Be More strategy 2012-2015 March 2012 Be More strategy 2012-2015 - - PowerPoint PPT Presentation

• March 2012

Be More strategy 2012-2015

BE MORE: THE NEW STRATEGY TO TACKLE THE GROWTH OPPORTUNITY…

2009 2009 2009 2009-

• 2011

2011 2011 2011 Be ONE Be ONE Be ONE Be ONE

2012 2012 2012 2012-

• 2015

2015 2015 2015

The growth opportunity The growth opportunity The growth opportunity The growth opportunity

OUR VISION FOR THE FUTURE

• We want to be

We want to be We want to be We want to be THE GLOBAL LEADER

THE GLOBAL LEADER THE GLOBAL LEADER THE GLOBAL LEADER in the artificial casing

in the artificial casing in the artificial casing in the artificial casing market. market. market. market.

• This vision means…
• The global leader focuses its efforts to create value to our shareholders in a

create value to our shareholders in a create value to our shareholders in a create value to our shareholders in a sustainable way sustainable way sustainable way sustainable way.

• The global leader is a benchmark

benchmark benchmark benchmark in efficiency and productivity in in efficiency and productivity in in efficiency and productivity in in efficiency and productivity in all the all the all the all the artificial casing artificial casing artificial casing artificial casing technologies.

• The global leader is the reference for our customers

the reference for our customers the reference for our customers the reference for our customers for our good practises, quality and service.

• The global leader attracts and keep talented people and develops their

attracts and keep talented people and develops their attracts and keep talented people and develops their attracts and keep talented people and develops their capacities capacities capacities capacities: A leader that build up a team that is committed with Group goals and vision, a team that foster innovation and best practises, a team that encompasses hard work and seamless collaboration between Group members.

Be Be Be Be

M O R E M O R E M O R E M O R E

THE GROWTH OPPORTUNITY

90 100 110 120 130 140 150 2006 2007 2008 2009 2010 2011 2012e

Artificial casings market growth Artificial casings market growth Artificial casings market growth Artificial casings market growth (Base 2006 = 100) The market is consistently growing above the historical high-end range driven by growth in emerging countries… but also in developed ones.

DRIVERS FOR AN ACCELERATED GROWTH

7 Bn people

Globalization

productivity and cost control

customization to increase market

New New New New production production production production technology technology technology technology Population growth & Feeding habits Population growth & Feeding habits Population growth & Feeding habits Population growth & Feeding habits

ALL REGIONS DELIVER GROWTH… BUT EMERGING AREAS ARE EVEN MORE DINAMYC

Expense on casing per capita (€)

2011 2011 2011 2011

Population 0,23 2008

Worldwide average Expense on casing per capita

0,28 0,28 0,28 0,28

+20%

7.0 7.0 7.0 7.0 Bn Bn Bn Bn PEOPLE PEOPLE PEOPLE PEOPLE

1.08 0.99 0.33 0.02 4,296 Europe Europe Europe Europe North North North North America America America America Latam Latam Latam Latam Asia/ Asia/ Asia/ Asia/Pacific Pacific Pacific Pacific A A A Africa frica frica frica 771 1,051

0.28 0.28 0.28 0.28

0.11 361 606

Arficial Arficial Arficial Arficial casing casing casing casing market market market market 2011 2011 2011 2011 Gut and artificial casing market Gut and artificial casing market Gut and artificial casing market Gut and artificial casing market 2011 2011 2011 2011

GLOBAL LEADERSHIP IN A GLOBAL MARKET

>4 >4 >4 >4 Bn Bn Bn Bn € € € € A unique technology proposition has reinforced Viscofan’s leadership in a very dynamic and demanding market… with clear growth potential

skinless fibrous plastics collagen Gut casings

2 2 2 2 Bn Bn Bn Bn € € € €

Devro Viskase Shenguan Others

26% 26% 26% 26%

• Viscofan

Viscofan Viscofan Viscofan

• Kalle

Kalle Kalle Kalle

• Visko

Visko Visko Visko-

• Teepak

Teepak Teepak Teepak

• Viskase

Viskase Viskase Viskase

• Case

Case Case Case-

• tech

tech tech tech

• …

… … …Others Others Others Others

THE WIDEST PORTFOLIO TO PROVIDE A UNIQUE SERVICE SOLUTION:

• Viscofan

Viscofan Viscofan Viscofan

• Kalle

Kalle Kalle Kalle

• Viskase

Viskase Viskase Viskase

• Visko

Visko Visko Visko-

• Teepak

Teepak Teepak Teepak

• …

… … … Others Others Others Others

• Viscofan

Viscofan Viscofan Viscofan

• Devro

Devro Devro Devro

• Shenguan

Shenguan Shenguan Shenguan

• Fabios

Fabios Fabios Fabios

• Nippi

Nippi Nippi Nippi

• …

… … … others

• thers
• thers
• thers
• Viscofan

Viscofan Viscofan Viscofan

• Viskase

Viskase Viskase Viskase

• Visko

Visko Visko Visko-

• Teepak

Teepak Teepak Teepak

Skinless Skinless Skinless Skinless Collagen Collagen Collagen Collagen Fibrous Fibrous Fibrous Fibrous Plastics Plastics Plastics Plastics

45 45 45 45% % % % of total sales is for customers

that buy the 4 technologies Leveraged on our technology to be “the casing company” for our customers:

Meat Meat Meat Meat processor processor processor processor needs needs needs needs

“BE MORE” MEANS BE GLOBAL IN THE COLLAGEN SEGMENT: Year Year Year Year 2011 2011 2011 2011 Year Year Year Year 2015 2015 2015 2015

From From From From Regional Regional Regional Regional producer producer producer producer To To To To Global Global Global Global producer producer producer producer

NEW EXTRUSION PLANT IN ASIA:

China is the largest market worldwide, and growing double-digit every year!! A very significant growth… with strong prospects for the future: Weight Weight Weight Weight of China in

• f China in
• f China in
• f China in worldwide

worldwide worldwide worldwide collagen collagen collagen collagen market market market market: : : :

2006 2006 2006 2006 2011 2011 2011 2011 5x larger 5x larger 5x larger 5x larger Artificial Artificial Artificial Artificial casing casing casing casing per per per per capita capita capita capita ( ( ( (€ € € €) ) ) ) Meat Meat Meat Meat production production production production per per per per capita capita capita capita (kg) (kg) (kg) (kg) China World average GDP GDP GDP GDP growth growth growth growth 2011 (%) 2011 (%) 2011 (%) 2011 (%) 0,28 0,28 0,28 0,28 0,28 50.1 50.1 50.1 50.1 29.6 29.6 29.6 29.6 9.2 9.2 9.2 9.2 3.8 3.8 3.8 3.8

Drivers for outstanding Drivers for outstanding Drivers for outstanding Drivers for outstanding growth growth growth growth in China in China in China in China: Higher standards of living Migration from rural areas to urban areas Feeding habits incorporating global trends Meat industry developing very fast

Better time to market, productivity time to market, productivity time to market, productivity time to market, productivity and safety and safety and safety and safety for an industry with strong dynamics and high inflation rates Premium Premium Premium Premium quality quality quality quality backed by leader expertise Casing solutions… Meat processor are widening their portfolio Meat processor are widening their portfolio Meat processor are widening their portfolio Meat processor are widening their portfolio and Viscofan is the only one with all the artificial casing technologies. Market share target Market share target Market share target Market share target: 15% to 20%

How? How? How? How? CHINA IS AT THE INITIAL PHASE OF INCORPORATING ARTIFICIAL CASING IN THEIR PRODUCTION PROCESS

• ffice
• ffice
• ffice
• ffice

Collagen Extrusion Collagen Extrusion Collagen Extrusion Collagen Extrusion plant plant plant plant

For 2013. For 2013. For 2013. For 2013. Full commitment Full commitment Full commitment Full commitment with market with market with market with market development and development and development and development and customer service. customer service. customer service. customer service. Capex Capex Capex Capex €

€ € €25 MM 25 MM 25 MM 25 MM Goals Goals Goals Goals: : : :

Our Our Our Our aproach aproach aproach aproach to the to the to the to the Chinesse Chinesse Chinesse Chinesse market: market: market: market: Viscofan, as the worldwide leader will provide added-value proposition

NEW COLLAGEN OPERATION IN LATAM:

• ffice
• ffice
• ffice
• ffice

Converting Converting Converting Converting plant plant plant plant

• market. No capex

Since 2012. Since 2012. Since 2012. Since 2012. Better time to Better time to Better time to Better time to market market market market Capex Capex Capex Capex: : : : € € € €1MM 1MM 1MM 1MM

Viscofan’s Viscofan’s Viscofan’s Viscofan’s aproach aproach aproach aproach to the to the to the to the Latam Latam Latam Latam market: market: market: market: Establishing converting capacity in Brazil as the largest market in Latam, improving time to market for the region and diversifying operational risk on collagen (concentrated in Europe)

