Verallia SAS · EURONEXT:VRLA

Verallia SAS — Verallia — FY2021 Earnings Presentation

37 slides from Verallia SAS's earnings presentation, Feb 17, 2022

  1. Slide 1: FY 2021 Results

    17 February FY 2021 RESULTS 2022

  2. Slide 2: Today's Agenda

    TODAY’S AGENDA 1 INTRODUCTION 2 KEY HIGHLIGHTS 3 FY 2021 FINANCIAL RESULTS 4 CONCLUSION & 2022 OUTLOOK 2 17 February 2022

  3. Slide 3: Introduction

    1 INTRODUCTION Michel GIANNUZZI Chairman and CEO

  4. 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%

  5. Slide 5: Key Highlights

    2 KEY HIGHLIGHTS Michel GIANNUZZI Chairman and CEO

  6. Slide 6: Capital Structure & Governance Evolution

    2 KEY HIGHLIGHTS CAPITAL STRUCTURE & GOVERNANCE EVOLUTION SHAREHOLDING STRUCTURE AS OF FEBRUARY 2022 GOUVERNANCE EVOLUTION  Dissociation of the functions of Executive Chairman of Treasury Shares the Board of Directors and Chief Executive Officer, effective from the closing of the AGM on May 11, 202

  7. Slide 7: CSR Roadmap Update

    2 KEY HIGHLIGHTS OUR ACTION PLAN CSR ROADMAP UPDATE RELIES ON 3 MAIN LEVERS 2021 MAIN ACHIEVEMENTS OBJECTIVE LEVER 1 Our plants already use 55% of external cullet, Shift and we target 66% by raw material mix 2030 of by LEVER 2 We announced the construction of two 100% Reduce electric furnaces in Thi

  8. Slide 8: CO2 Emissions Reduction: New Furnace Technologies

    2 KEY HIGHLIGHTS CO2 EMISSIONS REDUCTION: VERALLIA DEVELOPS NEW FURNACES TECHNOLOGIES TO SUPPORT ITS AMBITION TO LIMIT GLOBAL WARMING ONLY TO 1.5°C ELECTRICAL FURNACE HYBRID FURNACE  First project announced in December 2021, in Cognac  Evolution of existing furnaces’ technology, aiming at a (Franc

  9. Slide 9: Update Latest Ratings and Partnerships

    2 KEY HIGHLIGHTS UPDATE LATEST RATINGS AND PARTNERSHIPS Verallia wins for the first time THE PLATINUM MEDAL and enters the Top 1% of the companies best evaluated by EcoVadis* out of a total of 65,000 companies Four categories are examined based on 2021 data and: 1/ Environment, Our rating: 2/ Labor

  10. Slide 10: Social Responsibility Roadmap

    2 KEY HIGHLIGHTS SOCIAL RESPONSABILITY ROADMAP Providing Verallia employees with a safe and inclusive place of work by implementing additional regulations in line with EHS(1) standards Continue and further promote our employee We will continue to support local shareholding -Group- communities by ded

  11. Slide 11: Another Successful Year in a Challenging Environment

    2 KEY HIGHLIGHTS ANOTHER SUCCESSFUL YEAR IN A CHALLENGING ENVIRONMENT Revenue 1 – FY 2021: +5.4% to €2,674 million and +6.8% organic growth(1) – Q4 2021: +12.4% to €652 million and +10.2% organic growth(1) Adjusted EBITDA 2 – €678 million in 2021 (+8.4% compared to 2020) – Margin at 25.4% compared t

  12. Slide 12: FY 2021 Financial Results

    3 FY 2021 FINANCIAL RESULTS Nathalie DELBREUVE CFO

  13. Slide 13: Strong Organic Growth and Volumes Back to 2019 Levels

    3 FY 2021 FINANCIAL RESULTS STRONG ORGANIC GROWTH AND VOLUMES BACK TO 2019 LEVELS REPORTED REVENUE (IN €M) Reported Growth: +5.4%  Organic growth: +6.8% in 2021 Organic Growth(1): +6.8% – of which +10.2% in Q4 2,674  Volumes (33.3) 103.8 – Growing volumes, back to 2019 levels (pre-Covid)  Price /

