Slide 1: Orora Full Year Results
Orora Full Year Results Full Year Ended 30 June 2016 Nigel Garrard – Managing Director and CEO Stuart Hutton – Chief Financial Officer 15 August 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 24.8% • Robust double digit EBIT growth in both Australasia and North America - A$ Million FY15 FY16 ∆% despite flat economic conditions o Australasian EBIT up 10% - both Fibre Packaging and Beverage contributing R
Slide 4: Orora safety performance
Orora safety performance Safety progress is a key focus – an ongoing journey June 2015 June 2016 • RCFR has remained static – continued area of focus for all Business RCFR 5.9 5.9 Groups – injuries are all avoidable • Pleasing reduction in LTIFR LTIFR 1.9 1.5 • Reflects emphasis on reducing the risk
Slide 5: Full Year results
Full Year results Full Year Underlying Financial Highlights Increased sales (up 13.0%) A$ million FY15 FY16 ∆% • Underlying sales growth in Australasia was 2.5% • Local currency sales in North America up 11.9%. Organic sales growth of Sales 3,407.8 3,849.8 13.0 approximately 6%. Favourable FX impact
Slide 6: Orora Australasia
Orora Australasia Results Summary Underlying sales growth of 2.5%(1) despite subdued market conditions • Fibre A$ Million FY15 FY16 ∆% . o Steady organic growth; improved agriculture and grocery volumes in Australia; higher agriculture volumes in NZ led by a strong kiwi fruit and apple season Sales
Slide 7: On target realisation of B9 'self help' benefits
On target realisation of B9 ‘self help’ benefits A$ Million Production ramp up on target with expectations • Produced 382,000 tonnes during the period (367,000 tonnes in pcp) – extended September 2015 shut affecting 1H volumes, improved Net B9 ‘self help’ target 42.5 manufacturing consistency in 2H
Slide 8: Australasia EBIT growth
Australasia EBIT growth 10.4% Earnings Growth 5.9 (7.6) 6.4 0.4 200.4 13.7 181.6 (A$’M) FY15 B9 Vol/Mix/Efficiency Reversal of Furnace Energy & Soda Ash Other FY16 Rebuild Impact Delivery of further B9 benefits, positive vol/mix/efficiency and reversal of adverse FY15 furnace rebuild impact Solid re
Slide 9: Orora North America
Orora North America Strong Orora North America(1) growth despite subdued market conditions – sales up 11.9% Results Summary • Organic sales growth of approximately 6.0% o Increased sales to existing customers and market share gains – largely from independent players US$ Million FY15 FY16 ∆% o Execut
Slide 10: North America EBIT growth
North America EBIT growth 38.1% Earnings Growth (20.2% excluding FX impact) 10.7 98.9 16.6 71.6 (A$’M) Organic sales growth / market share gains, margin improvement initiatives and acquisition benefits driving improved earnings Favourable FX benefit 10 Ltd 2014 Orora
Slide 11: IntegraColor – integration progress update
IntegraColor – integration progress update • Acquired 1 March 2016 for US$77.0M (approx. AUD107M) • Approximately US$100M of annual sales revenue • Integration is tracking well o Good customer and employee engagement o Sound progress being made across all integration components • The business is per
Slide 12: Orora North America – provider of total packaging solutions
Orora North America – provider of total packaging solutions ORORA PACKAGING SOLUTIONS INTEGRACOLOR Through the acquisition of IntegraColor, Orora North America is an end-to-end provider of customised, total packaging solutions – extending right across the value chain Orora Ltd 2014 12
Slide 13: Orora Corporate
Orora Corporate Earnings Summary (EBIT) Underlying Corporate costs slightly lower than prior year • Underlying Corporate costs were $27.2M A$ Million FY15 FY16 ∆% • Includes restructuring costs associated with the new dairy sack line and New Zealand Cartons reorganisation partially offset by the Rep
Slide 14: Strong operating cash flow
Strong operating cash flow Increased earnings being converted into solid cash flow A$ Million FY15 . FY16. • Operating cash flow (excluding Petrie sale) up 20.3% to $313.8M – reflecting higher earnings and sound balance sheet management EBITDA 323.2.... 388.0. • Cash conversion of 76% - in line with
Slide 15: Balance Sheet and Debt
Balance Sheet and Debt Balance Sheet Strong balance sheet providing capacity to invest for future growth A$ Million June 15 June 16 • Reduced leverage through conversion of earnings into cash Funds Employed (period end) 2,049 2,128 o Leverage of 1.7x - down from 1.9x at June 2015 (1.7x at December 2
Slide 16: Returns focused capital allocation
Returns focused capital allocation Committed to maintaining sensible debt levels Total Debt Facilities – June 2016 $1,100 million • Targeting to maintain investment grade credit metrics Net debt $630 million • Successfully completed bank debt refinancing in April 2016 - received strong support from
Slide 17: Successful bank debt refinancing
Successful bank debt refinancing Completed successful bank debt refinancing in April 2016 Action: • Replaced A$350M multicurrency debt facility maturing in December 2016 with the following facilities: • 5 year USD denominated facility of US$200M (A$250M+) • 2 year AUD denominated facility of A$100M
Slide 18: Our Orora – culture of driving outperformance
Our Orora – culture of driving outperformance Orora Ltd 2014 18
Slide 19: Orora's blueprint for creating shareholder value
Orora’s blueprint for creating shareholder value ORGANIC RETURNS FOCUSED GROWTH SUSTAINABLE GROWTH & CAPITAL ALLOCATION DIVIDEND INNOVATION 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 G
Slide 20: Orora has invested approx. $225M in growth since ASX Listing
Orora has invested approx. $225M in growth since ASX Listing in December 2013 2H14 1H15 2H15 1H16 2H16 TOTAL INVESTMENT Established 2 new East Investing $42M to Coast US DCs (Charlotte increase glass bottle New customer backed & Orlando) – both manufacturing capacity Opened new Organic Dairy Sack Li
Slide 21: Committed to creating shareholder value
Committed to creating shareholder value What we said we would do What we have done in FY16 Shareholder value creation 1. Progressive realisation of B9 ‘self help’ benefits 1. Additional $13.7M of incremental B9 benefits delivered in FY16 • Total shareholder return in excess of 15% in the – cost redu
Slide 22: Perspectives for 2017
Perspectives for 2017 Orora Australasia • Expect to deliver final incremental B9 ‘self help’ benefits of approximately $7M – will represent full realisation of the $42.5M EBIT benefit program • Export of B9 paper to North America is expected to be in excess of 80,000 tonnes in FY17 • The Glass capac
Slide 23: Outlook
Outlook • Orora expects to continue to drive organic growth and invest in innovation and growth during FY17, with earnings expected to be higher than reported in 2016, subject to global economic conditions 23Orora Ltd 2014
Slide 24: Reconciliation: Profit on Sale of Petrie Land
Reconciliation: Profit on Sale of Petrie Land Appendix 1 24
Slide 25: Appendix 1: Reconciliation of Profit on Sale of Petrie Land
Appendix 1: Reconciliation of Profit on Sale of Petrie Land A$ Million – EBIT, NPAT A$ Cents – EPS EBIT NPAT EPS Reported 280.5 168.6 14.1 Petrie land sale impact 8.4 5.9 0.5 Underlying 272.1 162.7 13.6 25 Orora Ltd 2014