synthomer plc a focused speciality aqueous polymer business

SYNTHOMER PLC
A FOCUSED SPECIALITY AQUEOUS POLYMER BUSINESS
SEPTEMBER 2014
2
Key Facets of Synthomer’s Aqueous Polymers Business
• Our products typically provide one or both of two critical functions
– Provide a barrier
– Bind or stick two or more components together
• We don’t sell a chemical – we sell a formulation
– Intimate knowledge of customers’ products/production process AND frequently
their customers’ products/production process
– Significant technical service element to sales
– Deep “know-how” required to be successful
• 50% water
– Logistics costs rapidly become a significant proportion of total cost
– Need to manufacture close to customers
– “In Built” defence mechanism to “Out of Region” competitors
• Range of polymers
– We have the broadest range of aqueous polymers of all of our major competitors
3
A Balanced Portfolio Supported by a Strong Polymer Technology Platform
with Global Reach
Relative Growth Potential
Sales
Health &
Protection
20,2%
Carpet,
Compounds &
Foam
19,3%
Health & Protection (HP)
Construction &
Coatings (CC)
Construction &
Coatings
23,9%
Paper
16,4%
Performance
Polymers
7,3%
Functional
Polymers
12,9%
2013 Sales: £1,054.9m
Paper
Performance
Polymers (PP)
Functional
Polymers (FP)
Carpet, Compound &
Foam (CCF)
EBITDA Margins
Diameter of bubble is proportional to sales
4
SBU Sales Split
Carpet, Compounds & Foam
Binding and backing of tufted and other
carpets, foam backed carpets,
automotive and artificial grass. Foams
for mattresses, pillows and shoes.
Health & Protection
Medical, clean room and industrial
gloves, medical devices (e.g.
catheters), condoms and other
dipped latex goods.
Paper
Coated paper and paperboard, finecoated paper, lightweight coated paper,
food packaging and other specialty paper
grades.
Construction & Coatings
Construction
Cement and mortar modification,
bitumen modification, concrete repair
systems and plasticisers, bonding aids,
primers, flooring and construction
adhesives, liquid applied membranes,
flexible roof coatings, sealants and
primers.
Coatings
Acrylic and Vinyl Acetate copolymers
for walls (interior and exterior),
gloss/semi-gloss emulsion paints,
plasters/textured finishes, flexible wall
coatings, wood paints and stains,
anticorrosion paints, industrial
coatings and water-based fillers.
Performance Polymers
Lithene® - for various automotive applications in
electrical insulation and sound dampening. Alcotex
- Polyvinyl alcohol used as a stabilising material in
the PVC polymerisation process. Polyvinyl Acetate
- for solvent adhesives, Polyester resins and
composites.
Inorganic (non-Polymer) Specialties - for catalysts,
flame retardants and other niche applications.
Functional Polymers
Non-woven fabrics, insulation, textile
coatings, printing, gaskets, masking
tapes, specialty non-graphic papers,
abrasives, tyre cord, pressure sensitive
adhesives, packaging and wood
adhesives.
5
A Wide Range of Polymers to a Wide Range of End Uses
SBU
Paper
Carpet,
Compounds &
Foam
Health &
Protection
Construction &
Coatings
Functional
Polymers
Performance
Polymers
Chemistry
XSBR

