bond holders call ye 2014 - maccaferri
TRANSCRIPT
Bond holders Call YE 2014Date April 2015 Author Francesca Pettazzoni, Claudia Suzzi – Investor Relations
Confidential
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Agenda
1. Introduction
2. Highlights
3. Segment Overview
4. Financials
5. Appendix
� Total revenue for Q4 2014 totaled €122,8 Mio , 3,7% increase vs. Q4 2013 – mainly due to a recover in the last quarter of Latam and Asia
Pacific.
� Despite top line increase, EBITDA slightly decreased to €15 Mio, a -2,2% decrease vs. FY 2013; the worsening is mainly due to the different mix
of product and market sold in the last quarter . EBITDA margin decreased to 12,2% from 13,4% of 2013.
� Operating free cash flow generation (EBITDA 15,0 –Capex 8 – Change Working Capital -8 ) was equal to € -1 Mio due to high capex because of
the goodwill of €8 Mio arising from the incorporation of the Joint Venture Bekeart Maccaferri Underground Solution from the spin off of the
tunneling business line from Officine Maccaferri Group and Bekeart Group net of disposal of asset to Bekeart Group of € 4,2 Mio.
� Joint Venture Bekeart: incorporation of a belgian-based full function trading joint venture between Bekaert and Maccaferri with 50%
shareholding each, having a business scope of covering the market of tunnel and underground reinforcement solutions, including
reinforcement solutions for underground concrete construction applications.Bekaert Group is the leading player and a benchmark in the field of
steel fibers in the world, with several steel fiber production sites in different parts of the world and with a consolidated turnover in steel fiber
for tunneling of around € 50 Mio (in the geographic scope of the JV).
The JV’s geographic scope will be worldwide, excluding China, Hong Kong, Argentina, Brazil, Paraguay, Peru, and Uruguay.
Effects on Finacial statment Q4 2014: consolidated on 50 % basis
one off effect: gain of about € 3 Mio on the assets Sales
goodwill of € 8 Mio generated by the contribution of the business both from OM Group and Bekeart Group
the disposal of € 4,2 Mio of production asset to Group Bekeart
on going basis: revenues €3,6 Mio, 0 Ebitda (act 2014)
4
1. Introduction - Q4 2014
� Total revenue for whole Year 2014 totaled € 459,3 Mio, 5,5% decrease vs. FY 2013 – mainly due to the macroeconomic and geopolitical issues
in some of our key geographies (Russia and Brazil)
� Despite top line reduction, EBITDA slightly increased to € 47,5 Mio, a 0.6% increase vs. FY 2013; the improvement is mainly due to the effective
measures put in place to reduce costs and strengthen our profitability thanks also to JV Bekeart contribution. EBITDA margin increases to 10,4%
from 9,7% of 2013.
� Operating free cash flow generation (EBITDA 47,5 –Adjusted Capex * 15,0 – Change Working Capital -8 ) was equal to € 24,5 Mio due to:
− Control of Working Capital through a reduction of inventory more than offset by the increase of other credits for the application of new
Italian accounting principle for receivables sold on a recourse basis to factoring company.
− Limited capex spent, in line with the strategy indicated by the management
� Net leverage was equal to €148 Mio, or 3.1x EBITDA. Net adjusted Leverage ** was equal to €95,1 Mio, or 2.1x EBITDA
� General market conditions in key geographies can be summarized as follows:
o EE: Sudden collapse of the Russian Market due the Ukrainian situation, the relative sanctions, and the more recent depreciation or the local currency.
Russia was historically our second largest EBITDA contributor
o SA: Slow down in Brazil due to elections and post World Cup. Delayed second phase implementation Bolivia 2013 project.
o WE and NA : Recovery on Italian and UK Markets, alongside and expected positive performance in the final part of the year in France and other Central
European countries; Us market still not performing properly due to Infrastructure development program delayed
o AP: India underperformed penalized by long delays and displacements of major projects; good outlook for the next future due to a high order backlog .
