sacks and the city - fastmarkets risi...industry performance 225 175 containers & 200 packaging 150...

Sacks and The CitySacks and The City

Nicholas MockettMarch 2016Nicholas Mockett

Overview1. Introduction

2. Industry performance

3. Industry attractions

4 Global packaging M&A4. Global packaging M&A

5. Outlook

2

IntroductionMoorgate Capital is an independent Corporate Finance firm specialising in:

Mergers, Acquisitions & Disposals

Buy Outs

Capital Raising

d Strategic Advice

Public Company Advice & Fairness Opinions

Cli t i l d lti ti l bli i l di fi i l i t iClients include multinational public companies, leading financial sponsors, private companies, family offices, management teams, banks and state owned enterprises.

Clients benefit from:

Focus on upper mid market: Enterprise Value US$100m – US$1bn

Our investment in long term relationships

Lack of conflicts of interest

Deep sector knowledge globally

Industry specific Panel of Senior Advisers Industry specific Panel of Senior Advisers

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Key ContactsSir Peter Heap pheap@moorgate‐capital.comChairman Tel: +44 20 7060 7017Sir Peter was with the Foreign & Commonwealth Office of the British Government forSir Peter was with the Foreign & Commonwealth Office of the British Government forover 30 years, including being the Ambassador in Brazil, Senior Trade Commissioner inHong Kong, British High Commissioner, Bahamas, as well as the Head of EnergyDepartment. Subsequently he worked full time with HSBC Investment Bank, and as NEDor Chairman of a number of other companies including Amerada Hess and BOC Group.Sir Peter is Chairman Emeritus of the Brazilian Chamber of Commerce in Great Britain.

Nicholas Mockett nmockett@moorgate‐capital.comPartner – Packaging, Paper & Plastics Tel: +44 20 7060 7005Nick has focused on the Packaging Plastic & Paper related industries for over twentyNick has focused on the Packaging, Plastic & Paper related industries for over twentyyears and his experience includes disposals, acquisitions and leveraged buy outs. He hasadvised on several billion Dollars of transactions. Prior to Moorgate Capital he spent 4years with Europa Partners and 8 years with PwC Corporate Finance where he wasSector Leader for the PPP industry. Nick is a Liveryman of the Worshipful Company ofStationers & Newspaper Makers, a member of the Editorial Board of Plastics inPackaging, and a serial judge of Packaging News Awards.

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3. Macro drivers


5. Outlook

5

Industry performance225

CONTAINERS & 175

200

PACKAGING+61.8%150

FTSE 100%

100

125

+1.5%

75

25

50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

6

Industry performance over 10 yearsCONTAINERS & PACKAGING+61 8%+61.8%

DOW JONES+48.2%

AUTOMOBILES+46.7%

FTSE 100FTSE 100+1.5 %

CONSTRUCTION

Note: Containers & Packaging: Dow Jones U.S. Containers & Packaging Index (INDEXDJX:DJUSCP)FTSE 100: FTSE 100 (INDEXFTSE:UKX)Dow Jones: Dow Jones Industrial Average (INDEXDJX:.DJI)Automobiles: Dow Jones U.S. Automobiles & Parts Index (INDEXDJX:DJUSAP)

7

‐47.1%Automobiles: Dow Jones U.S. Automobiles & Parts Index (INDEXDJX:DJUSAP)Construction: Dow Jones U.S. Home Construction Index (INDEXDJX:DJUSHB)

Packaging (fibre) performance

500

400

300

DS Smith +233.3%

Mayr‐Melnhof +74.4%

Metsa Board +36 5%

200

Metsa Board +36.5%

Paples y Cartones +25.3%

FTSE 100 +7.5%

Reno de Medici 21 3%

100

Reno de Medici ‐21.3%

2006 2007 2008 2009 2010 2011 2012 2013 2014 20150

8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Packaging (non fibre) performance

