Présentation Roadshow Octobre 2019
Présentation Roadshow Octobre 2019
Investor Presentation
October 2019
I. SAH Overview
2
We are a
leading
personal care
products
company with
strong footprint
in Africa
3
At a Glance
Presence in
Public 20 8 +4 400
Company since 2014 Production facilities Employees
African countries
SAH Algeria SAH Libya SAH Morocco Azur Papier SAH CI Azur Detergent SAH Senegal
2007 2009 2010 2009 2016 2016 2018
Baby diapers, Feminine pads Distribution of baby Production of Baby diapers Bleach Baby Diapers
Handkerchief Napkins diapers, feminine cellulose wadding Feminine Hygiene Powder & Feminine hygiene
Napkins hygiene products, Paper products Liquid Paper products
adult diapers & paper detergent
products
51 %
SAH Distribution
2010
Distribution of
feminine hygiene
products, adult
diapers & paper
products 5
Product Offering
A singular offering reaching three promising markets
• Paper products
• Wipes
6
Product Offering by Category: Hygiene
Current Production
Product Category Formats (SKUs) Production Site (s)
Capacity
Baby Diapers > Mjez El Beb > 9 Production lines
> 3 Types : Comfort max,
Unisex & Pharmacy (Tunisia) > In # of items/year:
> 6 sizes (2 to 25 kg) > Beja (Tunisia) 1 103 940k
> Algeria (Tunisia only)
> Ivory Coast
Feminine Hygiene > Mjez El Beb > 6 Production lines
> 2 Subcategories : Sanitary
pads & Panty liners (Tunisia) > In # of items/year:
> 7 Types for Sanitary pads > Beja (Tunisia) 556 518k
& 3 Types for Panty liners > Libya (Tunisia only)
Adult Hygiene
> 2 Types: Protect & > Mjez El Beb > 1 Production line
Protect comfort (Tunisia) > In # of items/year:
> 3 sizes (Small, Medium 43 022k
& Large)
24.2% 13.3%
52.4%
6.2%
18.8%
61.8%
13.0%
Baby hygiene Feminine hygiene Adult hygiene Paper based products Wipes
Tunisia Libya Algeria Mauritania Ivory Coast Other African countries
11.8% 8.9%
3.1%
4.4%
71.1% 72.7%
SAH Tunisia SAH Libya SAH Algeria SAH Tunisia SAH Libya SAH Algeria SAH Ivory Coast Azur Papier
SAH Ivory Coast Azur Papier SAH Morocco
Excluding SAH Morocco EBITDA (negative yet non material)
8
Breakdown as of June 30, 2019
Product Offering by Category: Detergent
Production
Product Category Formats (SKUs) Competition
Capacity
BLEACH > 50k tons/year
16 SKUs:
• 4 Sizes: 1L, 1.75L, 3L & 4.75L > 3 Production lines
• 4 Fragrances: Classic, Woods,
Lavender & Lemon
9
Key Dates
A unique success story of a continuously expanding business..
