TECNOGLASS INC. Tecnoglass (NYSE: TGLS) Investor Presentation
March 2024
www.tecnoglass.com
Disclaimer
Disclaimer
This presentation (including any information which has been or may be supplied in writing or orally in connection herewith or in connection with any further inquiries, this "Presentation") contains information regarding Tecnoglass Inc. and its subsidiaries, as applicable, where it holds a direct or indirect interest (together "Tecnoglass" or the "Company") that is confidential and proprietary to the Company. We have prepared this document solely for informational purposes. You should not definitively rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. By participating in this Presentation, each participant agrees to the terms hereof, as follows: Each participant will and will cause its directors, officers, employees, affiliates, agents, advisors and representatives to use the information contained in this Presentation only to evaluate the proposed transaction in respect of the Company and may not communicate, reproduce, distribute or disclose it to any other person, or refer to it publicly, in whole or in part at any time except with our prior written consent. If you are not the intended recipient of this document, please delete and destroy all copies immediately.
Neither the Company nor any of its representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Presentation, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. Only those representations and warranties that are made in a definitive written agreement relating to a transaction in respect of the Company, when and if executed, and subject to any limitations and restrictions as may be specified in such definitive agreement, shall have any legal effect.
This Presentation does not purport to contain all of the information that may be required to evaluate a potential transaction in respect of the Company, and any person participating in this Presentation should conduct its own independent investigation and analysis.
Forward Looking Statements
This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. including statements regarding future financial performance. future growth and future acquisitions. These statements are based on Tecnoglass' current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic. business. competitive and/or regulatory factors. and other risks and uncertainties affecting the operation of Tecnoglass' business. These risks. uncertainties and contingencies are indicated from time to time in Tecnoglass' filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Further. investors should keep in mind that Tecnoglass' financial results in any particular period may not be indicative of future results. Tecnoglass is under no obligation to. and expressly disclaims any obligation to. update or alter its forward-looking statements. whether as a result 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. it includes EBITDA (earnings before interest. taxes depreciation and amortization) which is a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933. as amended. Accordingly, such information may be materially different when presented in Tecnoglass' filings with the Securities and Exchange Commission. Tecnoglass believes that the presentation of this non-GAAP financial measure provides information that is useful to investors as it indicates more clearly the ability of Tecnoglass to meet capital expenditures and working capital requirements and otherwise meet its obligations as they become due. EBITDA was derived by taking earnings before interest. taxes. depreciation and amortization as adjusted for certain one-timenon-recurring items and exclusions.
No offer or solicitation
This announcement is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction. nor shall there be any sale. issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933. as amended.
Investor Presentation | March 2024 | 2 |
Tecnoglass at a Glance
Key Stats
Miami, FL | ~9,000 | $2.2 B | ||||
Global Headquarter | Employees | Market Cap | ||||
At 2023 | ||||||
$833 MM | ~18% | $870 MM | |||
2023 Revenue | 2012 - 2023 | Backlog | |||
Revenue CAGR | |||||
$304 MM | ~37% | ~27% |
2023 Adj. EBITDA(1) | 2023 Adjusted | 2012 - 2023 |
EBITDA(1) Margin | Adjusted EBITDA(1) | |
CAGR | ||
Leading Position in U.S. Market | U.S. End Market Mix | ||
U.S. LatAm/Other | SF Residential | Multi-Family/ Commercial | |
5% | |||
Total | Total U.S. | 42% | |
Revenues | 58% | Revenues | |
2023 | 2023 | ||
95% |
Attractive Portfolio of Well-Positioned Brands
Tecnoglass is a leading architectural glass manufacturer with vertically integrated operations under one roof
Notes:
1. Adjusted EBITDA excludes non-recurring and non-cash expenses mainly associated with non-cash foreign exchange transaction gains or losses, non-recurring professional fees and other non-core items, and include the proportional contribution of the Company's joint venture with Saint-Gobain.
3
Global Leader in Architectural Windows and Glass
Supplying Architectural Glass Products to Landmark Properties in the U.S. and Latin America
Leading global manufacturer, distributor and installer of high-spec architectural windows and glass for residential and multi-family / commercial applications with leadership position in the U.S. market
40-year track record of product innovation and high-quality standards
Broad portfolio serving a well-diversified base of nearly 1,000 customers
Vertically integrated, state-of‐the‐art manufacturing complex with significant recent capital investments
Strategic, cost-efficient business model provides a significant structural competitive advantage and high barriers to entry
Highly skilled, dedicated employee base led by an experienced management team
Double-digit organic growth CAGR over past decade with industry-leading margins
Over 85% of revenues considered green revenues, contributing to reducing global emissions and mitigating climate change effects
TGLS Successful Geographic Expansion in the U.S.
