Full-Year 2015 results 29 February 2016
Full-Year 2015 results
29 February 2016
2 Full-Year 2015 results
CONTENTS
1. Introduction
2. FY 2015 financial statements
3. Review of Antalis & Arjowiggins
4. Outlook
5. Q & A
Appendix: Key financial data by business
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint1. Introduction
Pascal Lebard – Chairman and Chief Executive Officer
3 Full-Year 2015 results
4
Strategic repositioning of the Group
We have achieved the initial objectives of our strategic plan Streamlined financial structure Refocusing Arjowiggins on specialty markets Continuing Antalis' selective acquisitions policy
Antalis policy of diversifying into high-potential markets has born fruit: Packaging and Visual Communication now contribute 36% of its gross margin
The Group's operational and financial restructuring plan has been finalised Arjowiggins: reduction of debt and refocus on specialty markets
Repayment in full of the €125 million syndicated credit facility and stronger financing capacity thanks to €53 million worth of sale & leaseback financing arrangements
Streamlined scope focused on businesses with positive EBITDA in Q4 2015 Sequana: restructuring of capital
Early redemption of ORNANE and ORA bonds meaning less dilution for shareholders Impala became a Sequana’s shareholder with a 20% stake
Full-Year 2015 results
5
Operating results close to our expectations
Operating performances were buoyed by Antalis but adversely affected in H2 by production difficulties related to Arjowiggins' capacity reduction measures
Sales down 2,0% to €3.3 billion (down 5.6% at constant exchange rates) Antalis: positive impact of new acquisitions, consolidation of the paper distribution market
and favourable forex impact Arjowiggins: negative impact of decline in printing volumes (closure of Wizernes and
Charavines), exacerbated by difficulties encountered in H2 when transferring production
EBITDA up 1.5% to €126 million; EBITDA margin up 0.1 point to 3.8% Enhanced product mix both in distribution and production Favourable impact of lower overheads on both sides of the business
Net loss of €67 million due to the additional costs of restructuring measures deployed in 2015 and asset write-downs amounting to €32 million taken in Q4
Net debt stands at €235 million (an improvement of €76 million) and the consolidated Net debt/EBITDA ratio stands at 1.9 (2.5 in 2014) Thanks notably to the positive impact of disposals (€158 million), partially offset by
restructuring costs and non-recurring expenses (€92 million)
Full-Year 2015 results
At the AGM, the Board will recommend not paying any dividend for 2015
Sequana: strategic positioning in its two businesses
Business segments Growth drivers
• Historical businesses Print Office
Leading position in mature markets that generate cash flowPotential for growth in the digital and recycled paper segments Innovation in services
• Complementary markets Packaging Visual Communication
Selective acquisitionsGrowing, higher-margin markets
Development of cross selling (1)
• Graphic Recycled papers Specialty papers
High potential of recycled paper segmentExpanding into non-paper markets (graphic board)Presence in niche growth markets (transfer, laminatedand tissue segments)
• Creative papers Fine papers Specialty papers
Leading positionUpgraded production facilitiesDevelopment of new product applications
• Security Banknote paper Synthetic papers
No. 2 in the accessible banknote paper marketHigh value added papers incorporating security features
(1) Selling packaging and visual communication media to printers and companies who are already Group customers for print & office paper
Full-Year 2015 results6
7
Recomposition of ownership structure
Full-Year 2015 results
Impala Group became a Sequana shareholder in late June 2015
Ownership structure Voting rightsat 31 December 2015 at 31 December 2015
Impala Group20.00%
Bpifrance Participations 15.42%
Free float64.58% Impala Group
19.86%
Bpifrance Participations 15.31%
Free float64.83%
88
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint2. FY 2015 financial statements
Xavier Roy-Contancin – Chief Financial Officer
Full-Year 2015 results
Net income (loss) attributable to owners (67) 117 -
99
Consolidated income statement
(*) Percentage changes and margins are based on figures rounded out to one decimal place.
