Belysse Group Nv · EURONEXT:BELYS
Belysse Group Nv — Balta Group — H1 2017 Earnings Presentation
36 slides from Belysse Group Nv's earnings presentation, Aug 30, 2017
Slide 1: H1 2017 financial results
Yabalta H1 2017 financial results
Slide 2: Disclaimer
Disclaimer Certain details included in this presentation are subject to updating, revision, further verification and amendment. Balta Group NV (the "Company") is not under any obligation to update or keep current the information contained in this presentation. In considering any performance informat
Slide 3: Agenda
Agenda H1 2017 key highlights H1 2017 financial performance Update on key financial parameters 2017 business outlook Q&A 3
Slide 4: H1 2017 key highlights
H1 2017 key highlights 4
Slide 5: Balta is a global Rugs and Carpets champion
Balta is a global Rugs and Carpets champion Highlights Global presence and Acquisition of Bentley balanced end-market strengthens the growing A global leader in Highly automated, Long-standing strategic exposure between commercial segment decorative rugs and vertically integrated product development
Slide 6: Key developments
Key developments Successful €204m IPO in Q2 2017 Improvement of credit profile Integration of Bentley Mills progressing per plan Underlying business performance on track 6
Slide 7: Strong organic growth and much improved credit profile
Balta has achieved strong organic growth and has a much improved credit profile +6.1% organic • High organic growth rate +15.1% • Performance underpinned by a double-digit organic growth in Rugs and high single- (1.1%) FX impact digit growth in the Commercial segment yoy sales growth (reported) +10.
Slide 8: Integration of Bentley Mills on track
Integration of Bentley Mills on track A leader in the US premium commercial carpets Integration process is well on track • modulyss products tested in New York and Iconic premium brand Feb California 2017 Favourable market response World-class 1 Industry leading manufacturing design team and capab
Slide 9: Significant exposure of Balta's Commercial brands at NeoCon
Significant exposure of Balta’s Commercial brands at NeoCon at NeoCon (North America’s #1 design conference for Commercial) 15 modulyss 8 Awards for Bentley styles 10 new Bentley Strong attendance styles (+10% yoy) Best of NeoCon editor’s Night Vision choice Outskirts collection Best of NeoCon Inter
Slide 10: Balta Home's strong growth is driven by its innovation capabilities
Balta Home’s strong growth is driven by its innovation capabilities • Rebranding of Rugs division to Balta Home • Current portfolio contains 59 different rug collections • Twice a year, Balta Home makes a significant product portfolio switch: – Q1: Domotex fair in Hannover, in January – Q3: in showr
Slide 11: H1 2017 financial performance
H1 2017 financial performance 11
Slide 12: Balta's growth driven by successful organic and M&A growth
Balta’s growth driven by successful organic and M&A growth H1 2017 Revenue performance (€m) Comments • Reported growth of 15.1% underpinned by a successful organic growth of +6.1% – Strong performance in Rugs and Commercial – Residential revenue stable on a Non- constant currency basis Residential C
Slide 13: Relatively stable margin despite FX headwinds
Relatively stable margin despite FX headwinds, thanks to underlying organic margin improvement H1 2017 EBITDA performance (€m) Comments Adj. EBITDA margin (%) • Overall EBITDA growth of 11.1% 14.4% 14.9% 13.9% boosted by a strong organic growth of 9.8% – Organic growth has been mainly driven by top-
Slide 14: Strong growth momentum in Rugs across all regions
Strong growth momentum in Rugs across Rugs EBITDA share all regions Revenue evolution (€m) Comments 14.5 (0.3) 126.4 • Revenue up by 12.6% to €126.4m driven by strong organic growth across all regions: 112.2 (0.3%) +12.9% – Double digit organic growth across all 3 key regions (Europe, North America,
Slide 15: Stable underlying performance in Residential
Stable underlying performance in Residential Residential combined with strong FX headwinds EBITDA share Revenue evolution (€m) Comments 123.6 0.1 (2.4) 121.4 • Stable underlying revenue with slight growth in the UK and slight decline in continental Europe +0.2% (2.0%) • In anticipation of the furthe
Slide 16: Market outperformance in Commercial whilst preserving margins
Market outperformance in Commercial whilst Commercial preserving margins EBITDA share Revenue evolution (€m)(1) Comments 29.3 72.5 • Outperforming market growth in both Europe and North America implying market share gains 40.5 3.1 (0.4) • Organic growth driven by double digit growth in Commercial (1
Slide 17: Mitigating GBP depreciation remains a priority
Mitigating GBP depreciation remains a priority • Our exposure to UK is limited to 21% of PF Sales – true exposure to H1 2017 UK per invoicing method (€76.5m) GBP down to 10% of PF sales Invoiced £ - Invoiced € No FX mechanism 26% 48% – Bentley Mills acquisition and growth of non-GBP sales have decre
Slide 18: Active management of raw materials price inflation
Active management of raw materials price inflation Market change Inventory impact P&L impact During H1 2017, we have observed an increase in raw material purchase price Raw materials price inflation Level of inventory reflecting Rise in raw material purchase will be reflected when the higher cost of
Slide 19: Update on key financial parameters
Update on key financial parameters 19
Slide 20: From Adjusted EBITDA to net income
From Adjusted EBITDA to net income €m H1 2016 H1 2017 1• No impact of IPO expenses on P&L, recorded via equity Revenues 290.2 333.9 • Non-recurring expenses H1 2017 driven by acquisition of Bentley Adjusted EBITDA 41.9 46.5 Depreciation and amortisation (14.3) (15.5) Adjusted Operating Profit 27.6 3
Slide 21: Robust operating cash flow and stable cash position
Robust operating cash flow and stable cash position €m H1 2016 H1 2017 1 Cash generated before changes 40.5 43.9 • €43.9 million of cash generated before changes in working 1 in working capital capital, reflecting increased EBITDA Changes in working capital(1) (16.5) (18.6) 2 Net income tax paid (0.
