Investor Presentation Chargeurs reaffirms the effectiveness of its leadership strategy in high value-added niche markets January 2019
Summary (1/2) Chargeurs: since 2015, a long-term growth strategy successfully implemented ◼ From global leadership positions to iconic champions creation: upgrade of the business models ⚫ « Performance, Discipline, Ambition » plan launched right after the change of governance structure in 2015 ⚫ Implementation of the Chargeurs Business Standards to achieve operational excellence ⚫ Launch of the Game Changer program in 2017 to speed up the Group’s growth and profitability ⚫ In 2018, new marketing and iconic brands strategy to become iconic champions in all our businesses ◼ Premiumization of the solutions offers for a long-term value creation ⚫ Strategic growth of high value-added production capacities: launch of the first techno-smart production line mid-2019 (CPF) ⚫ Continuous launch of disruptive innovations: Low Noise (CPF), anti-moire effect for interlining (CFT), Sublimis (CTS), Organica (CLM) ⚫ New complete solutions offers developed thanks to accretive acquisitions strategy: « films + machines » (CPF) and « textile + lightbox » (CTS) ⚫ Deployment of the CSR strategy: Organica Precious Fiber label offering premium and 100% traceable wool, and launch of the Amédée 1851 digital brand ◼ Fundamental transformation of the company culture ⚫ Winning spirit broadcasted within all our businesses, and internationalization of the executive management and organizations ⚫ Strong investments on distinctive talents: young talents & executive talents programs ⚫ Development of our long-term resilience and robustness Chargeurs – Investor Presentation – 2019 January ― 2
Summary (2/2) Chargeurs: since 2015, a long-term growth strategy successfully implemented ◼ Successful deployment of the accretive acquisitions and integration strategy ⚫ Champions creation in high value-added niche markets ⚫ Since 2015, €100m in extra revenue and more than €10m in additional recurring operating profit ⚫ New game-changing acquisitions in 2018: Leach (CTS) in May and PCC Interlining (CFT) in August ◼ Strong enhancement of the growth profile, profitability and resilience ⚫ Since 2015, size change : i n pro forma, 2018 revenue and ROP respectively tops €600m and €50m ⚫ Margin profile constantly reinforced: ▪ Annual productivity plan set up since late 2015 ▪ Continuous investments in growth opex and capex to rise our businesses premiumization ⚫ Strong financial structure: €286m in financing raised at June 30, 2018 with a debt maturity of 5 years ⚫ Conclusion in December 2018 of a €230m syndicated credit facility, with excellent financial conditions Our global presence, prudence and long-term vision make us an opportunity taker, whatever the geopolitical and economic environment Chargeurs – Investor Presentation – 2019 January ― 3
CONTENTS 1. Since 2015: a methodical strategy of growth to achieve €1bn in revenue by 2021 2. Summary of the first nine months of 2018: Continued enhancement of Chargeurs’ growth profile, profitability and resilience 3. A successful acquisition program: > €100 m in additional revenue from value -generating acquisitions, purchased at reasonable price 4. Case study: Chargeurs - PCC Interlining, a remarkable acquisition 5. Industrial excellence roadmap for long-term value creation 6. Outlook Chargeurs – Investor Presentation – 2019 January ― 4
Since 2015: 1 a methodical strategy of growth to achieve €1bn in revenue by 2021 Chargeurs – Investor Presentation – 2019 January ― 5
The Chargeurs Group at a glance Worldwide industrial Leadership positions A robust financial excellence in niche markets profile Solid financial performance Serving over 90 countries Protective Films strengthened again in 2017 Geographic breakdown of 2017 revenue Revenue No. 1 worldwide +5.3% in temporary surface protection €533.0m (+3.2% like-for-like) Leadership position 47% Recurring in 10 market segments operating profit +14.1% 26% 27% €44.4m (+15.9% like-for-like) Fashion Technologies Net profit No. 1 worldwide in interlinings +0.8% €25.2m Leadership position More than 90% of revenue generated in 4 market segments An ever stronger in international markets balance sheet structure ◼ 15 plants : Technical Substrates ◼ €284m in financing raised at Dec. 31, 2017 5 in Europe by the Group with a debt maturity of 5 years 4 in North America European leader ◼ €230m syndicated credit facility concluded 3 in Asia in functionalized textiles in Dec. 2018 with excellent financial 2 in Latin America Leadership position conditions 1 in Africa in 4 market segments Confirmation of guidance ◼ for full-year 2018 16 R&D and Quality laboratories : Luxury Materials 7 for Fashion Technologies Revenue growth No. 1 worldwide 4 for Protective Films in high-quality combed wool 4 for Luxury Materials Higher operating margin 1 for Technical Substrates Leadership position Solid cash generation in 3 market segments Chargeurs – Investor Presentation – 2019 January ― 6
