Sequana overview. June 2015

Transcription

1 Sequana overview June 2015

2 A Group focused on the paper market 3.4 bn sales in 2014 B2B distribution Production ~ 3/4 ~ 1/4 2.6bn in sales #1 in Europe, #2 worldwide Operations in 44 countries 1.8 million tonnes of paper distributed in distribution centres More than 5,500 employees 1 bn in sales World leader in technical and creative papers High-profile brands including Conqueror, Satimat green, Cyclus, Cocoon, Rives 670,000 tonnes of paper produced in production and converting facilities Nearly 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 1/4 of group s sales 0.2 bn sales 2.6 bn sales 3/4 of group s sales Capacity optimization Planning and commercial efficiency Insight of end-markets to adapt Arjowiggins offering 3

4 A diversified profile in terms of geographies and business mix Balanced portfolio Antalis 2014 Sales By region By business France 13 % Office 22 % UK 25 % Rest of the world 9 % Eastern Europe 12 % Western Europe (excl.france & UK) 41% Packaging & Visual Com 18 % Visual Com. 6 % Packaging 12 % Print 60 % Present in 44 countries on four continents Broad product offering More than 120,000 clients Arjowiggins 2014 Sales Rest of the world 12 % Asia 20 % Europe (excl. France & UK) 34 %. By region US 5 % UK 13 % France 16 % Graphic 49 % By division Green 38% Spécialtés 34% Couché 28% Creative papers 24 % Security 27 % 19 production (1) and converting facilities in Europe, Asia, US and LatAm Large spectrum of businesses with different dynamic and endmarket (1) Including Arjo Wiggins Ltda (Brazil) sold to Fedrigoni Group 4

5 Antalis Overview A distribution group leader in its markets Key Products FY2014 Sales (% of total) Market Position (1) (Europe) Coated and uncoated papers Print Specialty and creative papers Envelopes 1,540m (60%) #1 Graphic supplies Office Paper and envelopes 580m (22%) #1 Visual Communication Board Plastics / Adhesives Paper 166m (6%) One of the leading distributors in Signage and POS segment Packaging Consumables Machines Bespoke solutions 298m (12%) #2 (1) Source: Company estimates 5

6 Global reach 2014 sales breakdown by geographic area Rest of the World 9% Western Europe (excl. France & UK) 41% UK 25% France 13% Eastern Europe 12% Present in 44 countries, including 28 in Europe 1.8 million tonnes of paper sold in 2014 Close to 14,000 deliveries per day worldwide 6

7 European leader Critical mass in Europe Present in 28 European countries Approximately 20% market shares in Europe #1 #2 #1 #1 #1 #2 #1 #1 #2 #2 #2 #4 #2 #1 #1 #1 #1 #1 #2 #3 #2 #2 #3 #2 * #4 #2 7

8 Arjowiggins overview A global leader in specialty papers Key Products Market position (3) FY2014 Sales (% of total) Recycled pulp and papers Graphic Specialty products (transfer, laminated, tissue, sterilisation packaging..) Standard coated and uncoated papers #1 European recycled graphic paper #1 worldwide in medical and hospital papers 499m (49%) Security Banknote paper Europe & Brazil (1) Identity and access control solutions (2) Brand protection and product traceability solutions (2) #1 globally in banknote paper #3 globally in synthetic paper (Arjobex) 272m (27%) Premium fine papers Creative Papers Paper for specialty applications (tracing papers, priplak) Papers for printed electronics #1 globally in premium fine paper #1 globally in tracing paper 249m (24%) Secure payment solutions ( cheques, vouchers,...) (1) Brazil (Sales: 70 M): sold to Fedrigoni Group in May 2015 (2) 85% of Arjo Systems and Arjowiggins Solutions (Sales: 54 M) currently being sold to Impala Group (3) Source: Company estimates 8

9 18 production and converting facilities Stoneywood Graphic Recycled Coated & specialty Deinked pulp (DIP) Medical Clacton (Arjobex) Chartham Apeldoorn Wizernes Château Thierry Priplak Brno Le Bourray Crèvecoeur Bessé Charlotte Charleston Palalda Rives (Arjobex) &Charavines Quzhou Gelida Creative Paper Security 9

10 Arjowiggins overview A global leader in specialty papers Sales by division Sales by geographic area Graphic 49% Green 38% Coated 28% Creative Papers 24% Asia 20% Rest of the World 12% USA 5% France 16% Speciality 34% Security 27% Europe (excl. France & UK) 34% UK 13% (1) Including Arjo Wiggins Ltda (Brazil) sold to Fedrigoni Group in May

11 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 11

12 Strategic plan in line with the Group s targets Industrial & financial restructuring Disposal of Appleton Coated (US) Disposal/closure of Wizernes and Charavines mills Factoring programme at Antalis for 200 M Disposal of Arjo Wiggins Ltda Continued deleveraging Reimbursement of Arjowiggins syndicated loan of 125 M: Sale of 85% of Arjo Systems and Arjowiggins Solutions to Impala In compensation for a debt write-off of 110 M and cash repayment of the balance Change in Sequana s financial structure: Reimbursement of the Holding s reinstated debt of 10 M Proposal to the next AGM for early equity conversion of ORNANE and ORA notes respectively entitling to 20.0% and 1.67% of the share capital post redemption 12

13 A stronger balance sheet millions 31 Dec Dec Goodwill Property, plant & equipment and intangible assets Other fixed assets Operating WCR Other current assets (liabilities) Assets (liabilities) held for sale 296 (142) (139) 20 Total assets 1,125 1,031 Shareholders equity Non-controlling interests Provisions Impact of refinancing Net debt Total equity and liabilities 1,125 1,031 13