HS-SBR











XNBR
Acrylic & Vinyl
Dispersions
Other


Compounds
CR, NR
CR, Alkyd &
UPE resins
CR, VP-SBR
PVOH, PVAC,
LPBD,
metal salts
6
Creating Value – Our Strengths
Innovative technology
• Sell a unique formulation, not a chemical
• Strong focus on aqueous polymers
• Customer collaboration and alignment driving innovation
Application diversity
• High exposure to global mega-trends
• Formulation in applications all around us
• Over 4,000 customers across the word
Manufacturing excellence
• Highly cost effective production capabilities
• Fast and commercially focused R&D
• World class people
• Flexible supply chain
Global foot print
• European engine room enabling investment in Asia
• Emerging market exposure (37% of 2013 sales)
• Local production sites: high water content of aqueous polymers
excludes ‘out of region’ competitors
7
Synthomer Manufacturing Footprint
Oss (Netherlands)
Hasselt (Netherlands)
Oulu (Finland)
Stallingborough (UK)
Ossett (UK)
Langelsheim (Germany)
Accrington (UK)
Marl (Germany)
Harlow (UK)
Atlanta (USA)
Worms (Germany)
Milan (Italy)
Filago (Italy)
Dammam (Saudi Arabia)
10th of Ramadan City (Egypt)
Shanghai (China)
Guangzhou (China)
Dubai (UAE)
Ho Chi Minh City (Vietnam)
Kuala Lumpur (Malaysia)
Kluang (Malaysia)
Pasir Gudang (Malaysia)
Johannesburg (South Africa)
Durban (South Africa)
Sales
Production
8
Synthomer Profit Development
Operating Profit £m
120
110
100
90
80
70
60
50
40
30
20
10
0
2006
2007
2008
2009
Restated Underlying Group Operating Profit
2010
2011
2012
2013
PolymerLatex Pro-forma Adjustment
9
Sales by Geography – Destination Basis
2013 Sales: £1,054.9m
Asia
28%
East Europe
and ROW
5%
West Europe
54%
South Africa
and Middle East
9%
Americas
4%
10
Growing Sales to Developing Markets
2013 Sales by Destination
2013 Sales by Origin
Europe
and North
America
72%
Asian
Capacity
‘000MT/yr
Asia and
Rest of
World
28%
Asia and
Rest of
World
37%
Europe
and North
America
63%
500
450
400
350
300
250
200
150
100
50
0
2006
2007
2008
2009
2010
2011
2012
2013
11
Building on Our Strengths for Future Growth
•
•
•
Key Strengths
Strategy
STRUCTURAL
STRONG MARKET POSITIONS
Exposed to global mega-trends
High water content excludes “out of
region” competitors
Sell a formulation not a chemical
GEOGRAPHIC
•
•
•
Emerging markets exposure
• 37% of sales by destination
Proximity to customers
European “engine room” enabling
Asian growth
•
CRITICAL ENABLERS
Financial Capital
and
Human Capital
LEVERAGE TO DRIVE “EM” GROWTH
•
•
•
4,000 customers
• Largest = 1.4% of sales
• Top 20 = 18.6% of sales
Broad product range
Re-invest strong European cash
flow and state of the art “knowhow”
Utilise our existing management
strengths in Asia and MEA
INVESTING IN INNOVATION
DIVERSITY
•
No. 1 or 2 position in our markets
• No.1 Global Nitrile Latex
producer
• No.2 Aqueous Polymer producer
in Europe
•
•
•
Our products are naturally “green”
Intimate customer knowledge
R&D and Technical Service to drive
growth AND margins
12
Synthomer’s Exposure to Global Mega-Trends
Category
Mega-Trend
Synthomer’s Leverage
1. Demographics
1.1 Population Growth
•
Large and growing developing world exposure
1.2 Rising Wealth in Emerging
Markets
•
As personal wealth rises, spending on the home
increases
1.3 Urbanization
•
Many of our products essential in modern
construction
2.1 Resources & Energy
•
Numerous products for use in insulation
applications
2.2 Environmental Protection
•
Aqueous Polymers replace solvent based
Polymers
3.1 Health & Ageing
•
Health and Protection business unit growing
strongly
•
Intimate customer knowledge and specifically
formulated products support individualisation
•
Localised product ranges based on core
technology
2.Resource
Constraints
3. Needs
Efficiency
3.2 Mobility
3.3 Global Information
3.4 Individualisation
13
Urbanisation and Energy Efficiency
Anti
Carbonisation
External Insulation
Systems
Integral Insulation
Systems
Wood joinery
Coatings
Cool Roof
Water Proof Membranes
Cool Roof
14
Recent Product Launches - Examples
• Elastomeric binder for roof coating applications
• High performance binders for interior and exterior coatings
• Tile adhesives for use in low emission systems
• Acrylic binder for low emission outdoor coatings
• Coater ready PSA for roof insulation foils
• PSA grade for speciality tapes
• Self cross-linking nitrile dipping latex
• High stress-relaxation nitrile dipping latex
• Lithene® Ultra
• Fourth Generation nitrile dipping latex
• APEO free coating polymers in emerging markets
• Bio-polymer latex for paper coatings
15
Appendices
• Sales by Chemistry
• Market Position Examples
16
Sales by Product Chemistry (by sales value)
Latex
49%
Dispersions
22%
Nitrile
34%
Compounds
5%
Specialities
24%
SBR
66%
17
Latex Market Position
Carpets & Foam
SBR Latex and
compounds for carpets,
pillows and mattresses
No 1 in Europe in SBR
No 1 in Europe in
Compounds
No 1 Worldwide in HS-SBR
Construction &
Textiles
SBR Latex for cement
additives, textiles and
glass fibre insulation
No 1 Worldwide
Dipped Goods
Nitrile Latex for thin wall
protective gloves and
industrial gloves
No 1 Worldwide
Paper
SBR Latex for coated
paper & board
No 2 in Europe
18
Dispersions Market Position
Paint
Decorative, speciality
and industrial
No 1 in UK, Middle East,
S Africa and Malaysia
No 4 in Europe
Adhesives
Construction
Pressure sensitive
labels and tapes,
packaging and wood
glues
No 1 in UK, Middle East,
and Malaysia
Building adhesives and
sealants, cement
additives
No 1 in UK, Middle East
No 3 in Europe
No 3 in Europe
19
Specialties Market Position
Alcotex
Speciality Polyvinyl
Alcohol
for use as a
suspension agent
in PVC polymerisation
No 1 Worldwide
Lithene
Liquid Polybutadiene
for automotive
sealants, electronic
encapsulants, printing
plates and specialist
coatings
No 2 in Europe and USA
Lipren/
Pyratex
Speciality water-based
polymers for protective
gloves,
contact adhesives,
tyre cord adhesive
Focused niche player
END
Summer 2013