2015
Non-recurring items (76) 119Net financial expense (41) (56)Income taxes (23) (11)Net income (loss) from discontinued operations - (8)Associates and non-controlling interests - -
Sales 3,300 3,369 - 2.0%
EBITDA 126 124 + 1.5%
EBITDA margin (%) 3.8% 3.7% + 0.1 point
Recurring operating income 73 72 0.7% Operating margin (%) 2.2% 2.1% + 0.1 point
Change*2015/20142014
down 5.6% at constant exchange rates
€ millions
Full-Year 2015 results
1010
Breakdown of non-recurring items
119Non-recurring items
(107)
(17)
(17)
260
Restructuring costs
Disposal gains
Impairment of goodwill and other assets
Other non-recurring items
Impact of 2014 refinancing programme
(45)
2014€ millions, at 31 December
Arjowiggins: €(28)mAntalis: €(4)m
Full-Year 2015 results
(76)
6-
(32)
(5)
2015
Sales of Arjo Wiggins Ltda& the Security Solutions
businesses (incl. derecognition of previously recognised
goodwill of €82m )
Arjowiggins: €(25)mAntalis: €(20)m
Arjowiggins: €170mORNANE : €90m
1111
Consolidated statement of financial position
€ millions31 Dec.
2015
GoodwillProperty, plant & equipment and intangible assetsOther fixed assets
Operating WCROther current assets (liabilities)Assets (liabilities) held for sale
Total assets
Shareholders' equityNon-controlling interestsProvisionsNet debt
Total equity and liabilities
301244190
269(116)
4
468-
189235
892
892
31 Dec. 2014
378295219
296(142)
79
588-
226311
1,125
1,125
Full-Year 2015 results
Impact of derecognition of
goodwill previously recognised on
Security business (€82m) and asset
write-downs
Pensions:Impact of IAS 19
1212
Breakdown of provisions
€ millions, at 31 December 2015
Pension provisionsRestructuring provisionsOther risk and contingency provisions
1035729
Total 189
2014
1018243
226
Antalis: €5mArjowiggins: €52m
Full-Year 2015 results
1313
Change in net debt
€ millions 2015
Consolidated net debt - 1 January (311)
EBITDAChange in WCR of businessesCAPEXAsset disposalsOperating cash flow
Net finance costsIncome taxes expense
Restructuring costs
Disposals/acquisitions
Capital increaseFinancial restructuring programCash flow from (used in) discontinued operationsCurrency impact
Other items
1268
(49)1499
(35)(12)
(93)
135
-(6)
-1
(13)
Consolidated net debt - 31 December (235)
Antalis: €(36)mArjowiggins: €(57)m
2014
(537)
124(76)(43)
1116
(46)(5)
(62)
5
64294(20)
(3)
(17)
(311)
Full-Year 2015 results
Arjowiggins: €158mAntalis: €(24)m
1414
Consolidated net debt
Consolidated net debt of €235 million vs. €311 million at 31 Dec. 2014 Antalis: €(232) million Arjowiggins: €(1) million
Financial ratios (covenants) at 31 December 2015
Antalis Net debt/EBITDA = 2.44 (< 3.60) Recurring operating income/net finance costs = 3.84 (≥ 2.10)
Full-Year 2015 results
Enhanced consolidated Net debt/EBITDA ratio1.9 at 31 December 2015
(2.5 at 31 December 2014)
1515
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint3. Review of Antalis & Arjowiggins
Full-Year 2015 results
1616
Business review
Hervé Poncin – Chief Operating Officer of Antalis
Full-Year 2015 results
17
Business environment
Major change in the competitive landscape on the European printing papermarket in 2015 Consolidation of the European paper distribution market following the demise
of PaperlinX, one of Antalis main competitors Direct sales development by certain paper producers in a number of markets
Contrasting performances between different segments and regions Continued decline in European printing volumes of around 2.5% Packaging and Visual Communication markets grew by approximately 2%
Currency fluctuations and currency depreciation against the US dollar and the euro in a number of countries
Full-Year 2015 results
18
2015 highlights
Favourable impact of PaperlinX’s demise on Antalis' European business, especiallyin the UK and Benelux
Strategic development in Packaging and Visual Communication No. 1 in the European Packaging market with annualised sales of around €450 million
Acquisitions in the UK, Denmark, Sweden and Estonia representing approximately€130 million in full-year sales and an enterprise value totalling €24 million
Significant market share increases in Visual Communication, especially in Nordic countries Packaging and Visual Communication now contribute 36% of Antalis' gross margin,
up by 4 points compared to 2014
Continued restructuring of the supply chain (Germany, Austria and France)
Antalis financing programme completed and secured through 2018 by setting up a €200 million factoring programme
Full-Year 2015 results
19
Operational and commercial progress in 2015
Further expansion in the fast-growing digital printing market (1)
Sales up 8% year on year Expanded product range
in office printing around 3 strong recognised brands (Image®, Xerox® and Data Copy®
acquired in 2015) in commercial printing (Superfine i-Tone®)
Innovative approach to marketing eco-friendly and recycled papers Green Star System (for evaluating the "greenness" of a product) Guaranteed product traceability with Antrak (on-line supplier platform)
200 listed suppliers covering almost 80% of purchasing volumes Solid commitment as official partner to COP21
Investments in customer-focused IT systems begin to bear fruit Continued deployment of CRM and e-commerce solutions Sustained growth in e-commerce: 26% of stock orders now placed on-line, i.e., a four point
year-on-year increase in the sales penetration rate
(1) Technology for printing small runs and customising documents by incorporating variable data (text, image, data) and enhancing print quality using variousdifferent techniques (hot stamping, laser-cutting, etc.).
