IPL Plastics plc 2017 results March 2018
Disclaimer This presentation and any oral information based upon such presentation (collectively hereinafter the “Presentation”), which is personal to the recipient, has been prepared by IPL Plastics plc (“IPL Plastics” and together with IPL Plastics subsidiaries, the “Group”) . By attending the meeting at which this Presentation is made, or by accepting or reading the slides that follow, you will be deemed to have: (i) agreed to all of the conditions and restrictions contained herein; and (ii) acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of this Presentation. The information provided in this Presentation is or may be price sensitive with respect to IPL Plastics shares traded on the “grey market” operated by Investec and Davy. Use of such information may be regulated or prohibited by applicable legislation. This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation to sell or issue, or the solicitation of an offer to subscribe for, buy or acquire, securities of IPL Plastics, or an inducement to enter into any investment activity in Ireland or the United Kingdom or in any other jurisdiction. Neither this document nor any part of it, or the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract therefor or investment decision in relation thereto. The information in this Presentation has not been independently verified and does not purport to contain all of the information that may be required to evaluate an investment in the Group and/or its financial position. Any prospective investors must make their own investigation, analysis and assessments and consult with their own adviser concerning the data referred to herein and any evaluation of the Group and its prospects. IPL Plastics is not undertaking any obligation to provide any additional information or to update this Presentation or to correct any inaccuracies that become apparent. The information contained in this Presentation is for background purposes only and is subject to material updating, completion, revision, amendment and verification. No representation or warranty, express or implied, is or will be given by IPL Plastics, its subsidiaries, its shareholders or their respective directors, officers, employees or advisers as to the accuracy or completeness of this Presentation. To the extent permitted by law, no liability whatsoever is accepted by IPL Plastics, its subsidiaries, its shareholders or their respective directors, officers, employees or advisers or any other person for any loss howsoever arising, whether directly or indirectly, from any use of this Presentation or such information or opinions contained herein or otherwise arising in connection herewith. In particular, without limitation, no representation or warranty is given as to the achievement or reasonableness of any projection, estimate, target or forecast in this Presentation, which it should be noted is provided for illustrative purposes only. This Presentation contains forward-looking statements which reflect management’s current views and estimates. These forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. Management undertake no responsibility to revise any such forward looking statements to reflect any changes in management’s expectations or any change in circumstances, events or the Group’s plans and strategy. Accordingly, no reliance can be placed on the figures contained in such forward looking statements and no representation or warranty is given as to the completeness or accuracy of the forward looking statements contained in this Presentation. The Group is under no obligation to update or keep current the information contained in this Presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein and any opinions expressed in the Presentation or in any related materials are subject to change without notice. 2
Group Overview Rigid Plastics IPL Plastics plc supplies products to a broad range of customers primarily in the USA, Canada, UK, Ireland and China from 14 production facilities across 3 primary business categories Returnable Packaging Solutions Large Format Packaging and Consumer Packaging Environmental Solutions 3
Geographic Footprint IPL Plastics has significant international reach with sophisticated R&D capabilities North America Ireland & Great Britain China 14 Manufacturing 9 Warehousing 6 Offices 2 R&D Facilities in c.2.2 Million 270+ Machines Facilities Units Worldwide Ireland and Canada Square Feet of Returnable Packaging Solutions Manufacturing Bulk, Environmental & Office Warehousing Units R&D Centre Industrial Products Space Packaging 4
2017 Trading Highlights ▪ 36.2% growth in Revenue² to €474.4m (2016: €348.2m) ▪ 46.0% increase in EBITDA² to €70.9m (2016: €48.5m) ▪ 47.3% growth in EBIT² to €41.6m (2016: €28.3m) ▪ Profit before exceptional and non-recurring items and share of equity-accounted investees profits increased to €19.6m (2016: €17.9m) ▪ Profit for the period of €17.6m (2016: €16.1m) ▪ 8.8% increase in Adjusted diluted EPS to 12.01c (2016: 11.04c) ▪ EBITDA interest cover of 5.2x (2016: 6.2x) ▪ Total Assets of €621.9m (31 December 2016: €511.4m) ▪ Total Equity (excluding IPL Put Liability ) of €202.5m (31 December 2016: €190.9m) ▪ Net Debt of €233.0m (31 December 2016: €152.5m ) 1 The financial highlights should be read in conjunction with the 2017 Annual Report & Accounts. 2 Amounts for Revenue, EBITDA and EBIT for the year ended 31 December 2017 and prior years throughout this document exclude amounts related to 5 discontinued operations. 3 Certain tables and numbers in this presentation may not add or compute precisely due to rounding.
2017 Operational Highlights ▪ The successful integration of Encore Industries into the IPL North America business since acquisition in November 2016. ▪ The North America market has contributed significant organic growth driven by continued increased demand in both the Consumer Packaging and Large Format Packaging and Environmental Solutions divisions. ▪ Macro delivered results for 2017 which were ahead of expectations announced at the time of acquisition. The integration of Macro has been completed successfully with growth anticipated for 2018 driven by a significant new contract with a global automotive customer. ▪ OPG’s Ireland and China business has been negatively impacted by reduced demand from its largest customer following the merger of that customer with another industry participant. ▪ OPG’s financial performance in the UK in 2017 was significantly improved on 2016 with EBITDA growth of 9% (prior to the allocation of OPG central overheads) even though turnover only increased by 1%. Performance in 2017 was driven by growth in the packaging and industrial products business and follows the successful reconfiguration of the operations at one of the UK sites. 6
2017 Operational Highlights (Continued) ▪ Significant development capital investment programmes continue in the Group’s North American operations providing it with enhanced ability and capacity to serve an expanding business. A number of these projects began to contribute to EBITDA in 2017. ▪ Renegotiated and extended the IPL Inc. Canadian syndicated loan facility to finance the acquisition of Macro and to provide further bank facilities to the IPL Inc. Group with a revised expiry date of July 2021. ▪ The hurricanes in the US in Quarter 3 2017 drove reduced capacity in both the resin and freight markets resulting in significant cost increases in Quarter 4 2017, trends which have continued into Quarter 1 2018. 7
2017 Strategic Highlights ▪ The acquisition of 100% of the share capital of Macro Plastics Inc. on 9 June 2017 through IPL Inc. ▪ The disposal of ClearCircle’s Specialist Environmental Services (“SES”) Divisions in Ireland and the UK, with cash consideration of c. €40m received from the sale of both divisions . ▪ At its EGM in December 2017, the Group took the initial steps to facilitate a possible liquidity event when shareholders gave the board authority to enable the company to proceed with an IPO and Listing in 2018 should market and other conditions permit. Authority was also received from shareholders to change the name of the company to IPL Plastics plc, which became effective on 7 December 2017. In addition, the shareholders approved a reorganization of the existing IPL Inc. shareholding structure by agreeing to an exchange of the current minority shareholders’ equity interests in IPL Inc. for shares in IPL Plastics plc. ▪ On 28 February 2018, the reorganization of the IPL Inc. shareholding structure was effected in line with the approval provided by shareholders at the December 2017 EGM, resulting in the issuance of 47,238,242 shares and the elimination of the Put Liability (i.e. the 33.3% of IPL Inc. not owned by the Group), which amounted to €119.8m at year end 2017. ▪ Continuing to position IPL Plastics for future growth by identifying appropriate organic and acquisition opportunities which can drive growth in shareholder value. 8
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