Verallia Sas · EURONEXT:VRLA
Verallia Sas — Verallia — FY2023 Earnings Presentation
37 slides from Verallia Sas's earnings presentation, Feb 15, 2024
Slide 1: FY 2023 results
FY 2023 results 15 February 2024
Slide 2: Summary
Summary 01 Introduction 02 Key 03 FY 2023 04 Guidance highlights financial results FY 2023 RESULTS 15.02.24 2
Slide 3: Introduction
INTRODUCTION Patrice LUCAS CEO FY 2023 RESULTS 15.02.24 3
Slide 4: A global leader in glass packaging
A global leader in glass packaging DIVERSIFIED AND BALANCED END-MARKETS 2023 Glass packaging(1) sales split by end-market(2) countries 12 10,000 employees Food 17% 31% Still wine decoration 16+ bottles/jars Soft drinks 11% plants 5 billion p.a. Beer 12% 12% 16% cullet glass 34 19 recycling Sparkling
Slide 5: Key highlights
KEY HIGHLIGHTS Patrice LUCAS CEO FY 2023 RESULTS 15.02.24 5
Slide 6: Major 2023 achievements – preparing for the future
Major 2023 achievements – preparing for the future ❑ Strong financial performance ✓ Highest-ever EBITDA, crossing the €1bn mark for the first time, x2 since 2017 ✓ Strong cash flow generation and continued deleveraging ❑ Inventory control thanks to faultless team commitment and agility ✓ Inventory r
Slide 7: Verallia continues to deliver a strong performance in a challenging market environment
Verallia continues to deliver a strong performance in a challenging market environment REVENUE ADJUSTED EBITDA NET INCOME & EPS(2) • +16.5% to €3.904bn • €1.108bn • Net Income: €475m • +21.4% organic growth(1) (+28.0% vs. 2022) (+33.7% vs. 2022) • Margin at 28.4% • EPS: €4.02 vs. 25.8% in 2022 (+256
Slide 8: Continuous progress in ESG ratings and performance
Continuous progress in ESG ratings and performance A- rating maintained in the “Climate B rating achieved in the Change” category "Water Security" category Effectiveness of measures to First participation of Veralllia address climate change 2023 MSCI (ESG) rating upgraded to A Constant progression o
Slide 9: CO2 emissions progressing towards our 2030 target
CO2 emissions progressing towards our 2030 target 2023 "Scope 1 and 2" CO2 emissions down -5.6% to 2,602 kt (-15.8% vs. 2019)(1) In line with our trajectory to reduce CO2 emissions by 46% in absolute terms by 2030 vs 2019 Verallia firmly positioned as the glass circularity leader 2023 Continued (Lat
Slide 10: Verallia continues to invest in cullet as a glass packaging circular economy leader
Verallia continues to invest in cullet as a glass packaging circular economy leader Key Actions 2023 external cullet usage • Latam: increase collection => • Latam: up to 36% from 32% in 1,000+ boxes installed (Brazil, 2022 External Chile) cullet • France and Germany: 15M€ • Western Europe: at 60.4%
Slide 11: Verallia at the forefront of technical innovation to support our 2030 CO2 reduction roadmap
Verallia at the forefront of technical innovation to support our 2030 CO2 reduction roadmap Electrical Furnace, Cognac Hybrid Furnace 2nd Hybrid Furnace Strategic partnership Location chosen: Location chosen: with FIVES Group Zaragoza, Spain Saint Romain-le-Puy Pilot on track (150t/d), start of Proj
Slide 12: Capacity increase plans fine tuned to reflect market conditions
Capacity increase plans fine tuned to reflect market conditions Additional Capacity confirmed Additional Capacity to be confirmed Commissioning delayed Technical studies in progress Campo Bom 2 • Brazil 1 new furnace in Spain • Furnace design and technology • Located in Montblanc finalized: oxy-comb
