Verallia SAS · EURONEXT:VRLA
Verallia SAS — Verallia — Q1 2022 Earnings Presentation
27 slides from Verallia SAS's earnings presentation, Apr 21, 2022
Slide 1: Q1 2022 Results
5 4 i Q1'2022 RESULTS h) Co mie | pee as | Fs. | é al Le _ eT
Slide 2: Today's Agenda
TODAY’S AGENDA 1 INTRODUCTION 2 KEY HIGHLIGHTS 3 Q1 2022 FINANCIAL RESULTS 4 2022 GUIDANCE 2 21 April 2022
Slide 3: Introduction
1 INTRODUCTION Michel GIANNUZZI Chairman and CEO
Slide 4: A Global Leader in Glass Packaging
1 INTRODUCTION A GLOBAL LEADER IN GLASS PACKAGING DIVERSIFIED AND BALANCED END-MARKETS 2021 Glass packaging(1) sales split by end-market 1 10,000 11 employees countries 16 N° Food in Europe(2) billion 89% of 2021 sales 2 16% bottles/jars p.a. 36% Still wine 3 N° Soft drinks 11% decoration plants 13%
Slide 5: Key Highlights
2 KEY HIGHLIGHTS Michel GIANNUZZI Chairman and CEO
Slide 6: Net Zero: SBTi validated 46% reduction targets
2 KEY HIGHLIGHTS THE SBTI VALIDATED IN MARCH 2022 OUR 46% REDUCTION TARGETS FOR CO2 EMISSIONS “SCOPE 1 AND 2” BETWEEN 2019 AND 2030 Verallia commits to the most ambitious target of limiting global warming to +1.5°C compared to pre-industrial temperatures, in line with the recommendations of the Inte
Slide 7: Verallia develops and promotes glass re-use
2 KEY HIGHLIGHTS VERALLIA DEVELOPS AND PROMOTES GLASS RE-USE To improve the circularity of glass packaging, we must work on both Recycling and Re-use In 2022, Verallia became the first player to launch two initiatives dedicated to glass re-use: Re-Use Lab White paper 90 Verallia shared ideas and wor
Slide 8: Verallia co-innovates with its partners and customers
2 KEY HIGHLIGHTS VERALLIA CO-INNOVATES WITH ITS PARTNERS AND CUSTOMERS Development of new reusable jars • Existing pool for dairy products in use • “Mehrwelt” pool (Oetker Group) since decades for traditional dairy jars • Now starting nationwide • Now also used for other foodstuff • Newly developed
Slide 9: Verallia co-innovates with its partners and customers
2 KEY HIGHLIGHTS VERALLIA CO-INNOVATES WITH ITS PARTNERS AND CUSTOMERS Verallia supports Champagne Telmont in the launch of a new experiment! It is on the site of Verallia Oiry (France), the center of expertise for champagne bottles, that these bottles have been eco-designed At Verallia, eco-design
Slide 10: Humanitarian aid for Ukraine
2 KEY HIGHLIGHTS HUMANITARIAN AID FOR UKRAINE To support local teams, Verallia has set up various actions: 4 trucks of emergency medical aid chartered by Verallia Poland, which have already arrived or are on their way to Ukraine In solidarity to Equipment donation for Ukrainian firemen Ukraine, all
Slide 11: Key financial highlights for Q1 2022
2 KEY HIGHLIGHTS KEY FINANCIAL HIGHLIGHTS FOR Q1 2022 1 Revenue Q1 2022: +24.0% to €750 million and +23.9% organic growth(1) Adjusted EBITDA 2 – €183 million in Q1 2022 (+20.4% compared to Q1 2021) – Margin at 24.4% compared to 25.1% in Q1 2021 (-72 bps) 3 Net Debt Reduction in net debt ratio to 1.7
Slide 12: Q1 2022 Financial Results
3 Q1 2022 FINANCIAL RESULTS Nathalie DELBREUVE CFO
Slide 13: Very strong organic growth
3 Q1 2022 FINANCIAL RESULTS VERY STRONG ORGANIC GROWTH REPORTED REVENUE (IN €M) Volumes Reported Growth: +24.0% Organic Growth(1): +23.9% – Growing volumes by around +10% 750 – Very dynamic underlying market 0.5 Price / mix 87.4 – Sales prices up more than 10% over Q1’22 – Positive contribution
Slide 14: Increase in adjusted EBITDA and slight decrease in margin
3 Q1 2022 FINANCIAL RESULTS INCREASE IN ADJUSTED EBITDA AND SLIGHT DECREASE IN MARGIN ADJUSTED EBITDA (IN €M AND % OF SALES) Reported Growth: +20.4% Organic Growth(1): +20.4% Activity / Operating leverage – Positive volume impact around +10% – Positive impact of stock variation 24.4% Negative pr
