FY 2016 results | 26 April 2017 Investor Meeting & Bondholder - - PowerPoint PPT Presentation

• 12. Mai 2017

Pfleiderer 1

FY 2016 results | 26 April 2017 Investor Meeting & Bondholder Call Michael Wolff (CEO) & Richard Mayer (CFO)

FY 2016 – HIGHLIGHTS AND KEY FIGURES AGEN ENDA

2

TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY FINANCIAL OVERVIEW AND INVESTMENT PROJECTS OUTLOOK

A leading fully integrated wood-based panel manufacturer with premium strategy

Company listed on the Warsaw Stock Exchange since 1997 Successful integration approx. EUR 32 million of synergies by the end of 2018 Value-added products (MFC&HPL) – 65% of total sales in 2016 Deleveraging from 4.0x in 2014 to 1.6x in 2016 149 million euros

• sust. EBITDA in 2016

(15.5% margin) Stable dividend policy - PLN 64.7 million (EUR 14.8 million) dividend paid to shareholders in 2016 1 PLN per share 1st wood panel producer (capacities) in Poland and Germany

• Approx. 1 billion euros

revenues in 2016 3,512 employees in Poland and Germany

3 April 2017

Production sites in two most important markets in Europe with sales

• perations in other regions across Europe

North West

United Kingdom Ireland Sweden Denmark Finland Norway

West

France Belgium Netherlands Luxembourg

Central

Germany Austria Switzerland

South

Italy Portugal Spain

South East

Albania Bosnia-Herzegovina Bulgaria Croatia Greece Macedonia Moldova Romania Serbia Slovenia

Commercial branches in the United Kingdom, the Netherlands, Switzerland, France and Austria Close proximity to key suppliers allowing for cost-efficient production and higher margin

East

Poland Czech Republic Estonia Hungary Latvia Lithuania Slovakia

4 April 2017

THE PRESENT THE PAST THE FUTURE

Reorganization of Pfleiderer provides basis for further growth

• Capacity reduction
• Cost optimization
• Corporate streamlining
• Production de-bottlenecking
• Debt reduction
• ’ONE PFLEIDERER’ - full

integration (processes and functions)

• Highly competitive EBITDA margin
• New innovative ’ONE

COLLECTION’

• Strong cash position
• Debt refinancing
• Investments for further growth
• Productivity improvement
• Expansion across Europe
• Innovative solutions
• Development in two additional business fields

– Construction, Resin

Restructuring finished Pfleiderer Group Today Path of growth

5 April 2017

6

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 the 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

• f damages that might be required to be paid cannot be assessed yet.)
• Follow up cost of antitrust proceedings: EUR 6.8 m

April 2017

Pfleiderer Group EBITDA margin of 15.5% to be record since 1996

1.7% 8.7% 1.9% 10.2% 12.5% 13.4% 15.5% 1,491 1,095 954 924 960 985 960 25 95 18 95 120 132 149

10 60 110 160 210 260 310 360 0,00% 20000,00% 40000,00% 60000,00% 80000,00% 100000,00% 120000,00% 140000,00% 160000,00%

2010 2011 2012 2013 2014 2015 2016 EBITDA margin Net sales

• Adj. EBITDA

After the restructuring process EBITDA margin gradually increases In 2016, EBITDA margin reached a record in the history

• f the company: 15.5%

Pfleiderer GmbH > Restructuring Pfleiderer GmbH > Turnaround Pfleiderer Group > Respositioning

• 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*

7

The financial information includes the full 12 month in 2016 as it does not reflect that the first-time consolidation of Pfleiderer Group

• ccurred on January 19, 2016.

Therefore, the financial information above will not be fully comparable with the reported audited financial statements for 2016 (period from January 19, 2016 through December 31, 2016).

