The Americas Investing in Growth. Ian Curley, Group CFO Juan Guillermo Castaneda, CFO the Americas

Transcription

1 The Americas Investing in Growth Ian Curley, Group CFO Juan Guillermo Castaneda, CFO the Americas

2 The Americas and M&A Key Takeaways Pan-regional footprint Increasing exposure to higher growth markets Benefits from transfer of equipment, technology and customer support tools Differentiation is key to our success M&A is an essential driver of earnings growth and improved returns 2

3 A unique Pan-American platform built through acquisitions 1947 Colombia and Mexico 1954 Venezuela 1986 JSG acquires CCA from Mobil Oil 1997 Argentina and Dominican Republic 2004 Chile and Ecuador 2005 Costa Rica Baguin acquisition and development of Greenfield sites 2012 Orange County (Northern Mexico & USA) 3

4 Latin America is expected to continue growing at a superior pace 2012A 2013E 2014E Global 3.1% 3.3% 4.0% US 2.2% 1.6% 1.3% Euro Area (0.5%) 0.0% 1.5% East Europe & ME 2.9% 2.8% 4.0% Latin America 2.7% 3.5% 4.0% Asia (excl. Japan) 6.2% 6.7% 7.1% Source: Credit Suisse, June

5 Region has been a strong contributor to SKG s growth in the past 10 yrs CAGR 12.8% * 2,528 1,753 1, ,081 1,268 1,401 1,462 1, H1'13 * CAGR of 9.9% when excluding SKOC acquisition in 2012 SKTA Net sales ($m) SKOC (annualised) 5

6 And is delivering consistently strong EBITDA margins 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 19.2% 18.5% 17.7% 17.9% 14.6% 14.5% 13.3% 13.5% 12.2% 12.9% 13.3% 13.4% 11.5% 18.2% 15.0% 15.3% 13.8% 13.9% 14.2% 12.7% 12.1% 18.5% 13.4% 12.9% FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 Q1'13 Q2'13 SKG SK Europe SK The Americas 6

7 Transfer of knowledge & expertise across regions Judicious use of machinery and equipment supporting returns Transfer of technology and knowledge from Europe Benchmarking through Top 10 Technical excellence teams optimise production Best Practice processes standardised across the Group Transfer of markets knowledge Tangible benefits in the case of Smurfit Kappa Orange County 7% improvement in recycled mill capacity Bottom slicing and production optimisation in corrugated operations 7

8 Differentiation is Key to our Success Differentiation through: The scale of our operations with strong market shares in each of our leading markets The comprehensive product and service offerings across the region Harnessing the collective intelligence and creative culture of SKG to deliver tangible benefits to customers Our experience and commitment to CSR and Sustainability 8

9 P&G in Mexico Product and Service re-design Challenge to design a box as a merchandising aid and implement a Just in Time production service Purchase Order 12 hrs Production and service Daily communication between P&G s sales force & SKG (graphic designer in-plant) Improved packaging line performance (mechandised packaging expert in-plant) Customer benefits Increased sales and reduced inventories Smurfit Kappa benefits Market share gains and customer retention 9

10 SKG Investing in Higher-growth Markets FY2012 Revenue % FY2015e Indicative Revenue % Americas 19% Americas 30% Other 4% 23% 40% W. Europe 77% Other 10% W. Europe 60% Western Europe Eastern Europe Americas Western Europe Eastern Europe Americas 10

11 Smurfit Kappa Orange County The Acquisition Template Acquired Smurfit Kappa Orange County for US$340 million Strong strategic fit to existing Mexican Business Mexican corrugated markets growing 4%+ Initial synergies of US$14 million revised upwards to US$32 million Improved earnings prospects Two US$50 paper price increases in last 12 months 11

12 Smurfit Kappa Group M&A strategy Focus on the higher growth, dynamic markets Incremental M&A to maintain our leadership position in Latin America in spite of recent consolidation The Americas priority areas include: Further expanding our integration in Mexico and US Enter Central America and Peru Consolidate our positions in Colombia and Chile Opportunistic acquisition in Brazil Key acquisition elements include: value synergy benefits and earnings accretion 12

13 The Americas and M&A Key Takeaways Pan-regional footprint Increasing exposure to higher growth markets Benefits from transfer of equipment, technology and customer support tools Differentiation is key to our success M&A is an essential driver of earnings growth and improved returns 13

14 Annex Country by country overview 14

15 SKTA Business at a glance # Operations Corrugated business focus Reclamation Containerboard/Sack kraft Boxboard & Other Printing & Writing 31 plants 10 PMs 6 PMs 1 PM Boxboard 7% P&W 6% Sacks 3% Folding 3% Others 4% Corrugated 33 plants Sacks 5 plants Folding Carton 3 plants Other converting TOTAL SKTA 4 plants 93 Operations Containerboard 17% Corrugated 60% Forestry 105,000 ha. Source: Smurfit Kappa, 2012 shipments in short tons, excl. Fibre 15

16 Argentina & Chile operations Market Market position #3 Resources Paper capacity Converting shipments Reclamation Grip 84% Forestry - Containerboard 120,000 MT Others - Corrugated 210 msqm Sacks - Folding Cartons - Source: Smurfit Kappa 16

17 Colombian operations Market Market position #1 Resources Reclamation Grip 95% Forestry 69,500 ha. Paper capacity Converting shipments Containerboard Others Corrugated Sacks Folding Cartons 140,000 MT 240,000 MT 280 msqm 50,000 MT N/A Source: Smurfit Kappa 17

18 Mexican operations Market* Market position #2 Resources Reclamation Grip 76% Forestry - Paper capacity Containerboard Others 320,000 MT 90,000 MT Converting shipments Corrugated 510 msqm Sacks - Folding Cartons 40,000 MT Source: Smurfit Kappa 18

19 Venezuelan operations Market* Market position #1 Resources Reclamation Grip 93% Forestry - Paper capacity Containerboard Others 100,000 MT 50,000 MT Converting shipments Corrugated 135 msqm Sacks - Folding Cartons 4,000 MT Source: Smurfit Kappa 19

20 SK Orange County operations Resources Paper capacity Reclamation Grip 150% Forestry - Containerboard 300,000 MT Others - Converting shipments Corrugated - Mexico Corrugated - USA 200 msqm 145 msqm Source: Smurfit Kappa 20

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