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Avgol Industries 1953 Ltd. Investor Presentation 2024
6668_rns_2024-05-08_84d7d89f-799e-47aa-9d24-ef14e39322ae.pdf
Investor Presentation
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Financial Results Financial Results
Q1/2024
Q1/2023
Sivan Yedidsion – CFO
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.
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.
AVGOL 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.
Our team
~880 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
Indorama Ventures LTD 65.97% +
The Public 34.03%
Analyst Conference | Technology & Markets
RAW MATERIAL
Polypropylene (PP) 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
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 lower costs
"SMS"
Fabrics comprised of one or more Spunbond beams and one or more Meltblown beams in a combination which improves barrier, absorbency, and
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
MARKETS
structural performance Hygiene Baby Care Hygiene Adult Incontinence Hygiene Feminine Care Others (including Wipes) Medical
Analyst Conference | We Are Committed to Sustainability
How we are planning to do things better
Analyst Conference | Strong footprint to serve the global market
Q1'24 Key highlights
| EBITDA | Underlying EBITDA | |||
|---|---|---|---|---|
| Q1'24 | Q1'23 | Q1'24 | Q1'23 | |
| \$10.0M | \$10.5M | \$11.3M | \$10.0M | |
| Leverage | Sales Volume | |||
| Net Debt/EBITDA | Q1'24 vs. Q1'23 | |||
| 3.1 | +13% | |||
Key highlights
- 2024 first quarter sales volume is up 13% compared to the first quarter of 2023.
- Market seems to recover some what, but is still challenging with over-capacity and increased competition, especially in APAC.
- Increased sales in NA supported by shipments from other locations in anticipation of the expected additional capacity from Line 6.
- Sales and marketing and administrative costs showing a slight reduction despite inflationary pressures, through diligent cost control and ease in shipping rates.
- Polypropylene prices increased during the first quarter, but a downward trend started in April.
Raw Material | Polypropylene Indices Trend Per region
During the first quarter of 2024, and until the publication date of this report, there is a moderate downward trend in raw materials prices. The Company expects this to have a minor positive impact on its results for the second quarter of 2024.
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.
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.
\$90M TOTAL PLANNED INVESTMENT Q4'24
Financial Results Q1-2024
Analyst Conference I Quarterly Financial Highlights
| USD Mn | Q1'24 | Q4'23 | Q3'23 | Q2'23 | Q1'23 | |
|---|---|---|---|---|---|---|
| Revenues, net | 86.5 | 79.4 | 80.3 | 78.3 | 80.0 | |
| Gross Profit | 10.9 | 9.1 | 13.6 | 10.9 | 11.9 | |
| 12.6% | 11.4% | 16.9% | 13.9% | 14.8% | ||
| EBIT | 3.6 | 1.2 | 7.0 | 3.4 | 4.0 | |
| 3.4% | 1.5% | 8.8% | 4.4% | 5.0% | ||
| 0.3 | (1.8) | 3.5 | 1.5 | 0.8 | ||
| Net Profit | 0.3% | (2.3%) | 4.3% | 1.9% | 1.0% | |
| 10 | 8.3 | 13.5 | 10.3 | 10.5 | ||
| EBITDA | 11.6% | 10.5% | 16.8% | 13.1% | 13.1% | |
| 11.3 | 9.6 | 9.6 | 12.0 | 10.0 | ||
| EBITDA Underlying | 13.1% | 12.0% | 11.9% | 15.3% | 12.5% | |
| Net Debt/EBITDA | 3.11 | 3.03 | 2.52 | 2.29 | 2.20 |
11 © Avgol Industries 1953 Ltd. 2022
Financial Results
| Results | Q1'24 | Key highlights |
|---|---|---|
