Deutsche Bank 21 st Annual Leveraged Finance Conference June 2017
Deutsche Bank 21st Annual Leveraged Finance Conference
June 2017
Disclaimer
2
This information has been prepared solely for the purpose of assisting the recipient (the “Recipient”) in starting to conduct its own independent evaluation and analysis of Grupo Antolín-Irausa, S.A. and its
subsidiaries (the “Group”). No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the Recipient’s
purposes.
The information herein is not all-inclusive nor does it contain all information that may be desirable or required in order to properly evaluate the Group. Neither the Group nor any of its officers, directors,
employees, affiliates or advisors will have any liability with respect to any use of, or reliance upon, any of the information herein. The Recipient acknowledges and agrees that it is responsible for making an
independent judgment in relation to information contained herein and for obtaining all necessary financial, legal, accounting, regulatory, tax, investment and other advice that it deems necessary or
appropriate. Neither the Group nor any of its officers, directors, employees, affiliates or advisors is responsible as a fiduciary nor acting as an advisor (as to financial, legal, accounting, regulatory, tax,
investment or any other matters) to the Recipient. The Group has no obligation whatsoever to update any of the information or the conclusions contained herein or to correct any inaccuracies which may
become apparent subsequent to the date hereof.
This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of any entity of the Group, in the United
States of America or in any other jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in
connection with, any contract or commitment or investment decision whatsoever. Any decision to invest in any securities of the Group or otherwise participate in any financing of the Group should not be
based on information contained in this presentation. This presentation is only for persons having professional experience in matters relating to investments and must not be acted or relied on by any persons.
Solicitations resulting from this presentation will only be responded to if the person concerned is a person having professional experience in matters relating to investments. This presentation does not
constitute a recommendation regarding the securities of the Group.
This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of the Group (“forward looking statements”), which reflect various assumptions
concerning anticipated results taken from the current business plan of the Group or from public sources which may or may not prove to be correct. These forward looking statements contain the words
“anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning. Such forward-looking statements reflect current expectations based on the current business plan and various other
assumptions and involve significant risks and uncertainties, and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such
results will be achieved. The Group is not under any obligation to update or revise such forward-looking statements to reflect new events or circumstances.
Certain financial data included in this presentation consists of “non-IFRS” and “non-GAAP” financial measures. These non-IFRS and non-GAAP financial measures may not be comparable to similarly titled
measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with the International Financial Reporting Standards promulgated
by the International Accounting Standards Board and as adopted by the European Union (“IFRS-EU”), the requirements of Regulation S-X under the U.S. Securities Exchange Act of 1934, as amended, or
any equivalent provisions under the Prospectus Directive or IFRS-EU. Although the Group believes these non-IFRS and non-GAAP financial measures provide useful information to users in measuring the
financial performance and condition of its business, users are cautioned not to place undue reliance on any non-IFRS and non-GAAP financial measures and ratios included in this presentation.
Market and competitive position data in this presentation has generally been obtained from studies conducted by third-party sources, including reports prepared by LMC Automotive in the fourth quarter of
2016. While LMC Automotive endeavours to ensure the accuracy of the data, estimates and forecasts provided in its services and reflected herein, decisions based upon them (including those involving
investment and planning) are at the user’s own risk and LMC Automotive accepts no liability in respect of information, analysis and forecasts provided there are limitations with respect to the availability,
accuracy, completeness and comparability of any such data obtained from studies conducted by third-party sources. The Group has not independently verified such data and can provide no assurance of its
accuracy or completeness. Certain statements in this presentation regarding the market and competitive position data are based on the internal analyses of the Group, which involves certain assumptions
and estimates. These internal analyses have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are accurate.
