092018罐头与玻璃包装行业报告地理多样性真好

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES ANALYST CERTIFICATIONS LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON US ANALYSTS US Disclosure Credit Suisse does and seeks to do business with companies covered in its research reports As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report Investors should consider this report as only a single factor in making their investment decision 12 November 2018 Americas United States Equity Research Metal Rating from NEUTRAL OUTPERFORM Target Price from 53 00 57 00 Analyst Lars Kjellberg Income Statement12 17A12 18E12 19E12 20E Revenue US m 8 698 011 309 612 150 612 459 5 EBITDA US m 1 3751 6881 8761 928 Depr 2 a decline in long term operating expense growth rate 3 100bps higher long term revenue growth Our Grey Sky Scenario US 41 00 For our grey sky scenario we 1 reduce near term volume growth by 400bps in 2018 2020 2 increase in long term operating expense growth rate assuming increasing cost inflation leading to lower margins and 3 100bps lower long term revenue growth Share price performance CCK NS 3 leverage shot up in excess of 5x following the deal However approaching the one year anniversary of the announcement of the Signode deal we believe it is appropriate to look how CCK has changed post the deal and what role Signode have in the new company structure Thus far it looks pretty promising to us Historical performance suggests a fairly stable slow growth business with relatively stable margins and high cash conversion In 2018 growth has picked up YTD revenue is up 7 6 with stable EBITDA margins at around 16 5 and cash conversion EBITDA Capex EBITDA of 92 A quick recap on Signode Signode is a global provider of transit packaging systems and solutions consisting of strap stretch and protective packaging consumables and application equipment Its product is used to contain unitize and protect goods during manufacturing transport and warehousing It used to be part of Illinois Tools Work and was acquired by Carlyle in 2014 Signode is a market leader globally with 1 or 2 position in 85 of its business Its business segments include Industrial solutions 60 of 2016 sales Steel strap plastic strap consumables Protective solutions 23 of 2016 sales Edge protectors Airbags honeycomb corrugated products Equipment and tools 27 of 2016 sales Equipment Parts and services A stable business Signode operates a razor razorblade business model with installed machine base driving recurring revenue from sales of consumables A diversified business in terms of customer base and products also contribute to the stable nature of the business The top 10 customers account for less than 10 of sales and no single product accounts for more than 15 of sales In addition Signode has diversified its end markets in the last 10 years The more cyclical metal industry now accounts for 20 of sales vs 29 in 2008 and food and beverage is now a bigger percentage of the business Another factor that contributes to the stable margin is Signode s proven ability to pass through raw material cost quickly from real time to 30 45 days 12 November 2018 Cans and Glass Packaging8 Figure 5 Revenue by products FY16 Figure 6 Revenue by end markets FY16 Steel Strap 15 Plastic Strap 12 Stretch Film 13 Other strap consumables 9 Airbags 6 Honeycomb 5 Other protective 5 Angleboard 7 Equipment 9 Tools 4 Service Parts 8 Contract Packaging 4 Other 3 Distribution 25 Metals 21 Food and beverages 12 General industrial 11 Construction 9 Corrugated 6 Agriculture 3 Other 13 Source Company dataSource Company data Cash generative Signode has delivered strong cash flow generation consistently due to its stable business nature and low capex requirement Cash conversion is generally above 85 apart from 2007 when Signode stepped up capex and 2009 when its revenue plunged 26 during the financial crisis Capex as sales averaged 1 6 2005 2012 and was 1 3 LTM as of 30 Sep 18 In 2018 we estimate cash conversion of 92 and EBITDA margins of 16 5 Figure 7 Cash conversion Figure 8 EBITDA Margin 87 92 84 90 84 88 91 89 91 92 50 55 60 65 70 75 80 85 90 95 100 200520062007200820092010201120122017LTM 9 30 18 14 6 15 4 15 1 13 3 8 6 13 0 12 9 14 4 16 6 16 6 0 2 4 6 8 10 12 14 16 18 200520062007200820092010201120122017LTM 9 30 18 Source Company data Cash conversion defined as EBITDA Capex EBITDASource Company data Potential growth opportunities Signode has grown organically