Investor Presentation. Quarter Three Ended September Albéa Beauty Holdings SA

Transcription

1 Investor Presentation Quarter Three Ended September Albéa Beauty Holdings SA November 13 th,

2 Today s speaker Xavier Leclerc de Hauteclocque Executive VP & Chief Financial Officer 10 years of experience in Beauty and Packaging industries Previously, held finance roles at CarnaudMetalbox (Crown Cork & Seal), Guerlain (LVHM Group) and as CFO of Brake France (CD&R) 2

3 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, our 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 forwardlooking 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. 3

4 Agenda Financial and Operational Highlights Business and Group Financials Conclusion Q&A Appendices 4

5 5 Financial and Operational Highlights

6 Good performance on a unstable market for with organic sales and EBITDA, up 2.5% and 12% Key Organic Financials Group Organic Sales, up 2.5% year-on-year, at $351.2 million Group Organic Sales, almost flat year-on-year, at $1,065.1 million Adjusted Organic EBITDA, up 12.0% year-on-year, at $40.6 million and margin at 11.6%, up 99bps year-on-year Adjusted Organic EBITDA, up 5.3% year-on-year, at $118.7 million and margin at 11.1%, up 57bps year-on-year LTM EBITDA of $159.1 million at September 30 th (at various rates) and margin at 11.2%, up 77bps year-on-year Cash and Liquidity Positive Free Cash Flow of $1.4 million in Positive Free Cash Flow of $10.6 million in, earlier than expected Positive LTM Free Cash Flow of $23.4 million Total Cash and Availability (*) of $145.0 million as of September 30 th Net Debt (**) of $651.9 million as of September 30 th Net leverage at 4.10 x at September 30 th 6 (*) Cash and Availability position includes $94.2 million of net cash and $50.8 million of undrawn lines as of September 30 th (**) Net Debt under IFRS, defined as total Albéa Gross Debt minus Cash and Cash equivalent as of September 30 th Gross Debt amounted to $746.1 million, as of September 30 th and includes the bonds issued October 2012 and February (net of amortised financing fees), factoring, ABL, etc For more details please see the note Borrowings in the unaudited consolidated financial statements for the period ended September 30 th

7 Volatile economic conditions and large sensitivity on currencies Currencies High Exchange rate volatility unfavourable translation effects on Sales for $47.3m (mainly EUR/USD for $26.3m) Negatively impacted by EUR/USD for $26.3m, USD/BRL for $11.1, USD/PLN for $3.3m, USD/RUB for $1.7m, USD/MXN for $1.6m, USD/IDR for $1.2m and USD/GBP for $1.1m translation effect hits EBITDA by $5.6m, Mainly due to EUR/USD for $3.0m, USD/BRL for $2.1m and USD/PLN for $0.5m favourable translation effects on Net Debt for $23.1 million N.B. a -10 cts EUR/USD variation impacts Group Sales unfavourably by $50 million per annum Economic Environment Despite some uncertainties, the US is rebounding and the Eurozone is recovering. On the other hand, the Chinese economy is growing relatively slowly and the Brazilian economy still in recession Data for the third quarter suggest that the recovery in the Eurozone continues in an unspectacular manner and no impact yet on Beauty (one weakest year and similar to 2008) Poor Brazilian economic performance and low confidence with high inflation and weak currency China export still very low and local demand under pressure US third quarter reflects significant destocking effect impacting GDP Customers and Competition Coty acquired P&G Cosmetics (Fragrance & make-up) Customers report single digit growth including price effect (some global accounts still in red) Texen acquired Topline (USA, China) Some competitors facing financial & operating issues Last updated ETMA (*) reports deliveries volumes down worldwide by 2.3% vs. last year, with Laminate up by 2.1% while Plastics down by 3.3% (*) H1 ETMA reporting = European Tube Manufacturers Association 7

