We are invisible. But we are everywhere. ICF Group Investor presentation February 18, 2020
2 Disclaimer This document has been prepared by ICF Group S.p.A. (“ICF Group” or together with its subsidiaries the “Group”) . This document does not constitute or form part of any offer or invitation to sell, or any solicitation to purchase any shares or any other kind of financial instruments issued or to be issued by ICF Group. Not all the information contained and the opinions expressed in this document have been independently verified. In particular, this document contains forward-looking statements and declarations of pre-eminence that are based on current estimates and assumptions made by the management of ICF Group to the best of their knowledge. Such forward-looking statements and declarations of pre-eminence are subject to risks and uncertainties, the non- occurrence or occurrence of which could cause the actual results including the financial condition and profitability of ICF Group to differ materially from, or be more negative than, those expressed or implied by such forward-looking statements and declarations of pre-eminence. Consequently, ICF Group can give no assurance regarding the future accuracy of the estimates of future performance set forth in this document or the actual occurrence of the predicted developments. The data and information contained in this document are subject to variations and integrations. Although ICF Group reserves the right to make such variations and integrations when it deems necessary or appropriate, ICF Group assumes no affirmative disclosure obligation to make such variations and integration and no reliance should be placed on the accuracy or completeness of the information contained in this document. To the extent permitted by applicable law, no person accepts any liability whatsoever for any loss howsoever arising from the use of this document or of its contents or otherwise arising in connection therewith. This document has been provided to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any third party. By accepting this document, you agree to be bound by the foregoing limitations.
3 ICF Group, a public company listed on AIM Italia ICF Group is a public company , with over 90% free float, controlling 100% of ICF S.p.A., a leading player in the technical adhesives and fabrics business. The mission is to pursue further organic expansion of ICF S.p.A. operations while acting as an aggregator of companies operating in complementary businesses exploiting the robust Free Cash Flow generation Shareholding structure 90.8% Industrial Operations Market 1.9% EPS Sponsors 100% 99.8% Forestali de Mexico Management 3.4% ICF Divisions 3.8% PEP
4 Industrie Chimiche Forestali: a 100-year History The production of formaldehyde as a derivative The production of special Industrie Chimiche Forestali stops impregnated fabrics for the of pyroligneous begins producing basic chemicals and footwear industry starts finally focuses on the upstream segment of the footwear industry 1918 ‘20s ‘30s 1941 ’50s Industrie Chimiche 1983 The Forestali activity is enhanced Forestali is founded and The production of with the establishment of the starts with the extraction of adhesives begins Società Italiana Resine SIR for pyroligneous acid from wood the production of phenolic resins in Sesto S. Giovanni Forestali relocates production from the plant in Sesto S. Giovanni to the new plant in Marcallo con Casone in the province of Milan EPS 1984 EQUITA PEP SPAC 1987 2005 May 2018 Adhesives for Furniture and Boating are formulated and introduced into the business network: Durabond brand is born . ABC (Adhesive Based Chemicals) begins its own Besides the formulation of high-quality and activity in 2005, within Forestali, as a company fully ICF completes the Business Combination ease of use adhesives, already existing dedicated to the polyurethane adhesives industry for with EPS Equita PEP SPAC (then renamed brands are purchased industrial applications (Automotive, flexible ICF Group ), listed on the AIM Italia packaging, graphic arts) exchange
