Asian Fo rest re Pr oducts Summit

Transcription

1 Asian Forest Products Summit June 2016 Nicholas Mockett

2 Overview 1. Introduction 2. Industry performance 3. Industry attractions 4. Global packaging M&A 5. Outlook 2

3 Introduction Moorgate Capital is an independent Corporate Finance firm specialising in: Mergers, Acquisitions & Disposals Buy Outs Capital Raising Strategic Advice Public Company Advice & Fairness Opinions Clients include multinational l public companies, leading financial i sponsors, private companies, family offices, management teams, banks and state owned enterprises. Clients benefit from: Focus on upper mid market: Enterprise Value US$100m US$1bn Our investment in long term relationships Lack of conflicts of interest Deep sector knowledge globally Industry specific Panel of Senior Advisers 3

4 Key Contacts Sir Peter Heap capital.com Chairman Tel: Sir Peter was with the Foreign & Commonwealth Office of the British Government for over 30 years, including being the Ambassador in Brazil, Senior Trade Commissioner in Hong Kong, British High Commissioner, Bahamas, as well as the Head of Energy Department. Subsequently he worked full time with HSBC Investment Bank, and as Senior Adviser, NED or Chairman of a number of other companies including Amerada Hess and BOC Group. Sir Peter is Chairman Emeritus of the Brazilian Chamber of Commerce in Great Britain. Nicholas Mockett nmockett@moorgate capital.com Partner Packaging, Paper & Plastics Tel: Nick has focused on the Packaging, Plastic & Paper related industries for over twenty years and his experience includes disposals, acquisitions and leveraged buy outs. He has advised on several billion Dollars of transactions. Prior to Moorgate Capital he spent 4 years with Europa Partners and 8 years with PwC Corporate Finance where he was Sector Leader for the PPP industry. Nick is a Liveryman of the Worshipful Company of Stationers & Newspaper Makers, a member of the Editorial Board of Plastics in Packaging, and a serial judge of Packaging News Awards. 4

5 Overview 1. Introduction 2. Industry performance 3. Macro drivers 4. Global packaging M&A 5. Outlook 5

6 Drivers of consolidation STRUCTURE CONDUCT PERFORMANCE 6

7 Industry performance CONTAINERS & PACKAGING +61.8% FTSE %

8 Industry performance over 10 years CONTAINERS & PACKAGING +61.8% DOW JONES +48.2% AUTOMOBILES +46.7% FTSE % Note: Containers & Packaging: Dow Jones U.S. Containers & Packaging Index (INDEXDJX:DJUSCP) FTSE 100: FTSE 100 (INDEXFTSE:UKX) Dow Jones: Dow Jones Industrial Average (INDEXDJX:.DJI) Automobiles: Dow JonesU.S.Automobiles & Parts Index (INDEXDJX:DJUSAP) Construction: Dow Jones U.S. Home Construction Index (INDEXDJX:DJUSHB) CONSTRUCTION 47.1% 8

9 Packaging (fibre) performance DS Smith % Mayr Melnhof +74.4% Metsa Board +36.5% Paples y Cartones +25.3% FTSE % Reno de Medici 21.3%

10 Pulp and Paper performance 500 ALTRI % JAMES CROPPER % 400 SCA % BILLERUD KORSNAS 143.6% MIQUEL & COSTAS +89.2% 300 PORTUCEL +74.4% FTSE % UPM 3.7% 200 IBERPAPEL 4.2% HOLMEN 4.6% STORA ENSO 31.3% 100 ENCE 32.8% ROTTNEROS 65.8%

11 Asian fibre performance 500 Lee & Man Paper +157% Yueyang Forest & Paper +152% NR Agarwal Industries +80% 400 Pudumjee Pulp Paper Mills +58% Sappi +44% 300 West Coast Paper Mills +9% JK Paper 11% Oji Holdings Corp 41% 200 D i Ni Dai Nippon P Printing i ti 49% 49% Ballarpur Industries 58% 100 Rainbow Papers 68% Nippon Paper Group 69% 0 1/1/2006 Mitsubishi Paper Mills 71% 1/1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/ /1/

12 FMCG performance UNILEVER % NESTLE +81.7% FTSE %

13 Comparative performance over 10 years NON FIBRE PACKAGING % FIBRE PACKAGING +69.6% PULP & PAPER +80.5% FMCG 111.2% RETAILERS 4.5% 13

14 Packaging industry concentration Commercial flexographic printing Plastic bag mfg Folding paperboard box mfg Plastic bottle mfg Polyester foam product mfg Laminated aluminum foil mfg for flexibles packaging uses Plastic packaging film & sheet (including laminated) mfg Uncoated paper & multiwall bag mfg Metal can mfg Glass container mfg AVERAGE Average ex glass Less concentrated t More concentrated t 14

15 Industry concentration Packaging Manufacturers Suppliers Customers Other Industrials 0 Less concentrated 500 t More 2500 concentrated 3000 t 15

16 Deal drivers Five Forces Maturing Markets Supply Side: > Consolidation > Volatility Packaging Producers Demand Side: > Consolidation > Globalisation Commodity v. Differentiation 16

