Orora Limited · ASX:ORA
Orora — Investor Presentation (September 2023)
60 slides from Orora's investor presentation, Sep 5, 2023
Slide 1: Acquisition of Saverglass and Equity Raising
Acquisition of Saverglass and Equity Raising 5 September 2023 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer Important notice and disclaimer This presentation (Presentation) has been prepared by Orora Limited (ABN 55 004 275 165) (Orora) in relation to its proposed acquisition of Saverglass SAS (the Target) as set out in further detail in this Presentation (the Acquisition) and a capital raising
Slide 3: Disclaimer (continued)
Disclaimer (continued) Not investment advice This Presentation does not constitute investment or financial product advice (nor tax, accounting or legal advice) or any recommendation by Orora or its advisers to subscribe for or acquire New Shares and does not and will not form any part of any contrac
Slide 4: Disclaimer (continued)
Disclaimer (continued) Financial data All financial information in this Presentation is in Australian Dollars ($ or AUD) unless otherwise stated. This Presentation includes certain historical financial information extracted from Orora’s audited consolidated financial statements for the full year end
Slide 5: Disclaimer (continued)
Disclaimer (continued) Disclaimer This Offer is fully underwritten by the Joint Lead Managers. A summary of the key terms of the underwriting agreement between Orora and the Joint Lead Managers is provided on pages 55 to 56 of this Presentation. None of the Joint Lead Managers, nor their respective
Slide 6: Contents
Contents 01 1 Insert dividersummary Transaction title 3 7 A 2 Insert divider Overview of Saverglass title 7 10 3 Strategic rationale and investment highlights 18 4 Equity raising 31 A Supporting materials 36 B Key risks 39 C Offer restrictions 48 D Underwriting Agreement 54 E Glossary 57
Slide 7: Transaction summary
1 Transaction summary 1
Slide 8: Transaction summary
Transaction summary • Orora Ltd (ASX:ORA) (“Orora”) has entered into arrangements to acquire 100% of Saverglass SAS (“Saverglass”) through the acquisition of all of the shares of Olympe SAS(1) for an enterprise value of €1,290m (A$2,156m)(2) (the “Acquisition”) Transaction • The Acquisition represen
Slide 9: Transaction summary (continued)
Transaction summary (continued) • Attractive value creation for existing shareholders of Orora: ‒ Acquisition is expected to be mid-single digit earnings per share (EPS) accretive (including full run-rate synergies)(1) in the first full financial year of ownership ‒ Return on investment expected to
Slide 10: Overview of Saverglass
2 Overview of Saverglass 2
Slide 11: Introduction to Saverglass
Introduction to Saverglass Saverglass is a global leader in the design, manufacturing, customisation and decoration of high-end glass bottles for the premium and ultra-premium spirit and wine markets Sales by end-market Sales by geography Key investment highlights (CY22A, Glass)(1) (CY22A, Glass)(1)
Slide 12: Integral to customer brand proposition
Integral to customer brand proposition Recognised as the preferred partner for established and emerging brands in premium spirits and wine, with their success intrinsically linked to Saverglass' unique designs Early-stage engagement Collaborative partnership Customer longevity Partnering with custom
Slide 13: Leading end-to-end design capabilities
Leading end-to-end design capabilities Saverglass is core to the creation of its customers’ brands – creating exclusive, personalised, high-quality products that stand out in a highly competitive market Enamel and precious Acid-etching Organic screen-printing Embossing decoration Hot stamping Coatin
Slide 14: Integrated global network
Integrated global network Saverglass has created a network of strategically located manufacturing operations in close proximity to key production regions and customers, able to service their needs worldwide Saverglass sells products to customers in 100+ countries… Global production network across th
Slide 15: Well-invested, optimised industrial footprint
Well-invested, optimised industrial footprint Over the past 20 years, Saverglass has scaled its business globally with significant investment in state-of-the-art facilities 1969 1999 2008 2013 2014 2018 2019 2023 Creation of Acquisition of Brownfield International Dedicated to North America Expanded
Slide 16: Roadmap to a sustainable future
Roadmap to a sustainable future Saverglass has demonstrated a continued commitment to sustainable development and is delivering on its decarbonisation strategy TARGETS Carbon neutral by 2050 50% decrease 70% cullet rate in coloured glass in 2025 – cullet replaces raw Saverglass has a goal of becomin
Slide 17: Historically consistent long-term financial performance
Historically consistent long-term financial performance Saverglass has leveraged its strong market position and global footprint to grow into a resilient and profitable operator at scale, with sustained margin performance Sales volume (kt)(1) Revenue(3) +16% CY19-LTM23 CAGR(2) +6% €739m CY08-CY22 CA
Slide 18: Strategic rationale and investment highlights
3 Strategic rationale and 3 investment highlights
Slide 19: Strong strategic alignment
Strong strategic alignment Acquisition of Saverglass enhances Orora’s strategic advantage and presents compelling growth opportunities Vertically integrated provider of custom packaging solutions Leading designer and manufacturer of multi-substrate beverage packaging Orora North America Orora Austra
Slide 20: Orora is the logical partner for Saverglass
Orora is the logical partner for Saverglass Orora and Saverglass to mutually benefit from their highly complementary operations across product capabilities, geographic footprint and customer / distribution networks. Orora is particularly well-positioned to assist with the acceleration of Saverglass'