8 8 Business and Group Financials

9 EBITDA up 12% YoY with solid momentun on sales In $ million unless stated otherwise Organic Sales (*) % 1, ,066.2 (0.1)% - Europe (3.0)% (2.1)% - Americas % % - Asia % % Disposal effects - - FX translation effects (**) Reported Sales (10.0)% 1, ,208.3 (11.9)% Organic Sales - Analytical % 1, ,066.2 (0.1)% - Tubes % % - CRP % (0.3)% Adjusted Organic EBITDA(*) % % - Europe (4.6)% (4.2)% - Americas % % - Asia (7.5)% (5.9)% Disposal effects - - FX translation effects (**) Adjusted Reported EBITDA (3.0)% (7.2)% (*) Sales / EBITDA are at rates (**) at rates 9

10 still weak in a European slow market In $ million unless stated otherwise Organic Sales (2.9)% (2.1)% FX translation effects (*) Disposal effects - - Reported Sales (18.6)% (19.2)% Adjusted Organic EBITDA (4.6)% (4.2)% - in percentage of Sales 9.7% 9.9% (17)bps 10.3% 10.6% (23)bps Capital Expenditure (Capex) (**) (36.6)% (26.3)% - in percentage of Sales 3.9% 5.9% (205)bps 5.4% 7.2% (177)bps Organic Sales - Analytical in $ million Regional view Europe total (***) (2.9)% (2.1)% Product family view Tubes (5.1)% (3.9)% Rigid Packaging (5.2)% (3.5)% Dispensing % (0.9)% Beauty Solutions % % (*) at rates (**) Capex cash out net of proceeds + new finance lease (***) Europe includes Russia & Poland Macro and Market Dynamics Financial Review Operational Review Eurozone estimated GDP up by 0.3% QoQ while France at +0,2% in negative translation impact on sales in all currencies against USD exchange rate by $30.6m, mainly on EUR ($26.3m) and PLN ($3.3m) Same negative translation impact on EBITDA in by $3.9. mainly with EUR at $3.0m and PLN at $0.5 YoY prices down by 0.1% in the Eurozone and the UK in September, flat in France while Polish inflation rate down by 0.8% Organic sales down by 3.0% at $154.7m, negatively impacted by Tubes and Rigid while Beauty Solutions and Dispensing up by respectively 15% & 1% vs. last Organic EBITDA down by $0.7m, due to Tubes ($2.1m); Rigid and Dispensing up by respectively $0.7m and $0.6m and Beauty Solutions flat Italy performance on Rigid continues to be good, while the rest of Europe is still affected by lower demand Dispensing European foam market continues on the steady trend from early this year while Fragrance market is down Transfer from Plastic to Laminates impacting particularly our French business 10

11 Strong Americas performance in on all product lines In $ million unless stated otherwise Organic Sales % % FX translation effects (*) Disposal effects - - Reported Sales (1.1)% (6.1)% Adjusted Organic EBITDA % % - in percentage of Sales 15.4% 11.3% 411bps 13.7% 12.3% 145bps Capital Expenditure (Capex) (**) % (6.2)% - in percentage of Sales 4.5% 3.9% 62bps 4.1% 4.4% (29)bps Organic Sales - Analytical in $ million Regional view North America (***) % % South America % (2.0)% Product family view Tubes % % Rigid Packaging % % Dispensing % (3.5)% Beauty Solutions % (14.2)% (*) at rates (**) Capex cash out net of proceeds + new finance lease (***) North America includes the US, Canada & Mexico Macro and Market Dynamics Financial Review Operational Review US GDP estimated growth at +2.5% QoQ Brazilian GDP planned to contract by 0.5% while Mexico to stay positive at 0.4% QoQ negative translation impact of BRL and MXN vs. USD exchange rate on Sales by $12.8m, respectively $11.1m and $1.6m Same negative translation impact on EBITDA in by $2.4 with BRL at $2.1m and MXN at $0.3 Inflation rates in Brazil up by 9.5% (fourth consecutive month above 8.5%) and Mexico 2.5% YoY. Consumer prices in the US flat in September YoY Organic sales good performance by 9.0% in all areas; all products lines between 8/9% vs. ; Beauty Solutions up by 20% Organic EBITDA up by almost +$7m; Dispensing (+$3.0) Tubes (+$2.3), Rigid (+$1.2) and Beauty Solutions (+$0.3) North America customer demand remains relatively stable on Rigid boosted by numerous successful new product launches New tubes line installed in Brazil, producing effectively and new capacity installed in Washington to support contracted new growth to pharma market Dispensing activity level confirms our repositioning action plan 11