| Revenues | \$86.5M vs \$80M in Q1'2023 | • Driven by an increase of 12.8% in sales volumes. |
| Gross Profit | \$10.9M vs \$11.9M in Q1'2023 | The Gross Profit in Q1'24 includes a negative impact of about \$1.3M in lag • effect, compared to a positive impact of \$0.5M in Q1'23. |
| SG&A expenses | \$7.3M vs \$7.8M in Q1'2023 |
Driven by a decrease in logistic costs across the board. • |
| \$27 |
Financial Results
| Results | Q1'24 | Key highlights | ||
|---|---|---|---|---|
| EBITDA | \$10.0M vs \$10.5M in Q1'2023 | EBITDA includes a negative impact of about \$1.3M in lag, compared to a • positive impact of \$0.5M in Q1'23. |
||
| Underlying EBITDA | Mainly due to • higher sales volumes across the board, \$11.3M vs \$10.0M in Q1'2023 |
|||
| Net Financing Expenses |
\$2.1M vs \$2.6M in Q1'2023 | The company capitalized interest expenses of about \$0.7M during Q1'24. • |
||
| 23 19 \$13.5 15 \$10.5 \$10.3 11 |
15 A \$12.0 D BIT \$10.0 11 Underlying E \$9.6 \$10.0 \$8.3 M D US |
\$11.3 \$9.6 |
1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
7
1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
EBITDA
USDM
7
Financial Results
| Results | Q1'24 | Key highlights |
|---|---|---|
| Net Profit | \$0.3M vs \$0.8M in Q1'2023 | Mainly influenced by a decrease in operating profit, partially • offset by lower finance expenses. |
| Operating Cash Flow |
\$12.2M vs \$14.6M in Q1'2023 |
• Mainly influenced by changes in working capital. |
| Net Working Capital |
\$44M vs \$48M in Q4'2023 | • Mainly because of an increase in trade payables. |
| Leverage Ratio | 3.1 vs 3.0 in Q4'2023 | • Net debt / EBITDA |
Analyst Conference I Balance Sheet
| As on Mar 31 | As on Dec 31 | |
|---|---|---|
| 2024 | 2023 | |
| K'USD | K'USD | |
| CURRENT ASSETS | ||
| Cash and cash equivalents | 45,847 | 49,804 |
| Trade receivables | 37,037 | 33,622 |
| Other receivables and debit balances | 3,661 | 4,013 |
| Current tax assets | 1,791 | 1,853 |
| Derivatives | 634 | 909 |
| Inventories | 33,547 | 33,623 |
| Total Current Assets | 122,517 | 123,824 |
| NON-CURRENT ASSETS | ||
| Property, plant and equipment, net | 305,022 | 301,177 |
| Right of use asset | 4,270 | 3,817 |
| Deferred tax assets | 2,568 | 2,173 |
| Long –term Tax balances | 3,429 | 3,634 |
| Intangible assets | 2,662 | 2,171 |
| Long-term debit balances | 4,734 | 4,842 |
| Total Non-current Assets | 322,685 | 317,814 |
| TOTAL ASSETS | 445,202 | 441,638 |
15
| As on Mar 31 | As on Dec 31 | |
|---|---|---|
| 2024 K'USD |
2023 K'USD |
|
| CURRENT LIABILITIES | ||
| Short-term credit and current maturities of long-term loans from banking corporations |
7,681 | 10,387 |
| Nonbank short-term credit | 27,008 | 27,150 |
| Current maturities of long-term bonds | 33,476 | 33,807 |
| Trade payables | 30,806 | 25,607 |
| Current tax liabilities | 618 | 14 |
| Other payables and credit balances | 20,659 | 17,343 |
| Total Current Liabilities | 120,248 | 114,308 |
| NON-CURRENT LIABILITIES | ||
| long term payables | 2,297 | 2,047 |
| Long-term loans from banking corporations | 96,020 | 96,964 |
| Bonds | 10,763 | 10,747 |
| Employee benefit liabilities | 175 | 175 |
| Deferred tax liabilities | 18,040 | 18,384 |
| Total Non-current Liabilities | 127,295 | 128,317 |
| EQUITY | ||
| Equity attributable to shareholders of the parent company |
197,341 | 198,694 |
| Noncontrolling interests | 318 | 319 |
| Total Equity | 197,659 | 199,013 |
| Total LIABILITIES AND EQUITY | 445,202 | 441,638 |
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