500

400

300

RPC +294.4%

Guillin +256.7%

Bunzl +201 4%

200

Bunzl +201.4%

Huhtamaki +122.8%

FTSE 100 +7.5%

Rexam +7 1%

100

Rexam +7.1%

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015

9

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Pulp and Paper performance

500

400

ALTRI +394.8%

JAMES CROPPER +243.9%

SCA +161.9%

300

BILLERUD KORSNAS 143.6%

MIQUEL & COSTAS +89.2%

PORTUCEL +74.4%

200

FTSE 100 +7.5%

UPM ‐3.7%

IBERPAPEL ‐4.2%

100

HOLMEN ‐4.6%

STORA ENSO ‐31.3%

ENCE ‐32.8%

0

ROTTNEROS ‐65.8%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

FMCG performance

500

400

300UNILEVER +140.8%

200

NESTLE +81.7%

FTSE 100 +7.5%

100

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

11

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Retailer performance

500

400

KONINKLIJKE +133 2%

300

KONINKLIJKE +133.2%

FTSE 100 +7.5%

MORRISONS ‐3.6%

SAINSBURYS ‐18 8%

200

SAINSBURYS ‐18.8%

CASINO ‐24.0%

CARREFOUR ‐31.0%

METRO 43 7%

100

METRO ‐43.7%

TESCO ‐43.9%

02006 2007 2008 2009 2010 2011 2012 2013 2014 2015

12

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Comparative performance over 10 yearsNON‐FIBREPACKAGING+176 5%+176.5%

FIBRE PULP & PAPER

FMCG111.2%

PACKAGING+69.6%

+80.5%

RETAILERS

13

‐4.5%

Banks Performance

500

400

300

FTSE 100 +7.5%

MORGAN STANLEY ‐48.2%

BANCO SANTANDER ‐59 8%

200

BANCO SANTANDER ‐59.8%

BARCLAYS ‐70.0%

CREDIT SUISSE ‐73.0%

DEUTSCHE 77 8%

100

DEUTSCHE ‐77.8%

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

14

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


2. Industry performanceSt f th h l

3. Macro drivers

• Strong performance through cycle• Outperformed other industrials and value chain


5. Outlook

15



3. Macro drivers


5. Outlook

16

Growing population & middle class

9

10Population (billion)

Over the next two decades ‐ it is estimated that the middle class will expand by another three billion people

7

8

9 expand by another three billion people

6

7POOR

4

5

2

3 MIDDLE CLASS

0

1

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

RICH

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

17

Ageing populationPopulation over 60

0‐9%10‐19%20‐24%25‐29%30+%No data 2012

Over the next four decades, it is estimateddecades, it is estimated that over 60s will make up 20% of the world populationpopulation

2050

18



3. Macro drivers

4 Global packaging M&A

• Compelling growth drivers and demographics

4. Global packaging M&A

5. Outlook

19



3. Macro drivers


5. Outlook

20

Global Packaging M&A

$33b$35b

$35b

$40b

$27b

$33b

$29b$30b

$30b

$35b

$

$19b $18b

$24b

$

$22b

$20b

$25b

$ $18b $18b

$15b

$20b

$10b

$0b

$5b

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Packaging M&A by buyer type

10%100%

Private Companies Public Companies Private Equity

21%11% 12%

25% 19% 22% 24%

10%20% 18% 23%

80%

22% 27%22%

10%11% 12%

17%

60%

70% 70%40%

54% 53% 57%66% 69% 70% 70%

60%

20%

0%

22

2007 2008 2009 2010 2011 2012 2013 2014

Packaging deals by segment

120

Number of dealsPackaging Manufacturers Packaging Equipment Solutions & Suppliers Distributors

