BAML Conference - Miami

Transcription

1 BAML Conference - Miami Francois Luscan, President & CEO Xavier Leclerc de Hauteclocque, CFO December 3, 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, 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 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.

3 Agenda Solid Positioning Good Progress on Key Priorities Q3 and YTD 2013 Financials Conclusion and Investment Highlights

4 Solid Positioning

5 #1 A Global Leader in Beauty and Cosmetics Packaging in plastic tubes in Europe in laminated tubes in US, Europe and Brazil globally in lipgloss and mascara 16,000 employees worldwide and headquartered in France COMPANY OVERVIEW ONE OF THE WORLD S LEADING PACKAGING COMPANIES #2 globally in fragrance pumps 42 production facilities in14 different countries across Europe, North America, South America and Asia Diverse geographic sales, customer and profit mix Long-standing blue chip customer base with increasing diversification through growing contribution from small and medium enterprises worldwide PRO FORMA COMBINED SALES BY GEOGRAPHIC REGION LTM SEPTEMBER 2013 (*) PRO FORMA COMBINED SALES BY SEGMENT LTM SEPTEMBER 2013 KEY CUSTOMERS 20% 22% 47% $1,525m sales LTM September 33% 61% $1,525m sales LTM September 39% 27% % of sales by customer base 51% Emerging Europe Americas Tubes Cosmetic rigid packaging Global Accounts Key Accounts Small & Medium In $ million, unaudited LTM September 2013 Sales 1,525 Adjusted EBITDA Adjusted EBITDA margin 9.4% 5

6 Developments Bolster Operations Across the Group Acquired by Sun Capital Albéa s and Betts s (another Sun portfolio company) businesses combined into Albéa Acquisition of Eyelematic (now Albéa Metal) Acquisition of Rexam PC for a total price consideration of $452.1 million Acquisition completed on a carve-out basis Bond issuance ( 200 million 8.75% Senior Secured Notes and $385 million 8.375% Senior Secured Notes, due 2019 Acquisition of Tex China 2012 Rexam PC integration and associated cost saving programs currently on schedule Including Annecy s divestment, $16.0 million of synergies have been realised as at September 2013 (out of a total of $47.0 million expected by 2016) 2013 Adjusted EBITDA in $ million > FY 2009 FY 2010 FY 2011 FY 2012 FY

7 A Clear Path Towards Value Creation ATTRACTIVE MARKET DYNAMICS Clearly identified growth prospects with underlying socio economic and demographic shifts presenting opportunities for increased product penetration and turnover High barriers to entry The global beauty and personal care market is projected to grow at a CAGR of 6.3% between 2012 and 2016 (Euromonitor) Increased ability to control pricing and improve EBITDA Market share gains and client retention Value creation and deleveraging OPERATIONAL EXCELLENCE Greater flexibility and scale Cost efficient operating structure and streamlined manufacturing base INNOVATION Proven ability to seize business opportunities through innovation and specialty products 7 VALUE PROPOSITION (GLOBAL/LOCAL) Comprehensive (and complementary) product offering across all segments Servicing a growing variety of customers across the globe Represents the broadest portfolio in the industry

8 Working Towards Rebalancing the Group s Performance Current Positioning end of September 2013 High Attractiveness Old flagship Grow Engines Invest and grow Turnaround Fix and Grow Emerging Markets Grow first then realign profits Low 0 5 % 5-10 % 10-15% 15 20% Sales Growth YTD 2013 vs. YTD 2012 (Group s current adj. EBITDA margin) 8

9 Group s Engine : Invest and Grow The Way Forward High TODAY GOING FORWARD Continue to invest in sales growth Engines Invest in productivity to maintain competitive advantage Attractiveness Enable further growth and increase the contribution from the Engines to above 50% of Group revenues through flexibility in trade off of profitability Low 0 5 % 5-10 % 10-15% 15 20% Sales Growth YTD 2013 vs. YTD 2012 (Group s current adj. EBITDA margin) 9

10 Emerging Markets: Seize Growth Opportunities to Build an Unparalleled Footprint The Way Forward High TODAY GOING FORWARD Continue investing to grow market share and secure first mover advantage Attractiveness Emerging Markets Seek to accompany global accounts in their geographic expansion through Albea s unique positioning and ability to invest Invest in productivity and efficiency once volumes reach a critical level Low 0 5 % 5-10 % 10-15% 15 20% Sales Growth YTD 2013 vs. YTD 2012 Reposition offering and pricing structure to capitalise on business opportunities (e.g. in India) (Group s current adj. EBITDA margin) 10

