Slide 1: Orora Pro Forma Half Year Results
ORORA PRO FORMA HALF YEAR RESULTS YEAR ENDED 31 DECEMBER 2013 Nigel Garrard – Managing Director and CEO Stuart Hutton – Chief Financial Officer 18 February 2014
Slide 2: Disclaimer
Disclaimer This presentation should be read in conjunction with the Demerger Booklet that was released to ASX on 1 November 2013 and which can be found on the Orora website (www.ororagroup.com). The information contained in this presentation is for informational purposes only. The information contai
Slide 3: Orora Business Highlights
Orora Business Highlights Solid first half result, in line with expectations • Strong earnings growth Underlying Pro forma Earnings Summary (EBIT) • “Self help” cost reduction program on track A$ Million 1H13 . 1H14 . ∆% • Interim ordinary dividend of 3.0 cents per share unfranked (represents payout
Slide 4: Orora Safety Performance
Orora safety performance Long-term safety performance improvement 13.4 • 37% improvement in RCFR in last 5 years 11.4 • 27% improvement in LTIFR in last 5 years 8.5 8.4 • Not pleased with past 12-24 months – safety is a long 8.0 term journey 5.9 World-class, employee-led program in Australasian Cart
Slide 5: Pro Forma Half Year Results
Pro forma Half year results Firm sales and earnings growth A$ million 1H13 1H14 ∆% • Higher volumes in glass and distribution businesses. Volumes Sales 1,491.0 1,609.8 8.0% were generally steady in remaining businesses apart from softness in the carbonated beverages segment EBITDA 142.5 158.6 11.3 •
Slide 6: Orora Australasia
Orora Australasia Operating results in line with expectations • Improved volumes in glass offset by reduction in beverage cans Underlying Pro forma Earnings Summary (EBIT) • Volumes in general steady A$ Million 1H13 1H14 ∆% • Increased earnings in Fibre and Beverage divisions • Ongoing focus on cost
Slide 7: Australasia EBIT Growth
Australasia EBIT growth 20.9% Earnings 80 Growth 16.3 69.4 70 (2.7) 62.9 (1.6) 60 57.4 (5.5) 50 40 30 20 10 0 1H13 One - Off 1H13 "Self Help" Rent^ Other 1H14 Actual Reported Items* Underlying Cost Reduction Programs On track execution of “self help” cost reduction initiatives driving earnings Given
Slide 8: Realisation of Targeted Cost Benefits Continues
Realisation of targeted cost benefits continues as a key priority Total targeted cost Cost reduction Cost reduction Remaining targeted cost A$ Million reduction benefit achieved in FY13 achieved in H1FY14 reduction benefits Recycled Paper Mill 50.0 - - 50.0 Portfolio exits/plant closures 18.0 8.0 8.
