pfleiderer group strategy · sales revenues in 2016 above 3,500 qualified employees in poland and...

PFLEIDERER

GROUP

STRATEGY

Investor presentation

INSPIRATIONS CLOSE TO YOU

20th of September 2017

2

AGENDA

PFLEIDERER GROUP TODAY

COMPETITIVE ENVIRONMENT

TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY

DIAMOND STRATEGY – MAIN ASSUMPTIONS

SHARE BUYBACK – PARAMETERS OF THE PROGRAM

In the recent months there have been significant investments in management

capabilities and a strong team has been established

3

Source: Company Information.

September 2017

In the recent months there have been significant investments in management capabilities and a

strong team has been established

Joined in

November 2016 Joined in

August 2017

Joined in

June 2017

One of the leading fiber-panel manufacturer with cutting-edge technologies,

targeting the high-margin premium segment and attractive returns

Reorganization of the PFL Group is

successfully completed

Successful integration (One Pfleiderer)

– approx. EUR 32 m of targeted

synergies by the end of 2018

Strong cash generating

business

Targeted over EUR 60 m CAPEX

in 2017 supporting our growth strategy

Stable dividend policy –

approx. PLN 71.2 m (EUR 16.8

million) dividend paid to

shareholders in 2017 – 1.1 PLN

per share

Company listed on the

Warsaw Stock Exchange since 1997

Approx. 930 m euros

sales revenues in 2016

Above 3,500 qualified employees

in Poland and Germany

4

Buyback program of up to approx. PLN 390 m

- an additional form of sharing profits with

shareholders

September 2017

Increase in EBITDA margin: 13.1% in H1, 2017

compared to 10.6% EBITDA margin in H1, 2016

Consistent reduction of net

financial leverage ratio: 1.93

as of H1, 2017

Savings out of operational

improvement program of

EUR 12.5 m in H1, 2017

5

Source: Company information.

The Group’s manufacturing and service facilities offer seamless service to

pan-European markets

The Group is able to provide advanced products and

customer service for key European markets through its

service departments located in the UK, the Netherlands,

Switzerland, France, Austria and Romania.

September 2017

Positive management initiatives launched in 2017 have been offset by tough

procurement cost rises

6 September 2017

Quantitative elements – EBITDA development Improvement actions

(EUR m) New Management Board – installment of a new

management team

New Design collection – launch of Pfleiderer‘s One

Collection

Smart pricing tactics – new pricing approach

implemented

One SAP roll-out – One SAP as a basis for one

harmonized process and application landscape

New operational improvement programs – major

initiatives started

New capex projects – High impact CAPEX projects

initiated to support further growth

Refinancing project completed – extensive refinancing

project led to significantly reduced finance costs EBITDA counter-effected by heavy headwinds

Raw material prices – Massive increase of raw material

prices in H1-2017

47

EBITDA sust.PY

Sales &Purchase

Price Effects

Volume &other effects

Improvementprogram

contribution

EBITDAreported ACT

93.5

121.4 119.2 110

10.1%

12.6% 12.1% 11.4%

2013 2014 2015 2016* 2017 2018 2019 2020 2021

EBITDA EBITDA margin

924 960

985 960

2013 2014 2015 2016* 2017 2018 2019 2020 2021

2018 has substantial potential for profit growth

7

* 2016 shows EBITDA reported (110 MEUR) and sustainable EBITDA (149 MEUR); For 2016, the financial information include the full 12 month as it does not reflect that the first-time consolidation of Pfleiderer

Group occurred on January 19, 2016. Therefore, the financial information above will not be fully comparable with the reported audited consolidated financial statement of the Group for the year ended 31 December

2016.

Pfleiderer GmbH - Turnaround

EBITDA (EUR m) and EBITDA margin (%)

Net sales revenue (EUR m)

Pfleiderer Group - Respositioning

September 2017

Targeted level of sales revenue in

2021:

EUR 1.2 bn

Targeted EBITDA margin ≥

16%

Margin improvement i.a. out of:

• One Pfleiderer savings

• Operational improvements

• Sales revenue growth, i.a. through:

• Smart pricing

• Value-added products

strategy

Targeted CAGR 2016-2021

5.1%

Targeted CAGR 2016-2021

13.7%

149 15.5%

Sustainable EBITDA and reported

will be the same going forward

132 13.4%

95.0

Sustainable & sust. EBITDA margin (%)