5 The «Invisible Power» Counter The Adhesives: Toe puff • Upper «Invisible Power» Solvent-based Insole • Footwear & Solvent-free Sole Unit • Leather Water-based Technical fabric is used Technical fabric goes Adhesive is used Goods in the toe puffs and to reinforce the handle, to glue different Adhesives have a Technical fabrics: • counters of the shoe. bottom and sides of components of the Toe-puff, counters negligible impact Adhesive is used to put the bag. Adhesive is upholstery / stiffeners on cost of • together mainly uppers, used to glue the linings Linings and production of the reinforcing insoles and sole units final article… The layers of the headliner in a vehicle. It …But a relevant Automotive can be applied to light impact on the vehicles (passenger and commercial) performance . A low quality adhesive can lead to serious issues Adhesives are used to glue and costs (eg. destroyed shoes or Adhesives: • stained car roof) Solvent-based • Solvent-free • Water-based Packaging Product quality, The layers of films The plastic cover of The pins used in the customized comprising the package magazines and staplers and similar solutions and for various applications periodicals objects reliability are key (food and non food) drivers to serve clients
6 Industrie Chimiche Forestali: a Leading Player in the Technical Adhesive World ICF Group in numbers (1) Manufacturing of Core activity adhesives and technical NFP (2) Revenues EBITDA EBITDA Margin fabrics 2019 2019 2019 12.3% €3.6m (2019) Footwear €71.6m €8.8m Leather Goods 0.4x leverage on 13.2% End market Automotive 2019 EBITDA (Average ‘15 - ’19) Packaging Upholstery 3.3 21,000 More than Adhesives (water-based, million 129 (1) Tons solvent-free, solvent- 1,800 meters of Key products based) employees Adhesive/ products Technical Fabrics technical Year (impregnated, coextruded) fabrics • • 22 R&D 3 labs • More than 800 industrial clients Marcallo con Casone , HQs Milan (Italy) employees • 20 new products • 60,000 sqm. plant per month (2) Note: (1) As of 31/12/2019; (2) Around €6.2m of debt are represented by real estate leasing
7 A Balanced Portfolio with a Global Exposure The company is export-oriented, with a balanced exposure to the Automotive, Footwear and Packaging sectors Geographic Area Business Line ABC Division ICF Division 46% 54% Africa Packaging Middle America 9% Footwear - East 13% Adhesives 10% East 20% Europe 14% €72m Other - €72m Adhesives Automotive Italy 12% 37% 33% Europe CEE 21% Fabrics Far East 18% 9% * Commercialized - Other 4% Forestali manufactures both The Automotive and the Footwear Export makes up for c. 67% of adhesives (c. 32%) and fabrics (c. market segments account for the large revenues for 2019 18%), while ABC manufactures majority of revenues adhesives only Note: (*) «Commercialized» indicates products purchased and resold to final customers
8 From Italy to the rest of the world From the headquarter of Marcallo con Casone ICF reaches 80 countries all over the world Albania Czech Republic Hungary Portugal Sweden Austria Denmark Latvia Romania Switzerland Belarus Estonia Lithuania Russia Turkey Benelux France Macedonia Serbia UK Bulgaria Finland Malta Slovakia Ukraine Croatia Germany Norway Slovenia Croatia Greece Poland Spain Europe Far East North Marcallo con America Casone Africa, Bangladesh USA Middle East China Hong Kong India Japan Benin Pakistan Camerun Philippines Egypt South Korea Gabon Thailand Gambia Vietnam Ghana South Guinea Guinea Bissau America Iran Israel Brazil Ivory Coast Chile Jordan Colombia Lebanon Ecuador Mali Mexico Mauritania Mauritius Morocco
9 Substantial growth mainly based on Export Historically, sales have been growing at mid single digit since 2009 with export accounting for 67% of group revenues in 2019 € million Guido Cami and Massimo Rancilio appointed as CEO 80 and CFO, respectively 79 72 72 69 65 64 60 60 53 47 45 54 55 42 44 48 39 44 39 16.3% 15.5% 33 12.3% 26 11.5% 11.6% 10.7% 9.9% 9.9% 6.5% 6.1% 6.0% 25 25 25 24 24 23 21 21 20 20 18 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Domestic Export EBITDA margin Export (% on revenues) 59% 62% 65% 69% 65% 65% 65% 65% 68% 69% 67% Domestic (% on revenues) 41% 38% 35% 31% 35% 35% 35% 35% 32% 31% 33% Source: Company financial statements
10 Material Free Cash Flow Generation 2012-2019 Cumulative Free Cash Flow Generation was € 38.9m 30.0 27.1 25.0 17.7 20.0 Net debt 15.0 16.7 13.8 12.4 10.0 10.9 9.7 8.2 5.0 6.1 5.3 (2) 3.6 - dic-11 giu-12 dic-12 giu-13 dic-13 giu-14 dic-14 giu-15 dic-15 giu-16 dic-16 giu-17 dic-17 giu-18 dic-18 giu-19 dic-19 Key events In 2019 , Free Cash Flow was € 7.3m (1) , Re-leverage of € 21m Capex for €13m due deleverage was €6.1m notwithstanding to the purchase of the through merger with plant building 918 Group the €1.2m spent in shares buyback (Dec-2013) (Jan-2016) Note: (1) Adjusted for extraordinary outflow given by the share buyback program; (2) of which €6.2m are real estate leasing
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