Slide 1: Half Year Financial Results
HALF YEAR FINANCIAL RESULTS HALF YEAR ENDING 31 DECEMBER 2020 Presentation by Brian Lowe — Managing Director and CEO Shaun Hughes — CFO Orora Limited ABN 55 004 275 165 Authorised for release to the ASX by Orora’s Company Secretary, Ann Stubbings.
Slide 2: Important information
Important information Forward Looking Statements This presentation contains forward looking statements that involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to Orora. Forward look
Slide 3: 1H21 Highlights, Group Strategy & Sustainability
1H21 Highlights, Group Strategy & Sustainability Brian Lowe – Managing Director and CEO
Slide 4: 1H21 financial highlights
1H21 financial highlights EARNINGS BEFORE INTEREST SALES REVENUE AND TAX (EBIT) • Improved operating and $1,814.1M $140.0M financial performance across all businesses 1.2% decrease 5.2% increase • Strong EPS growth • Strong cash generation and + 3.1% constant currency + 7.5% constant currency balanc
Slide 5: 1H21 business & operating highlights
1H21 business & operating highlights Solid 1H21 operating result driven by focused and improved execution of strategy and achievement of strategic milestones, with all businesses reporting an increase in underlying EBIT compared to the prior corresponding period despite ongoing impacts of COVID-19.
Slide 6: Orora safety performance
Orora safety performance Update on our approach to improving safety Lost time injury Recordable case • Slight increase to the lost time injury frequency rates frequency rate frequency rate shows that there is more work to be done on safety (LTIFR)* (RCFR)^ improvement initiatives. Ongoing improvemen
Slide 7: Refreshed Executive Leadership Team
Refreshed Executive Leadership Team Brian Lowe Shaun Hughes Ann Stubbings Matt Wilson Managing Director Chief Financial Group General Group General & CEO Officer Counsel & Manager, Strategy Company Secretary • Commenced role in October 2019 • Joined in October 2020 • Commenced current role upon Oror
Slide 8: New strategic pillars were established during FY20 as part of refreshed strategy
New strategic pillars were established during FY20 as part of Orora’s refreshed corporate strategy Orora’s strategic pillars ENABLERS Safety 1 OPTIMISE AND GROW To be a leading Diverse talent sustainable packaging solutions company Customer ENHANCE AND focus 2 EXPAND Delivering on the Operating prom
Slide 9: Returns-focused, risk-weighted approach to investment and capital management
Orora applies a returns-focused, risk-weighted approach to investment and capital management decisions Shareholder value blueprint TSR COMPONENT ORGANIC GROWTH RETURNS-FOCUSED INVESTMENT CAPITAL MANAGEMENT STRATEGIC Enhance & Enter new Optimise & Grow Disciplined approach to capital allocation PILLA
Slide 10: 1H21 saw continued progress against the core strategies in each Orora business
1H21 saw continued progress against the core strategies in each Orora business Strengths Strategies Progress • Market leadership • Maintain, renew and win key contracts • Orora continues to actively assess future • Sustainable products • Continued focus on optimising manufacturing requirements to me
Slide 11: Business unit strategic priorities
Each business has a number of strategic priorities across each of the strategic pillars in the near-term Business unit strategic priorities Optimise & Grow Enhance & Expand Enter new segments • Increased utilisation/shifts to enhance • Anticipated new capacity online in FY23 • Expand current substra
Slide 12: A leading sustainable packaging solutions company
A leading sustainable packaging solutions company Glass successfully commenced transporting cullet from WA Progress towards the new five year Orora Eco Targets CDS scheme increasing recycled content (from ~25% to 40% in is tracking well time). Cullet sourced from SA and NSW CDS schemes continued Cul
Slide 13: Orora Packaging Solutions – Strategic Direction
Orora Packaging Solutions – Strategic Direction Brian Lowe – Managing Director and CEO
Slide 14: OPS is well positioned in a growing and diverse customer market
OPS is well positioned in a growing and diverse customer market • OPS is an integrated packaging solutions provider in the c.US$35Bn US packaging distribution market, providing a range of essential products to a broad set of customers across a diverse and defensive group of end-markets • B2B distrib
Slide 15: OPS capabilities