10.2% 120

12.5%

Sustainable EBITDA

Reported EBITDA

8

Disciplined management initiatives are delivering significant EBITDA

contribution and will continue to do so

September 2017

mEUR

Cumulative synergy effects

Key targets

Pfleiderer Group

2016 2017 2018

Synergies out of integration (One Pfleiderer )

Budget 12.3 22.8 30.0

Realized/target 19.1 27.4 32.6

Operational improvement program

Budget 1.5 23.9 33.3


Sales Growth / Business Development & others

Budget 9.8 17.3 30.1


Alignments

Budget 0.0 -5.6 -11.7

Realized/target 0.0 -4.6 -14.7

Total

Budget 23.6 58.4 81.8


The year 2018 will be one further step for profitable growth

9 September 2017

5-step plan under execution to further strengthen EBITDA result

153

EBITDA target2017

New 'smart' pricing- recovery of 2017

raw materialsinflation

Successfulintegration

Improved capacityutilization

Successfulimplementation of

capex projects

Cost reductioninitiatives

EBITDA target2018

1 2 3 4 5

Market

driven factors

Company internal

actions >

10

AGENDA






11

Strong macroeconomic environment across Europe is supporting stable

future growth

North West Core (est. 2018 GDP

growth):

United Kingdom +1.2%

Ireland +3.3%

Sweden +2.1%

Denmark +1.8%

Finland +1.5%

Norway +1.5%

West Core (est. 2018 GDP

growth):

France +1.7%

Belgium +1.6%

Netherlands +1.8%

Luxembourg +3.9%

Central (est. 2018 GDP

growth):

Germany +1.8%

Austria +1.6%

Switzerland +1.9%

South (est. 2018 GDP

growth):

Italy +1.1%

Portugal : +1.5%

Spain +2.1%

South East (est. 2018 GDP

growth):

Albania +3.5%

Bosnia-Herzegovina +3.2%

Bulgaria +2.8%

Croatia +2.5%

Greece +3.1%

Macedonia +2.8%

Moldova +2.5

Romania +3.7%

Serbia +2.3%

Slovenia +3.0%

Est. GDP

growth rate in

2018:

4.00-3.00

2.90-2.00

1.90-1.00

0.90-0.00

Est. GDP growth in 2018:

EU: 1.8%

DACH*: 1.8%

Poland: 3.1%

Germany: 1.8%

Source: European Comission, European Economic

Forecast Winter 2017.

OECD, Data, World Bank Forecasts

* DACH is defined as Germany, Austria and Switzerland.

East Core (est. 2018 GDP

growth):

Poland +3.1%

Czech Republic +2.7%

Estonia +2.6%

Hungary +3.2%

Latvia +3.0%

Lithuania +2.8%

Slovakia +3.6%

September 2017

Positive outlook for Pfleiderer core markets

Stable GDP growth in Poland driven by private consumption

Solid labour market, exports and construction boom enable further

growth in Germany

100

100,9

102.3

104.6

107.0

109.4

110.2

111.3 111.7

100

100.9

103.7

106.4

108.9

111.3

112.7

114.0

114.9

100

101.9

104.8

106.6

108.3 108.8

110.2

110.6 110.7

100 100.5

100.6

102.1

104.0

106.7

109.4

111.1

112.2

2013 2014 2015 2016 2017 2018 2019 2020 2021

Construction Furniture industry Door industry Wholesale

Treiber HWS [Basis 2013=100]

Germany

• Positive trend in German residential construction

• The major driver is expected to be the new building segment in

residential construction, which covers the key target markets for

Pfleiderer product segment

• Increasing exports driven by demand for German furniture

Source: Reputable industry information provider, April 2016.

12

Promising growth for Pfleiderer target markets in the Construction, Furniture,

Door & Wholesale business (1/2)

Poland

• Poland is the fourth largest furniture exporter in the world in terms of

value (6.3% of the world’s furniture export)

• Poland is the second largest furniture exporter in the world in terms of

tonnage

• The favourable economic situation as well as the high demand for

apartments, supported by governmental grant programs should be one of

the main growth drivers

100

101,9

103.3

105.6

108.0

110.4

113.2

115.2

117.3

100

103.8

106.8

109.2

112.5

115.3

118.0

120.8

123.2

100

101.9

105.8

110.3

113.9

116.6

119.5 120.8

122.0

100 101.6

102.8

104.7

106.8

108.7

110.8

112.4

114.0

2013 2014 2015 2016 2017 2018 2019 2020 2021



An outperformer in

European landscape

Source: Polish Chamber of Commerce of Furniture Manufacturers,

B+R Studio of analysis Polish Furniture Market.