at a 2005 2012 CAGR of 0 3 and on average 1 under ownership of Carlyle Group CCK is confident that Signode can grow organically at GDP level stating numerous organizational changes have positioned the business to grow at higher level including a refocus on premier equipment and tool package not only as a way to grow equipment and tools sales but also as a way to tie in growing consumables The recent quarterly data shows Signode has achieved higher organic growth than in the past In Q2 CCK mentioned volume growth has been 0 5 on consumables depending on region and 10 for equipment and tools order In Q3 commented Transit Packaging is certainly growing above GDP level As reported Transition Packaging revenue grew at 7 8 in Q2 and 3 5 in Q3 One of the rationales of acquiring Signode was the growth platform it can provide Signode is the market leader in the fragmented strap stretch and protective consumables and related equipment industry worth 14bn with 16 market share While CCK emphasizes deleveraging as the main priorities for the next couple of years it seems confident in 12 November 2018 Cans and Glass Packaging9 achieving its leverage target and would consider bolt on acquisition opportunities if they arise Cash generation We see the strong cash conversion of Signode positively increasing free cash flow for CCK CCK has guided FCF to 625m for 2018 and 775m for 2019 Our estimates are in line with guidance Figure 9 CCK free cash flow 2013 2020E 641 612 602 479 503 627 775 878 0 100 200 300 400 500 600 700 800 900 1000 201320142015201620172018E2019E2020E Source Company data Credit Suisse estimates CCK has been an active acquirer over the past 10 years including the European food can company Mivisa in 2014 the Mexican beverage can company Empaque in 2015 and Signode in 2018 The company has a solid track record of deleveraging the balance sheet post deals while continuing to reinvest in the company for growth In the near term delevering is a priority and CCK target to delever by c 0 5x per year approaching 3x by 2020 As leverage is approaching 3x CCK has a history of returning cash to shareholders through share repurchases Buy backs have been on hold since the announcement of the Signode deal We expect buy backs to resume in 2020 Figure 10 History of deleveraging post dealsFigure 11 CCK use of cash 2013 2020E 3 1 3 5 3 8 3 3 3 6 4 8 4 0 3 6 0 x 1x 2x 3x 4x 5x 6x 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 201320142015201620172018E2019E2020E Net DebtND EBITDA 275 328 354 473 498 460 435 400 300 339 240 0 100 200 300 400 500 600 700 800 900 1000 201320142015201620172018E2019E2020E CapexShare buyback Source Company data Credit Suisse estimatesSource Company data Credit Suisse estimates 12 November 2018 Cans and Glass Packaging10 2018 an Easy Comp We view 2018 as a year of transition for CCK Heading into 2019 we view 2018 as an easy comparable Metal costs are typically contractually passed through in the metal can operation Other costs are in many contracts passed on through PPI escalators with a year time lag However with several years of deflationary pressure passing on lower costs from 2017 in a 2018 environment with tightening labor markets sharply rising freight costs and inputs energy coatings etc have weighed on margins and EBIT Assuming stabilizing cost inflation in 2019 we see PPI escalators matching or modestly exceeding inflation positively impacting margins Other factors we believe should drive earnings in 2019 vs 2018 1 Start up costs from sizeable new can lines continue to weigh on earnings in 2018 Such costs should reduce by 10 15m in 2019 vs 2018 on our estimates 2 CCK increased borrowings and incurred higher finance costs ahead of the Signode deal that closed in June Related cash transaction costs have also weighed on FCF Full year contribution from Signode no repeat of transaction costs including debt issuance should boost earnings and cash flow materially in 2019 3 We expect volume trends in the weak regions to stabilize in 2019 following sharp volume declines in 2018 which should help sustain volume growth around 3 4 4 CCK have been oversold in the US through 2018 which means the company have had to resort to buying marginal can volumes from a competitor to fulfil contract commitments These third party sourced cans had low margins and incurred high freight costs We expect CCK to be able to honor contracts from own production in 2019 12 November 2018 Cans and