Slide 15: Further deleveraging and net debt reduction
2 Q1 2022 FINANCIAL RESULTS FURTHER DELEVERAGING AND NET DEBT REDUCTION In € million 31/03/2022 31/12/2021 31/03/2021 Net Debt 1,221.8 1,268.4 1,296.6 LTM Adjusted EBITDA 709.1 678.1 626.1 Net Debt / LTM Adjusted EBITDA 1.7x 1.9x 2.1x 1.7x ratio of net debt over LTM adjusted EBITDA as of March 31,
Slide 16: Optimized financial structure
3 Q1 2022 FINANCIAL RESULTS OPTIMIZED FINANCIAL STRUCTURE NOMINAL AMOUNT OR In € million MATURITY NOMINAL RATE 31 March 2022 MAX. AMOUNT DRAWABLE Sustainability-Linked Bond – May 2021 (1) 500.0 May 2028 1.625% 504.3 Sustainability-Linked Bond – November 2021 (1) 500.0 November 2031 1.875% 495.4 Term
Slide 17: 2022 Guidance
4 2022 GUIDANCE Michel GIANNUZZI Chairman and CEO
Slide 18: 2022 Guidance
4 2022 GUIDANCE 2022 GUIDANCE It should be noted that the consequences of the conflict in Ukraine (direct and indirect) are changing rapidly, generating very high volatility which is likely to affect forecasts 1 Revenue 2 Adjusted EBITDA Sharp growth in annual revenue (>10%) Significant increase
Slide 19: Appendices
APPENDICES
Slide 20: Our purpose: Re-imagine glass for a sustainable future
APPENDICES OUR PURPOSE Re-imagine glass for a sustainable future ESG more than ever at the heart of Verallia's purpose and strategy 20 21 April 2022
Slide 21: Disciplined and dynamic risk hedging policy
APPENDICES DISCIPLINED AND DYNAMIC RISK HEDGING POLICY ENERGY CO2 EXCHANGE RATES Disciplined fuel, gas and electricity Disciplined carbon emission quotas Very limited transactional FX risk with hedging policy limiting energy cost hedging policy in Western Europe ca 2% of the Group’s receivable
Slide 22: Efficient and responsible purchasing strategy
APPENDICES EFFICIENT AND RESPONSIBLE PURCHASING STRATEGY – AS OF FY 2021 COGS & SG&A Raw Materials Raw Mat. excl. cullets €2.2bn* €414m €187m External cullet share exceeding total of other raw In % of 2021 COGS + SG&A material volume reflects increase in external cullet Soda Ash usage Production L
Slide 23: Simulation of inflation impact on EBITDA margin at zero spread
APPENDICES SIMULATION OF INFLATION IMPACT ON EBITDA MARGIN AT ZERO SPREAD Cost inflation (on cash production costs) As is 10% 12% 20% 25% 30% Sales 100 107.4 108.9 114.8 118.5 122.2 Cash costs -74 -81.4 -82.9 -88.8 -92.5 -96.2 EBITDA 26 26.0 26.0 26.0 26.0 26.0 Margin 26.0% 24.2% 23.9% 22.6% 21.9% 2
Slide 24: Reconciliation of operating profit to adjusted EBITDA
APPENDICES RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA In €m Q1 2022 Q1 2021 Operating profit 109.1 83.5 Depreciation, amortisation and impairment (i) 69.9 66.9 Restructuring costs 0.6 (0.3) Acquisition costs and M&A 0.1 0.0 IAS 29 Hyperinflation (Argentina) (ii) 0.0 (0.1) Management share
Slide 25: IAS 29: Hyperinflation in Argentina
APPENDICES IAS 29: HYPERINFLATION IN ARGENTINA • Since 2018, the Group has applied IAS 29 in Argentina. The adoption of IAS 29 requires the restatement of non‐monetary assets and liabilities and of the income statement to reflect changes in purchasing power in the local currency, leading to a gain o
Slide 26: Glossary
APPENDICES GLOSSARY • Activity category: corresponds to the sum of the volumes variations plus or minus changes in inventories variation. • Organic growth: corresponds to revenue growth at constant exchange rates and scope. Revenue growth at constant exchange rates is calculated by applying the aver
Slide 27: Disclaimer
DISCLAIMER Certain information included in this presentation are not historical facts but are forward-looking statements. These forward-looking statements are based on current beliefs, expectations and assumptions, including, without limitation, assumptions regarding Verallia's present and future bu