Full-Year 2015 results
20
Enhanced operating performances
Sales up 1.5 % to €2,625 million (down 2.2 % at constant exchange rates) Sustained growth in the Packaging (up 24 %) and Visual Communication (up 11%) businesses
Acquisitions contributed sales of around €77 million Continued growth in cross selling
Decline in printing volumes Exacerbated by proactive customer risk management and supplier and brand portfolio
reorganisation Partly offset by continued good growth on the back of the market consolidation, especially
in the UK and Benelux Higher selling prices in the stock business Favourable forex impact, mainly attributable to fluctuations in sterling and the Swiss franc
EBITDA grew 16.7% to €94 million year on year (2014: €80 million); EBITDA margin rose by 0.5 points to 3.6% Buoyed by a favourable forex impact and the positive contribution of new acquisitions completed
in Packaging and Visual Communication Improved product mix The positive impact of lower overheads, particularly across the supply chain
Recurring operating income up 23.9% to €68m vs. €55m in 2014
Debt stands at €232 million, an improvement of €18 million, thanks to good working capital management despite higher levels of business due to the demise of PaperlinX and acquisition financing requirements (€24 million)
Full-Year 2015 results
21
Key income statement items
down 2.2% at constant exchange
rates
€ millions, year ended 31 December
Sales 2,585 + 1.5%
EBITDAEBITDA margin (%)
803.1%
+16.7%+0.5 points
Recurring operating incomeOperating margin (%)
552.1%
+ 23.9%+0.5 points
Capital employedROCE
47911.5%
2,625
943.6%
682.6%
44215.4%
H1 2015Pro forma
**
H1 2015Pro forma
IFRS2015 2014 Change
2015/2014
Full-Year 2015 results
Including €77 million related to
acquisitions
22
EBITDA trends
2014 EBITDA
Forex impact Inflation Overheads Bad debts 2015 EBITDA
Margins/Mix/Volumes
Variable costs
Full-Year 2015 results
Acquisitions
Mainly GBP and CHF
Impact of packaging acquisitions
23
Key cash flow items
€ millions, at 31 December
EBITDA 94
Change in WCRCapex
Disposals of fixed assets
41
(17)
11
Operating cash flow 129
Net debt 232
2015
80
(21)
(14)
3
250
2014
48
Full-Year 2015 results
24
Breakdown of sales and EBITDA
2015 sales by region 2015 EBITDA by region 2015 sales by business
Office22%
Visual Comm7%
Packaging14%
Western Europe 78%
Eastern Europe12%
Eastern Europe12%
Rest of the world9%
France11%
Western Europe (excl. France & UK)
40%
UK28% Print
57%
Rest of the world10 %
Packaging & Visual Comm.