April 2017 *comparable business

Balanced and diversified portfolio with growth potential

8 April 2017

Revenue split 2016

43% 23% 24% 7% 3% DACH Poland Other Western Europe Other Eastern Europe Beyond Europe 51% 17% 16% 10% 5% Laminated/lacquired board Raw PB HPL & elements Raw MDF/ HDF Other

Customer split 2016 (% of revenue)

43% 10% 73% Top 10 Top 11-22 Other 43% 34% 7% Distributors Industry Others

2015 2016 Raw particleboards (cbm)

Development of sales volumes by product

9 April 2017 2015 2016 Laminated particleboard (Tqm) 2015 2016 HPL (Tqm)

9.25% 4.48% 4.77%

2015 2016 Laminated MDF/HDF board (Tqm)

(2.06%)

2015 2016 Raw MDF/HDF board (cbm) Value-added products Basic products

(4.78%)

• 37% share of white colored particleboards in 2016
• 18% share of specialities raw particleboards in 2016
• Laminated MDF/HDF:
• Core West: 96%
• Core East: 4%
• 67% share of value added products in 2016

Market strategy with focus on value-added segment

10 April 2017

Area Examples

Premium products

• Incremental growth in value-add segment

− Continued product innovation

• Leverage of Core West knowledge and expertise in Core

East − Worktop brands and elements’ press in Poland

Product related services Vertical integration

• Marketing strategies for integration with customers

− B2B concepts for direct and indirect customers

• Knowledge sharing with customers
• Established ground in impregnation, lamination and

HPL production

• Selective value chain expansion
• Recent launches in Poland
• LivingBoard
• LivingBoard Face
• LivingBoard Face Contiprotect
• MDF.RWH
• MDF assembly in Poland

(furniture back panels)

• Digital printing
• Customized products and decors
• 24 hrs sampling services
• B2B Platforms: P+ (carpenters) and

P Connect (architects and designers)

• Pfleiderer Academy: training around

products and applications

FY 2016 – HIGHLIGHTS AND KEY FIGURES AGEN ENDA

11

TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY FINANCIAL OVERVIEW AND INVESTMENT PROJECTS OUTLOOK

12

Strong macroeconomic environment across Europe

North West Core (est. 2017 GDP growth):

United Kingdom +1.0% Ireland +3.6% Sweden +2.4% Denmark +1.7% Finland +0.8% Norway +2.2%

West Core (est. 2017 GDP growth):

France +1.4% Belgium +1.3% Netherlands +1.7% Luxembourg +3.8%

Central (est. 2017 GDP growth):

Germany +1.5% Austria +1.6% Switzerland +1.8%

South (est. 2017 GDP growth):

Italy +0.9% Portugal : +1.2% Spain +2.3%

South East (est. 2017 GDP growth):

Albania +3.5% Bosnia-Herzegovina +3.2% Bulgaria +2.9% Croatia +2.5% Greece +2.7% Macedonia +3.5% Moldova +2.5 Romania +3.9% Serbia +2.5% Slovenia +2.6%

• Est. GDP

growth rate in 2017:

4.00-3.00 2.90-2.00 1.90-1.00 0.90-8.00

• Est. GDP growth in 2017:

EU: 2.34 % DACH: 1.63 % Poland: 3.40 % Germany: 1.50%

Source: European Comission, European Economic Forecast Winter 2016

East Core (est. 2017 GDP growth):

Poland +3.4% Czech Republic +2.6% Estonia +2.3% Hungary +2.6% Latvia +2.8% Lithuania +2.7% Slovakia +3.2%

April 2017

Positive fundamental dynamics in our target markets

13 April 2017

DACH(1) Poland



Macroeconomic environment and consumer confidence



Construction market growth



Furniture market growth



Greater product specifications Environmental focus Consumer trends Growing preference for premium products Convergence of consumer trends between Eastern and Western Europe

Key drivers and trends

Basic fundamentals Secular trends Residential construction(2) Raw PB volume MFC volume HPL / CPL volume

Markets’ dynamics (2015 - 19E CAGR)

Source: Reputable industry information provider. (1) DACH defined as Germany, Austria and Switzerland. (2) Includes new and RMI.

1.1% 4.2%

MDF / HDF volume

0.5% 2.5% 1.3% 3.8% 1.7% 2.6% 1.3% 3.2%

High value-add segments

   

Healthy utilisation rates in Pfleiderer’s core Central European markets

14 April 2017

94% 91% 90% 85% 78% 70% Germany Poland North West West South South East

Industry utilisation levels (2016)

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.

