Orora Limited · ASX:ORA
Orora — Macquarie Australia Conference 2019
31 slides from Orora's conference presentation, May 1, 2019
Slide 1: Orora Limited
Orora Limited Macquarie Australia Conference 1 May 2019 Presentation by Nigel Garrard – Managing Director and CEO Orora Limited ABN 55 004 275 165
Slide 2: Invest innovate grow video
Invest innovate grow video To watch the video visit ororagroup.com/about/invest- innovate-grow-1556595438 2
Slide 3: Orora Limited
Orora Limited Macquarie Australia Conference 1 May 2019 Presentation by Nigel Garrard – Managing Director and CEO Orora Limited ABN 55 004 275 165
Slide 4: Agenda
Agenda • Orora overview and FY19 half year results • Business group overview and performance • M&A integration update • Orora’s blueprint for creating shareholder value and innovation update • Orora’s approach to sustainability • Corporate and trading update • Outlook 4
Slide 5: Orora at a glance
Orora at a glance Manufacturing, distribution and point of purchase @ Procurement sourcing operations @ Sales office OR:
Slide 6: What we do
What we do OR: 2RA Glass bottles Closures andcaps Boxes and cartons Recycled paper Flexible packaging Printing and signage Automation and Innovation and Product sourcing —_ engineering Design Digital technology
Slide 7: Orora – overview of sales and earnings
Orora – overview of sales and earnings Pro Forma Sales by Region Sales EBIT AUD million AUD million North America is now largest revenue generator History of solid sales and earnings growth 7
Slide 8: 1H19 financial highlights
1H19 financial highlights EARNINGS BEFORE INTEREST SALES REVENUE AND TAX (EBIT) Solid earnings growth, increased dividends and higher $2,306m $175.1m returns. Strong balance sheet to continue to pursue growth. 9.9% INCREASE 5.9% INCREASE Refinance and upsize of syndicated bank facilities UNDERLYING
Slide 9: Business group overview
Business group overview
Slide 10: Business performance - Australasia
Business performance - Australasia 1H19 FINANCIAL HIGHLIGHTS SALES REVENUE $1,088m 4.4% INCREASE EARNINGS BEFORE INTEREST AND TAX (EBIT) $127.6m 6.6% 5.4% INCREASE ROAFE% Solid earnings growth from well invested, 13.5% resilient business segment 40 bps INCREASE 10
Slide 11: Business performance - North America
Business performance - North America 1H19 FINANCIAL HIGHLIGHTS SALES REVENUE (USD millions) $882m 11.% 7.2% INCREASE EARNINGS BEFORE INTEREST AND TAX (USD millions) $46.5m 1.1% DECREASE ROAFE% 20.0% Steady earnings in tough market conditions 40 bps DECREASE 11
Slide 12: M&A integration update
M&A integration update
Slide 13: Recent North American acquisition’s integration update
Recent North American acquisition’s integration update Acquisitions of Pollock Packaging and Bronco Packaging are aligned to Orora’s North American focused M&A growth strategy in OPS • Bronco (effective 1 September 2018) is a highly regarded specialist packaging business primarily serving corporate
Slide 14: Creating shareholder value
Creating shareholder value
Slide 15: Orora’s blueprint for creating shareholder value
Orora’s blueprint for creating shareholder value ORGANIC RETURNS FOCUSED GROWTH GROWTH CAPITAL ALLOCATION Orora Orora North Australasia America Organic Growth Bolt-on M&A 60-70% GDP+ Sales Capital (North America Focused) Adjacent M&A Pay Out Ratio GDP Sales Growth Growth GDP based Targeted GDP based
Slide 16: Orora has committed ~$650M since ASX listing in December 2013
Orora has committed ~$650M since ASX listing in December 2013 Benefits from growth investments starting to impact earnings 16
Slide 17: Orora - growth and innovation investment
Orora - growth and innovation investment $75 million Additional $30m committed in 2018, taking the total Global Innovation Initiative innovation initiative to $75 million • Established in 2015 • Supports the development of customer-led products and improvement in plant productivity 17
Slide 18: Examples of Global Innovation Initiatives
Examples of Global Innovation Initiatives Game-changing EFI digital printers • Offer exceptional ‘photographic quality’ print on carton board at very high speed • Takes digital printing to the next level and is the first of its kind in Investing in productivity Australasia market. Like machine commi
Slide 19: Examples of Global Innovation Initiatives
Examples of Global Innovation Initiatives Limitronic digital printer • Provides on-demand, variable printing onsite for customers • Print directly on carton board, removing need for plastic labels Smarter produce labels • Showcased as last years Innovation Expo Smarter produce trays • ACCU label is
Slide 20: Next generation packaging
Next generation packaging • Consumers across the world are telling our customers they want to reduce their impact on the world and that they want to buy products in recyclable packaging. • In response, Orora is partnering with customers to investigate and test a range of sustainable packaging initia
Slide 21: Orora’s approach to sustainability
Orora’s approach to sustainability
Slide 22: Orora’s sustainability program
Orora’s sustainability program • Orora’s sustainability program is managed through three focus areas: People, Plant and Prosperity. • The program aims to minimise Orora’s impact on the environment and improve the sustainability of its products and services. • Orora’s approach is guided by being a si
Slide 23: Taking action - recycling
Taking action - recycling Orora is one of Australia’s leading large-scale recyclers Paper Glass Cans • Orora collects more than 700,000 • Orora recycles approximately 80% of • Orora sources coils of aluminium that tonnes of old corrugated containers all glass collected through South contain approxim
Slide 24: Taking action – energy efficiency
Taking action – energy efficiency • Orora has signed two long-term power purchase agreements (PPA’s) with renewable energy providers to supply wind generated electricity to Orora’s operations in South Australia, Victoria and New South Wales, where Orora operates it largest and most energy intensive
Slide 25: Taking action – Eco targets
Taking action – Eco targets At the time of demerger, Orora adopted Eco targets for the year ending 30 June 2019. These defined Orora’s goals to reduce greenhouse gas emissions, waste to landfill and water use across the business. Orora is on track to achieve the targets set at Demerger New Eco targe
Slide 26: Corporate update
Corporate update 26
Slide 27: Corporate Update
Corporate Update Debt Refinancing • Successfully completed refinancing of syndicated bank debt facilities in April 2019 • Australian syndicate increased by A$50M to A$450M with maturity in April 2022 • US Syndicate increased by US$100M to US$300M with maturity in April 2024 • Additional capacity ava
Slide 28: Trading update and outlook
Trading update and outlook 28
Slide 29: Trading update
Trading update Market conditions • Slower start to calendar 2019 than previous years – primarily North America. Improvement seen in March / April • Expecting ongoing challenging market conditions in North America, some mixed short term demand signals appearing in ANZ • Reviewing cost structures as a
Slide 30: Outlook
Outlook Orora expects to continue to drive organic growth, integrate recent North American acquisitions and invest in innovation during the remainder of FY19, with constant currency underlying earnings expected to be higher than reported in FY18, subject to global economic conditions 30
Slide 31: 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