Orora Limited · ASX:ORA
Orora — Macquarie Conference 2017
25 slides from Orora's conference presentation, May 4, 2017
Slide 1: Orora Limited
Orora Limited For presentation at Macquarie Conference 4 May 2017
Slide 2: Important Information
Important Information Forward Looking Statements This presentation contains forward-looking statements that involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to Orora. Forward-look
Slide 3: Contents
Contents • Orora overview • 1st half financial highlights • Orora’s blue print for creating shareholder value • Orora North America – Introducing Orora Visual • Orora Australasia – Glass capacity expansion project – Corrugated asset upgrade program – Energy – Old corrugated cardboard prices • Innova
Slide 4: An innovative, customer-led provider of packaging solutions
An innovative, customer-led provider of packaging solutions Orora Ltd 2017 4
Slide 5: Orora – overview of sales and earnings
Orora – overview of sales and earnings Pro Forma Sales by Region* Pro Forma Sales by End Segment* Sales EBIT AUD million AUD million Orora Ltd 2017 “ A diversified and defensive business with a healthy track record of improving earnings and cash flow generation * Reflects 1H17 sales plus a pro forma
Slide 6: 1H17 financial highlights
1H17 financial highlights Earnings growth is being converted into strong cash flow and increased dividends Orora Ltd 2017 6
Slide 7: 1H17 business performance
1H17 business performance Australasia * • Organic earnings benefits of $10M largely offset by $7M of input cost headwinds • Generally muted market conditions notwithstanding continued volume growth in Glass and Wine Closures • Improving operating efficiency and cost control • EBIT margin +40bps to 1
Slide 8: Orora's blueprint for creating shareholder value
Orora’s blueprint for creating shareholder value ORGANIC RETURNS FOCUSED GROWTH SUSTAINABLE GROWTH CAPITAL ALLOCATION DIVIDEND Orora Orora North Australasia America Organic Growth Bolt-on M&A Adjacent 60-70% GDP Sales GDP+ Sales Capital (North America Focused) M&A Pay Out Ratio Growth Growth GDP bas
Slide 9: Orora has invested approx. $380M in growth since ASX listing
Orora has invested approx. $380M in growth since ASX Listing in December 2013 FY14 FY15 FY16 FY17 TOTAL INVESTMENT Established 2 new East Coast $26M spend committed New customer backed US DCs (Charlotte & from Orora Global Dairy Sack Line ($20M) Orlando) – both customer Innovation initiative to date
Slide 10: Orora North America: Introducing Orora Visual
Orora North America Introducing Orora Visual Orora Ltd 2017 10
Slide 11: Orora Ltd 2017
11 Orora Ltd 2017 11
Slide 12: Orora Visual video
Orora Visual video To watch the video visit ororagroup.com/about/orora-visual 12 Orora Ltd 2017 12
Slide 13: Orora North America services the complete customer value chain
Orora North America services the complete customer value chain 13 Orora Ltd 2017 13
Slide 14: Orora Visual overview
Orora Visual overview Capital invested: ~USD180M Annual revenue: ~USD230M Average multiple paid: 6.3 times trailing EBITDA Total synergies: ~USD7.0M over the first 2-3 years Returns hurdle: Orora Visual is expected to generate a 20% RoAFE by the 3rd full year Employees: ~800 “ USD180M invested over
Slide 15: Unique national footprint optimising customer's supply chain
Unique national footprint optimising customer’s supply chain Able to reach 90% of US zip codes in less than 48 hours by ground… Orora Ltd 2017 15
Slide 16: Point of Purchase market
Point of Purchase market Estimated target market size: USD10B (total market is USD20B) Fragmented and regional industry structure provides growth opportunity • Multiple market participants • Top 5 players hold an estimated 25%-30% market share • Orora Visual is a top 5 player within its target marke
Slide 17: Orora Visual - integration update
Orora Visual - integration update • Successfully completed the acquisition of Garvey Group and Graphic Tech in March 2017 Established a single • Chief Operating Officer has been appointed to help drive Orora ‘go to market’ brand Visual’s integration and growth strategy, reporting to Larry King as Se
Slide 18: Orora Australasia Update
Orora Australasia Update Orora Ltd 2017 18
Slide 19: Glass capacity expansion project
Glass capacity expansion project • Bottled wine industry export volume growing ahead of GDP • Orora’s glass furnaces (Gawler) are in an oversold position – have been importing approx. 100M bottles to meet customer demand • Orora successfully completed the $42.0M expansion of its bottle forming capac
Slide 20: Investing to improve manufacturing capability within corrugated
Investing to improve manufacturing capability within corrugated In excess of $70M committed for investment in the ANZ corrugating business over the past 3 years Over $70M committed • Improving quality and output capacity to improving corrugated • Upgrading printing and converting assets manufacturin
Slide 21: Orora Australasia's self help energy initiatives
Orora Australasia’s self help energy initiatives Australian energy prices have increased significantly due Orora is proactively investing in self-help energy to widely publicised supply issues initiatives to reduce usage and cost • A range of Government initiatives have recently been • Assessing pot
Slide 22: Volatile Old Corrugated Cardboard (OCC) prices
Volatile Old Corrugated Cardboard (OCC) prices Key Points OCC AUD$/tonne CIF to South East Asia and Orora sources OCC as feedstock for B9 China - range of vendors, mixture of terms Price of OCC has retreated from all OCC spiked ~30% …and has time high set in Mar 17 - currently over 6 months… retreat
Slide 23: Innovation Update
Orora Innovation Update Orora Ltd 2017 23
Slide 24: Innovation update
Innovation update “Fresh Realm” – Fresh Food Start Up (OPS) Glass Bottle Sleeving Line $27 million committed thus far to new product and process innovations Large Format Digital Printer (Corrugated) $45 million Global Innovation Initiative Orora Ltd 2017 24
Slide 25: Outlook
Outlook Orora expects to continue to drive organic growth and invest in innovation and growth during the remainder of FY17, with earnings expected to be higher than reported in 2016, subject to global economic conditions “ Maintain guidance provided in February 2017 ” Orora Ltd 2017 25 25