Slide 9: Orora North America
Orora North America Strong sales growth Underlying Pro forma Earnings Summary (EBIT) • Higher organic sales and new business won in the A$ Million 1H13 1H14 ∆% Landsberg distribution division - gained market share in most regions Sales Revenue 486.7 626.4 28.7 • Manufacturing division increased sale
Slide 10: North America EBIT Growth
North America EBIT growth EBIT growth 32.2% (17.4% excluding FX impact) 30 3.1 27.9 3.7 25 21.1 20 EBIT (A$M) 15 10 5 0 Actual 1H13 Vol/Mix FX Actual 1H14 Strong organic growth, new business won & market share gain driving earnings Favourable FX benefit Orora Ltd 2014 10
Slide 11: Strong Underlying Operating Cash Flow
Strong underlying operating cash flow A$ Million • Stable earnings streams from defensive end markets Pro Forma... Pro Forma. 1H13... 1H14. • Average working capital to sales ratio improved to 10.8% EBITDA 142.5.... 158.6. • Well managed in the Half and remains a key focus Non Cash Items (45.3)(1) (
Slide 12: Working Capital Performance
Working capital performance Average Working Capital to Sales(1) (%) 12.4 11.6 11.2 10.8 10.2 9.7 Dec-2009 Dec-2010 Dec-2011 Dec-2012 Dec-2013 Dec-2014 Improvement in working capital to sales Strong inventory management Footprint rationalisation benefits (1) Average net working capital for the period
Slide 13: Balance Sheet and Debt
Balance sheet and Debt Pro Forma Actual Robust balance sheet A$ Million June 13 Dec 13 • Leverage reduced to within Management target range of Funds Employed (period end) 1,978 2,092 <2.5x Net Debt 696 694 • Pro forma gearing is 33% • Significant headroom in covenants and capacity Equity 1,282 1,398
Slide 14: Returns Focused Capital Management
Returns focused capital management • Increasing earnings driving strengthening of balance sheet Total Debt Facility $1,100 million. • Pro forma leverage at Dec 13 – 2.4x EBITDA Net debt at 1H14 $694 million . Cash on hand at 1H14 $68 million . • Focus on sensible debt levels Drawn Debt at 1H14 $762m
Slide 15: Continued Commitment to a Proven Strategy
Continued commitment to a proven strategy Significant Returns Well invested Strong operating Focused portfolio “self help” earnings focused capital businesses cash flow opportunity management •Multi-year transformation • Investment for growth & • B9 benefits • Stable earnings streams • Sustainable d
Slide 16: Outlook
Outlook • Continue to deliver on the cost improvement initiatives in 2014 with pro forma operating earnings (measured as EBIT) to be higher than that reported in 2013, subject to global economic conditions • On track to deliver $30 - $40M of total cost reduction benefit in 2013/14 Orora Ltd 2014 16
Slide 17: Orora is Set Up for Success
Orora is set up for success • Strong, well-positioned core business • Continue to invest in core operations • Stable, defensive earnings streams • Near term earnings growth within Orora’s direct control • On track to deliver $30–40M of total cost benefit in FY14 • $16M of cost benefits delivered in
Slide 18: Appendix Slides
Appendix slides Sub-title to go here
Slide 19: Pro Forma Profit After Tax
Pro forma Profit after tax for six months ended 31 December 2013 (A$M) 1H14 Sales 1,609.8. EBITDA 158.6. EBIT 97.3. Interest (as per Scheme Booklet assumptions) (22.0) Pro forma profit before tax 75.3. Tax (as per Scheme Booklet assumptions) (23.2) Pro forma profit after tax 52.1. Dividend – cps 3.0
Slide 20: The Orora Limited Group - Background
The Orora Limited Group - Background Australasia North America Pro Forma FY13 Revenue A$1,888m A$1,007m Pro Forma FY13 PBITDA A$193m1 A$52m Pro Forma FY13 PBIT A$106m1,2 A$44m Manufacturing plants 26 10 Countries 2 5 Employees 3,800 1,900 Fibre Beverage North America • The Fibre operating division p
Slide 21: Regional Strength
Regional Strength FY13 Sales by Region Orora Australasia Australia North America 26 Plants New Zealand Other 25 Distribution Sites 2 Countries 1% 9% 56% 34% FY13 Revenues $2,895 million Employees 5,700 Countries 7 Orora North America 10 Plants 54 Distribution Sites Orora Ltd 2014 5 Countries 21
Slide 22: Orora Australasia
Orora Australasia Overview Sales breakdown • A portfolio of scale businesses with leading positions in their respective Fibre Beverage Australia New Zealand markets 36% 64% 13% 87% • Predominantly services the defensive food and beverage segments • 3,800 employees across 26 plants and 25 distributio
Slide 23: Orora North America
Orora North America Overview Sales breakdown • Orora North America is a large packaging distributor and manufacturer, Distribution Manufacturing North America Other headquartered in Buena Park, California 3% 14% 86% 97% • Comprises 10 manufacturing plants and 54 distribution sites and 1,900 employee