Sequana-generique-EN..

Sequana at a glance
September 2014
A Group focused on the paper market
€3 3 3bn sales in 2013
€3.3.3bn
B2B distribution
~ 1/4
Production
~ 3/4

€ 2.5bn
2 5bn in sales


#1 in Europe, #3 worldwide


Operations in 44 countries

1.8
1
8 million
illi
t
tonnes
off paper distributed
di t ib t d
every year

100 distribution centres

Approximately 6,000 employees




2
€ 1 bn in sales
World leader in technical and
creative papers
High-profile
High
profile brands including
Conqueror, Satimat green, Cyclus,
Cocoon, Rives
Nearly 1 million tonnes of paper
produced every year
20 production and converting facilities
More than 4,000 employees
A unique positioning in the paper industry

A differentiated positioning on the industry value chain
Pulp
production
R
Raw
materials
t i l
Paper
production

Recycled pulp
producers

Specialty papers
(incl. recycled)

Not involved in
virgin pulp
production

Graphic papers
Distribution/
converting

P i ti
Printing
Paper
merchants
The only integrated recycled pulp and
paper producer in Europe

Optimizing synergies between Arjowiggins and Antalis




Supply chain optimization
Breadth of product offering
Enhanced service quality
Lead time and working capital
€ 0.2 bn sales
€1 bn sales (1)
1/4 of group’s sales



Capacity optimization
Planning and commercial efficiency
Insight of end-markets to adapt
Arjowiggins’ offering
(1) Excluding Arjowiggins’ US Coated business reclassified in discontinued operation
3
€2.5 bn sales
3/4 of group’s sales
E d users
End
A diversified profile in terms of geographies
and business mix
Balanced portfolio
Antalis - 2013 sales breakdown
By region
By business
Western Europe
(excl. France & UK
41%
France
13%
Packaging
& VisCom
17%
UK
22%
Rest of the world
10%
Office
18%
Print
65%

VisCom
6%
Antalis

Present in 44 countries
in four continents

Packaging
11%

Broad products offering
125 000 clients
E t Europe
Eastern
E
14%
Arjowiggins - 2013 sales (1) breakdown
R t off the
Rest
th world
ld
14%
Asia
19%
By division
By region
US
5%
France
18%
Coated
29%
Graphic
49%
Green
38%
Europe
UK
(excl. France and UK)
10%
34%
.
(1) Excluding Arjowiggins’ US Coated business reclassified in discontinued operation
4

Creative Papers
22%
Specialty
33%
Security
29%
Arjowiggins
j gg

20 production and converting
facilities in Europe, Asia, US
and Latam

Large spectrum of businesses
with different dynamic and
end-market
* Including US Coated business’s
Combined Locks mill
Antalis overview
Ad
distribution
st but o group
g oup leader
eade in its
ts markets
a ets
Key Products
FY2013 Sales
(% of total)
Distribution
market Size (1)
(Europe)
Market
Position(1)
(Europe)
9.2mt paper
#1
3.3mt paper
#1
€4bn
One of the
leading
distributors in
Signage and
POS segment
€5bn
#2
 Coated and uncoated papers
Print
 Specialty and creative papers
 Envelopes
€1,648m
(65%)
 Graphic supplies
Office
 Paper and envelopes
 Board
Visual
Communication
 Plastics / Adhesives
 Paper
 Consumables
Packaging
 Machines
 Bespoke solutions
(1) Source: Company estimates
5
€442m
(18%)
€157m
(6%)
€282m
(11%)
Global reach
2013 sales breakdown
yg
geographic
g p
area
by
Eastern Europe
14%
France
13%
UK
22%
 Present in 44 countries
countries, including 28 in Europe
 1.8 million tonnes of paper sold in 2013
6
Western Europe
(excl. France & UK)
Rest of the world
41%
10%
European leader


Critical mass in Europe

Present in 28 European countries

Approximately 20% market shares in
Europe
#1
#1
#2
Close to 12,000 deliveries per day
throughout Europe
#1
#1
#2
#1
#1
#2
#1
#2
#2
#4
#2
#1
#1
#2
#1
#1
#3
#2
*
#3
#2
#2
#4
#2
7
Arjowiggins overview
A global leader in specialty papers
Key Products
 Recycled pulp and papers
Graphic
 Specialty products
 Standard coated and
uncoated papers
 Secure payments
Security
 Secure documents
 B
Brand
d and
d consumer
protection
 Premium fine papers
Creative Papers
 Tracing papers
 Papers for printed electronics
Coated US *
 Standard coated and
 uncoated papers
(*) excl. lightweight coated paper (LWC)
8
Market position
FY2013 Sales
((% of total))
#1 European recycled
graphic paper(a)
€510m
#6 European coated woodfree paper
(49%)
#1 globally in banknote paper
€305m
#3 g
globally
y in synthetic
y
p
paper
p
(Arjobex)
(29%)
#1 globally in premium fine paper
€224m
#1 globally in tracing paper
(35%)
#4 US coated woodfree paper
* Discontinued
operation
20 production and converting facilities
Graphic
Recycled
Coated & specialty
Deinked pulp (DIP)
Medical
Stoneywood
Clacton (Arjobex)
Chartham Apeldoorn
Wizernes
Brno
Château Thierry
Priplak
L Bourray
Le
B
Crèvecoeur
Bessé
Combined Locks
Rives (Arjobex) &Charavines
Charlotte
Charleston
Palalda
Gelida
Creative Paper
Coated US (discontinued
operation)
Security
9
Salto
Quzhou
Arjowiggins overview
A global leader in specialty papers
Sales ((1)) by geographic area
Rest of the world
14%
Asia
19%
Sales (1) by division
US
Creative Papers
22%
Graphic
49%
5%
Coated
29%
France
18%
Green
38%
Spécialty
33 %
Europe
(excl. France & RU)
34%
UK
10%
(1) Excluding Arjowiggins’ US Coated business reclassified in discontinued operation
10
Security
29%
Steady market deterioration since 2008
The printing & writing paper market, Arjowiggins’ main market segment in
volume, has been deteriorating steadily since 2008




