LIBET S.A. RESULTS FOR Q1, MAY 2014

Transcription

1 LIBET S.A. RESULTS FOR Q1, MAY 2014

2 Effective Management Thomas Lehmann President of the Board Managing Director Libet S.A. Udział w rynku Ireneusz Gronostaj Member of the Board Financial Director Libet S.A. 2

3 Agenda LIBET BASIC INFORMATION SITUATION IN THE INDUSTRY RESULTS Q1, 2014 STRATEGY SUMMARY 3

4 Libet S.A. Libet is a leading manufacturer of pavers in Poland The company has established itself as an undisputed leader in Premium segment and a leading manufacturer of pavers in total Private housing Developers investments Representative public space Libet s advantages: Many years of experience on the Polish market Shopping centres and offices Hotels and other commercial investements Churches Advanced production technology Creating a tailored offer adjusted to clients expectations Petrol stations Sport facilities Squares and pavements Professional advice Availability across the country Roads and highways shoulders Logistic centres Parking places 4

5 History of Innova Capital investment IV 2010 Innova Capital takes control over 100% of the shares of Libet from the British company Anglo American XI 2013 Innova reduces the number of shares held by 6 mln, reducing the shareholding to 42.2% IV 2014 Innova reduces the number of shares held by 2 mln, reducing the shareholding to 38.2% IV 2011 Libet debuts on the Warsaw Stock Exchange. In a mpln115 public offering Innova sells 45.8% of the Company s shares IV 2014 Libet and Innova Capital inform about the proposed transaction, which resulted in 30.06% share package and will be controlled by the Company s managers After four years of control over the Company, Innova will become a minority shareholder. Investment in Libet, from the point of view of funds, is a success. We have achieved a very satisfactory return from the Investment (IRR of over 100% p.a.). Andrzej Bartos, Managing Partner in Innova Capital The proposed transaction is the proof that the managers are convinced of its value and potential. I'm sure that it will give us even more motivation to work for the benefit of all shareholders. Thomas Lehmann, President of the Board Libet S.A. 5

6 Libet changes in shareholder structure Shareholder structure by the end of 2013 Shareholder structure for 21 May 2014* Expected shareholder structure*,** 20,37 19,60 17,86 42,17 IAB Financing Sarl LEGG MASON TFI OFE (i.a. AVIVA 4,8%, ING 4,5%, PZU 4,0%) Others 23,64 14,67 5,66 17,86 38,17 IAB Financing Sarl LEGG MASON TFI ING OFE OFE (i.a. AVIVA 4,8%, PZU 4,0%) Others 23,64 30,06 14,67 5,66 17,86 8,11 IAB Financing Sarl LEGG MASON TFI ING OFE OFE (i.a. AVIVA 4,8%, PZU 4,0%) Others Glaspin Consultants Ltd IAB Financing sold 2 mln shares - decrease in the shareholding of about 4 percentage points ING OFE reported increased involvement in Libet shares to 5.66% Entity controlled by members of the Management Board and the Supervisory Board Libet (Glaspin Consultants) is going to take over a package of IAB Financing 30.06% of the Company s shares The transaction should be completed in a few months (requires the OCCP approval) * Based on publicly available data ** The expectations do not include potential transactions made by Company s individual shareholders 6

7 Libet - a key player in the Polish market Premium pavers market in % Libet Others The increase in market share of Libet's Premium from 32% to 34% y/y In 2013, Libet produced more than twice of Premium materials more than the next player on the market Source: PMR Report (estimates, March 2014) Pavers supply in total in % The increase in Libet s share of the total market from 19% to 22% y/y Alignment of the market share of total production of paving stones with current leader Libet Others Source: PMR Report (estimates, March 2014) 7

8 Power in the market Power of Libet brand name Libet Competitor Competitor 4 Competitor Competitor Power in the mind Libet is a brand with the greatest strength, resulting from both a favorable perception of the market users and the actual position of the Premium segment of the market * Competitor 1, has a strong position in selected regions, while in the whole market, its share is relatively low - hence the indicator 'power in the market' takes the brand's low value Sources: TNS Poland Report (May 2014) *Based on PMR estimates of

