Wendel Se · EURONEXT:MF
Wendel — Materis Paints — Investor Day (December 2014)
28 slides from Wendel's investor day presentation, Dec 4, 2014
Slide 1: Materis Paints
Materis Paints Bertrand Dumazy Wendel Investor Day, December 4, 2014
Slide 2: Agenda
Agenda The DecoPaints Industry Materis Paints Key Financials 2014-2018 Game Plan Investor Day 2014 – December, 4 133
Slide 3: Executive summary
Executive summary 1 A €35bn market impacting our daily life A multi-local industry strongly driven by renovation (~90%) and construction 2 trends (~10%) A highly competitive market made of numerous international, national and 3 local players to serve a diffuse end-customer base looking for quality,
Slide 4: A large market…
1 A large market… WORLDWIDE DECOPAINTS MARKET EUROPEAN DECOPAINTS MARKET €35bn €10bn France Others 16% 13% Materis Paints addresses ~40% Western of DecoPaints Europe European market 30% Italy 14% Portugal Spain 2.5% 6% Asia Pacific North America 37% 20% Others 62% Investor Day 2014 – December, 4 135
Slide 5: … influencing our daily life
1 … influencing our daily life Imagine Institute Orsay Museum La Piscine Museum (Paris) (Paris) (Roubaix) Investor Day 2014 – December, 4 136
Slide 6: A multi-local industry strongly driven by renovation and construction trends
2 A multi-local industry strongly driven by renovation and construction trends New construction - 10% Renovation - 90% • Long term evolution of total housing stock • Housing stock renovation cycle (e.g. 8 years in France) influenced by economic conditions Sub-drivers • Housing units transactions • R
Slide 7: A highly competitive market made of numerous players
3 A highly competitive market made of numerous players AKZO NOBEL 2,508 PPG 2,040 DAW (G) 800 MATERIS PAINTS 750 TIKKURILA (FI) 650 Despite 10 years of consolidation, the industry remains highly fragmented HEMPEL (S) 350 BRILLUX (G) 300 STO (G) 300 OSTENDORF (G) 300 MEFFERT (G) 250 Deco Paints Europ
Slide 8: Decopaints is a purchasing, marketing and sales game
4 Decopaints is a purchasing, marketing and sales game 1L of paint @ 5€ Contribution €0.55 i.e. 10.9% Manufacturing €0.32 i.e. 6.4% Logistics / transportation €0.35 i.e. 6.9% Raw materials and packaging €1.62 i.e. 32.3% Distribution, sales and marketing €2.16 i.e. 43.5% Investor Day 2014 – December,
Slide 9: Agenda
Agenda The DecoPaints Industry Materis Paints Key Financials 2014-2018 Game Plan Investor Day 2014 – December, 4 140
Slide 10: Key competitive advantages
Key competitive advantages 1 STRONG MARKET POSITIONS 2 ICONIC BRANDS ■ N°1 in Italy, N°2 in France and ■ Preferred brands on their market: Portugal Robbialac in Portugal, Max Meyer in Italy ■ N°3 in Spain and N°4 in Morocco ■ Top 4 preferred brands on their ■ N°5 in Argentina market: Tollens in Fran
Slide 11: Materis Paints Presents Strong Local Positions and….
