Full-Year 2015 results. 29 February 2016

Transcription

1 29 February 2016

2 CONTENTS 1. Introduction 2. FY 2015 financial statements 3. Review of Antalis & Arjowiggins 4. Outlook 5. Q & A Appendix: Key financial data by business 2

3 CONTENTS 1. Introduction Présentation PowerPoint 1. Introduction 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook Pascal Lebard Chairman and Chief Executive Officer 3

4 Strategic repositioning of the Group We have achieved the initial objectives of our strategic plan Streamlined financial structure Refocusing Arjowiggins on specialty markets Continuing Antalis' selective acquisitions policy Antalis policy of diversifying into high-potential markets has born fruit: Packaging and Visual Communication now contribute 36% of its gross margin The Group's operational and financial restructuring plan has been finalised Arjowiggins: reduction of debt and refocus on specialty markets Repayment in full of the 125 million syndicated credit facility and stronger financing capacity thanks to 53 million worth of sale & leaseback financing arrangements Streamlined scope focused on businesses with positive EBITDA in Q Sequana: restructuring of capital Early redemption of ORNANE and ORA bonds meaning less dilution for shareholders Impala became a Sequana s shareholder with a 20% stake 4

5 Operating results close to our expectations Operating performances were buoyed by Antalis but adversely affected in H2 by production difficulties related to Arjowiggins' capacity reduction measures Sales down 2,0% to 3.3 billion (down 5.6% at constant exchange rates) Antalis: positive impact of new acquisitions, consolidation of the paper distribution market and favourable forex impact Arjowiggins: negative impact of decline in printing volumes (closure of Wizernes and Charavines), exacerbated by difficulties encountered in H2 when transferring production EBITDA up 1.5% to 126 million; EBITDA margin up 0.1 point to 3.8% Enhanced product mix both in distribution and production Favourable impact of lower overheads on both sides of the business Net loss of 67 million due to the additional costs of restructuring measures deployed in 2015 and asset write-downs amounting to 32 million taken in Q4 Net debt stands at 235 million (an improvement of 76 million) and the consolidated Net debt/ebitda ratio stands at 1.9 (2.5 in 2014) Thanks notably to the positive impact of disposals ( 158 million), partially offset by restructuring costs and non-recurring expenses ( 92 million) At the AGM, the Board will recommend not paying any dividend for

6 Sequana: strategic positioning in its two businesses Business segments Historical businesses Print Office Complementary markets Packaging Visual Communication Growth drivers Leading position in mature markets that generate cash flow Potential for growth in the digital and recycled paper segments Innovation in services Selective acquisitions Growing, higher-margin markets Development of cross selling (1) Graphic Recycled papers Specialty papers Creative papers Fine papers Specialty papers High potential of recycled paper segment Expanding into non-paper markets (graphic board) Presence in niche growth markets (transfer, laminated and tissue segments) Leading position Upgraded production facilities Development of new product applications Security Banknote paper Synthetic papers No. 2 in the accessible banknote paper market High value added papers incorporating security features (1) Selling packaging and visual communication media to printers and companies who are already Group customers for print & office paper 6

7 Recomposition of ownership structure Impala Group became a Sequana shareholder in late June 2015 Ownership structure Voting rights at 31 December 2015 at 31 December 2015 Bpifrance Participations 15.42% Bpifrance Participations 15.31% Free float 64.58% Impala Group 19.86% Impala Group 20.00% Free float 64.83% 7

8 CONTENTS 1. Introduction Présentation PowerPoint 2. FY 2015 financial statements 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook Xavier Roy-Contancin Chief Financial Officer 8

9 Consolidated income statement millions Change* 2015/2014 Sales 3,300 3, % EBITDA % down 5.6% at constant exchange rates EBITDA margin (%) 3.8% 3.7% point Recurring operating income % Operating margin (%) 2.2% 2.1% point Non-recurring items (76) 119 Net financial expense (41) (56) Income taxes (23) (11) Net income (loss) from discontinued operations - (8) Associates and non-controlling interests - - Net income (loss) attributable to owners (67) (*) Percentage changes and margins are based on figures rounded out to one decimal place. 9

10 Breakdown of non-recurring items millions, at 31 December Arjowiggins: (25)m Antalis: (20)m Restructuring costs Disposal gains Impairment of goodwill and other assets (45) 6- (32) (107) (17) Sales of Arjo Wiggins Ltda & the Security Solutions businesses (incl. derecognition of previously recognised goodwill of 82m ) Other non-recurring items Impact of 2014 refinancing programme (5) (17) 260 Arjowiggins: (28)m Antalis: (4)m Non-recurring items (76) 119 Arjowiggins: 170m ORNANE : 90m 10

