Verallia SAS · EURONEXT:VRLA
Verallia SAS — Verallia — H1 2019 Earnings Presentation
24 slides from Verallia SAS's earnings presentation, Jul 26, 2019
Slide 1: H1 2019 Results
H1 2019 Results July 26th, 2019
Slide 2: Agenda
H1 2019 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2019 Results 26/07/2019 2
Slide 3: H1 2019 financial highlights: strong performance
H1 2019 financial highlights: strong performance Revenue: – Reported revenue at €1,329m in H1 2019 – Robust growth in revenue, up 6.9% (up 9.6% at constant exchange rates*) vs. H1 2018 Adjusted EBITDA: – Up 13.5% at €313m (+16.6% at constant exchange rates*) vs. H1 2018 – Margin reached 23.5%, u
Slide 4: Opening of the Jacutinga plant
OPENING OF THE JACUTINGA PLANT Relocation of our Sao Paulo plant to Jacutinga, State of Minas Gerais Greenfield project (€77m) Productivity improvement and industrial output optimization State-of-the-art plant 20 months of construction work Jacutinga Porto Project on time, on cost Ferrei
Slide 5: A new version of "Virtual Glass" launched in Europe
A new version of “Virtual Glass” launched in Europe New digital tool aimed at facilitating Verallia’s customers new product development process At the forefront of virtual reality and 3D computing technologies Generating very quickly hyper-realistic renderings of unprecedented quality in terms
Slide 6: Agenda
H1 2019 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2019 Results 26/07/2019 6
Slide 7: Solid revenue growth supported by volume, mix and prices in all segments
Solid revenue growth supported by volume, mix and prices in all segments Still negative exchange rates impact Reported revenue (in €m) due to continued depreciation of the Argentine peso against the euro Reported growth: +6.9% Growth at cst FX*: +9.6% Significant volume improvement (33.8) 1,329
Slide 8: SWE: volumes well-oriented and strong momentum in wine
SWE*: volumes well-oriented and strong momentum in wine Reported revenue (no exchange rates impact - in €m) +7.2% 928 866 Volumes well-oriented General rise in prices, to compensate cost inflation especially on the energy Strong momentum in the still and sparkling wine markets, in which Verall
Slide 9: NEE: good growth country wide
NEE*: good growth country wide Reported revenue (in €m) +8.8% 275 252 Volume growth country wide H1 2018 H1 2019 Selling price increases implemented Revenue at constant exchange rates (in €m) as expected, to compensate cost +8.7% inflation especially on the energy 275 252 Negligible FX impact
Slide 10: Latin America: +28.4% growth offset by negative exchange rates impact
Latin America: +28.4%* growth offset by negative exchange rates impact Reported revenue (in €m) +1.2% 125 126 €34m negative exchange rate variations, mostly coming from Argentina Solid local market in Brazil H1 2018 H1 2019 Successful start-up of Jacutinga new plant (State of Minas Gerais, Bra
Slide 11: Significant adjusted EBITDA growth and margin expansion
Significant adjusted EBITDA growth and margin expansion Adjusted EBITDA (in €m) Adjusted EBITDA margin H1 2018 H1 2019 22.2% 23.5% + 137 bps +13.5% At constant exchange rates(***), adjusted EBITDA increased by 16.6%, driven by Robust revenue growth Positive price/cost spread (44) PAP on trac
Slide 12: Agenda
H1 2019 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2019 Results 26/07/2019 12
Slide 13: Lower capex than in H1 2018 due to a different phasing
Lower capex than in H1 2018 due to a different phasing Strategic investments (excluding M&A) Recurring capex Total Capex H1 2018 (€m) Total Capex H1 2019 (€m) 103.1 12.3 97.4 8.9 Recurring Capex 7.3% 90.8 6.7% in % of revenue: 88.5 H1 2018 H1 2019 H1 2019 total capex lower than last year mostly du
Slide 14: Improved operating cash flow and cash conversion
Improved operating cash flow and cash conversion In €m H1 2018 H1 2019 High operating cash flow thanks to Adjusted EBITDA 275.6 312.9 Strong EBITDA growth Total capex 103.1 97.4 Lower capex cash-out than in H1’18 Cash conversion 63% 69% Lower increase of the operating working capital Change
Slide 15: Verallia's net debt: €1,689.5 million at June 30, 2019
Verallia’s net debt: €1,689.5 million at June 30, 2019 Nominal amount or In €m maximum amount Nominal rate Final maturity June 30, 2019 drawable Term Loan B 1,125.0 Euribor +2.75% 29/10/2022 1,110.9 Term Loan C 550.0 Euribor +2.75% 01/08/2025 545.4 Revolving Credit Facility 325.0 Euribor +2.50% 29/1
Slide 16: Further deleveraging effort: from 3.4x to 2.9x
Further deleveraging effort: from 3.4x to 2.9x between H1 2018 and H1 2019 In € million 30/06/2018 30/06/2019 LTM Adjusted EBITDA 525.7 590.0 Net Debt 1,793.8 1,689.5 Net Debt / LTM Adjusted EBITDA 3.4x 2.9x 2.9x ratio of net debt over LTM adjusted EBITDA in June 30, 2019: – Net debt at €1,689.5 m
Slide 17: Agenda
H1 2019 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2019 Results 26/07/2019 17
Slide 18: Conclusion
Conclusion Strong first half illustrates our ability to deliver on our 3 main pillars: Growth bringing operating leverage Positive spread (price increase versus cost inflation) Productivity improvement thanks to the roll out of our Performance Action Plan (PAP) Contemplated Initial Public
Slide 19: Appendices
H1 2019 Results Appendices Verallia H1 2019 Results 26/07/2019 19
Slide 20: Glossary
GLOSSARY At constant exchange rates: Measures referred to as being calculated at constant exchange rates are intended to present the relevant information at constant exchange rates between the two comparable periods (applying the previous period’s exchange rates to the current period’s figures). F
Slide 21: Impact of IFRS 16 "Leases"
Impact of IFRS 16 “Leases” Verallia has applied IFRS 16 since January 1, 2019 using the simplified retrospective transition method. IFRS 16 (Leases) eliminates the distinction between operating and finance leases and requires the lessee to recognize an asset (the right to use the leased asset) and a
Slide 22: IAS 29: Hyperinflation in Argentina
IAS 29: Hyperinflation in Argentina Since the second half of 2018, the Group 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 gai
Slide 23: Adjusted EBITDA: Reconciliation to net income
Adjusted EBITDA: Reconciliation to net income In € million H1 2018 H1 2019 Net income 37.7 74.8 Finance costs – net 52.9 44.1 Income tax 21.8 42.8 Depreciation and amortization (i) 146.1 141.2 Restructuring costs 3.8 1.9 Acquisition and other transaction related costs 0.0 0.0 Fabe (Brazil) closure p
Slide 24: 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 present and future business stra