Lilas enters the
“Detergent” segment
2019
2018
2017
SAH goes public Lilas starts production
in Côte d’Ivoire
2014
11
Strategy Pillars
Production innovation is at the core of Lilas’ operations
Historically, SAH has been able to successfully:
• Launch a wide range of products every year and
• Customize its products for each market (packaging, sizes, etc..), while emphasizing on product quality
and affordability
SAH creates well-tailored products to match its markets needs through:
• In-house R&D strategy; 45%
Innovation & • Technical know-how, and
• Close collaboration with business partners (Suppliers, companies and laboratories)
Differentiation
10
Local Export
12
Strategy Pillars
Vertical integration for cost optimization and speed to market
• In 2013, SAH launched Azur Papier, a company specialized in the production of cellulose wadding, its
main raw material in order to secure its availability and reliability while increasing margins. Gross margin
moved from 34% in 2013 to 41% in 2017;
• First production line reached full capacity, leading to a capacity increase with the acquisition of a second
production line. Additional sales (non-group) would represent 7.6% of total Group’s sales by 2022
Cellulose wadding sold to: Non-Group Group line 1 capacity (kT) line 2 capacity (kT)
13
Strategy Pillars
Expanding into Africa through exploring new export markets &
developing regional platforms • Introduce SAH activity to
East Africa
• SAH has proven ability to penetrate and establish manufacturing
• Establish a production unit
capabilities in new markets with the successful launch of the of baby diapers and
Algerian, Libyan and Ivorian subsidiaries feminine products intended
to domestic and
neighboring markets
• Benefit from the market’s
Regional rapid urbanization
Expansion Lilas to start
Exports to Exports to Production in production in
Libya Algeria Libya Senegal
Diversification of
business lines by Product mix Place mix Price mix Competitors
launching the
- Width: 3 lines - Traditional - In line with - 4 local producers
detergent activity
- Length: 10 products distribution competition
- Depth: 129 SKUs - Modern retail
- Healthcare - 3 foreign competitors
facilities
15
Key Investment Highlights
A solid track record and a healthy financial performance
▪ High birth rates and increasing female working ratio in targeted countries. Ratios
1 reached 36% and 45% respectively in Sub-Saharan Africa
Markets dynamics
▪ Rapid urbanization and increasing levels of disposable income
▪ Low penetration rate of paper based products
▪ Increased awareness and access to health and hygiene
Unparalleled growth
2 track record & Healthy
▪ Solid and sustainable growth: +12% Revenue CAGR over the last 7 years
profit margins
▪ Gross margin expansion: +7% following the integration of the paper mill (Azur Papier)
4 ▪ Vertical integration providing SAH Group full control of its supply chain and allowing
Vertical integration
sustainable margins. Additional capacity of 33.5 thousand tons planned for Q1’2020
6 Strong product
▪ Sustained CapEx investment with +US$ 75m over the last 2 years
development
capabilities ▪ Continuous upgrade and maintenance of production lines and equipment
16
II. Our Value Proposition
17
We deliver on
key business
metrics
International Management
Sales growth Sustainability
expansion excellence
19
1. Sales Growth
Customer value is in the heart of our sales growth strategy
Jumbo
Launch
rolls
Detergents Launch
20
1. Sales Growth
Customer value is in the heart of our sales growth strategy
Innovative & Unparalleled Exceptional brand
High quality products
diversified offer retail coverage messaging
Ensuring availability for the customer is our priority Our distribution channels*
1%
40,000
Point of sale in Africa 24%
223
Vehicles of which 157 owned by
distributors (Hygiene& Detergent) 10%
65%
113
Regional warehouses of which 40 owned
Pharmacy
by Lilas
Export
Modern distri. channels
Traditional distri. Channels
With: 157 50 11
Sales men Supervisors Area managers
21
*: SAH Tunisia only
1. Sales Growth
Customer value is in the heart of our sales growth strategy
Innovative & Unparalleled Exceptional brand
High quality products
diversified offer retail coverage messaging
22
