A DREAM Risi North America Conference 10/04/2016 Luigi Lazzareschi CEO of the Sofidel Group

Transcription

1 A DREAM Risi North America Conference 10/04/2016 Luigi Lazzareschi CEO of the Sofidel Group

2 WHO WE ARE Sofidel Group, owned by the two families, Stefani and Lazzareschi, is the main Italian producer and one of the most important in the world of tissue paper for hygienic and domestic use, namely: toilet paper, kitchen rolls, paper napkins and handkerchiefs. Founded in 1966, 50 years ago, Sofidel has grown constantly in all dimensions: from turnover to profit, in volumes to geographic coverage, and social return in terms of well-being for the community. 2

3 THE 4 PHASES OF OUR GROWTH IN EUROPE FIRST PHASE SECOND PHASE Launch of the business in Italy and dedication to export in northern Europe. Building green field operations France, Poland, Germany, UK, Spain. Sofidel learns about the market and the technology. It grows and strengthens investing prevalently in production plants in Italy. Collaboration with big European retailers. This is the internationalisation phase developed through important greenfield investments. Sofidel followed the great development of big retailers mainly with their private label. Increases in production capacities made possible by a still growing European market (3-4% per annum). 3

4 THE 4 PHASES OF OUR GROWTH IN EUROPE THIRD PHASE FOURTH PHASE FUTURE Acquisitions in Greece, Sweden, Belgium, Turkey, Romania, Hungary, but also acquiring additional sites in France, UK and Germany. In Europe we are going to grow at a smaller pace, through organic growth, by increasing capacity in existing sites. This is the phase of acquisitions. With the crisis that began in 2008, in fact, our market changed as well. In a difficult economic and financial context acquisitions prove to be a winning and quick tool to grow and develop our presence on the markets. We implement a massive multi-brand strategy. Many of our sites were built in order to be easely enlarged in the future. Our production sites in Germany, France, Poland, Great Britain and Spain, for example, have enough space to be doubled in size and, in some cases, even tripled. Organic growth, more continuous and less traumatic. Polish expansion already announced. 4

5 KEY NUMBERS 5,514 EMPLOYEES 1,809 CONSOLIDATED TURNOVER IN MILLIONS 13 COUNTRIES 1,058,000 TONS ANNUAL PRODUCTION CAPACITY Source: Sofidel SpA - 12/31/2015 5

6 TURNOVER FROM 2000 TO Source: Sofidel SpA 12/31/2015 Consolidated turnover in millions of Euro 6

7 TURNOVER BREAKDOWN AT THE END OF 2015 JUMBO ROLL 6.8% BRAND 25.1% AFH 14.9% OTHERS 0.5% UK/Ireland 23.1% Italy 16.6% Germany 13.1% France 12.0% USA 10.3% Poland 5.3% Others 19.6% PRIVATE LABEL 52.7% BY BUSINESS LINES BY COUNTRY Source: Sofidel SpA - 12/31/2015 7

8 EBITDA FROM 2013 TO 2015 EBITDA ( thousand of ) 221, % 250, % 207,079 EBITDA / net sales % Source: Sofidel SpA 12/31/2015 8

9 SOFIDEL S EUROPEAN PRESENCE: CLOSE TO OUR CLIENTS/MARKETS SOFIDEL SWEDEN SOFIDEL UK Lancaster SOFIDEL UK INTERTISSUE Leicester Horwich INTERTISSUE Swansea SOFIDEL FRANCE Ingrandes IBERTISSUE SOFIDEL BENELUX SOFIDEL FRANCE Nancy SOFIDEL FRANCE Roanne SOFIDEL GMBH WERRA PAPIER SOFFASS Monfalcone SOFIDEL SOFFASS SOFIDEL POLAND SOFIDEL HUNGARY SOFIDEL GREECE SOFIDEL ROMANIA SOFIDEL KAGIT 9

10 THREE VARIABLES THAT SOFIDEL USES TO ASSESS ITS GROWTH Market shares, volumes, employees and geographical coverage: growth has been constant for the past 20 years Economic results: good EBITDA and its numbers exceed the market average Social return: the social benefits that Sofidel's activity produces 10