100

80

60

20

40

0

20

23

2007 2008 2009 2010 2011 2012 2013 2014

Packaging deals by material2013

25% Plastic 49%

2014

3%6% 4%

Plastic 46%

49%2%

Plastic 49%

Paper 24%

Metal 2%

Labels 25%

46%

Plastic 46%

Paper 41%

Metal 3%

Labels 6%

24%

Labels 25%

41%

Labels 6%

Glass 4%

2011

6% 4%2%

l

2012

7%6% 3%

l

50%

Plastic 50%

Paper 38%

Metal 6%23%

7% Plastic 61%

Paper 23%

Metal 7%

38%Labels 4%

Glass 2%61%

23% Labels 6%

Glass 3%

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Deal target locationsBRIC P k i M&A

Brazil 5%Russia 10%

BRIC Packaging M&A

20% 15%

25%

25% 20%

20%

20%

20%

0%

100%India 15%China 15%Other 55%2 2 3

60%

80%

80% 85%

75%

75% 80%

80%

80%

80%

0%

40%

7

20%

0%2007 2008 2009 2010 2011 2012 2013 2014 2015

De eloped Markets Emerging Markets

2015

25

Developed Markets Emerging Markets

EV/EBITDA packaging transactionsPackaging M&A transactions

8 1x9x

8.1x

6.9x6.5x

6.9x 7.0x 6.8x7.4x

7.7x

7x

8x

5.9x

5x

6x

3x

4x

2x

3x

0x

1x

2007 2008 2009 2010 2011 2012 2013 2014 2015

26

EV/EBITDA packaging valuationsPublic packaging companies Paper packaging Plastic packaging

10 5

12x

8.8x 8.5x9.0x 9.0x

9.8x10.2x 10.5x

10x

7.4x 7.5x7.0x

7.9x8.0x8x

4x

6x

2x

4x

0x2010 2011 2012 2013 2014 2015

27

Low interest rates

28

Recent deals

29



3. Macro drivers

4 Global packaging M&A4. Global packaging M&A• Record 2015• Multiples above long term average

5. Outlook

30



3. Macro drivers


5. Outlook

31

HHI: Packaging industry concentration

Plastic bag mfg

Commercial flexographic printing

Plastic bottle mfg

Folding paperboard box mfg

Plastic bag mfg

Laminated aluminum foil mfg for flexibles packaging uses

Polyester foam product mfg

g

Uncoated paper & multiwall bag mfg

Plastic packaging film & sheet (including laminated) mfg

Glass container mfg

Metal can mfg

Average ex‐glass

AVERAGE

L t t d M t t d

32

Less concentrated More concentrated

HHI: Industry concentration

Packaging Manufacturers

Suppliers

Customers

Other Industrials

L t t d M t t d0 500 1000 1500 2000 2500 3000

33

Less concentrated More concentrated

Outlook for Packaging

Performance through cycle

Defensive / counter cyclical

Cash generation

Asset rich Asset rich

Blue chip clientelep

Macro fundamentals

Growth

34

Conclusion

Att ti i d t Attractive industry

Valuations are high

Hungry buyers

35

Banks Performance 1 year

120

100

MORGAN STANLEY ‐33.6%

80 BARCLAYS ‐36.8%

BANCO SANTANDER ‐39.7%

DEUTSCHE ‐45.8%

60

CREDIT SUISSE ‐46.7%

40Feb‐2015 Apr‐2015 Jun‐2015 Aug‐2015 Oct‐2015 Dec‐2015 Feb‐2016

36

Feb 2015 Apr 2015 Jun 2015 Aug 2015 Oct 2015 Dec 2015 Feb 2016

Thank you

www.moorgate‐capital.com

33 St James's Square

London

SW1Y 4JS

Tel: +44 20 7060 7007

Fax: +44 20 7060 7009

37

Important Notice

The statements herein have been taken from sources we believe to be reliable but suchstatements are made without any representation as to accuracy or completeness orstatements are made without any representation as to accuracy or completeness orotherwise. Any opinion or forecast constitutes our judgment as at the date of issue andis subject to change without notice. Moorgate Capital (Corporate Finance) Ltd

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sacks and the city - fastmarkets risi...industry performance 225 175 containers & 200 packaging 150...

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