Investor Presentation FY 2012

Transcription

1 Investor Presentation FY 2012 Francois Luscan CEO Xavier Leclerc de Hauteclocque CFO April 26, 2013

2 Forward Looking Statement This Presentation may include forward-looking statements. Forward-looking statements are statements regarding or based upon our management s current intentions, beliefs or expectations relating to, among other things, Albéa s future results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. By their nature, forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results or future events to differ materially from those expressed or implied thereby. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this Presentation regarding trends or current activities should not be taken as a representation that such trends or activities will continue in the future. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this Presentation. The information contained in this Presentation is subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, accuracy, reasonableness or completeness of the information contained herein and no reliance should be placed on it. 2

3 Note on Provision of Financial Information Whilst this document generally refers to Albéa s audited FY 2012 earnings, a number of slides provide information on the basis of unaudited figures with regards to: Rexam s Personal Care ( PC ) FY 2012 figures, disclosed stand alone (and based on Rexam management reporting) on slides 11, 19 and 24 Preliminary indications for the combined Albéa and Rexam PC entity for the quarter ended March 31, 2013 ( Q ) on slide 31 FY 2012 Profit & Loss items are disclosed on a stand alone basis, whereas Balance Sheet and Cash Flow statements are on a combined basis In this document figures have been approximated to one decimal place, which may give rise to minor rounding differences when compared to the FY 2012 annual report Emerging countries include among others Brazil, India, China, Indonesia and Russia 3

4 Table of contents Key Developments & Strategy Update 5 Operational Review 14 Financials 20 Outlook & Closing Remarks 30 4

5 Key Developments & Strategy Update Based on Albéa s FY 2012 audited financial statements, unless stated otherwise 5

6 Sustained Profitability Resulting from Improved Efficiency Group Sales reach $957.8 million FY 2012 down 5.2% year-on-year, and broadly flat at constant currency Q down 0.4% year-on-year and up 2.2% at constant currency Adjusted EBITDA at $87.4 million, a 0.9% year-on-year increase and +5,6% at constant currency FY 2012 Adjusted EBITDA margin at 9.1%, versus 8.6% in FY 2011 Q Adjusted EBITDA margin at 8.0%, versus 7.9% in Q Free Cash Flow consumption of $442.7 million in FY 2012 Operating Free Cash Flow consumption of $7.8 million Total Cash & Availability of $271.2 million as of Dec 31, 2012 Net Debt (*) at $507.4 million as of Dec 31, (*) Net Debt is defined as total Albéa Gross Debt minus Cash and Cash equivalent as of Dec 31, Gross Debt amounted to $732.5 million as of Dec 31, 2012 and include among others, the bonds issued in 2012, factoring, ABL, etc. For the detailed overview of Albéa s Gross Debt please see section 6.9. Borrowings and other financial liabilities in the 2012 notes to the financial statements

7 Key Market Dynamics Trends APAC countries characteristics: Growth of retail cosmetic market and good performance by our customers, mainly in EM countries Steep regulated salary increases Destocking throughout 2012 Not fully absorbed by traditional pass through mechanisms Cost Inflation Customers Fewer new fragrances launched Greater cash consciousness / increases in payment terms Increased delays between contract awards and effective P&L recognition Increases in energy prices make the worldwide sustainability program more important Energy Prices Key Market Dynamics Suppliers & Competitors Scattered bankruptcies amongst equipment suppliers and competitors in mature countries Polypropylene and polyethylene (indices and prices) increased in Q after 3 stable quarters (*) Raw Materials Currencies Negative currency impact in line with previous reporting periods Resin pricing trended up substantially in Asia during H Group raw material margin up by 1.3 ppt in 2012 Mostly translation effect Essentially Brazilian Real, Indian and Indonesian Rupees and /$ movements 7 (*) Source: Platts

8 Focus on Emerging Markets and Innovation to Leverage Growth... Brazil India Indonesia Russia China + 34% sales growth in FY 2012 (*) + 23% sales growth in FY % sales growth in FY % sales growth in FY % sales growth in FY 2012 Strong performance of caps (CRP) Encouraging progress in Lipstick / Mascara and Lip gloss +15% sales growth (in $) in FY 2012 (**) Solid growth in Laminate tubes sales +8% sales growth (in $) in FY 2012 Strong performance of Laminate tubes and Compact Decline in Skincare and Lipstick +7% sales growth (in $) in FY 2012 Strong performance in Plastic tubes Sales decrease in Lipstick +5% sales growth (in $) in FY 2012 Solid performance in Lipstick / Mascara (CRP) +12% sales growth (in $) in FY 2012 The blended gross margin currently on raw materials in emerging markets is a few percentage points below Albéa s average given local market dynamics The initial dilution is expected to improve alongside increasing consumer discretionary spending 8 (*) Variations in local currency, rounded restated by contract losses (**) Variations in $ restated by contract losses

