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Q3 Report September 30, 2015
Investors presentation
November 19, 2015
Confidentiality
This presentation has been prepared by Marcolin S.p.A. and its affiliates. The information contained
herein is confidential and has been prepared solely for the needs of the adressee and is not to be relied
upon by any other person or entity. Hence, if you wish to disclose copies of this report to any other
person or entity, you must inform they that they may not use these reports for any purpose without
Marcolin written consent.
No representation, warranty or undertaking, express or implied, is made as to, and no reliance shoud be
placed on, the fairness, accuracy, completeness or correctness of the information or the opinions
contained herein.
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3
At a glance
Key consolidated financials: LTM
Viva Integration Project
Agenda
Appendix
Key consolidated financials: Q3 2015
At a glance Key facts 2015
> Project Fortogna
> Joint ventures
4
> Portfolio licences
5
At a glance
Key consolidated financials: LTM
Viva Integration Project
Agenda
Appendix
Key consolidated financials: Q3 2015
Key consolidated financials
* EBITDA is affected by a number of extraordinary items. For this reason it has been adjusted to restate the one-off effects deriving from the re-organization as
represented in “Consolidated Adjusted EBITDA” page 22.
Sales Consolidated Net sales increased +18.8% vs. PY; +8.6% at constant FX.
Mainly driven by TF (+€ 25.0m), GU (+€ 7.4m), SK (+€ 5.2m) and the EZ contribution
for € 8.8m.
323.4 Million EUR
EBITDA 2015 3Q EBITDA Reported is € 25.4m (€ 21.9m previous year).
2015 3Q Adjusted EBITDA* (excluding one-offs) is € 34.9m or 10.8% (€29.5m PY).
LTM Adjusted Run-Rate EBITDA for 2015 is € 50.9m or 12.3% on Net sales.
3Q 34.9 10.8%
On Net sales
Net Debt
295.6 2015 Constant FX
6
Consolidated Net Debt as of September 2015 is € 235.3m (€ 196,1m end of
December 2014), growing €39.2m vs. PY mostly due to Trade Working Capital
increase.
The ratio Net financial position to LTM Adjusted Run-rate EBITDA is 4.50.
Million EUR in 2014
272.2
4.50 NFP /
Adj LTM RR Ebitda
LTM 50.9 12.3% On Net
sales
235.3 Million EUR
YTD 3Q Consolidated Sales 323.4 million EUR
2015 YTD 3Q
@ const FOREX
+18.8% vs PY
Global sales By market destination
295.6 mill EUR +8.6% vs PY
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North America
Europe Asia
RoW
143.6 Mill. EUR
95.4 Mill. EUR
27.6 Mill. EUR
56.6 Mill. EUR
44.4%
29.5% 8.6%
17.5%
+11.4%
+23.5%
+38.4%
+13.0%
PY like-for-like perimeter
• Net Sales performance is positive: +€51.2m (+18.8%) above last year, driven by full recovery of Italy (+31.0%)
and growth of USA and Far East. In terms of brands the performance was driven by TF (+31%), SK (+69.4%), MB
(+22.7%), BA (+47.2%) and EZ launched in the first quarter 2015 (+8.6m).
• Net Sales @ constant FX +€23.4m or +8.6% vs. PY.
• GM in 2015 is €25.8m higher than that of the previous year, growing from €164.0m (or 60.3%) up to €189.8m (or
58.7%) in 2015. The negative price effect for certain product lines to accommodate specific market demands and
the negative volumes effect also influenced by the disruptions resulting from the move of the Distribution Center
from Arizona to New Jersey, were more than counterbalanced by an important positive brand mix effect and the
positive impact of exchange rates.
• EBITDA Reported in 2015 is €25.4m vs. €22.0m last year (respectively 7,9% vs. 8.1% of Net sales).
• EBITDA Adjusted, excluding one-off items, would be €34.9m vs. last year € 29.5m (in both periods 10,8% of Net
sales).
• Net Financial Costs of €17.6m in 2015 include €12.7m for Bond interests (of which €8.5m already paid in May). The
change in respect to previous year is mostly due to exchange rate differences, in particular explained by a higher
net result on US currency accrued in 2014, in addition to unrealized losses due to the devaluation of currency
Brazilian real incurred in 2015.
