Tecnoglass - A Leading Manufacturer of Architectural Glass and Windows Serving the Global...

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 May 2015 A Leading Manufacturer of Architec tural Glass and Windows Serving the Global Residential and Commercial Construction Industries (Nasdaq: TGLS; OTCBB: TGLSW) Jose Manuel Daes Abuchaibe President at ES Windows LLC. Chief Executive Officer at Tecnoglass. Committed with Corporate Social Responsibility and Environmental Sustainability.

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Tecnoglass - A Leading Manufacturer of Architectural Glass and Windows Serving the Global Residential and Commercial Construction Industries. Jose M Daes President at ES Windows LLC. Chief Executive Officer at Tecnoglass. Committed with Corporate Social Responsibility and Environmental Sustainability.

Transcript of Tecnoglass - A Leading Manufacturer of Architectural Glass and Windows Serving the Global...

  • May 2015

    A Leading Manufacturer of Architectural Glass and Windows

    Serving the Global Residential and Commercial Construction Industries

    (Nasdaq: TGLS; OTCBB: TGLSW)

    Vanessa_TorresTypewritten textJose Manuel Daes Abuchaibe President at ES Windows LLC. Chief Executive Officer at Tecnoglass. Committed with Corporate Social Responsibility and Environmental Sustainability.

  • 2Safe Harbor

    FORWARD LOOKING STATEMENTS

    This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation ReformAct of 1995, including statements regarding future financial performance, future growth and future acquisitions. Thesestatements are based on Tecnoglasss current expectations or beliefs and are subject to uncertainty and changes incircumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes ineconomic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation ofTecnoglass business. These risks, uncertainties and contingencies are indicated from time to time in Tecnoglass filings with theSecurities and Exchange Commission. The information set forth herein should be read in light of such risks. Further, investorsshould keep in mind that Tecnoglass financial results in any particular period may not be indicative of future results. Tecnoglassis under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as aresult of new information, future events, changes in assumptions or otherwise.

    FINANCIAL PRESENTATION

    Certain of the financial information contained herein is unaudited and does not conform to SEC Regulation S-X. Furthermore, itincludes EBITDA (earnings before interest, taxes depreciation and amortization) which is a non-GAAP financial measure asdefined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. Accordingly, such informationmay be materially different when presented in Tecnoglasss filings with the Securities and Exchange Commission. Tecnoglassbelieves that the presentation of this non-GAAP financial measure provides information that is useful to investors as it indicatesmore clearly the ability of Tecnoglass to meet capital expenditures and working capital requirements and otherwise meet itsobligations as they become due. EBITDA was derived by taking earnings before interest, taxes, depreciation and amortization asadjusted for certain one-time non-recurring items and exclusions.

  • 3Investment Highlights: 30-year History of Quality, Innovation, and Service

    #1 architectural glass transformation company in Latin America; second largest glass fabricator serving the U.S. in 2014 (Glass magazine)

    800+ customers in North, Central and South America

    Growing U.S. presence, representing ~51% of total 2014 sales

    and ~61% of Q1 2015 total sales

    Record 2014 revenue and Adjusted EBITDA; significant growth forecast for 2015 and 2016

    Strategic, cost-effective location in Barranquilla, Colombia

    Invested / committed ~$95 M to expand manufacturing capacity, reduce costs, and improve efficiencies

    Organic growth and market consolidation via acquisitions

    Plans to initiate regular quarterly dividend of $0.125 per share

    Vanessa_TorresTypewritten textChristian Daes Abuchaibe founder of Tecnoglass

  • 4Global Customer Base: Hi-Spec Products for Premier Properties

    South Dade Miami Cultural Arts Center

    (Miami, FL)

    50 UN Plaza (New York City)

    Lincoln Center (Miami, FL)

    4 Waterway Square (The Woodlands, TX)

    Fordham University (New York City)

    The Edge(West Palm Beach, FL)

  • 5Global Customer Base: Hi-Spec Products for Premier Properties

    Forum II(Costa Rica)

    Trump Tower (Panama)

    OPM(Argentina)

    Hotel Marriott (Aruba)

    Aeropuerto El Dorado (Bogota)

    Hotel La Concha (Puerto Rico)

  • 6Barranquilla: Manufacturing and Delivery Cost Advantages Provide Significant Structural Competitive Advantages