September 2017

13

Source: Reputable industry information provider, FRA July 2016.

94.7

92.1

93.2

93.9

95.5

97.0

98.1 98.5

98.5 99.0

100.2

101.2

102.3 102.9

103.2 103.0

100.0

97.0

94.9 95.4

97.0

99.1

100.4

101.4 101.9

98.3

97.4

98.7

100.1

102.0

103.2 104.1

104.5

2013 2014 2015 2016 2017 2018 2019 2020 2021



Promising growth for Pfleiderer target markets in the Construction, Furniture,

Door & Wholesale business (2/2)

France

• Recovery expected after declining trend over the last three years

• Increasing share of timber frame construction and growing prefab

housing market

99.9

101.3

103.5

105.9

108.3

110.9

112.9

115.0

99.2 98.7

99.3

100.4

102.3

104.4

107.4

110.1

100.0

96.2

95.4 95.6

98.6

103.0

107.1

110.2

112.2

95.2

93.0 92.5

93.7

95.7

98.0

100.2 102.2

2013 2014 2015 2016 2017 2018 2019 2020 2021



• Vast backlog demand for residential housing after harsh downturn until

2014

• Solid residential construction growth one major driver

• Non-residential construction slowly recovers since 2015

• Slow recovery of furniture industry due to improving consumer climate but

limited by imports

Italy

September 2017

14

56.7 60.6 62.1 61.5

114.1 113.5 113.0 112.4

170.8 174.2 175.1 173.9

2016E 2017E 2018E 2019E

31.4 31.7 31.4 31.2

49.2 49.4 49.4 49.2

80.5 81.1 80.8 80.4

2016E 2017E 2018E 2019E

9,6 9,8 10,2 10,8

3.4 3.5 3.6 3.7 13.0 13.4 13.9 14.5

2016E 2017E 2018E 2019E

13.1 13.4 13.9 14.6

5.0 5.1 5.2 5.3 18.1 18.5 19.1 19.9

2016E 2017E 2018E 2019E

Continued recovery of the housing market driven by investment increase

caused, among others, by:

low interest rates

National Housing Programme ’’Flat Plus”

Future rise of non-residential market driven by beneficial situation in both

public and private sector caused by absorption of EU funds and growing

economy

Highly competitive and largely export-driven Polish furniture business raises

its share in the European market

Residential market growth is driven by new construction mainly due to:

very low interests rate level,

rising real income levels,

additional demand for residential accommodation

Non-residential market growth is limited due to continued caution in public

spending

Renovation in both residential and non-residential segments has been

stable

Source: Reputable industry information provider. New RMI (Renovation, Maintenance, Improvement)

Resid

en

tial

mark

et

(€b

n)

No

n-r

esid

en

tial

mark

et

(€b

n)

Resid

en

tial

mark

et

(€b

n)

No

n-r

esid

en

tial

mark

et

(€b

n)

Both core markets, Germany & dynamic Poland are driven by new residential

construction which will bolster the sales growth

Germany

Poland

+3.1

(0.1)

CAGR

16E-19E

+1.5

+1.8

September 2017

DA

CH

(a)

Po

lan

d

3.73 3.76 3.79 3.82 3.80

2015 2016 2017 2018 2019

(a)DACH defined as Germany, Austria and Switzerland | Source: own calculation based on data from reputable industry information provider (July 2017).

Raw Chipboards MFC MDF/HDF HPL/CPL

3.10 3.14 3.22 3.26 3.27

2015 2016 2017 2018 2019

3.26 3.27 3.31 3.34 3.37

2015 2016 2017 2018 2019

75.76 77.21 79.02 80.46 81.22

2015 2016 2017 2018 2019

1.8 1.87 1.95 2.03 2.09

2015 2016 2017 2018 2019

2.11 2.22 2.30 2.37 2.43

2015 2016 2017 2018 2019

1.11 1.17 1.22 1.27 1.31

2015 2016 2017 2018 2019

7.62 7.91 8.16 8.39 8.62

2015 2016 2017 2018 2019

M cbm M cbm M cbm M m2

+0.8%

Solid market demand for WBP will support sales growth in Germany and

Poland

15

+0.7% +0.8% +1.4% -0.5% +2.6% +1.2% +0.2% +0.1% +1.3% +0.8% +1.0% +1.9% +2.3% +1.8% +0.9%

+4.0% +3.9% +4.1% +3.0%

+5.0% +3.8% +3.1%

+2.8%

+5,1% +4.4%

+3.7% +3.1% +3.8% +3.2% +2.9%

+2,7%

September 2017

16

AGENDA






Particleboard Wood panel1 capacity

in Europe by country MDF/HDF

Germ

any

Pola

nd

German

y

Poland

Germany

18%

Poland

11%

Note: Capacity share as at Aug-17 based on operating capacity.