1 Materis Paints Presents Strong Local Positions and…. FRANCE N°2 SWITZERLAND • €495m sales • €20m sales • 2,440 employees • 70 employees • 292 company-operated stores • 4 company-operated stores • 3 plants • 1 plant PORTUGAL N°2 • €34m sales • 270 employees ITALY N°1 • 58 company-operated stores •
Slide 12: …gains market shares on its main markets
1 …gains market shares on its main markets Materis Paints’ market share 2014 vs 2013 (pp) (1) FRANCE +0.2 pp ITALY +0.1 pp ~89 % of revenue SPAIN +0.5 pp PORTUGAL(2) +0.2 pp (1)YTD 2014 (2)H1 2014 Investor Day 2014 – December, 4 143
Slide 13: A unique portfolio of premium brands
2 A unique portfolio of premium brands Key brands Competitive position* • Market share: 14%, #2 • Spontaneous awareness: Tollens #3 Part of • Market share: 7%, #1 top 2 • Spontaneous awareness: players Max Meyer #1, Duco #4 • Market share: 14%, #2 • Spontaneous awareness: Robbialac #1 • Market share
Slide 14: Significant resources are dedicated to innovation
3 Significant resources are dedicated to innovation 9 R&D laboratories 80 engineers and technicians R&D budget: 2% of sales 27% of sales generated by last 3-year innovation Investor Day 2014 – December, 4 145
Slide 15: Product innovation priorities
3 Product innovation priorities Socio / Eco trends Ease of use and versatility Ever cleaner products Energy savings and thermal comfort Housing trends Noise absorption Odorless Color and light End user pain points Investor Day 2014 – December, 4 146
Slide 16: Recent innovation examples
3 Recent innovation examples Ever Cleaner Products Paint with 97% of Indoor air cleaning paint, eliminating 0 biocide and natural raw VOC like formaldehyde allergen-free paint material Innovation of the Year Award at Castorama Ease of use & Versatility Ultra light, quick-drying, no-sanding 112L
Slide 17: A business model of integrated distribution
4 A business model of integrated distribution Manufacturing > 1,000 DIY STORES: Distribution PROFESSIONAL PAINT 11% of sales DISTRIBUTION NETWORK: 89% of sales 1% 10% 28% 61% 374 Company- > 7,500 operated stores Private label Branded products Independent (integrated distributors distribution) Profit
Slide 18: Agenda
Agenda The DecoPaints Industry Materis Paints Key Financials 2014-2018 Game Plan Investor Day 2014 – December, 4 149
Slide 19: An adequate financial structure
An adequate financial structure 7-year bullet senior term loan €267m Long term maturities 6-year revolving credit facilities €77m Revolving credit facility to finance WCR needs, acquisitions & capex Flexibility Incremental uncommitted facilities €83m for growth to finance acquisitions and capex He
Slide 20: Since 2012, Materis Paints has started improving its financial performance
Since 2012, Materis Paints has started improving its financial performance 812 Sales in million of euros 2012-2014 EBITDA margin EBITDA +14.7% EBITDA (%) +1.3 PP 771 768 764 754 748 748 12.6% 733 10.7% 11.4% 8.3% 8.2% 7.6% 8.9% 10.1% 2007 2008 2009 2010 2011 2012 2013 2014E ADVERSE MARKET CONDITIONS
Slide 21: H1 2014 demonstrated a significant improvement in profit generation
H1 2014 demonstrated a significant improvement in profit generation (in millions of euros) FY 2013 H1 2013 H1 2014 Δ Organic Δ Revenue 753.9 378.4 383.3 +1.3% +2.7% EBITDA(1) 61.5 33.6 37.0 +10.1% % of net sales 8.2% 8.9% 9.7% +80 bps Operating income(1) 43.3 19.9 24.9 +25.1% % of net sales 5.7% 5.3
Slide 22: Organic growth of Materis Paints stood at 1.2% over the first nine months of the year
Organic growth of Materis Paints stood at 1.2% over the first nine months of the year 9-month sales growth stands at +1.2% (organic growth) and -0.1% (including currency impact) vs. 2013: ► Degrading Q3 market conditions in France ► Strong organic growth in Morocco (+29%) and Argentina (+33%) ► Re
Slide 23: Agenda
Agenda The DecoPaints Industry Materis Paints Key Financials 2014-2018 Game Plan Investor Day 2014 – December, 4 154
Slide 24: 2012-2014 Achievements: Back to basics
2012-2014 Achievements : Back to basics Cost rightsizing leading to significant EBITDA improvement (+16%) Working Capital optimization leading to major cash-flow generation increase (+55%) Management team renewal ► 25% renewal rate ► 5 different nationalities ► A growing diversity (parity with
Slide 25: 2014-2018 game plan
2014-2018 game plan 1.Market share gains 2.Moderate price increase Mid/low single digit sales growth rate 3.Slowly recovering markets Investor Day 2014 – December, 4 156
Slide 26: 2014-2018 Sales & marketing game plan
2014-2018 Sales & marketing game 1.Agile pricing 3. Customer Experience 2.Strong innovation roadmap 3.More customers: On-line distribution and store openings 2. Product 1. Price Deeper penetration: field sales activity management, retail excellence, customer Satisfaction, value Proposition Precise b
Slide 27: 2014-2018 Supply Chain and R&D Game Plan
2014-2018 Supply Chain and R&D Game Plan ■ New frontier in product quality and availability ■ Deeper coordination in R&D to sustain the innovation effort ■ High performance purchasing Investor Day 2014 – December, 4 158
Slide 28: 2014-2018 Finance game plan
2014-2018 Finance game plan ■ Rigorous cost, EBITDA and cash optimization ■ Ambitious investment plan : IT, Distribution Footprint, industrial and logistics efficiency … Thanks to - Long term, cheaper and more flexible debt - A long-term shareholder supporting our growth strategy Investor Day 2014 –