Sequana at a glance. July 2014

Transcription

1 Sequana at a glance July 2014

2 A Group focused on the paper market 3.3.3bn sales in 2013 B2B distribution ~ 1/4 Production ~ 3/4 2.5bn in sales in Europe, #3 worldwide Operations in 44 countries 1.8 million tonnes of paper distributed every year 100 distribution centres Approximately 6,000 employees 1 bnin sales World leader in technical and creative papers High-profile brands including Conqueror, Satimat green, Cyclus, Cocoon, Rives Nearly 1 million tonnes of paper produced every year 20 production and converting facilities More than 4,000 employees 2

3 A unique positioning in the paper industry A differentiated positioning on the industry value chain Raw materials Pulp production Paper production Distribution/ converting Printing End users Recycled pulp producers Not involved in virgin pulp production Specialty papers (incl. recycled) Graphic papers The only integrated recycled pulp and paper producer in Europe Paper merchants Optimizing synergies between Arjowiggins and Antalis Supply chain optimization Breadth of product offering Enhanced service quality Lead time and working capital 1 bn sales (1) 1/4 of group s sales 0.2 bn sales 2.5 bn sales 3/4 of group s sales Capacity optimization Planning and commercial efficiency Insight of end-markets to adapt Arjowiggins offering (1) Excluding Arjowiggins US Coated business reclassified in discontinued operation 3

4 A diversified profile in terms of geographies and business mix Balanced portfolio Antalis sales breakdown UK 22% France 13% By region Western Europe (excl. France & UK 41% Packaging & VisCom 17% Office 18% VisCom 6% Packaging 11% By business Print 65% Antalis Present in 44 countries in four continents Broad products offering clients Rest of the world 10% Eastern Europe 14% Europe (excl. France and UK) 34%. Arjowiggins sales (1) breakdown By region UK 10% France 18% Graphic 49% By division Rest of the world 14% US Creative Papers 5% 22% Asia Coated 19% 29% (1) Excluding Arjowiggins US Coated business reclassified in discontinued operation Green 38% Specialty 33% Security 29% Arjowiggins 20 production and converting facilities in Europe, Asia, US and Latam Large spectrum of businesses with different dynamic and end-market * Including US Coated business s Combined Locks mill 4

5 Antalis overview A distribution group leader in its markets Key Products FY2013 Sales (% of total) Distribution market Size (1) (Europe) Market Position (1) (Europe) Coated and uncoated papers Print Specialty and creative papers Envelopes 1,648m (65%) 9.2mt paper Graphic supplies Office Paper and envelopes 442m (18%) 3.3mt paper Visual Communication Board Plastics / Adhesives Paper 157m (6%) 4bn One of the leading distributors in Signage and POS segment Packaging Consumables Machines Bespoke solutions 282m (11%) 5bn (1) Source: Company estimates 5

6 Global reach 2013 sales breakdown by geographic area Eastern Europe 14% France 13% UK 22% Western Europe (excl. France & UK) 41% Rest of the world 10% Present in 44 countries, including 28 in Europe 1.8 million tonnes of paper sold in

7 European leader Critical mass in Europe Present in 28 European countries Approximately 20% market shares in Europe Close to 12,000 deliveries per day throughout Europe #4 #3 #3 * #4 7

8 Arjowiggins overview A global leader in specialty papers Key Products Market position FY2013 Sales (% of total) Graphic Recycled pulp and papers Specialty products Standard coated and uncoated papers European recycled graphic paper (a) #6 European coated woodfree paper 510m (49%) Security Secure payments Secure documents Brand and consumer protection globally in banknote paper #3 globally in synthetic paper (Arjobex) 305m (29%) Creative Papers Premium fine papers Tracing papers Papers for printed electronics globally in premium fine paper globally in tracing paper 224m (35%) Coated US * Standard coated and uncoated papers #4 US coated woodfree paper * Discontinued operation (*) excl. lightweight coated paper (LWC) 8