12 Sales in Asia up 3.2% while operating profitability flat In $ million unless stated otherwise Organic Sales % % FX translation effects (*) Disposal effects - - Reported Sales (3.3)% (1.1)% Adjusted Organic EBITDA (7.5)% (5.9)% - in percentage of Sales 10.2% 11.4% (118)bps 9.3% 10.3% (103)bps Capital Expenditure (Capex) (**) (11.5)% (45.8)% - in percentage of Sales 6.5% 7.6% (109)bps 4.7% 9.1% (439)bps Organic Sales - Analytical in $ million Regional view China & Hong-Kong % % South East Asia (***) % % Product family view Tubes % % Rigid Packaging % % Dispensing (10.3)% % Beauty Solutions (*) at rates (**) Capex cash out net of proceeds + new finance lease (***) South East Asia includes India & Indonesia Macro and Market Dynamics Financial Review Operational Review China GDP expanded by +1.8% QoQ (same pace as previous quarter) Indonesian GDP estimated at +3%, QoQ Trading Activity in Asia hit by Forex translation effects on sales for $1.9m. Inflation rates in India at 4.4% and Indonesia at 6.8% YoY YoY inflation rate in China recorded at 1.6% in September Organic sales up by +3.2% with China at +$1.3m and South East Asia at +$0.7m with Tubes (+$1.9m), Rigid (+$0.5) while Dispensing (-$0.6) Organic EBITDA down by $0.5m mainly due to Tubes activity Indonesia Rigid continues to outperform the market despite local market softness Rigid Suzhou new plant is now in a stabilized situation focusing on gaining new business and the rest of the organization is focusing to automatize processes and reduce cost in a inflationary environment Tubes challenging conditions in India, as oral care markets have slowed down while demand for tubes for non-oral care products has been strong, especially in Indonesia Dispensing China dificult with lower demand in the quarter 12

13 Positive LTM Free Cash Flow at $23.4 million In $ million Q2 Q1 Cash flow from operating activities o/w Adjusted Ebitda o/w Change in Working Capital (6.4) 20.6 (9.5) 4.2 o/w Income Tax paid/received (5.6) (4.5) 2.1 (4.0) o/w Other (*) (8.2) (6.6) (4.0) (10.5) Cash flow from Investing activities (14.9) (16.3) (13.5) (4.0) o/w Capex (15.4) (15.0) (15.0) (19.8) Finance lease additions (1.0) (3.7) (1.9) (4.5) Interest paid (2.1) (28.8) (0.5) (2.0) Other (1.0) (1.1) (1.1) 0.3 Free Cash Flow (*) Mainly restructuring/projects cost and cash out on provisions for risk and contingencies 13 Change in Working Capital For the fifth quarter in a row, Positive Free Cash Flow in Free Cash Flow at +$1.4 million (after +$6.6 million in Q1 and $2.6 million in Q2 ) Working capital initiatives (receivables, inventory) Overdue at $11.4 (end of ) LTM Positive Free Cash Flow at +$23.4 million Capex Capital Expenditure adjustment to market growth Investing in sales growth/renewal (50%), cost reduction/restructuring (23%) to fully support business and manufacturing capabilities ( ) Capital Expenditure including leasing at $16.5 million Capital Expenditures at $52.1 million, incl. leasing at $6.6 million

14 Net Debt Bridge In $ million Positive Free Cash Flow $10.6 million 680,0 660,0 640, (7.3) , ,0 (66.9) 580,0 560,0 540,0 520,0 500,0 (*) Mainly consulting fees (**) mainly Forex 14