9 In Conjunction with Driving Cost Reductions Footprint optimisation, reorganisation and re-layout of shop floors in Indonesia and the UK amongst other regions Number of value re-integration projects underway to bring outsourced services back in-house, which will reduce costs and operational risk going forward Continue to drive the sustainability program and further energy efficiencies Integration benefits from 2012 acquisitions will progressively become visible in FY 2013 Further synergies to be realised from the Rexam PC acquisition 9

10 Rexam s PC Integration on Track Flawless carve out of IT infrastructure All departments operational from Day 1 Commercial organisation in place, further optimisation to be done SG&A targeted structure well advanced leading to potential cost savings ahead of plan Integration of Rexam entities into the Pan European factoring programme and the Group s cash pooling Albéa s Environment, Health and Safety programme is being satisfactorily implemented within Rexam s acquired business Stable business operations maintained 10

11 Revised Business Plan Points towards Accelerated Synergies Realisation in Year1 At least 50% of the acquisition synergies expected in year 1 have been realised in Q Implementation costs expected to be lower by up to $20.0 million Rexam PC stand alone FY 2012 Sales grew in the Dispensing business In particular in France, the US and Brazil Chinese state grant in progress (as planned) FY 2012 stand alone Rexam PC adjusted EBITDA at $46.4 million (*) Down $19.6 million compared to June 30, 2012 LTM adj. EBITDA (*) Lower Sales in particular in China, France leading to lower absorption costs Low win rate of new business in past few months impacting 2013 unfavourably Lower implementation cost to compensate cash effect of lower FY 2012 stand alone adjusted EBIDTA for Rexam PC division 11 (*) Based on unaudited management reporting

12 Gauging Progress on Synergies Initial Objectives: $45.5 million within 3 years Q Update SG&A Redundant stand alone costs of $8 million (*) Integration of the two SG&A organisations across Sales, R&D, Finance, HR and other support functions with identified headcount reductions Savings in office lease costs, corporate functions and IT c. $45 million implementation costs Manufacturing Footprint Optimisation Europe: Optimise footprint of Cosmetics production Asia: Consolidation of two sites in North China and two sites in South China into the other sites. Integration of the two Indonesian sites Brazil and Mexico: Leverage available space at existing sites to increase capacity c. $29 million net implementation costs Procurement In-sourcing of metal parts Raw material supplier renegotiations (resins, metals, etc.) to achieve savings of 2 to 3% of combined spend c. $16 million of net implementation costs Headcount 60% Europe 65% Resins/ Others 46% $21 million savings IT 15% $16 million savings $9 million savings Corporate/ Other 25% Brazil/ Mexico 10% Asia 25% Metal Parts 54% SG&A Year 1 Target of $11 million Q1 achieved ahead of plan Stand alone savings confirmed Manufacturing Footprint Optimisation Year 2 Target of $7 million China grant well on track in 2013 Europe project on track Brazil site merger in 2013 Procurement Year 1 Target of $2 million Procurement optimisation on track In-sourcing delayed to 2014 due lack of equipment availability from supplier 12 (*) Corporate overhead and administrative functions integration

13 Strategic Priorities Remain Unchanged Achieve a successful integration of recent acquisitions (e.g. Tex, Eyelematic and Rexam PC) Capitalise on attractive product and geographic mix to capture growth opportunities Explore further opportunities for cost reductions 13

14 Operational Review Based on Albéa s FY 2012 audited financial statements, unless stated otherwise 14

15 Tubes FY 2012 Financials In $ million unless stated otherwise FY 2012 FY 2011 Delta Organic Sales % FX translation effects (*) Contract loss impacts (**) Contribution from acquisitions Reported Sales (7.6)% FY 2012 Sales Reconciliation In $ million (32.5) (22.2) (2.3) Underlying Sales at constant currency by regions % - of which Europe % - of which North America (5.8)% FY 2011 Reported Fx translation Contract losses** FY 2011 adjusted Price / Mix Volume FY 2012 reported - of which Emerging countries % Adjusted EBITDA % - in percentage of Sales 11.6% 10.5% 103 bps Capital Expenditure ( Capex ) (***) (17.4)% - in percentage of Sales 6.7% 7.5% (80) bps Excluding contract losses in LatAm, underlying growth of +1.8% year-on-year Cost optimisation driving EBITDA margin EBITDA increased 8.6% year-on-year at constant currency 15 (*) 2011 at 2012 rates (** ) FY 2011 adjusted for the contracts lost in 2011 in South America (*** ) Excluding $9.0 million under finance lease for the building of the new plant in Ste Ménéhould currently in progress ( Project DREAM )