Glass Packaging11 Results Summary Q3 EPS of 1 71 6c above IBES consensus 1 65 11c above CSe 1 60 and topping CCK s 1 60 1 70 guidance range The beat vs CSe is explained by a combination of FX adjustments 8c better operations 1c equity earnings 1c and lower minority interest 2c partially offset by higher finance costs Revenues 3 17bn in line with consensus Revenues gained 29 y o y on Signode acquisition 24 and rising beverage can volumes 3 vs CSe 2 and pass through of higher costs EBIT 415m 18 y o y 2m above CSe 413m but 3m short of consensus Segment performance was mixed with strong performance from Americas Beverage and APAC more than offset by weak performance in Europe Beverage Europe Food poor harvest yields on challenging weather conditions and Transit Packaging Signode Total reportable segments EBIT was 408m 13m short of CSe This was more than offset by 13m beat from Non reportable segments and lower central costs Americas Beverage Q318 sales increased by 14 y o y to 872m Q318 EBIT was down 3 y o y to 125m while margins dropped 260bps to 14 3 Earnings were positively impacted by mid single digits unit volumes growth supported by volume improvement in Brazil high single digit and North America growing ahead of flat market European Beverage Q318 sales were down 2 y o y to 418m Q3 operating profit declined 14 to 66m while Q318 margins were down by 220bps y o y to 15 8 Sales volumes were down by 1 as strong performance in Spain Turkey and UK was more than offset by declines in Jordan and Saudi Arabia European Food Q318 sales were down 3 y o y to 623m Operating profit decreased by 10 y o y to 90m and margin decreased by 120bps to 14 4 Unit volumes were down 7 due to weather condition negatively impacting vegetable processing industry Asia Pacific Q318 sales increased 7 y o y to 321m and operating profit improved 15 y o y to 46m margins were up by 100bps to 14 3 This was supported by double digit volume growth in Southeast Asia more than offset high single digit declines in China due to closure of the Beijing facility in late 2017 Transit Packaging Q318 sales were at 585m and operating profit at 81m supported by good demand and building backlog EBIT margin was 13 8 Net debt of 8 77bn increased 3 85bn vs end Q417 LTM Net debt EBITDA increased to 5 5x as of Q3 up vs 3 6x in Q4 2017 CCK expects leverage to be reduced to 4 6x by year end 2018 and to decline by around 0 5x year through 2020 Outlook CCK guides Q4 EPS in the range of 0 97 1 02 midpoint 8c below consensus FCF guidance unchanged at 625m for 2018 and 775 for 2019 12 November 2018 Cans and Glass Packaging12 Valuation In setting our target price we have used three valuation methodologies applying a P E of 10 6x to our 12 months forward estimates applying an EV EBITDA multiple of 8 2x on our 12 months forward estimates and our discounted cash flow analysis using discount rate of 7 9 WACC We have adjusted our P E multiple down from 12 9x to 10 6x to reflect the significant increase in EPS 1 00 sh pro forma for Signode increase due to exclusion of the amortization of intangibles following CCK accounting policy To derive to our target price we weight our DCF valuation by 50 and P E multiple by 25 and EV EBITDA multiple by 25 Figure 12 CCK Valuation Methodology MethodologyTarget MultipleValuation 12M forward P E10 6x 61 12M forward EV EBITDA8 2x 51 DCF using WACC of 7 9 59 Credit Suisse 12 month price target 57 Source Credit Suisse estimates DCF Valuation Figure 13 DCF valuation Q4 18E2019E2020E2021E2022E2023E2024E2025E2026E2027E Revenue2 89312 15112 46012 77113 09013 41813 75314 09714 44914 810 Y Y Growth7 4 2 5 2 5 2 5 2 5 2 5 2 5 2 5 2 5 Operating Expenses 2 503 10 275 10 532 10 795 11 065 11 341 11 625 11 916 12 213 12 519 EBITDA Margin13 5 15 4 15 5 15 5 15 5 15 5 15 5 15 5 15 5 15 5 EBITDA3901 8761 9281 9762 0252 0762 1282 1812 2362 292 Less Depreciation Rating from OUTPERFORM NEUTRAL Target Price from 21 00 15 30 Analyst Lars Kjellberg Income Statement12 17A12 18E12 19E12 20E Revenue US m 8 596 09 102 69 111 19 247 6 EBITDA US m 1 5081 4601 5041 552 Depr 2 a decline in long term operating expense growth rate driven by CAPEX projects that delivers structural cost improvements and margin expansion 3 100bps higher long term revenue growth Our Grey Sky Scenario US from 15 00 10 70 For our grey sky scenario we 1 reduce near term volume growth by 400bps over the next 3 years and assume 2 increase in long term operating expense