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YTD 3Q P&L Executive Summary
Consolidated Profit & Loss
9 9
Key financials: YTD 3Q
YTD September
(EURm)Actual 15
Reported
Actual 15
Reported %NS
Actual 14
Reported
Actual 14
Reported %NS
Net sales 323,4 100,0% 272,2 100,0%
Cost of sales (133,5) -41,3% (108,1) -39,7%
-- Gross Margin 189,8 58,7% 164,0 60,3%
Selling and marketing costs (150,4) -46,5% (129,1) -47,4%
General and administrative expenses (25,4) -7,9% (22,8) -8,4%
Other operating income and expenses 2,7 0,8% 2,0 0,7%
Effects of accounting for associates 0,3 0,1% 0,2 0,1%
-- OPERATING PROFIT (EBIT) 17,1 5,3% 14,3 5,3%
Net finance costs (17,6) -5,4% (8,4) -3,1%
-- Profit before taxes (0,5) -0,2% 5,9 2,2%
Income tax expense (5,3) -1,6% (2,8) -1,0%
-- Net Result (5,8) -1,8% 3,1 1,1%
-- EBITDA 25,4 7,9% 22,0 8,1%
-- EBITDA ADJUSTED 34,9 10,8% 29,5 10,8%
• Net Trade Receivables: compared to Dec 14, the increase of €8.4m is explained by the sales growth, the
business seasonality and also impacted by the foreign exchange rate difference for €2.1m. In the period total
consolidated DSO index is under control and increased by 2 days.
• Inventory: compared to Dec 14 has risen by €13.5m, mostly due to improve customer service aimed at reducing
delivery time, and to investing in supplies of continuing products (to be “never out of stock”). It has been also
impacted by the discontinuity represented new brands launched in 2015, and new JVs inventory. In addition it has
been influenced by a foreign exchange rate difference for €4.1m.
• Payables: in reference to trade payables, the improvement we had in the DPO at the end of 2014 (due to the
alignment of Viva and Marcolin’ suppliers payment terms to the longest time period), has been reabsorbed
during 2015. The higher amount as at Dec 14 was related to payables due to licensors also in connection with
renewal fees paid during 2015, and other payables due to capital expenditures.
• Capex: primarily consisted in the investments in the new Fortogna plant (tangibles), in addition to investments in
extending/improving terms and conditions of licenses (intangibles).
• Net Financial Position: September 2015 increased from €196.1m (Dec 14) to €235.3m, with a change of €39.2m
mostly due to TWC, as detailed in the consolidated Cash Flow Statement.
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B/S Executive Summary
Consolidated Balance Sheet
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Key financials: 3Q
Balance Sheet (EURm) Sep-15 Dec-14 Change vs Dec
Net trade receivables 75,3 66,9 8,4
Inventory 113,6 100,1 13,5
Payables to suppliers (90,1) (102,3) 12,2
TRADE WORKING CAPITAL 98,8 64,6 34,1
Other receivables 14,2 14,1 0,1
Other payables (35,3) (31,0) (4,3)
NET WORKING CAPITAL 77,7 47,8 29,9
Other receivables - medium/long term 38,2 39,4 (1,2)
Equity investments 2,0 1,9 0,1
Net tangible assets 28,0 24,7 3,3
Net intangible assets 40,3 37,2 3,1
Goodwill 285,4 278,0 7,4
FIXED ASSETS 393,9 381,1 12,7
Funds and reserves (10,3) (10,0) (0,2)
NET INVESTED CAPITAL 461,3 418,9 42,4
Financial debts - short term 63,7 41,4 22,4
Financial debts - medium/long term 201,7 199,2 2,6
FINANCIAL POSITION 265,4 240,5 24,9
Other current financial (25,6) (39,0) 13,3