Slide 13: On track to deliver all targets of the 2022-24 mid-term plan
On track to deliver all targets of the 2022-24 mid-term plan Guidance On track? Target Realized Organic growth ✓ +4-6% CAGR 2021-23 CAGR: >20% Adjusted EBITDA margin ✓ 28-30% in 2024 2023: 28.4% Implied 2024 EBITDA €800-950m Cumulative FCF ✓ ca €900m over 3 yrs 2022-23: €729m EPS excl. PPA ✓ €3 in 2
Slide 14: FY 2023 Financial Results
FY 2023 FINANCIAL RESULTS Nathalie DELBREUVE CFO FY 2023 RESULTS 15.02.24 14
Slide 15: 2023 Consolidated Revenue Variance Analysis
2023 Consolidated Revenue Variance Analysis REPORTED REVENUE (IN €m) • Organic growth: +21.4% in 2023 and +18.1% in Q4 • Negative volume impact reflecting slower consumption and significant destocking down the chain in H2 3,904 369.2 • By product category 203.2 > Strongest decline in beer and to a l
Slide 16: 2023 SWE1 Revenue Evolution
2023 SWE1 Revenue Evolution REPORTED REVENUE (IN €M) +13.0% 2 527 2 236 • Lower year-on-year volumes across geographies, especially in H2 2022 2023 • Beer most affected end market as early as H1 REVENUE AT CONSTANT EXCHANGE RATES & SCOPE (2) (IN €M) • Spirits down in H2 among lower end demand (eg Co
Slide 17: 2023 NEE1 Revenue Evolution
2023 NEE1 Revenue Evolution REPORTED REVENUE (IN €M) +40.9% 979,8 • Volumes down despite recovery in Ukraine (reopening of 695,3 Zorya’s second furnace in early 2023) • Sharp decline in beer and still wine in Germany, only partly 2022 2023 offset by resilient sparkling volumes (Sekt) REVENUE AT CONS
Slide 18: 2023 LATAM1 Revenue Evolution
2023 LATAM1 Revenue Evolution REPORTED REVENUE (IN €M) -5.5% • Volumes increase in Brazil with the second Jacutinga 500 furnace rapid ramp-up (opened in December 2022) 419,8 396,8 0 • Lower activity in Chile and Argentina 2022 2023 REVENUE AT CONSTANT EXCHANGE RATES & SCOPE (2) (IN €M) • Significant
Slide 19: 2023 Consolidated Adjusted EBITDA Variance Analysis
2023 Consolidated Adjusted EBITDA Variance Analysis ADJUSTED EBITDA (IN €m) +256bps FY 2023 FY 2022 Adjusted EBITDA margin 28.4% 25.8% 52.5 1,108 89.3 41.6 • Activity / Operating leverage > Volumes down from 2022, especially in H2 > Capacity adjustments in H2 following inventory rebuild in H1 • Posi
Slide 20: 2023 SWE1 Adjusted EBITDA Evolution
2023 SWE1 Adjusted EBITDA Evolution ADJUSTED EBITDA (IN €M) +390bps +30.8% 2023 2022 725 Adjusted EBITDA margin 28.7% 24.8% 555 • Positive inflation spread compensating the sharp rise in costs 2022 2023 • Positive product mix ADJUSTED EBITDA AT CONSTANT FX & SCOPE (IN €M) • Good industrial performan
Slide 21: 2023 NEE1 Adjusted EBITDA Evolution
2023 NEE1 Adjusted EBITDA Evolution ADJUSTED EBITDA (IN €M) +386bps +66.7% 2023 2022 244 Adjusted EBITDA margin 24.9% 21.1% 147 • Positive inflation spread on sales across the region 2022 2023 • Recovery in Ukraine following the restart of Zorya’s ADJUSTED EBITDA AT CONSTANT FX & SCOPE (IN €M) secon
Slide 22: 2023 LATAM1 Adjusted EBITDA Evolution
2023 LATAM1 Adjusted EBITDA Evolution ADJUSTED EBITDA (IN €M) -430bps -15.9% 2023 2022 165 Adjusted EBITDA margin 34.9% 39.2% 139 • Decline in EBITDA entirely due to Argentina and the 2022 2023 FX impact from the peso devaluation (including latest one in December) ADJUSTED EBITDA AT CONSTANT FX AND
Slide 23: 2023 Capex Evolution: preparing for the future
2023 Capex Evolution: preparing for the future TOTAL BOOKED CAPEX AS % OF SALES - In € million 10.7% • 2023 total booked capex in line with ~10% of sales 10.9% objective 4.7% 97 184 2.9% • Recurring capex down vs 2022 reflecting lighter furnace 418 repair calendar 367 270 • Strategic capex up from 2
