Financial Results 9 Months 2016 Investors and Analysts Presentation - - PowerPoint PPT Presentation

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Financial Results 9 Months 2016 Investors and Analysts Presentation Athens, 3 November 2016 9M 2016 Highlights Group Turnover increases 12% (Q3 2016 vs Q3 2015) reaching 1,124.2m YTD (+9%yoy) due to US growth. Best quarterly

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SLIDE 1

Financial Results – 9 Months 2016

Investors’ and Analysts’ Presentation

Athens, 3 November 2016

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SLIDE 2

9M 2016 Highlights

9M 2016

Investors' and Analysts' Presentation

2

 Group Turnover increases 12% (Q3 2016 vs Q3 2015) reaching €1,124.2m YTD (+9%yoy) due to US growth.  Best quarterly profitability performance for over 5 years. EBITDA jumps to €85.5m in Q3 (up 43% yoy) primarily due to US growth and Egypt recovery. 9M 2016 EBITDA up €39.8m to reach €205.0m (+24%yoy).  NPAT in Q3 2016 rises to €112.7m due to a deferred tax asset recognition of €79m in the US and despite FX losses in Egypt. 9M NPAT at €121.9m (vs €36.2m in 2015).  In the US, volume growth continues strong across all markets, in Mid-Atlantic, in Florida and in New York

  • Metro. YTD Turnover and EBITDA increase to €584.2m (+18%) and €98.0m (+38%).

 In Greece, Q3 2016 performance remains muted (comparison to capital controls’ affected Q3 2015 not meaningful). 9M Turnover stable at €195.6m (-2%) while EBITDA is down to €28.0m(-11%).  In SEE, overall cement sales volumes are up, but YTD Turnover and EBITDA remain stable (at €156.8m and €46.1m respectively) due to lower pricing environment.  In Egypt, in Q3 2016 production levels reach historical highs, however pricing volatility continues. YTD revenue is at similar levels as 2015 in € terms, but 18% higher in EGP. 9M EBITDA reach €32.8m (up 105%) benefiting from the plants’ conversion to use of solid fuels.  In September, Group expands to South America. Investment in JV in Cimento Apodi in Northeastern Brazil adds 2m MT of cement capacity to the Group.  Acquisition impacts Net Debt which rises to €713m.

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SLIDE 3

Strong Q3 2016 Profitability with YTD EBITDA Rising by €40m (24.1% increase)

9M 2016

Investors' and Analysts' Presentation

3

9 Months 3rd Quarter

1,029.5 1,124.2 94.7

400 800 1200 Turnover 2015 Variance Turnover 2016

9.2%

€ in millions

165.2 205.0 39.8

80 160 240 EBITDA 2015 Variance EBITDA 2016

24.1%

EBITDA Margin 18.2% 16.0%

€ in millions

356.7 400.4 43.7

150 300 450 Turnover 2015 Variance Turnover 2016

12.2%

€ in millions

59.9 85.5 25.6

30 60 90 EBITDA 2015 Variance EBITDA 2016

42.8%

EBITDA Margin 21.4% 16.8%

€ in millions

Turnover EBITDA

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SLIDE 4

Robust Financial Performance Best Quarterly Profitability in Five Years

9M 2016

Investors' and Analysts' Presentation

4

In Million Euros, unless otherwise stated

9M 2016 9M 2015 Variance Q3 2016 Q3 2015 Variance Net Sales 1,124.2 1,029.5 9.2% 400.4 356.7 12.2% Cost of Goods Sold

  • 805.3
  • 768.8

4.7%

  • 274.5
  • 262.2

4.7% Gross Margin (before depreciation) 318.9 260.7 22.3% 125.9 94.5 33.2% SG&A

  • 107.8
  • 97.1

11.0%

  • 36.6
  • 32.8

11.3% Other Income / Expense

  • 6.1

1.6

  • 3.8
  • 1.8

EBITDA 205.0 165.2 24.1% 85.5 59.9 42.8% Depreciation/Impairments

  • 89.5
  • 84.7

5.6%

  • 29.0
  • 28.0

3.4% Finance Costs - Net

  • 50.4
  • 50.6
  • 0.4%
  • 15.7
  • 17.9
  • 12.4%

FX Gains/ Losses

  • 30.0

8.6

  • 10.5
  • 4.2

Share of profit of associates & JVs 4.8 3.8 2.2 1.5 Profit Before Taxes 39.9 42.2 32.5 11.3 Income Tax Net 82.3

