FY 2016 results | 26 April 2017 Investor Meeting & Bondholder Call Michael Wolff (CEO) & Richard Mayer (CFO) 12. Mai 2017 Pfleiderer 1
AGEN ENDA FY 2016 – HIGHLIGHTS AND KEY FIGURES TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY FINANCIAL OVERVIEW AND INVESTMENT PROJECTS OUTLOOK 2
A leading fully integrated wood-based panel manufacturer with premium strategy 1st wood panel producer (capacities) in Poland and Germany 3,512 employees Company listed on the Warsaw Stock in Poland and Germany Exchange since 1997 Successful integration approx. Deleveraging from 4.0x in 2014 EUR 32 million of synergies by to 1.6x in 2016 the end of 2018 Approx. 1 billion euros Stable dividend policy - PLN 64.7 revenues in 2016 million (EUR 14.8 million) dividend paid to shareholders in 2016 1 PLN per share 149 million euros sust. EBITDA in 2016 Value-added products (MFC&HPL) – ( 15.5% margin ) 65% of total sales in 2016 April 2017 3
Production sites in two most important markets in Europe with sales operations in other regions across Europe East North West Poland United Kingdom Czech Republic Ireland Estonia Sweden Hungary Denmark Latvia Finland Lithuania Norway Slovakia Central Germany Austria West Switzerland France Belgium Netherlands Luxembourg South East Albania Bosnia-Herzegovina Bulgaria Croatia Commercial branches in the United Kingdom , South Greece the Netherlands, Switzerland, France and Austria Italy Macedonia Portugal Moldova Spain Close proximity to key suppliers allowing Romania Serbia for cost-efficient production and higher margin Slovenia April 2017 4
Reorganization of Pfleiderer provides basis for further growth THE PRESENT THE PAST THE FUTURE Restructuring finished Pfleiderer Group Today Path of growth • • ’ONE PFLEIDERER’ - full • Capacity reduction Investments for further growth • Cost optimization • integration (processes and Productivity improvement • Corporate streamlining • functions) Expansion across Europe • Production de-bottlenecking • • Highly competitive EBITDA margin Innovative solutions • Debt reduction • New innovative ’ONE • Development in two additional business fields COLLECTION’ – Construction, Resin • Strong cash position • Debt refinancing April 2017 5
2016 – a highly sucessfull year for the Pfleiderer Group Good set of financial results supported by favorable market conditions Higher volumes across all segments, in particular by value-added products 12.5% growth of t he Group’s sustainable EBITDA - to EUR 149 million EBITDA margin was raised to 15.5% of revenue and to be record since 1996 One Pfleiderer cost synergies already achieved EUR 18 million (vs. total target of approx. EUR 32 million by the end of 2018). The Management Board recommendation to pay dividend in amount of PLN 71.2 millon or PLN 1.1 per share 2016 is an extraordinary year regarding non-sustainable expenses . In FY2016 into consideration should be taken: • Expenses for the re-IPO: EUR 9.7 million • Provisions for necessary reorganization process of the capital group: EUR 7.1 million (150 white collar employees leaving German entities in 2017 – 2018) • Provisions for negotiations to settle antitrust claims: EUR 7.65 million (The outcome, i.e. the potential costs that may arise in connection with the cartel claims or the amount of damages that might be required to be paid cannot be assessed yet.) • Follow up cost of antitrust proceedings: EUR 6.8 m April 2017 6
Pfleiderer Group EBITDA margin of 15.5% to be record since 1996 • Improvement of the operational efficiency over the last years – a record EBITDA margin (15.5%) achieved at the level of revenues in the amount of EUR 960 m* Pfleiderer GmbH Pfleiderer GmbH Pfleiderer Group > Restructuring > Turnaround > Respositioning 15.5% 160000,00% 1,491 After the restructuring process EBITDA margin gradually 13.4% 360 140000,00% increases 12.5% 310 120000,00% 1,095 In 2016, EBITDA margin 10.2% 985 reached a record in the history 960 960 954 260 100000,00% 8.7% of the company: 15.5% 924 210 80000,00% 149 160 60000,00% 132 120 The financial information includes the full 12 month in 2016 as it does 95 95 110 40000,00% not reflect that the first-time 1.9% consolidation of Pfleiderer Group 1.7% 60 20000,00% occurred on January 19, 2016. 18 25 Therefore, the financial information above will not be fully comparable 0,00% 10 2010 2011 2012 2013 2014 2015 2016 with the reported audited financial statements for 2016 (period from January 19, 2016 through December EBITDA margin Net sales Adj. EBITDA 31, 2016). *comparable business April 2017 7