21%
Full-Year 2015 results
25
Business review
Pascal Lebard – Chief Executive Officer
Full-Year 2015 results
26
2015 highlights€125 million related to the outstanding balance on Arjowiggins' syndicated credit facility has been cleared in full Sale of 85% of Arjo Systems and Arjowiggins Solutions to Impala group in June 2015 In exchange for a debt waiver of €110 million and payment of the balance in cash
Strengthening of Arjowiggin's balance sheet Sale of Arjo Wiggins Ltda (Brazil) in May based on an enterprise value of €85 million €53 million worth of sale & leaseback financing set up in Q4 based on several industrial
assets
Wizernes and Charavines mills closed at the end of June Industrial problems encountered after transferring production from the two sites Redundancy procedures have been finalised, with the exception of those concerning
protected workers at Wizernes mill Search for a buyer for the sites
Exclusive agreement with Global Hygiène for sale of the Charavines site. The sale should be finalised in Q2 2016
No concrete viable offers for the Wizernes site These closures are expected to have a positive impact of around €19 million in 2016
due to lower full-year overheads and the absence of the costs involved in transferring production that weighed on EBITDA in the second-half of 2015
Full-Year 2015 results
27
Results hit by industrial issues related to theoperational restructuring planSales down 11.2% to €905 million (down 14.7% at constant exchange rates) Decline in printing volumes amplified by
Production capacity cuts in the standard coated paper segment (closure of Wizernes) Difficulties encountered in H2 by the Graphic and Creative Papers divisions when transferring
production Impact of divestments in H1 (Arjo Systems, Arjowiggins Solutions, Arjo Wiggins Ltda) Negative impact on volumes of downtime on a machine in the banknote paper business Business in the other specialty businesses held up well, particularly in the Healthcare business
EBITDA down 17.4% to €45m vs. €54m in 2014 Positive impact of lower overheads following the closure of the Wizernes and Charavines
mills Offset by the decline in printing volumes and divestments Negative impact of higher raw material prices (essentially pulp) due to the fall in the euro against
the US dollar Recurring operating income of €18 million compared to €28 million in 2014
NB: in H1 2015, disposals represented sales of €62 million and EBITDA of €14 million For full-year 2014, they represented sales of €123 million and EBITDA of €18 million
Full-Year 2015 results
28
Key income statement items
€ millions, year ended 31 December 2015
Sales 905
EBITDA 45 54 - 17.4%EBITDA margin (%) 4.9 % 5.3% - 0.4 point
Recurring operating income 18 28 - 35.0%Operating margin (%) 2.0% 2.7% - 0.7 point
Capital employed 194 248
ROCE 9.4% 11.3%
Change 2015/2014
-11.2%
2014
1,020down 14.7% at
constant exchange rates
Full-Year 2015 results
29
EBITDA trends
Full-Year 2015 results
Volumes down11% on 2014
of which, €(33)mforex impact (mainly pulp)
of which, €31mforex impact
of which, €(8)mforex impact
Arjo Wiggins Ltda, Arjo Systems & Arjowiggins Solutions and
closure of Wizernes and Charavines
30
Pro forma EBITDA
Full-Year 2015 results
Impact of disposals on 2015: Arjo Wiggins Ltda, ArjoSystems & Arjowiggins
Solutions
Closure of Wizernes and Charavines:Reduction in full-year overheads and impact of additional costs involved in
transferring production in H2 2015
(13)
19
45
31
50
0
10
20
30
40
50
2015 EBITDA 2015 Scope impact Continued activitiesEBITDA
Wizernes & Charavines 2015 pro forma EBITDA
31
Key cash flow items
EBITDA
Change in WCR
Capex
Disposals
(31)
(32)
3
Operating cash flow
Net debt (1)
2015
5445
€ millions, year ended 31 December
(15)
(48)
(28)
5
(17)
67
2014
Full-Year 2015 results
32
Results by division
Impact of Wizernes closureon volumes Significant reduction in
production capacity in the standard coated paper segment
Blockade of buffer stock built up in preparation for transferring production
Production difficulties in H2 2015 at Bessé-sur-Braye
Reduction in overheads Growth in most specialty businesses,
especially Healthcare, laminated, transfer and tissue segments
446499
2015
59
2015 20142014
Graphic
Sales (€ millions) EBITDA (€ millions)
237 249
2015
17 21
2015 20142014
Creative papers
Sales (€ millions) Impact of Charavines closure on fine papervolumes Difficulties encountered in H2 when
transferring production to Stoneywood
Reduction in overheads Resilient performances in the luxury
packaging, bookbinding and tracing paper businesses
EBITDA (€ millions)
Full-Year 2015 results
- 4.6%
- 18.8%
- 10.7 %
- 46.8 %
33
Results by division
