Slide 1: Orora Half Year Results
Orora Half Year Results Half Year Ended 31 December 2014 Nigel Garrard – Managing Director and CEO Stuart Hutton – Chief Financial Officer 24 February 2015
Slide 2: Disclaimer
Disclaimer 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-looking stateme
Slide 3: Business Highlights
Orora Business Highlights Earnings Summary Strong half year result – meeting expectations • Strong earnings growth – NPAT up 23.0% • B9 production ramp up on track and translating into earnings Pro Forma benefits A$ Million 1H14 1H15 ∆% • On target delivery of remaining “self help” cost reduction pr
Slide 4: Safety performance
Orora safety performance Safety improvement remains a continued priority Jun-2013 Jun-2014 Dec-2014 • Solid progress in RCFR in last 18 months RCFR 8.5 6.6 6.2 • Slight increase in LTIFR in last 18 months - this is an area of ongoing focus LTIFR 1.9 1.8 2.3 Emphasis on implementing best practice & p
Slide 5: Half year results
Half year results Half Year Financial Highlights Increased sales and earnings growth • Higher Beverage volumes aided by Glass market share gains. Pro Forma Increased Landsberg Packaging Solutions sales. Volumes stable in A$ million 1H14 1H15 ∆% remaining divisions. • Increasing earnings despite mute
Slide 6: Australasia
Orora Australasia Earnings Summary (EBIT) Operating results in line with expectations despite flat market conditions • Underlying sales growth(1) of 2.1%, in line with GDP Pro Forma Higher Beverage volume – Glass market share gains offsetting slight ∆. o A$ Million 1H14 1H15 underlying volume declin
Slide 7: Realisation of targeted B9 'self help' benefits remain a focus
Realisation of targeted B9 ‘self help’ benefits remain a focus A$ Million Ramp up progressing in line with expectations • On-going production stability maintained at FY14 exit levels • Produced 185k tonnes during the half (vs. 167k tonnes in pcp) Total targeted B9 ‘self help’ benefit1 50.0 • Exporte
Slide 8: Australasia EBIT growth
Australasia EBIT growth 10.7% Earnings Growth 14.2 1.9 (6.3) 101.0 91.2 (A$’M) Pro Forma Self Help Vol/Mix/Efficiency Other 1H15 EBIT 1H14 EBIT On target delivery of cost reduction & B9 benefits and positive vol/mix/efficiency driving higher earnings Solid result despite headwinds faced by the busin
Slide 9: North America
Orora North America Earnings Summary (EBIT) Top line performance led by Landsberg Packaging Solutions sales growth of 7.0% • Increased organic sales, market share gains in most regions and benefits from Pro Forma previous bolt on acquisition A$ Million 1H14 1H15 ∆. • Continued focus on securing larg
Slide 10: North America EBIT growth
North America EBIT growth 20.4% Earnings Growth (16.3% excluding FX impact) 4.5 1.2 33.6 27.9 (A$’M) 1H14 EBIT Vol/Mix/Efficiency FX 1H15 EBIT Organic growth, market share gain & margin improvement initiatives delivering higher earnings Favourable FX benefit Orora Ltd 2014 10
Slide 11: Corporate
Orora Corporate Earnings Summary (EBIT) Corporate costs in line with pro forma prior year • Corporate costs of $16.2M, in line with pcp • Included in Corporate are costs associated with the New Zealand Pro Forma Cartons reorganisation partially offset by the net profit result A$ Million 1H14 1H15 ∆%
Slide 12: Strong underlying operating cash flow
Strong underlying operating cash flow Pro Forma... Strong conversion of earnings growth into cash • Underlying operating cash flow up $9.1M (8.4%) despite planned A$ Million 1H14... 1H15. above average capex spend EBITDA 154.1.... 166.7. • Cash conversion(2) of 66% (target is approximately 70%) Non
Slide 13: Balance sheet and Debt
Balance sheet and Debt Balance Sheet A$ Million Strong balance sheet providing platform for future growth June 14 Dec 14 • Reduced leverage through conversion of earnings into cash Funds Employed (period end) 2,018(2) 2,074 • Leverage of 2.1x is within Management target of <2.5x. Leverage at Decembe
Slide 14: Returns focused capital management
Returns focused capital management Balance sheet strength driven by conversion of increasing earnings into cash Total Debt Facility $1,000 million • Leverage 2.1x EBITDA – down from 2.4x at December 2013 Net debt $645 million Committed to maintaining sensible debt levels Cash on hand $26 million • T
Slide 15: Our Orora – culture of driving outperformance
Our Orora – culture of driving outperformance Customer led culture to drive sustainable outperformance Orora Ltd 2014 15
Slide 16: Shareholder Value Creation
Continued commitment to a proven strategy Significant Returns Well invested Strong operating Focused portfolio “self help” earnings focused capital businesses cash flow opportunity management Shareholder Value Creation •Multi-year transformation • Investment for growth & • B9 benefits • Stable earni
