BUSINESS STRATEGY OUTSIDE EUROPE

Transcription

1 RPC THE ESSENTIAL INGREDIENT BUSINESS STRATEGY OUTSIDE EUROPE 13 November RPC Group Plc. All Rights Reserved.

2 Agenda Business strategy outside Europe Eric Chavent Astrapak Robin Moore RPC Group in North America Eric Chavent US case study M&H US David Duffield US case study Letica Anton Letica 2

3 Business strategy outside Europe Eric Chavent 3

4 Creation of a meaningful presence outside Europe Pre Vision 2020 (2012/13) Only injection moulding capabilities outside Europe Limited to three manufacturing operations No R&D capabilities outside Europe Today All main conversion technologies available outside Europe Able to support global customers across all regions Strong R&D capabilities outside Europe 4 50m Revenue 5% Group revenues Where we manufacture Where we sell 3 Operations 3 Countries 320 Employees RPC outside Europe* 890m Revenue 25% Group revenues 46 Operations 10 Countries 8,400 Employees *Pro forma to include a full year of acquisitions

5 Attractive opportunities to grow outside Europe RPC is well positioned: Plastic packaging by region: High quality platforms in high growth geographies Best-in-class innovation capabilities; increasing demand for sophisticated packaging solutions Opportunity to leverage leading design and engineering expertise Very few players positioned to support the globalisation trend in packaging driven by international customers Europe North America South & Central America Asia Rest of World 2.8% 2.0% 2.3% 5.0% 4.9% $150 $100 $50 USD $ billions $0 0% 2% 4% 6% CAGR Source: Smithers Pira Market forecast 5 ATTRACTIVE GLOBAL EXPANSION OPPORTUNITIES ENHANCE LONG TERM ORGANIC GROWTH PROSPECTS

6 Leading innovator; global platform Opportunities to export our leading capabilities Recent examples of best practice sharing Long standing relationships in Europe built on innovation capabilities Process and operational excellence; experienced in best practice transfer Worldwide design and engineering centres of excellence One-stop solution for customers, capabilities to manage: Global projects across multiple geographical platforms Local projects leveraging global network Design & engineering centres of excellence 1 Market leading sport caps worldwide 2 P&G dispensing solutions to US 6 A worldwide partner leveraging industry leading innovative solutions Nescafé coffee capsules to Brazil Superfos patented innovations to South Africa M&H business model to US and Australia

7 Astrapak Robin Moore 7

8 Astrapak (acquired June 2017) Leading design and engineering company in South Africa using all main conversion technologies - a mini RPC Leading specialised manufacturer of rigid plastic products in South Africa Packaging solutions for petrochemical, cosmetics, personal care and food industries Strong long-term relationships with multinational customers Nine manufacturing plants across South Africa; employs c. 1,500 people South African listed since 1997, robust corporate governance and strong management team Charting a new course four year restructuring programme successfully completed prior to acquisition by RPC c. 80m sales Manufacturing facility Astrapak Sales - by end market Food 39% Non-Food 16% Personal Care 40% Other 5% 8

9 South Africa and Astrapak; attractive platforms for growth Entry rationale South Africa Good infrastructure with sophisticated packaging markets Attractive long term growth prospects Significant geography for RPC s customers Acquisition rationale Astrapak Growth platform for fast-growing African continent Extension of RPC s contact with a number of existing major international customers Scalable platform from which further organic and buy-and-build strategy can be initiated Plastic packaging growth rates: Global South Africa Africa 3.7% 5.5% 5.3% Global average plastic packaging 0% 2% 4% 6% CAGR Source: Smithers Pira Market forecast United States India China 9 WELL-ESTABLISHED POSITIONS WITHIN ATTRACTIVE DOMESTIC MARKETS; HIGH QUALITY PLATFORM OFFERING GATEWAY TO SUB-SAHARAN AFRICA

10 TECHNOLOGIES PRODUCTS CUSTOMERS Strategy: RPC Astrapak RPC Group gives access to: Leverage worldwide manufacturing footprint for global customers Innovation and design resources across multiple products, markets and technologies Cross-fertilisation of respective customer bases Robust financial standing A platform for growth: Enhance competitive position; best practice sharing in processing and decoration capabilities RPC s full product range Innovations that promote substitution to plastic Highly complementary products and markets Use Astrapak as platform for inorganic growth where attractive opportunities are presented Leverage RPC s relationships and scale; Astrapak already accessing opportunities not previously available to a standalone local supplier 10 Support on technically demanding applications, such as tubes and in-mould labelling Automation to improve efficiency and reduce cost Expertise across all conversion technologies and best-in-class processing capabilities Medium to long term growth; platform to serve the wider Sub-Saharan Africa region as demand for plastic packaging develops