Market trends towards value-added products expected to support future growth

15 April 2017

Shop fittings Kitchen/bathroom Hotel & tourism Roofing Walls Doors

Furniture Construction Key drivers

• Large and resilient renovation market in DACH/

Western Europe

• Fast-growing new building market in Poland/Eastern Europe
• Increasingly demanding consumer requirements in

Western Europe

• Catch up of Eastern European consumer requirements with Western

European standards

Key drivers

Source: Company information.

The example of Raw PB and MFC product mix evolution in Germany

Value growth driven by the increasing share of value-added products in the panel market

16 April 2017 54% 51% 46% 49% 2014 2015 Raw PB MFC

• The generalization of lamination has unlocked scale advantages in favour of panel manufacturers

vs furniture players, leading panel manufacturers to increase their share of value-add products

Key drivers of value growth

• Premiumization
• Consumer preferences
• Product innovation
• Customization
• New applications

Lamination increasingly performed by panel manufacturers

Mix by volume

 Greater market value at a given volume

Source: EPF (2016).

Development of raw materials prices

17 April 2017

100% 95% 84% 2014 2015 2016 100% 102% 99% 2014 2015 2016 Wood (EUR/to) 100% 97% 76% 2014 2015 2016 Glue (EUR/to) Electricity (EUR/KWh)

Wood:

• Average yearly wood price

decrease of approx. 16% over 2014-2016 mainly driven by decrease in industry and recycling wood

• The use of wood for energy

production is on a high level. Therefore a certain competition between energy production and production of wood products exists Glue:

• While average yearly glue price

remained relatively steady in 2014-2015, it dropped by c. 22% in 2015-2016

• Negative trend turned around in

May 2016: price rose c. 10% in the last 7 months of the year Electricity:

• Electricity price decreased slightly
• ver 2015-2016
• In Core West renewable power

generation was at its historic peak, which led to significant cost savings

• Increase in electricity prices in

Q4/2016 in Core West due to standstill of nuclear power plants in France

Note: Raw material prices indexed as of 2014

DACH Poland

18

Raw PB MFC MDF/HDF HPL/CPL

M cbm M cbm M m2

DACH defined as Germany, Austria and Switzerland | Source: B+L (Jan 2017)

M cbm

3.10 3.26 2015 2019 2.11 2.45 2015 2019 1.8 1.99 2015 2019 3.73 3.81 2015 2019 1.11 1.26 2015 2019 3.26 3.43 2015 2019 7.62 8.45 2015 2019 75.76 80.89 2015 2019

Favorable growth drivers continue to support our core products

April 2017

FY 2016 – HIGHLIGHTS AND KEY FIGURES AGEN ENDA

19

TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY FINANCIAL OVERVIEW AND INVESTMENT PROJECTS OUTLOOK

20

Pfleiderer Group has successfully priced and allocated debt refinancing

April 2017

On 7 April the Company has successfully priced and allocated a EUR 350.0 million 7-year covenant- lite term loan B facility carrying an interest margin of 325bps (Euribor floor: 0.75%) and 99.0 OID (Original Issue Discount). The new EUR 100.0 million 5-year revolving credit facility will have an interest margin of 300bps (Euribor floor: 0%).

The proceeds from the facilities will be used to redeem the existing EUR 321,684,000 7.875% senior secured notes issued by PCF GmbH (formerly Pfleiderer GmbH) in full, to refinance the existing senior secured revolving credit facility and to fund related transaction fees, redemption premium and expenses as well as for general corporate purposes and working capital requirements. Subject to the completion of the facilities, Pfleiderer plans to redeem the notes on or after August 1, 2017 at a redemption price of 101.969%.

• Starting from 2018, interest savings are expected to be at approx. EUR 6.5 million compared to 2016/2017

(although TLB is 50 MEUR higher).

• Loan interest on a standalone base provides an cost advantage of EUR 11.4 million.

