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1
Star Conference 2010
Milan, 18th March 2010
Reno De Medici - Star Conference - Milan, 18 March 2010 2
DISCLAIMER: Certain statements in this presentation, including statements regarding target results and performance, are forward-looking statements based on current analysis and/or assumptions. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decrease in demand for the Company’s products, increase in raw material and energy costs, changes in the relative value of certain currencies, fluctuations in selling prices, adverse changes in general market and industry conditions and other factors.
Christian Dubé Chairman
Giuseppe Garofano Deputy Chairman
Ignazio Capuano Chief Executive Officer
Stefano Moccagatta Chief Financial Officer
Guido Vigorelli Investor Relations Officer
Reno De Medici - Star Conference - Milan, 18 March 2010 3
Contents
Sections Page
� Section I - Overview 4
� Section II - FY09 Results 8
� Section III - Market Environment 13
� Conclusion 21
� Appendices 25
Section I - Overview
Reno De Medici - Star Conference - Milan, 18 March 2010 5
Section I – Milestones
1967
1996
1998
20052006
2008
2009
� 1967 Establishment of the Company Cartiera del Reno, based in Milan with production unit in Marzabotto (Bologna). Output capacity of 8,000 tons.
� 1985 Acquisition of Ovaro, capacity 32,000 tons.
� 1986 Acquisition from Cartiera Binda de Medici of the Ciriè (Turin) plant, output 60,000 tons. The Company changed name to Reno de Medici.
� 1992 Equity holding in Grafiche Capretta, a converting firm with a potential output capacity of 15,000 tons.
� 1995 Ovaro merged into Reno de Medici. Equity holding in Grafiche Capretta raised to 70%.
� 1996 Reno de Medici listed on the Milan stock exchange. Global output capacity up to 270,000 tons.
� 1997 Reno de Medici and Saffa merge. The Company take the name Reno De Medici, acquiring the Bianchi Saffapack converting division, Saffa Immobiliare, Italmatch, a number of smaller holdings and a controlling interest in Sarrio’ (Spain).
� 1998 Reno De Medici merged with Sarrio’, the main holding of the former Saffa, becoming Europe's second largest maker of mainly recycled cardboard with an output capacity of over 950,000 tons and a market share in Europe of around 20%.
� 1999 The company Grafiche Capretta merged with Bianchi Saffapack, changing name to Europoligrafico and becoming Italy's leading paper-transformation firm with 4 production units and an output capacity of 60,000 tons.
� 2001 Acquisition of Aticarta with a paper mill in Pompei and a converting mill in Rovereto.
� 2005 Non-core assets disposal and sale of the share capital owned in Europoligrafico and Aticarta.
� 2006 Demerger of some real estate assets, through the creation and simultaneous listing of RDM Realty.
� 2008 Merger by incorporation of the European recycled cartonboard business of the Cascades Group. Creation of a commercial joint-venture (Careo) for the sale of all kind of cartonboard both from virgin and recycled fibres.
� 2009 Acquisition of a minority stake in Manucor, the leading Italian plastic film producer.
Reno De Medici - Star Conference - Milan, 18 March 2010
0
1
2
3
4
5
0 200 400 600 800 1000 1200 1400 1600 1800
Production capacity (Thousand/tons)
Geogra
phical pre
sence
by n° of co
untries
6
Section I – Competitiveness is improving
MARKET PRESENCE BEFORE AND AFTER THE MERGER WITH CASCADES
Source: Company data as at Dec, 31 2009
CAS 07 RDM 07 Other 14 Producers
RDM 09
Other German
producers
MM 09
Reno De Medici - Star Conference - Milan, 18 March 2010 7
Section I – European coverage is more balanced
EVOLUTION OF RDM GROUP SALES GEO MIX
Source: Company data as at Dec, 31 2009
Cascades 2007
15%
25%
23%
9%
4%2%
22%
BeneluxFranceGermanySpainItalyUKOthers
RDM 2007
2% 10%
6%
13%
4%
14%
51%
BeneluxFranceGermanySpainItalyUKOthers
RDM Group 2009
5%
15%
12%
8%
36%
5%
19%
BeneluxFranceGermanySpainItalyUKOthers
Section II - FY09 Results
Reno De Medici - Star Conference - Milan, 18 March 2010 9
Section II – EBITDA Bridge (adjusted)
YoY WATERFALL
Source: unaudited management account as at Dec, 31 2009. Data in Eur/million
(*) FY2008 EBITDA adjusted includes Blendecques and Arnsberg contribution also for Jan and Feb 2008 (pre merger).
EBITDAFY2008
(*)
Rawmaterialprices
Energiesprices
Sellingprices
Cost ofsales
OtherIncome
Volumesold
Efficiency FixedCosts
EBITDAFY2009
-
10
20
30
40
50
60
70
Reno De Medici - Star Conference - Milan, 18 March 2010 10
Section II – Profit & Loss
(*) FY2009 financial data have not yet been audited by an Independent Auditor.