(1) Includes PB, and MDF. Total country capacity as % of total total European capacity excluding Russia and Turkey.

Source: EPF (Aug-17).

1

2

1 6

5

2

Pfleiderer Group 30%

No 2 16%

No 3 10%

No 4 10%

Others 35%

Pfleiderer Group 38%

No 1 43%

No 3 19%

17

Top market positions in the two most important European markets – scale will

continue to deliver sales opportunities

Capacity share Capacity share

No 1 22%

No 2 19%

No 3 18%

No 4 15%

No 5 11%

Pfleiderer 9%

No 7 6%

No 1 52%

No 2 17%

No 3 13%

No 4 9%

Pfleiderer 9%

September 2017

Characteristics: Volume

LOW PRICE

SEGMENT

MIDDLE-

PRICE

SEGMENT

UPPER-PRICE

SEGMENT

Product portfolio:

MFC coloured

HPL

Lacquered boards

Decorative specialties

Value-added service

65% value-added

products

25%* basic products

*10% - other products – Electricity, Resin Silekol, Impregnation paper, Edges and paper foils.

** Number 1-5 represent competitors of Pfleiderer

Source: Company information.

18

Pfleiderer follows a premium strategy and is targeting the high margin

value-added segment - aimed at delivering higher returns

1**

September 2017

2**

3**

4**

5**

Pfleiderer Awards | Products

19

Successful award track record proves our value-added market strategy

Pfleiderer Awards | Structures

Pfleiderer Awards | Company

September 2017


https://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjl0YOPibDSAhVGFCwKHfLBAIEQjRwIBw&url=https://www.linkedin.com/company/frapol-sp.-z-o.o.&psig=AFQjCNGyQ9LQFicqwE2xTT74JcQIV2hgWQ&ust=1488277833950682

https://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwilqYWNjrDSAhUJWywKHe6XBKEQjRwIBw&url=https://www.yankodesign.com/2015/10/02/the-if-design-awards-2016-are-you-ready-for-this/&psig=AFQjCNHz1Nu_5GT0mmKf6sLBg3XKQXx0NQ&ust=1488279171723763

20

AGENDA






Our strategy sets the direction for the coming years

21

A smart market segmentation will drive our sales strategy and will enable

a value-added customer proposition

Our salesforce will harvest the new capacity, implement smart pricing and active

product portfolio management

We will focus on operational excellence & disciplined capacity

debottlenecking

Our culture will become more cost conscious and performance driven

September 2017

Attractive shareholder value will be delivered by strong cash generation, attractive dividend

policy, potential additional share buyback programs and open investor relations

communication

Pfleiderer Strategy – the diamond approach

22

SHAREHOLDER

VALUE

Lean organization

Sound financial basis

Active investor relations

Attractive dividend policy

Available net cash will be distributed to

shareholders

OPERATIONS

PEOPLE

Target oriented leadership (MBO)

New Management Team

Lean organization

People recruitment and development

Talent program

Succession plan

SALES & Marketing

Market segmentation & strategy

Organic growth & value-added

product strategy

Sales excellence program

New Design Collection

Target group marketing

PFL Academy

PFL DIAMOND

APPROACH CORPORATE

CULTURE

Empowerment

Cost consciousness

Diversified workforce

International management approach

Employee survey

Mid-term programs

Lean Six Sigma - LSS

Procurement excellence

World class manufacturing

Next 12 months

Uptime & productivity

Capacity ext. / debottlenecking

Value-added technologies

Procurement savings

NWC optimization

IMPROVEMENT PROGRAM FAFIO

September 2017

Please note: Bold text passages reflect key initiatives for generating growth

Sales strategy – to boost organic growth in gross sales revenue and increase

profitability till 2021

23

Sales & Marketing

Smart & focused customer segmentation

Focus on growth for higher value-added products

Implement Commercial Excellence Program

Selective approach in Export markets to focus on

the most profitable customers

Harvest new product developments

1

2

3

4

5

September 2017

• Identify and enter into new sub-segments of high potential

target industries

• Develop and implement unique product and service offerings

• Specialized and trained sales force teams

• Industry leading range of premium products & Design Collection

• New trendy décors & surfaces

• Innovative carrier materials

• New level of service orientation supported by CRM approach

• Extensive Academy offerings for Pfleiderer customers

• Digitalization – strong partner for customers going “digital”

• Develop smart and disciplined pricing tactics

• Focus on most attractive markets

• Superior “Made in Germany” labeled products

• Local presence for ultimate customer convenience

• Innovative product pipeline to satisfy changing customer needs

Continuous improvement programs will deliver continued competitiveness

24

Operations

1) Until 2016 (base year 2014).