Other non current financial (4,5) (5,5) 0,9
NET FINANCIAL POSITION 235,3 196,1 39,2
NET EQUITY 226,0 222,8 3,2
COVERAGE OF NIC 461,3 418,9 42,4
Net Financial Position
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Key financials: 3Q
1
2
(EURm) Sep 2015 Dec 2014
Short Term borrowings 63,7 41,4
Medium Long Term borrowings 208,8 207,2
Gross borrowings 272,5 248,6
Cash and cash equivalents 24,5 36,9
Financial receivables current 1,1 2,0
Financial receivables non current 4,5 5,5
Reported Net indebtedness befor Amortized Fees 242,3 204,1
Bond amortized fees (7,0) (8,1)
Reported Net indebtedness after Amortized Fees 235,3 196,1
Revolving Credit Facility 25,0 20,0
Short term borrowings from Banks 16,2 15,0
Financial Loan - Current 13,9 1,3
Vendor Loan (HVHC) - Short Term 1,8 1,7
Bond accrued interests 6,5 2,3
Financial leasing current 0,3 1,1
Short Term gross borrowing 63,7 41,4
Senior Secured bonds 200,0 200,0
Financial Loan - Non Current 5,3 3,8
Vendor Loan (HVHC) - Long Term 2,5 2,1
Financial leasing non current 1,0 1,4
Medium Long Term gross borrowing 208,8 207,2
Consolidated Cash Flow Statement
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Key financials: 3Q
(EURm) Sep 2015 Sep 2014 Dec 2014
Operating activities
Profit before income tax expense (0,5) 5,9 7,1
Depreciation, amortization and impairments 7,8 7,0 9,0
Accruals to provisions/ other non cash items 21,3 0,3 6,1
CF from operating activities before changes in WC, tax and int. 28,6 13,2 22,2
Movements in working capital (39,2) (10,7) (11,0)
Income taxes paid 0,2 (3,1) (3,6)
Net cash flows provided by operating activities (10,4) (0,6) 7,6
Investing activities
Purchase of property, plant and equipment (6,6) (4,0) (6,2)
Proceeds from the sale of property, plant and equipment 0,1 0,4 0,8
Purchase of intangible assets (7,6) (5,3) (6,7)
Acquisition of investment 0,1 0,0 (6,5)
Net cash from/(used in) investing activities (14,1) (8,8) (18,7)
Adjustments to other non-cash items (0,0) 2,9 (2,5)
Financing activities
Net proceeds from/(repayments of) borrowings 19,7 8,0 26,5
Interest paid (9,5) (9,0) (18,3)
Other cash flows from financing activities 1,0 0,0 0,0
Net cash from/(used in) financing activities 11,1 -1,0 8,2
Net increase/(decrease) in cash and cash equivalents (13,3) (7,5) (5,3)
Effect of foreign exchange rate changes 0,9 2,7 3,7
Cash and cash equivalents at beginning of period 36,9 38,5 38,5
Cash and cash equivalents at end of period 24,5 33,7 36,9
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At a glance
Key consolidated financials: LTM
Viva Integration Project
Agenda
Appendix
Key consolidated financials: Q3 2015
Revenues Analisys by market destination
Europe million eur Row ASIA North america million eur million eur million eur
15 Ex rate EUR/USD : 1,3549 in 2014 and 1,1145 in 2015
+11.4%
+7.5% +19.5%
+38.4%
+25.0% +10.7%
Key financials: LTM
+23.5% +13.0%
As of September, 30th Full Year
2015 Q3 % 2014 Q3 % 2015 LTM % 2014 %
Europe 95,4 29,5% 85,7 31,5% 140,1 33,9% 130,4 36,0%
North America 143,6 44,4% 116,3 42,7% 167,5 40,5% 140,2 38,7%
Asia 27,6 8,6% 20,0 7,3% 38,4 9,3% 30,7 8,5%
Rest of World 56,6 17,5% 50,2 18,4% 67,3 16,3% 60,8 16,8%
Total 323,4 100,0% 272,2 100,0% 413,3 100,0% 362,1 100,0%