2. Sustainability from a financial perspective (1/2)
SAH Group financial profile
✓ Revenue grew at an average rate of EBITDA (TNDm)& EBITDA margin
8.7% over the 2014-2018 period; Revenues (TNDm)
✓ FY18 profitability was adversely 80.0 19.1% 25.0%
70.0 19.0% 14.0%
affected by: 1.5x 15.8%
17.3% 72.1 20.0%
442.7 60.0
• The rise in raw materials’ prices 50.0
64.7 62.1
376.8 56.3 15.0%
(+30% for cellulose and +15% for 325.0 341.3 40.0 46.2
super absorbent); 291.8 30.0 10.0%
• The ongoing depreciation of the local 20.0
5.0%
10.0
currency against the Euro and US
0.0 0.0%
dollar (80% of used raw materials are 2014A 2015A 2016A 2017A 2018A
imported, of which 65% are 2014A 2015A 2016A 2017A 2018A
denominated in Euros and the EBITDA EBITDA margin
In North Africa :
Tunisia ▪ Leveraging the region’s demand potential as
countries like Algeria and Morocco are still
Morocco lagging in terms of tissue paper consumption
per capita
▪ Reinforcing presence in Mauritania where
Algeria Libya Egypt Lilas is leader with an estimated 70% market
share, competing with various imported brands
Mauritania
Mali Niger In the UEMOA and CEMAC regions:
Chad
Senegal Establishing footprint gradually:
▪ November 2017: Launch of production in
Côte d’Ivoire. Currently, SAH produces baby
diapers
Côte d’Ivoire Cameroon ▪ 2018: Set up of a subsidiary in Senegal;
Uganda ▪ December 2019: Launch of production in
Gabon Democratic Kenya Senegal with the set up of baby diapers line
Republic of
the Congo Tanzania In the EAC region:
▪ Selected distributors for the region
Angola ▪ A Kenyan production site is being explored
25
3. International expansion from a strategic perspective
North Africa
196m
M.E
8.7m
UEMOA
120m CEMAC 650m
140m consumers
market reach
EAC
Parent company
186m
Production site
Served market
Future production site
Total population
26
4. Management from an internal perspective
Lilas success is built on its experienced, owner-led management team
with strong governance practices
Jalila Mezni. – Executive Chairman
Founder & CEO
Tarek Kabil
Expert in the FMCG & Mohamed Hammadi Mounir El Jaiez Ahmed
Anas Ben Malek Achref Mezni Adel Goucha
Hygiene sectors with Fahed Alnemah Employee at SAH since
Mokdadi Co-Founder & Managing
Badreldin Managing Director -
extensive experiences in Representative of Representative of Director of Azur Minority shareholder
2004 Partner - RMBV RMBV
Pepsi & Procter & Ekuity Capital minority shareholders Detergent
Gamble
CFO
HR Sales Exports Transit
Procurement Legal Marketing Operations Mohamed IT
Monaam Khaled Seif Eddine Anis
Ali Chaouachi Najet Jebali Jihene Almi (Vacant) Amine Ben Aida Mejri
Daagi Chaaben Saddam Hammami
Malek
Independent members
27
4. Management from an ESG perspective
Committed to the
protection of the
environment and
65% 1 23.9 kwh/ton
Of production is Water treatment Of Electricity
engaged with the based on recycled facility on site (the consumption in 2018 vs
immediate local paper second is under study) 23.5kwh/ton in 2017
community (following LED
implementation*)
Salaries
significantly
higher than
100% +480 c.30%
minimum wage Of SAH employees are Of trained workers in Of female workers
and gender direct hires – No 2018 (Reported for SAH
contracted workers Tunisia & Azur Papier only)
parity in
compensation
Ongoing
Committed to
employee
100% US$ k audits 43
safety & Of SAH workers are Of expenditures in
2018 dedicated to For fire & life safety
security equipped with the
H&S verification
required PPE
29
We Plan to
deliver balanced
and sustainable
growth and create
shareholders
value in attractive
African markets
Focus on the Detergent Business: Market Dynamics
The Tunisian market is characterized by a significant stake of imports while local
production is centralized by four main players: Henkel, Unilever, Judy & Sodet
Market segmentation Evolution of exports (in kTND)
37,851 32,921 33,092
63% 10% 20% 7% 22,721
► The local detergent market is dominated by the powder detergent ► Exports in value of household products and bleach reported CAGRs of
in terms of production, sales and consumption (12%) and (6%), respectively over the 2013-16 period. Exports in quantities
► The bleach represents 90% of the household products’ sub-market reported higher decreases, i.e. (10.4%) and (14.5%);