11 SOME OF OUR MOST IMPORTANT LEVERS OF GROWTH Sustainability, as a factor of cultural development and competitive growth. Sofidel regards product innovation and environmental sustainability as crucial factors even in order to increase margins. Consistently with our Less is more approach, the aim is to offer products with an ever shrinking ecological footprint and higher functional qualities; products that enclose lower share of natural capital thanks to innovative performance. 11

12 SUSTAINABILITY POLICIES REGARDING THE ENVIRONMENT As a company operating in the tissue sector, a high energy consuming sector, Sofidel has resolved to primarily commit to environmental sustainability. Environmental sustainability policies favour global aspects such as fighting climate changes, commitment protecting the forestry heritage and optimising the use of water resources. FIGHTING CLIMATE CHANGES COMMITMENT TO SAFEGUARDE OUR FOREST HERITAGES OPTIMISING THE USE OF WATER RESOURCES 12

13 SUSTAINABILITY RESULTS -17.8% REDUCTION IN CARBON INTENSITY (2009/2015) 99.97% OF PULP FROM CERTIFIED OR CONTROLLED SOURCES REDUCTION OF CO2 EMISSIONS The investments made in renewable energy sources* improving energy efficiency and the use of cogeneration plants have led to an 17.8% reduction in Carbon Intensity** 2009/2015. Sofidel is currently committed to setting a challenging new target to reduce greenhouse gases across all its new plants ( [* Renewable sources: solar power, hydroelectric and biomass] [** Carbon intensity: emissions set against the amount of paper produced] FIBER SOURCING POLICY Sofidel continue to consolidate its commitment to reduce the risk of receiving supplies from controversial or illegal sources. In 2015, 99.97% of the pulp used was from certified or controlled sources, in accordance with the major certification schemes (FSC, PEFC e SFI ). In 2014, the percentage was 99.7%. 7.3l/kg LITRES OF WATER USED ON AVERAGE PER KG OF PAPER PRODUCED WATER RESOURCES In 2015, the specific average amount of water consumed by Sofidel processes was 7.3* litres per kg of paper produced (compared to 7.8 l/kg in 2014). [* Sector benchmark: litri/kg] 13 Source: Sofidel SpA - 12/31/2015

14 SOFIDEL AND WWF: A FUNDAMENTAL PARTNERSHIP IN 2008 Sofidel is the first Italian company and the first in the world in the tissue sector to join the WWF's Climate Savers programme. Climate Savers asks major leading companies to voluntarily adopt plans to reduce greenhouse gas emissions through innovative technologies and strategies that allow them to take on a leading role in cutting CO2 emissions. THE 2020 TARGETS -23% of greenhouse gas emissions for each tonne of paper produced compared with In comparison terms, this means reducing the emissions of approximately 900,000 tonnes of CO2, equivalent to the emissions of a fleet of 10,000 HGVs (Heavy Goods Vehicles) travelling 10,000 km each per year for 10 years. -13% of indirect emissions (emitted by third parties, along Sofidel s value chain) for each tonne of paper produced, compared to % of the total energy consumed annually to come from renewal energy sources. 14

15 WHY US?

16 LOVE

17 PASSION

18 DREAMS

19 GROWTH

20 THE GROWTH IN THE US 2012 In 2012, Sofidel broadens its horizons and lands in the US. Here, it acquires Cellynne, now known as Sofidel America, active in the Away-from-Home market with three plants: an integrated one in Haines City (FL) and two converting ones in Green Bay (WI), and in Henderson (NV). Sofidel's annual production capacity exceeds one million tonnes. 20

21 PRESENCE IN THE US SOFIDEL AMERICA Green Bay, WI SOFIDEL AMERICA Henderson, NV SOFIDEL AMERICA Haines City, FL US 21

22 THE GROWTH IN THE US Sofidel opens a new operation in Tulsa (OK). Sofidel acquires a new converting plant in Green Bay (WI). Sofidel opens a new converting plant in Hattiesburg (MS). Sofidel opens new offices in Pennsylvania (PA). Sofidel announces a new greenfield investment in Circleville (OH) to build a large integrated plant. 22

23 PRESENCE IN THE US SOFIDEL AMERICA Green Bay, WI SOFIDEL AMERICA Circleville, OH SOFIDEL AMERICA Philadelphia, PA SOFIDEL AMERICA Henderson, NV SOFIDEL AMERICA Tulsa, OK SOFIDEL AMERICA Hatteisburg, MS SOFIDEL AMERICA Haines City, FL US 23

