Orora Limited · ASX:ORA
Orora — Investor Presentation (February 2023)
26 slides from Orora's investor presentation, Feb 16, 2023
Slide 1: Financial Results Half Year Ended 31 December 2022
Financial Results Half Year Ended 31 December 2022 16 February 2023
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: 1H23 Highlights and Group Strategy
1H23 Highlights and Group Strategy Brian Lowe Managing Director & Chief Executive Officer 3
Slide 4: 1H23 financial highlights
1H23 financial highlights • Disciplined execution of strategy delivers a Earnings Before Interest and Underlying Net Profit After Revenue Tax (EBIT) Tax (NPAT) solid increase in Group earnings, with EBIT and NPAT up 7.3% and 5.3% respectively $2,264.5m $165.8m $108.1m • Earnings growth driven by bus
Slide 5: 1H23 operating and segment highlights
1H23 operating and segment highlights Strong earnings growth in North America with a resilient earnings performance in Australasia North America Australasia Revenue growth Continued business Increase in revenue EBIT Reflects timing of Revenue EBIT led by OPS, with optimisation gains Revenue supporte
Slide 6: Orora safety performance update
Lost time injury frequency rate (LTIFR)* Recordable case frequency rate (RCFR)^ Orora safety performance 2.8 8.4 update 2.5 7.2 Jun-22 Dec-22 Jun-22 Dec-22 LTIFR* = (Number of lost time injuries / Total number of hours worked for employees and contractors) x 1,000,000 RCFR^ = (Number of recordable c
Slide 7: Compelling investment proposition
Compelling investment proposition Orora provides investors with a robust and defensive earnings profile with attractive growth upside Leadership Robust and Well invested Long term positions in diversified assets and customer trading attractive business model defensive growth relationships markets pr
Slide 8: Orora's strategic advantage
Orora’s strategic North America Australasia advantage Vertically integrated provider of custom packaging solutions Leading designer and manufacturer of multi-substrate beverage packaging Attractive market • Top five market position • Top two market positions in Cans, Glass and Metal Closures positio
Slide 9: Progressing our strategy
Progressing our strategy Disciplined execution of our strategy to drive sustainable earnings growth North America – 1H23 Progress Australasia – 1H23 Progress ✓ Continued improvement in OPS financial performance and operating discipline, with ✓ Execution of long-term contract for key Cans customer EB
Slide 10: Financial Results
Update Picture Financial Results Shaun Hughes Chief Financial Officer 10
Slide 11: 1H23 Group Financial Performance
1H23 Group Financial Performance Underlying ($m) 1H23 1H22 Var$ Var% CC% Revenue 2,264.5 1,988.6 275.9 13.9% 6.6% • Revenue up 13.9%, driven by a 20.6% increase in Australasia and a 12.0% increase in North America EBITDA 225.9 212.9 13.0 6.1% 1.1% Depreciation and amortisation (60.1) (58.4) (1.7) (2
Slide 12: 1H23 North America financial highlights
1H23 North America Business performance financial highlights • Continued strong earnings growth in North America, with EBIT up 10.2%, revenue up 2.6%, and further margin improvement Revenue (USD) EBIT (USD) • Strong earnings growth in Distribution driven by continued improvements in account profitab
Slide 13: 1H23 Australasia financial highlights
Business Performance 1H23 Australasia • Revenue growth of 20.6% driven by 3.0% net volume growth, 10.8% higher aluminium cost passthrough and 6.8% cost inflation recoveries financial highlights • Continued strong Cans volume demand, with revenue benefiting from both a growth in Cans volumes, and imp
Slide 14: Operating cash flow
Operating cash flow $m 1H23 1H22 Var$ Var% • Underlying operating cash flow of $161.1m was $15.6m higher than the pcp, driven by earnings growth of $13.0m, EBITDA 225.9 212.9 13.0 6.1% partially offset by an increase in working capital and higher Lease payments (31.2) (29.6) (1.6) base capex Non-cas
Slide 15: Group capex profile
Group capex profile Growth capex underpins incremental future earnings growth Base and Growth capex ($m) Significant ongoing capex projects Continuing operations 116.2 Spend Capital Initiative Type Purpose 92.2 90.3 87.2 Period Spend 42.1 84.8 5.0 26.9 5.2 Cans - Ballarat ends capacity expansion Gro
Slide 16: Balance sheet and net debt
Balance sheet and net debt Strong balance sheet providing operating and strategic flexibility to support Orora’s growth strategy Balance sheet Net debt and leverage ratio 1.8x 1.9x 1.6x $m 1H23 FY22 1.5x Average funds employed 1,372.8 1,275.6 671 629 Net debt 670.8 629.0 0.9x 512 453 Net assets 784.
Slide 17: Interim 1H23 Dividend
Interim 1H23 Dividend 6.3% dividend growth reflects underlying earnings performance 1H23 interim dividend Payout ratio Ordinary dividends per share (cps) 16.5 8.5 cps 66.4% 14.0 12.5 13.0 12.0 8.5 6.5 7.5 6.5 5.5 +0.5 cps 60-80% target payout 6.3% increase ratio (1H22: 68%) 8.5 8.0 6.0 6.5 6.5 6.5 F
Slide 18: Sustainability Update
Sustainability Update Brian Lowe Managing Director & Chief Executive Officer 18
Slide 19: 1H23 sustainability performance highlights
1H23 sustainability performance highlights We continue to invest and make good progress with our sustainability goals and commitments • Significant steps made towards our 60% • On-track to achieve a 40% reduction in • Rollout of Our Orora Culture Shaping recycled content target in manufactured green
Slide 20: FY23 Perspectives and Outlook
FY23 Perspectives and Outlook Brian Lowe Managing Director & Chief Executive Officer 20
Slide 21: Perspectives for FY23
Perspectives for FY23 Disciplined execution of our strategy to drive sustainable earnings growth North America Australasia • Kelly Barlow appointed President of OPS • Expected growth in Cans driven by volume growth and product mix optimisation • Build on current momentum to drive further earnings gr
Slide 22: FY23 outlook
FY23 outlook • The Orora Group earnings are expected to be higher in FY23, reflecting the resilience of the business in what is a challenging year of economic conditions • In North America, we expect 2H23 EBIT to be up on 2H22, delivering EBIT growth for the full year • In Australasia, we expect 2H2
Slide 23: Supporting Information
Supporting Information 23
Slide 24: Shareholder value blueprint
Shareholder value blueprint Orora applies a returns-focussed, risk-weighted approach to investment and capital management decisions TSR COMPONENT ORGANIC GROWTH RETURNS-FOCUSED INVESTMENT CAPITAL MANAGEMENT STRATEGIC Enhance and Enter new PILLAR Optimise to Grow Disciplined approach to capital alloc
Slide 25: Liquidity and debt maturity profile
Liquidity and debt maturity profile Strong liquidity and debt facilities to support growth investments and repayment of maturing debt facilities Liquidity Profile ($m) Debt Maturity Profile ($m) As at 31 December 2022 Reflects new bilateral facilities established in January 2023 460 460 60 376 367 2
Slide 26: Statutory to underlying reconciliations
Statutory to underlying reconciliations Statutory to underlying results 1H23 1H22 ($m) EBIT PBT NPAT EBIT PBT NPAT Statutory result 165.8 144.7 108.1 154.5 141.4 100.3 Add significant items: - Discontinued operations – net (profit) / loss on sale of Australasian Fibre - - - - - 2.4 Underlying result