Slide 17: Committed to creating shareholder value
Committed to creating shareholder value What we said we would do What we have done in 1H15 Shareholder value creation • Ongoing delivery of cost reduction programs • Delivered $14.2M of incremental cost reduction • Total shareholder return in excess of 15% benefits in 1H15 over pcp in the six months
Slide 18: Investing in innovation & growth for future success
Investing in innovation & growth for future success Australasia North America Customer led growth investments Organic growth E.g. Proposing to invest approximately $20M in a new state of the art dairy Continue to target large corporate accounts and increase share of wallet sack line to service growi
Slide 19: M&A and Integration Blue Print
Orora M&A and Integration Blue Print Origination Initial Assessment Due Diligence Integration Efficiently find & develop Conduct thorough due diligence Quickly & successfully integrate opportunities that align with which results in most effective businesses into Orora for maximum Orora’s strategy ac
Slide 20: Perspectives for 2015
Perspectives for 2015 Orora Australasia • Ongoing ramp up of B9 and delivery of an expected $20M of cumulative cost reduction and innovation benefits • Increased Glass market share in beer commencing July 2015 • Glass furnace rebuild (G1) commenced January 2015 – rebuild “on track”, out of operation
Slide 21: Outlook
Outlook • Orora expects to continue to drive organic growth and deliver on the cost reduction initiatives in 2015 with earnings to be higher than that reported (on a pro forma basis) in 2014, subject to global economic conditions Orora Ltd 2014 21
Slide 22: Appendix slides
Appendix slides 22
Slide 23: Comparative year pro forma reconciliation
Comparative year pro forma reconciliation Appendix 1 23
Slide 24: Comparative year: reconciliation for 1H14 pro forma NPAT
Comparative year: reconciliation for 1H14 pro forma NPAT (A$M) 1H14 Significant Adjustments2 1H14 (previously Item1 (restated) reported) Sales 1,611.5. -. -. 1,611.5. EBITDA 158.6. 4.0. (8.5) 154.1. EBIT 97.3. 4.0. 2.0. 103.3. Interest (as per Scheme Booklet (22.0) -. -. (22.0) assumptions) Pro form
Slide 25: General business information
General business information Appendix 2 25
Slide 26: Regional Strength
Regional Strength $3.2 BILLION FY14 Revenue 122 Sites, 7 Countries 39 Manufacturing Plants 83 Distribution Centres 5,500 Employees Orora Ltd 2014 26
Slide 27: Australasia
Orora Australasia Overview Sales & Earnings History Pro forma sales revenue Pro forma EBIT • A portfolio of scale businesses with leading positions in their respective AUD million AUD million markets 125.8 • Predominantly services the defensive food and beverage segments • 3,500 employees across 28
Slide 28: North America
Orora North America Overview Sales & Earnings History Pro forma sales revenue Pro forma EBIT • Orora North America is a total packaging solutions provider in the USA, Canada USD million USD million and Mexico. It also has integrated corrugated sheet and box manufacturing and equipment sales capabili
Slide 29: Historical pro forma financial information – FY11 to FY14
Historical pro forma financial information – FY11 to FY14 Appendix 3 29
Slide 30: Pro Forma Historical Earnings Before Interest and Tax
Orora Limited Pro Forma Historical Earnings Before Interest and Tax (A#039;m) FY11 FY12 FY13 FY14 Australasia 125.8 129.8 129.3 162.5 Orora North America 46.2 49.5 43.5 57.1 Corporate (24.3) (22.8) (24.6) (27.5) Group 147.7 156.5 148.2 192.1 Orora Ltd 2014 30
Slide 31: Pro Forma Historical Financials
Orora Limited Pro Forma Historical Financials (A#039;m) FY11 FY12 FY13 FY14 Sales 2,836.1 2,872.2 2,942.7 3,176.1 PBITDA 247.3 262.1 245.6 290.8 PBIT 147.7 156.5 148.2 192.1 PBITDA margin (%) 8.7 9.1 8.3 9.2 PBIT margin (%) 5.2 5.4 5.0 6.0 1 AFE 1,447.3 1,487.8 2,071.1 2,071.7 RoAFE (%) 10.2 10.5 7.2 9
Slide 32: Australasia Pro Forma Historical Financials
Orora Australasia Pro Forma Historical Financials (A#039;m) FY11 FY12 FY13 FY14 Sales 1,898.2 1,928.5 1,935.6 1,912.9 PBITDA 206.0 216.7 212.8 245.4 PBIT 125.8 129.8 129.3 162.5 PBITDA margin (%) 10.9 11.2 11.0 12.8 PBIT margin (%) 6.6 6.7 6.7 8.5 1 AFE 1,280.1 1,313.9 1,887.2 1,822.9 RoAFE (%) 9.8 9.9
Slide 33: North America Pro Forma Historical Financials
Orora North America Pro Forma Historical Financials (A#039;m) FY11 FY12 FY13 FY14 Sales 938.0 943.8 1,007.1 1,263.2 PBITDA 56.5 59.3 51.3 67.5 PBIT1 46.2 49.5 43.5 57.1 PBITDA margin (%) 6.0 6.3 5.1 5.3 PBIT margin (%) 4.9 5.2 4.3 4.5 AFE 204.2 196.5 203.1 263.8 RoAFE (%) 22.6 25.2 21.4 21.6 AUD Cash F