15 Leverage at 4.10 X as at September 30 th, 15 In $ million As of September 30 th Liquidity Of which cash and cash equivalents - Of which undrawn lines Net Debt LTM Adjusted EBITDA Net Debt / Adjusted EBITDA multiple x million 8.75% Senior Secured Notes due 2019, dealt 28 January and fungible into existing 200 million Notes dealt October year committed Factoring facility of 100m (maturity June 2017) with Eurofactor and syndicated through Albéa pool of banks (Natixis, BNPP) late April ABL line of $60m (extended maturity October 2019) In $ million As of September 30 th Cash on hand 94.2 North America ABL facility amount 60.0 Facility borrowing base as of Sept. 30 th 47.7 Less amount utilised under NA ABL (2.7) Less minimum availability under NA ABL (7.5) North America ABL Net Availability 37.5 Europe A/R facility amount Facility borrowing base as of Sept. 30 th 24.1 Less amount utilised under EUR A/R (10.8) Europe A/R Net Availability 13.3 Total Liquidity S&P Albéa Beauty Holdings B ratings affirmed on improved liquidity profile; outlook Stable (Update 8 October )

16 Permitted debt at end of Permitted Debt (since October 30 th, 2012) Items Total Capacity (in $ million) Remaining Available Amount as of September 30 th, (in $ million & %) Capital Leases (64%) General Debt Basket (*) Local Overdraft and Facilities (50%) Credit Facilities (83%) Total (56%) (*) Additional notes issued last Feb. taken from Credit Facilities & General Debt Basket ( 45m), i.e. $50.6m at September EUR/USD 49.7% 53,0% 55.7% 16

17 17 Conclusion

18 Product Launches P&G Wella SP Enrich Hair Care Estée Lauder Clinique Smart Custom Repair Serum Coty Astor Skin Match Protect Unilever Dove Derma Spa LVMH Dior Addict Lipstick Puig Paco Rabanne Olympea Air France Baby Kit 18

19 Key takeaways - The name of the game for Albéa is Robustness and Agility, Albéa adapts its business model to a market in evolution - - Demonstrating value creation (organic/external) and cash generation confirms our credibility - - Keeping our costs down as % of sales in order to contain inflation - - Ensuring seamless execution - - Focusing on projects with the biggest returns - focus is still Delivering on commitments: - - Operational with performance and competitiveness - - Financial with positive Free Cash flow - - Customer with quality and services 19

20 Q&A 20

21 Albéa communication calendar Upcoming earnings releases Q4 & FY Trading Update January 22 nd, 2016 Q4 & FY Earnings Release April 14 th, 2016 Q Earnings Release May 12 th, 2016 July 22nd Q2 & H Trading Update July 22 nd, 2016 A Q2 & H Earnings Release August 25 th, Earnings Release November 10 th, 2016 Q4 & FY 2016 Trading Update January 20 th, 2017 Q4 & FY 2016 Earnings Release April 20 th,

22 22 Appendices

23 Financial Highlights at various rate (1/2) In $ million Reported Sales (10.0)% 1, ,208.2 (11.9)% COGS (287.5) (319.0) (9.9)% (874.1) (981.8) (11.0)% Gross Profit (10.2)% (15.7)% SG&A (40.4) (46.2) (12.4)% (123.2) (147.5) (16.5)% Restructuring and project costs (5.2) (7.1) (27.0)% (13.4) (20.7) (35.3)% Other (5.8) (4.3) 34.4% (12.9) (11.7) 10.2% Operating Profit (7.8)% (10.8)% Operating Profit (7.8)% (10.8)% + Operational non cash items % + Restructuring and project costs (27.0)% (35.3)% + Add backs N.M % = Adjusted EBITDA (3.0)% (7.2)% - in percentage of Sales 11.6% 10.7% 82bps 11.1% 10.6% 56bps 23

24 Financial Highlights at various rate (2/2) In $ million Adjusted EBITDA (3.0)% 118, (7.2)% D&A (19.9) (19.9) - (59.6) (57.3) 3.9% Restructuring and project costs (5.2) (7.1) (27.0)% (13.4) (20.7) (35.3)% Other (3.3) (1.6) N.M. (4.2) (3.4) 26.3% Operating Profit (7.8)% (10.8)% Net Finance costs (12.9) (47.5) N.M. (82.1) (96.3) (14.8)% Profit from continuing operations before income taxes (0.6) (34.2) N.M. (40.6) (49.8) (18.4)% Income tax (4.5) 0.7 N.M. (11.7) (5.7) N.M. Share of profit of associates N.M (6.4)% Profit / (loss) for the Period (5.0) (33.2) N.M. (51.9) (55.0) (5.7)% 24

25 Packaging and More