The printing & writing market has been structurally
declining (internet, digital media)
 Volume drop ca. 8% per annum in Europe since
2008
The economic crisis has accelerated the decline in
volumes and leads to a deterioration of our product
mix and margins in the fine paper segment.
Raw material prices (pulp
(pulp, chemicals
chemicals, energy) remain
high, thereby pressuring margins
Overcapacities on the market (15-20%) are causing
strong pressures on selling prices
Paper consumption in CEPI region
1
[2004 - 2012 ; mT]
CAGR 08-12
0%
-4%
The pace of volume decline has accelerated in 2013

Decline in volumes sharper than expected by the
various market operators
88
87
89
90
90
11
11
11
10
10
32
31
32
32
36
35
36
37
81
86
33
28
37
34
81
8
77
8
-7%
29
26
24
-8%
37
36
35
-1%
9
9
-2%
Expected decline of 2% to 5% per annum in printing &
writing paper volumes
3
7
2004
3
6
2005
4
7
2006
4
7
2007
3
7
2008
3
7
2009
Newsprint
Packaging & Wrapping
Print & Office
Hygiene paper
3
7
2010
4
7
2011
4
7
2012
Industrial & special papers
1) CEPI countries: Austria, Belgium, Czech Rep., Finland, France, Germany, Hungary, Italy, Norway, Poland, Portugal,
Slovakia, Spain, Sweden, Switzerland, Netherlands, United Kingdom
Source:CEPI
11
+5%
Key milestones of the Group’s strategy
2008
2009
2011
2010
2012
2013
Consolidation of Map into Antalis
Antalis RACE 2012 Program Roll-Out
DNA Initiative
Packaging & Visual com. acquisitions
Xerox
Arjowiggins’ Green Paper strategy and development of Specialty activities
Strategic Plan roll-out and cost-cutting measures driven by fall in demand
• Greater Autonomy of
Branches, Corporate
downsizing
• Restructuring of
Carbonless
• Arjowiggins: Capacity cuts
• Antalis: cost reduction plans
stepped-up
€€180m cost
savings
over 2 years
(2009 vs. 2007)
• Closures – Witcel (1 machine
- Argentina), Rives (France)
• Shorter working time
arrangements, etc.
• Closures - Dalum
(Denmark) Witcel
(Argentina),
Ivybridge (UK)
• Appleton US
restructuring & cash
protection plan
Divestment of non strategic assets & contribution to market consolidation process
- Promotional
Products
- B. Dumas
- Decor Paper Asia
- Carbonless
- AWA Ltd (exit Fox
River envir. Claim)
12
- Office Supplies
- Antonin
Rodet
- Decor / Abrasive
- Moulin du Roy
-Casting
-US Coated exit
Group restructuring plan announced on 10 April
2014
The group’s industrial and financial plan enables it to pursue its long term development
by repositioning it on promising segments and strengthening its financial structure
Strategic & industrial pillar
Arjowiggins
•
Refocusing on speciality segments
with leadership positions
•
Exit from loss-making businesses and
simplification of industrial footprint
•
Back to positive cash flow generation
•
Antalis
Sequana
13
Continued acquisition plan in high
growth segments and geographic
areas
Financial pillar
•
Credit facility restructuring from €400m
down to €125m
•
Maturity extension of reinstated debt
until end 2020
•
Rescheduling of repayments and
lighter covenants
•
•
Debt maturity extended to end 2018
•
Partial refinancing through a factoring
programme (€200m out of €520m)
•
•
€64m rights issue
Significantly improved financial
flexibility (maturities, covenants and
acquisition baskets)
Reduction of credit facilities from €26m
down to €10m
Outcome
Sustainability
secured by a
refocused business
and a stronger
balance sheet
Continued growth
potential and
diversified sources
of financing
Lighter financial
structure
Key highlights of the industrial restructuring plan

Creative
Papers
Graphic
Exit from US
Coated
14

Change of economic model to capture market shares and bolster leadership position

Simplifying the product range and increasing the size of production runs

Targeted sales and marketing effort toward emerging countries and promising sectors (e.g.
labelling, luxury packaging or specialty papers)