1. Overview
1,2 1,61,9 2,1 2,1 2,1 2,2
3,5
5,2
0,0
1,0
2,0
3,0
4,0
5,0
2009 2010 2011 2012 2013 2013* 2014 2015 2016
Revenues
4
Global Tier 1 supplier
mill
(€)
*2013 restated according IFRS 10 and 11 (mandatory application 1 January 2014)
• Grupo Antolin is a leading global Tier 1 supplier of automotive components for vehicle interiors
• Present in 26 countries with more than 165 facilities and 29 technical commercial offices:
� Supplying components for 1 out of every 3 vehicles manufactured around the world
� Providing components for 510 different models
• In 2016, Grupo Antolin generated revenues and EBITDA of €5.2bn and €521m respectively (9.9% EBITDA margin)
• The Antolin family is sole shareholder of Grupo Antolin
114184 210 224 238 225
267
388521
0
100
200
300
400
500
600
2009 2010 2011 2012 2013 2013* 2014 2015 2016
EBITDA
bill
(€)
5
4 Strategic Business Units
Overhead & Soft Trim
• Modular headliner• Substrate• Sunvisors• Lighted headliner• Panoramic systems• Soft trim
Number 1 Worldwide
Lighting
• Complete solutions• Interior:
FunctionalMood lighting
• Exterior
Innovation Comes toLight
Doors & Hard Trim
• Carrier solutions• Door panels• Window regulators• Mechanisms
Multi-TechnologicalOffer
Cockpits & Consoles
• Cockpits• Instrument panels• Central consoles
We improve life on board
2. Key Credit Highlights
Summary credit highlights
7
Strong and leading market positions1
Diversified business across clients, products and g eographies2
Long-standing and strategic customer relationships3
Innovative solutions providing strong competitive a dvantage5
Experienced management team and committed sharehold ers6
Attractive market fundamentals for scale operators4
54%
14%
82%49%
23%39% 30%15%
37%
8
Strong and leading market positions1
Note: The number within each graph represents the expected position of Grupo Antolín in the ranking based on existing 2016 data. Market shares are based on number of vehicles equippedSource: Vehicle volumes based on LMC Automotive Q4 2016. Market shares based on company estimates
21%
Grupo Antolin estimates of market shares and ranking in 2016
NAFTAMarket size: 17.9m vehicles
EuropeMarket size: 21.5m vehicles
WorldwideMarket size: 92.4m vehicles
27%
MercosurMarket size: 2.5m vehicles
1
Ranking as main supplier
Overhead systems
1 2 1 1
Overhead systems Door panels Sunvisors Window reg. Overhead front consoles
1 1 11
Overhead systemsOverhead systems Overhead systems Window reg. Sunvisors
IndiaMarket size: 4.1m vehicles
Top 2
Top 3
Top 2
Geography Client Product
2016
201026%
16%
14%
14%
6%
6%
4%
3%
3%3% Others
5%
9
Diversified business across clients, products and geographies2
Overheads47%
Doors41%
Seating12%
Group
Europe68%
NAFTA18%
Mercosur8%
APAC5%
Others1%
Europe58%
NAFTA33%
APAC8%
Mercosur1%
Others0,5%
Overheads40%
Doors28%
Cockpits21%
Seating6%
Lighting5%15%
12%
12%
11%9%
9%
9%
9%
5%
2% Others7%
Group
7%
2%5%
9%
9%
9%
9%
11%
12%
12%
15%
2016
7%3%3%3%4%5%
11%
12%
15%
18%
19%
10
Long-standing and strategic customer relationships
€627m
Group
Other
€1,685m
Other
Group
Other
Group
€2,225m
Other
Group
2000 2007 2014
3
€5,247m� Strategic relationships with key customers in 2016
− VW FAST supplier for Headliners
− Ford ABF partner for Headliners
− PSA “Car of the future” think tank
� Revenues from top 5 OEMs have grown from €1.3bn in 2010 to €3.1bn in 2016, while overall customer diversification has further increased
11
Attractive market fundamentals for scale operators4
Comfort and affordable price
Sustainability and safety
Globalizations of platforms
Consolidation of supplier base
Technological partnerships with OEMs
Growth outside traditional markets
NAFTA1
2
3
4
5
6
Key drivers/trends
CAGR 16 – 20 CAGR 16 – 20
Europe Asia PacificCAGR 16 – 20
CAGR 16 – 20
South AmericaCAGR 16 – 20
Global
Vehicle production continues to grow globally with +2.9% CAGR expected through 2020
Source: LMC Automotive world light vehicle assembly, Quarter 4, 2016
1.5% 2.2% 3.9%
2.9%6.1%
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Innovative solutions providing strong competitive advantage
12
5
Focused mainly on weight reduction to minimize CO2 emissions and the use of green materials (recyclable/recycled)
Supporting our customers’ brand strategy is key to end user experience and perceived quality based on customization
Innovative processes to produce different functions. Adapting to meet evolving market demands with minimum investment
Materials & Processes Industrial flexibilitySmart Interiors
� 230 patent filings related to 80 innovations worldwide since 2011
� Staff in R&D, product innovation and graphic engineering has grown from 550 (2010) to more than 1,350 (2016)
13
Experienced management team and committed shareholders6
� Highly experienced management with long-term track record� Committed family shareholders provide stability and focus on value generation
Ernesto AntolínChairman
� Chairman of the company since 2015
� 26 years with Grupo Antolin
María Helena AntolínVice Chairman
� Appointed as Vice Chairman of the company in 2015
� 24 years with Grupo Antolin
� Board member of Iberdrola
Jesús PascualCEO
� Appointed CEO in July 2015
� Previously, COO since 2013
� 31 years with Grupo Antolin
Cristina BlancoCFO
� CFO since 2016
� 17 years of experience with Grupo Antolin
Miguel Ángel VicenteCOO & CCO
� CCO since 2013 and COO from April 2017
� 36 years of international experience within the automotive industry, 23 years with Grupo Antolin
Miguel Marañón� Head of Seating division, to become CCO from mid 2017 post transition period
� 20 years with Grupo Antolin
Proven commitment to profitability
International expansion incl.
