Slide 1: Orora Pro Forma Full Year Results
Orora Pro Forma Full Year Results Year Ended 30 June 2014 Nigel Garrard – Managing Director and CEO Stuart Hutton – Chief Financial Officer 25 August 2014
Slide 2: IMPORTANT – PLEASE READ
IMPORTANT – PLEASE READ Effective 17 December 2013, Orora Limited (the Company) and its controlled entities (collectively referred to as the Orora Group) demerged from Amcor Limited. The demerger was implemented on 31 December 2013. The Company today announced its first full year result as an indepe
Slide 3: 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 4: Orora Business Highlights
Orora Business Highlights Pro forma Earnings Summary Solid full year result, in line with expectations • Strong earnings growth – NPAT up 44 44.8% 8% • On target delivery of “self help” cost reduction programs A$ Million FY13 . FY14 . ∆% • Sales growth in North America of 12.1% (constant currency) N
Slide 5: Orora safety performance
Orora safety performance 13.4 Long‐term safety performance improvement 11.4 • 51% improvement in RCFR in last 5 years • 40% improvement in LTIFR in last 5 years 8.5 • Disappointed with past 12‐24 months – safety is a long term 80 8.0 j journey 6.6 5.9 Strengthened Orora‐wide safety leadership team 3
Slide 6: Pro forma full year results
Pro forma full year results Pro forma Full Year Financial Highlights Improved sales and earnings growth • Higher volumes in Glass and Distribution businesses. Volumes A$ million illi FY13 FY14 ∆% generally steady in remaining divisions • Increasing earnings despite little support from economy Sales
Slide 7: Orora Australasia
Orora Australasia Pro forma Earnings Summary (EBIT) Operating results delivering to expectations • Higher volumes and increased market share in Glass. Volumes A$ Million FY13 FY14 ∆% ll stable generally bl iin other h didivisions ii • Improved earnings in Fibre and Beverage divisions Sales Revenue 1
Slide 8: Australasia EBIT growth
Australasia EBIT growth 25.7% Earnings Growth 13.4 1.0 (4.1) (4 2) (4.2) 162.5 27.1 129.3 (A$’M) FY13 Pro Forma Self Help# Vol/Mix/ Other Rent^ Bad FY14 Pro Forma EBIT* Efficiency Debts EBIT On target delivery of “self help” cost reduction initiatives and positive vol/mix/efficiency driving higher e
Slide 9: Realisation of targeted cost benefits remains a key priority
Realisation of targeted cost benefits remains a key priority Total targeted cost Cumulative cost reduction Cumulative cost reduction A$ Million reduction benefit achieved in FY13 achieved in FY14 Recycled Paper Mill – B9 50.0 ‐ 3.0. Portfolio exits/plant closures 18.0 8.0 16.9. Cost improvement 25.0
Slide 10: Orora North America
Orora North America Pro forma Earnings Summary (EBIT) Strong top line performance in a relatively modest market • Increased organic sales and won new business in the Landsberg A$ Million FY13 FY14 ∆% distribution division – gaining market share in most regions • Benefits from strategic focus on secu
Slide 11: North America EBIT growth
North America EBIT growth 31.3% Earnings Growth 57.1 (17.4% excluding FX impact) 6.1 7.5 43.5 (A$’M) (A$ M) Actual Vol/Mix FX Actual FY13 EBIT FY14 EBIT Strong organic growth & margin improvement initiatives driving earnings Favourable FX benefit Orora Ltd 2014 11
Slide 12: Orora Corporate
Orora Corporate Pro forma Earnings Summary (EBIT) Corporate costs in line with guidance • Pro forma corporate costs of $27.5M, up from $24.6M in pcp • Prior to demerger, the business already had a number of corporate A$ Million FY13 . FY14 . ∆% and shared service functions • Historically these costs
Slide 13: Strong underlying operating cash flow