    Tecnoglass ships its products from

    Barranquilla to Miami less expensively than

    its competitors ship from

    Minneapolis to Miami

    $34.9

    $56.1$61.4

    $17.2

    2012 2013 2014 Q1 2015

    $ in MMs

    26.8%

    31.1%30.2%

    Gross Profit / Margin

    33.0%

  • 7State-of-the-Art Assets, Talented Workforce

    Manufactures various glass + aluminum

    products

    Products are customized into finished goods

    Tecnoglass purchases prime

    raw materials

    Quick, on-time delivery to global customers

  • 8Capacity Expansion: Responding to Improving Global Outlook for Architectural Glass and Aluminum

    Target ~ 50% increase in manufacturing capacity

    Aluminum extrusion capacity to increase to 1,600 tons/month from 1,200 tons/month

    Painted aluminum capacity +100%

    Aluminum billet manufacturing capacity +100%

    Laminated glass production capacity +20%

    $40 M glass coating line

    Places TGLS among a handful of manufacturers with this capability

    Will initially use ~15% of capacity; longer term, $200 - $250 M in estimated sales at full capacity

    $6 - $8 M in waste-related cost savings in the first year

    Commence operations in Q3 2015

  • 9Strong Growth Profile: Rising Revenues, Income, Adjusted EBITDA

    (1) Excludes gains / losses related to change in fair value of warrant liability

    $130

    $183 $197

    $240 $288

    $-

    $100

    $200

    $300

    $400

    2012 2013 2014 2015E 2016E

    Revenues

    $6

    $15

    $20.3 $22.3

    $32.6

    $-

    $10

    $20

    $30

    $40

    2012 2013 2014 2015E 2016E

    Consolidated Net Income

    $22

    $39 $48

    $60

    $80 - $85

    $-

    $20

    $40

    $60

    $80

    $100

    2012 2013 2014 2015E 2016E

    Consolidated Adjusted EBITDA (1)

    (1)

    22%

    53%

    38 - 40%

    CAGR

    CAGR

    CAGR

    ($ in MMs)

    Vanessa_TorresTypewritten text

    The Tecnoglass ESWindows Foundation was created on July 18th, 2005 due to Tecnoglass and Energia Solar S.A.s founders Jose Manuel Daes y Chistian Daes interest in collaborating with the management of social projectsdevelopment projects.

  • 10

    Global Revenue Profile: Rising U.S. Sales

    OtherPanamaU.S.Colombia

    Rising demand in South Florida

    Penetrating newer markets, including Baltimore-Washington, California, New York, New Jersey and Texas

    Initiatives underway to reach new markets, including Europe, Far East, and Africa

    Increased bonding capacity

    Quality, service, manufacturing efficiencies

    Strategic Acquisitions

    $80.1

    $101.6

    $11.4$4.4

    2014 Revenues $197.5 M

    $12.4$15.5

    $17.7$21.1 $21.9

    $26.0 $26.8 $26.9$31.7

    31.2%35.1%

    38.9% 39.2%45.7%

    50.1% 50.2%

    60.8% 60.9%

    Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

    $ in

    MM

    S

    U.S Sales / % of Total Sales

  • 11

    Rising Backlog($ in MMs; backlog at quarter end)

    $120 $140 $132

    $220

    $280

    $320

    $0

    $50

    $100

    $150

    $200

    $250

    $300

    $350

    Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

  • 12

    Consolidating South Florida Market

    Glasswall, LLC

    o Selected assets acquired from CMC Group in January 2015

    o CMC Group has developed 10M + sq. ft. of luxury properties in South Florida

    o TGLS establishes U.S. base with acquisition of warehouse / manufacturing / office facility

    o TGLS expected to supply windows and doors for four upcoming CMC properties

    RC Aluminum Industries

    o Selected assets acquired July 2014

    o $70 M of South Florida backlog

    o Miami-Dade NOA for 50+ products

    o Industry veteran now leading South Florida sales effort

  • 13

    APPENDIX SLIDES

  • 14

    Financial Highlights

    Financial Highlights

    (in MMs, except per share data)

    Q1 2015

    Q1 2014

    FY2014

    FY2013

    Total Revenues (1) $ 52.0 $ 47.8 $ 197.5 $ 183.3

    Gross Profit $ 17.2 $ 14.6 $ 61.4 $ 55.4

    Operating Income $ 8.0 $ 7.9 $ 27.2 $ 27.3

    Change in Fair Value of Warrant Liability $ 5.1 $ (8.9) $ (1.7) $ 7.6

    Non-operating Revenues (2) $ 3.7 $ 1.3 $ 12.2 $ 4.0

    Net Income $ 9.9 $ (4.7) $ 20.3 $ 22.3

    Net Income per Diluted Share $ 0.35 $ (0.19) $ 0.73 $ 1.08

    Adjusted EBITDA $ 14.2 $ 11.1 $ 48.0 $ 38.5

    Adjusted EBITDA Margin 27.3% 23.2% 24.3% 21.0%

    (1) Revenues in 2014 /2015 reflect impact of depreciation of COP against the US Dollar