24 OUR RESPONSIBILITY BECOMES EVEN GREATER On 21 June 2016 US President Barack Obama mentioned Sofidel in reference to its investment in Ohio in his speech at the SelectUSA Investment Summit, the event dedicated to promoting direct foreign investment in the US. It was something that moved myself in depth. The real moment in which I realized how much important and demanding was the step we had taken. 24

25 CIRCLEVILLE: OUR FIRST GREENFIELD INVESTMENT 2016 In July: groundbreaking of the new plant in Circleville (OH). The selected area offers important cities located within a few hundred kilometers and is a wellestablished logistics hub for distribution operators. 280 acres of relatively flat land, good road system, railway connected, good availability of water, gas and electricity. Good airport, good logistics, intermodal capabilities, lots of customers distribution centers. And a potential workforce of educated and hardworking people. By the end of 2017, part of the plant will be already producing finished product, and by mid-2018 the plant should be fully operational employing at completion of the first phase more than 300 people. This site is big enough that in the future we could add additional paper machines and converting lines. Potentially this site may become Sofidel s largest operation. 25

26

27 SOFIDEL AMERICA: SITES CLOSE TO THE MARKETS SOFIDEL AMERICA Green Bay, WI SOFIDEL AMERICA Circleville, OH SOFIDEL AMERICA Henderson, NV SOFIDEL AMERICA Tulsa, OK SOFIDEL AMERICA Hattiesburg, MS SOFIDEL AMERICA Haines City, FL

28 LOWER GREENHOUSE EMISSIONS: COGENERATION PLANT AT SOFIDEL AMERICA S HAINES PLANT 2014 Sofidel America s plant based in Haines (FL) commissioned a new cogeneration plant (CHP Combined Heat & Power). By turning to a less polluting source of energy, such as methane gas, whilst simultaneously producing both heat and energy, CO2 emissions can be reduced and energy costs can also be cut. 28

29 NEW CUTTING EDGE CONVERTING LINES 2016/2017 Sofidel installed two new state-of-the-art converting machines in Sofidel America in Hattiesburg (MS). It is the cutting edge technology Constellation, produced by Perini, guarantees uniform winding from first to last sheet with every kind of paper. One again is expected to be installed in Hattiesburg (MS) by Q Another Constellation machine will be installed in Green Bay (WI) by Q

30 30 ADVANTAGE NEW TISSUE TECHNOLOGY (NTT) 200 MACHINE PRODUCED BY VALMET

31 A LATEST-GENERATION MACHINE FOR THE PRODUCTION OF TISSUE 2018 Sofidel will install in the Sofidel America new plant in Circleville two latest-generation machines for the production of tissue. The first will be running by Q1, the second by Q3. It is the Advantage New Tissue Technology (NTT) 200 machine produced by Valmet, that manufactures both conventional and textured tissue. It will allow Sofidel America to further improve the quality of its product range and increase further the plant s energy efficiency. The new machine, that has a 5.5 metres size and a speed of 2,000 metres per minute and a production capacity of 70,000 tons a year. Valmet s supply includes the stock preparation as well as the entire automation system. NTT technology allows the production of tissue with minor energy and fiber consumptions in an extremely flexible way, and it is consistent with Sofidel s sustainability strategy for environmental footprint reduction. Furthermore Sofidel will install at least three Constellation machines in the Sofidel America new plant in Circleville from Q1 to Q2. 31

32 OTHER INNOVATIVE TECNOLOGIES WILL BE INSTALLED IN CIRCLEVILLE The new mill will have a gas turbine cogeneration plant integrated with the Yankee hood air system. Whereas in a traditional cogeneration plant, the exhaust produced by the gas turbine is only used to generate steam by a recovery boiler, in our new integrated system, the turbine exhaust will be sent directly to the hoods of tissue machine to dry the paper and then recovered to produce the steam for the Yankee dryer. As result, this system will provide almost all the energy needed for the drying process and, in some conditions, will allow to run the tissue machine without any further gas consumption (burners off). This means energy efficiency improving and significantly CO2 emissions reduction: Gas consumption estimated reduction: by 15-20% a year CO2 emissions estimated reduction: over ton a year 32