  • 4.6

80.7 1.7 Non Controlling Interest

  • 0.3
  • 1.5
  • 0.5
  • 1.0

Net Profit after Taxes & Minorities 121.9 36.2 112.7 12.0 Earnings per Share (€/share) – basic 1.491 0.442 1.378 0.146 30 Sep' 16 31 Dec' 15 Variance Net Debt 713 621 14.7% Share Price 20.98 17.61 19.1% ASE Index 565.53 631.35 -10.4%

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SLIDE 5

Increasing Operating Cash Generation Net Debt Impacted by Acquisitions

9M 2016

Investors' and Analysts' Presentation

5

205 (91) 6 (97) (34) (91) (100) 20

  • 150
  • 100
  • 50

50 100 150 200

EBITDA 9Μ 2016 Non-Cash Items CapEx Operating Working Capital * Acquisitions Net of Disposals Interest, Tax, Dividends FX Impact

  • n Net Debt

Increase in Net Debt 30/09/16

Sources and Uses of Cash

9M Operating Free Cash Flow

€80m

(€ in millions)

* Interest and tax related payments are presented separately and excluded from Operating Working Capital cash movements

2015

165 10 (128) (39) (10) (91) (16) (109)

€8m 8m

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SLIDE 6

Funds Raised in Q2 Utilized for Buy-back of 2017 Bond and Brazil Acquisition

9M 2016

Investors' and Analysts' Presentation

6

Group Net and Gross Debt Evolution

For comparability purposes all figures have been adjusted in order to exclude Turkey.

1,112 986 988 930 947 874 831 739 739 707 732 674 754 602 632 562 596 552 563 509 541 490 529 541 660 630

650

621 605 578

713

1,169 1,017 1,031 947 994 963 886 806 825 906 967 1,008 980 1,021 907 846 881 851 791 695 715 717 702 684 798 849 818 743 684 852 877 400 500 600 700 800 900 1,000 1,100 1,200 Q1 Q2Q3 Q4 Q1 Q2Q3 Q4 Q1 Q2 Q3Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 2009 2010 2011 2012 2013 2014 2015 2016

Net Debt Gross Debt

(€ in millions)

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SLIDE 7

22% 77% 1%

Total Utilization €877m

197 674 6 877 347 166 513 200 400 600 800 1,000 1,200 1,400 1,600 Banks' Committed Bonds Un-CommittedTotal Facilities

Facilities by Type / Utilization (€m)

Un-Utilized Utilized 1,390 172

Total Committed Lines: 1,218/ Utilization 871

674 544 37% 63% 33% 9 58 63 16 25 27 6 88 284 282 20 50 100 150 200 250 300 350 <Dec'16 <Dec'17 <Dec'18 <Dec'19 <Dec'20 <Dec'21 >Dec'21

Maturity Profile (€m)

Bonds Bank Debt 145 300 309

Debt & Liquidity Profile

9M 2016

Investors' and Analysts' Presentation

7

September 2016

Note: Utilized includes loan fees/ Bonds include US IRBs; Un-utilized without loan fees

9 25 63 25

85 3 25 31 20 164

50 100 150 200 250 300

Europe Int'l Greece US SEE EG Group Total Cash

Liquid Assets by location (€m)

25% 48% 27%

Facilities / Utilization by Lender

Int'nal Banks Bonds Greek Banks

Total Facilities €1,390m

1: including US Industrial Revenue Bonds

1

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SLIDE 8

Titan Group Balance Sheet

9M 2016

Investors' and Analysts' Presentation

8

In Million Euros, unless otherwise stated

30 Sep' 16 31 Dec' 15 Variance Property, plant & equipment 1,731.3 1,806.2

  • 74.9

Intangible assets and goodwill 428.4 455.9

  • 27.5

Other non-current assets 228.8 108.9 119.9 Non-current assets 2,388.5 2,371.0 17.5 Inventories 269.6 286.8

  • 17.2

Receivables and prepayments 216.3 167.6 48.7 Cash and liquid assets 164.2 123.8 40.4 Current assets 650.1 578.2 71.9

Total Assets 3,038.6 2,949.2 89.4

Share capital and share premium 361.4 361.4

  • 0.0

Treasury shares

  • 87.8
  • 79.1
  • 8.7

Retained earnings and reserves 1,335.0 1,304.6 30.4 Non-controlling interests 110.9 118.4

  • 7.5

Total equity 1,719.4 1,705.3 14.1

Long-term borrowings 724.7 716.8 7.9 Deferred income tax liability 93.0 163.8

  • 70.8

Other non-current liabilities 60.8 59.9 0.9 Non-current liabilities 878.5 940.5

  • 62.0

Short-term borrowings 152.2 26.3 125.9 Trade payables and current liabilities 288.4 277.1 11.3 Current liabilities 440.6 303.4 137.2