Slide 22: Stable like for like capex and seasonal movement in working capital
Stable like for like capex and seasonal movement in working capital Net working capital evolution(1)(2) (€m) Capex evolution(3) (€m) PF for Bentley 17.9% acquisition 16.0% 15.0% 14.3% 110.3 13.8% 14.0% 101.2 94.8 84.7 80.0 77.8 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 NWC NWC % revenue (1) NWC for Q1/17
Slide 23: Continued commitment to deleveraging and improving credit profile
Continued commitment to deleveraging and improving credit profile and financing cost Net financial debt and leverage ratio Comments Moody’s: B2 B1 • Post-IPO debt repayment(1), significantly reducing our leverage S&P: B B+ ratio to 2.6x Acquisition Post 385 of Bentley deleveraging using primary • As
Slide 24: Early debt redemption has started with further refinancing opportunities
Early debt redemption has started with further opportunities to refinance in the future Financial Expenses Cash Impact Financial Expenses Non-Cash Impact Description One-Off Non-Cash Annualized Non-Cash One-Off Cash Annualised Net Release Capitalised Saving Capitalised Cost Saving Cash Interest Fina
Slide 25: 2017 business outlook
2017 business outlook 25
Slide 26: Overall financial objectives re-affirmed for 2017
Overall financial objectives re-affirmed for 2017 on a pro forma basis • Mid- to high-single digit group sales growth %, underpinned by: – Low-teens % sales growth in Rugs Top-line – Low-single digit % sales decline in Residential on the back of GBP depreciation – Low-teens % sales growth in Commerc
Slide 27: Key take-aways
Key take-aways Strong set of H1 2017 financial results • Fast organic growth pace across regions with every division performing in line with expectations • Organic growth triggered improved organic margin. This is only offset by GBP devaluation, but margin level remains at a robust c. 14% Materially
Slide 28: Q&A session
Q&A session 28
Slide 29: Appendices
Appendices 29
Slide 30: Balta is a global specialist in Rugs and Carpets
Balta is a global specialist in Rugs and Carpets Carpets Rugs Broadloom Tiles Product • A piece of carpet directly put on a hard flooring • Large roll of carpet installed throughout a • Modular pieces of carpets assembled square room, from wall to wall by square to cover a floor • No installation ne
Slide 31: Successful repositioning for profitable growth
Successful repositioning for profitable growth Track record of profitable growth Adj. EBITDA(1) & Adj. EBITDA margin 2014A- 2016A (€m)(2) Adj. EBITDA margin Bentley Non-Woven Non-Woven 5% 3% Commercial Commercial Rugs Rugs 14.6% 12% 120 13.6% 15% 29% 39% 47% 12.5% 97 100 12% 16 80 75 65 9% 60 6% 40
Slide 32: Divisional overview of Q2 Revenue & Adjusted EBITDA
Divisional overview of Q2 Revenue & Adjusted EBITDA Revenue evolution per segment Adj. EBITDA evolution per segment Revenue in €m yoy growth (%) In €m yoy growth (%) Q2 2016 Q2 2017 Organic FX M&A Total Q2 2016 Q2 2017 Organic FX M&A Total Adj. EBITDA 11.3 12.1 7.1% (0.6)% 0.0% 6.5% Rugs 58.0 63.0 9
Slide 33: Divisional overview of H1 Reported Revenue & Adjusted EBITDA
Divisional overview of H1 Reported Revenue & Adjusted EBITDA Revenue evolution per segment Adj. EBITDA evolution per segment Revenue in €m yoy growth (%) In €m yoy growth (%) H1 2016 H1 2017 Organic FX M&A Total H1 2016 H1 2017 Organic FX M&A Total Adj. EBITDA 19.4 23.2 20.7% (0.6%) - 20.1% Rugs 112
Slide 34: Divisional overview of H1 PF Revenue & Adjusted EBITDA
Divisional overview of H1 PF(1) Revenue & Adjusted EBITDA Revenue evolution per segment Adj. EBITDA evolution per segment Revenue in €m yoy growth (%) In €m yoy growth (%) H1 2016 H1 2017 Organic FX Total H1 2016 H1 2017 Organic FX Total Adj. EBITDA 19.4 23.2 20.7% (0.6)% 20.1% Rugs 112.2 126.4 12.9
Slide 35: Secured Notes reduce outstanding amount to €234.9m
Completed and announced further redemptions of the Senior Secured Notes reduce outstanding amount to €234.9m Current Balta pro forma capital structure Mar-17 Δ over the Use of July September Adj. €m (incl. BM) period proceeds(1) Jun-17 Redemption Redemption Jun-17 Terms Cash (39.7) 3.9 - (35.9) 8.0
Slide 36: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Condensed Balance Sheet (€k) Condensed Cash Flow Statement (€k) Jun-17 Dec-16 H1 2017 H1 2016 Property, plant and equipment 314,338 299,238 Opening balance 45,988 45,462 Goodwil and other intangible assets (1) 210,539 127,049 Adjusted EBITDA 46,536 41,895 Fixed