14 Enhanced financial structure Reduction in net debt 537m Consolidated net debt at 31 December m Consolidated net debt at 31 December 2014 Reduction in leverage ratio (net debt/ebitda) 4.6x Consolidated leverage at 31 December x Consolidated leverage at 31 December 2014 Reduction in gearing ratio (net debt/equity) 1.7x Consolidated gearing at 31 December x Consolidated gearing at 31 December

15 Sequana: a stronger profile Two businesses Distribution of paper and packaging products (Antalis) No. 1 in Europe and no. 2 worldwide Antalis sales by division ( 2,585m) Production (Arjowiggins) World leader in technical and creative papers Arjowiggins sales by division (1) ( 1,020m) Office 22% Print 60% Graphic 49% Green 38% Creative Papers 24% Packaging & Vis. Com 18% Vis. Com 6% Packaging 12% Coated 28% Specialty 34% Security 27% No. 1 in printing papers in Europe No. 1 in office papers in Europe No. 2 in distribution of packaging products No. 1 in creative papers worldwide No. 1 in banknote papers worldwide No. 1 in recycled papers in Europe (1) Including Arjo Wiggins Ltda (Brazil) sold to Fedrigoni Group in May

16 Sequana: a stronger profile Growth strategy focused on the most dynamic markets Antalis Traditional markets (print and office papers): Active player in consolidating an industry where Antalis is already leader, in order to strengthen its market positions The acquisition of Xerox s distribution business has strengthened Antalis leadership in office papers and digital print media Arjowiggins Printing and writing paper businesses refocused on specialty activities Focus on recycled papers where the Group is the European leader Leadership strengthened in creative papers thanks to the new-look business model and leaner manufacturing facilities Fast-growing, more profitable markets and regions (Packaging, Visual Communications, emerging markets): Growth based on targeted acquisitions Packaging and Visual Communications accounted for 32% of Antalis gross margin in 2014 Increased profitability in emerging markets A group focused on profitable markets On a pro forma basis, once the transformation plan has been completed, around 95% of sales will be delivered by the specialty businesses 16

17 Ownership structure as of 30 April 2015 Ownership structure Voting rights Treasury shares 0.19% Bpifrance Participations 19.68% Bpifrance Participations 19.08% Public 68.79% DLMD (incl. Pascal Lebard) 3.28% Public 67.50% DLMD (incl. Pascal Lebard) 4.78% Allianz 8.06% Allianz 8.64% 17

18 Ownership structure as of 30 April 2015 Capital stake acquisition by Impala Group Amended terms of ORA and ORNANE notes submitted for approval to the Shareholders General Meeting of June 2015 Capital dilution reduced from over 30% down to 20% for the benefit of shareholders The Impala Group would become one of the main shareholders with a long-term equity stake of 10% minimum in Sequana s share capital Pre-transformation Post-transformation Number of shares in % of postredemptioncapital in % of issued capital Number of shares in % of postredemptioncapital Share capital at 30 July ,060, % 51,060, % in % of issued capital ORA 1,979, % 3.88% 1,086, % 2.13% ORNANE 23,748, % 46.51% 13,036, % 25.53% Post-redemption capital 76,788, % 50,39 % 65,183, % 27.66% 18

19 Sommaire 1. Introduction Présentation PowerPoint Appendix 2. Résultat et Bilan Consolidés 3. Activité des Filiales 4. Stratégie et Perspectives 19

20 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 Expected decline of 2% to 5% per annum in printing & writing paper volumes 20

21 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 21

22 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

23 Arjowiggins: revenue split pre- and post-restructuring The restructuring of Arjowiggins printing & writing activities will enable it to reduce its exposure to standard coated paper and to focus on specialty segments where it is a market leader The share of commodity segments (standard coated) will go down from around 30% in 2013 (including US Coated) to around 5% pro forma AW s exposure to the printing & writing segment will go down from nearly 60% to around 40% Arjowiggins: Revenue breakdown pre- and post-restructuring Arjowiggins: % of sales in standard coated Arjowiggins: % of sales in printing & writing 100% 80% 60% 40% 20% 0% 31% 19% 5% 11% 5% 2013A US standard coated 2013PF Europe standard coated 100% 80% 60% 40% 20% 0% Specialties (P&W) 57% 27% 19% 37% 11% (AWCP) 5% 2013A 2013PF US standard coated Green and Recycled (Graphic), Fine, Tracing, Binding 42% Europe standard coated Note: 2013 data not adjusted for the treatment of US Coated business under IFRS 5 Estimated pro forma data including reduced exposure to standard coated in Europe and exit from US Coated, but excluding expected developments in continuing activities (e.g.,volume growth in recycled pulp and papers) 23

24 Milestones in the implementation of the transformation plan Industrial restructuring plan to be completed shortly Definitive exit from the US Coated Paper market with the disposal of Appleton Coated in December 2014 Restructuring of printing and writing paper operations in Europe being finalised: For lack of a viable takeover project, the Wizernes and Charavines mills will cease their production at the end of the first half-year 2015 Employment Protection Plan ( PSE ) procedures finalised at the end of April 2015 Decisive steps recently finalised in the turnaround of Arjowiggins Disposal of Arjo Wiggins Ltda (Brazil) to the Fedrigoni Group for an enterprise value of 85 million in May 2015 Arjo Wiggins Ltda, producing mainly banknote paper in Latin America, has annual sales of around 70 million Sale of 85% of Arjo Systems and Arjowiggins Solutions (brand protection and access control solutions businesses) to the Impala Group Debt write-off of 110 million and reimbursement of the debt balance On completion of these transactions, Arjowiggins will be fully released of its debt and will benefit from bolstered financing capacities. 24

25 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 25

26 contact@sequana.com 26 02/06/2015