Good performance for China mainly for the DT manufacturing companies results
Without Head Quarter acquisitions, extra dividend and transaction costs
** refer to slide #14
5
1. Introduction - YE 2014
6
2. Highlights
€ in millions Q4 2013 Q4 2014 2013 2014
Total revenue 118,3 122,8 485,9 459,3
growth (%) 3,7% -5,5%
Opex (102,4) (107,8) (438,6) (411,7)
EBITDA 15,9 15,0 47,3 47,5
margin (%) 13,4% 12,2% 9,7% 10,4%
growth (%) -5,7% 0,6%
Total net capex (2,6) (8,01) (17,7) (15,0)
as a % of total revenue -2,2% -6,5% -3,6% -7,9%
Net cash flow from operating activities 37,6 29,6 20,0 8,9
growth (%) -21% -55%
Capex proforma adjusted
without € 14,6 Mio
Headquarters acquisition and
€ 6,9 Mio Bond issuance cost
capitalized
€ in millions YE 2013 YE 2014 Δ
Total net working capital 80,8 88,8 8,0
Inventories 87,3 83,8 (3,5)
Trade receivables 101,3 104,6 3,3
Advance from customes (2,5) (1,1) 1,4
Trade payables (62,9) (67,4) (4,6)
Other net working capital items (42,5) (31,1) 11,3
7
3. Segment OverviewTotal Revenue
Millions € Millions €
23,1
43,8
53,3
40,0
15,9
21,916,5
13,08,4
10,51,2
-6,5
118,3
122,8
(50)
0
50
100
150
200
Q4 2013 Q4 2014
153,9 143,9
165,9 145,8
68,3
71,8
54,2
53,8
32,2
34,1
11,5
9,9
485,9
459,3
0
100
200
300
400
500
2013 2014
Gross sales
Other revenue
NAFTA
Italy
Asia Pacific
EMEA (ex Italy)
Latin america
YE 2014 relevant exchange rate impact
8
3. Segment OverviewTotal Revenue by Product Category
2014 2013
Rockfall
Protection
10%
Others
Products
33%
Geosynthetics
22%
Double Twist
Mesh
35%
Rockfall
Protection
8%
Others
Products
30%
Geosynthetics
26%
Double Twist
Mesh
37%
9
4. FinancialsTotal Revenue
Millions € Millions €
485,9
459,3476,8
0
100
200
300
400
500
2013 2014 2014 with
2015
Exchange
rate
485,9459,3
480,3
0
100
200
300
400
500
2013 2014 2014 with
2013
Exchange
rate
2014 adj for ex rate 2013 2014 adj for ex rate 2015
10
4. FinancialsEBITDA
Millions € Millions €
47,3 47,549,3
0
10
20
30
40
50
60
2013 2014 2014 with
2015
Exchange
rate
12,2 %13,4 % 9,7 % 10,4 % 10,3 %
47,3 47,550,2
0
10
20
30
40
50
60
2013 2014 2014 with
2013
Exchange
rate
9,7 % 10,4 % 10,4 %
2014 adj for ex rate 2013 2014 adj for ex rate 2015
11
4. FinancialsWorking Capital
Millions €
87,3 83,8
101,3 104,6
(2,5) (1,1)
(62,9) (67,4)
(42,5) (37,9)
-150
-100
-50
0
50
100
150
200
250
December 31, 2013 December 31, 2014
Net WC
+ 80,8
Net WC
+ 88,8
Advance from customers……………
Trade receivables……………………….
Trade payables………………………….
