q1 2018 financial results · *source: trigon 10 • despite share buy-back activity our share price...
TRANSCRIPT
Q1 2018
Tom K. Schäbinger (CEO)Dirk Hardow (COO)
Dr. Nico Reiner (CFO)Ivo Schintz (CCO)
Financialresults
Investor presentation
Key developments
Financial results
Outlook
Market environment
Pfleiderer investments
Keydevelopments
Q1 2018
Key highlights Q1 2018
Revenues increased6.5% y/y to EUR 268.8 m, with positiveimpact of value-added products
EBITDA rose 18.5% y/y to EUR 36.5 m, EBITDA margin up to 13.6%
2nd and 3rd trancheof the share buy-backprogram executed
Successful launch of the new lacquering line in Leutkirch(Germany) for value-added products
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30.835.3
30.1
23.8
36.5
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Reported EBITDA (in EUR m)
Current EBITDA trend
5
• Revitalised performance after missteps in 2017
!
Dr. Nico ReinerA new CFO from the 1 st April
Education:
Business administration at the University Regensburg, GermanyPhD title at HHL Leipzig Graduate School of Management
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Professional experience:
Since 2014 CFO of AL-KO Kober SE, a Member of Management Board, CFO of holding company of AL-KO Kober Group Germany, a globally active company specialized in vehicle technology, garden technology and air technology
2005 – 2014 CFO, Member of the Executive Board of Schueco International KG, a worldwide leading supplier of building envelopes, active in the market of windows, doors and facades
Earlier Dr. Reiner was working on managerial positions for Droege & Comp. GmbH, International Management Consultancy.
Management changesnow complete
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Joined in June 2017
Chief Executive OfficerChief Executive OfficerTom K. SchäbingerTom K. Schäbinger
Joined in June 2017
Chief Executive OfficerTom K. Schäbinger
Chief Operating OfficerChief Operating Officer
Dirk HardowDirk Hardow
Joined in November 2016
Chief Operating Officer
Dirk Hardow
Joined in November 2016
Chief Commercial OfficerChief Commercial OfficerIvo SchintzIvo Schintz
Joined in August 2017
Chief Commercial OfficerIvo Schintz
Joined in August 2017
Chief Financial OfficerChief Financial Officer
Dr. Nico ReinerDr. Nico Reiner
Joined in April 2018
Chief Financial Officer
Dr. Nico Reiner
Joined in April 2018
EBITDA outlook
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• Optimistic outlook on the basis of current market condi tions
!
120.0129.1
146.7
FY 2017 FY 2017 exc. cartel fine FY 2018 Market consensus
Reported EBITDA (in EUR m)
Opportunities – beyond 2018
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New product capabilities development and reduction of manufacturing costs thanks to CapexCapex
Commercial
OperationalContinuing the process of identifying further opportunities or cost optimization and operationel efficiency
CapacitySome value-added lines running at below 60% utilization rates - de-bottlenecking continuesto add capacity to other lines
New sales & marketing approach should accelerate growth in value-added products
Commercial and operational improvements will drive earnings despite expected new market capacity
New market capacity
Share buy-back activity
10*Source: TRIGON
• Despite share buy-back activity our share price remainslow vs. comparable companies
• Pfleiderer’s valuation multiple appears surprisingly lowvs. comparable companies
EV / EBITDA MEDIAN
2017A 2018E 2019E
Comparablelistedcompanies
Polish wood companies 13.9x 11.2x 8.9x
Western Europe wood companies 9.7x 7.7x 7.1x
DACH construction materials companies
10.7x 8.3x 7.8x
Q4 2017 5.00%
Q1 2018 3.34%
8.34%
EV / EBITDA MEDIAN
2017E 2018E 2019E
Consensusestimates
Pfleiderer Group S.A. 8.0x 6.2x 5.7x
EV / EBITDA MEDIAN
2017E 2018E 2019E
Trigonestimates
Pfleiderer Group S.A. 7.2x 5.8x 5.5x
Pfleiderer’sactivity
Financial results
Q1 2018
Revenue growing
252.4 268.8
Q1 2017 Q1 2018
Revenue (EUR m)
+6.5%
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• 6.5% revenue growth thanks to new pricing approach and value-added products
• 63% of revenue generated by growing sales of value-added products
!
Revenue breakdown (products)
48%
15%
19%
12%6%
Laminated/lacquered board
HPL & elements
Raw PB
Raw MDF/HDF
Other
Value-added products
Basic products:
• Raw PB• Raw MDF/HDF
Extra characteristics and benefits:
• The most fashionable designs• Extra resistance for scratches• Improved moisture and fire
resistance
Value-added products in segments:
• Construction (examples): PremiumBoard, LivingBoard, StyleBoard
• Interior and Exterior applications (examples): HPL Compact, PrimeBoard
• New collection
Value-added products for the producer:
• Competitive advantage• Less cyclical• Extra value
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Europe – key markets
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46%
24% 22%
6% 2%
DACH Poland Other WesternEurope
Other EasternEurope
Beyond Europe
Q1 2018 revenue breakdown (markets)
• EBITDA improved to EUR 36.5 m with 13.6% margin thanks to strong commercial programme
EBITDA growth
!