11 Transition and Turnaround Businesses: Improve Cost Efficiency and Operational Execution The Way Forward High TODAY GOING FORWARD Turnaround already underway (+400 bps improvement YTD 2013 in EBITDA margin vs. YTD 2012) Attractiveness Turnaround Further improve profitability to bring it in line with Group average Develop sales growth plan to achieve higher return on investment and reach best competitors Low 0 5 % 5-10 % 10-15% 15 20% Sales Growth YTD 2013 vs. YTD 2012 Explore possibilities of joint-ventures, partnerships or disposals if necessary (Group s current adj. EBITDA margin) 11

12 Transform Old Flagship into Another Engine of Growth The Way Forward High TODAY GOING FORWARD Resolve trading inefficiencies Attractiveness Old flagship Low Strengthen operational processes Leverage 2013 investments to: Improve footprint (projects in Brazil, France Dream project and China) Grow sales (e.g. in Russia) Grow sales in Dispensing 0 5 % 5-10 % 10-15% 15 20% Sales Growth YTD 2013 vs. YTD 2012 (Group s current adj. EBITDA margin) 12

13 Strategic Focus Supports Transformation Agenda TRANSFORMATION AGENDA STRATEGIC PRIORITIES INTEGRATION OF REXAM PC PROFITABILITY AND OPERATIONAL EXCELLENCE EMERGING MARKETS OPERATIONAL OBJECTIVES OPTIMISE INDUSTRIAL FOOTPRINT ENHANCE COMMERCIAL CAPABILITIES FURTHER INSTIL CULTURE OF INNOVATION ALIGNED WITH GROUP S STRICT FINANCIAL FRAMEWORK FOLLOWING A DISCIPLINED APPROACH TO RESOURCE ALLOCATION AND CASH MANAGEMENT DELEVERAGE 13

14 Priorities Will Shift Over Time 5% 15% 30% 80% 50 % 50% PERCENTAGE OF TIME SPENT TODAY 20% EMERGING MARKETS PROFITABILITY AND OPERATIONAL EXCELLENCE INTEGRATION OF REXAM PC 45% 5% 14

15 Good Progress on Key Priorities

16 Integration of Rexam PC Profitability and Operational Excellence Emerging Markets Executing on Realisation of Synergies from Acquisition Objective to generate $47.0 million savings by FY % SG&A Redundant stand-alone costs of $11 million (*) c.$40.0 million implementation costs vs. $45.0 million previously $22.0m savings (vs. $21.0 million previously) 15% 25% IT Corporate/Other Headcount Manufacturing Footprint Optimisation c.$16.0 million net implementation costs (after China Compensation) vs. $22.0 million previously 65% $18.0m savings (vs. $16.0 million previously) 10% 25% Asia Brazil/Mexico Europe Procurement c.$8.0 million net implementation costs vs. $16.0 million previously 46% $7.0m savings (vs. $9.0 million previously) 54% Metal Parts Resins/Others Q update $12.1 million of savings achieved through September 2013 Year 2 Target maintained at $19.9 million Annecy sale completed as of October 1 Year 2 Target maintained at $7.0 million Other projects progressing well $0.9 million achieved through September Full implementation scheduled to begin in Q when investment made Year 2 target confirmed at $3.0 million Synergy realisation YTD 2013 $13.0m synergies achieved by the end of Q $16.0m accounting for the effect of Annecy deconsolidation Implementation costs cash out YTD Capex $4.5m Restructuring & Integration $7.1m Separation $15.3m TOTAL $26.9m (*) Corporate overhead and administrative functions integration