Artificial Artificial Artificial Artificial casing casing casing casing per per per per capita capita capita capita ( ( ( (€ € € €) ) ) ) Meat Meat Meat Meat production production production production per per per per capita capita capita capita (kg) (kg) (kg) (kg) Latam World average GDP GDP GDP GDP growth growth growth growth 2011 (%) 2011 (%) 2011 (%) 2011 (%) 0.28 0.28 0.28 0.28 53.0 53.0 53.0 53.0 29.6 29.6 29.6 29.6 4.6 4.6 4.6 4.6 3.8 3.8 3.8 3.8 Latam is enjoying a high pace of growth due to industrialization and middle-class evolution. 0.33 0.33 0.33 0.33

NEW RESOURCES FOR THE REST OF THE FAMILIES:

Skinless casings Skinless casings Skinless casings Skinless casings: : : : The “common” way to taste a delicious sausage. The “common” way to taste a delicious sausage. The “common” way to taste a delicious sausage. The “common” way to taste a delicious sausage. Largest markets are populated areas: US, Brazil, Mexico… Largest markets are populated areas: US, Brazil, Mexico… Largest markets are populated areas: US, Brazil, Mexico… Largest markets are populated areas: US, Brazil, Mexico… … but penetration in emerging countries is about to come: … but penetration in emerging countries is about to come: … but penetration in emerging countries is about to come: … but penetration in emerging countries is about to come: China, South East of Asia or Africa… China, South East of Asia or Africa… China, South East of Asia or Africa… China, South East of Asia or Africa… Drivers for growth: Drivers for growth: Drivers for growth: Drivers for growth: Cooked sausages for global population… Cooked sausages for global population… Cooked sausages for global population… Cooked sausages for global population… (for many, the first step to animal protein (for many, the first step to animal protein (for many, the first step to animal protein (for many, the first step to animal protein). ). ). ). Cheap Cheap Cheap Cheap to buy for consumers and unbeatable to buy for consumers and unbeatable to buy for consumers and unbeatable to buy for consumers and unbeatable performance to produce cooked sausages for performance to produce cooked sausages for performance to produce cooked sausages for performance to produce cooked sausages for meat processors. meat processors. meat processors. meat processors. Viscofan is working internally to consolidate improvements and capacity to face the possibility of a strong growth in a massive market of thousand of million meters

NEW RESOURCES FOR THE REST OF THE FAMILIES:

Fibrous and Plastics: Fibrous and Plastics: Fibrous and Plastics: Fibrous and Plastics: Strenghten the segments to improve service. Strenghten the segments to improve service. Strenghten the segments to improve service. Strenghten the segments to improve service. Growth focus: Growth focus: Growth focus: Growth focus: Increase resources on R&D oriented to Increase resources on R&D oriented to Increase resources on R&D oriented to Increase resources on R&D oriented to added added added added-

• value segments:

value segments: value segments: value segments:

• Production focus: Upgrade technology

Production focus: Upgrade technology Production focus: Upgrade technology Production focus: Upgrade technology

• Market focus: To wide the portfolio

Market focus: To wide the portfolio Market focus: To wide the portfolio Market focus: To wide the portfolio Consolidate capacity expansion in fibrous done in 2011 Consolidate capacity expansion in fibrous done in 2011 Consolidate capacity expansion in fibrous done in 2011 Consolidate capacity expansion in fibrous done in 2011 Increase capacity in plastics in 2012 Increase capacity in plastics in 2012 Increase capacity in plastics in 2012 Increase capacity in plastics in 2012

A BALANCED PRODUCTION PORTFOLIO LED BY EXCELLENCE CENTRES AND VERY COMPETITIVE COST PLANTS Skinless Skinless Skinless Skinless Collagen Collagen Collagen Collagen Fibrous Fibrous Fibrous Fibrous Plastics Plastics Plastics Plastics

• *
• *

Production capacity by technology: Production capacity by technology: Production capacity by technology: Production capacity by technology:

• *
• *
• *

Plans to improve automation in Czech Republic and in Brazil

EXCELLENCE CENTRES GAINING COMPETITIVENESS THROUGH TECHNOLOGY AND COST CONTROL.

Consolidate investments made in late 2011 and technology upgrades. Achieve new efficiency benchmarks

Upgrading technology Upgrading technology Upgrading technology Upgrading technology and automation plans and automation plans and automation plans and automation plans

Investments in China, Brazil, Czech Republic and Serbia Viscofan is increasing capacity in countries with very competitive production costs.