Total Equity and Liabilities 3,038.6 2,949.2 89.4

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SLIDE 9

Strong Volume Growth in Q3 YTD Volume Increase Across All Product Lines

9M 2016

Investors' and Analysts' Presentation

9

12.2 10.2 3.19 12.7 12.0 3.58

Cement (tn m) Aggregates (tn m) Ready-mix (m3 m)

2015A 2016A

4.3 3.3 1.06 4.6 4.1 1.26

Cement (tn m) Aggregates (tn m) Ready-mix (m3 m)

2015A 2016A

3rd Quarter Sales Volume

* Intragroup product sales for processing are included in sales volumes (1) Cement sales include clinker and cementitious materials (2) Includes Turkey, does not include Associates (3) % represents performance versus last year

+23%(3) +9%(3)

(1), (2) (2) (2)

9 Months Sales Volume

(1), (2) (2) (2)

+18%(3) +18%(3) +12%(3) +4%(3)

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SLIDE 10

Market Overviews

9M 2016

Investors' and Analysts' Presentation

10

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SLIDE 11

Strong US Performance and Improving Egypt Profitability Drive EBITDA Growth.

9M 2016

Investors' and Analysts' Presentation

11

Regional Performance Includes Exports to 3rd Parties and Terminals Variance vs last year X% Weight contribution to total X% Variance vs last year – local currency X%

9M 2016 Turnover (€m) 9M 2016 EBITDA (€m) Total Assets (€m)

178.9 155.5 198.6 496.5 187.7 156.8 195.6 584.2

200 400 600

  • E. MED.

SEE GR/WE USA

5% 1% 18%

  • 2%

17% 18% 15% 48% 52% 19% 17% 14%

18% 18% 1,029.5 1,124.2 400 800 1200 GROUP

2016 2015

9% 165.2 205.0 80 160 240 GROUP

2016 2015

24%

889 495 558 1,006 813 485 655 1,086

400 800 1200

EMED SEE GR/WE USA

30% 27% 17% 16% 34% 36% 19% 21%

2,949 3,039

1000 2000 3000

GROUP

30-Sep-16 31-Dec-15 3%

* Includes Brazil JV *

16.0 46.6 31.4 71.1 32.8 46.1 28.0 98.0

30 60 90

E.MED. SEE GR/WE USA

105%

  • 1%
  • 11%

10% 17% 28% 22% 43% 48% 19% 13%

38% 40% 134%

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SLIDE 12

EBITDA 12Month-Rolling Quarterly Analysis by Region (2006-2016)

9M 2016

Investors' and Analysts' Presentation

12

USA EASTERN MEDITERRANEAN SOUTH EASTERN EUROPE GREECE & WE

184 164 154 130 106 101 70 51 433939 36 2610 4 4 4 5

  • 3 -8-6 -2

3 2 6 8 1225323340414751 70 86 101 113 111 128

  • 10

40 90 140 190 240

Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

73 86 90 94 97 99 105 104 105 95 8784 74 78 848587 89 87 88 86 75 74 6764 63 565863 7070 68 67 62 62 61 56 5857 56 50 100 150 200 250

Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 20062007 2008 2009 2010 2011 2012 2013 2014 2015 2016 33 34 30 29 31 3141 46 64 8288 98 103 111 119 136 138 139 150 141 128 112 100 91 94 99 95 928780 6250 31 19 16 15 15 22 26 32

50 100 150 200 250

Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 20062007 2008 2009 2010 2011 2012 2013 2014 2015 2016 191 206 213203 194 185 183 177 169 150 135 129 128 130 123 107 87 696155 35 4436 25 32 17 13 11142121 313742493945443641

50 100 150 200 250

Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Turkey consolidated on an equity basis for 2013-2016.

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SLIDE 13

9M 2016

Investors' and Analysts' Presentation

13

US Continues to Grow with Marked Increase of Turnover, EBITDA and EBITDA Margin

9 Months

USA Turnover USA EBITDA

496.5 584.2 87.7

200 400 600

Turnover 2015 Variance Turnover 2016

17.7%

€ in millions

71.1 98.0 26.9

30 60 90

EBITDA 2015 Variance EBITDA 2016

37.8%

EBITDA Margin 16.8% 14.3%

€ in millions

 Higher yoy prices and volumes across all geographies and products lead to YTD sales of €584.2m (+18% yoy) and

EBITDA of €98.0m (+38% yoy).