17 Integration of Rexam PC Profitability and Operational Excellence Emerging Markets Strengthening Operations Rexam PC Integration Operational ramp-up progressing according to plan, in particular in China, where the impact of contract wins will be visible in 2014 Positive response from customers on expanded product offering, however dampened by global economic conditions Following a stagnant 2013, investment plan to grow dispensing activities on track for 2014 People Reinforcing Albéa s industry expertise and further promoting an integrated approach towards the Group s customers through hires of key executives with consumer goods and/or packaging background Footprint Project Dream in France: all three Progress manufacturing sites now consolidated Completed during Q % of lines reinstalled with no operational disruption Project Be One in Italy: financing approved Merger of two CRP sites in Italy Project has started and completion expected by June 2014 China: move to Suzhou completed (Albéa) with exit from Shanghai (Rexam PC) starting in November 2013 and ending March 2014 Customer Diversification Completed Greater diversification of Group customer base with an increased portion of sales being generated from new small and medium customers Market share gains in Tubes (Albéa stand-alone) 17

18 Integration of Rexam PC Profitability and Operational Excellence Emerging Markets Business segment Improvement plan Tubes Leverage innovation pipeline Secure more profitable business by investing in spare capacity to reduce time to market Invest in people to maintain our leadership position Invest in new decoration solutions CRP Rationalise product range to reduce complexity and leverage specialised platforms Add more value in the finishing and decoration process Invest in more competitive solutions Reintegration of processes where Albea has in-house knowledge and expertise to increase value for customers and reintegrate margin Reinforce partnerships to accelerate worldwide coverage 18

19 Integration of Rexam PC Profitability and Operational Excellence Emerging Markets Expanding Activities in Emerging Markets LTM September 2013 Revenue Breakdown by Geography Emerging 33% Europe 47% Americas 20% Latin America Asia and Russia At constant foreign exchange rates, sales in emerging markets grew by 5.7% YTD 2013 Strong growth in tubes in India (+18.0%) and CRP for Brazil (+19.0%) LatAm facility location Asia and Russia facility location 19

20 Q3 and YTD 2013 Financials

21 Satisfying Performance in Q Across the Board In $ million unless stated otherwise Q PF Q Delta YTD 2013 PF YTD 2012 Delta Organic Group Sales % 1, , % - Tubes % % - Cosmetic Rigid Packaging (CRP) % % - Corporate N.M. Contribution from acquisitions (*) N.M. FX translation effects (**) - (4.8) N.M - (4.5) N.M. - Tubes - (1.6) N.M. - (2.1) N.M. - CRP - (3.2) N.M. - (2.4) N.M. Reported Group Sales % 1, , % Organic Group Sales at constant currency by regions (***) - Europe % % - North America % % - Emerging countries % % 21 (*) Tex acquisition completed in Q (**) 2012 at 2013 rates (***) Sales from Corporate in the amount of $0.4 million are excluded from the breakdown by region for YTD 2012

22 Q Financial Highlights In $ million Q PF Q Delta YTD 2013 PF YTD 2012 Delta Group Sales % 1, , % COGS (324.7) (290.0) 11.9% (962.5) (910.1) 5.7% Gross Profit % (1.9)% SG&A (49.0) (49.3) (0.5)% (146.7) (151.6) (3.3)% Restructuring & project costs (11.6) (10.9) 6.4% (26.9) (28.9) (6.9)% Other (*) (14.3) 0.4 N.M. (14.6) 2.3 N.M. Operating Profit (5.0) 7.2 N.M (44.2)% Operating Profit (5.0) 7.2 N.M (44.2)% + Operational non cash items % % + Restructuring & project costs % (6.9)% + Add backs (**) N.M N.M. = Adjusted EBITDA % % - in percentage of Sales 10.3% 9.5% 77 bps 9.9% 9.5% 48 bps 22 (*) Annecy & Sussex disposals impact (**) Other + Sun fees

23 Positive Operating Cash Flow YTD 2013 In $ million Q PF Q Delta YTD 2013 PF YTD 2012 Delta Adjusted EBITDA % % Change in Working Capital (*) (0.2) 16.6 N.M. (37.1) 4.5 N.M. Capital Expenditure (**) (13.9) (25.9) (46.5)% (59.3) (67.2) (11.6)% Other (Restructuring & Integration) (9.0) (4.5) 99.7% (16.0) (12.4) 29.5% Operating Cash Flow (13.1)% N.M. Progress in DSO (Day Sales Outstanding) and overdue receivable management, in particular within the acquired business, despite pressure from customers on payment terms Temporary safety stockpiling to support on-going plant move as well as timing of customer launches Capex spend totalling $59.3 million to date, in-line with Management indications for FY (*) Excluding payables for acquisition fees (**) Excluding $11.5 million in Q ($21.7 million YTD 2013) under finance lease, separation & implementation