11 Consolidated statement of financial position millions Goodwill Property, plant & equipment and intangible assets Other fixed assets 31 Dec Dec Impact of derecognition of goodwill previously recognised on Security business ( 82m) and asset write-downs Operating WCR Other current assets (liabilities) Assets (liabilities) held for sale 269 (116) (142) 79 Pensions: Impact of IAS 19 Total assets 892 1,125 Shareholders' equity Non-controlling interests Provisions Net debt Total equity and liabilities 892 1,125 11

12 Breakdown of provisions millions, at 31 December Pension provisions Restructuring provisions Other risk and contingency provisions Antalis: 5m Arjowiggins: 52m Total

13 Change in net debt millions 2015 Consolidated net debt - 1 January (311) 2014 (537) EBITDA Change in WCR of businesses CAPEX Asset disposals Operating cash flow (49) (76) (43) Net finance costs Income taxes expense (35) (12) (46) (5) Antalis: (36)m Arjowiggins: (57)m Restructuring costs Disposals/acquisitions (93) 135 (62) 5 Arjowiggins: 158m Antalis: (24)m Capital increase Financial restructuring program Cash flow from (used in) discontinued operations Currency impact - (6) (20) (3) Other items (13) (17) Consolidated net debt - 31 December (235) (311) 13

14 Consolidated net debt Consolidated net debt of 235 million vs. 311 million at 31 Dec Antalis: (232) million Arjowiggins: (1) million Financial ratios (covenants) at 31 December 2015 Antalis Net debt/ebitda = 2.44 (< 3.60) Recurring operating income/net finance costs = 3.84 ( 2.10) Enhanced consolidated Net debt/ebitda ratio 1.9 at 31 December 2015 (2.5 at 31 December 2014) 14

15 CONTENTS 1. Introduction Présentation PowerPoint 3. Review of Antalis & Arjowiggins 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook 15

16 Business review Hervé Poncin Chief Operating Officer of Antalis 16

17 Business environment Major change in the competitive landscape on the European printing paper market in 2015 Consolidation of the European paper distribution market following the demise of PaperlinX, one of Antalis main competitors Direct sales development by certain paper producers in a number of markets Contrasting performances between different segments and regions Continued decline in European printing volumes of around 2.5% Packaging and Visual Communication markets grew by approximately 2% Currency fluctuations and currency depreciation against the US dollar and the euro in a number of countries 17

18 2015 highlights Favourable impact of PaperlinX s demise on Antalis' European business, especially in the UK and Benelux Strategic development in Packaging and Visual Communication No. 1 in the European Packaging market with annualised sales of around 450 million Acquisitions in the UK, Denmark, Sweden and Estonia representing approximately 130 million in full-year sales and an enterprise value totalling 24 million Significant market share increases in Visual Communication, especially in Nordic countries Packaging and Visual Communication now contribute 36% of Antalis' gross margin, up by 4 points compared to 2014 Continued restructuring of the supply chain (Germany, Austria and France) Antalis financing programme completed and secured through 2018 by setting up a 200 million factoring programme 18

19 Operational and commercial progress in 2015 Further expansion in the fast-growing digital printing market (1) Sales up 8% year on year Expanded product range in office printing around 3 strong recognised brands (Image, Xerox and Data Copy acquired in 2015) in commercial printing (Superfine i-tone ) Innovative approach to marketing eco-friendly and recycled papers Green Star System (for evaluating the "greenness" of a product) Guaranteed product traceability with Antrak (on-line supplier platform) 200 listed suppliers covering almost 80% of purchasing volumes Solid commitment as official partner to COP21 Investments in customer-focused IT systems begin to bear fruit Continued deployment of CRM and e-commerce solutions Sustained growth in e-commerce: 26% of stock orders now placed on-line, i.e., a four point year-on-year increase in the sales penetration rate (1) Technology for printing small runs and customising documents by incorporating variable data (text, image, data) and enhancing print quality using various different techniques (hot stamping, laser-cutting, etc.). 19

20 Enhanced operating performances Sales up 1.5 % to 2,625 million (down 2.2 % at constant exchange rates) Sustained growth in the Packaging (up 24 %) and Visual Communication (up 11%) businesses Acquisitions contributed sales of around 77 million Continued growth in cross selling Decline in printing volumes Exacerbated by proactive customer risk management and supplier and brand portfolio reorganisation Partly offset by continued good growth on the back of the market consolidation, especially in the UK and Benelux Higher selling prices in the stock business Favourable forex impact, mainly attributable to fluctuations in sterling and the Swiss franc EBITDA grew 16.7% to 94 million year on year (2014: 80 million); EBITDA margin rose by 0.5 points to 3.6% Buoyed by a favourable forex impact and the positive contribution of new acquisitions completed in Packaging and Visual Communication Improved product mix The positive impact of lower overheads, particularly across the supply chain Recurring operating income up 23.9% to 68m vs. 55m in 2014 Debt stands at 232 million, an improvement of 18 million, thanks to good working capital management despite higher levels of business due to the demise of PaperlinX and acquisition financing requirements ( 24 million) 20

