CAPITAL MARKETS DAY Portada Victoria 25 JANUARY 2018
CAPITAL MARKETS DAY Portada Victoria 25 JANUARY 2018 Presentation to Shareholders Held at Keraben To provide further information on the recently acquired business (November 2017)
Leading European Player in Branded Floor and Wall Ceramic Tiles Revenue ue Mix (2017A) 7A) – “Complete room” design concept of mid to high-end tiles By Prod roduct ct By Geogr ography – Reputation for exceptional differentiated designs, high quality, and outstanding customer service Special Pieces RoW 5% 16% – Established networks of specialist retailers and growing presence in Spain Wall Tiles Other the DIY channel 36% 52% Europe 8% – Best-in-class integrated manufacturing at three well-invested and € 130m € 130m Germany highly efficient plants 9% Floor Tiles Northern – Unique business model delivering exceptional growth and industry 43% Europe leading margins France 11% 20% Revenue ue EBITDA TDA (in € millions) (in € millions) 2014A – 2016A CAGR GR: 12,9% 2014A – 2017A CAGR GR: 10,3% 130 36 118 107 28 25 97 2014A 2015A 2016A 2017A 2014A 2015A 2016A Cash Conversion (1) 106% 74% 99% _____________________ (1): EBITDA is underlying and pre-exceptional. / The year end is to December, being Keraben’s historical financial period. 2
Continuous Improvement across the Company has Delivered a Best-in-Class Financial Profile Super perior Busi siness ess Model del and d Well Execut cuted ed Product uct Portfolio and Cost st Manageme ement nt Strat ateg egy (1) Price / sq. meter Cost / sq. meter SG&A as % of sales € 10,00 Avg. Price / € 9,85 Sq. m. € 9,50 € 9,28 € 9,17 € 9,10 Strengthened Gross Profit € 6,10 € 5,56 € 5,14 € 5,02 Avg. Cost / 22,6% Sq. m. € 4,65 € 4,57 21,0% 20,3% 19,5% SG&A as % 18,2% 17,9% of Revenue 2012A 2013A 2014A 2015A 2016A 2017E _____________________ (1): Excludes special pieces. 3
Product Mix Optimised to Drive Consistent Price and Volume Growth Average Price Development Over-Time – Active product portfolio management (in € , individual size format price curves are indicative) Overall – Consistent price increases via average (1) • Addition of new features Size format #3 • Introduction of new formats Average Tile Price – Collections actively monitored to per sqm Size format #2 identify low rotation and / or low margin products Size format #1 – Allows Keraben to stay ahead of the competition 2012A 2013A 2014A 2015A 2016A 8.2% 8.2% Avg. price per sqm increase between 2012 and 2016 _____________________ (1): Excludes special pieces. 4
Highly Differentiated and Efficient Production Process − Raw materials optimised to Keraben’s production process and tile characteristics ~ € 23 million Millin ing & − Only economically viable at volumes exceeding ~6 million sqm p.a. Atomising sing cost to purchase an atomiser − Format-dedicated presses and production lines result in short changeover times € 5 million + Press ss & & invested in presses − 6,500 tonne presses Dryers ers since 2013 to produce larger tiles − Glaze materials standardised, reducing supply chain complexity and increasing volume Glazing ing € 0.11 discounts Line saving per sqm − In-house mixing guarantees specific viscosity and density to ensure superior tile quality from standardising − Combine inkjet and rotocolour technology to deliver a more natural textured product Over 1,000 Print ntin ing unique designs − Latest kiln technology 25% Kiln − Plans to invest in kilns to increase capacity by 3.5 million sqm more efficient Kiln new kilns − Allows Keraben to produce five additional formats – without additional production lines ~ € 2 Cuttin ing and − Most smaller manufacturers outsource this process at a higher cost saving per sqm on Squarin aring rectified tiles Fully y integrat rated in-house use capabili pability y allows ws for r flexibil ibilit ity y and qualit ity y at all stages s of the produ duct ctio ion n process cess 5
In-house Design Team Ensures a Unique “Keraben look” with Superior Aesthetics Madeira ra Collect ction on Design – Studied over 100 – Team of 12 – Collaborates closely – Strong – Highly coordinated, real wood samples experienced in- with the Product differentiation matching designs house designers Development / within each between wall and – Delivers a pattern Manufacturing collection floor tiles – Leverage a range of most suited to tile team – Unique designs to surface application design tools – Delivers significant Keraben production and purchasing synergies Knowledge of the latest design trends through direct feedback loop with Specialty Retailers 6