 In Q3, strong growth in US Revenues (€211.7m +16% vs Q3 2015) and robust EBITDA performance (€45.9m +58%

vs Q3 2015) with EBITDA margin reaching 21.7%.

 Substantial NPAT increase in Q3 due to deferred tax recognition of €79m.  Residential construction (single family housing) is the key driver of growth. Titan’s operating regions rank

amongst fastest growing in the US (Cement consumption-PCA: Florida +13%, Virginia +11%, S. Carolina +26%,

  • N. Carolina +23% yoy).

 Rigorous 2015-2016 Capex program in place to capture market growth.

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SLIDE 14

9M 2016

Investors' and Analysts' Presentation

14

  • 9%(2)

 Greece Turnover and EBITDA remain weak. Favorable comparison to Q3 of last year, exclusively due to the Capital Controls disruption in Q3 2015.  Domestic cement sales volumes at low levels representing 7% of Group volumes. Low construction activity.  Cement consumption in Greece at similar levels with the early 1960s.  Clinker and cement export prices affected by intense competition.

Greece Performance Remains Subdued due to Weak Local Market and Intense Exports Competition

9 Months

Greece & WE Turnover Greece & WE EBITDA

198.6 195.6

  • 3.0

200 400 600

Turnover 2015 Variance Turnover 2016

  • 1.5%

€ in millions

31.4 28.0

  • 3.4

30 60 90

EBITDA 2015 Variance EBITDA 2016

  • 10.9%

EBITDA Margin 14.3% 15.8%

€ in millions

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SLIDE 15

9M 2016

Investors' and Analysts' Presentation

15

 In SEE, stable overall performance with YTD Turnover at €156.8m and EBITDA at €46.1m.  Cement sales volumes in the Region increase but prices remain soft.  Savings from lower fuel cost and higher use of alternative fuels. High alternative fuel substitution in Bulgaria.  Demand remains at levels well below the Group’s cement capacity in the Region.

SEE Performance Largely Stable. Mixed Performance Among Countries.

9 Months

SEE Turnover SEE EBITDA

155.5 156.8 1.3

200 400 600

Turnover 2015 Variance Turnover 2016

0.8%

€ in millions

46.6 46.1

  • 0.5

30 60 90

EBITDA 2015 Variance EBITDA 2016

  • 1.0%

EBITDA Margin 29.4% 29.9%

€ in millions

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SLIDE 16

9M 2016

Investors' and Analysts' Presentation

16

Egypt Cement Production and Sales Volumes Reach Record Highs in Q3 2016

 Egypt Turnover YTD increases in EGP (+18%) and in € terms (+5%). Significant negative FX translation impact on sales revenues. YTD EBITDA more than doubles to €32.8m and EBITDA margin reaches 17.5% vs 9% in 2015.  Cement demand grows by nearly 10% in 2016 while price volatility continues.  Q3 2016 EBITDA continue to recover strongly (+89% vs Q3 2015), a result of volume growth and the substantial reduction in production costs, primarily in fuel costs.  Considerably higher 9M 2016 production volumes and lower production costs due to conversion of Beni-Suef plant to solid fuels.  Weak EGP leads to substantial FX losses in 9M 2016. Scarcity in foreign currency.  In Turkey market remains resilient. Adocim records Net Profits of €7.1m (vs €4.1m last year).

9 Months

EMED Turnover EMED EBITDA

178.9 187.7 8.7

200 400 600

Turnover 2015 Variance Turnover 2016

4.8%

€ in millions

16.0 32.8 16.8

30 60 90

EBITDA 2015 Variance EBITDA 2016

104.7%

EBITDA Margin 17.5% 9.0%

€ in millions

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SLIDE 17

TITAN invests in Brazil a country with long term growth potential Joint venture in Cimento Apodi – Aug 2016

231 224 220 195 197 205 221 240 272 271 311 333 349 354 354 320 285

Cement consumption per capita in Brazil has increased considerably but still has room to grow

Source: IBGE, Bloomberg, CBIC,JP Morgan estimates, IMF, SNIC

  • A large country (205mln people) with strong growth potential

young population large scope for urbanization lagging infrastructure all key drivers of cement demand.

  • Government programs for public infrastructure projects total
  • f US$62bn for the period 2015-2019.
  • Cement consumption in Brazil declined by 9% in 2015 and

by 13% ytd September 2016. Consumption in the Northeast declined by 5% in 2015 and by 13% ytd September 2016.

  • Recent political developments bring market optimism.
  • Macro forecasts for 2017 are revised upwards, IMF projects

+0.5% GDP growth in 2017 (vs. -3.3% in 2016)

  • North/Northeast regions have better supply/demand balance

and more promising prospects.