Excellence Excellence Excellence Excellence centres centres centres centres Additional Additional Additional Additional capacity in capacity in capacity in capacity in low cost countries low cost countries low cost countries low cost countries

DEMANDING QUALITY AND SERVICE IN MORE THAN 100 COUNTRIES WORLDWIDE

A better management of supply chain to capture A better management of supply chain to capture A better management of supply chain to capture A better management of supply chain to capture new synergies... new synergies... new synergies... new synergies... Growth will involve additional working capital Growth will involve additional working capital Growth will involve additional working capital Growth will involve additional working capital efforts in the short term… efforts in the short term… efforts in the short term… efforts in the short term… … but better service, time to market, and working … but better service, time to market, and working … but better service, time to market, and working … but better service, time to market, and working capital efficiency in the long term. capital efficiency in the long term. capital efficiency in the long term. capital efficiency in the long term.

Commercial offices Production footprint Commercial agents

BALANCING EFFORTS TO OFFSET A VERY DEMANDING ENVIRONMENT.

Price mix in emerging countries Start-up costs Raw material inflation Energy Volume & Scale Technology upgrades Efficiency control Optimize investments on energy (new cogeneration engine in Spain) Strong balance sheet

FOCUS ON GROWTH, BUT KEEPING DISCIPLINE AS THE BEST GUARANTEE FOR SUSTAINABLE VALUE CREATION. Growth opportunity: Top line will drive bottom line growth

Raw material Raw material Raw material Raw material

(27% o/ revenue)

Personnel Personnel Personnel Personnel

(21% o/ revenue)

Energy Energy Energy Energy

(11% o/ revenue)

Other Other Other Other REVENUE REVENUE REVENUE REVENUE

Gross margin affected Expanding capacity in emerging Tough environment and structural Lean structure and cost control

Profit Costs

by growth priority and high prices of raw material. markets… but they also have below- average costs. inflation trend… optimize use and co- generation as the best alternative.

“BE MORE” WILL BE POSTING RETURNS “WELL ABOVE” COST OF CAPITAL… EVEN IN A PERIOD OF “ABOVE AVERAGE” EXPANSION.

2008 2009 2010 2011 2012E 105,3 129,0 154,4 162,1 177 45,1 46,0 47,4 64,7 75

OpCF OpCF OpCF OpCF > > > >€ € € €100MM

100MM 100MM 100MM 97 107 83 60 OpCF OpCF OpCF OpCF = EBITDA = EBITDA = EBITDA = EBITDA -

• Capex

Capex Capex Capex

A VERY COMPLEX AND TECHNICAL SALE WHERE PURCHASE IS BASED ON PERFORMANCE METRICS (that our

customers track on daily bases).

Added Added Added Added value value value value

Time to Time to Time to Time to market market market market Stuffing Stuffing Stuffing Stuffing speed speed speed speed Stick Stick Stick Stick length length length length Waste Waste Waste Waste Customiza Customiza Customiza Customiza-

• tion

tion tion tion Safety Safety Safety Safety Bite Bite Bite Bite Price Price Price Price

Service Service Service Service added value matrix...

External collaboration: External collaboration: External collaboration: External collaboration: Internal triangular teams: Internal triangular teams: Internal triangular teams: Internal triangular teams:

R&D+i R&D+i R&D+i R&D+i Produc

• tion

Sales

COLLABORATIVE AND PROACTIVE R&D

Specialists collaboration Specialists collaboration Specialists collaboration Specialists collaboration: : : :

A COMMITTED TEAM FOR SUCCESS 68% 11% 21%

4.082 PEOPLE WITH A STRONG 4.082 PEOPLE WITH A STRONG 4.082 PEOPLE WITH A STRONG 4.082 PEOPLE WITH A STRONG PASSION TO OUTPERFORM! PASSION TO OUTPERFORM! PASSION TO OUTPERFORM! PASSION TO OUTPERFORM!

Average workforce Average workforce Average workforce Average workforce

Capex Capex Capex Capex and “ and “ and “ and “start start start start-

• up”

up” up” up” Opex Opex Opex Opex to to to to fuel top line fuel top line fuel top line fuel top line growth growth growth growth 2011 Revenue Revenue Revenue Revenue EBITDA EBITDA EBITDA EBITDA Capex Capex Capex Capex

US$/ US$/ US$/ US$/€ € € €

9 9 9 9% % % %-

• 11%

11% 11% 11% 9% 9% 9% 9%-

• 12%

12% 12% 12% % y % y % y % y-

• y.

y. y. y. < < < <€ € € €75MM 75MM 75MM 75MM

1.35 1.35 1.35 1.35

Revenue EBITDA Adjusted Net Profit

667 162 98

730 730 730 730-

• 740

740 740 740 177 177 177 177-

• 182

182 182 182 102 102 102 102-

• 105

105 105 105

Adjusted net profit Adjusted net profit Adjusted net profit Adjusted net profit1

4% 4% 4% 4%-

• 7%

7% 7% 7%