Highly Successful Multi-brand Strategy Prove ven n New Brand and Rollout Model Pari ris s (Il Illu lustr trati tive) (Revenue index of each brand’s sales in Spain) (1) 244% 184% 130% Year 1 Year 2 Year 3 Year 4 = Illustrative catchment area Single pricing strategy Increases density of sales Provides brand exclusivity across three brands in retailers’ trading radius footprint _____________________ (1) 2013 to 2016. 7
Focused Sales and Marketing Strategy Drives a Growing Retailer Base and an Increasing Share of Wallet Across Brands Total Number r of Retaile lers rs Averag rage Annual al Sales s per r Retaile iler ‘ 12A – ’17E CAGR: (in € thousands) 9,8% 43,4 42,9 1.943 40,1 1.786 250 36,4 1.625 183 33,7 33,2 100 1.464 - 1.340 - 1.216 747 680 - 657 614 23,1 545 22,5 454 20,7 20,1 18,8 18,8 13,6 12,5 946 923 868 850 10,0 795 762 2012A 2013A 2014A 2015A 2016A 2017E 2012A 2013A 2014A 2015A 2016A 2017E Keraben Metropol CasaInfinita Keraben Metropol CasaInfinita 8
Long-Standing Direct Relationships with Specialty Retailers 85% of 2016A Revenue ue (1) ~15% (1) Distribut ributor r / Retailers : Large and fragmented market ~85% Wholesaler salers Analytics: advise the retailer on the in-store product selection Retail ilers Point of sale product displays and Samples: encouraging and supporting consumer purchase decision Instal alle ler End-Use ser: r: – Homeowner Salesforce : Large, experienced salesforce enables day-to-day – Interior designer, acting for homeowner support, across the three main brands – Architects and builders (specifiers for remodeling and certain growth oriented commercial projects) Campus Keraben: unique training days for Specialty Retailers _____________________ (1) Average of Spain, France, Germany and the UK. 9
10
Complementary Ability to Offer Sales of Mid-to-High End Tiles to DIY Channel Priv rivat ate Label 10% of 2017A Revenue ue DIY Retaile ler Instal alle ler Keraben: aben: a Logica cal Partner r to DIY Chains ns Renowned Brand – Keraben has a dedicated and experienced sales team focused on DIY accounts Unique Designs and Co-Branding – DIY retailers’ products are supplied under the “ ZiqZaq by Keraben” brand or white label – all designs are owned by High Service Levels Keraben – Keraben designed a complete category management programme Fulfilment Excellency – Particularly well suited to the rigorous requirements of the DIY Financial Strength retailers Attractive Margins to Retailer 11
Unique Business Model Designed to Deliver Maximum Profitability Deliver Coordinated Company Functions Differentiated Offering for Retailers Mid-to to-hi high gh-end end brand nded ed floor oor and wall ll tile les Brand nd exclu clusivity ty Design Sales and Marketing Poin int of sale le support ort Comple lete te room m conc ncept ept Highe gher r profi ofit t per r squa uare re Operations meter ter and Supply Chain Sales les traini ning ng Reduc uced inv nvent entor ory commi mitment tment Market et Feedb dback 12
Addressable Market is Expected to Outperform Broader Tile Industry Total al and Addr dress essab able e Ceram amic Tile e Overv erview ew of Regional nal Tile e Market in Keraben’s Key Geographies Product uction n Clust usters ers (in € billions) CAGR % CAGR % (2012 – 2016) (2016 – 2020) Addressable market in: Total Market Spanish producers span the value Germany France 2.5% 4.5% 4.0 spectrum while Italian producers focus on Spain Italy Spain UK mid-to-high-end to premium floor tiles 3.4 2,3 4.8% 5.3% Domestic competition: inferior quality 0,2 3.8% 1.2% and design to Spain and Italy Germany Portugal UK 3.1 1,9 0,2 0,7 9.5% 9.4% 1,5 Lower end manufacturers Poland Turkey 0,2 0,5 0,3 0,6 2.5% 4.6% Addressable Market Low-to-mid range manufacturers 0,5 serving regional markets 0,5 Brazil Mexico 0,8 Low-end manufacturers for domestic 4.1% 4.1% 0,7 0,6 and adjacent geographies India UAE China 2012A 2016A 2020F Focused on production for the domestic market US _____________________ Source: Transaction Due Diligence. 13
Optimise Product Mix to Generate Superior Pricing Two new formats launched at meaningfully higher price points (approx. +30% on a per square meter basis) 75x150 floor tile: – Launched in 2016 and is increasingly used across all applications – LTM sales of ~ € 2 million at ~60% gross margin Uptown 75x150 40x120 wall tile : – Launched at the Cersaie tile trade show in Q3 2017 – ~ € 0,5 million sold during the first 4 months Groove 40x120 14
Recommend
More recommend