Slide 21: Investment highlights
Investment highlights Unique acquisition of a market leader and a logical and compelling extension of Orora’s growth strategy as a global, sustainable value-added packaging solutions player Unique acquisition of a global market leader, extending and enhancing Orora’s core competencies in premium 1 s
Slide 22: Unique acquisition of a global market leader
1 Unique acquisition of a global market leader Saverglass specialises in providing innovative design solutions to market leading and emerging players in the premium and ultra-premium spirit and wine sectors, significantly enhancing Orora’s existing glass capabilities Saverglass specialises in premiu
Slide 23: Favourable growth trends in premium spirits and wine
2 Favourable growth trends in premium spirits and wine Saverglass' core markets continue to exhibit strong accelerated growth, enhancing Orora’s embedded organic growth outlook Premium spirits and wine categories expected to continue to exhibit accelerated growth… (Global volume growth, Forecast 202
Slide 24: Positioned to capture growth in diversified end-markets
2 Positioned to capture growth in diversified end-markets Saverglass has a successful history of strategically building capacity to service emerging high-growth markets. North America represents a key under-penetrated market with significant momentum in Premium+ spirits expected to continue Strategi
Slide 25: Tangible benefits from a unique global footprint
3 Tangible benefits from a unique global footprint Orora and Saverglass' complementary footprint creates a global glass player, with tangible benefits and value creation opportunities across both businesses Unique global glass footprint at scale(1)… …optimising performance of the Combined Group Oper
Slide 26: Unlocks significant value creation opportunities
3 Unlocks significant value creation opportunities Orora’s existing distribution network and customer relationships provide Saverglass with a platform to accelerate growth prospects in the North American wine and spirits market Underpenetrated market with increased momentum Combined North American f
Slide 27: Global, diversified packaging solutions player
4 Global, diversified packaging solutions player Orora will benefit from significant diversification by geography, substrate and end-markets Orora (30 June 2023) Orora (post-Acquisition) FY23A Underlying EBIT A$321m Pro forma FY23 Underlying EBIT A$487m(1) Product Corrugated / Dist’n 34% 48% 52% Bev
Slide 28: Highly capable management team
5 Highly capable management team Saverglass will become the centrepiece of Orora’s global glass business unit Leader of Orora’s global • Management team have been with Saverglass on average for 15+ years(1) glass business Expertise and longevity • Supported by strong depth of talent, with significan
Slide 29: Saverglass enhances Orora's business
6 Saverglass enhances Orora’s business Saverglass has historically demonstrated sustained, strong performance across key financial metrics, with future growth from the second Mexico furnace commissioned in January 2023 and strong underlying tailwinds in demand Pro forma FY23 Underlying EBIT FY20 - F
Slide 30: Robust financial position
6 Robust financial position FY23 pro forma financial profile Combined Combined Enhanced scale Saverglass Group Estimated run- Group Orora A$m (Underlying, FY23) (Adjusted, LTM (pro forma, pre rate synergies (pro forma, post •1 >$5.5bn pro forma revenue in FY23 June 2023)(1) run-rate run-rate synergi
Slide 31: Equity raising
4 Equity raising 4
Slide 32: Details of the Equity Raising
Details of the Equity Raising • Fully underwritten Equity Raising of approximately $1,345 million comprising: − $450 million institutional placement (“Placement”); and Offer structure and size − $895 million 1-for-2.55 accelerated non-renounceable pro rata entitlement offer (“Entitlement Offer”) • A
Slide 33: Sources and uses of funds
Sources and uses of funds Transaction funding structure Sources and uses of funds(1) • A$875m drawdown of new debt facilities, in the form of Uses €m A$m new A$1,050m committed debt facilities − Orora has entered into a bilateral bridge facility which, Consideration(2) 1,290 2,156 subject to satisfy
Slide 34: Pro forma balance sheet
Pro forma balance sheet Jun-23 pro forma balance sheet Pro forma post A$m Orora Equity Raising(3) Debt Funding(5) Saverglass Acquisition • Pro forma balance sheet illustrates (30 June 2023) (30 June 2023)(1) (30 June 2023)(1) the impact of the Acquisition and Cash 58 1,321 866 (2,187)(4) 58 Equity R
Slide 35: Timing
Timing Event Date Announcement of Offer, Institutional Entitlement Offer and Placement opens Tuesday, 5 September 2023 Institutional Entitlement Offer and Placement closes Wednesday, 6 September 2023 Announcement of results of Institutional Entitlement Offer and Placement Wednesday, 6 September 2023
Slide 36: Supporting materials
A APPENDIX Supporting materials
Slide 37: Detailed zoom-in of Saverglass' assets
Detailed zoom-in of Saverglass' assets Saverglass has a well-maintained portfolio of facilities and furnaces that are located near its key customers, with a combined book value of ~A$845m(1) Arques Le Havre Feuquières Ghlin Ras al Khaimah Acatlán Location France France France Belgium UAE Mexico Esta
Slide 38: Extensive and long client relationships – Case Studies
Extensive and long client relationships – Case Studies Beyond innovation and execution, client specific designs are proprietary, further enhancing client stickiness ● Establishing the presence of Grey Goose in ● Execution of Rhum Clément’s annual limited Challenge Challenge the new sector of luxury
Slide 39: Key risks
B APPENDIX Key risks
Slide 40: Key risks – Acquisition