(**) Due to the excess of the fair value of the assets, liabilities and contingent liabilities identified at 31 December 2008, over the cost of the business combination with Cascades.
(***) This figure does not include the volumes sold by Blendecques and Arnsberg mills in January and February 2008 (pre merger). If this was to be included, total volumes sold by the Group for FY2008 would amount to 958,000 tons.
Source: unaudited management account as at Dec, 31 2009
(Eur/million) FY2009 (*) FY2008
Revenues from sales 428,2 455,0
EBITDA adj before badwill and non recurrent items 31,0 18,8
% EBITDA margin adj 7,2% 4,1%
Badwill (**) 0,0 21,2
EBITDA 31,0 40,0
% EBITDA margin 7,2% 8,8%
Depreciation, amortisation and write downs (27,1) (25,7)
Financial charges (9,1) (11,7)
Discontinued operations 0,0 (6,8)
EBT (5,1) (4,1)
Taxation (1,7) (2,1)
Result for the period (6,8) (6,2)
Tons sold (tons/thousands) 864 889 (***)
Reno De Medici - Star Conference - Milan, 18 March 2010 11
Section II – Balance Sheet
(*) FY2009 financial data have not yet been audited by an Independent Auditor.
Source: unaudited management account as at Dec, 31 2009
(Eur/million) FY2009 (*) FY2008
Stock 74,3 82,1
Trade receivables 110,5 114,5
Trade payables (102,7) (108,8)
Total working capital 82 88
Other assets - current 4,6 6,3
Other liabilities - current (13,9) (17,4)
Other non-current receivables 0,0 0,2
Non-current assets 271,2 274,9
Non-current liabilities (34,5) (38,0)
Employees' leaving indemnity (24,5) (23,5)
Net capital invested 285 290
Net financial position (131) (128,5)
Net Equity 154,1 161,2
Total sources 285 290
Reno De Medici - Star Conference - Milan, 18 March 2010 12
Section II – Net Financial Position
(*) FY2009 financial data have not yet been audited by an Independent Auditor.
(**) In the FY2008 Financial Statements, according to IAS 1, a portion of the non-current loans has been reclassified as a short-term loan, for an amount respectively of 44,4 and 45,9 millions of Euro.
Source: Unaudited management account as at Dec, 31 2009
(Eur/million) FY 2009 (*) FY 2008
Cash and cash equivalents and short-term financial receivables 2,2 6,0
Short-term financial debt (68,3) (113,6) (**)
Valuation of current portion of derivatives (1,1) (0,1)
Short-term financial position (67,2) (107,7)
Medium-term financial debt (62,7) (19,9) (**)
Valuation of non-current portion of derivatives (0,8) (0,9)
Net financial position (130,7) (128,5)
Section III – Market Environment
Reno De Medici - Star Conference - Milan, 18 March 2010 14
Section III - Market environment
� Raw material cost is increasing
� WLC demand is picking up since Q4 2009
� Transfer of price increase on final product will take place during Q2 2010
� This might lead to capacity reduction on the WLC market
Reno De Medici - Star Conference - Milan, 18 March 2010 15
Section III - Market environment
The experienced correlation between WLC consumption and GDP seems to be confirmed. Assuming there will be no major “pipeline effects”, 2010 should mark a modest growth.
-6
-5
-4
-3
-2
-1
0
1
2
3
4
2006 2007 2008 2009 2010
Growth rate of GDP - EU (27 countries) Growth rate of WLC shipped - European Market
Source: Company data as at Dec, 31 2009
WLC MARKET DEMAND EVOLUTION
Reno De Medici - Star Conference - Milan, 18 March 2010 16
Section III – Order BacklogTons
Source: unaudited management accountsData relating to RDM Group world WLC, tons per week
VOLUMES
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53
2007 2008 2009 2010
Reno De Medici - Star Conference - Milan, 18 March 2010 17
Section III – Production Efficiency
Jan. 1, 2007 = 100
OPERATING RATE IS IMPROVING THANKS TO INTERNAL ASSETS RATIONALISATION
Source: unaudited management accountsData relating to RDM Group, working days on calendar year
60
70
80
90
100
110
120
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
Feb
2010
Reno De Medici - Star Conference - Milan, 18 March 2010
Section III - Trend of the spread
18 Source: Company data as at Dec, 31 2009
A NARROWING SPREAD CAUSED BY GROWING COSTS WILL HELP REDUCE OVERCAPACITY…
Jan. 1, 2006 = 100
80
90
100
110
120
130
140
