Orora Limited · ASX:ORA
Orora — Investor Presentation (February 2022)
30 slides from Orora's investor presentation, Feb 16, 2022
Slide 1: Financial Results Half Year Ended 31 December 2021
FINANCIAL RESULTS HALF YEAR ENDED 31 DECEMBER 2021 Presentation by Brian Lowe — Managing Director and CEO Shaun Hughes — CFO
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: 1H22 Highlights & Group Strategy
1H22 Highlights & Group Strategy Brian Lowe – Managing Director and CEO
Slide 4: 1H22 financial highlights
1H22 financial highlights SALES EARNINGS BEFORE INTEREST UNDERLYING NET PROFIT • Strong improvement in AND TAX (EBIT) AFTER TAX (NPAT) Group EBIT and NPAT, up $1,988.6M $154.5M $102.7M 11.1% and 13.6% respectively (constant 9.6% increase 10.4% increase 12.9% increase currency basis) +10.6% constant
Slide 5: 1H22 business & operating highlights
1H22 business & operating highlights • Continued strong growth in North America, with Group EBIT and NPAT increasing 11.1% and 13.6% respectively on a constant currency basis. • Disciplined execution of strategy further evidences benefits of diversified packaging assets driving sustainable growth in
Slide 6: Orora safety performance update
Orora safety performance update Update on our approach to improving safety Lost time injury Recordable case frequency rate • Operating during COVID-19 has continued to add frequency rate complexity and challenge to our operating (LTIFR)* (RCFR)^ environment. • A number of additional health and safet
Slide 7: Orora's strategic pillars and enablers
Orora’s strategic pillars and enablers Our strategic pillars continue to guide our actions and support the delivery of our achievements in 1H22. ENABLERS Safety 1 OPTIMISE TO GROW To be a leading Diverse talent sustainable packaging solutions company Customer ENHANCE AND focus 2 EXPAND Delivering on
Slide 8: Progressing our strategy
Progressing our strategy* – We continue to progress our strategy and remain focused on our strategic priorities 1H22 PROGRESS FY22+ PRIORITIES Australasia • Extension of long-term contracts for key customers in Cans & Glass • Maintain, renew and win new key customer contracts and strategic accounts
Slide 9: Beverage – Cans capacity expansion and Glass product expansion
Beverage – Cans capacity expansion and Glass product expansion Brian Lowe – Managing Director and CEO
Slide 10: Orora Beverage Cans | capacity expansion
Orora Beverage Cans | capacity expansion • As announced at the AGM in October 2021, in light of strong customer demand and limited unutilised capacity, Orora can confirm plans for a significant expansion of Cans multi-size capacity at the Dandenong site and Ends capacity at the 10% 40% Ballarat site
Slide 11: Orora Beverage Glass | product expansion
Orora Beverage Glass | product expansion • The well disclosed impacts of Chinese wine tariff decisions on Australian wine exports adversely impacted Orora’s customers in 2021. Spirits • In response, the Glass team quickly sought out new market opportunities • Capitalising on strong growth in by exte
Slide 12: Orora Visual – Strategic Review
Orora Visual – Strategic Review Brian Lowe – Managing Director and CEO
Slide 13: Orora Visual | review of strategic direction
Orora Visual | review of strategic direction Overview Key findings • Review of strategic direction announced at 1H21 results; • OV’s addressable market in North America estimated at completed at end of CY2021 ~US$8 billion and growing • Key areas explored: • Management team stabilised and enhanced •
Slide 14: Orora Visual | business overview
Orora Visual | business overview Products & services Visual & Product • In-store displays: End-caps, floor units, fabric/canvas, counter displays Marketing • Promotional signage: Sales posters, graphic wall out-fittings, decals Consumer • Retail-ready & consumer packaging: High resolution graphic la
Slide 15: Orora Visual | strategic roadmap
Orora Visual | strategic roadmap OV has identified various strategic opportunities to pursue capital-lite, high-return initiatives over the next 1-3 years that are expected to drive earnings growth Longer-term Medium-term (FY25+) Near-term (FY23-25) Expand (FY22-3) Enhance Capability extension Optim