24 24 Net Debt Evolution Since Rexam PC Acquisition In $ million ,0 622, ,4 60 Albea stand-alone debt, preacquisition Rexam acquisition (*) Proforma debt at deal closing as of December 31, 2012 Operating cash flow YTD 2013 Other cash debt items YTD 2013 (**) Non-cash debt items YTD 2013 (**) Closing proforma Net Debt as of September 30, 2013 (*) Of which $89.8 million paid during FY 2013 (**) Other cash debt items include: Interest, Chinese compensation, tax, separation costs (***) Non cash debt items mainly include: Accrued interest, Dream and Forex losses

25 Liquidity Considerations In $ million As of September 30, 2013 Cash on hand 47.8 As of September 30, 2013 Cash & Cash equivalents: Undrawn lines Cash & Availability position $47.8 million $124.4 million $172.2 million North America ABL facility amount 60.0 Facility borrowing base as of September 30, Less amount utilised under NA ABL (6.6) Less minimum availability under NA ABL (7.5) North America ABL Net Availability 38.9 Europe A/R facility amount Facility borrowing base as of September 30, Less amount utilised under EUR A/R (15.0) Europe A/R Net Availability 85.5 Total Cash & Available Liquidity

26 Leverage at 4.4x including PF Synergies and excluding Albéa Annecy Reported September 2013 $143.4 m LTM adj. EBITDA + PF $19.9 m of PF cost savings - $12.1 m of savings achieved YTD + $4.4 m of Annecy September 2013 LTM adj. EBITDA = $155.6 m(*) September 2013 LTM adj. EBITDA including PF synergies and Annecy discontinued impact As of September 2013 $686.7 m Net Debt $155.6 m September 2013 LTM adj. EBITDA including PF synergies and Annecy discontinued impact 4.4X Debt / EBITDA multiple 26 (*) Reversal of EBITDA losses in LTM period

27 Conclusion and Investment Highlights

28 Continuous Assessment of Internal and External Drivers External Dynamics Market environment remains challenging (currencies andconsumer demand) Soft market conditions expected in Q Operations On-going focus on achieving operational efficiencies 85% of Year 1 PF synergies already achieved on an annual basis Focus on improving cash flow profile Management maintains strong commitment to grow the business and increase competitiveness Continue to focus on deleveraging the business 28

29 Investment Highlights 1 Global leadership in beauty and personal care packaging market 2 Operating in highly resilient market with significant barriers to entry 3 Unique, comprehensive product portfolio and high innovation strength 4 Truly global footprint with increasing exposure to emerging markets 5 Long-standing relationships with diverse range of blue chip customers 6 Upside from significant synergy potential 7 Experienced management team with strong track record 29

30 Appendix

31 Costs and Synergies: What Are We Talking About? A Albéa stand-alone improvements B Rexam PC standalone improvements C Business Combination Rexam PC & Albéa Costs mostly generated by: Capex Restructuring Capex Restructuring Implementation and separation Capex Restructuring Acquisition related charges Synergies mostly generated by: Capex investment payback Productivity gains Value re-integration Restructuring payback Turnaround of recent acquisitions Capex investment payback Productivity gains Value re-integration Restructuring payback SG&A savings Manufacturing footprint optimisation Procurement savings 31

32 Q Financial Highlights (2/2) In $ million Q PF Q Delta YTD 2013 PF YTD 2012 Delta Adjusted EBITDA % % D&A (18.5) (15.3) 21.1% (53.7) (44.9) 19.6% Restructuring & project costs (11.6) (10.9) 6.4% (26.9) (28.9) (6.9)% Other (15.4) (0.6) N.M. (18.0) (0.6) N.M. Operating Profit (5.0) 7.2 N.M (44.2)% Net Finance costs (income) (*) 0.1 (14.9) N.M. (37.1) (48.2) (22.9)% Profit from continuing operations before income taxes (4.8) (7.7) (37.3)% (19.5) (16.6) 17.8% Income tax (expenses) / benefit (2.9) (2.9) 0.1% (10.4) (15.4) (32.3)% Profit / (loss) for the Period (7.7) (10.6) (27.1)% (29.9) (31.9) (6.3)% 32 (*) Forex offsets financial costs