21 Key income statement items H H Pro forma Change 2015 millions, year ended 31 December 2014 Pro forma ** 2015/2014 IFRS Sales 2,625 2, % Including 77 million related to acquisitions EBITDA EBITDA margin (%) % % +16.7% +0.5 points down 2.2% at constant exchange rates Recurring operating income Operating margin (%) % % % +0.5 points Capital employed ROCE % % 21

22 EBITDA trends Mainly GBP and CHF Impact of packaging acquisitions 2014 EBITDA Forex impact Acquisitions Margins/Mix/ Variable Inflation Overheads Bad debts 2015 Volumes costs EBITDA 22

23 Key cash flow items millions, at 31 December EBITDA 94 Change in WCR Capex Disposals of fixed assets 41 (17) 11 Operating cash flow 129 Net debt (21) (14)

24 Breakdown of sales and EBITDA 2015 sales by region 2015 EBITDA by region 2015 sales by business Rest of the world 9% Western Europe (excl. France & UK) 40% Rest of the world 10 % Eastern Europe 12% Office 22% Visual Comm 7% UK 28% France 11% Eastern Europe 12% Western Europe 78% Packaging & Visual Comm. 21% Packaging 14% Print 57% 24

25 Business review Pascal Lebard Chief Executive Officer 25

26 2015 highlights 125 million related to the outstanding balance on Arjowiggins' syndicated credit facility has been cleared in full Sale of 85% of Arjo Systems and Arjowiggins Solutions to Impala group in June 2015 In exchange for a debt waiver of 110 million and payment of the balance in cash Strengthening of Arjowiggin's balance sheet Sale of Arjo Wiggins Ltda (Brazil) in May based on an enterprise value of 85 million 53 million worth of sale & leaseback financing set up in Q4 based on several industrial assets Wizernes and Charavines mills closed at the end of June Industrial problems encountered after transferring production from the two sites Redundancy procedures have been finalised, with the exception of those concerning protected workers at Wizernes mill Search for a buyer for the sites Exclusive agreement with Global Hygiène for sale of the Charavines site. The sale should be finalised in Q No concrete viable offers for the Wizernes site These closures are expected to have a positive impact of around 19 million in 2016 due to lower full-year overheads and the absence of the costs involved in transferring production that weighed on EBITDA in the second-half of

27 Results hit by industrial issues related to the operational restructuring plan Sales down 11.2% to 905 million (down 14.7% at constant exchange rates) Decline in printing volumes amplified by Production capacity cuts in the standard coated paper segment (closure of Wizernes) Difficulties encountered in H2 by the Graphic and Creative Papers divisions when transferring production Impact of divestments in H1 (Arjo Systems, Arjowiggins Solutions, Arjo Wiggins Ltda) Negative impact on volumes of downtime on a machine in the banknote paper business Business in the other specialty businesses held up well, particularly in the Healthcare business EBITDA down 17.4% to 45m vs. 54m in 2014 Positive impact of lower overheads following the closure of the Wizernes and Charavines mills Offset by the decline in printing volumes and divestments Negative impact of higher raw material prices (essentially pulp) due to the fall in the euro against the US dollar Recurring operating income of 18 million compared to 28 million in 2014 NB: in H1 2015, disposals represented sales of 62 million and EBITDA of 14 million For full-year 2014, they represented sales of 123 million and EBITDA of 18 million 27

28 Key income statement items millions, year ended 31 December Change 2015/2014 Sales 905 1, % EBITDA % EBITDA margin (%) 4.9 % 5.3% point down 14.7% at constant exchange rates Recurring operating income % Operating margin (%) 2.0% 2.7% point Capital employed ROCE 9.4% 11.3% 28

29 EBITDA trends Volumes down 11% on 2014 of which, (33)m forex impact (mainly pulp) Arjo Wiggins Ltda, Arjo Systems & Arjowiggins Solutions and closure of Wizernes and Charavines of which, (8)m forex impact of which, 31m forex impact 29

30 Pro forma EBITDA Impact of disposals on 2015: Arjo Wiggins Ltda, Arjo Systems & Arjowiggins Solutions (13) Closure of Wizernes and Charavines: Reduction in full-year overheads and impact of additional costs involved in transferring production in H EBITDA 2015 Scope impact Continued activities EBITDA Wizernes & Charavines 2015 pro forma EBITDA 30

31 Key cash flow items millions, year ended 31 December EBITDA Change in WCR Capex Disposals Operating cash flow (31) (32) 3 (15) (48) (28) 5 (17) Net debt (1) 67 31

