Verallia SAS · EURONEXT:VRLA
Verallia SAS — Verallia — FY2022 Earnings Presentation
36 slides from Verallia SAS's earnings presentation, Feb 16, 2023
Slide 1: FY 2022 results
FY 2022 results 16 February 2023
Slide 2: Summary
Summary 01 Introduction 02 Key 03 FY 2022 04 Guidance highlights financial results FY 2022 RESULTS 16.02.23 2
Slide 3: Introduction
INTRODUCTION Patrice LUCAS CEO FY 2022 RESULTS 16.02.23 3
Slide 4: A global leader in glass packaging
A global leader in glass packaging DIVERSIFIED AND BALANCED END-MARKETS 2022 Glass packaging(1) sales split by end-market countries 12 10,000 employees Food 16% 35% Still wine decoration 17 bottles/jars Soft drinks 11% plants 5 billion p.a. Beer 13% 12% 13% cullet glass 34 12 recycling Sparkling win
Slide 5: Key Highlights
KEY HIGHLIGHTS Patrice LUCAS CEO FY 2022 RESULTS 16.02.23 5
Slide 6: Growing European demand in a tight supply environment
Growing European demand in a tight supply environment EUROPEAN DOMESTIC CONTAINER GLASS SALES VOLUMES (Food & Beverages, mT)(1) Internal estimation +2% 24 2015-21 CAGR CAGR by 2025 +7.0% +2.9% 23 • Market demand is expected to grow by at least 22.9 +2.9% 2% per year by 2025, representing an addition
Slide 7: Update on key industrial projects
Update on key industrial projects CAPACITY INCREASE – +400 KT PER YEAR BY 20241 = IN LINE WITH PLANS + 2 ADDITIONAL FURNACES BY 2026 Campo Bom 2 – Brazil Pescia 2 – Italy 1 new furnace in Spain by 2025 1 new furnace in Italy by 2026 • Furnace design and technology • Furnace design and • Located in M
Slide 8: Successful start-up of Jacutinga furnace
Successful start-up of Jacutinga 2 furnace Product overview and investment rationale Best-in class implementation • Focus on Long runs beer and spirits productions – Increase in capacity for Emerald Green bottles Initial target Actual • 2 new lines will serve OW beer bottles market, fastest Capex €6
Slide 9: Upgrade in ESG ratings and performance
Upgrade in ESG ratings and performance • Validation of the CO 2 EMISSIONS Group’s CO2 emissions reduction • Part of the CAC SBT 1.5° Index = targets by 2030 climate-focused version of the CAC 40 • 2022 "Scope 1 and 2" CO2 emissions down -2.7% to 2,756 kt CO2 versus 2021 emissions of 2,833 kt CO2 (i.
Slide 10: New products launches in 2022: premium and innovative
New products launches in 2022: premium and innovative Cava Tradición for Codorniu Cuvee des Princes (Anna de Codorniu) Champagne de Venoge Barra gin • The lightest cava bottle in the • Reminiscent of the habits of • Barra Atlantic Gin for our market the European aristocracy of customer Isle of Barra
Slide 11: Acquisition of Allied Glass, now Verallia UK, closed in November
Acquisition of Allied Glass, now Verallia UK, closed in November AN INDUSTRY LEADING PREMIUM GLASS PLATFORM • 100% stake acquired Highly profitable Longstanding UK Diversified customer Strong management Clear sustainability for an EV of c. £315m platform with industry market presence base covering b
Slide 12: Verallia continues its profitable growth and delivers an outstanding performance in 2022
Verallia continues its profitable growth and delivers an outstanding performance in all areas in 2022 REVENUE ADJUSTED EBITDA NET INCOME NET DEBT EXTRA-FINANCIAL DIVIDEND & EPS(2) INDICATORS • +25.3% to €3.352Bn • €866m • Net Income: €356m • Leverage: 1.6x FY22’ • CO2 emissions: • Dividend per share
Slide 13: FY 2022 Financial Results
FY 2022 FINANCIAL RESULTS Nathalie DELBREUVE CFO FY 2022 RESULTS 16.02.23 13
Slide 14: 2022 Consolidated Revenue Variance Analysis
2022 Consolidated Revenue Variance Analysis REPORTED REVENUE (IN €M) • Organic growth: +26.5% in 2022 and +32.9% in Q4 • Limited volumes impact for the year due to temporary 47.4 3,352 reduced capacity in H2 (more furnace renovations than last 17.5 year) • Price / mix > In Europe, several selling pr
Slide 15: 2022 SWE Revenue Evolution
2022 SWE1 Revenue Evolution REPORTED REVENUE (IN €M) +22.1% 2,236 1,832 • Flat volumes despite 4 furnaces renovations in H2 • Strong growth in spirits 2021 2022 • Sparkling wine recovered strongly: REVENUE AT CONSTANT EXCHANGE RATES (2) (IN €M) > Dynamic champagne > Steady increase in Prosecco +21.9
Slide 16: 2022 NEE Revenue Evolution
2022 NEE1 Revenue Evolution REPORTED REVENUE (IN €M) +29.3% • Slight increase in volumes despite significant volumes drop in 695 538 Ukraine • Strong performance of still wines and spirits 2021 2022 • Growth in beers and food jars REVENUE AT CONSTANT EXCHANGE RATES (2) (IN €M) • Situation unchanged
Slide 17: 2022 LATAM Revenue Evolution