Operational Showrooms
Expected Operational 1Q 2024
Expected 2024 Openings
Significant presence
Developing Presence
Emerging Presence
Investor Presentation | March 2024 | 4 |
Built-to-Suit Innovative Products Pacing Ahead of Evolving Industry Trends
Tecnoglass' High-Quality Products and Exceptional Customer Service Allow it to Better Serve Customers and Support Organic Growth in Each of Our End Markets
Multi-Family / Commercial Markets:
Curtain Walls and Other Architectural Systems such as windows, doors, window walls, storefronts, railings, louvers and new vinyl product line
Aluminum products for architectural glass settings: bars, plates, profiles, rods, and tubes
- Revenue 2023: $498mm, 21% YoY Growth
- CAGR '17- '23: 14%
- 35+ years serving all end markets
Single-Family Residential Specialty Brands:
High performance energy-efficientLow-E and impact-resistant aluminum and vinyl Windows and Doors meeting demanding security, strength, and durability standards
- Revenue 2023: $335 mm, 10% YoY Growth
- CAGR '17- '23: 90%
- 6+ years serving SF residential
Glass Technology
Features: | ||
Low-emissivity | Tempered | |
glass (Low-E) | Glass | Blast Resistant |
Laminated | Insulated Glass | Hurricane Resistant |
Glass | ||
Thermally Broken | ||
Digital Print | Silkscreen glass | |
Glass |
The Prestige residential line offers meticulously crafted luxury windows and doors with superior quality and style
E-Line offers homeowners comfort, high design, and superior thermal performance
Multimax product line specifically targeting large scale homebuilders, legacy and new dealers in Florida
Investor Presentation | March 2024 | 5 |
Evolution of Revenue & Adjusted EBITDA
Key Milestones
900.0
800.0
700.0
Revenue & Adj. EBITDA | 400.0 |
Delivering Double-Digit Organic CAGR
833.3
350.0
716.6
2013
2015
2017
2019
Became public
Investment in top-class manufacturing facility to produce high-spec insulated glass
Entered into the single-family residential market in the U.S., now accounting for 43% of total U.S. sales
Entered into JV agreement with Saint Gobain for secure float glass supply
600.0
500.0
Revenue CAGR '13 - '23: 16.3%
Adj. EBITDA CAGR '13 - '23: 23.4%
300.0
304.1
265.7
250.0
496.8
2020
Investments in automation began, $25 mm of Capex invested during 2019
Automation investments became operational
COVID-19 Pandemic
400.0
300.0
200.0
100.0
0.0
430.9200.0
371.0 | |||
376.6 | |||
314.5 | 150.3 | 150.0 | |
305.0 | |||
242.2 | |||
197.5 | 97.5 | ||
183.3 | 100.0 |
80.8 | 92.4 |
72.0 |
57.162.0
50.0
37.3 37.2
0.0
2021
2022
2023
Introduction of Multimax products oriented towards production homebuilders
Sales reps in expanding geographies building relationships with targeted general contractors, developers, architects & glazers
Opening of new showrooms in expanding geographies (NYC & Charleston now operational)
Revenue increase of 44% YoY at the higher end of guidance; gross margin up ~790 bps
Installed capacity reaches approx. $1 B
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
Revenues | Adjusted EBITDA | ||||||||||
Record backlog of $870.1 mm, up ~20% YoY
Entered into vinyl windows market, more than doubling addressable market Relocated Global Headquarters from Colombia to Miami, Florida Completed nearly half of $50 mm Buyback Program
Investor Presentation | March 2024 | 6 |
Seven Oaks East|
Austin, Texas
Investor Presentation | March 2024
Why Invest in Tecnoglass
Key Investment Highlights
- | Strong Revenue Generating Track Record and Positive Outlook
- Impressive Track Record of Organic Revenue Growth in the U.S. Commercial and Residential Markets
- Effectively Positioned to Further Penetrate the Attractive U.S. Market
- Demonstrated History of Converting Backlog to Revenue
- | Operational Efficiencies Resulting from Structural Competitive Advantages
- Vertically-IntegratedBusiness Model Allows Tight Control Over Supply Chain and Costs
- Geographic Location of Manufacturing Facilities Provides Cost and Logistical Advantages
- State of the Art Manufacturing Facilities Drives Efficiency and Enhances Cost Efficiencies
- | Best in Class Profitability and Cash Flow Generation
- Structurally Strong Margins & Cash Flow
- | Disciplined Capital Allocation Framework Supporting Leading Financial Returns