9 Libet vivid market leader Strength of brand loyalty (%) Libet Competitor Among the strongest competition, Libet has the largest percentage of people strongly attached to the brand Competitor The increase in the number of "enchanted of 39 p.p. from 2012 Enchanted Average Superficial Doubtful Summary of conclusions from TNS Poland study Libet is a most powerful brand among the manufacturers of pavers operating in Poland Libet is a brand with great growth potential (the greatest opportunity to attract new customers among the strongest competition) Customers declare their readiness to recommend Libet s products to others In the customers eyes, Libet s products are of high quality and favorable quality to price ratio 73% of respondents claim that the brand is important when choosing a manufacturer of surface materials (including 17% that it is extremely important) Sources: TNS Poland Report (May 2014) 9

10 Agenda LIBET BASIC INFORMATION SITUATION IN THE INDUSTRY RESULTS Q1, 2014 STRATEGY SUMMARY 10

11 Improving the economic situation at the beginning of Construction Mounting 2013/2012 Construction-Mounting 2014/2013 Q1 Q2 Q3 Q4-0,1% -7,0% 12,0% 12,2% A significant rise in the construction-mounting area in ,3% Q1 April -23,0% Industry PMI in Poland (points) Industry PMI in Poland (points) 48,5 48,1 52,3 53,6 55,1 52,0 50 points Limit separating increase from recession The average PMI reading in Q highest since Q4, 2010 Q1 Q2 Q3 Q4 Q1 April Source: Central Statistical Office, Markit Economics / HSBC 11

12 Macro Perspectives New EU budgetary perspective General improvement in the economic situation Low interest rates Decrease in mortgage interest rates Economic recovery and expected further improve the health of the economy Improving forecasts of economic growth in % to 2.9% on the beginning of the year (in 2013 an increase of 1.6%) Expected 3.5% GDP growth in 2015 Expected growth in private consumption in 2014 by 2.7% y/y (Q1 retail sales rose by 5.5% y/y) The projected increase in the volume of construction and mounting to bpln86.9 (dynamics 6.6%) Investment increase beur72.9 for the period in the framework of the Cohesion Fund beur28 under the regional operational programs (beur11 more than in the previous budget) Acceleration of preparations for the investment in Expected two-fold increase in length of expressways and highways by ,6 3,5 97,1 96,0 16,3-1,1 82,2 86,9-13,6 6, P Sell of construction-mounting production (current prices, bpln) Contruction-mounting production (constant prices, %) Sources: CSO, IMF, National Bank of Poland, Goldman Sachs 12

13 Perspectives for pavers market Medium-run perspective In 2014, moderate increases are expected Since 2015, increased market dynamics are expected (increased inflow of EU funds from a new perspective) In the years the projected steady growth in the market for at least 3-4% Forecast for paving market in Poland % 4% -10% -10% 1% 3% 4% 4% 4% S 2014P 2015P 2016P 2017P 2018P Production volume (mln m²) (1) Dynamics Other growth factors Expected increase in the number of local investment in the periods immediately preceding local elections In the present year a big part of thou. dwellings will be finished whose construction started in 2012 (56.2% of them are individual investments) Increase in construction investment thanks to the introduction of the Apartment for Young" programme In the period January-April 2014, 27.7% increase in the number of housing starts y/y Market value of pavers In Poland in (bpln) % S 2014P 2015P 2016P 2017P 2018P CAGR Sources: PMR Report (estimates, March 2014) (1) Production is estimated primarily based on the amount of cement sold for the purpose of surface elements and expert interviews 13

14 Agenda LIBET BASIC INFORMATION SITUATION IN THE INDUSTRY RESULTS Q1, 2014 STRATEGY SUMMARY 14

15 Record Q1 Start of season in Q1, 2014 was the best in the history of Libet The results clearly better than in the record 2011 Sell EBITDA Profit (kpln) Q1, 2009 Q1, 2010 Q1, 2011 Q1, 2012 Q1, 2013 Q1,

16 Libet s sales Cement market is strongly correlated with pavers market Libet s increase in sales in Q1 was more than three times higher than cement sales Libet grows faster than the market Cement s sell (thou. tons) Libet s sell (kpln) % % Q1, 2013 Q1, 2014 Q1, 2013 Q1, 2014 Data: Cement Manufacturers' Association, the Company 16

17 Q1, 2014 summary Achieving a positive result from sales in Q1 In 2014, expected increase in sales volume while maintaining optimal cost structure developed in previous years Sell results (kpln) Gross margin on sales (%) Q1, 2013 Q1, 2014 Q1, 2013 Q1, , ,1 The low level of margins in Q1 is a seasonal phenomenon 23% - gross margin on sales throughout 2013 Data on a consolidated basis, presented on the basis of international accounting standards 17