Strong underlying operating cash flow A$ Million Pro Forma... Pro Forma. Strong conversion of earnings growth into cash • Underlying operating cash flow f up $55.2M $ (32.7%) ( ) FY13... FY14. EBITDA 245.6.... 290.8. Average working capital to sales ratio improved to 10.6% • Well managed throughout
Slide 14: Balance sheet and Debt
Balance sheet and Debt Balance Sheet Pro Forma Actuall Healthy balance sheet enabling future growth A$ Million June 13 June 14 • Strong earnings growth and cash conversion reducing leverage Funds Employed (period end) 1,978 2,018 • Leverage below Management target range of <2.5x • Gearing is 31% ‐ d
Slide 15: Returns focused capital management
Returns focused capital management Strong cash conversion of increasing earnings driving strengthening balance sheet Total Debt Facility $1,100 million • Leverage 2 2.2x 2x EBITDA – down from 2 2.9x 9x at June 13 Net debt $636 million Committed to maintaining sensible debt levels Cash on hand $31 mi
Slide 16: Our Orora – culture of driving outperformance
Our Orora – culture of driving outperformance Orora Ltd 2014 16
Slide 17: Continued commitment to a proven strategy
Continued commitment to a proven strategy Significant Returns Well invested Strong operating F Focused d portfolio tf li “self lf help h l ” earnings i f focused d capital i l businesses cash flow opportunity management Value Creattion •Multi‐year transformation • Investment for growth & • B9 benefi
Slide 18: Committed to creating shareholder value
Committed to creating shareholder value What we said we would do What we have done Shareholder value creation • $30‐40m of cumulative cost reduction • $39m of cumulative cost reduction • Total shareholder returns of in excess benefits expected to be realised in benefits delivered in FY14 of 15% in t
Slide 19: Perspectives for FY2015
Perspectives for FY2015 Orora Australasia • Ongoing ramp up of B9 and delivery of expected cost reduction and innovation benefits • Increased Glass market share in wine and beer, commencing July 2014 and July 2015 respectively • Glass furnace rebuild (G1) – estimated cost $30M, out of operation for
Slide 20: Outlook
Outlook • We expect the Group to continue to deliver on the cost reduction initiatives in 2015 with earnings to be higher than that reported (on a pro forma basis) in 2014, 2014 subject to global economic conditions Orora Ltd 2014 20
Slide 21: Appendix slides
Appendix slides
Slide 22: Pro forma profit after tax for year ended 30 June 2014
Pro forma profit after tax for year ended 30 June 2014 A$ Million Pro Forma.FY131 Pro Forma.FY142 Sales 2,942.8. 3,176.1. EBITDA 245.6. 290.8. EBIT 148.2. 192.1. Interest expense (44.0) (41.3) Pro forma profit before tax 104.2. 150.8. Tax expense (32.1) (46.4) Net profit after tax (before SIs) 72.1.
Slide 23: Significant items
Significant items (A$ million) 2013 2014 P&L Cash P&L Cash Costs incurred on demerger ‐ . ‐. 19.2 . 13.5 . Asset impairments recognised on demerger ‐ . ‐. 209.8 . ‐. Australasia restructuring 171.7 . 55.6 . 22.4 . 57.4 . Gain arising on disposal of Fairfield property (57.3) . ‐. ‐ . ‐. Significant I
Slide 24: Regional Strength
Regional Strength Orora Ltd 2014 24
Slide 25: Orora Australasia
Orora Australasia Overview Sales & Earnings History • A portfolio of scale businesses with leading positions in their respective markets • Predominantly services the defensive food and beverage segments • 3,500 employees across 26 plants and 25 distribution centres • Focused on fibre (recycled paper
Slide 26: Orora North America
Orora North America Overview Sales & Earnings History • Orora North America is a large packaging distributor and manufacturer, headquartered in Buena Park, California • Comprises 10 manufacturing plants and 54 distribution sites and 2,000 employees across five countries • Orora North America has two