- Strong Balance Sheet and Leverage Profile
- Record of High Returns Through Capital Deployment
5 | Committed to ESG Principles
- "Green Revenues"
- Sustainability Strategy and Established Policies in Place to Benefit our Stakeholders
- Management Experience and Track Record Promoting Continuous, Ethical and Responsible Growth
7
Impressive Track Record of Organic Revenue Growth in the U.S. Multi-Family / Commercial and Residential Markets
TGLS Revenue by Country | ||||||||||
Total Sales | 833 | |||||||||
900 | ||||||||||
800 | 717 | |||||||||
700 | ||||||||||
600 | 497 | |||||||||
500 | 431 | 377 | ||||||||
314 | 371 | |||||||||
400 | 305 | |||||||||
242 | ||||||||||
300 | 197 | |||||||||
183 | ||||||||||
200 | ||||||||||
100 | ||||||||||
0 | ||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
Other | Colombia | United States |
Vast Market Opportunity1
- U.S. revenues continue to represent the majority of sales, contributing ~95% and 94% of total revenues and total backlog as of Q4'23
- The Company has ~1,000 customers, mostly located in North America, without any one customer exceeding 10% of revenues
Single-Family Residential Contributing to Strong Revenues
833
850.0 | ||||||
750.0 | 717 | |||||
650.0 | ||||||
550.0 | 498 | |||||
497 | ||||||
410 | ||||||
431 | ||||||
450.0 | 371 | 377 | ||||
350.0 | 314 | 319 | ||||
250.0 | 365 | 305 | ||||
334 | ||||||
307 | 306 | 335 | ||||
150.0 | ||||||
50.0 | 177 | |||||
66 | 71 | |||||
7 | 37 | |||||
16%
$40 B
20% 2022
64%
US Market Size: $40bn
TGLS U.S. Share : Top-5
Windows
Architectural
Glass
Windows
Installation
(50.0) | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
SF Residential | Multi-Family/Commercial | |||||||
• | Continued growth into the single-family residential market through showroom |
openings across expanding geographic footprint (NYC and Charleston, SC now | |
operational and Houston expected to be operational in the first quarter of 2024), | |
with two more showrooms planned by the end of 2024, along with the | |
introduction of new and innovative products | |
• | Long term strategy continues to be supported by an expanding dealer base in |
underpenetrated geographies and geographic expansion within the Southeast |
Notes:
1. External sources include IBISWorld, Fenestration and Glazing Industry Alliance (FGIA), Insight Partners and Arizton Advisory and Intelligence
and Southcentral U.S. |
Investor Presentation | March 2024 | 8 |
Effectively Positioned to Further Penetrate the Attractive U.S. Market With Demonstrated History of Converting Backlog to Revenue
Backlog by End Market
3% 3% | Multifamily / |
Residential Related |
- Solid single-family residential growth trajectory not fully captured in backlog given shorter term "spot" duration of projects
- Record Backlog of $870 mm, up ~20% YoY, representing ~1.7x LTM multi family and commercial revenues. Pipeline of project increasing with continued growth expected for the rest of the year
13% | Commercial | |
38% | ||
$870 mm | 62% | |
• U.S. backlog of $814 mm, representing 94% of total backlog, led by market share gains, geographical diversification and |
strong activity in the Southeast U.S., our strongest region, currently outperforming most of the country |
Dec'23
62%
19%
Backlog primarily consists of residential related projects which were less impacted by COVID-19
• | Book-to-bill ratio of 1.2x in Q4'23 with strong bidding activity signaling attractive project opportunities in the near |
future and adding to a solid book-to-bill ratio above 1.1x for the past 12 consecutive quarters | |
• Virtually no project cancellations historically given late-stage installation of windows into largely completed buildings | |
• | Given this dynamic, the Company has very strong visibility over the next 18 months over approximately 60% |
(commercial segment) of its revenues. Residential construction has avenues of growth related to the showroom | |
expansion and the entrance into the vinyl window segment |
$ millions
Backlog to Revenue Conversion
$ 950 | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ 850 | 106% | 108% | 114% | 110% | 111% | 106% | ||||||||||||||||||||||||||||||||||||||||||||