2022 LATAM1 Revenue Evolution REPORTED REVENUE (IN €M) +38.0% • Sales volumes increased thanks to brisk growth in the 420 beer, spirits and sparkling wines segments 304 • Significant increase in selling prices, especially in 2021 2022 Argentina to cope with local hyperinflation REVENUE AT CONSTANT E
Slide 18: 2022 Consolidated Adjusted EBITDA Variance Analysis
2022 Consolidated Adjusted EBITDA Variance Analysis ADJUSTED EBITDA (IN €M AND % OF SALES) +47bps FY 2022 FY 2021 26.7 3.4 866 Adjusted EBITDA margin 25.8% 25.4% 33.9 • Activity / Operating leverage > Flat volume throughout the year 135.7 > Positive impact of stock variation and valuation • Positive
Slide 19: 2022 SWE Adjusted EBITDA Evolution
2022 SWE Adjusted EBITDA Evolution ADJUSTED EBITDA (IN €M) +8bps +22.5% FY 2022 FY 2021 555 453 Adjusted EBITDA margin 24.8% 24.7% • Positive inflation spread compensating the sharp rise in costs 2021 2022 • Positive product mix ADJUSTED EBITDA AT CONSTANT EXCHANGE RATES (IN €M) • Good industrial pe
Slide 20: 2022 NEE Adjusted EBITDA Evolution
2022 NEE Adjusted EBITDA Evolution ADJUSTED EBITDA (IN €M) -71bps +25.1% FY 2022 FY 2021 147 Adjusted EBITDA margin 21.1% 21.8% 117 • Positive inflation spread on sales due to the sharp rise in costs 2021 2022 • Industrial performance in line with the cost reduction ADJUSTED EBITDA AT CONSTANT EXCHA
Slide 21: 2022 LATAM Adjusted EBITDA Evolution
2022 LATAM Adjusted EBITDA Evolution ADJUSTED EBITDA (IN €M) +365bps +52.1% FY 2022 FY 2021 165 Adjusted EBITDA margin 39.2% 35.6% 108 2021 2022 • Operating leverage linked to sales volume growth ADJUSTED EBITDA AT CONSTANT EXCHANGE RATES (IN €M) • Positive inflation spread throughout the year +82.3
Slide 22: 2022 Capex Evolution
2022 Capex Evolution TOTAL BOOKED CAPEX AS % OF SALES - In € million 10.9% • 2022 total booked capex in line with ~10% of sales objective 2.9% 97 9.6% • Recurring capex maintained at 8% of sales 38 1.4% 367 • Strategic capex up from 1.4% to 2.9% of sales, comprising: 256 270 > Building of the new Ja
Slide 23: 2022 Group Cash-flow Generation
2022 Group Cash-flow Generation In € million FY 2022 FY 2021 • Growth in adjusted EBITDA Adjusted EBITDA 865.5 678.1 • Increase of Total Capex mainly due to strategic Total Capex 367.0 256.3 investments and more furnace repairs Cash Conversion 57.6% 62.2% • Increase in operating working capital requ
Slide 24: 2022 Group Net Debt Evolution and Leverage
2022 Group Net Debt Evolution and Leverage In € million 31/12/2022 31/12/2021 • €123m of dividend payment in 2022 Net Debt 1,405.9 1,268.4 • Allied Glass acquisition for £315m (EV)(1) • Net debt at €1,406m including rights-of-use for €53.5m LTM Adjusted EBITDA 865.5 678.1 • Investment grade trajecto
Slide 25: 2022 Financial Structure and Liquidity
2022 Financial Structure and Liquidity In € million Nominal amount or Maturity Nominal rate 31 dec. 2022 max. Amount drawable Sustainability-Linked Bond – May 2021 (1) 500.0 May 2028 1.625% 502.7 Sustainability-Linked Bond – November 2021 (1) 500.0 November 2031 1.875% 493.7 Term Loan A (TLA)(1) 500
Slide 26: 2023 Guidance
2023 GUIDANCE Patrice LUCAS CEO FY 2022 RESULTS 16.02.23 26
Slide 27: 2023 Guidance
2023 Guidance Market expected to REVENUE remain supportive in ADJUSTED EBITDA 2023 revenue growth of Europe and in Latin Adjusted EBITDA more than 20% America of approximately €1Bn FY 2022 RESULTS 16.02.23 27
Slide 28: Q&A
Q& A FY 2022 RESULTS 16.02.23 28
Slide 29: Appendices
APPENDICES FY 2022 RESULTS 16.02.23 29
Slide 30: Circularity is core to our model
Circularity is core to our model SAVINGS* +10pts of cullet -5% of CO2 emissions -2.5% of energy consumption Source: Company. * Press release from the Fédération Européenne du Verre d’Emballage (FEVE), 12 April 2018. FY 2022 RESULTS 16.02.23 30
Slide 31: Capital Structure and Share Buy Back Program
Capital Structure and Share Buy Back Program SHAREHOLDING STRUCTURE AS OF 31 DECEMBER 2022 SHARE BUYBACK Brasil Warrant • As part of its capital allocation strategy and Administração de Bense Bpifrance Empresas S.A. (BWSA)(1) following the finalization of the acquisition Participations 28.0% of Alli
Slide 32: 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 33: Reconciliation of operating profit to adjusted EBITDA
Reconciliation of operating profit to adjusted EBITDA In €m 2022 2021 Operating profit 558.3 393.1 Depreciation and amortisation (i) 295.9 281.1 Restructuring costs (0.8) (2.7) IAS 29 Hyperinflation (Argentina) (ii) 4.3 (4.8) Management share ownership plan and associated costs 6.2 10.1 Company acqu
Slide 34: 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 35: 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 36: Thank you
Thank you