36.4 40.5 132.3 148.9 Q4, 2015Q4, 2016 2015 2016 12.5% (EUR 16.6 million)

Pfleiderer Group – increase of sustainable EBITDA by 12.5% in 2016

21 April 2017

Revenues (€m)

• Sust. EBITDA (€m)

Net income (€m) EBITDA (€m)

242.6 233.8 984.5 960.4 Q4, 2015Q4, 2016 2015 2016 32.0 32.6 119.2 109.8 Q4, 2015Q4, 2016 2015 2016 5.6

• 1.8

20.7 11.7 Q4, 2015Q4, 2016 2015 2016

• 2.4%

(EUR -24.1 million)

• 3.6%

(EUR -8.8 millon) 1.9% (EUR 0.6 million)

• 7.9%

(EUR -9.4 million) 11.4% (EUR 4.2million)

• 43.2%

(EUR -8.9 million)

• 132.4%

(EUR -7.4 million)

Comparable Business

• EBIT (EUR 35.1 million in 2016 vs. EUR 71.2 million in 2015) – affected by PPA = EUR 30.7 million (PPA - driven by higher depreciation and

amortization = EUR 26.6 million)

• Figures Q4, FY 2015 represent comparable business ff.

Sales development – Core West & Core East (incl. intercompany sales)

22 April 2017

94.9 87.5 374.2 339.1 Q4, 2015 Q4, 2016 2015 2016

• 7.8%

(EUR -7.4 million) 160.4 157.8 651.3 659.1 Q4, 2015 Q4, 2016 2015 2016

Core East

(EURm)

Core West

(EURm)

• 9.4%

(EUR -35.0 million)

• 1.6%

(EUR -2.6 million) +1.2% (EUR +7.8 million) Sales development (EURm) Q4, 2015 Q4, 2016 Change (%) 2015 2016 Change (%) Pfleiderer Group 242.6 233.8

• 3.6%

984.5 960.4

• 2.4%
• Growth is mainly driven by volumes (especially raw and laminated

particleboards)

• Sales prices are below level of previous year
• In 2016 sales decrease as a result of drop in turnover of Grajewo

plant; lower sales prices in Poland due to raw material prices and FX effects

• IKEA volumes now re-alocated

Volume growth in Q4, 2016 vs. Q4, 2015: Raw particleboard: + 11.3% Laminated particleboard: +3.6% Raw MDF/HDF board: +14.7% Laminated MDF/HDF board: - 7.9% HPL: -5.4% Volume growth in 2016 vs. 2015: Raw particleboard: + 9.3% Laminated particleboard: +4.5% Raw MDF/HDF board: -4.8% Laminated MDF/HDF board: - 2.1% HPL: +4.8%

Improvement of sustainable EBITDA over time in Core West

23 April 2017

14.4 11.4 54.5 49.2 Q4, 2015 Q4, 2016 2015 2016

• Sust. EBITDA

(EURm) Q4, 2015 Q4, 2016 Change (%) 2015 2016 Change (%) Pfleiderer Group 36.4 40.5 11.4% 132.3 148.9 12.5% (EURm)

Core West

+29.2% (EUR 22.7 million)

• 20.3%

(EUR -2.9 million)

Core East

(EURm)

• 9.7%

(EUR -5.3 million) 21.9 29.8 77.8 100.5 Q4, 2015 Q4, 2016 2015 2016

• Successful cost saving and operational improvement measures

driving margin improvement

• Margin improvement as a result of ongoing efficiency programs and

productivity improvements

• 2016 decline given by IKEA contract and FX

+36.1% (EUR 7.9 million)

13.7% 18.9% 11.9% 15.2% 15.2% 13.0% 14.6% 14.5% EBITDA Margin EBITDA Margin

Q4, 2015 Q4, 2016 2015 2016 Revenues

242.6 233.8 984.5 960.4

Gross profit

63.7 56.2 243.2 222.4

Gross profit margin (%)

26.3% 24.1% 24.7% 23.2%

EBITDA

32.0 32.6 119.2 109.8

Sustainable EBITDA

36.4 40.5 132.3 148.9

• Sust. EBITDA margin (%)

15.0% 17.3% 13.4% 15.5%

D&A

• 13.2
• 18.5
• 48.0
• 74.7

EBIT

18.7 14.1 71.2 35.1

Financial result

• 12.1
• 10.8
• 38.7
• 25.8

EBT

6.6 3.4 32.5 9.3

Income taxes

• 1.1
• 5.2
• 11.8

2.4

Profit/loss for the period

5.6

• 1.8

20.7 11.7

Q4 2016, FY2016 P&L Pfleiderer Group

24 April 2017

(EURm)