Year 06 Year 07 Year 08 1Q09 2Q09 3Q09 4Q09 Feb 2010
net selling price raw material cost spread
Reno De Medici - Star Conference - Milan, 18 March 2010
Section III - Reducing overcapacity
19
2006: De Endracht (Holland) closure: 130,000 tons
2006: Rio Verde (Spain) closure: 45,000 tons
2007: Romani (Spain) closure: 30,000 tons
2007: Nikopol (MAYR MELNHOF - Bulgaria) closure: 80,000 tons
2008: Papelera del Centro (Spain) closure: 45,000 tons
2009: Blendecques BM5 (RENO DE MEDICI - FR) closure: 60,000 tons
2009: Marzabotto (RENO DE MEDICI - ITALY) closure: 90,000 tons
…A TREND THAT STARTED 4 YEARS AGO, AMOUNTING TO 480,000 TONS SO FAR:
Source: Company estimates
Reno De Medici - Star Conference - Milan, 18 March 2010 20
Section III – Order Inflow
Jan. 1, 2007 = 100
PRICES DEVELOPMENT
Source: unaudited management accountsData relating to RDM Group world WLC, standard unit prices
75
80
85
90
95
100
105
110
115
120
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
Feb
2010
Conclusion
Reno De Medici - Star Conference - Milan, 18 March 2010 22
Conclusion
� Improvement of the product portfolio to customer� Specialisation by market and by product to offer a wide
spectrum of packaging solutions
� Strong asset base and continue capex expenditure tostrengthen our best performing mills
� R&D to help maximise cross-selling opportunities
Reno De Medici - Star Conference - Milan, 18 March 2010 23
Conclusion
IN THE CURRENT ENVIRONMENT ONLY THE BEST PERFORMING MACHINES WILL CREATE VALUE
BM >200 kton
35%
53%
12%
RDM M.M Weig
No. BM:
1
No. BM:
3
No. BM:
3
BM <200 kton
89%
11%
RDM Others
No. BM: 20
No. BM:
4
Board Machine producing over 200,000tons and respective production capacity
Source: Company estimates
Board Machine producing less than 200,000 tons and respective production capacity
Reno De Medici - Star Conference - Milan, 18 March 2010 24
PRODUCERS CONVERTERS END-USERS
RecycledFibers
Virigin
Fibers
Flexible
GROW
ING
PACKAGING VALUE CHAIN
La Rochette
Djupafors
Conclusion
Growing opportunity to improve products portfolio, better serving end-users
Source: Company data as at Dec, 31 2009
Reno De Medici - Star Conference - Milan, 18 March 201025
Market Cap.
78
N.F.P. 131
209
257FixedAssets
70 N.W.C
327~ 118
28 Lands
45 Buildings
184 Machinery
Conclusion
____________________Source: Unaudited management accounts. Data in millions of Euro, as of 31 December 2009
VALUATION MULTIPLES
“Market value” “Book value”
which should lead to better valuation
Increase profitability will come from:
� adjust supply to demand
� reduce fixed costs
� Increase selling prices
Appendices
Reno De Medici - Star Conference - Milan, 18 March 2010
Market42,32%
Management0,16%
Cascades Sas
35,01%
*
Industria e Innovazione
SpA9,05%
*SianoDante5,42%
*
EurinvestFinanza
Stabile Srl5,51%
*
Bonati Fabio2,53%
27
Appendices – Shareholders
* Shareholders’ Agreement
Source: Company data as at Dec, 31 2009
Reno De Medici - Star Conference - Milan, 18 March 2010 28
Appendices – Corporate Governance
Source: Company data as at Dec, 31 2009
Christian Dubé Chairman
Giuseppe Garofano Deputy Chairman
Ignazio Capuano Managing Director
Riccardo Ciardullo Director
Sergio Garribba Director
Robert Hall Director
Laurent Lemaire Director
Mirko Leo Director
Vincenzo Nicastro Director
Carlo Peretti Director
Emanuele Rossini Director
BOARD OF DIRECTORS
Sergio Pivato Chairman
Giovanni Maria Conti Standing auditor
Carlo Tavormina Standing auditor
BOARD OF STATUTORY AUDITORS
INDEPENDENT AUDITORS
PricewaterhouseCoopers S.p.A
Reno De Medici - Star Conference - Milan, 18 March 2010 29
Appendices – Group’s structure
Source: Company data as at Dec, 31 2009
70%
Reno De MediciSpA
Production
plantsSheeting and
distribution centres
Italian
Mills
RDM
Arnsberg
RDM
Blendecques
RDM
Iberica
Manucor
RDM
Uk
Emmaus
Pack
C.A.M
Pac
Services
Careo
SpainCareo
France
Careo
Poland
Careo
RussiaCareo
UK
Careo
Hungary
Careo
Czech.
Rep.
Careo
Germany
Sales
organizations
100%
51%
100%
33%
Tissue
Core
51%
100%
22,75%
100%
100%
100% CareoS.r.l
For more information:www.renodemedici.it
Guido Vigorelli – [email protected]
Laurence Duretz – [email protected]