2) Base year 2015, improvement uptime of all CPL, MDF and PB lines until 2018.

3) Base year 2015, targeted increase in productivity of all CPL, MDF and PB lines until 2019.

4% overall production

volume increased

Uptime improvement by +4% targeted 2)

Productivity improvement by +5%

targeted 3)

Comprehensive production cost

optimization until the end of 2019

Realization of short-term procurement

savings & NWC optimization

World Class Manufacturing approach (WCM)

Procurement excellence program

September 2017

Historic performance 1)

✓

1% out of uptime ✓

Short-term operational activities

Successful integration (One

Pfleiderer) – approx. EUR 32 m of

targeted synergies by the end of

2018

Capacity ext. / debottlenecking

investments

Invests in value-added

technologies

Mid-term activities

Targeted total savings out of

operational improvement program of

EUR 41.6 m until 2018

700

800

900

1000

1100

1200

0

0,1

0,2

0,3

0,4

0,5

0,6

2017 2018 2019 2020 2021

Sales EBITDA CAPEX

Capex projects to drive organic growth targets and capacity

– >50% of the expected sales increase is from value-added linked investments

25 September 2017

Investment Capex Targeted outcome

(per annum)

Projects already in operation:

“4-pack” investment to diversify

MDF product mix (Grajewo)

Increase of lacquering capacity by about 30%

Sanding line

Cut to size

Custimization

EUR 10.0 m Sales revenue increase by EUR 17-20 m

and margin EUR 1.5-2.0 m

Worktop line (Wieruszów) EUR 3.0 m Sales revenue increase by EUR 4.5 m

and margin EUR 1.3-1.6 m

Dynasteam (Wieruszów) EUR 3.0 m EUR 6 m sales revenue and EUR 1.2 m

margin

Projects under execution:

Sanding Line (Neumarkt) EUR 6.2 m EUR 2.0 m EBITDA

Recycled wood (Neumarkt) EUR 9.6 m EUR 5.0 m EBITDA

Lacquering line (Leutkirch) EUR 12.3 m EUR 8.4 m EBITDA

Silekol Growth Plan (Kędzierzyn-Koźle) EUR 12.4 EUR 6.4 EBITDA

Operations

Plenty of empty capacity will support further sales growth

26

Operations

September 2017

Short-term operational activities

100%

103%

106%

108% 108%

2017 2018 2019 2020 2021

Raw Chipboards

100%

104% 106%

108%

113%

2017 2018 2019 2020 2021

MDF Pfleiderer has more than enough capacity to meet simulated

volumes

Smart CAPEX projects will boost further production capacity

Debottlenecking and product allocation management will

support capacity growth rates

Above 65% of the total raw chipboard production volumes are

further processed to value-added products such as MFC and

elements

Simulation of production volumes development*

100% 102% 108%

123% 125%

2017 2018 2019 2020 2021

MFC

100% 110%

119% 131%

146%

2017 2018 2019 2020 2021

HPL

100%

122% 139%

167%

211%

2017 2018 2019 2020 2021

Elements

Base year = 100%

Utilization rate = forecasted production volume / available capacity; available capacity is simulated based on a maximum feasible shift model.

Please note: the production development of HPL and elements is based on theoretical projection of the maximum capacity without consideration of the availability of

primary products and potentially required infrastructure measures / investments.

Massive empty capacity

for value-added

products Utilization rate in 2017:

68%*

Utilization rate in 2017:

47%*

> Focus area: high value-added products

Utilization rate in 2017:

94%*

> Raw boards

Organic growth drivers

GROWTH

FIELDS • Capacity extension / debottlenecking

• New (value-added) technologies

• Resin growth strategy (Silekol)

IMPROVEMENT PROGRAM SMART INVESTMENTS

FOUNDATION Finance metrics in our business case*:

• Min. EBITDA margin of 16%

• Equity ratio > 30%

• Target level of net financial leverage is between 1.5x and 2x EBITDA

• Net financial leverage is considered without factoring which is off-balance and non-recourse

• Dividend payment: up to 70% of net income

27

• Uptime improvement (+4%)1)

• Productivity improvement (+5%) 1)

• Purchasing offensive

1) Uptime improvement of all CPL, MDF and PB lines +4% from base year 2015 until 2018;

productivity improvement of all CPL, MDF and PB lines +5% from base year 2015 until 2019.