Slide 16: Orora's North American capabilities
Orora’s North American capabilities • Orora’s North American operations provide value-added packaging products and services to a range of customers in consumer- facing industries • Whilst operating as stand-alone businesses, OV and OPS are complementary and share a range of commercial capabilities O
Slide 17: Orora – Sustainability Update
Orora – Sustainability Update Brian Lowe – Managing Director and CEO
Slide 18: Our progress on Sustainability
Our progress on Sustainability We are making good progress with our sustainability goals and commitments 60% recycled content* Net zero emissions by 2050 Prioritising action for our for Glass beverage containers by 40% reduction in emissions by 2035 people and our community 2025 • Orora’s use of rec
Slide 19: Financial Results
Financial Results Shaun Hughes – CFO
Slide 20: 1H22 Group financial summary – Underlying and Statutory Results
1H22 Group financial summary – Underlying and Statutory Results Profit & Loss A$M – Underlying 1H22 1H21 Var$ Var% CC% • Reported Group Sales grew by 9.6% on the pcp, driven by an A$ 12.6% increase in North American sales and a 0.5% Sales 1,988.6 1,814.1 174.5 9.6% 10.6% increase in Australasian sal
Slide 21: 1H22 Australasian financial highlights
1H22 Australasian financial highlights Business Performance • Sales up 0.5%, mainly due to higher aluminium input costs that have been SALES UNDERLYING EBIT passed on to customers, partially offset by short term COVID-19 Cans volume $443.2M $84.0M impacts. • Excluding Aluminium pass-through Cans inf
Slide 22: 1H22 North American financial highlights
1H22 North American financial highlights Business Performance • North America significantly improved operating and financial performance in USD SALES USD EBIT 1H22, with local currency sales up 13.9% and EBIT up 32.1%. $1,130.7M $51.5M OPS • Delivered low double digit sales growth. • Continued impro
Slide 23: Operating cash flow – continued strength and resilience
Operating cash flow – continued strength and resilience Operating cash flow(1) A$ Million 1H22 1H21 • Operating cashflow remains strong at $145.5M, broadly in-line with the pcp. EBITDA 212.9 199.3 • EBITDA up 6.8% to $212.9M on the pcp. Lease repayments (29.6) (30.5) • Cash EBITDA up $10.9M or 5.9%
Slide 24: Balance sheet and debt
Balance sheet and debt Strong balance sheet provides operating and strategic flexibility A$ Million Dec 21 June 21 • Balance sheet remains strong and provides a solid foundation for the next phase of Orora’s growth strategy. Funds Employed (period end) 1,243 1,252 • Preference continues to be the pu
Slide 25: Interim 1H22 Dividend
Interim 1H22 Dividend • Interim dividend of 8.0 cents per share (unfranked). • Interim dividend is up 23.1% or 1.5 cents per share versus 1H21. • Key dates for interim dividend: Interim 1H22 • Ex-dividend date: 1 March 2022 dividend • Record date: 2 March 2022 8.0 cps • Payment date: 30 March 2022 •
Slide 26: FY22 Perspectives & Outlook
FY22 Perspectives & Outlook Brian Lowe – Managing Director and CEO Orora Limited ABN 55 004 275 165
Slide 27: Perspectives for FY22
Perspectives for FY22 Australasia North America Cashflow & Capex • Strength in Cans – subject to any COVID • Build on continued operating and • Ongoing investment in existing businesses - related production and supply chain performance momentum in OPS & OV – base and growth capex. disruptions, 24/7
Slide 28: FY22 Outlook
FY22 Outlook • Positive operating and earnings momentum is expected to continue for the Orora group throughout FY22, correspondingly we are forecasting FY22 EBIT to be higher than FY21. • In Australasia, EBIT growth is expected for the Beverage business in 2H22, with FY22 EBIT to be broadly in line
Slide 29: Appendix 1H22
APPENDIX 1H22
Slide 30: Orora applies a returns-focused, risk-weighted approach to investment and capital management decisions
Orora applies a returns-focused, risk-weighted approach to investment and capital management decisions Shareholder value blueprint TSR COMPONENT ORGANIC GROWTH RETURNS-FOCUSED INVESTMENT CAPITAL MANAGEMENT STRATEGIC Enhance & Enter new Balanced & disciplined approach to Optimise to Grow PILLAR Expan