9 20 production and converting facilities Stoneywood Graphic Recycled Coated & specialty Deinked pulp (DIP) Medical Combined Locks Charlotte Charleston Clacton (Arjobex) Chartham Apeldoorn Wizernes Château Thierry Priplak Brno Le Bourray Crèvecoeur Bessé Rives (Arjobex) &Charavines Palalda Gelida Quzhou Creative Paper Coated US (discontinued operation) Security Salto 9

10 Arjowiggins overview A global leader in specialty papers Sales (1) by geographic area Sales (1) by division Asia 19% Rest of the world 14% US 5% France 18% Graphic 49% Green 38% Coated 29% Creative Papers 22% Spécialty 33 % Europe (excl. France & RU) 34% UK 10% Security 29% (1) Excluding Arjowiggins US Coated business reclassified in discontinued operation 10

11 Steady market deterioration since 2008 The printing & writing paper market, Arjowiggins main market segment in volume, has been deteriorating steadily since 2008 The printing & writing market has been structurally declining (internet, digital media) Volume drop ca. 8% per annum in Europe since 2008 The economic crisis has accelerated the decline in volumes and leads to a deterioration of our product mix and margins in the fine paper segment. Raw material prices (pulp, chemicals, energy) remain high, thereby pressuring margins Overcapacities on the market (15-20%) are causing strong pressures on selling prices The pace of volume decline has accelerated in 2013 Decline in volumes sharper than expected by the various market operators Paper consumption in CEPI region 1 [ ; mt] 0% -4% CAGR % -8% -1% Expected decline of 2% to 5% per annum in printing & writing paper volumes Newsprint Packaging & Wrapping Industrial & special papers Print & Office Hygiene paper 1) CEPI countries: Austria, Belgium, Czech Rep., Finland, France, Germany, Hungary, Italy, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Netherlands, United Kingdom Source:CEPI -2% +5% 11

12 Key milestones of the Group s strategy Consolidation of Map into Antalis Antalis RACE 2012 Program Roll-Out Packaging & Visual com. acquisitions DNA Initiative Xerox Arjowiggins Green Paper strategy and development of Specialty activities Strategic Plan roll-out and cost-cutting measures driven by fall in demand Greater Autonomy of Branches, Corporate downsizing Restructuring of Carbonless Arjowiggins: Capacity cuts Antalis: cost reduction plans stepped-up 180m cost savings over 2 years (2009 vs. 2007) Closures Witcel (1 machine - Argentina), Rives (France) Shorter working time arrangements, etc. Closures - Dalum (Denmark) Witcel (Argentina), Ivybridge (UK) Appleton US restructuring & cash protection plan Divestment of non strategic assets & contribution to market consolidation process - Promotional Products - Office Supplies - B. Dumas - Decor Paper Asia - Carbonless - Decor / Abrasive - Moulin du Roy -Casting -US Coated exit - AWA Ltd (exit Fox River envir. Claim) - Antonin Rodet 12

13 Group restructuring plan announced on 10 April 2014 The group s industrial and financial plan enables it to pursue its long term development by repositioning it on promising segments and strengthening its financial structure Strategic & industrial pillar Financial pillar Outcome Arjowiggins Refocusing on speciality segments with leadership positions Exit from loss-making businesses and simplification of industrial footprint Back to positive cash flow generation Credit facility restructuring from 400m down to 125m Maturity extension of reinstated debt until end 2020 Rescheduling of repayments and lighter covenants Sustainability secured by a refocused business and a stronger balance sheet Antalis Continued acquisition plan in high growth segments and geographic areas Debt maturity extended to end 2018 Significantly improved financial flexibility (maturities, covenants and acquisition baskets) Partial refinancing through a factoring programme ( 200m out of 520m) Continued growth potential and diversified sources of financing Sequana 64m rights issue Reduction of credit facilities from 26m down to 10m Lighter financial structure 13