growth rate assuming increasing cost inflation leading to lower margins and 3 100bps lower long term revenue growth Share price performance ARD NS Rating OUTPERFORM Target Price from 32 00 24 00 Analyst Lars Kjellberg Income Statement12 17A12 18E12 19E12 20E Revenue US m 6 869 06 939 56 918 17 033 5 EBITDA US m 1 3381 3671 3921 440 Depr 2 a decline in long term operating expense growth rate driven by efficiency improvements and margin expansion 3 50 bps higher long term revenue growth Our Grey Sky Scenario US from 17 00 13 00 For our grey sky scenario we 1 reduce near term volume growth by 400bps in 2018 2020 2 increase in long term operating expense growth rate assuming increasing cost inflation leading to lower margins and 3 100bps lower long term revenue growth Share price performance OI NS FX headwind mostly due to weaker Brazilian Real 41m That was partially offset by higher prices 32m 3Q18 operating profit broadly flat y o y at 158m as costs inflation and lower volumes were masked by better prices better mix and a gain related to a favourable court ruling in Brazil 13m allowing OI to recover revenue tax paid from previous years EBIT margin was up 30bps y o y to 16 8 Europe 3Q18 sales declined 2 y o y to 613m mostly due to FX headwind 5m from the weaker Shipments were down y o y 13m as higher shipments to non alcoholic beverage customers were more than offset by lower volumes to wine customers impacted by weak grape harvest in 2017 3Q18 EBIT increased 7 y o y to 87m driven by positive FX impact 1m and higher prices 7m Negative timing effect of energy credit recognition 10m in Q317 was offset by gain from asset sale and benefits from costs initiatives EBIT margin expanded 120 bps y o y to 14 2 Asia Pacific 3Q18 sales were down 12 y o y to 165m as favorable pricing of 1m was more than offset by lower volumes 10m and FX headwind 14m 3Q operating profit deteriorated 50 y o y to 10m impacted by higher costs related to planned asset improvement projects 7m and lower volumes EBIT margin dropped by 460bps y o y to 6 1 Successful completion of these projects should lead to Q418 EBIT nearly double Q417 14m Capital allocation O I repurchased 0 7m shares in Q3 for 12m from 400m program launched in Q118 107m already completed YTD Management outlook O I cut its 2018 EPS guidance to 2 72 2 78 midpoint down by 5c prev 2 75 2 85 expecting results at the lower end of the range due to FX headwinds and softer than expected sales volumes FCF is expected to be in the range of 350 to 375 for FY18 prev 400m 12 November 2018 Cans and Glass Packaging26 Valuation In setting our target price we have used three valuation methodologies applying a P E of 8 3x to our 12 months forward estimates applying an EV EBITDA multiple of 6 3x on our 12 months forward estimates and our discounted cash flow analysis using discount rate of 8 5 WACC To derive to our target price we weight our DCF valuation by 50 and P E multiple by 25 and EV EBITDA multiple by 25 In Our DCF valuation we include 582m of OI s total asbestos related liability Figure 20 OI Valuation Methodology MethodologyTarget MultipleValuation 12M forward P E8 3x 24 12M forward EV EBITDA6 3x 24 DCF using WACC of 8 5 23 Credit Suisse 12 month price target 24 Source Credit Suisse estimates DCF Valuation Figure 21 DCF valuation Q4 18E2019E2020E2021E2022E2023E2024E2025E2026E2027E Revenue1 6976 9187 0347 1047 1757 2477 3197 3927 4667 541 Y Y Growth 0 3 1 7 1 0 1 0 1 0 1 0 1 0 1 0 1 0 Operating Expenses 1 367 5 526 5 593 5 705 5 762 5 820 5 878 5 937 5 996 6 056 EBITDA Margin19 4 20 1 20 5 19 7 19 7 19 7 19 7 19 7 19 7 19 7 EBITDA3301 3921 4401 3991 4131 4271 4411 4561 4701 485 Add back Less Depreciation prior to 2nd October 2012 U S and Canadian ratings were based on 1 a stock s absolute total return potential to its current share price and 2 the relative attractiveness of a stock s total return potential within an analyst s coverage universe For Australian and New Zealand stocks the expected total return ETR calculation includes 12 month rolling dividend yield An Outperform rating is assigned where an ETR is greater than or equal to 7 5 Underperform where an ETR less than or equal to 5 A Neutral may be assigned where the ETR is between 5 and 15 The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks Prior to 18 May 2015 ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15 and 7 5 which was in operation from 7 July 2011 Restricted R In certain circums