Balanced and diversified portfolio with growth potential Revenue split 2016 Customer split 2016 (% of revenue) 3% 7% 43% 43% 10% 24% 73% 23% DACH Poland Other Western Europe Other Eastern Europe Beyond Europe Top 10 Top 11-22 Other 7% 5% 10% 34% 16% 43% 51% 17% Laminated/lacquired board Raw PB HPL & elements Raw MDF/ HDF Distributors Industry Others Other April 2017 8
Development of sales volumes by product Laminated particleboard (Tqm) HPL (Tqm) • 37% share of white colored particleboards in 2016 • Value-added products 18% share of specialities raw particleboards in 2016 4.77% 4.48% • Laminated MDF/HDF: • Core West: 96% • Core East: 4% • 67% share of value added products in 2016 2015 2016 2015 2016 Laminated MDF/HDF board (Tqm) Raw MDF/HDF board (cbm) Raw particleboards (cbm) (2.06%) (4.78%) 9.25% Basic products 2015 2016 2015 2016 2015 2016 April 2017 9
Market strategy with focus on value-added segment Area Examples • Incremental growth in value-add segment • Recent launches in Poland − Continued product innovation o LivingBoard Premium • Leverage of Core West knowledge and expertise in Core o LivingBoard Face products East o LivingBoard Face Contiprotect o MDF.RWH − Worktop brands and elements’ press in Poland • Customized products and decors • 24 hrs sampling services • Marketing strategies for integration with customers Product • B2B Platforms: P+ (carpenters) and − B2B concepts for direct and indirect customers related P Connect (architects and designers) services • Knowledge sharing with customers • Pfleiderer Academy: training around products and applications • Established ground in impregnation, lamination and • MDF assembly in Poland Vertical HPL production (furniture back panels) integration • Selective value chain expansion • Digital printing April 2017 10
AGEN ENDA FY 2016 – HIGHLIGHTS AND KEY FIGURES TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY FINANCIAL OVERVIEW AND INVESTMENT PROJECTS OUTLOOK 11
Strong macroeconomic environment across Europe Est. GDP growth in 2017: EU: 2.34 % DACH: 1.63 % East Core (est. 2017 GDP North West Core (est. 2017 GDP growth): Poland: 3.40 % growth): Poland +3.4% United Kingdom +1.0% Czech Republic +2.6% Germany: 1.50% Ireland +3.6% Estonia +2.3% Sweden +2.4% Hungary +2.6% Denmark +1.7% Central (est. 2017 GDP Latvia +2.8% Finland +0.8% growth): Lithuania +2.7% Norway +2.2% Slovakia +3.2% Germany +1.5% Austria +1.6% Switzerland +1.8% West Core (est. 2017 GDP South East (est. 2017 GDP growth): Est. GDP growth): France +1.4% growth rate in Belgium +1.3% Albania +3.5% 2017: Netherlands +1.7% Bosnia-Herzegovina +3.2% Luxembourg +3.8% Bulgaria +2.9% Croatia +2.5% 4.00-3.00 Greece +2.7% South (est. 2017 GDP Macedonia +3.5% 2.90-2.00 Moldova +2.5 growth): Romania +3.9% Italy +0.9% 1.90-1.00 Serbia +2.5% Portugal : +1.2% Slovenia +2.6% Spain +2.3% 0.90-8.00 Source: European Comission, European Economic Forecast Winter 2016 April 2017 12
Positive fundamental dynamics in our target markets Markets’ dynamics (2015 - 19E CAGR) Key drivers and trends DACH (1) Poland Macroeconomic environment and consumer confidence 4.2% Residential 1.1% construction (2) Construction market growth Basic fundamentals 2.6% 1.7% Furniture market growth HPL / CPL volume Greater product specifications 3.8% 1.3% MFC volume Environmental focus 3.2% Consumer trends MDF / HDF 1.3% Secular volume trends Growing preference for premium products 2.5% Raw PB Convergence of consumer trends 0.5% volume between Eastern and Western Europe Source: Reputable industry information provider. High value-add segments (1) DACH defined as Germany, Austria and Switzerland. (2) Includes new and RMI. April 2017 13
Healthy utilisation rates in Pfleiderer’s core Central European markets 94% 91% 90% 85% 78% 70% Industry utilisation levels (2016) Germany Poland North West West South South East Pfleiderer core markets Source: Pöyry Management Consulting (Feb-2017 for Germany and Poland, Jan-2017 for the rest). Note: Particleboard data includes both Raw PB and MFC. West defined as Belgium, France, Luxemburg and Netherlands; North West defined as Denmark, Finland, Norway, Ireland, Sweden and UK; South defined as Italy, Portugal and Spain; South East defined as Bulgaria, Croatia, Greece, Romania, Slovenia, Albania, Bosnia, Mecedonia, Moldova and Serbia. April 2017 14
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