► Main export country is Libya followed by Algeria and France
► Production of soaps, detergent and household products reported ► Imports of detergent products reported a 3% CAGR;
an annual growth of 2.6% in average over the 2013-16 period; ► The production opportunity in Tunisia is driven by lower production costs
► Up to 75% of the local production is dominated by four main (water, gas, fuel and workforce) compared to Europe and limited local
players competition
31
Source: Agence de Promotion de l’industrie et de l’Innovation
Focus on the Detergent Business: Achievements & Prospects
Lilas’ entering the detergent market is a stepping stone to becoming a local and
regional monopoly in the household sector
In June 2019, Lilas enters the market as the first local manufacturer
offering a complete range of detergent products
Revenue breakdown by distribution Revenue breakdown by category
channel
12%
12%
42%
Lilas reports YTD revenues of TND 30.5m (c. US$ 11m) as of September,
representing an estimated market share of 6.2% 46%
88%
Lilas forecasts TND 57m (c. US$ 20.3) of revenues by the end of
December 2019, representing an estimated market share of 11.6%
32
Focus on the Detergent Business: Achievements & Prospects
Lilas’ commercial team meeting its prospective customers
33
Focus on the Detergent Business: A State of the Art Facility (1/2)
34
Focus on the Detergent Business: A State of the Art Facility (2/2)
35
Focus on the Detergent Business: Presence in the Modern Retail
36
Focus on the Detergent Business: Presence in the Traditional Retail
37
Appendices
-
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1,000.0
12/22/2015
1/22/2016
421.7
2/22/2016
3/22/2016
Free Float
4/22/2016
5/22/2016
6/22/2016
62.7%
7/22/2016
8/22/2016
JM Holding
4.3%
9/22/2016
10/22/2016
11/22/2016
12/22/2016
33.0%
1/22/2017
2/22/2017
3/22/2017
4/22/2017
Other minority shareholders
5/22/2017
Shareholding structure as of September 2019
6/22/2017
11/22/2017
12/22/2017
1/22/2018
2/22/2018
Market Capitalization (TNDm)
3/22/2018
4/22/2018
5/22/2018
6/22/2018
7/22/2018
8/22/2018
9/22/2018
10/22/2018
11/22/2018
12/22/2018
1/22/2019
2/22/2019
39
3/22/2019
4/22/2019
5/22/2019
6/22/2019
7/22/2019
8/22/2019
P/E 2020*: 15.2x
Top 5 shareholders (+1% ownership), excluding JM Holding
764.5
9/22/2019
Distribution Network (Hygiene)
Local distribution network
Healthcare
Hypermarkets &
Traditional facilities &
Supermarkets
Pharmacies
Order acceptance &
Wholesale: invoicing managed by 14
Retail sale:
200 Sales representatives,
45
Wholesalers who in turn report to 4
Distributors
Sales managers Managed by 25
Supervisors,
who in turn
Semi - Distributor Distributor Distributor report to 11
wholesalers
Retail sellers
#1 #2
…………… #45 Area managers
Vehicle #2
Vehicle #1 Vehicle #2
Vehicle #1 Vehicle #2
Vehicle #1 100 Vehicles
100 Sales men
(1 Sales
(1 Sales man
man (1 Sales
(1 Sales man
man (1 Sales
(1 Sales man
man held by
(Employees of SAH); & 1 Driver)
& 11 Driver)
& Driver) & 11 Driver)
& Driver) & 1 Driver) distributors
Drivers report to
& managed
……
……
……
distributors
by Lilas
Vehicle #x Vehicle #x Vehicle #x
(1 Sales man (1 Sales man (1 Sales man
& 1 Driver) & 1 Driver) & 1 Driver)
41
41
Facilities’ Pictures
SAH ZRIBA
AZUR PAPIER
42
42
Distribution Network (Detergent)
Local distribution network
Healthcare
Hypermarkets &
Traditional facilities &
Supermarkets
Pharmacies
Order acceptance &
Wholesale: invoicing managed by 14
Retail sale:
200 Sales representatives,
45
Wholesalers* who in turn report to 4
Distributors*
Sales managers* Managed by 15
Supervisors,
who in turn
Semi - Distributor Distributor Distributor report to 11
wholesalers
Retail sellers
#1 #2
…………… #45 Area managers*
Vehicle #2
Vehicle #1 Vehicle #2
Vehicle #1 Vehicle #2
Vehicle #1 57 Vehicles
57 Sales men
(1 Sales
(1 Sales man
man (1 Sales
(1 Sales man
man (1 Sales
(1 Sales man
man held by
(Employees of SAH); & 1 Driver)
& 11 Driver)
& Driver) & 11 Driver)
& Driver) & 1 Driver) distributors
Drivers report to
& managed
……
……
……
distributors
by Lilas
Vehicle #x Vehicle #x Vehicle #x
(1 Sales man (1 Sales man (1 Sales man
& 1 Driver) & 1 Driver) & 1 Driver)
44
Detergent products’ display in the traditional retail
45