104% | 100% | 106% | 104% | 102% | ||||||||||||||||||||||||||||||||||||||||||||||
98% | 95% | 99% | ||||||||||||||||||||||||||||||||||||||||||||||||
92% | 90% | 93% | ||||||||||||||||||||||||||||||||||||||||||||||||
$ 750 | 87% | 88% | 88% | 89% | ||||||||||||||||||||||||||||||||||||||||||||||
86% | ||||||||||||||||||||||||||||||||||||||||||||||||||
75% | ||||||||||||||||||||||||||||||||||||||||||||||||||
70% | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ 650 | 73% | 72% | 71% | 73% | 69% | 62% | 63% | 63% | ||||||||||||||||||||||||||||||||||||||||||
69% | 66% | 60% | 70% | 63% | ||||||||||||||||||||||||||||||||||||||||||||||
61% | 63% | |||||||||||||||||||||||||||||||||||||||||||||||||
58% | 56% | 59% | 60% | 58% | 55% | 57% | 870 | |||||||||||||||||||||||||||||||||||||||||||
836 | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ 550 | 797 | |||||||||||||||||||||||||||||||||||||||||||||||||
776 | ||||||||||||||||||||||||||||||||||||||||||||||||||
697 | 725 | |||||||||||||||||||||||||||||||||||||||||||||||||
651 | 668 | |||||||||||||||||||||||||||||||||||||||||||||||||
$ 450 | ||||||||||||||||||||||||||||||||||||||||||||||||||
501 | 497 | 506 | 515 | 518 | 525 | 532 | 542 | 546 | 550 | 536 | 545 | 552 | 559 | 576 | 585 | |||||||||||||||||||||||||||||||||||
$ 350 | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ 250 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Q1 '18 | Q2 '18 | Q3 '18 | Q4 '18 | Q1 '19 | Q2 '19 | Q3 '19 | Q4 '19 | Q1 '20 | Q2 '20 | Q3 '20 | Q4 '20 | Q1'21 | Q2'21 | Q3'21 | Q4'21 | Q1'22 | Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | Q3'23 | Q4'23 | |||||||||||||||||||||||||||
Total Backlog | Multi-Family / Commercial Revenue Next 12M as % of Backlog | Multi-Family / Commercial Revenue Next 18M as % of Backlog | ||||||||||||||||||||||||||||||||||||||||||||||||
Note: Excludes Single-family Residential |
130%
110%
90%
70%
50%
30%
10%
-10%
Historically, ~65% of multi- family and commercial revenue in backlog rolls off within 12 months and ~99% of the backlog rolls off within 18 months. This dynamic provides strong backing to support double digit revenue growth in 2024
Investor Presentation | March 2024 | 9 |
Recent Strategic Entry into Vinyl Windows More than Doubles Addressable Market
Significant Addressable Market Potential1
Operational Update
3% | |||
2% | |||
20% | Vinyl | ||
~$26 B | Wood | ||
Aluminum | |||
U.S. Architectural | |||
Windows Market | Fiberglass | ||
12% | 63% | ||
Other
Current vinyl window operating capacity
represents an
estimated $300 million in annual revenues over time
• Completed installation of 3 full vinyl window production lines | |
with ability to serve the US and LatAm | |
• | Began shipping vinyl windows in December 2023 |
• | TGLS vinyl sales & marketing primarily focused on North Florida, |
Alabama, South Carolina, North Carolina & Georgia. Expansion in | |
the northeast U.S. supported by existing NYC showroom | |
• Early quotes and sampling carried out through 30-40 legacy | |
dealers in central and northern Florida which already carried | |
both aluminum & vinyl products. New distributors signed in |
- More than doubles addressable market with an opportunity to add ~$300mm in annual revenues once production lines are fully ramped up
- Further strengthens geographic expansion, given vinyl's adaptability for various weather conditions and efficient thermal performance to address increased demand for energy efficiency
- Attractive synergies given that 1) many existing dealer customers already sell both aluminum and vinyl windows and 2) ability to leverage manufacturing expertise and vertically integrated operations
northern Florida in 2024 | |
• | Showrooms already displaying legacy aluminum window lines |
plus new vinyl designs | |
• | Cadence of orders expected to start ramping up after Q2'24, once |
clients have sampled and tested these products |
Notes: | 10 | |
1. | External sources include IBISWorld, Fenestration and Glazing Industry Alliance (FGIA), Insight Partners and Arizton Advisory and Intelligence |
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Tecnoglass Inc. published this content on 05 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 01:38:07 UTC.