EBITDA (EUR m) EBITDA margin (%)
30.836.5
Q1 2017 Q1 2018
12.213.6
Q1 2017 Q1 2018
+18.5% +1.4 p.p.
15
EBITDA bridge
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• Strong focus on pricing more than offset raw materials inflation
• Measures to improve production costs expected to bear fru its later this year
!
30.836.5
0.9
14.6 -10.6
0.3 0.5
Q1 2017 Volume Price / Mix Raw Materials Production costs /SG&A
Other Q1 2018
EBIT grew robustly
• Full translation of EBITDA improvement to EBIT (+45.2%)
• Q1 2017 net income inflated by FX effects
• Normalized net income in Q1 2017 would have been EUR +2.3 m
!
EBIT (EUR m) Net income (EUR m)
12.4
18.0
Q1 2017 Q1 2018
10.4
7.3
Q1 2017 Q1 2018
+45.2%-3.1 m
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(EUR m) Q1 2017 Q1 2018
Revenues 252.4 268.8
Gross profit 59.6 62.7
Gross profit margin (%) 23.6 23.3
EBITDA 30.8 36.5
EBITDA margin (%) 12.2 13.6
D&A -18.3 -18.5
EBIT 12.4 18.0
Financial result 1.4 -6.7
EBT 13.8 11.3
Income taxes -3.4 -3.9
Profit / loss for the period 10.4 7.3
Q1 2018 – P&L
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(EUR m) Q1 2017 Q1 2018
Selling expenses -34.4 -33.4
Administrative expenses -12.1 -12.3
R&D -0.5 -0.4
SG&A (% of sales)¹ -18.6 -17.1
Other operating income/expenses -0.1 1.3
EBIT margin (% of sales) 4.9 6.7
PMO 9.1 2.5
Q1 2018 – costs
1 SG&A includes selling expenses, admin expenses and R&D
Working capital after factoring (EUR m)
45.131.2 24.2
-0.9-10,0%
50,0%
-10,0
90,0
Q1 2015 Q1 2016 Q1 2017 Q1 2018
Net working capital after factoring % of sales
17.9%
12.7%9.6%
-0.3%
32.9 26.6 33.6 21.6
95.190.2
97.497.6
-82.9 -85.6-107.1 -120.1
Q1 2015 Q1 2016 Q1 2017 Q1 2018
Trade receivables Inventories Trade payables
45.1 31.224.2
-0.9
Working capital lowered
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• Net working capital reduced by EUR 25.1 m through active working capital management
despite overall volume increases
!
FCF invested in future profit growth
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(EUR m) Q1 2017 Q1 2018
Reported EBITDA 30.8 36.5
CF investing activities -9.1 -21.7
WC changes -13.9 -13.5
Taxes -2.2 -2.1
Other 3.1 1.9
FCF pre financing 2.5 -2.8
Share buy-back programcontinued in Q1 2018
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Balance Sheet influenced by share buy-back program
No. of shares Capital share Value (EUR k)
Q4 2017 3.235.050 5.00% 35.643
Q1 2018 2.161.883 3.34% 18.609
Total 5.396.933 8.34% 54.252
(EUR m) Q1 2017Q1 2018w/o SBB
Q1 2018
Net leverage 2.05 1.81 2.24
Equity ratio 29.2% 28.7% 24.5%
Q1 2018 – financial summary
Positive growth of EBITDA: + 18.5%, EBIT: + 45.2%
Raw materials inflation successfullymanaged
Cost savings successful and further measures planned
Management Board recommended PLN 1.2 per share (+9.1% y/y) dividend payout for 2017
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Market environment
Q1 2018
2.1%DACH
Macro outlook supportingfuture growth
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3.5%Poland
2.3%Germany
GDP growth on main markets (2018 est.)
3.5%2.3%
2.3%EU
• Pfleiderer Group S.A. to benefit from positive macro developments in the core markets in Euro pe !
Markets clearly on growth
• Strong development activity to drive demand for products and solutions within construction, interior and exterior applications and will contribute to the Group’s profitable future gr owth
!