5,000 10,000 15,000 20,000 25,000 30,000 35,000

2010 2011 2012 2013 2014 2015

Thousand MT

North Northeast Midwest Southeast South

Evolution of cement consumption by region The Northeast is steadily increasing its share

Source: Sindicato Nacional Da Industria Do Cimento

9M 2016

Investors' and Analysts' Presentation

17

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SLIDE 18

9M 2016

Investors' and Analysts' Presentation

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Cimento Apodi – State of Ceará -Northeast Brazil

Cimento Apodi operates two units in Ceará state, which together form a well-connected network:

 One integrated cement plant in Quixere, which began clinker production in March 2015  One grinding cement plant in Pecem, operating since 2011  Total capacity : Over 2 m MT cement per year  Cement sales over 1m MT in 2015  Joint Venture 50/50 between the Dias Branco Group and TITAN/Sarkis vehicle (94% owned by TITAN)  TITAN’s investment abt $100 m  Transaction closed in September 2016

Cement plant Grinding plant North Northeast Mid-West Southeast South Brazil

Cement consumption 2016 vs 2015 by region (Ytd September 2016 , % change)

2015 2016

(12.9%) (8.0%) (12.8%) (19.5%) (14.4%) (4.7%)

Source: SNIC

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SLIDE 19

Outlook

9M 2016

Investors' and Analysts' Presentation

19

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SLIDE 20

9M 2016

Investors' and Analysts' Presentation

20

Outlook 2016

Greece USA Eastern Med

Group Strategic Priorities

  • Domestic demand to remain subdued.
  • Focus on exports and cost competitiveness.
  • Growth to continue within a positive environment.
  • Focus on business development and on expanding margins.
  • Construction activity picks up in some markets.
  • Focus on synergies & efficiencies.

 Balancing profitability and growth  Taking the next step in operating excellence  Nurturing the long term sustainability of the business S.E. Europe

  • Egypt adjustment program and devaluation increase short term uncertainty.
  • Focus on completing task for restoring profitability and margins.
  • Turkey market shows resilience despite political situation.
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SLIDE 21

Appendix

9M 2016

Investors' and Analysts' Presentation

21

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SLIDE 22

9M 2016

Investors' and Analysts' Presentation

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Q3 Sales and Profitability by Region

USA GREECE & WE SEE EMED USA GREECE & WE SEE EMED

Turnover EBITDA

51.9 62.2 10.3

50 100 150 200

Turnover 2015 Variance Turnover 2016

19.8%

€ in millions

3.4 8.3 4.9

10 20 30 40

EBITDA 2015 Variance EBITDA 2016

143.7%

EBITDA Marg

rgin

13.3% 6.6%

€ in millions

182.8 211.7 28.9

50 100 150 200

Turnover 2015 Variance Turnover 2016

15.8%

€ in millions

29.0 45.9 16.8

10 20 30 40 50

EBITDA 2015 Variance EBITDA 2016

57.9%

EBITDA Margin

21.7% 15.9%

€ in millions

64.7 59.8

  • 4.8

50 100 150 200

Turnover 2015 Variance Turnover 2016

  • 7.5%

€ in millions

21.4 19.9

  • 1.5

10 20 30 40

EBITDA 2015 Variance EBITDA 2016

  • 6.8%

EBITDA Margin 33.2% 33.0%

€ in millions

57.3 66.7 9.4

50 100 150 200

Turnover 2015 Variance Turnover 2016

16.4%

€ in millions

6.1 11.5 5.4

10 20 30 40

EBITDA 2015 Variance EBITDA 2016

88.7%

€ in millions

EBITDA Margin 17.2% 10.6%

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SLIDE 23

9M 2016

Investors' and Analysts' Presentation

23

Disclaimer

  • This document contains forward-looking statements relating to the Group’s future business, development

and economic performance. It also includes statements from sources that have not been independently verified by the Company.

  • Such statements may be subject to a number of risks, uncertainties and other important factors, such as

but not limited to: – Competitive pressures – Legislative and regulatory developments – Global, macroeconomic and political trends – Fluctuations in currency exchange rates and general financial market conditions – Delay or inability in obtaining approvals from authorities – Technical development – Litigation – Adverse publicity and news coverage, which would cause actual development and results to differ materially from the statements made in this document

  • TITAN assumes no obligation to update or alter such statements whether as a result of new information,

future events or otherwise.

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SLIDE 24

Thank you

9M 2016

Investors' and Analysts' Presentation

24