Key risks – Acquisition Acquisition may not complete or be delayed Completion of the Acquisition is conditional on certain matters taking place, some of which are beyond Orora’s direct control. In particular, while the parties have entered into a Put Option Agreement in connection with the Acquisiti
Slide 41: Key risks – Acquisition (continued)
Key risks – Acquisition (continued) Integration The integration of a business of the size and nature of Saverglass carries risk, including potential delays or costs in implementing necessary changes and difficulties in integrating various operations. The success of the Acquisition, and the ability t
Slide 42: Key risks – Orora and its business
Key risks – Orora and its business While the risks set out in this section are stated to relate to Orora and its business, investors should consider that some or all of these risks will also apply to Saverglass and its business, which Orora will own following completion of the Acquisition Changes in
Slide 43: Key risks – Orora and its business (continued)
Key risks – Orora and its business (continued) While the risks set out in this section are stated to relate to Orora and its business, investors should consider that some or all of these risks will also apply to Saverglass and its business, which Orora will own following completion of the Acquisitio
Slide 44: Key risks – Orora and its business (continued)
Key risks – Orora and its business (continued) While the risks set out in this section are stated to relate to Orora and its business, investors should consider that some or all of these risks will also apply to Saverglass and its business, which Orora will own following completion of the Acquisitio
Slide 45: Key risks – Orora and its business (continued)
Key risks – Orora and its business (continued) While the risks set out in this section are stated to relate to Orora and its business, investors should consider that some or all of these risks will also apply to Saverglass and its business, which Orora will own following completion of the Acquisitio
Slide 46: Key risks – General investment risks
Key risks – General investment risks Risks associated with an investment in There are general risks associated with investments in equity capital such as Orora shares. The trading price of Orora shares may fluctuate with movements in equity capital markets in shares Australia and internationally. Th
Slide 47: Key risks – General investment risks (continued)
Key risks – General investment risks (continued) Accounting standards may change The Australian Accounting Standards to which Orora adheres are set by the Australian Accounting Standards Board (AASB) and are outside the control of Orora and the directors. Any changes to accounting standards issued b
Slide 48: Offer restrictions
C APPENDIX Offer restrictions
Slide 49: International Offer restrictions
International Offer restrictions This document does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to th
Slide 50: International Offer restrictions (continued)
International Offer restrictions (continued) Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than: a) in the case of any action for rescission, 180 days after the date of the transaction that gave rise to the cause of action; or b)
Slide 51: International Offer restrictions (continued)
International Offer restrictions (continued) Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission
Slide 52: International Offer restrictions (continued)
International Offer restrictions (continued) Japan The New Shares have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948), as amended (the "FIEA") pursuant to an exemption from the registration requirements app
Slide 53: International Offer restrictions (continued)
International Offer restrictions (continued) United Arab Emirates Neither this document nor the New Shares have been approved or passed on in any way by the Emirates Securities and Commodities Authority ("ESCA") or any other governmental authority in the United Arab Emirates. Orora has not received
Slide 54: Underwriting Agreement
D APPENDIX Underwriting Agreement
Slide 55: Underwriting Agreement summary
Underwriting Agreement summary Orora has entered into an underwriting agreement with the Joint Lead Managers in respect of the management and underwriting of the Offer (Underwriting Agreement). The Underwriting Agreement contains representations, warranties and indemnities in favour of the Joint Lea
Slide 56: Underwriting Agreement summary (continued)
Underwriting Agreement summary (continued) o) * Orora contravenes any provision of the Corporations Act, the Constitution, ASX Listing Rules or any other applicable law or any Offer Materials or any aspect of the Offer does not comply with the Corporations Act or the ASX Listing Rules (or waivers fr
Slide 57: Glossary
E APPENDIX Glossary
Slide 58: Glossary
Glossary Term Definition Term Definition A$ Australian dollar CEO Chief Executive Officer AAS Australian Accounting Standards CO2 Carbon dioxide AASB Australian Accounting Standards Board Combined Group Represents Orora and Saverglass post Completion Acquisition Refers to Orora’s proposed acquisitio
Slide 59: Glossary (continued)
Glossary (continued) Term Definition Term Definition EPS Earnings per share NPAT Net profit after tax ESG Environmental, social, and corporate governance Offer Capital raising by Orora, comprising Placement and Entitlement Offer FY Financial year (June year end) Statement contained in the materials
Slide 60: Glossary (continued)
Glossary (continued) Term Definition RAK Ras Al Khaimah, city in the United Arab Emirates Retail Entitlement Retail component of the Entitlement Offer Offer ROU Right of use SBTi Science Based Targets initiative Target Saverglass SAS (“Saverglass”) TERP Theoretical ex-rights price UAE United Arab Em