2) FY 2016 consolidated financial results are presented for the 12 months period ended 31

December 2016.

Pfleiderer strategy & execution to deliver superior EBITDA returns of >16% by 2021

Shareholder value and financials

September 2017

Sales revenue: EBITDA EBITDA margin Net financial leverage CAPEX

20162

2021 Key targets

EUR 1.2 bn

EUR 930 m EUR ~110 m

Min. EUR ~200 m

11.8%

Min. 16% Ø EUR 70 m

p.a., incl. EUR 20 m of

maintenance CAPEX p.a.

EUR 52 m 2.2

< 1.5

2017 2018 2019 2020 2021

~ EUR 1.2bn SALES GROWTH of €960 in 2016 to €1.2B in 2021

Driven by existing product growth initiatives:

GROWTH ABOVE €1.2B

Mix of innovation and pricing / marketing improvement

GROWTH INITATIVES

> ‚BASE CASE‘

28

Pfleiderer - a clear strategic roadmap for sales revenue growth until 2021


1. “4-pack” investment in Grajewo to diversify MDF

product mix

2. Worktop line Wieruszow

3. Dynasteam injection Wieruszow

4. Sanding line / 21 shifts MFC Neumarkt

5. Lacquering line

6. Growth in HPL / Elements

7. Resin growth strategy (Silekol)

September 2017

1. Further product innovations: Smart Surfaces, Balance

Board, Living Board, Premium Board, HPL for exterior

2. New Design Collection

3. Strategic pricing

4. Industry market segmentation strategy (individual

penetration of kitchen, bath& office customers) and PFL

Academy

> UPSIDE POTENTIAL

160

EBITDA target2017

Recovery of rawmaterials pricing

Existing productpushes

New productlaunches & Sales

strategy

Capacity utilisation Cost out EBITDA target2021

29 September 2017

Components of EBITDA growth to 2021

1 2 3 4 5

› Ongoing pricing

actions

5-step plan under execution to further strengthen EBITDA result

› “4-Pack”

› Worktop line

› Dynasteam

› Lacquering line

› HPL / Elements

› Etc.

› Smart surfaces

› Balance board

› HPL for exterior

› New market

segmentation

› Debottlenecking

& revised

utilization

strategy

› Operational

improvement

program and other

cost improvement

initiatives –

Procurement,

Logistics, SG&A,

› Production costs

30

Approx. 20% increase of the capitalization in January – August 2017, outperforming

WIG-index


• The market capitalization of the company increased in the period

January-August 2017 by approx. 20%.

Market ticker PFL

Market

capitalization PLN 2.71 bn*

Free float 31.91%

Indices

mWIG40 (1.85%)

WIG (0.44%)

WIG-Poland (0.45%)

Source: www.infostrefa.pl *As of 31 August 2017

0,00

0,50

1,00

1,50

2,00

2,50

Rates of return (19.01.2016-31.08.2017)

Pfleiderer Group (% change) WIG index (% change)

%

September 2017

31

The Company, after fulfilling the legal requirements and depending on market conditions,

intends to allocate up to 70% of consolidated net profit for dividend payment


On 19 July, 2017 Pfleiderer Group paid to shareholders a dividend in the amount of approx. PLN 71.2 million, i.e. 1.1 PLN per share.

Dividend yield: 2.5%*.

An additional form of sharing profits with shareholders is the buyback program of up to approx. PLN 390 million:

• The Company may repurchase up to 6,470,100 ordinary bearer shares representing jointly no more than 10% of the Company's

share capital.

• The repurchase price of the shares cannot be lower than PLN 0.33 per share nor higher than PLN 60 per share.

• The authorisation granted to the Management Board for the repurchase of the shares runs until 30 June 2018.

• The shares acquired may be:

• used for a Company incentive program, subject to Supervisory Board approval,

• Redeemed, or

• otherwise disposed, if needed.

Approx. PLN 71.2 million dividend

paid to shareholders in 2017

Up to approx. PLN 390 million –

allocated to buyback program, until

30 June 2018

September 2017

*As of a dividend date.