32 Results by division Graphic Sales ( millions) % 2015 Creative papers EBITDA ( millions) % Impact of Wizernes closure on volumes Significant reduction in production capacity in the standard coated paper segment Blockade of buffer stock built up in preparation for transferring production Production difficulties in H at Bessé-sur-Braye Reduction in overheads Growth in most specialty businesses, especially Healthcare, laminated, transfer and tissue segments Sales ( millions) EBITDA ( millions) Impact of Charavines closure on fine paper volumes 249 Difficulties encountered in H2 when transferring production to Stoneywood -4.6% Reduction in overheads % Resilient performances in the luxury packaging, bookbinding and tracing paper businesses

33 Results by division Security Reported figures Sales ( millions) EBITDA ( millions) % Excluding disposals Sales ( millions) % EBITDA ( millions) Decline in volumes in the banknote paper business due to the temporary shutdown of a machine Impact of divestments (Security Solutions businesses, Brazilian banknote business) Sustained growth in the Secure documents business -6.6% %

34 Breakdown of sales and EBITDA 2015 sales by division 2015 EBITDA by division 2015 sales by region Graphic 49% Green 39% Creative Papers 26% Creative Papers 38% Graphic 11% Asia 18% Rest of the world 11% US 7% Coated 20% Specialty 41% France 20% Security 25% Security 51% Europe (excl. France and UK) 35% UK 9% 34

35 CONTENTS 1. Introduction Présentation PowerPoint 4. Outlook 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook Pascal Lebard Chairman and Chief Executive Officer 35

36 Outlook In a complex business environment, 2016 looks set to be an uncertain year in our different markets Antalis Continuation in the early part of the year of the momentum created by PaperlinX's demise Growth in Packaging and Visual Communication business buoyed by 2015 acquisitions Arjowiggins Positive impact of restructuring of Graphic and Creative Papers divisions finalised in 2015 Sequana Continued refocus on distribution, especially via external growth policy in the Packaging sector Sequana s 2016 EBITDA should be ahead of that for 2015 and the consolidated Net debt/ebitda ratio should remain below

37 CONTENTS 1. Introduction Présentation PowerPoint 5. Q & A 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy Pascal Lebard and Outlook Chairman and Chief Executive Officer of Sequana Xavier Roy-Contancin Chief Financial Officer Hervé Poncin Executive Vice-President of Sequana, Chief Operating Officer of Antalis 37

38 CONTENTS 1. Introduction Présentation PowerPoint 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook contact@sequana.com 38

39 CONTENTS 1. Introduction Présentation PowerPoint Appendix Key financial data 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook 39

40 Breakdown by business millions Change* 2015/2014 Sales Antalis Sales Arjowiggins Eliminations & holding company 2, (230) 2,585 1,020 (236) + 1.5% % - Consolidated net sales 3,300 3, % EBITDA Antalis % EBITDA Arjowiggins % EBITDA - holding company & other (13) (10) - Consolidated EBITDA ,5% Recurring operating income - Antalis % Recurring operating income - Arjowiggins % Recurring operating loss - holding co. & other (13) (11) - Consolidated Recurring operating recurring income operating income % (*) Percentage changes and margins are based on figures rounded out to one decimal place. 40

41 Antalis millions Change 2015/ 2014 Sales Europe 2,384 2, % Sales Rest of the World % Eastern Europe 13% Europe 2015 sales by region UK 31% Sales Antalis 2,625 2, % EBITDA Europe % EBITDA Rest of the World % EBITDA Antalis % Recurring op. income Europe % Recurring op. income Rest of the World % Western Europe (excl. France & UK) 44% France 12% Rest of the world 2015 sales by region South Africa 31% Recurring operating income Antalis % South America 44% Asia 25% 41

42 Results by division Reported figures Excluding disposals* millions % change 2015/ 2014 millions % change 2015/ 2014 Sales - Graphic Sales - Creative Papers Sales - Security % -4.6% -18.2% Sales - Graphic Sales - Creative Papers Sales - Security % +1.3% -6.6% Sales 905 1, % Sales % EBITDA - Graphic EBITDA - Creative Papers EBITDA - Security % % -5.4% EBITDA - Graphic EBITDA - Creative Papers EBITDA - Security % -4.4% +24.4% EBITDA % EBITDA % Recurring op. loss - Graphic R O I - Creative Papers R O I. - Security (6) (3) NA % % Recurring op. loss - Graphic R O I - Creative Papers R O I - Security (6) 12 (1) (3) % -8.6% NA Recurring operating income % Recurring operating income % * On a full-year basis, the sales and EBITDA for the disposals amount to 123 million and 18 million, respectively 42

43 CONTENTS 1. Introduction Présentation PowerPoint 2. Consolidated income statement and statement of financial position 3. Activities of subsidiaries 4. Strategy and Outlook contact@sequana.com 43