RINGMETALL - AN ALL-ROUND SUCCESS STORY…ringmetall.de/wp-content/uploads/2019/11/20191101... · SYSTEM PROVIDER FOR THE NO. 1 PACKAGING UNIT: THE INDUSTRIAL DRUM Company Presentation

RINGMETALL - AN ALL-ROUND SUCCESS STORY…

Company PresentationNovember 2019

WORLDMARKET LEADERFOR SECURE PACKAGING SOLUTIONS

2Company Presentation November 2019

2018 Performance (IFRS, EUR m) 2019 Guidance (IFRS, EUR m)

Revenue EBITDA

110.6 10.4

Revenue EBITDA

115-125 8.5-11.0

2021 Perspective

Revenue EBITDA

>200m 12.5-15%

Revenue Split 2019eKey Takeaways of Equity Story

○ Producer of industrial packaging and handling solutions○ Worldwide market leadership of core product in a

highly regulated market ○ Strong footprint in specialty goods industries

worldwide (esp. Chemicals, Pharmaceuticals, Food)○ 14 production sites in 7 countries on 3 continents○ Stable organic growth enhanced by strong M&A

track record (>85% of revenues acquired since 2012)

STABLE MANAGEMENT BOARDMEETS EXPERIENCED SUPERVISORY BOARD


Christoph Petri

Konstantin Winterstein

Klaus F. Jaenecke

Markus Wenner

Ralph Heuwing

Spokesperson of theManagement Board,joined in 2011

Member of theManagement Board,joined in 2014

Chairman of theSupervisory Board,joined in 2018

Deputy Chairman of theSupervisory Board,joined in 2013

Member of the Supervisory Board,joined in 2016

STRONG PRODUCT PORTFOLIO WITHDOMINANT FOOTPRINT IN PACKAGING SOLUTIONS


INDUSTRIAL HANDLING○ restraint systems and accessory

for industrial trucks / forklifts○ accessory equipment for agricultural /

forestry machines

DRUM CLOSURES(part of INDUSTRIAL PACKAGING)○ >70% global market share with

drum clamping rings ○ 2.500+ different product varieties○ undisputed market position with

only smaller regional competitors○ drum lids, gaskets & accessory

INLINERS (part of INDUSTRIAL PACKAGING)○ inner linings for industrial drums

and other packaging units○ bag-in-box systems for liquids○ strong footprint in food and

chemical industry○ market leading position in EU

WORLDWIDE PRODUCTION AND GLOBAL REGIONAL SPLIT (BASIS: 2019e)


Sales Region

Production Site

GER32 %

Europe(Rest)41 %North

America25 %

LatAm/Africa

1 %

Asia /Pacific

1 %

SYSTEM PROVIDER FOR THE NO. 1 PACKAGING UNIT:THE INDUSTRIAL DRUM


Lid & Gasket

Clamping Ring

Inliner

Drum

○ Single components combine to oneUN-certified drum unit

○ Components cannot be exchanged without recertification of the drum unit(time & cost intensive)

○ Product safety is by far the most important feature of any drum component…

○ ...directly followed by in-time and on-location availability (“always & everywhere”)

○ Move towards System Provider for packaging industry ensures higher market visibility and customer experience

INDUSTRIAL DRUM SPECIFICATIONSSUITABLE FOR ALL TYPES OF LIQUIDS & SOLIDS


IBC STEEL DRUM

PLASTIC DRUM

FIBERDRUM

PAIL

OPEN TOP / CLOSED TOP FACTORY NEW / RECONDITIONED

Ringmetall produces 2.500+ different types of clamping rings and 5.000+ different types of inliners

Lids andgaskets!

STRONG MARKET ENTRANCE BARRIERSSTRENGTHEN OUR MARKET POSITION


The specificities of the drum industry make it difficult for new competitors to challenge Ringmetall's market position:

LEAD TIMESLead times are usually only 5-7 working

days, making global sourcing impossible and resulting again in need

for global presence

MACHINERYMachinery for ring production is self-developed and cannot be

purchased “off the rack”, involving years of expertise

COST vs. RISKLow average price of a clamping ring

(1$) stands in vast contrast to its safety relevance, resulting in extremely high

customer stickiness

LOGISTIC COSTStacking of rings is highly inefficient, resulting in high cost for logistics and

thus the need for global presence

EFFICIENCY2.500+ different ring types, a highly

efficient machine park and a constant quality worldwide make production

outsourcing a no-brainer for drum producers

REGULATIONIndustrial drums for hazardous goods are regulated by the United Nations!