• Attractive shareholder value will be delivered by strong cash generation, attractive dividend policy, potential additional share

buyback programs and open investor relations communication

32

AGENDA






33

Rationale

September 2017

Superior form of earnings distribution vs. dividends

Shares are currently undervalued by the market

Liquidity event for shareholders

Creation of a long-term incentive program (LTIP)

Existing shares more effective than issuing new shares

No dilution of current shareholders

Major Shareholders: SVP and Atlantik announced that they

will not participate in the program

Timeline

Subscription period:

21 September – 5 October, 2017

Trade date:

10 October, 2017 Settlement date:

12 October, 2017

Share buyback

Key parameters

3,235,050 shares

5% percent of capital

Price: PLN 47.00

34

Rationale

September 2017

Focus on sustainable share price increases as a measure

of the long-term value of the company

Further motivation for management to create value

Strong alignment of incentives between management and

shareholders

Compensation paid only upon achievement of results

Costs for the Company will be minor

Key parameters

Duration: 5 years

Max # of shares: 2.745.749

Max % of shares: 4.86%

Exercise Price: PLN 40

Vesting of shares based on

70-day VWAP on the WSE

(adjusted for dividends):

Timeline Timeline

5% 10%

18%

28%

50%

100%

0%

20%

40%

60%

80%

100%

120%

40 47 55 63 70 80

Long-Term Incentive Plan (1/2)

0.21% 0.42%

0.74% 1.17%

2.12%

4.86%

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

40 47 55 63 70 80

35

Participation by key Mgmt and SB members:

September 2017

Tom K. Schäbinger, CEO

Richard Mayer, CFO

Zbigniew Prokopowicz,

Chairman of the SB

Ivo Schintz, CCO

Dirk Hardow, COO

Michael Keppel,

Deputy Chairman of the SB

Unallocated

1.75%

0.61%

0.44%

0.61%

0.61%

0.22%

Long-Term Incentive Plan (2/2)

Tom K. Schäbinger

1.75

Richard Mayer

0.61 Ivo Schintz

0.61

Dirk Hardow

0.61

Zbigniew

Prokopowicz

0.44

Michael

Keppel

0.22

0.61%

Unallocated

0.61

Strategy mission – Our Direction

36

A smart market segmentation will drive our sales strategy and will enable

a value-added customer proposition

Our salesforce will harvest the new capacity, implement smart pricing and active

product portfolio management

We will focus on operational excellence & disciplined capacity

debottlenecking

Our culture will become more cost conscious and performance driven

September 2017

Attractive shareholder value will be delivered by strong cash generation, attractive dividend

policy, potential additional share buyback programs and open investor relations

communication

37

Appendix

Pfleiderer Group S.A. Management Board

38


September 2017

Strategy

Human Resources

Internal Audit

Investor Relations

Corporate

Development

Accounting / Tax

Controlling

Treasury

Legal affairs / GRC

PMO

Sales Core Markets

Sales Export and

Projects

Marketing /

Communications

Product Management

R & D

Production

Engineering

Purchasing

Technology

Health & Safety

Environment

Supply Chain

Customer

Management

Quality Management

IT


39


September 2017

Mr Tom K.Schäbinger (born in 1962)

Graduated from the Vienna University of Economics & Business (Business Administration) and

Secondary School for Mechanical Engineering in St. Pölten

Has been working as CEO for Bundy Refrigeration Group (cooling technology provider) since 2015

and has been managing partner of TS TRUST GmbH (a capital investment company) since 2014.

Between 1998 and 2014 held several positions in Mondi Europe and International (formerly known

as Frantschach – a packaging and paper group with global operations), including several positions

as Chief Executive Officer.

Previously, worked in various management positions including at Unilever and at Beiersdorf.

Mr Richard Mayer (born in 1962)

Has a degree in economics

Held top management positions at Reichard, CON MOTO, Wacker Neuson SE. In Wacker Neuson

SE also held the position of Member of the Management Board.

Since January 2013 has been working for Pfleiderer Group as a CFO.

Until January 19th, 2016 held a position of Member of Pfleiderer Grajewo Supervisory Board.


40


September 2017

Mr Ivo Schintz (born in 1957)

Completed National Agricultural College in Deventer in Netherlands with a title of Engineer and

obtained International Management MBA title at Thunderbird School of Global Management in USA.

Since 1997 has been working for Tarkett SA – a worldwide leader of innovative and sustainable

flooring and sports surface solutions - in various management positions.

Since 2004 has been holding a position of Vice President, member of executive committee of divison

EMEA ( Europe, Middle East, Africa) and since 2011 has been holding a position of Area Vice

President for Central Europe activity.