14 Key highlights of the industrial restructuring plan Creative Papers Change of economic model to capture market shares and bolster leadership position Simplifying the product range and increasing the size of production runs Targeted sales and marketing effort toward emerging countries and promising sectors (e.g. labelling, luxury packaging or specialty papers) Improving the efficiency and competitiveness of the production equipment Production concentrated in a limited number of sites Launch of a disposal process for the Charavines mill (France) and ultimately, transfer of production from Charavines to Stoneywood (UK) Refocusing the Gelida mill (Spain) on the book binding market Optimising industrial facilities in the Tracing paper business 178 jobs affected by the reorganisation project Graphic Production concentrated in a limited number of sites in France Launch of a disposal process for the Wizernes mill (France) and ultimately, transfer of production from Wizernes to Bessé mill Selective focus on the most profitable clients and countries in standard coated paper Boosted leadership of Arjowiggins Graphic in recycled graphic papers Building of a de-inking plant ( 30m) at Bessé mill (France), expected to be operational in mid- 2016, to make the site self-reliant in recycled pulp Greenfield: recycled pulp production for Arjowiggins Group and external clients 307 jobs affected by the reorganisation project Exit from US Coated Disposal process for the non-core and loss-making US Coated division following a substantial savings programme conducted in Q

15 Key terms of the financial restructuring plan Arjowiggins Restructuring of 400m credit facility 125m conversion into ORNANEs (net share settled bonds convertible into new shares and/or exchangeable for existing shares) giving access to Sequana s share capital 105m reinstated gross debt (tranches A and B) 20m reimbursement through asset disposal(s) 170m debt write-off (including 15m of accrued interests not due yet) Reduction in overdraft facilities from 50m to 30m Antalis Restructuring of 520m credit facility Refinancing of 200m through setup of a factoring programme Amend and extend of remaining 320m Sequana 64m rights issue Restructuring of 26m credit facilities Repayment of 10m 7m conversion into ORAs providing access to Sequana s share capital 9m debt write-off 15

16 A significantly enhanced debt profile millions Financing lines Pre-financial restructuring Financing lines Post financial restructuring Arjowiggins Credit facility Reimbursement via asset disposals 0 20 Overdrafts Antalis Credit facility Factoring Overdrafts 8 8 Holding Credit facilities and overdrafts Total 1, Group Reduction in financial debt (311) Reduction in financial debt (excl. overdrafts) (291) 16

17 A stronger balance sheet millions 30 June 2014 (reported) 30 June 2014 (pro forma) Goodwill Property, plant & equipment and intangible assets Other fixed assets Operating WCR Other current assets (liabilities) Assets (liabilities) held for sale Total assets Shareholders' equity Non-controlling interests Provisions Net debt Total equity and liabilities (104) 3 1, , (104) 3 1, ,161 17

18 Enhanced financial structure Data at 30 June 2014 Reduction of net debt 730m Consolidated net debt at 30 June m Consolidated net debt at 30 June 2014 (after financial restructuring) Reduction in leverage ratio (net debt/ebitda) 5.9x Consolidated leverage at 30 June x Consolidated leverage at 30 June 2014 (after financial restructuring) Reduction in gearing ratio (net debt/equity) 3.0x Consolidated gearing at 30 June x Consolidated gearing at 30 June 2014 (after financial restructuring) 18

19 A strategic plan that repositions the Group from both an operational and a financial perspective Arjowiggins Antalis Strategic / Industrial Refocusing on specialty activities Strengthened leadership in recycled graphic papers and high potential creative papers Streamlined industrial footprint Continued growth through acquisitions in growing segments and geographic areas Financing Reduced debt through write-offs and conversions into quasi-equity Extended maturities and rescheduled repayments Lighter covenants Set up of factoring programme Extended maturities and rescheduled repayments Lighter covenants Conclusions Refocused activity, cash generative again Adequate financial structure Preserved resources to support growth Diversification of financing sources A refocused group enjoying a robust balance sheet, competitive industrial and distribution setup and the means to take part in market consolidation 19

20 Post rights issue ownership structure Successful rights issue 63.8 million gross initial issue, increased to 66.3 million after partial exercise of the extension clause The entire proceeds of the rights issue are to be contributed to Arjowiggins to finance the operational restructuring plan for its printing and writing paper businesses Ownership structure at 29 July, 2014 Treasury shares 0.33% Bpifrance 19.68% Free float 46.16% Exor SA 17.03% Allianz 10.01% DLMD (incl. Pascal Lebard) 6.79% 20

21 contact@sequana.com 21 02/09/2014