%) organic • FY2019 Consolidated Adjusted EBITDA of €
Slide 5: Financial Review
Financial Review Ya balta
Slide 6: Group Q4 2019 Revenue Performance
Group Q4 2019 Revenue Performance €m 173.3 -4.5 2.4 -7.4 Q4 Growth Q4 Growth (%) (€m) Organic -€10.2m -5.9% 0.3 164.1 FX Impact +€1.0m +0.6% Reported -€9.1m -5.3% -8.2% +4.1% -13.7% +5.0% • Rugs impacted by delayed US outdoor shipments and e-commerce sales below initial expectations • Residential sa
Slide 7: Group Q4 2019 Adjusted EBITDA and Margins
Group Q4 2019 Adjusted EBITDA and Margins Adj. EBITDA margin (%) Lfl(1) Reported % Change €m Q4 2018 Q4 2019 Lfl(1) 12.2% 13.2% 12.1% Rugs 9.9 5.0 -49.4% €m 1.8 22.9 (3.4) 21.1 Commercial 9.9 10.7 +8.7% 0.2 19.8 Residential 2.8 3.7 +28.5% -14.7% +1.0% Non-Woven 0.3 0.4 +27.6% Lfl(1) -13.6% Consolida
Slide 8: Group FY 2019 Revenue Performance
Group FY 2019 Revenue Performance €m FY Growth FY Growth (%) (€m) 20.8 -11.9 1.4 671.2 14.7 646.2 Organic +€16.7m +2.6% +7.4% +9.7% -5.8% +5.2% FX Impact +€8.3m +1.3% Reported +€24.9m +3.9% • Continued solid growth in our US Commercial business • Some recovery in European Rugs after challenging 2018
Slide 9: Group FY 2019 Adjusted EBITDA and Margins
Group FY 2019 Adjusted EBITDA and Margins Lfl(1) Reported % Change Adj. EBITDA margin (%) €m FY 2018 FY 2019 Lfl(1) 11.2% 12.2% 11.1% Rugs 29.0 16.8 -42.2% €m 6.5 78.8 (5.9) 1.4 74.4 72.4 Commercial 35.6 40.5 +13.7% -7.4% +1.8% Residential 11.8 15.1 +27.5% Lfl(1) -5.7% Non-Woven 2.4 2.1 -13.4% Conso
Slide 10: From Adjusted EBITDA to Net Income
From Adjusted EBITDA to Net Income Adjusted EBITDA & Depreciation impacted by IFRS16 Non recurring expenses in 2019 primarily in relation to NEXT Tax income mainly driven by recognition of previously unrecognized tax losses as a result of the alignment of the intercompany financing to the enacted ta
Slide 11: Cash Flow
Cash Flow Interest expenses and repayment of net debt above last year by the application of IFRS 16 (1) Changes in working capital includes trade working capital and other working capital 11
Slide 12: Leverage of 4.0x Excluding IFRS 16
Leverage of 4.0x Excluding IFRS 16 €m Leverage 4.2x including IFRS 16 impact 12
Slide 13: Announced repayment of €35m Senior Term Loan in Q1/20
Announced repayment of €35m Senior Term Loan in Q1/20 Debt Maturity Profile Post Announced 300 Transactions Q1/20 16,4 Sale-and-lease-back announced January 2020 250 4,7 • Entered into sale-and-lease-back of two of our plants in Belgium (Tielt & part of Sint-Baafs-Vijve) 200 • Proceeds of €42m • Amo
Slide 14: Update on NEXT
14 Update on NEXT Ya balta
Slide 15: NEXT: Key Assumptions
NEXT: Key Assumptions Next impacts presented in the following pages are to be understood as follows: • The assumptions are calculated versus a baseline of 2018 or 2019 • Impacts shown for the Revenue initiatives are the anticipated gross impacts and take no account of possible ‘cannibalization effec
Slide 16: NEXT Revenue: Target to add €85m of revenues in two years
NEXT Revenue : Our Target is to add €85m of revenues to our Top Line in the next two years 2019A 2021 Key Drivers (vs 2018A) (vs. 2019A) Total Additional Sales 1 Balta e-commerce + €5m + €25m + €85m New Segment Revenue 2 + €10m Direct route to market vs. 2018 vs. 2019 3 Other Revenue Initiatives + €
Slide 17: NEXT Margin Improvement: €16m additional savings planned
NEXT Margin Improvement : €16m additional savings planned in the next two years Key Drivers 2019A (vs.2018A) 2020F (vs. 2019A) 2021F (vs. 2020A) 4 Lean + €6m + €7m + €4m 5 Procurement + €4m + €3m + €3m Margins(1) Incremental (€4m) (€1m) (€0m) Opex Total + €6m + €9m + €7m EBITDA savings 2019 2020 202
Slide 18: Balta e-commerce
1 Balta e-commerce NEXT Establishing a strong position in the B2B e-commerce to capture growth, ambition starting with Rugs in US and then EU • Supply chain redesigned for specific e-commerce requirements in 2019, from production planning in Turkey and Belgium to dropship services requirements in US
Slide 19: Establishing a successful position in the US online business
Establishing a successful position in the US online business Tackling the US e-commerce channel with a dedicated design team & state-of-the-art e-commerce warehouse in Savannah Specific US design team Introduced 600 new SKUs with additional 250 designs in Q1 2020 Fast track prototyping for brick & c
Slide 20: Focus Segments & Direct Route To Market Approach
2 Focus Segments & Direct Route To Market Approach NEXT Be the growth leader in commercial flooring category, ambition through delivery of unmatched value and customer experience • Focus on high growth segments and direct route to market approach for Bentley and modulyss brands (Architects and Desig