Decline in volumes in the banknote paper business due to the temporary shutdown of a machine
Impact of divestments (Security Solutions businesses, Brazilian banknote business)
Sustained growth in the Secure documents business
23
2015 2014
223
272
2015 2014
Security
Sales (€ millions) EBITDA (€ millions)
24- 18.2%-5.4%
Full-Year 2015 results
10
2015 2014
161
173
2015 2014
Sales (€ millions) EBITDA (€ millions)
8-6.6% +24.4%
Reported figures
Excluding disposals
34
Breakdown of sales and EBITDA
Creative Papers26%
Security25%
Graphic49%
Rest of the world11%
US7%
France20%
UK9%
Europe(excl. France and UK)
35%
Asia18%
2015 sales by region2015 sales by division 2015 EBITDA by division
Graphic11%
Security51%
Creative Papers38%
Full-Year 2015 results
Coated20%
Green39%
Specialty41%
35
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint4. Outlook
Pascal Lebard – Chairman and Chief Executive Officer
Full-Year 2015 results
36
Outlook
In a complex business environment, 2016 looks set to be an uncertain year in our different markets
Antalis Continuation in the early part of the year of the momentum created by PaperlinX's demise Growth in Packaging and Visual Communication business buoyed by 2015 acquisitions
Arjowiggins Positive impact of restructuring of Graphic and Creative Papers divisions finalised in 2015
Sequana Continued refocus on distribution, especially via external growth policy in the Packaging
sector
Sequana’s 2016 EBITDA should be ahead of that for 2015 and the consolidated Net debt/EBITDA ratio should remain below 2.5
Full-Year 2015 results
37
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint5. Q & A
Pascal Lebard – Chairman and Chief Executive Officer of Sequana
Xavier Roy-Contancin – Chief Financial Officer
Hervé Poncin – Executive Vice-President of Sequana, Chief Operating Officer of Antalis
Full-Year 2015 results
38
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint www.sequana.com
+33 1 58 04 22 80
Full-Year 2015 results
39
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPointAppendix – Key financial data
Full-Year 2015 results
404040
Breakdown by business
€ millions
Sales – Antalis Sales – ArjowigginsEliminations & holding company
2,625905
(230)
+ 1.5%- 11.2%
-
Consolidated net sales 3,300 - 2.0%
EBITDA – AntalisEBITDA – ArjowigginsEBITDA - holding company & other
9445
(13)
+ 16.7%- 17.4%
-
Consolidated EBITDA 126 + 1,5%
2015 Change* 2015/2014
Recurring operating income - Antalis Recurring operating income - ArjowigginsRecurring operating loss - holding co. & other
6818
(13)
+ 23.9%- 35%
-
Consolidated recurring operating income 137Recurring operating income 73 + 0.7%
2,5851,020(236)
3,369
8054
(10)
124
2014
5528
(11)
72
(*) Percentage changes and margins are based on figures rounded out to one decimal place.
Full-Year 2015 results
4141
Antalis
€ millions
Sales – Europe 2,384 2,337 +2.0%
Sales – Antalis 2,625 2,585 +1.5%
EBITDA – Europe 85 69 +22.1%EBITDA – Rest of the World 9 11 -17.3%
EBITDA – Antalis 94 80 +16.7%
2015
Recurring op. income – Europe 62 47 +31.9%Recurring op. income – Rest of the World 6 8 -22.0%
Recurring operating income – Antalis 68 55 +23.9%
2014Change
2015/ 2014
Europe 2015 sales by region
Rest of the world 2015 sales by region
Asia25%
South Africa31%
South America44%
Western Europe (excl. France & UK)
44%
Eastern Europe
13%UK
31%
France12%
Sales – Rest of the World 241 248 -2.9%
Full-Year 2015 results
4242
Results by division
Excluding disposals*
* On a full-year basis, the sales and EBITDA for the disposals amount to €123 million and €18 million, respectively
€ millions
Sales - GraphicSales - Creative Papers Sales - Security
446237223
-10.7%-4.6%
-18.2%
Sales 905 - 11.2%
EBITDA - GraphicEBITDA - Creative PapersEBITDA - Security
51723
EBITDA 45 - 17.4%
2015
Recurring op. loss - GraphicR O I - Creative PapersR O I. - Security
(6)1212
Recurring operating income 18 - 35.0%
499249272
1,020
92124
54
2014
(3)1417
28
% change2015/ 2014
- 46.8% - 18.8% - 5.4%
NA- 12.2%- 32.0%
Reported figures
€ millions
Sales - GraphicSales - Creative Papers Sales - Security
446228161
Sales 835EBITDA - GraphicEBITDA - Creative PapersEBITDA - Security
51610
EBITDA 31
2015
Recurring op. loss - GraphicR O I - Creative PapersR O I - Security
(6)12(1)
5
499225173
896
919
8
36
2014
(3)13
3
13
% change2015/ 2014
- 10.7%+1.3%- 6.6%
- 6.9%- 46.7%
-4.4%+24.4%
-14.2%
+51.4%-8.6%
NA
- 58.6%Recurring operating income
Full-Year 2015 results
43
1. Introduction
2. Consolidated income statement and statement of financial position
3. Activities of subsidiaries
4. Strategy and Outlook
CONTENTS
Présentation PowerPoint www.sequana.com
+33 1 58 04 22 80
Full-Year 2015 results