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Avgol Industries 1953 Ltd.
Investor Presentation • Nov 8, 2023
6668_rns_2023-11-08_47b3ed05-c0a7-41f8-9173-e5f13ae92d21.pdf
Investor Presentation
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Financial Results Financial Results
Q3/2023
Sivan Yedidsion – CFO Sivan Yedidsion –CEO David Peretz –CFO
Q1/2023
Analyst Conference | Disclaimer
- מצגת זו הוכנה ע"י חברת אבגול תעשיות 1953 בע"מ )להלן "החברה"(. המידע הכלול במצגת וכל מידע אחר שיימסר במהלך הצגת המצגת )להלן "המידע"( אינו מהווה בסיס לקבלת החלטת השקעה, ואינו מהווה המלצה או חוות דעת, וכן לא מהווה תחליף לשיקול דעת של משקיע פוטנציאלי. המידע ניתן לצורך הנוחות בהצגת הנתונים והחברה אינה חייבת להמשיך לתת את הנתונים ו/או לעדכנם. האמור במצגת בכל הקשור לניתוח הפעילות של החברה הינו תמצית בלבד, ועל מנת לקבל תמונה מלאה של פעילות החברה ושל הסיכונים עימם מתמודדת החברה, יש לעיין בדיווחים המלאים של החברה לרשות לני"ע ולבורסה.
- המצגת כוללת מידע צופה פני עתיד, כהגדרתו בחוק ניירות ערך, של תחזיות, מטרות, הערכות ואומדנים המתייחסים לאירועים או עניינים עתידיים, אשר התממשותם אינה ודאית ואינה בשליטת החברה, והוא מבוסס רק על הערכתה הסובייקטיבית של החברה.
- התממשותו ו/או אי התממשותו של המידע הצופה פני עתיד תושפע מגורמים אשר לא ניתן להעריכם מראש והם אינם מצויים בשליטת החברה ולפיכך על אף שהחברה מאמינה שציפיותיה, כמוצג במצגת, הינן סבירות, הרי שאין כל וודאות כי תוצאותיה בפועל של החברה בעתיד תהיינה בהתאם לציפיות אלה והן עשויות להיות שונות מאלו שהוצגו במידע צופה פני עתיד.
- This information is forward-looking information, which is based on the information known by the Company at the time of this report is being published. This information might not materialize or might materialize in a way that differs from that anticipated, inter alia, if a material change in trend occurs, or due to other parameters that affect the Company's manufacturing costs or the Company's selling prices.
- This presentation is based on the Company financial reports.
© AVGOL Nonwovens 2020
- There is no data in this presentation that isn't presented in the public financial reports.
- If there is any discrepancy between this presentation and the data in the financial report that was issued to the Israeli SEC and the TASE, the valid data is the one which appears in the formal reports.
- This presentation is provided for information and as a matter of record only. It does not constitute an offer to sell or a solicitation of an offer to buy or sell securities or other financial instruments in any jurisdiction or any advice or recommendation with respect to such securities or other financial instruments of the company.
AVGOL Market
Analyst Conference I Who We Are
AVGOL is a world leader in the development, manufacturing and marketing of nonwoven fabrics for diapers, adult incontinence products, disposable feminine hygiene products, disposable medical products, wipes, fabrics used to produce masks, gowns and additional medical products.
The Company also manufactures nonwoven fabrics used as raw or component materials in various non-hygiene products.
Our products are based on polyolefin resins, specifically those in the Polypropylene (PP) family.
Analyst Conference | Who We Are
Our Vision: We Aspire to Create Nonwoven Innovations to Enhance Quality of Life
Our team
~800 employees in the Global commercial and technical team
Global
6 production sites in Israel, USA, China, Russia and India supplying more than 30 countries.