17 Trend for Asia / Europe M&A Date Target Acquirer Value Jul 2014 Pizza express $ 1.5 b Sep 2013 $ 2.2 b Feb 2013 $ 200 m May 2012 n. d. Apr 2012 $ 500 m Jul 2012 Jul 2011 Canning Assets $ 100 m $ 300 m May 2011 $ 14 b 17

18 Trend for Asia / Europe M&A Futamura acquired the cellulose film business of acquired the Monmouth business of April 2016 n. d. September 2013 n. d. 18

19 Recent deals in Asia Acquisitions position companies well to take advantage of significant growth in Asia Xiamen Bridge Hexing acquired acquired China & Southeast Asia corrugated packaging business of May 2016 March 2016 $ 225 m $ 150 m Pandawa Sakti acquired the controlling stake of acquired pulp, paper and packaging businesses of Sabah Forest Industries September 2015 December 2014 $ 500 m $ 730 m 19

20 Unsolicited takeover offers Source: Dealogic, Wall Street Journal 20

21 Overview 1. Introduction 2. Industry performance Strong performance through h cycle Outperformed other industrials and value chain 3. Macro drivers 4. Global packaging M&A 5. Outlook 21

22 Overview 1. Introduction 2. Industry performance 3. Macro drivers 4. Global packaging M&A 5. Outlook 22

23 Growing population & middle class Population (billion) 10 Over the next two decades it is estimated that the middle class will 9 expand by another three billion people POOR MIDDLE CLASS 2 1 RICH

24 Ageing population Population over % 10 19% 20 24% 25 29% 30+% No data 2012 Over the next four decades, it is estimated that over 60s will make up 20% of the world population

25 Overview 1. Introduction 2. Industry performance 3. Macro drivers Compelling growth drivers and demographics 4. Global packaging M&A 5. Outlook 25

26 Overview 1. Introduction 2. Industry performance 3. Macro drivers 4. Global packaging M&A 5. Outlook 26

27 Global Packaging M&A $40b $35b $33b $35b $30b $25b $20b $27b $19b $29b $24b $18b $18b $22b $30b $15b $10b $5b $0b

28 Packaging M&A by buyer type Private Companies Public Companies Private Equity 100% 25% 19% 22% 24% 10% 20% 18% 23% 80% 60% 22% 27% 22% 10% 21% 11% 12% 17% 40% 54% 53% 57% 66% 69% 70% 70% 60% 20% 0%

29 Packaging deals by segment Number of deals 120 Packaging Manufacturers Packaging Equipment Solutions & Suppliers Distributors

30 Packaging deals by material % 6% 4% Plastic 46% Paper 41% 46% Metal 3% Labels 6% 41% Glass 4% 25% Plastic 49% Paper 24% 49% Metal 2% 2% Labels 25% 24% % 3% 7% Plastic 61% 6% 4% 2% Plastic 50% Paper 23% Paper 38% Metal 7% 23% Labels 6% 61% Glass 3% 38% 50% Metal 6% Labels 4% Glass 2% 30

31 Deal target locations 100% 80% 20% 15% 25% 25% 20% 20% 20% 20% 0% 3 BRIC Packaging M&A Brazil 5% Russia 10% India 15% China 15% Other 55% 60% 40% 80% 85% 75% 75% 80% 80% 80% 80% 7 0% 20% 0% Developed eloped Markets Emerging Markets 31

32 EV/EBITDA packaging transactions Packaging M&A transactions 9x 8x 7x 6x 81x 8.1x 6.9x 5.9x 6.5x 6.9x 7.0x 6.8x 7.4x 7.7x 5x 4x 3x 2x 1x 0x

33 EV/EBITDA packaging valuations Public packaging companies Paper packaging Plastic packaging 12x 10x 8x 9.0x 9.0x 8.0x 7.4x 7.5x 7.0x 8.8x 9.8x 8.5x 10.2x 7.9x 10.5x 6x 4x 2x 0x

34 EV/EBITDA: Asian fibre 16x 14x 13.95x 12x 10x 10.50x 10.74x 8.85x 8.91x 8.68x 9.26x 8.88x 9.58x 11.66x 8x 6x 4x 2x 0x Source: Bloomberg 34

35 Low interest rates 35

36 Overview 1. Introduction 2. Industry performance 3. Macro drivers 4. Global packaging M&A Record 2015 Multiples above long term average 5. Outlook 36

37 Overview 1. Introduction 2. Industry performance 3. Macro drivers 4. Global packaging M&A 5. Outlook 37

38 Outlook for Packaging Performance through cycle Defensive / counter cyclical Cash generation Asset rich Blue chip clientele Macro fundamentals Growth including emerging markets 38

39 Conclusion Attractive ti industry Valuations above long term average Hungry buyers 39

40 Thank you capital.com 33 St James's Square London SW1Y 4JS Tel: Fax:

41 Important Notice The statements herein have been taken from sources we believe to be reliable but such statements are made without any representation as to accuracy or completeness or otherwise. Any opinion or forecast constitutes our judgment as at the date of issue and is subject to change without notice. Moorgate Capital (Corporate Finance) Ltd 41