    (2) Non-operating revenues primarily reflect gain in exchange rate derived from US Dollar-denominated receivables

  • 15

    Adjusted EBITDA Reconciliation ($ in 000s)

    Adjusted EBITDA

    DepreciationAdjusted

    EBITWarrantsLiability

    Interest Expense

    Tax Provision

    Net Income

    Net Income w/o

    Warrants

    Q1 2014 11,095 1,952 9,143 -8,880 1,973 2,971 -4,681 -4,199

    Q1 2015 14,228 2,501 11,727 5,078 2,152 4,772 9,881 4,803

    2013 38,506 7,238 31,268 - 7,626 7,886 8,696 22,312 14,686

    2014 48,009 8,542 39,467 1,711 8,900 8,538 20,318 22,029

    2015 (E) 60,000 12,400 47,600 - 12,600 12,700 22,300 22,300

    2016 (E) 80,000 17,200 62,800 - 13,500 16,700 32,600 32,600

  • 16

    Strong & Experienced Team

    Name Position Biography Notes

    Jos M. DaesChief Executive Officer &

    Director

    Founder and CEO of C.I. Energia Solar E.S since 1990

    Over 30 years experience starting and operating various businesses in Colombia and the U.S

    Christian T. DaesChief Operating Officer

    & Director

    Founder and CEO of Tecnoglass S.A. since 1995

    Responsible for all aspects of operations, marketing, sales and overall expansion

    Joaqun F. Fernndez

    Chief Financial Officer & Director

    CFO of Tecnoglass and ES since 2007

    Director of ES since 2002

    Sergio Barake Deputy CFO

    10+ years experience as U.S. financial executive, including 6 years as Worldwide Director of Corporate Finance for global manufacturer

    Fluent in English

    BA, MS Universidad del Norte; MBA University of Maryland

    Joined Tecnoglass in 2014

    Rodolfo Espinosa Meola

    President, C.I. EnergiaSolar S.A.

    Attorney, specializing in business, tax and finance

    9 years with Tecnoglass

  • 17

    Strong & Experienced Team

    Name Position Biography Notes

    Omar DominguezNational Sales Manager,

    SA Tecnoglass 32 years of industry experience, 19 with Tecnoglass

    Jean Paolo ChemelloTechnical Manager,

    C.I. Energia Solar S.A

    41 years of industry experience

    23 years with Tecnoglass

    Karla Rodriguez ChainChief Operating Officer

    C.I. Energia Solar S.A 15 years industry experience, all with Tecnoglass

    Carlos Amin Cargo Sales USA 10 years of industry experience, all with Tecnoglass

    Raul CasaresSales Director for

    South Florida

    Founder and President of RC Aluminum

    50 years of industry experience

  • 18

    Board of Directors

    Name Position Age Biography Notes

    A. Lorne WeilNon-Executive

    Chairman of the Board66

    Chairman of the Board of Scientific Games Corporation (Oct. 1991 Nov. 2013); CEO for all but ~24 months of that time

    During his tenure, Scientific Games grew from under $50 million in annualized revenue to ~ $2 billion

    Samuel R. Azout Director 54

    Investment Manager, Abacus Real Estate

    Served as Senior Presidential Advisor for Social Prosperity

    Served as CEO of National Agency for Overcoming Extreme Poverty in Colombia

    Juan Carlos Vilario

    Director 51 GM of various business consortiums in Colombia, including the Malla

    Vial del Atlntico Consortium and the Barranquilla-Cinaga consortium

    Martha (Stormy) L. Byorum

    Director 59

    Founder and CEO, Cori Investmet Advisors

    Former EVP, Stephens, Inc. & co-founder, VB&P

    Former Chief of Staff and CFO for Citibanks Latin American Banking Group, and former head of Citibanks U.S. Corporate Banking Business

    Julio A. TorresDirector 46 Managing Director, Nexus Capital Partners

    Former Director General of Public Credit and Treasury, Colombia Ministry of Finance

    Former Vice President, JPMorgan Chase Bank

  • 19

    Contacts

    Devin Sullivan

    Senior Vice President

    (212) 836-9608

    [email protected]

    Kalle Ahl

    Senior Associate

    (212) [email protected]

    Jos M. Daes

    Chief Executive Officer

    [email protected]

    Christian DaesChief Operating Officer

    [email protected]

    Sergio BarakeDeputy [email protected]

    A. Lorne Weil

    Non-Executive [email protected]

    Vanessa_TorresTypewriterJose Manuel Daes