Quality
Committed to serve our customers with on-time, in full supply of materials to specification
Strategy
=
Global leader in the Nonwovens industry, with broad application and end-use touch points
The Public 34.03%
Analyst Conference | Who we are
Covering Baby diapers , Feminine Care, Adult Incontinence, PPE and medical
Mainly Polypropylene Spunmelt / Meltblown Biodegradable NW
We aspire to:
- Grow and strengthen our position by expanding production capacity to meet the continuous growth in the hygiene market
- Bring innovative nonwoven products that will bring better solutions to regional trends and preferences
- Be the definitive leader in the commercialization of nonwoven spunlaid materials that have reduced impact on the environment
Who We Are | Pushing Technology Bounds
Polypropylene (PP) Thermoplastic "addition polymer" made from the combination of propylene monomers and used in a variety of applications, such as packaging for consumer products, plastic parts for various industries, and textiles
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TECHNOLOGY
Spunbond One continuous process in which fibers are spun and then directly dispersed into a web by deflectors or with air stream. This technology leads to faster belt speeds and cheaper costs
"SMS" Fabrics comprised of one or more Spunbond beams and one or more Meltblown beams in a combination which improves barrier, absorbency, and structural
Meltblown High-velocity air blows molten thermoplastic resin from an extruder die tip onto a conveyor to create random laid nonwoven fabric, a structure useful for filtration and wipes performance Hygiene Baby Care
MARKETS
Hygiene Adult Incontinence Hygiene Feminine Care Other Medical
USA Expansion | Project Update
In December 2022, the company's Board of Directors decided to establish a new production line in our North Carolina, USA facility, as an alternative to the originally planned expansion in Russia.
The addition of this new Reicofil 5 machine will expand the company's existing production capacity by 20K MT annually, offering better efficiency and more advanced products to serve the growing North American market.
Total planned investment : USD 90 million
Commissioning planned during Q4/2024
Financial Results Q3-2023
Analyst Conference I Quarterly Financial Highlights
| USD Mn | Q3'23 | Q2'23 | Q1'23 | Q4'22 | Q3'22 | |
|---|---|---|---|---|---|---|
| Revenues, net | 80.0 | 78.3 | 80.0 | 102.5 | 109.8 | |
| Gross Profit | 13.6 | 10.9 | 11.9 | 19.1 | 18.4 | |
| 16.9% | 13.9% | 14.8% | 18.6% | 16.8% | ||
| EBIT | 7.1 | 3.4 | 4.0 | 9.7 | 8.6 | |
| 8.8% | 4.4% | 5.0% | 9.5% | 7.8% | ||
| 3.5 | 1.5 | 0.8 | 4.7 | 5.5 | ||
| Net Profit | 4.3% | 2.0% | 1.0% | 4.6% | 5.0% | |
| 13.5 | 10.3 | 10.5 | 17.6 | 16.2 | ||
| EBITDA | 16.8% | 13.1% | 13.1% | 17.1% | 14.7% | |
| EBITDA Underlying | 9.6 | 12.0 | 10.0 | 9.4 | 8.6 | |
| 11.9% | 15.3% | 12.5% | 9.2% | 7.9% | ||
| Net Debt/EBITDA | 2.50 | 2.29 | 2.20 | 1.82 | 1.87 |
9 © Avgol Industries 1953 Ltd. 2022
Raw Material | Polypropylene Index
During the third quarter of 2023 and according to the publication date of this report, there is a moderate upward trend in the raw materials price indices. The Company expects this to have a moderate negative impact on its results during the fourth quarter of 2023.