  14. Slide 14: SWE: Recovery in Most Categories

    3 FY 2021 FINANCIAL RESULTS SWE1: RECOVERY IN MOST CATEGORIES REPORTED REVENUE (IN €M)  Full benefit of new production capacities in H2  Growth in all product categories, except food jars +5.0% 1,832  Strong growth in still wine and spirits 1,744  Sparkling wine recovered strongly: – Record year

  15. Slide 15: NEE: Trends Improving in H2

    3 FY 2021 FINANCIAL RESULTS NEE1: TRENDS IMPROVING IN H2 WITH POSITIVE ORGANIC GROWTH REPORTED REVENUE (IN €M) -3.0%  Decrease in volumes concentrated in H1 due to 554 538 unfavorable comparable basis  Back to positive organic growth in H2 (+2.1%) 2020 2021  Nice recovery in sparkling wine and sp

  16. Slide 16: LATAM: Strong Continued Growth

    3 FY 2021 FINANCIAL RESULTS LATAM1: STRONG CONTINUED GROWTH DURING THE YEAR REPORTED REVENUE (IN €M) +28.3% 304  Contribution from 2020 additional capacities and 237 outstanding production performance  Revenue increases in all product categories, except 2020 2021 food jars REVENUE AT CONSTANT EXCH

  17. Slide 17: Sustained Adj. EBITDA Growth & Margin Improvement

    3 FY 2021 FINANCIAL RESULTS LEADING TO SUSTAINED ADJ. EBITDA GROWTH & MARGIN IMPROVEMENT ADJUSTED EBITDA (IN €M AND % OF SALES)  Activity / Operating leverage – Positive volume impact Reported Growth: +8.4% – Destocking lower than last year Organic Growth(1): +10.2% 25.4% – Inventory level @end of

  18. Slide 18: SWE: Margin Improvement Despite H2 Cost Inflation

    3 FY 2021 FINANCIAL RESULTS SWE1: MARGIN IMPROVEMENT DESPITE H2 COSTS INFLATION +70bps ADJUSTED EBITDA (NO EXCHANGE RATES IMPACT - IN €M) FY 2021 FY 2020 Adjusted EBITDA margin 24.7% 24.0%  Activity: positive operating leverage  Benefiting from strong demand and supported by 453 +8.0%  Two new fu

  19. Slide 19: NEE: Negative Inflation Spread Weighing on Profitability

    3 FY 2021 FINANCIAL RESULTS NEE1: NEGATIVE INFLATION SPREAD WEIGHTING ON PROFITABILITY ADJUSTED EBITDA (IN €M) -100bps FY 2021 FY 2020 Adjusted EBITDA margin 21.8% 22.8% 126 -7.4% 117  Activity: Recovery in H2 after a slight decline in volumes in H1 2020 2021  Negative inflation spread on sales du

  20. Slide 20: LATAM: Significant Margin Expansion

    3 FY 2021 FINANCIAL RESULTS LATAM1: SIGNIFICANT MARGIN EXPANSION ADJUSTED EBITDA (IN €M) +180bps FY 2021 FY 2020 Adjusted EBITDA margin 35.6% 33.8% +35.1% 108 80  Strong growth in sales volumes in a highly dynamic market 2020 2021  Positive inflation spread throughout the year ADJUSTED EBITDA AT C

  21. Slide 21: Smart Capex Policy Supporting Organic Growth and ESG Roadmap

    3 FY 2021 FINANCIAL RESULTS SMART CAPEX POLICY SUPPORTING ORGANIC GROWTH AND ESG ROADMAP Total booked capex 9.9% 9.6% as % of sales 256 251 47 38 203 218 2020 2021 Recurring Capex (€m) Strategic Capex (€m)  2021 total booked capex in line with ~10% of sales objective  Comprises the building of a n