Total @ constant FX (€ Mln) 295,6change vs. PY 8,6%
in € Mln, except percentages in € Mln, except percentages
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EBITDA REPORTED EBITDA ADJUSTED *
7.9%
ADJ RUN-RATE EBITDA **
% 2015 LTM on net sales
11.9% % 2015 LTM on net sales
8,1% in 2014 12.3%
% 2015 LTM on net sales
12,1% in 2014 13,9% in 2014
* excluding one-offs * including synergies
Ebitda performance – run rate ebitda post synergies (million eur)
Key financials: LTM
2015 LTM FY 2014 2014 SEPTEMBER LTM
NET SALES 413,3 362,1 349,2
% vs. PY 14,1% 4,6% 1,3%
EBITDA 32,8 29,4 23,7Adjustment 16,4 14,4 13,2
49,3 43,8 36,9
Management Fees 0,0 0,0 0,3Germany J/V 0,0 0,0 0,4
EBITDA ADJUSTED 49,3 43,8 37,7Synergies 1,6 6,4 8,5
ADJ RUN-RATE EBITDA 50,9 50,3 46,2
EBITDA ADJ % on Net sales 11,92% 12,10% 10,79%
EBITDA ADJ RR % on Net sales 12,31% 13,88% 13,23%
in € Mln, except percentages
CONSOLIDATED
17
At a glance
Key consolidated financials: LTM
Viva Integration Project
Agenda
Appendix
Key consolidated financials: Q3 2015
Integration Plan
18 18
Viva Integration
TOTAL
(*)
18 months
6 months
3 m
3 m
2014 2015
3 m
6 months
3 m
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
US
UK
France
Hong
Kong
Brazil
Canada
Germany
Integration Updates
19 19
Viva Integration
TOTAL
(*)
2014 2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
US
UK
France
Hong
Kong
Brazil
Canada
Germany
15 months
6 months
4 months
3 m
3 m
3 m
Distr.
15 months
Synergies & OTC
20
Synergies 2014 & 2015
One Time Costs 2014 & 2015
Viva Integration
in € Mln Original Budget Spent FY 2014 New Estimation FY 2015 3Q 2015 To Go
US (*) 6,4 6,3 11,2 4,9 -
UK 0,9 1,4 1,4 - -
France 1,0 0,9 2,4 1,5 -
Brazil 0,4 0,5 0,6 0,1 -
Hong Kong 0,3 0,3 0,3 - -
Total OTC 9,0 9,4 15,9 6,5 -
(*) US includes Canada estimated OTC, related to the integration project
in € Mln Original Budget Realized FY 2014 Estimation FY 2015 Realized 3Q 2015 To Go
US 6,1 3,0 6,6 2,7 0,9
UK 1,0 0,5 2,0 1,1 0,4
France 0,8 - 0,9 0,6 0,2
Brazil 0,4 - 0,4 0,3 0,1
Hong Kong 0,2 0,1 0,2 0,1 -
Total Sinergies 8,5 3,6 10,0 4,8 1,6
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At a glance
Key consolidated financials: LTM
Viva Integration Project
Agenda
Appendix
Key consolidated financials: Q3 2015
Consolidated Adjusted Ebitda
22
Appendix
in € Mln, except percentages YTD Q3 2015 YTD Q3 2014
EBITDA pre-adjustment 25,4 22,0
Costs of discontinued operations 2,4 -
Pro-Forma EBITDA 27,8 22,0
Senior management changes 0,6 1,2
Cost related to VIVA Integration 6,5 6,4
Total adjustments 7,1 7,5
EBITDA ADJUSTED 34,9 29,5
Net Sales 323,4 272,2
% on Net Sales 10,8% 10,8%
in € Mln, except percentages LTM 2015 FY 2014
EBITDA pre-adjustment 32,8 29,4
Costs of discontinued operations 2,4 -
Pro-Forma EBITDA 35,2 29,4
Senior management changes 1,4 2,0
Cost related to VIVA Integration 9,6 9,4
Other 3,0 3,0
Total adjustments 14,0 14,4
EBITDA ADJUSTED 49,3 43,8
Net Sales 413,3 362,1
% on Net Sales 11,9% 12,1%
EBITDA ADJUSTED RUN-RATE 50,9 50,3
% on Net Sales 12,3% 13,9%
Investor relation
Marcolin Contacts:
Massimo Stefanello
Corporate Managing Director
+39 0437 777111
Alessandra Sartor
CFO
+39 0437 777204
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