Slide 1: Orora Half Year Results
Orora Half Year Results Half Year Ended 31 December 2015 Nigel Garrard – Managing Director and CEO Stuart Hutton – Chief Financial Officer 16 February 2016
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: Orora Business Highlights
Orora Business Highlights Reported Earnings Summary Strong underlying EPS growth – up 19.3% • Solid double digit EBIT growth despite subdued economic conditions in A$ Million 1H15 1H16 ∆% all regions Reported NPAT 69.1 .. 87.9. . 27.2. • B9 production ramp up on track and translating into earnings b
Slide 4: Orora safety performance
Orora safety performance Safety improvement remains a priority – an ongoing journey Jun 2014 Dec 2014 Jun 2015 Dec 2015 • Dissatisfied with the uptick in RCFR - subject area of focus for all RCFR 6.6 6.2 5.9 6.6 Business Groups • Pleasing reduction in LTIFR LTIFR 1.8 2.3 1.9 1.4 • Reflects focus on
Slide 5: Half Year results
Half Year results Half Year Underlying Financial Highlights Increased sales and earnings growth • Underlying sales growth in Australasia was 1.8% A$ million 1H15 1H16 ∆% • Constant currency sales growth in North America of 7.5%; Landsberg Packaging Solutions sales up 6.6% Sales 1,666.6 1,898.5 13.9
Slide 6: Orora Australasia
Orora Australasia Earnings Summary (EBIT) Underlying sales growth of 1.8%(1) despite flat market conditions • Positive Fibre volumes o Steady organic growth & increased market share in selected segments A$ Million 1H15 1H16 ∆% . o New business won in the “go direct” channel in fruit & produce partia
Slide 7: Realisation of targeted B9 'self help' benefits remain a focus
Realisation of targeted B9 ‘self help’ benefits remain a focus A$ Million B9 production ramp up remains on track • Production stability progressively improved during the period following an extended planned maintenance shut – produced 95,000 Net B9 ‘self help’ target 42.5 tonnes in Dec ‘15 quarter •
Slide 8: Australasia EBIT growth
Australasia EBIT growth 4.5% Earnings Growth 2.5 (2.2) 5.4 (1.2) 105.5 101.0 (A$’M) 1H15 B9 Vol/Mix/Efficiency Gas Other 1H16 (Glass Division) Further benefits from B9 and positive vol/mix/efficiency driving earnings growth Solid result despite headwinds faced by the business(1) 8 Ltd 2014 Orora (1)
Slide 9: Orora North America
Orora North America Strong top line growth – sales up 7.5% Earnings Summary (EBIT) • Landsberg Packaging Solutions sales up 6.6% • Increased organic sales, market share gains and benefits from the September ‘15 acquisition of Jakait US$ Million 1H15 1H16 ∆% • Continued success in winning large corpo
Slide 10: North America EBIT growth
North America EBIT growth 36.9% Earnings Growth (11.0% excluding FX impact) 7.8 46.0 4.6 33.6 (A$’M) 1H15 Vol/Mix/Efficiency FX 1H16 Increased organic sales, winning market share & margin improvement initiatives driving improved earnings Favourable FX benefit 10 Ltd 2014 Orora
Slide 11: Orora Corporate
Orora Corporate Earnings Summary (EBIT) Underlying Corporate costs lower than prior year • Underlying Corporate costs were $14.6M and included restructuring costs associated with the new dairy sack line and A$ Million 1H15 1H16 ∆% New Zealand Cartons reorganisation • Reiterate guidance that underlyi
Slide 12: Strong operating cash flow
Strong operating cash flow Strong conversion of increased earnings into cash • Operating cash flow up 24.2% to $146.1M – reflecting earnings growth and sound A$ Million 1H15 . 1H16. balance sheet management EBITDA 166.7.... 197.7. • Cash conversion of 72% (target is approximately 70%)(2) Average wor
Slide 13: Balance Sheet and Debt
Balance Sheet and Debt Balance Sheet Robust balance sheet – well positioned to invest for growth A$ Million June 15 Dec 15 • Reduced leverage through conversion of earnings into cash Funds Employed (period end) 2,049 2,066 o Leverage of 1.7x - down from 1.9x at June 2015 (2.1x at December 2014) Net
Slide 14: Returns focused capital allocation
Returns focused capital allocation Committed to maintaining sensible debt levels Total Debt Facility – Dec 2015 $1,090 million • Targeting to maintain investment grade credit metrics • Refinancing of $350M due in December 2016 – Management has commenced the Net debt $593 million process • Average te
Slide 15: Our Orora – culture of driving outperformance
Our Orora – culture of driving outperformance 15 Orora Ltd 2014 Customer led culture to drive sustainable outperformance
Slide 16: Shareholder value creation blue print
Shareholder value creation blue print Sustainable Organic Growth Returns Focused Growth Capital Allocation Dividend Orora Orora 60-70% North Australasia Bolt-on M&A Pay Out America Organic Growth Capital Adjacent M&A GDP Sales (North America Focused) Ratio GDP+ Sales Growth Growth GDP based growth G
Slide 17: Committed to creating shareholder value
Committed to creating shareholder value What we said we would do What we have done in 1H16 Shareholder value creation 1. Progressive realisation of B9 ‘self help’ benefits over 1. $5.4M of incremental B9 benefits delivered in 1H16 • Total shareholder return in excess of 15% in the next 2 years over
Slide 18: Perspectives for balance of 2016
Perspectives for balance of 2016 Orora Australasia • Anticipate B9 will exit FY16 on a quarterly production run rate approaching name plate capacity of 400,000 tonnes • Expect to deliver approximately $15.0M of incremental B9 ‘self help’ benefits – will take cumulative benefits at the end of FY16 to
Slide 19: Outlook
Outlook • Orora expects to continue to drive organic growth, deliver on the B9 ‘self help’ initiatives and invest in innovation and growth during the remainder of FY16, with earnings expected to be higher than reported in 2015, subject to global economic conditions 19Orora Ltd 2014
Slide 20: Reconciliation: Profit on Sale of Petrie Land
Reconciliation: Profit on Sale of Petrie Land Appendix 1 20
Slide 21: Appendix 1: Reconciliation of Profit on Sale of Petrie Land
Appendix 1: Reconciliation of Profit on Sale of Petrie Land A$ Million – EBIT, NPAT A$ Cents – EPS EBIT NPAT EPS Reported 145.3 87.9 7.3 Petrie land sale impact 8.4 5.9 0.5 Underlying 136.9 82.0 6.8 21 Orora Ltd 2014