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105,6
108
103.3
105.6
108.0
110.4
109,2
103.8
106.8
109.2
112.5
115.3
110,3
101.9
105.8
110.3113.9
116.6
104,7101.6
102.8
104.7106.8
108.7
2016 2017 2018 2019 2020 2021
Construction Furniture industry Door industry Wholesale
104,6
107
102.3104.6
107.0109.4
106,4
100.9
103.7
106.4
108.9 111.3
106,6
101.9104.8
106.6
108.3
108.8
102,1
100.5
100.6
102.1
104.0
106.7
2016 2017 2018 2019 2020 2021
Construction Furniture industry Door industry Wholesale
Germany Poland
94.7
92.1
93.2
93.995.5
98.5
99.0
100.2 101.2
102.3
100.0
97.0
94.9
95.497.0
99.198.3
97.4
98.7
100.1102.0
2016 2017 2018 2019 2020 2021
Construction Furniture industry Door industry Wholesale
France
99.9
101.3
103.5
105.9
108.3
99.2 98.7
99.3
100.4
102.3
100.0
96.2
95.4
95.6
98.6
103.0
95.2
93.0
92.5
93.7 95.7
2016 2017 2018 2019 2020 2021
Construction Furniture industry Door industry Wholesale
Italy
Treiber HWS [Basis 2013=100]
Wood (EUR/to) Glue (EUR/to) Electricity (EUR/KWh)Q1, 2016 = 100%
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Raw materials prices mitigated
• Efficient margin management and effective pricing policy offset rising prices of raw materials
!
Product prices on upward path
90
95
100
105
110Raw chipboard
80
85
90
95
100
105
110MDF raw HDF raw
85
90
95
100
105
110
MFC
80
85
90
95
100
105
110HPL Worktops
28* Base on January 2016 =100
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95%92%
90%94%
84%
79%
Central East West North West South South East
Industry utilisation
levels (Q1 2018)
Source: Pöyry Management Consulting 2018
Note: Particleboard data includes both raw and laminated particleboard; East defined as Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia; West defined as France, Belgium, Netherlands and Luxemburg; Central defined as DACH region Germany, Austria and Switzerland; North West defined as Sweden, Norway, Denmark and UK; South defined as Italy, Spain and Portugal; South East defined as Slovenia, Croatia, Serbia, Romania, Bulgaria and Greece
IncludesGermany
IncludesPoland
High utilisation rates in Pfleiderer’s core markets
Focus on profitable growth
Pfleiderer Group S.A. to use positive macro & market trendsto strengthen its leading position
New value-added product in Q1: PrimeBoard:
• Mirror (XTreme Gloss) oranti-fingerprint (XTreme Matt) effect
• Very high scratch resistance
Pfleiderer Group S.A. will focus on further investments to create futureprofitable growth
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New value-added product in Q1:HPL Compact Exterior :
• Perfect for exterior applications• Anti-fingerprint effect
Pfleidererinvestments
Q1 2018
Q1 Strategic investments
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Wood recycling plant (Neumarkt)Lacquering line (Leutkirch)
• The lacquering line will increase value-added products’ production
• The largest and the most advanced “Hot Coating” plant in the world
• Neumarkt investment to improve wood recycling capacity
• New plant to increase recycling wood proportion up to 50% (sustainableproduction)
CAPEX supportinggrowth in 2018-2021
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Investment Capex (EUR m) Description, start – finish of the investmentRamp up /
start of operation
Expected outcome(EUR m
EBITDA p.a)
Recycled woodNeumarkt
9.8Increasing consumption of recycled wood03.2017 - 02.2018
Q1 2018 5.0
Lacquering lineLeutkirch
12.3New functional surface technology, new high gloss and matt surfaces12.2016 - 06.2018
Q1 2018 9.6
Plant conceptLeutkirch
20.6
Increase production volume of raw particleboards. Installation of new drying area incl. new dryer and hot gas generator06.2017 - 06.2019
Q1 2019 8.1
New KT press line Grajewo
8.5Increase volume of laminated particleboards in large format04.2018 - 12.2019
H2 2019 3.1
Outlook
Q1 2018
• Management Board recommended PLN 1.2 per share dividend payout for 2017 (+9.1% y/y)Dividend
Sales growth
Material prices
• Overall material price increase in Q1 2018 driven by wood and chemicals – cost successfullypassed to customers
• Stabilization over the next months expected
EBITDA
• Volume growth will deliver EBITDA, influenced by value-added products
• Key focus on raw material price inflation pass through
• Cost out actions will strengthen EBITDA performance
• Reduced SG&A costs
• Strong order book
• Shift towards value-added product segments, which will support growth
• Innovations and new products will support sales growth (e.g. PrimeBoard, Duropal HPL CompactExterior)
• Operational improvements: operations excellence, uptime improvements, de-bottlenecking, cost savings
• CAPEX projects
Positive outlook for 2018
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Summary
Pfleiderer Group S.A. improves performance in Q1 (Revenue +6.5% y/y | EBITDA +18.5% y/y )
The Group undertakes focused new investments to support revenue and production efficiency
The Group is to capitalize on value-added products and willdevelop further innovative solutions
Pfleiderer Group S.A. is on track to achieve goals of the PfleidererGroup strategy 2018-2021
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www.pfleiderer.com
More information
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Appendix
Q1 2018
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