16 Tubes Operational Review Market 2012 Emerging markets remain strong whilst the mature markets are softer Greater demand for Personal Care products in Asia Increased focus on supply chain from customers # 1 worldwide leader in the oral, skin and hair care segments Over 5 billion tubes produced at 19 sites in 13 countries Seizing opportunities in new markets through innovation and specialist expertise e.g. aluminum tubes Highlights 2012 Outlook Significant business wins from both local and global clients Source low cost and environmentally friendly raw materials Consolidation of manufacturing sites at Colchester driving efficiencies Continued growth in Emerging markets with particular focus on laminate tubes Greater focus on innovative products Further optimise asset utilisation Dream project combining 3 plants into 1 in France ready by year end 16

17 Cosmetic Rigid Packaging FY 2012 Financials In $ million unless stated otherwise FY 2012 FY 2011 Delta Organic Sales (3.1)% FX translation effects (*) Contribution from acquisitions Reported Sales (2.0)% FY 2012 Sales Reconciliation In $ million (23.1) (12.3) Underlying Sales at constant currency by regions (3.1)% - of which Europe (4.5)% - of which North America (7.9)% - of which Emerging countries % FY 2011 Reported Fx translation FY 2011 adjusted Price / Mix Volume Acquisition FY 2012 reported Adjusted EBITDA % - in percentage of Sales 7.1% 5.5% 155 bps Capital Expenditure ( Capex ) % - in percentage of Sales 6.6% 3.8% 275 bps Lower sales as a result of soft volume, destocking and unfavorable year-on-year comparison Strong improvement in EBITDA driven by efficiency gains in low profitability sites Sustained Capex investments outside mature markets 17 (*) 2011 at 2012 rates

18 Cosmetic Rigid Packaging Operational Review Market 2012 Strong H1 followed by weak H2 driven by customer destocking Greater operational flexibility required due to market uncertainty Customers maintain price pressure #1 in Mascara and Lipsticks and a key player in Compacts and Closures 20 Plants over 3 continents Provide a fully integrated solution: Metallisation Varnishing Highlights 2012 Outlook Full range of decorations offered in all regions Integration of Eyelematic on track Further investment in new technologies Rationalise footprint in China and Europe Further product and operational developments to exploit particular opportunities Moulds reintegration 18

19 Rexam PC Stand Alone FY 2012 Financials (based on unaudited Management reporting) In $ million unless stated otherwise FY 2012 FY 2011 Delta Organic Sales (4.9)% FX translation effects (*) Reported Sales (9.1)% Adjusted EBITDA (37.8)% - in percentage of Sales 9.3% 13.6% (429) bps In $ million unless stated otherwise Total sales decrease FY 2012 vs. FY 2011 (50.1) Sales variation by sources: - of which FX translation effects (24.2) - of which Europe (8.2) - of which North America of which Emerging Markets (**) (21.2) 19 (*) 2011 at 2012 rates (**) Including Brazil +$4.7 million and Asia $(25.9) million

20 Financials Based on Albéa s FY 2012 audited financial statements, unless stated otherwise 20

21 FY 2012 Financial Highlights (1/2) In $ million FY 2012 FY 2011 Delta Group Sales ,010.7 (5.2)% COGS (789.9) (825.6) (4.3)% Gross Profit (9.3)% SG&A (116.0) (127.7) (9.2)% Restructuring, impairment & other (49.2) (23.2) 111.7% Gross Operating Profit (92.0)% Gross Operating Profit (92.0)% + Operational non cash items % + Non recurring items % + Sun Management Fees (15.6)% = Adjusted EBITDA % 21

22 FY 2012 Financial Highlights (2/2) In $ million FY 2012 FY 2011 Delta Adjusted EBITDA % D&A (31.1) (24.2) 28.3% Restructuring & project costs (49.2) (23.2) 111.7% Other (4.3) (5.2) (17.6)% Operating Profit (92.0)% Finance costs (income) net (19.8) (6.6) N.M Profit from continuing operations before income taxes (17.1) 27.6 N.M Income tax (expenses) / benefit (9.1) (9.0) 1.5% Profit / (loss) for the Period (26.3) 18.6 N.M 22

23 Improved Productivity Drives EBITDA Growth across the Group FY 2012 Sales Reconciliation FY 2012 Adjusted EBITDA Reconciliation 1,010.7 In $ million In $ million (55.6) (22.2) (2.1) (3.1) (4.0) 82.6 (2.0) (12.3) * FY 2011 adjusted for the loss of the contracts lost in 2011 in South America