• EBIT (EUR 35.1 million in Q1-Q4, 2016 vs. EUR 71.2 million in Q1-Q4, 2015) – affected by PPA = EUR 30.7 million (PPA - driven by higher

depreciation and amortization = EUR 26.6 million) and non-sustainable items (EUR 39.1 million in 2016 and EUR 13.1 million in 2015)

Q4 2016, FY 2016 cost development – Group level

25 April 2017

Q4, 2015 Q4, 2016 2015 2016

Selling expenses

• 32.1
• 29.8
• 121.7
• 115.7

Administrative expenses

• 13.1
• 11.4
• 49.1
• 50.1

R&D

• 0.3
• 0.4
• 1.5
• 1.6

SGA (% of sales)¹

• 18.8%
• 17.8%
• 17.5%
• 17.4%

Other operating income/expenses 0.7

• 0.6

0.4

• 20.0

EBIT margin (% of sales) 7.7% 6.0% 7.2% 3.7% PMO 7.2 0.2 25.4 5.3 Non-sustainable items 4.4 7.9 13.1 39.1

1 SG&A includes selling expenses, admin expenses and R&D for this ratio 2 Sales prices impacted PMO negatively (EUR -26.8 million in Q1 – Q4, 2016)

(EURm)

Working capital

26 April 2017 50.9 51.4 15.0 18.4 98.8 95.6 94.3 91.9 (73.7) (69.0) (98.1) (89.1) 76.0 78.0 11.1 21.2 2013 2014 2015 2016 Trade receivables Inventories Trade payables 76.0 78.0 11.1 21.2 8.2% 8.1% 1.1% 2.2% 2013 2014 2015 2016 Net Working Capital % of sales

Working capital after factoring (€m)

• Working capital decreased c. 34.7% yoy over the 2013-2016 period

Resilient business model with strong cash generation

27 April 2017

(EURm)

2015 2016

Reported EBITDA

119.2 109.8

CF investing activities

(47.0) (62.9)

thereof capex1

(46.9) (52.0)

WC changes before factoring

30.0 (8.7)

Taxes

(7.4) (4.6)

Other

(9.8) 20.8

FCF pre financing

85.1 54.4 85.1 54.4 2015 2016 0.7x 0.5x

FCF pre financing

1 Includes investments in property, plant and equipment as well as in intangible assets; excludes change in advance payments; other items included in cash flow from investing

are proceeds from asset sales

Net leverage – Pfleiderer Group

28 April 2017

1.8x 1.6x

Dec 2015 Dec 2016

December 31, 2016 x Sust. EBITDA Senior secured notes due 2019 329.7 2.21x Accrued interest 10.7 0.07x Other (Liabilities pension trust) 0.2 0.00x Total debt 340.7 2.29x Cash on BS 97.7 0.66x Net total debt 242.9 1.63x

• Sust. EBITDA LTM 2016

148.9

• Sust. EBITDA LTM 2015

132.3

• Net financial debt / sustainable EBITDA

Net leverage ratio

Basis for 2014-2016 figures is TM1 which represents the key figures definition of the Pfleiderer Group. 2013 and 2012 figures regarding calculation Working capital, EBITDA sustainable LTM and Net debt are based on proforma-data.

(EURm) Driven by operational performance and ongoing efficiency programs, positive development in all KPIs

• S&P rating update (24 Mar 2017): B+ (outlook positive)
• Moody’s rating update (23 Mar 2017): Ba3 (outlook stable)
• S&P rating update (20 Jan 2017): B+ (outlook positive)
• S&P rating update (29 Jan 2016): B (outlook positive)
• Moody’s rating update (26 Jan 2016): B1 (outlook stable)

Financial performance indicators Group

29 April 2017

Definition 2015 2016 Liquid funds MEUR 86.8 97.7 Net debt Financial debts - liquid funds MEUR 243.7 242.9 Net leverage Net debt / sust. EBITDA (LTM) factor 1.8 1.6 Equity ratio Equity / balance sheet totals % 31.2% 28.2% Gearing Net debt / equity factor 0.9 0.9

• Sust. EBITDA (LTM)

Profit from operations + depreciation and amortization MEUR 132.3 148.9 Interest cover

• sust. EBITDA / net finance charges

factor 3.4 5.8

RoCE

EBIT(LTM) / Capital employed % 12.2% 5.6%

ROA

Net profit (LTM) / total assets at the end of the period % 2.3% 1.2%

ROE

Net profit (LTM) / equity at the end of the period % 7.4% 4.4%

• Mostly driven by operational performance and ongoing efficiency programs.