  22. Slide 22: Very Strong Cash-Flow Generation

    3 FY 2021 FINANCIAL RESULTS VERY STRONG CASH-FLOW GENERATION  Growth in adjusted EBITDA In €m FY 2021 FY 2020  High level of cash conversion Adjusted EBITDA 678.1 625.7 Total Capex 256.3 250.5  Significant improvement in operating working capital requirement Cash Conversion 62.2% 60.0% – Stocks @

  23. Slide 23: Leverage < 2x After Dividends and €221M Share Buybacks

    3 FY 2021 FINANCIAL RESULTS LEVERAGE < 2X AFTER DIVIDENDS AND €221M OF SHARE BUYBACKS In € million 31/12/2021 31/12/2020 Net Debt 1,268.4 1,278.6 LTM Adjusted EBITDA 678.1 625.7 Net Debt / LTM Adjusted EBITDA 1.9x 2.0x  €114m of dividend payment and €221m of share buybacks in 2021  Net debt at €1,

  24. Slide 24: Diversification of Funding and Lengthening of Maturities

    3 FY 2021 FINANCIAL RESULTS DIVERSIFICATION OF FUNDING AND LENGHTENING OF MATURITIES NOMINAL AMOUNT OR In € million MATURITY NOMINAL RATE 31 Dec. 2021 MAX. AMOUNT DRAWABLE Sustainability-Linked Bond – May 2021 (1) 500.0 May 2028 1.625% 502.2 Sustainability-Linked Bond – November 2021 (1) 500.0 Novem

  25. Slide 25: Conclusion & 2022 Outlook

    4 CONCLUSION & 2022 OUTLOOK Michel GIANNUZZI Chairman and CEO

  26. Slide 26: Strong 2021 Performance

    4 CONCLUSION & 2022 OUTLOOK STRONG 2021 PERFORMANCE 1 Revenue – FY 2021: +5.4% to €2,674 million and +6.8% organic growth(1) Adjusted EBITDA 2 – €678 million in 2021 (+8.4% compared to 2020) – Margin at 25.4% compared to 24.7% in 2020 (+68 bps) Net Income & EPS(2) 3 – Net Income of €249 million in 2

  27. Slide 27: Unprecedented Inflation in Energy Costs

    4 CONCLUSION & 2022 OUTLOOK UNPRECEDENTED INFLATION IN ENERGY COSTS 27 17 February 2022

  28. Slide 28: 2022 Outlook

    4 CONCLUSION & 2022 OUTLOOK 2022 OUTLOOK Provided that the situation linked to the COVID‐19 pandemic does stabilize, that the inflation in costs and the geopolitical context do not deteriorate further 1 Revenue 2 Adjusted EBITDA 3 Adjusted margin EBITDA  Sharp growth in  Significant increase in 

  29. Slide 29: Appendices

    APPENDICES

  30. Slide 30: 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 30 17 February 2022

  31. Slide 31: 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

  32. Slide 32: Efficient and Responsible Purchasing Strategy

    APPENDICES EFFICIENT AND RESPONSIBLE PURCHASING STRATEGY 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 Labor 20% Raw Mat

  33. Slide 33: 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 1% 2% 5% 8% 10% 12% 20% 25% Sales 100 100.7 101.5 103.7 105.9 107.4 108.9 114.8 118.5 Cash costs -74 -74.7 -75.5 -77.7 -79.9 -81.4 -82.9 -88.8 -92.5 EBITDA 26 26.0 26.0 26.0 26.0

  34. Slide 34: Reconciliation of Operating Profit to Adjusted EBITDA

    APPENDICES RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA In €m FY 2021 FY 2020 Operating profit 393.1 316.4 Depreciation, amortisation and impairment (i) 281.1 276.4 Restructuring costs (ii) (2.7) 19.8 Acquisition costs and M&A 0.0 0.1 IAS 29 Hyperinflation (Argentina) (iii) (4.8) 2.9 Manage

  35. Slide 35: 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

  36. Slide 36: 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

  37. Slide 37: Disclaimer

    DISCLAIMER Certain information included in this presentation does not constitute historical data but constitutes forward-looking statements. These forward-looking statements are based on current beliefs, expectations and assumptions, including, without limitation, assumptions regarding present and f

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