24 Acquired Rexam PC Businesses to Operate within Group Guidelines to Extract Value Rexam PC FY 2012 Sales Reconciliation Rexam PC FY 2012 Adjusted EBITDA Reconciliation In $ million In $ million (24.2) (3.0) (22.9) 74.6 (4.5) 70.1 (3.0) (15.9) (4.8) 46.4 Driving efficiencies is part of Albéa s DNA 24

25 Deterioration of Underlying Operating Cash Flow on the back of Increased Capex and WC consumption In $ million FY 2012 FY2011 Delta Adjusted EBITDA % Change in Working Capital (*) (10.4) 30.6 N.M Capital Expenditure (**) (67.0) (62.5) 7.2% Restructuring (17.8) (18.8) (5.3)% Operating Cash Flow (7.8) 35.9 N.M 25 (*) Excluding payables for acquisition fees (** ) Excluding $9.0 million under finance lease for the building of the new plant in Ste Ménéhould currently in progress ( Project DREAM )

26 Investing in Growth Opportunities and High Return Projects Capex to Sales ratios FY 2012 FY 2011 Total Group Capex to Sales 6.9% 6.2% Capex to Sales per Region - of which Europe (*) 6.2% 6.2% - of which North America 3.9% 3.8% - of which Emerging countries 8.7% 8.0% Ambition to achieve leadership in Emerging countries and opportunities for cost efficiency in Europe drive investments 26 (*) Excluding $9.0 million under finance lease for the building of the new plant in Ste Ménéhould currently in progress ( Project DREAM )

27 Net Debt Uplift as a Result of Acquisitions of Rexam and Tex In $ million Opening Net Debt as of Jan 1, 2012 Financing Costs Acquisition fees Taxes Acquisitions (*) Operating Cash Flow (**) Closing Net Debt as of Dec 31, (*) Including cash out related to the Rexam and Tex acquisitions (**) Including Capex, Change in Working Capital, Restructuring.

28 Pro-forma Net Debt Points Towards a 4.6x Leverage Ratio as of FY 2012 Closing Net Debt as of 31, 2012 (In $ million) (507.4) + IFRS adjustment for financing fees (25.6) + Rexam Tréport tax on hive down, profit sharing paid in 2013 (17.6) + Rexam Brazil tax on acquisition paid in 2013 (15.6) + Deal fees to be paid in 2013 (52.5) Net Debt pro-forma of the acquisition costs (paid in 2013) (618.7) Combined stand alone EBITDA (unaudited) Debt/ EBITDA Multiple 4.6x Commitment to deleverage as integration of acquired businesses continues 28

29 Majority of Existing Debt Maturing in More than 5 Years Total gross debt outstanding as of Dec 31, 2012: $732.5 million A renewed funding structure providing some liquidity headroom ABL & Factoring PEC / CEPC Bonds Finance lease Other * Over 85% of total outstanding debt expiring in more than 5 years Total bonds outstanding: $623.7 million, issued in 2012 (**) Net debt at $507.4 million as of Dec 31, 2012 Maturity Profile in $ million < 1 year 1 to 3 years 3 to 5 years > 5 years Total ABL Factoring PEC / CEPC Bond Lease Other Total As of Dec 31, 2012 Cash & cash equivalents: Undrawn lines* Cash & Availability position $220.9 million $50.3 million $271.2 million 29 (*) Including unutilised asset based facility and overdraft (**) Net of amortised financing fees

30 Outlook & Closing Remarks Based on unaudited preliminary indications for the combined Albéa and Rexam PC entity for Q

31 Pro Forma Q1 2013: Combined Business Trading Update Sales stable year-on-year; slight uplift in Tubes Division, at constant currency. EBITDA Q down 3.7% year-on-year as expected In $ million unless stated otherwise PF Q PF Q Delta Group Organic Sales (0.4)% - Tubes % - CRP (1.7)% - Corporate N.M. FX translation effects (*) Tubes CRP Reported Group Sales (0.9)% - Tubes % - CRP (2.4)% - Corporate N.M. Adjusted Group EBITDA (3.7)% - in percentage of Sales 8.9% 9.1% (26) bps 31 (*) 2012 at 2013 rates

32 Strengthening Investment Proposition through Focus on Execution Successful acquisitions position the Company as a global market leader Significant opportunities in high growth markets and segments being captured through innovation and customer centricity On-going focus on driving efficiencies is in Albéa s DNA which will continue to be rolled out to new and existing businesses 32

33 Albéa s Financial Calendar Upcoming Earnings Releases Q May 23, 2013 Q August 29, 2013 (TBC) Q November 21, 2013 (TBC) 33

34 Q&A

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