33 OTHER INNOVATIVE TECNOLOGIES WILL BE INSTALLED IN CIRCLEVILLE Another peculiarity of the new facility will also be the high automation level of internal logistic management, completely automatic from the paper mill up to the shipping of the finish product. By means Laser Guided Vehicles (LGVs), parent reels will be automatically handled from paper mill to the warehouse and from here to each converting line; LGVs will be used for raw materials and finished products handling. Wrapped finished products will be stored in a full automatic warehouse (Smart Store): with its 7 levels height and rows, this warehouse will store over pallets. Based on customers orders, the Smart Store will be able to automatically select, pick up, move the finished products and have them available for truck shipping. 33

34 THAT S ALL,THANK YOU FOR YOUR ATTENTION

35 GOOD NEWS FROM US TISSUE CONSUMPTION In the last year (2015) total tissue consumption grew by 2.2% in the US. The growth rate of AfH exceeded 3%. (source Esko Uutela) 35

36 ROOM FOR GROWTH: PL SECTOR AFH represents a large part of our market shares in the US. However Sofidel regards the private label sector as the most attractive. Today in Europe private labels represent about 65-70% of the tissue market share. In the US, private labels carry less weight compared to Europe. Sofidel expects that private labels will grow substantially and this implies structural change in US production. This is the reason why Sofidel aims to grow in this sector. 36

37 OUR US SUBSIDIARY Sofidel America is a subsidiary of the Sofidel Group. It was established in 2012 through the acquisition of the Cellynne tissue company which was founded in 1988 with three production sites in the USA Haines City (FL), an integrated plant where the head office was based, Green Bay (WI) and Henderson (NV). The company is now active in 6 States the original three already listed, as well as Oklahoma (Tulsa), Mississippi (Hattiesburg) and Pennsylvania (Philadelphia) where we have a corporate office. The company serves both the Away-From-Home and Consumer lines of business and represents 10.3% of Sofidel s turnover (2015). A new integrated plant is currently under construction in Ohio (Circleville). And we do not intend to stop. 37

38 OUR CURRENT CHALLENGES to increase our production capacity to get closer to clients by gaining geographical coverage to engage our stakeholders in our business model that is focused on sustainability, trust, and transparency to pay attention to the needs and concern of our clients, consumers and communities to find people with the right skill set we need 38

39 A DREAM CALLED AMERICA First of all I would like to make you aware of my own story: I studied in the US, and I have dreamed to come back as an entrepreneur. I have always loved this country, a land where dreams do come true. This has been one of the main reasons why Sofidel entered in the US market in

40 BUT OBVIOUSLY THERE IS SOMETHING MORE TO POINT OUT the US is the most important tissue market in the world in terms of per capita consumption low number of players to pursue a market diversification strategy to balance the exchange rate risk good business climate good support from public bodies legal certainty 40

41 BY REPLICATING OUR EUROPEAN SUCCESSFUL STRATEGY IN US Over the following years Sofidel is planning to replicate in the US market the successful strategy already implemented as part of the company s internationalization process in Europe, by launching a few new greenfield investments and with new acquisitions 41

42 EMPLOYEES FROM 2000 TO Source: Sofidel SpA 12/31/2015

43 PRODUCTION CAPACITY FROM 2002 TO Source: Sofidel SpA 12/31/2015 Thousand of tonnes

44 TOP FIFTEEN TISSUE MANUFACTURING COMPANIES IN THE WORLD Clearwater Paper ICT C&S Paper Group Metsä Tissue Cascades Kruger Tissue WEPA CMPC Tissue Hengan Sofidel P&G APP G-P K-C SCA 44 Fonte: RISI Outlook for World Tissue Business - 03/31/2015 Thousands of tonnes

45 PRESENCE IN THE US SOFIDEL AMERICA Green Bay, WI SOFIDEL AMERICA Philadelphia, PA SOFIDEL AMERICA Henderson, NV SOFIDEL AMERICA Tulsa, OK SOFIDEL AMERICA Hatteisburg, MS SOFIDEL AMERICA Haines City, FL US 45

46 SOME OF OUR MOST IMPORTANT LEVERS OF GROWTH Geographical coverage, with the presence of plants near the end markets (within a 600/800 km radius from customers) 46