18 Summary Q1, 2014 EBITDA profit of mpln2.7 comparing to mpln1.8 loss in Q1, 2013 An important limitation of net loss EBITDA (kpln) Profit/loss net (kpln) Q1, 2013 Q1, 2014 Q1, 2013 Q1, EBIT Amortyzacja EBITDA 50% Data on a consolidated basis, are presented on the basis of international accounting standards 18

19 Results Q1 Consolidated results kpln Q1, 2014 Q1, 2013 change Income ,8% EBIT n/a EBITDA n/a Gross profit n/a Net profit n/a CF operational n/a CF investment n/a CF financial n/a Individual results kpln Q1, 2014 Q1, 2013 change Income ,4% EBIT n/a EBITDA n/a Gross profit n/a Net profit n/a CF operational n/a CF investment n/a CF financial ,5% A significant increase in income Significant reduction of losses at the beginning of the year Maintenance of SG&A expenses at the level of 2013, with sales increase Use of weather and production under contract for Q2 Decrease in receivables Comment refers to data on a consolidated basis Consolidated results are presented on the basis of international accounting standards Individual results are presented on the basis of national accounting standards 19

20 Agenda LIBET BASIC INFORMATION SITUATION IN THE INDUSTRY RESULTS Q1, 2014 STRATEGY SUMMARY 20

21 Libet s strategy Acquisitions of factories and gravel deposits/mines Focusing on Premium segment Increase in the share of new products in total sales International expansion A separate brand for other distribution channels 21

22 Acquisitions of factories and gravel deposits/mines mpln100 Planned level of investment to 2020 Acquisition of 3-4 facilities in Poland Elimination of "white spots" - full availability of Libet s products throughout the country Acquisition financing without an impact on Libet s financial results Expected increase in sales The first acquisitions in 2014 Purchase of gravel deposits and/or mines An entirely new element of strategy Start of vertical integration Reduction of production costs A new source of income (40-60% extraction for Libet s purposes) Drop of mines prices in recent periods 22

23 Focusing on Premium segment Increase in the sales of new products in total sales 50+ News sales in 2014 consistent with the adopted plan New products introduced to the offer Sales value I II III IV In 2014, the offer received over 50 new products More than 80% of new products for 2014 are high-margin premium products In the current year the plan is to double the sales of new products 23

24 New Products 2014 New categories of high-margin products (additional sales) Product solutions to facilitate space arrangement New, comprehensive solutions for designers The ability to differentiate in the market Modern colors 24

25 New Products 2014 High quality products for developers, architects and individual investors 30 cm In 2014, planned five-fold increase in sales 60 cm 90 Increasing cm productivity The first realization of Art Gallery ZACHĘTA" 60 cm 25

26 New Products 2014 complementary products Launching a new sub-brand to complement the existing product palette Diversification of APS offer ALPAMAYO SEVILLA MARABELLA CANTABRIA CASARES 26

27 International Expansion Aim: mpln15-18 annualy from export till 2018 Subsequent agreements with distributors of Premium products in Slovakia Continuing investment in garden exhibitions Constant cooperation with a designer on the purpose of selling Premium products Preparation of full product range in the Slovak language Launching Czech website Employment of a person acting in the Czech Republic 27

28 Prestigious investments Niezapominajki, Łódź 28

29 Prestigious investments Cedrowe Housing Estate, Gdynia Palace, Łochów 29

30 Prestigious investments Chopin Housing Estate, Mysłowice Leśny Dwór Restaurant, Brzeziny 30

31 Agenda LIBET BASIC INFORMATION SITUATION IN THE INDUSTRY RESULTS Q1, 2014 STRATEGY SUMMARY 31

32 Summary Income increase by 198% y/y EBITDA profit at kpln2 662 in relation to loss of kpln1 881 y/y Limitation of net losses by half, to kpln3 580 mpln100 investment in the purchase of factories and gravel deposits/mines by 2020 Increasing the share of Premium segment in sales to 50% at the end of 2015 Implementation of Platinum agreements in other places New sources of income (deposits/mines, new product categories) Emphasis on development of new products sale and Stampo products Development of sales in new markets 32

33 THANK YOU FOR YOUR ATTENTION LIBET S.A. MANAGEMENT BOARD Contact IR: Piotr Książek InnerValue