OPS is an integrated packaging solutions provider delivering essential products and services to diverse and defensive end-markets OPS business overview Manufacturing Distribution Engineering & Design Fulfillment • Corrugated packaging • Customer consultation and • Graphic and structural • Assembly a
Slide 16: OPS is entering the second phase of the strategic journey
OPS is entering the second phase of the strategic journey as Orora positions the business for sustainable growth With a stabilised core, solid execution and positive momentum, OPS is well positioned MEDIUM-TERM NEAR-TERM Expand TODAY Enhance • Pursue fill-outs in geographic Optimise capabilities • E
Slide 17: Financial Results
Financial Results Shaun Hughes – CFO
Slide 18: 1H21 Group financial summary – Underlying and Statutory Results
1H21 Group financial summary – Underlying and Statutory Results A$M – Underlying 1H21 1H20 Var$ Var% Revenue • Reported Group revenue declined by 1.2% on the pcp, driven Revenue 1,814.1 1,835.2 (21.1) (1.2%) by an A$ 3.5% reduction in North American revenue, partially EBITDA 199.4 194.8 4.6 2.4% off
Slide 19: 1H21 Australasian financial highlights
1H21 Australasian financial highlights • Sales were up 7.0%. After taking into account the pass through of lower SALES REVENUE UNDERLYING EBIT aluminium prices, underlying sales increased 9.0% compared to the pcp. $441.2M $86.1M • EBIT growth was predominately driven by strong volume growth in Cans
Slide 20: Australasia EBIT bridge
Australasia EBIT bridge 4.2% EBIT increase 2.3 5.8 86.1 82.6 (A$’M) 1H20 Organic Growth Cost Headwinds 1H21 Orora Ltd “ Organic growth was partially offset by cost headwinds associated with energy and insurance ” 20
Slide 21: 1H21 North American financial highlights
1H21 North American financial highlights North American Group • North America improved its operating and financial performance in 1H21, with USD SALES REVENUE USD EBIT local currency revenue and EBIT up 2.0% and 12.7% respectively. $993.1M $39.0M • Higher local currency earnings were achieved despit
Slide 22: North American EBIT bridge
North American EBIT bridge 6.7% EBIT growth 12.7% constant currency EBIT growth 0.8 3.0 7.2 53.9 50.5 (A$’M) 1H20 Organic Growth Cost Headwinds FX 1H21 Local currency earnings higher by ~13% with both businesses ahead of the pcp Orora Ltd 22
Slide 23: Strong operating cash flow - a foundation of Orora
Strong operating cash flow - a foundation of Orora A$ Million 1H21 1H20 Operating cash flow(1) increased 13.8% to $144.8M • Increase in cash EBITDA broadly in line with lease adjusted earnings. EBITDA 199.4 194.8 • Lease repayments and non-cash items broadly in line with pcp. Lease repayments (30.5)
Slide 24: Balance sheet and debt – Orora Group
Balance sheet and debt – Orora Group Strong balance sheet provides operating and strategic flexibility A$ Million Dec 20 June 20 • Balance sheet remains strong and provides a solid foundation for the next phase Funds Employed (period end) 1,304 1,403 of Orora’s enhance, expand and grow strategy. Net
Slide 25: Interim Dividend
Interim Dividend • Interim dividend of 6.5 cents per share (unfranked). • Interim dividend is in-line with 1H20. • Key dates for interim dividend: 6.50cps • Ex-dividend date: 3 March 2021 Interim dividend • Record date: 4 March 2021 • Payment date: 1 April 2021 • Interim dividend represents a payout
Slide 26: FY21 Perspectives & Outlook
FY21 Perspectives & Outlook Brian Lowe – Managing Director and CEO Orora Limited ABN 55 004 275 165
Slide 27: Perspectives for FY21
Perspectives for FY21 Australasia North America Cashflow & Capex • Continue to identify and implement cost • The new Management teams are focussed on • Group cash conversion of >70% in FY21. reduction initiatives, reinvest in asset upgrades continuing to build momentum from the • Phasing of Australa
Slide 28: FY21 Outlook
FY21 Outlook • Orora delivered a solid operating performance in the first half of FY21, with improved operating momentum and financial performance across all business units. Correspondingly, at a Group level Orora is forecasting higher earnings in FY21 compared to the prior year. • In Australasia, O
Slide 29: Appendix 1H21
APPENDIX 1H21
Slide 30: Appendix 1: core focus areas during COVID-19
Appendix 1: 3 core focus areas during COVID-19 Health, Safety Customers and Active Financial 1 & Wellbeing 2 Supply Chain 3 Management • Response continues to be guided by formal • Strong emphasis on clear customer and • Orora has worked tirelessly to mitigate government and health authority advice