please note, that reported profit figures are influenced by non-sustainable items

Investment projects realized in 2016

30

Investment Capex Rational Expected outcome

4-Pack Project (Grajewo)

• Increase of lacquering

capacity by about 30%

• Sanding line
• Cut to size
• Customization

EUR 9.8 million Additional sales and margin by shifting commodities into value-added products

• Sales increase by EUR 17-20

million

• Additional margin:
• EUR 1.5- 2.0 million in

2017 Worktop line (Wieruszów) EUR 3.4 million Added value products (launched in March 2016) Sales increase by EUR 4.5 million and margin EUR 1.3-1.6 million in 2017 Dynasteam (Wieruszow) EUR 3.0 million Extension of capacity by 50.000 cbm, launched in October 2016 EUR 6 million revenue and EUR 1.2 m margin in 2017

April 2017

Pipeline of attractive investments to support growth – 2017 Capex

31 April 2017

Investment Capex Rational Expected outcome

Sanding Line (Neumarkt) EUR 5.8 million More flexibility in production (launch in August 2017) EUR 2.0 million EBITDA Recycled wood EUR 9.5 million Increasing consumption of recycled wood fibre and reducing cost for wood (launch at the end of 2017) EUR 5.0 million EBITDA Lacquering line (Leutkirch) EUR 12.0 million New functional surface technology, new high gloss and dull surfaces (launch in Q1, 2018) EUR 8.4 million EBITDA Commercial Growth Strategy EUR 11.3 million Growth of current & new products and exploring new markets; securing & increasing production capacity; development of resins and quality improvement (launch in H2 2018) EUR 6.4 million EBITDA

FY 2016 – HIGHLIGHTS AND KEY FIGURES AGEN ENDA

32

TRENDS IN CONSTRUCTION AND FURNITURE INDUSTRY FINANCIAL OVERVIEW AND INVESTMENT PROJECTS OUTLOOK

Main drivers in 2017

33 April 2017

Sales growth and volume

• Sales growth driven by volume increases whilst prices expected to recover slightly vs. low point in Q4 2016
• Volume increase primarily driven by value-added products
• Growth as a result of:
• capacity improvement projects from 2016: Worktopline and Dynasteam in Wieruszow, 4Pack project Grajewo
• perational improvements: operations, uptime improvements, debottlenecking at the level of EUR 22 million in 2017
• as well as intensified marketing activities (e.g. One Collection) with the side effect of additional costs

EBITDA

• EBITDA driven by improvement and cost savings, offsetting additional cost for volume-based headcount

increases

• Management Board is expecting to achieve at least a low double-digit increase in EBITDA in 2017

Dividend, Leverage

• Stable dividend policy with payout of up to 70% of consolidated net income
• Target net leverage between 1.5-2.0x

34

Joanna Pydo Head of IR Pfleiderer Group Joanna.Pydo@pfleiderer.pl

• m. +48 602 102 734

Pfleiderer IR contact

ADDITIONAL INFORMATION

35

Overview from ONE Pfleiderer effects

36 April 2017

mEUR

• add. effects against

2014 Pfleiderer Group Core East Core West 2016 2018 2016 2018 2016 2018 Budget 12.3 30.0 4.7 6.6 7.6 23.4 Actual 18.0 32.7 7.7 9.3 10.3 23.4

Non-sustainable items

37 April 2017  Mainly legal and consulting costs associated with full integration

and optimisation of the Poland-based Core East and Germany- based Core West divisions of the business

 Severance payments for top management  Costs associated with launch of new product collection in January

2017

 Provision for replacing employees in West with employees in East  Cancelled acquisition project  Costs associated with the reverse takeover of Pfleiderer GmbH and

its re-IPO at the Warsaw Stock Exchange

 Write-off of asset value restatement during the re-IPO  Relates to a fine imposed on Pfleiderer AG by the German federal

cartel authority on September 15, 2011. Follow-up costs refer to compensation accruals and lawyer costs