Inventories………………………………
Other elementsof net working capital…………………
Δ ’14 vs ‘13
(3,3)
(3,5)
1,4
(4,6)
11,3
12
4. FinancialsOperative Expenses (OPEX)
Millions € Millions €
58,99 64,40
26,40 24,69 17,05 18,70
0
50
100
150
200
250
300
350
400
450
500
Q4 2013 Q4 2014
87,8%86,6%
265,2246,5
99,293,4
74,2
71,8
0
50
100
150
200
250
300
350
400
450
500
YE 2013 YE 2014
90,3%89,6%
Δ ’14 vs ‘13
Trade receivables………………………. (2,4)
Cost of personnel …………………..…. (5,8)
Costs of materials and consumables…………………………….. (18,7)
20,8
44,1
22,6
(3,1)
(7,6) (7,6)-5
5
15
25
35
45
12M 2013 12M 2014 12M 2014 Adj
2,4
13,1
(5,1)
-5
5
15
25
35
45
Q4 2013 Q4 2014
13
Millions € Millions €
Capital Expenses (CAPEX)Capital Expenses (CAPEX)
2,1%
1,1%
%
Total revenue
Investment
Disposal
4,3%
9,6%
Capex proforma adjusted
without € 14,6 Mio
Headquarters acquisition and
€ 6,9 Mio Bond issuance cost
capitalized
10,7%
4. FinancialsCapital Expenses (CAPEX)
14
4. FinancialsNet Debt
Net Debt December 31, 2014 includes acquisition of Headquarters building for €14,6 Mio, €32 Mio of extra dividends and €6,9 Mio for transaction costs.
Net Debt Decemebr 31, 2014 has been adjusted for €7 Mio for the amount of receivable sold on a recourse basis to Factoring. In 2013 receivables were written off versus cash while in 2014 because new accounting principles does not allow this treatment.
Millions €
90,93
148,60
95,10
0
20
40
60
80
100
120
140
160
Dec 31, 2013 Dec 31, 2014 Dec 31, 2014
1,9 x
3,1 x
2,0 x
Net Leverage Ratio (Net Debt/EBITDA)
Net Debt proforma adjusted without Headquarters acquisition, extra dividend and transaction costs.
Net Debt
0,0 x
15
4. FinancialsNet Financial Debt
December 31, 2014
December 31, 2013
Non-current portion of banks loans and other financial liabilities
(14.532) (64.741)
Non-current bonds (200.000) 0
Current portion of banks loans and other financial liabilities (16.207) (82.728)
Gross Financial Indebtness (230.739) (147.469)
Other current financial assets 32.212 33.713
Cash and cash equivalents 43.136 22.823
Net Financial Indebtness (155.391) (90.933)
Net Financial DebtNet Financial Debt
16
5. Appendix
Consolidated income statement For the twelve month period ended December 31, For the three month period from September to December
(Euro/000) 12 months
2014% of Total
revenue12 months
2013% Q4 2014
% of Total revenue
Q4 2013% of Total
revenue
Revenue from sale of goods and services 449.381 97,9%474.409 98% 129.220 105,3% 117.144 99,0%
Other revenue 9.869 2,1% 11.479 2,4% (6.453) -5,3% 1.187 1,0%
Total revenue 459.250 100,0% 485.888 100,0% 122.767 100,0% 118.331 100,0%
Costs of materials and consumables (246.510) -53,7% (265.158) -54,6% (64.396) -52,5% (58.986) -49,8%
Costs of services and use of third party assets (91.394) -19,9% (96.269) -19,8% (23.621) -19,2% (24.950) -21,1%
Costs of personnel (71.821) -15,6% (74.249) -15,3% (18.695) -15,2% (17.048) -14,4%
Other operating costs (1.976) -0,4% (2.924) -0,6% (1.066) -0,9% (1.447) -1,2%
Total Operating costs (411.701) -89,6% (438.600) -90,3% (107.778) -87,8% (102.431) -86,6%
EBITDA 47.549 10,4% 47.288 9,7% 14.989 12,2% 15.900 13,4%
Amortization, depreciation and write downs (19.233) -4,2% (19.399) -4,0% (5.495) -4,5% (5.517) -4,7%
Accrual to provision for risks and charges (1.691) -0,4% (1.671) -0,3% (523) -0,4% (1.555) -1,3%
Total Amortization, depreciation, write downs and provisions (20.924) -4,6% (21.070) -4,3% (6.018) -4,9% (7.072) -6,0%
Operating income 26.625 5,8% 26.218 5,4% 8.971 7,3% 8.828 7,5%
Financial income 2.966 0,6% 1.105 0,2% 850 0,7% 608 0,5%
Financial expenses (16.037) -3,5% (12.094) -2,5% (3.856) -3,1% (3.352) -2,8%
Gain/(losses) on exchange rate 101 0,0% (3.713) -0,8% (221) -0,2% (2.457) -2,1%
Net losses from financial activities (12.970) -2,8% (14.702) -3,0% (3.227) -2,6% (5.201) -4,4%