Previously, worked in various management positions including Philips Lighting BV and Dokkumer

Vlaggen Centrale BV.

Mr. Dirk Hardow (born in 1965)

Graduated from the Technical Univeristy of Hamburg, where in 1993 he graduated in Industrial

Engineering & Management (“Hochschulübergreifender Studiengang Wirtschaftsingenieur”).

Since 2011 was associated with US corporation Owens – Illinois Inc. Within the Owens – Illinois Inc

structures was i.a. the Vice President of European Operations (August 2011 – May 2015) and since

October 2013 was the Vice – Chairman of the Board of Vetrerie Meridionali, a glass manufacturing

company.

Since June 2015 was the General Manager for South East Europe, where he was responsible for the

operations of 11 factories in Italy and Hungary.

From October 2011 to April 2013 was a Member of the Board of Directors of Maltha Groep BV, a glass

recycling company.

Previously, worked on the management positions i.a. at Cremer-Group, Rohm and Hass Company as

well as H.B. Fuller Company.

Glossary / definitions

41

EBITDA: results from operating activities + depreciation and amortization

EBITDA margin: EBITDA / total sales revenue

Equity ratio: total equity / total assets

Net financial leverage: Net financial debt / EBITDA.

Net financial debt : total loans and borrowings - cash and cash equivalents

All above financials are on a consolidated basis i.e. they refer to financial results and financial position of the Group

September 2017

42

IR contact

IR Contact: Katarzyna Szczepaniak

InnerValue Investor Relations

[email protected]

+48 500 037 347

Disclaimer

43

This document and the information contained herein (unless otherwise indicated) has been prepared by Pfleiderer Group SA (referred to herein as the “Issuer”) solely for

informational purposes. For the purposes of this notice, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the

Issuer or any person on behalf of the Issuer, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials

distributed at, or in connection with the presentation (collectively, the “Presentation”). By attending the meeting at which the Presentation is made, or by reading the

Presentation, you will be deemed to have (i) agreed to all of the following restrictions and made the following undertakings and (ii) acknowledged that you understand the

legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the Presentation.

The information contained in this Presentation is private and confidential and may not be reproduced, redistributed or disclosed in any way, in whole or in part, to any

other person without the prior written consent of the Issuer. This Presentation does not purport to contain all the information that may be required by the recipient to make

an evaluation. The Issuer prepared this Presentation on the basis of information which it has and from sources believed to be reliable. To the extent available, the industry,

market and competitive position data contained in this Presentation come from official or third party sources. Third party industry publications, studies and surveys

generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of

such data. While the Issuer believes that each of these publications, studies and surveys has been prepared by a reputable source, the Issuer has not independently

verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in this Presentation come from the Issuer's own

internal estimates based on the knowledge and experience of the Issuer’s management in the market in which the Issuer operates. While the Issuer believes that such

estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or

completeness and are subject to change without notice. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data

contained in this Presentation. The Issuer is not under any obligation to update or keep current the information contained in the Presentation.

This presentation contains certain financial data that are non-IFRS measures (“Non-IFRS Measures”). These Non-IFRS Measures, as defined by the Issuer, may neither

be comparable to similarly titled measures as presented by other companies, nor should they be considered as an alternative to the historical financial results or other

indicators of the Issuer’s performance based on IFRS.

This presentation may contain certain forward-looking statements, forecasts, estimates, projections and opinions ("Forward-looking Statements"). By their nature, Forward-

looking Statements involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will

occur in the future whether or not outside the control of the Issuer. No representation is made or will be made that any Forward-looking Statements will be achieved or will

prove to be correct. Actual future results and operations could vary materially from the Forward-looking Statements. Similarly, no representation is given that the

assumptions disclosed in this Presentation upon which Forward-looking Statements may be based are reasonable. The recipient acknowledges that circumstances may

change and the contents of this Presentation may become outdated as a result. The assumptions and key targets included in this presentation do not constitute profit

forecasts and/or profit estimates.

The presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or

acquire the Issuer or the Issuer´s securities, or an inducement to enter into investment activity in any jurisdiction in which such offer, solicitation, inducement or sale would

be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction. No part of this presentation, nor the fact of its

distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever . This presentation is not for

publication, release or distribution in any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction nor should it be taken or transmitted

into such jurisdiction.

September 2017

pfleiderer group strategy · sales revenues in 2016 above 3,500 qualified employees in poland and...

Documents