EBITDA reported 119.206 109.8 I Improvement programs / Personnel restructuring 8.3 16.5 One Pfleiderer 5.8 3.7 Strategic Marketing East 1.2 1.5 Severence payments 0.1 1.1 ONE collection – 1.3 ONE SAP 0.3 0.4 Balance of interest – 7.1 Other 0.8 1.4 II Acquisitions / Disposals 0.0 1.1 Project Rhein – 1.1 III Optimization of financial and corporate structure 0.6 10.1 Pinehurst 0.8 5.6 PPA Adjustments – 4.1 Other (0.1) 0.4 IV Certain litigation matters 2.7 6.6 Follow-up costs antitrust proceeding 2.3 6.8 Other 0.4 (0.2) V Other non-recurring effects 1.5 4.9 Non-sustainable items 13.1 39.1 EBITDA sustainable 132.3 148.9

Commentary 1 2 3 4 5 6 7 8 1 3 2 6 7 8 5 4

Comparable business 2016

38 April 2017

fiscal year '16 Re-IPO 1-12/2016 PPA- 1-12/2016 non-sus- 1-12/2016 1-12/2016 '000 EUR "as reported"

• Jan. 1-19

"full year" Effects "comaprabl e" tainable items "sustainabl e" "sustainable" less 19 days Sales 929 588 30 813 960 401 960 401 960 401 COS, SG&A, other without D&A

• 820 845
• 29 745
• 850 590
• 4 057
• 846 533
• 35 036
• 811 497

EBITDA 108 743 1 068 109 811

• 4 057

113 868

• 35 036

148 904 147 836 in % of sales 11,7% 3,5% 11,4% n/a 11,9% n/a 15,5% D&A

• 71 360
• 3 352
• 74 712
• 26 636
• 48 076
• 48 076

EBIT 37 383

• 2 284

35 099

• 30 693

65 792

• 35 036

100 828 in % of sales 4,0%

• 7,4%

3,7% n/a 6,9% n/a 10,5%

Pfleiderer Grajewo S.A. changed its name to Pfleiderer Group S.A.

39

• The Company’s registered office has been relocated from Grajewo to Wrocław.

The changes made to the group’s corporate structure are of a strategic nature and as a consequence, the

• rganization have three tiers:

1 2 3

Holding Company: Pfleiderer Group S.A.

• Domiciled in Wrocław
• Responsible for governing the Group in terms of strategy execution, finance and controlling, including

internal audit and compliance Two major companies responsible for the Group’s operations

• Pfleiderer Polska Sp. z o.o.
• Pfleiderer Deutschland GmbH

Responsible for relations with clients and devising a cohesive offer under ONE PFLEIDERER. All service functions, like sales, marketing, human resources, IT, finance and procurement have been transferred to these two operating companies. The production companies Have become subsidiaries of Pfleiderer Polska Sp. z o.o. and Pfleiderer Deutschland GmbH.

April 2017

Structure of the Pfleiderer Group

40

Pfleiderer Group S.A. strategically modifies its corporate organization - below presented future structure of the Group

Pfleiderer Group S.A.

Pfleiderer Polska Sp. z o.o. PCF GmbH

Pfleiderer Grajewo Sp. z o.o. Pfleiderer Wieruszów Sp. z o.o. Pfleiderer Silekol Sp. z o.o. Jura Polska Sp. z o.o. Pfleiderer France S.A.S. Pfleiderer Benelux B.V Pfleiderer Suisse AG Pfleiderer UK Ltd Pfleiderer Austria GmbH Pfleiderer Neumarkt GmbH Pfleiderer Gutersloh GmbH Pfleiderer Baruth Pfleiderer Leutkirch Pfleiderer Arnsberg GmbH Heller Holz GmbH Jura-Spedition GmbH Functions: E S P P P O H P P P P O O H H P S E O Holding Production Support Sales Other Pfleiderer MDF Grajewo Sp. z o.o. P Pfleiderer Deutschland GmbH S E E

April 2017

E E E E

Shareholder structure

41

Shareholder structure as of 26 April, 2017 Number of shares % of equity Number of votes

• n GM

Percentage of votes on GM Strategic Value Partners LLC 19,183,149 29.65% 19,183,149 29.65% Atlantik S.A. 12,474,561 19.28% 12,474,561 19.28% Aviva OFE Aviva BZ WBK 6,000,000 9.27% 6,000,000 9.27% Nationale-Nederlanden OFE 6,400,000 9.89% 6,400,000 9.89% Other shareholders 20,643,297 31.91% 20,643,297 31.91% Total 64,701,007 100.00% 64,701,007 100.00% 29.65% 19.28% 9.27% 9.89% 31.91% Strategic Value Partners LLC Atlantik S.A. Aviva OFE Aviva BZ WBK Nationale Nederlanden OFE Other shareholders

According to latest available information

April 2017

Pfleiderer Group on the Warsaw Stock Exchange

42

Coverage by 7 brokerage houses.