A methodical growth strategy deployed since 2015 aimed at achieving €1bn in revenue by 2021 A clear vision & Well on the way to achieving A success model solid strategy €1bn in revenue by 2021 Acting as a “designer” of our niche Managerial transformation to drive Upscaling and multiplying sources of markets to create integrated value internal and external growth growth chains ◼ ◼ A winning mindset and Simplifying the customer universe ◼ Strong technical expertise a performance culture ◼ Proposing multiple solutions to customers ◼ Global supply chain management ◼ Ongoing optimization of in order to meet their challenges ◼ Consumer-centric and service-oriented ◼ the business model Seizing highly profitable opportunities organizational structure that pave the way for game-changing ◼ ◼ A solid financial model Globally-recognized B2B brands developments ◼ 6 acquisitions generating €100m in revenue Growth track for €1 bn revenue target Our ambition 1 000 Revenue (€m) Full-year basis 730 Acquisitions: 600 > - Innovation - Game-changing 533 506 - Innovation - New markets & "bolt-on" October 2015: 499 - New markets - High value-added - Expanding the change in solutions 478 €72m raised from - High value-added value chain governance 5-year and 7-year solutions - Additional Euro PPs "Performance, operational €50m raised from €20m invested in a Discipline, Strengthening of segments new coating line 5-year and 7-year Ambitions" management Euro PPs program committees 2014 2015 2016 2017 Organic External After 1st Organic External By growth growth acquisitions growth growth 2021 (full-year) "Performance, Discipline, Ambitions" Game Changer Chargeurs Business Standards: operational excellence in the creation of global innovation champions Chargeurs – Investor Presentation – 2019 January ― 7
Our value creation drivers Product and services innovation Market segmentation Targeted acquisitions Customer Talent management closeness Industrial & logistics excellence Innovative marketing Digital at the heart of our processes Chargeurs – Investor Presentation – 2019 January ― 8
Successful deployment of the Game Changer performance acceleration plan SMART AND ADVANCED → Plan aimed at accelerating the MANUFACTURING Group's growth and profitability: Improving the performance of our production assets • launched in September 2017 Reducing our production costs TALENT Reducing our non-quality • covering 24 months MANAGEMENT costs • designed in collaboration with Implementing the SALES & Excellence Training Program all of Chargeurs' teams MARKETING Enhancing & expanding our “Young worldwide and focused on Developing the “soft skills” Talents & Seasoned Managers” of our sales teams program four key areas Improving our customer Optimizing our intimacy organizational structure Developing new INNOVATION marketing tools Reviewing our addressable → Objective: adjacent markets double profitable revenue by Accelerating the development of break-through innovations 2021 Upscaling our innovation capabilities, footprint and network Chargeurs – Investor Presentation – 2019 January ― 9
Business upscaled in the space of three years – a robust and distinctive performance Revenue up once again and strong increase in margins and cash generated by operations Revenue EBITDA Recurring Operating Profit 533.0 54.6 44.4 +5.3% +11.9% +14.1% 48.8 506.4 10.2% 38.9 +1.5% 498.7 8.3% +21.1% +27.1% 7.7% 40.3 9.6% 30.6 8.1% 6.1% €m €m €m 2015 2016 2017 2015 2016 2017 2015 2016 2017 Attributable profit Cash generated by operations • "Profit to cash" up sharply once again 36.6 +0.8% +22.0% • New thresholds crossed: 25.0 25.2 30.0 +24.5% EBITDA tops €50m +63.4% 24.1 & ROP tops €40m 15.3 €m €m 2015 2016 2017 2015 2016 2017 Chargeurs – Investor Presentation – 2019 January ― 10
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