This information is forward-looking information, which is based on the information known by the Company at the time this report is being published. This information might not materialize or might materialize in a way that differs from that anticipated, inter alia, if a material change in trend occurs, or due to other parameters that affect the Company's manufacturing costs or the Company's selling prices
Financial Results
| Results | Q3'23 | Key highlights |
|---|---|---|
| Revenues | \$80M vs \$110M in Q3'2022 | • Decrease in polypropylene prices, to which our sales prices are linked. • A decrease of 4.4% in sales volumes . |
| Gross Profit | \$13.5M vs \$18.4M in Q3'2022 | The Gross Profit in Q3'23 includes a positive impact of about \$3.9M in lag • effect, compared to a positive impact of \$7.5M in Q3'22. • The gross profit was impacted mainly by lower sales volumes and subsequent efficiency rates resulted from lower asset utilization |
| SG&A expenses | \$6.5M vs \$9.0M in Q3'2022 | Driven by significant decrease in logistic rates around the globe and diligent • control of fixed costs. |
\$27
Financial Results
| Results | Q3'23 | Key highlights |
|---|---|---|
| EBITDA | \$13.5M vs \$16.2M in Q3'2022 | EBITDA includes a positive impact of about \$3.9M in lag, compared to a • positive impact of \$7.5M in Q3'22. |
| Underlying EBITDA | \$9.6M vs \$8.6M in Q3'2022 | Mainly due to global decrease in logistics rates ; improved RM purchase • conditions across the board, partially offset lower efficiency rates |
| Net Financing, Expense | \$2.3M vs \$1.2M in Q3'2022 | The increase is a result of a ~\$1.7M decrease in FOREX income • The global increase in interest rates had a moderate impact on the company's • financing expenses due to fixed interest rates on its debt |
Financial Results
| Results | Q3'23 | Key highlights |
|---|---|---|
| Net Profit | \$3.5M vs \$5.5M in Q3'2022 | Mainly influenced by the decrease in the operating profit and • an increase in net financing expense , partially offset by lower income tax expenses. |
| Operating Cash Flow |
\$5.1M vs \$7.2M in Q3'2022 | Mainly influenced by decrease in profits. • |
| Net Working Capital |
\$49M vs \$64M in Q3'2022 | Mainly as a result of decrease in the balances of trade • receivable and Inventory value partially offset by trade payables. |
| Leverage Ratio | 2.5 vs 1.8 in Q4'2022 | Net debt / EBITDA • |
Analyst Conference I Balance Sheet
| As on Sep 30 | As on Dec 31 | |
|---|---|---|
| 2023 | 2022 | |
| K'USD | K'USD | |
| CURRENT ASSETS | ||
| Cash and cash equivalents | 45,340 | 61,511 |
| Trade receivables | 33,709 | 47,719 |
| Other receivables and debit balances | 4,087 | 3,913 |
| Current tax assets | 797 | 64 |
| Derivatives | 159 | 1,267 |
| Inventories | 35,679 | 29,918 |
| Total Current Assets | 119,771 | 144,392 |
| NON-CURRENT ASSETS | ||
| Property, plant and equipment, net | 296,578 | 306,275 |
| Right of use asset | 4,836 | 3,802 |
| Derivatives | 149 | 1,212 |
| Deferred tax assets | 2,000 | 489 |
| Long –term Tax balances | 3,695 | 4,346 |
| Intangible assets | 2,162 | 1,910 |
| Long-term debit balances | 3,941 | 3,255 |
| Total Non-current Assets | 313,361 | 321,289 |
| TOTAL ASSETS | 433,132 | 465,681 |
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| As on Sep 30 | As on Dec 31 | |
|---|---|---|
| 2023 | 2022 | |
| K'USD | K'USD | |
| CURRENT LIABILITIES | ||
| Short-term credit and current maturities of | 11,696 | 13,017 |
| long-term loans from banking corporations | ||
| Nonbank short-term credit | 26,653 | 27,671 |
| Liabilities in respect of derivatives | 544 | 22 |
| Current maturities of long-term bonds | 32,541 | 34,382 |
| Trade payables | 23,790 | 23,450 |
| Current tax liabilities | 22 | 1,288 |
| Other payables and credit balances | 20,234 | 21,856 |
| Total Current Liabilities | 115,480 | 121,686 |
| NON-CURRENT LIABILITIES | ||
| long term payables | 2,086 | 2,679 |
| Long-term loans from banking corporations | 58,380 | 66,217 |
| Bonds | 43,422 | 45,244 |
| Employee benefit liabilities | 155 | 161 |
| Deferred tax liabilities | 17,925 | 19,844 |
| Total Non-current Liabilities | 121,968 | 134,145 |
| EQUITY | ||
| Equity attributable to shareholders of the parent company |
195,369 | 209,484 |
| Noncontrolling interests | 315 | 366 |
| Total Equity | 195,684 | 209,850 |
| Total LIABILITIES AND EQUITY | 433,132 | 465,681 |
© Avgol Industries 1953 Ltd. 2022
SAY HELLO!
Avgol is proud to support our clients with outstanding technical service and support
To find out more about how Avgol can support your baby care diaper range developments, please visit avgol.com or contact us at: [email protected]
We Aspire to Create Nonwoven Innovations to Enhance the Quality of Life
Avgol Industries 1953 Ltd.
9 Shimshon St. Lexus House, 7th floor, Petah Tikva, 4952707 Israel