Improving the efficiency and competitiveness of the production equipment
Production concentrated in a limited number of sites

Launch of a disposal process for the Charavines mill (France) and ultimately, transfer of
production from Charavines to Stoneywood
p
y
((UK))

Refocusing the Gelida mill (Spain) on the book binding market


Optimising industrial facilities in the Tracing paper business
178 jobs affected by the reorganisation project

Production concentrated in a limited number of sites in France


Launch of a disposal process for the Wizernes mill (France) and ultimately, transfer of
production from Wizernes to Bessé mill

Selective focus on the most profitable clients and countries in standard coated paper
Boosted leadership of Arjowiggins Graphic in recycled graphic papers

Building of a de-inking plant (€30m) at Bessé mill (France), expected to be operational in mid2016, to make the site self-reliant in recycled pulp

Greenfield: recycled pulp production for Arjowiggins Group and external clients

307 jobs affected by the reorganisation project

Disposal process for the non-core and loss-making US Coated division following a substantial
savings programme conducted in Q4 2013
Key terms of the financial restructuring plan

Arjowiggins

Antalis
Sequana
15
Restructuring of €400m credit facility

€125m conversion into ORNANEs ((net share settled bonds convertible into
new shares and/or exchangeable for existing shares) giving access to
Sequana’s share capital

€105m reinstated gross debt (tranches A and B)

€20m reimbursement through asset disposal(s)

€170m debt write-off
rite off (including
(incl ding €15m of accrued
accr ed interests not due
d e yet)
et)
Reduction in overdraft facilities from €50m to €30m

Restructuring of €520m credit facility

Refinancing of €200m through setup of a factoring programme

Amend and extend of remaining €320m

€64m rights issue

Restructuring of €26m credit facilities

Repayment of €10m

€7m conversion into ORAs providing access to Sequana’s share capital

€9m debt write-off
A significantly enhanced debt profile
Financing lines
Pre-financial
restructuring
t
t i
€ millions
Credit facility
Arjowiggins
Antalis
Holding
400
105
0
20
Overdrafts
50
30
Credit facility
520
320
F t i
Factoring
0
200
Overdrafts
8
8
26
10
1,004
693
Reimbursement via asset disposals
Credit facilities and overdrafts
Total
Group
16
Financing lines
Post financial
restructuring
Reduction in financial debt
(311)
Reduction in financial debt (excl. overdrafts)
(291)
A stronger balance sheet
€ millions
Goodwill
Property, plant & equipment and intangible assets
Other fixed assets
Operating WCR
Other current assets (liabilities)
Assets (liabilities) held for sale
Total assets
Shareholders' equity
Shareholders
Non-controlling interests
30 June 2014
(pro forma)
438
316
148
438
316
148
360
(104)
3
360
(104)
3
1,161
1,161
239
614
-
-
Provisions
192
192
Net debt
730
355
1,161
1,161
Total equity and liabilities
17
30 June 2014
(reported)
Enhanced financial structure
Data at 30 June 2014
Reduction of net debt
€730m
Consolidated net debt
at 30 June 2014
€355m
Consolidated net debt
at 30 June 2014
(after financial restructuring)
Reduction in leverage ratio (net debt/EBITDA)
5.9x
Consolidated leverage
at 30 June 2014
2.9x
Consolidated leverage
at 30 June 2014
(after financial restructuring)
Reduction in gearing ratio (net debt/equity)
30
3.0x
18
Consolidated gearing
at 30 June 2014
06
0.6x
Consolidated gearing
at 30 June 2014
(after financial restructuring)
A strategic plan that repositions the Group from
both an operational and a financial perspective
Arjowiggins
Strategic /
Industrial
Financing
Conclusions
•
•
Refocusing on specialty activities
•
Streamlined industrial footprint
•
Reduced debt through write-offs and
conversions into quasi-equity
•
Extended maturities and rescheduled
repayments
•
Lighter covenants
•
•
Refocused activity, cash generative again
Strengthened leadership in recycled graphic
papers and high potential creative papers
Adequate financial structure
Antalis
•
Continued growth through acquisitions in
growing segments and geographic areas
•
•
Set up of factoring programme
•
Lighter covenants
•
•
Preserved resources to support growth
Extended maturities and rescheduled
repayments
Diversification of financing sources
A refocused group enjoying a robust balance sheet, competitive industrial and distribution
setup and the means to take part in market consolidation
19
Post rights issue ownership structure
Successful rights issue
 €63.8 million gross initial issue, increased to €66.3 million after partial exercise
of the extension clause
 The entire proceeds of the rights issue are to be contributed to Arjowiggins to
finance the operational restructuring plan for its printing and writing paper
businesses
Ownership structure at 31 August, 2014
T
Treasury
shares
h
0.32%
Bpifrance Participations
19.68%
Free float
49.68%
Exor SA
17.03%
Allianz
10.01%
20
DLMD (incl. Pascal Lebard)
3.28%
www.sequana.com
 +33 1 58 04 22 80
 [email protected]
04/09/2014
21