Exchange of single components would require immediate recertification

of the drum unit

BUY & BUILD APPROACH COMBINES WITHFOCUS ON PRODUCTION EXCELLENCE


IMPROVE ACQUIRE CONSOLIDATE PERFORM

○ build and optimizeexisting business

○ improve structuresand generate groupsynergies

○ put customers in center of attention and deliver added value

○ upscaling of production to ensurefuture corporate success

○ generate stable cash flows to guaranteefinancial flexibility

○ identify suitable targets in core and adjacent industries

○ standardize due diligence process and ensure attractive multiples and financing

○ pursue best practice integration track

○ pursue professional M&A approach

○ build a leading system provider in global industrial packaging

○ consolidate industriesto reduce competition and increase group pricing power

○ leading market position to ensure long-term corporate success

○ focus on constantly expanding group revenue, earnings & service quality

○ steer group on basis of key performance indicators

○ ensure a stable / slightly increasing dividend payment(‘base dividend’)

○ professionally steer and fulfill investors’ expectations

SUSTAINABLE ORGANIC GROWTH -MEGA TRENDS IN THE PACKAGING INDUSTRY


Growth of worldwide population is No.1

industry growth trigger...

...followed by trend towards increasing urbanization

Higher demand for food / nutrition supplements!

Higher demand for fertilizers / chemicals!

Higher demand for pharmaceuticals!

Leading to:

...which require safe packaging for shipping!

GLOBAL MARKET SIZE 2024:73 bn USD / 4 % CAGR

5 YEAR COMPARISONDRIVEN BY ORGANIC AND INORGANIC GROWTH


KEY PERFORMANCE INDICATORSRINGMETALL IN NUMBERS


Target EBITDA Margin

12.5 - 15 %

Target Acquisition Multiple

Target Tax Rate

Target CAPEX

2.5 - 3 mEUR

Target Acquisition Size Worldwide Market Share (e)

Rings Inliners

> 70 % > 20 %

Target Dividend Ratio Target Equity Ratio

Target Leverage

6 - 8 x EBITDA

3 - 4 x EBITDA

5 - 25 mEUR

Revenue

27 - 29 %20 - 25 %

35 - 45 %of Net Profit

SHARE PRICE DEVELOPMENTRINGMETALL vs. SDAX


Ticker / ISIN: HP3 / DE0006001902 Shares Outstanding: 29,069,040

Segment: General Standard Market Capitalization: ~ EUR 80 m

Daily Turnover: ~ 5.000 shares (12M av.) Free Float: ~ 45 %

SHAREHOLDER STRUCTUREHIGH MANAGEMENT COMMITMENT


Latest notifications:

08-10/2019Management Pool + 1.9 %

20.09.2019Otus Capital> 5.0 %

09.08.2019Amiral Gestion< 3.0 %

22.05. 2019Lazard Frères Gestion> 3.0 %

PEER GROUP VALUATION (11/2019)


MARKET CAP (mEUR)

EV

/ EB

ITD

A (2

019e

)

RINGMETALL 2021MIDTERM GROWTH POTENTIAL


94mEUR

Revenue2016

200mEUR

Revenue2021

EBITDA margin between

12.5 and 15.0 %

Reality check 2019:

120 mEUR mid-range revenue 2019

+ 5 mEUR organic growth until 2021

75 mEUR inorganic growth component until 2021

inorganic growth is financed via agreed credit facilities at interest levels below cost of equity

GUIDANCE 2019WHEN THE GOING GETS TOUGH...


Revenue EBITDA

115 - 125mEUR

8.5 - 11.0mEUR

Guidance 2019

International trade conflicts, Brexit fears and turmoil in the automotive industryhave put pressure on cyclical key clients of the drum industry and the logistics sector.

Following profit warnings from key industries, Ringmetall revised its guidance on 24 July 2019:

✓ includes revenue contribution from newly acquired Tesseraux✓ includes effects from first-time application of IFRS 16✓ New guidance includes both scenarios: economic recession (low) and economic dip (high)

FINANCIALS 9M 2019KEY INDICATORS OF OPERATING PERFORMANCE


IFRS, in EUR `000 9M 2019 9M 2018 ∆ [abs.] ∆ [%]

Revenues 91,986 85,820 6,166 7.2

Gross profit 40,355 36,238 4,117 11.4

Gross margin 43.9% 42.2%EBITDA 8,149 8,292 -143 -1.7

EBITDA margin 8.9% 9.7%EBIT 4,639 6,509 -1,870 -28.7

EBIT margin 5.0% 7.6%

Industrial Packaging [mEUR]Revenues 83.3 75.4 7.9 10.4

EBITDA 9.2 8.9 0.3 3.6

EBITDA margin 11.1% 11,8%Industrial Handling [mEUR]Revenues 8.7 10.4 -1.7 -16.1

EBITDA 0.8 1.1 -0.3 -26.1

EBITDA margin 8,9% 10,1%

FINANCIALS 2018PROFIT & LOSS STATEMENT


in EUR `000 2018 2017 ∆ [abs.] ∆ [%]