Slide 21: Intensifying our focus segment approach with our award-winning brand
Intensifying our focus segment approach with our award-winning brand BENTLEY : launching new carpet and LVT styles to meet price and aesthetic needs of education & multi-family segment Continued revenue double digit growth in target segments in 2019 Offering product design, style and customer servic
Slide 22: Developing modulyss direct route to market approach
Developing modulyss direct route to market approach Develop closer relationships with Architects & Designers Move to customer centric organization and products Offering new product designs Developing end-of-life solutions and cradle-to-cradle offering Developing online tools to facilitate visualizat
Slide 23: Other Revenue initiatives
3 Other Revenue initiatives NEXT Increasing margins by generating new sales from new higher-end products and ambition developing smart pricing across business units • Strengthened sales force capability with solid tools required for differentiated pricing What we have • Increased product development
Slide 24: Addressing demand for sustainable and recyclable products
Addressing demand for sustainable and recyclable products Our Rugs division values sustainable product development through innovation, turning trash into treasure RE_GENERATION RUGS: A new range of in- & outdoor area rugs made from recycled materials comprising plastic PET-bottles, discarded cotton
Slide 25: Differentiating our position with our stylish and handcrafted brand
Differentiating our position with our stylish and handcrafted brand launching a mix of hand-made trendy and prestigious products inspired by nature Stylish & affordable designs Reflecting contemporary lifestyle trends with a wide range of price categories fitting a large customer base Sustainable pr
Slide 26: Global Lean program for Operational Excellence
4 Global Lean program for Operational Excellence NEXT Implement the Lean program in all plants to establish superior cost position and ambition deliver sustainable margin improvement • Implementation ongoing in all EU and US plants. What we have • In six plants, multiple “waves” are currently rolled
Slide 27: Lean – case study
4 Lean – case study Rugs – SBV Finishing line • Overall Equipment Effectiveness improvement on gluing lines • 30% productivity improvement achieved vs 2018 • Enabled by CAPEX investments with a pay-back period of 18 months • Increased productive output of machines and value-added time from operators
Slide 28: Case study inventory reduction
4 Case study inventory reduction Broadloom 10% raw materials inventory reduction through : • Introducing vendor owned inventory for externally sourced semi-finished products • Just-in-time ordering of yarn creels, enabled by a 1 month reduction of the overall lead time • Close collaboration through
Slide 29: Procurement drive
5 Procurement drive NEXT Our ambition is to optimize spending and maximize savings for all product ambition groups, without compromising on quality, service and sustainability • Price, product and supplier optimization: working on multiple fronts, such as the What we have introduction of new supplie
Slide 30: Creating procurement synergies with One Balta
Creating procurement synergies with One Balta Bringing together world-wide Balta product specialists to work on product optimization, sourcing projects and purchased SKUs reduction Working groups created with 10 specialists involved in each Focusing on Plastic packaging, Cardboard packaging and mach
Slide 31: Supply chain optimization
Supply chain optimization NEXT End-to-end improvements to supply chain to significantly reduce working capital ambition requirements and improve service levels • Enhancements made to existing planning and CRM tools • Shift to vendor owned inventory and just-in-time ordering of raw materials and What
Slide 32: Complexity reduction
Complexity reduction NEXT Right trade-off between a broad product offering and the adherent cost of ambition complexity in supply chain and production • Created transparency on complexity drivers and costs at SKU level What we have • Net reduction of SKUs in Residential by 10% done so far • Net redu
Slide 33: Balta’s Strategic Priorities
Balta’s Strategic Priorities Environmental, Social Digital Transformation NEXT and Governance (ESG) Three year earnings Contributing to Sustainable Digital Transformation enhancement program Development Goals • Enhancing customer • Delivering sustainable growth • Appointed Head of experience through
Slide 34: Q&A Session
Q&A Session 34