Net non-recurring expenses and charges (3.374) -0,7% (2.854) -0,6% (1.623) -1,3% (674) -0,6%
Income before taxes 10.281 2,2% 8.662 1,8% 4.121 3,4% 2.953 2,5%
Income taxes (3.543) -0,8% (3.555) -0,7% (1.780) -1,4% (2.920) -2,5%
Net income for the year 6.738 1,5% 5.107 1,1% 2.341 1,9% 33 0,0%
17
5. Appendix
Consolidated financial statement
(Euro/000) December 31, 2014
December 31, 2013
Intangible assets 33.832 19.210
of which goodwill 22.923 14.381
Property, plant and equipment 127.002 118.414
Investment in subsidiaries, associates, joint ventures and other companies
1.515 1.639
Other non-current assets 20.363 13.338
of which deferred tax assets 18.465 12.421
Total non-current assets 182.712 152.601
Cash and cash equivalents 43.136 22.823
Other current financial assets 39.004 33.713
Trade receivables 104.625 101.301
Inventories 83.763 87.282
Current tax receivables 7.899 8.437
Other current non-financial assets 20.371 10.780
Total current assets 298.798 264.336
Total assets 481.510 416.937
(Euro/000) December 31, 2014
December 31, 2013
Shareholders' equity and liabilities
Share capital 33.400 33.400
Reserves 32.589 66.835
Net income for the year 5.724 4.025
Equity attributable to equity holders of the parent 71.713 104.260
Equity attributable to non-controlling interests 34.614 30.845
Total shareholders' equity 106.327 135.105
Non-current portion of banks loans and other financial liabilities
14.532 64.741
Non-current bonds 200.000 0
Employees' termination indemnity 2.097 2.481
Provisions for risks and charges 10.737 8.367
Deferred tax liabilities 7.656 4.834
Total non-current liabilities 235.022 80.423
Current portion of banks loans and other financial liabilities 16.207 82.728
Advance from customers 1.072 2.517
Trade payables 67.420 62.861
Current tax payables 6.092 6.142
Other current non-financial liabilities 49.370 47.161
Total current liabilities 140.161 201.409
Total liabilities 375.183 281.832
Total shareholders' equity and liabilities 481.510 416.937
18
5. Appendix
2014 2013
Net income for the year 6.738 5.107
Amortization, depreciation and write downs 19.233 19.399
Accrual of provision for risks and charges 3.723 3.247
Accrual of employees' termination indemnity 597 638
Decrease/(increase) of inventories 3.519 (1.825)
Decrease/(increase) of trade receivables (7.773) 3.940
Decrease/(increase) of other operating assets and liabilities (17.517) 316
Increase/(decrease) of trade payables and advances from customer 3.114 (7.145)
Payment of employees' termination indemnity (980) (995)
Utilization and reversal of provision for risks and charges (1.621) (2.685)
Net cash flow from operating activities 9.032 19.997
Investments in PP&E and intangible assets (44.103) (20.782)
Decrease of PP&E and intangible assets 7.629 3.094
Net cash (used) in business combination net of proceeds from
disinvestments 0 (1.079)
Net change in investments 124 (842)
Net cash flow used in investing activities (36.351) (19.609)
Net proceeds from/(reimbursement of) borrowings 83.270 32.698
Net decrease/(increase) in short term financial assets 1.501 (22.713)
Capital increase (6.135)
Dividends paid (39.524) (17.398)
Contribution of non-controlling interests to subsidiaries paid in
capital net of reimbursement 0 20.289
Net cash flow from/(used in) financing activities 45.247 6.741
Net effect of foreign currencies exchange rate variation and of
movement in Equity attributable to non-controlling interests 2.385 (3.768)
Change in cash and cash equivalent 20.313 3.361
Cash and cash equivalent at the beginning of the period 22.823 19.462
Changes in cash and cash equivalent 20.313 3.361
Cash and cash equivalent at the end of the period 43.136 22.823
Twelve months period ended as of December 31,