11 RPC Group in North America Eric Chavent 11

12 RPC Group in North America Best-in-class processing and engineering capabilities, with a diverse and wide range of technologies C. $820m revenues (1) ; 20 high quality manufacturing operations Comprehensive manufacturing footprint; US wide facilities Leading innovators across a diverse spectrum of end markets, focused on attractive product market combinations All operations benefit from centralised approach to polymer procurement Manufacturing facility Case study Case study (2) June 2000 Greenfield HIGHLY SKILLED MANUFACTURING PLATFORM OCCUPYING ATTRACTIVE PRODUCT MARKET POSITIONS (1) Pro forma to include a full year of acquisitions (2) Superfos North American manufacturing operation established

13 US case study M&H US David Duffield 13

14 RPC M&H US Extension of a successful business model Greenfield expansion of the M&H UK business model in 2004 Leveraging established sales distribution channels Selling direct to key customers, offering both standard and custom solutions Specialising in personal care where product differentiation, speed to market and cost effective solutions are key Focus on added value solutions rather than following volume Introduced more complex decoration and moulding capabilities over time M&H UK business model now being exported to Australia M&H US Sales ($m) 18% Acquired by RPC Group /04 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

15 Well-suited to fragmented customer demand Fragmented customer demand: Changing market dynamics impacting customers across the spectrum Consumer demand continues to sophisticate requiring regular brand and product revisions and extensions M&H s capabilities: Industry leading library of products Customised solutions from standard packaging On-shelf differentiation as standard; premium decoration available off-the-shelf Less visibility over demand favours smaller production runs with minimal capital commitment Expertise in multiple conversion technologies Offer full range (bottles, jars, closures), critical in personal care markets where complementary products are common; other players typically specialise Select most attractive niches and apply most appropriate technology Speed to market increasingly important Dynamic to market changes Fast changeover platforms give speed to market and entry point order quantities Capabilities readily available when products migrate between packaging formats 15 CAPABILITIES WELL-SUITED TO CAPITALISE ON AN INCREASINGLY SOPHISTICATED MARKET

16 Platform to grow a successful business model Strategy: M&H US Organic opportunities available; continue to invest Enhance current product portfolio Product differentiation increasingly important in adjacent markets; apply business model to attractive niche opportunities Leverage ability to best serve fragmenting customer demand Geographical expansion: Operations currently limited to East Coast; customers requesting support across US Letica acquisition offers ready made US wide manufacturing platform and distribution network Attractive platform for growth initiated with M&H s capabilities M&H s diverse range of process and engineering knowledge offers platform for Superfos to return to US Superfos delivers continued organic growth, leveraging M&H s production expertise Letica acquisition provides platform for US wide roll-out of Superfos product range, but also gives vehicle to expand M&H s business model across US STRONG ORGANIC GROWTH BASED ON EXPORT OF SUCCESSFUL BUSINESS MODEL; OPPORTUNITY TO EXPAND MARKET AND GEOGRAPHICAL REACH

17 US case study Letica Anton Letica 17

18 Letica (acquired March 2017) A major player in US packaging: Founded and privately-owned by the Letica family since 1968 Manufacturer and distributor of rigid packaging and foodservice products to construction, food, chemical and retail markets Broad portfolio with over 250 product configurations; 50+ live patents Robust engineering capabilities in injection moulding, supported by dedicated full-service design centre Well-invested North American manufacturing footprint with 13 owned plants in 11 states; headquartered in Rochester, MI Coast-to-coast reach: integrated distribution network with over 400 trucks and trailers c.$450m sales Letica sales FY By operating segment Manufacturing facility Design & engineering centre of excellence Food Packaging 43% Non-Food Packaging 57% 18 HIGHLY SKILLED MANUFACTURER WITH EMBEDDED CULTURE OF INNOVATION AND NEW PRODUCT DEVELOPMENT

19 Compelling acquisition with clear strategic benefits Acquisition rationale Letica Well-invested US business platform with strong design and engineering capabilities Extended geographical footprint from which to serve global customers Platform to expand Superfos operations in the US Platform to expand RPC s wider product range in the US Immediate and strategic procurement benefits Superfos US sales ($m) 45.0 US sales before exiting from market prior to RPC s ownership /09 11/12 12/13 13/14 14/15 15/16 16/17 Superfos SuperLock examples

20 Strategy: Letica Attractive short and long-term opportunities Optimise existing business by realising identified cost savings Extract synergies: highly-visible cost synergy opportunities in procurement and distribution Best practice sharing: Letica automation team currently developing downstream equipment based on RPC Superfos technology Knowledge transfer: access to RPC s industry leading lightweighting capabilities and in-mould labelling technology Cross-selling opportunities: Existing customers currently served from the East Coast would like RPC to support them across the US Increased points of contact with key decision makers of shared customers Manageable integration requirements: key Letica family members and full senior management team remaining with the business 1 2 Extract cost savings and synergies 3 Best practice sharing 4 Knowledge transfer Cross-selling opportunities 20 DELIVER IDENTIFIED COST BENEFITS; DEVELOP PLATFORM TO SUPPORT CUSTOMERS WITH RPC S LEADING PRODUCTS AND INNOVATIONS

21 RPC THE ESSENTIAL INGREDIENT QUESTIONS? 2017 RPC Group Plc. All Rights Reserved.