Revenues 110,567 102,348 8,219 8.0%

Cost of materials -64,937 -57,032 -7,905 13.9%

Cost of personnel -21,703 -20,101 -1,602 8.0%

Other operating expenses -15,130 -14,060 -1,070 7.6%

Other taxes -373 -353 -20 5.7%

EBITDA 10,431 12,041 -1,610 -13.4%

Depreciation and amortisation -2,151 -2,006 -145 7.2%

EBIT 8,280 10,035 -1,755 -17.5%

Financial result -625 -1,100 475 -43.2%

Taxes on income -2,499 -1,800 -699 38.8%

Net Income (before minorities) 5,156 7,135 -1,979 -27.7%

Number of shares (average, thousands) 28,204 25,423 2,781 10.9%

Earnings per share (in EUR) 0.17 0.27 -0.10 -37.0%

FINANCIALS 2018BALANCE SHEETS - ASSETS


IFRS, in EUR ´000 31.12.18 31.12.17 ∆ [abs.] ∆ [%]

Non-current Assets 49,289 35,810 13,479 37.6%

thereof Intangible assets 582 321 261 81.3%

thereof Goodwill 22,599 22,211 388 1.7%

thereof Property, plant and equipment 12,515 12,189 326 2.7%

thereof Other non-current assets 12,803 146 12,657 8,669.2%

thereof Deferred tax assets 790 943 -153 -16.2%

Current Assets 32,982 39,986 -7,004 -17.5%

thereof Inventory 11,610 10,950 660 6.0%

thereof Trade & other receivables 13,763 12,460 1,303 10.5%

thereof Other current assets 1,510 918 592 64.5%

thereof Current tax receivables 163 322 -159 -49.4%

thereof Cash & cash equivalents 5,936 14,936 -9,000 -60.3%

thereof Non-current assets held for sale - 400 -400 -100.0%

Total Assets 82,271 75,796 6,475 8.5%

FINANCIALS 2018BALANCE SHEETS - LIABILITIES


IFRS, in EUR `000 31.12.18 31.12.17 ∆ [abs.] ∆ [%]

Equity 48,537 39,102 9,435 24.1%

thereof Share capital 29,069 27,685 1,384 5.0%

thereof Capital reserve 16,664 12,532 4,132 33.0%

thereof Currency translation differences outside P&L -1,361 -2,131 770 -36.1%

thereof Gain / Loss carryforward 3,153 -56 3,209 5,730.4%

thereof Non-controlling interests 1,012 1,072 -60 -5.6%

Non-current liabilities 12,308 14,077 -1,769 -12.6%

thereof Provisions for post-employment benefits 773 806 -33 -4.1%

thereof Financial liabilities 10,752 12,809 -2,057 -16.1%

thereof Deferred tax liabilities 783 462 321 69.5%

Current liabilities 21,426 22,429 -1,003 -4.5%

thereof Other provisions 2,212 2,135 77 3.6%

thereof Current tax liabilities 442 349 93 26.6%

thereof Financial liabilities 6,601 7,301 -700 -9.6%

thereof Trade payables 10,390 9,684 706 7.3%

thereof Other liabilities 1,781 2,920 -1,139 -39.0%

Total Liabilities 82,271 75,796 6,475 8.5%

FINANCIALS 2018CASH FLOW


IFRS, in EUR `000 2018 2017 ∆ [abs.] ∆ [%]

Cash & cash equivalents as of 1 Jan 14,844 5,265 9,579 181.9%

Cash flow from operations 8,249 10,984 -2,735 24.9%

Cash flow from investments -15,191 -5,108 -10,083 197.4%

Cash flow from financing -2,050 3,844 -5,894 153.3%

Cash & cash equivalents as of 31 Dec 5,936 14,844 -8,908 -60.0%

Further key figuresEmployees (FTE, average) 591 504 87 17,3%


CONTACT

Ingo MiddelmenneInvestor RelationsRingmetall AGInnere Wiener Str. 981667 Munich

Mobile +49 174 9091190Fax +49 89 4522098 22Email [email protected] www.ringmetall.de

DISCLAIMERThis presentation contains forward-looking statements based on estimates of the management of Ringmetall AG. Such statements reflect current opinions of Ringmetall AG with respect to future events and results and are subject to risks and uncertainties. Actual results may vary materially from those projected herein this presentation. due to factors including changes in general economic and business conditions. changes in currency exchange. the introduction of competing products. lack of market acceptance of new products. services or technologies and changes in business strategy. Ringmetall AG does not intend or assume any obligation to update these forward-looking statements.

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RINGMETALL - AN ALL-ROUND SUCCESS STORY…ringmetall.de/wp-content/uploads/2019/11/20191101... · SYSTEM PROVIDER FOR THE NO. 1 PACKAGING UNIT: THE INDUSTRIAL DRUM Company Presentation