19 24 29 34 39 44 49

Pfleiderer Group Quotations (19.01.2016-20.04.2017)

PLN

Company data New ticker PFL Market capitalization PLN 2,730 m* Free float 48.77% Indices mWIG40 (1.728%) WIG (0.407%) WIG-Poland (0.420%)

Source: www.gpwinfostrefa.pl

Recommendations info:

• 06.02.2017 – BZ WBK

Recommendation: Hold. TP: 43.36 PLN

• 19.12.2016 – Noble Securities

Recommendation: Hold. TP: 40.25 PLN

• 08.09.2016 – DM BZ WBK

Recommendation: Buy. TP: 42.4 PLN

• 19.08.2016 – Wood & Company

Recommendation: Buy. TP: 39.30 PLN

• 13.07.2016 – ING

Recommendation: Buy. TP: 38.40 PLN

• 30.06.2016 – DM PKO BP

Recommendation: Hold. TP: 31.00 PLN

• 03.06.2016 – Noble Securities DM

Recommendation: Buy. TP: 38.12 PLN

• 27.04.2016 – DM BDM

Recommendation: Buy. TP: 40.50 PLN

• 26.04.2016 – Deutsche Bank

Recommendation: Buy. TP: 36.00 PLN

• 08.04.2016 – DM Trigon

Recomendation: Buy . TP: 45.90 PLN

The chart presents Pfleiderer Group stock prices evaluation during one year period and at the moments of reports publication

As of 21 April, 2017

April 2017

Sell-side analyst covering Pfleiderer Group

43 April 2017

Institution Analyst DM BDM Krystian Brymora DM BZ WBK Michał Sopiel Deutsche Bank Tomasz Krukowski DM Noble Securities Krzysztof Radojewski DM PKO BP Piotr Łopaciuk DM Trigon Maciej Marcinowski Wood &Company Maciej Wardejn

44 April 2017

Date Award Product/Category Institution 2017 Listed Company of the Year 2016 Category: “Investor Relations” Puls Biznesu” daily and TNS Polska 2017 Iconic Award interior innovation SolidColor Xtreme Rat für Formgebung Service GmbH 2017 pro-K Award SolidColor Xtreme pro-K Industrieverband Halbzeuge und Konsumprodukte aus Kunststoff e.V. 2017 German Design Award 2017 SolidColor Xtreme, Mattlack, Natural Wood Rat für Formgebung Service GmbH 2017 Red Dot Award: Product Design 2017 SolidColor Xtreme red dot GmbH & Co. KG 2017 Interzum award: intelligent material & design 2017 SolidColor Xtreme Interzum 2016 German Design Award 2016 Strukturen Xtreme, Meandra Rat für Formgebung Service GmbH 2016 HolzLand Award TopLieferant HolzLand GmbH 2016 Iconic Award 2016 SolidColor Xtreme Rat für Formgebung Service GmbH 2016 iF Award Trade fair stand BAU 2015 IF 2016 Good Design SolidColor Xtreme Institute of Industrial Design

Pfleiderer Awards

Disclaimer

45 April 2017 This document and the information contained herein (unless otherwise indicated) has been prepared by Pfleiderer GmbH and Pfleiderer Group SA jointly (referred to herein as the “Issuer”) solely for informational purposes. For the purposes of this notice, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the Issuer or any person on behalf of the Issuer, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials distributed at, or in connection with the presentation (collectively, the “Presentation”). By attending the meeting at which the Presentation is made, or by reading the Presentation, you will be deemed to have (i) agreed to all of the following restrictions and made the following undertakings and (ii) acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the Presentation. The information contained in this Presentation is private and confidential and may not be reproduced, redistributed or disclosed in any way, in whole or in part, to any

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