greenfield projects
Successful integration of
multicultural teams
Strategic long-term relationship with
key clients
Long term commitment to
the Group
Key strengths of the management team
3. Financial Strength
15
• Sales of €5.2bn, up 50% from 2015
• EBITDA of €521m up 34% from 2015, margin of 9.9%
• EBIT of €339m up 27% from 2015, margin of 6.5 %
• Excluding the acquisition of Magna Interiors:
• Sales of €2,892m up 7.4% from 2015 versus 3.9%* industry production growth
• EBITDA of €350m with margin of 12.1%
2016 Highlights
16
Q1 2017 Highlights
• Sales of €1.4bn, up 8.2% from Q1 2016
• EBITDA of €158m up 10.1% from Q1 2016, margin of 11.2%
• EBIT of €112m up 13.2% from Q1 2016, margin of 7.9%
• Cash available of €246m
• Available revolving credit facilities of €250m
• LTM EBITDA of EUR 535m and Net Debt to EBITDA of 1.8x
17
Balanced, long term capital structure
Gross debt 31 March 2017€1,257m
Net debt 31 March 2017€982m
� €800m senior secured notes
� €387m senior financing
� €6m soft loans with cost; €31m soft loans with no
cost
� €28m other facilities, of which €9m are credit lines
� €5m accrued interests
� €0m ADE facility (prepaid)
� Cash available of €246m
� For covenant purposes, Net debt totalled € 982m (excludes
soft loans without financial cost, includes cash using 12
month FX average).
� €200m undrawn syndicated revolving credit facility, and €50m
undrawn local credit lines
Covenants
1.8x Net Debt/Adjusted EBITDA9.3x EBITDA/Financial
expenses
Covenant: under 3.50x Covenant: over 4.00x
€ 535.2mMarch 2017 LTM EBITDA
2017 2018 2019 2020 2021 2022 2023 2024
Term Loan Soft loans Leasings SSN 22 Other loans ST Credit & Interests SSN 24
30
91
234
3
403
34 55
406
Financial policy
18
Target leverage
• Long-term target leverage (Net debt / EBITDA) of no more than 2x
• Deleveraging strategy consistent with strict investment approach and de minimis dividend policy
M&A / investments
• No immediate acquisitions anticipated
• Selective add-on acquisitions may be considered in case of strong strategic rationale and if financially solid
Dividend policy
• Conservative dividend policy, after 2017 payout ratio c. 10% of net income, and not exceeding 15%
• Family shareholders focused on value generation rather than dividends
2017 Outlook
19
• Revenue ≈ € 5bn
• EBITDA margin ≈ 10%
• Capex ≈ 7% of revenues
• Working Capital stable as a percentage of LTM sales
• Leverage is expected to be below 2.0x at year end
• Dividend ≈ € 16m
Q&A
21
Q1 2017 Sales breakdown
541 534
362 39684 9368
82249 305
Q1 2106 Q1 2017
Overheads Doors Seating Lighting Cockpits
779 811
410 45497 12113
19
Q1 2106 Q1 2017
Europe NAFTA APAC Mercosur Others
1,3041,411
EU
Rm
EU
Rm
� Doors and Cockpits continue to drive growth
� FX impact represents c. € 24m of decreased sales
� Ramp up of facilities accounts for c. € 14m of increased sales
� Overheads impacted in Central Europe and USA
� Strong performance across all key markets
� China sales up 23.7% vs market production up 6.6% in Q1 ’17*
� Brazilian 46% growth in the quarter outpacing the Brazilian
automotive market production, up 14.3% in Q1 ’17*
- 1%
8%
+ 11%
+ 9%
+ 46%
+ 4%
+ 24%
+ 11%
*Source: LMC Global Automotive Production. Quarter 1, 2017
+22%
+22%
22
Q1 2017 EBITDA breakdown
60 58
47 50
15 12
13 176
17
Q1 2106 Q1 2017
Overheads Doors Seating Lighting Cockpits Others
143
158
EU
Rm
� Significant improvement in Grupo Antolin based on:
� Growth in Cockpits (5.7% EBITDA margin)
� Improved margins in Lighting
� Overheads impacted by product launches (lower sales and higher
fixed costs)
� Seating impacted by higher fixed costs and launch costs
� Favorable impact of seasonality
11.0%Margin 11.2%
+34%
-4%
10%
-24%
+6%
+201%