avgol

Q3- 2013
Financial Results
Analysts Conference Call
November 2013
Financial Results
Analysts Conference Call
This presentation is based on the Company financial reports.
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.
1
Analysts Conference Call
Agenda
• Key Highlights
• Financial highlights
• Revenue Breakdown
• COGS Breakdown
• Cash Flow
• Balance Sheet
2
Analysts Conference Call
Presentation Team
Mr. Michael Teacher
Chairman
Mr. Shachar Rachim
CFO / Interim CEO
3
Analysts Conference Call
Financial Highlights
USD Million
Q3
Q3 2013
Revenue, net
Gross Profit
EBIT
Net Profit
EBITDA
9M
Q3 2012
%
9M 2013
%
86.1
6%
81.3
253.0
7%
236.8
13.5
15.7%
8.3
9.7%
3.6
4.2%
13.8
16.1%
-23%
17.6
21.6%
11.9
14.6%
7.9
9.7%
16.1
19.8%
40.7
16.1%
23.7
9.4%
10.7
4.2%
40.8
16.1%
-16%
48.5
20.5%
29.9
12.6%
18.3
7.7%
43.1
18.2%
-30%
-54%
-14%
-21%
-42%
-5%
30-09-13
Total Assets
Net Debt
% Net Debt/ Total Assets
Net Debt/EBITDA
* Company’s Net Profit before allocation to majority and minority shareholders.
4
9M 2012
456.4
157.5
34.5%
2.84
30-9-12
-8%
3%
420.1
162.2
38.6%
2.99
Analysts Conference Call
Pegas data – base ) except EBITDA )on Q2-13
This presentation is based on the Company’s financial reports. If there is any discrepancy between this presentation and the data in the financial reports, the valid data is the one which appears in
the formal reports of the companies. Financial Results Currency translated by Avgol to USD - PEGAS in EUR, PROVIDENCIA in BRL and there might be foreign exchange translation impacts.
5
Analysts Conference Call
Investments & Net Debt
• Net Debt/ EBITDA ratio decreased to
2.84 during Q3/13 ( vs 2.99 in Q2/13).
• The company initiate its investment in
new line at Russia. Till now we already
paid approximately USD2M (USD5M in
the third quarter).
6
Analysts Conference Call
Key Highlights
Financial Q3/2013
 The Company’s revenues in the first nine months of 2013 totaled USD 253 million, an
approximately 6.8%increase compared to USD 236.5 million in the corresponding period of
2012 driven by higher production volumes.
 Revenues in the third quarter of 2013 totaled about USD 86.2 million, up about 6% from the
revenues of USD 81.3in the corresponding period of 2012, and up 4% compared to the
second quarter of 2013.
 Both the gross profit and operating income margins in the third quarter were impacted by the
production issues in North America – these issues are being addressed and improvements
aimed at restoring key performance targets are beginning to be seen.
 Operating cash flow in the third quarter totaled about USD 19.5 million significantly higher
than in both the corresponding period of 2012 and the second quarter of 2013.
 Cash and cash equivalents at the quarter end totaled approximately USD 75.6 million
7
Analysts Conference Call
Key Highlights
Market & Business
• We continue to devote extensive management efforts in order to accelerate
operational improvements in the US factory and we're starting to see the beginning of
the change take effect.
• Demand for our products in the US remains robust, and the focus on efficiency will
continue to ensure the business is positioned to meet the demand for Avgol's
products.
• Sales at the company's China site in the third quarter have started to pick-up although
the full capacity of our three production lines is not yet being utilized. An increase in
sales and utilization on the third line was being seen by quarter end.
• The company has started to build the infrastructure of the new line in Russia. The
demand for Avgol's unique products in Russia continues to be high, and in order to
keep the market leadership positioning in this area, the company is supporting supply
to the region from other group plants.
8
Analysts Conference Call
Cost of Goods Sold (COGS)
•
Materials share in the COGS
decreased from 74.6% to 74 %
Source: Company Financial Reports
9
Analysts Conference Call
Profit Development
Source: Company Financial Reports
10
Analysts Conference Call
Cash Flow
Source: Company Financial Reports
11
ST = Short Term; LT = Long Term
Analysts Conference Call
Balance Sheet Highlights
Cash and cash equivalents
Short-term deposits
Trade receivables
Other receivables
Current tax assets
Derivative financial instruments
Inventories
Total current assets
As on December 31
As on September 30
20 1 3
20 1 2
20 1 2
USD
USD
USD
thousands thousands
thousands
49,752
75,619
54,724
10,000
55,482
58,687
51,329
6,310
5,456
3,895
846
6,228
3,746
3,461
6,346
4,664
34,564
39,529
38,947
160,415
191,865
157,305
Property, plant and equipment, net
Derivative financial instruments
Deferred tax assets
Intangible asset
Other long-term receivables
Total noncurrent assets
244,740
15,872
813
1,970
1,168
264,563
247,823
6,654
669
2,407
2,110
259,663
251,119
6,187
695
2,204
4,849
265,054
Total assets
456,428
420,078
422,359
17,246
84
21,698
34,937
1,323
11,996
87,284
19,071
135
18,546
23,079
829
9,060
70,720
25,878
138
19,405
31,352
794
9,499
87,516
Long-term loans from banking corporations
Bonds
Liability in respect of derivative financial instruments
Employee benefit liabilities
Deferred tax liabilities
Total noncurrent liabilities
84,854
128,946
311
155
27,692
241,958
95,285
95,391
1,823
198
23,887
216,584
89,454
79,778
582
150
25,021
194,985
Total equity
127,186
132,774
139,858
Total liabilities and equity
456,428
420,078
422,359
Short-term credit from banking corporations
Liabilities in respect of derivative financial instruments
Current maturities of long-term bonds
Trade payables
Current tax liabilities
Other payables
Total current liabilities
12 Source: Company Financial Reports
Financial Results
Analysts Conference Call
Thank You
13