Slide 24: 2023 Group Cash-flow Generation
2023 Group Cash-flow Generation In € million FY 2023 FY 2022 • Strong growth in adjusted EBITDA Adjusted EBITDA 1,108.0 865.5 • Increase in cash conversion despite higher total Total Capex 418.0 367.0 capex linked to higher strategic investments (new Cash Conversion 62.3% 57.6% furnaces, CO2) Change
Slide 25: 2023 Group Net Debt Evolution and Leverage
2023 Group Net Debt Evolution and Leverage • €209m of cash returns to shareholders in 2023 In € million 31/12/2023 31/12/2022 (€167m dividend + €42m share buy-backs) Net Debt 1,364.5 1,405.9 • Net debt at €1,365m including €62m rights-of-use LTM Adjusted EBITDA 1,108.0 865.5 • Verallia corporate cre
Slide 26: 2023 Financial Structure and Liquidity
2023 Financial Structure and Liquidity In € million Nominal amount or Maturity Nominal rate 31 Dec. 2023 max. amount drawable Sustainability-Linked Bond – May 2021 (1) 500.0 May 2028 1.625% 503.2 Sustainability-Linked Bond – November 2021 (1) 500.0 November 2031 1.875% 494.6 April 2027 + 1 yr Term L
Slide 27: 2024 Guidance
2024 GUIDANCE Patrice LUCAS CEO FY 2023 RESULTS 15.02.24 27
Slide 28: Towards a normalization of the European Food & Beverage glass container market
Towards a normalization of the European Food & Beverage glass container market European domestic F&B glass container sales in mT (FEVE perimeter) 2020: 1H23: -1.5% -9.5% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2021-22: 2023: 2020: 2024: strong growth sharp drop steady n
Slide 29: 2024 guidance
2024 guidance Gradual rebound in activity Adjusted EBITDA Volumes up year-on-year around €1bn Sequential improvement through the year - 1H24 EBITDA below 1H23 - 2H24 EBITDA above 2H23 - 2H24 EBITDA above 1H24 FY 2023 RESULTS 15.02.24 29
Slide 30: 2023-24 adjusted EBITDA bridge dynamics
2023-24 adjusted EBITDA bridge dynamics ADJUSTED EBITDA: 2022-23 BRIDGE (€m) ADJUSTED EBITDA: 2023-24 BRIDGE (€m) 52.5 47.7 1,108 1,108 ? ca 1,000 392.8 866 REMINDER ILLUSTRATIVE 155.1 2022 Activity Spread price- Net Exchange 2023 2023 Activity Spread price- Net Exchange 2024 mix / cost Productivity
Slide 31: Q&A
Q&A FY 2023 RESULTS 15.02.24 31
Slide 32: Appendices
APPENDICES FY 2023 RESULTS 15.02.24 32
Slide 33: Disciplined and dynamic risk hedging policy
Disciplined and dynamic risk hedging policy ENERGY CO2 EXCHANGE RATES & INTEREST RATE • Disciplined fuel, gas and • Disciplined carbon emission • Very limited transactional FX risk electricity hedging policy quotas hedging policy in Western with ca 2% of the Group’s receivables limiting energy cost
Slide 34: Reconciliation of operating profit to adjusted EBITDA
Reconciliation of operating profit to adjusted EBITDA In €m 2023 2022 Operating profit 761.3 558.3 Depreciation and amortisation (i) 326.7 295.9 Restructuring costs 3.4 (0.8) IAS 29 Hyperinflation (Argentina) (ii) 5.8 4.3 Management share ownership plan and associated costs 6.2 6.2 Company acquisiti
Slide 35: Glossary
Glossary • Activity category: corresponds to the sum of the • Capex: Short for “capital expenditure”, this represents • Free Cash-Flow: defined as the Operating Cash volumes variations plus or minus changes in purchases of property, plant and equipment and Flow - Other operating impact - Interest pa
Slide 36: 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
Slide 37: Thank you
Thank you