Verallia SAS · EURONEXT:VRLA
Verallia SAS — Verallia — FY2019 Earnings Presentation
34 slides from Verallia SAS's earnings presentation, Feb 21, 2020
Slide 1: 2019 Annual Results
2019 Annual Results February 21, 2020
Slide 2: 2019 Annual Results Agenda
2019 Annual Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion 21/02/2020 2
Slide 3: A Global Leader in Glass Packaging
A GLOBAL LEADER IN GLASS PACKAGING… Leading positions 2019 Financial Highlights in Europe(1) Sales €2,586m #1 90% of 2019 sales Organic growth vs. 2018 +9.1% #2 in Latin America(2) 10% of 2019 sales 10,000 employees Adjusted EBITDA €615m #3 Globally 11 16 billion Adjusted EBITDA bottles / jars p.a.
Slide 4: Now Listed on Compartment A of Euronext Paris
… NOW LISTED ON COMPARTMENT “A” OF EURONEXT PARIS 2 months after the Group's successful IPO, Verallia Share Price Evolution since the IPO entered the SBF 120 Index => enhanced visibility 37 35 +29% Board of Directors Composition 33 31 Michel Giannuzzi Chairman 29 Robert Seminara Apollo 27 Claudia Sc
Slide 5: Burgos: Inauguration of the New Installations in Q4 2019
BURGOS: INAUGURATION OF THE NEW INSTALLATIONS IN Q4 2019 €33 million investment: reconstruction of one of the site's two furnaces and modernization of its production lines Increase of capacity by 7% from 560 to 600 million bottles per year mainly for the wine and spirits markets Following its
Slide 6: Calcin Iberico: New Cullet Treatment Plant
CALCIN IBERICO: NEW CULLET TREATMENT PLANT JV between Verallia Spain S.A. (49%) and its partner TM Alcudia Reciclatges, S.L., (51%) TM Alcudia is a strategic cullet supplier for Verallia’s Montblanc plant (Spain) Plant capacity 90 kt The recycled glass comes from Madrid and is mainly used by
Slide 7: 2019 Annual Results Agenda
2019 Annual Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion 21/02/2020 7
Slide 8: Strong organic revenue growth in all segments and geographies
Strong organic revenue growth supported by volumes, mix and prices in all segments, across all geographies Reported revenue (in €m) Significant volume improvement Reported growth: +7.0% Organic growth*: +9.1% Full impact of selling price increases mainly to pass on the rise (47) 2,586 147 (3) in
Slide 9: SWE: solid growth country wide
SWE*: solid growth country wide Reported revenue (in €m) +6.4% 1 754 1 649 Volume growth by country: - France: Growth in still & sparkling wine (momentum of “vintage” 2018 2019 Champagne) and in jars - Italy: Steady growth in all Revenue at constant exchange rates and scope (in €m) segments - Spai
Slide 10: NEE: strong growth in volumes and prices
NEE*: strong growth in volumes and prices Reported revenue (in €m) +9.0% 568 521 Well-oriented volumes driven by: - Russia: Solid recovery - Germany: Dynamism in beer and 2018 2019 still wine markets Revenue at constant exchange rates and scope (in €m) Selling price increases implemented as expe
Slide 11: Latin America: strong organic growth dampened by negative exchange rates
Latin America*: strong organic growth dampened by negative exchange rates impact Reported revenue (in €m) +7.5% 265 €54m negative FX impact, mostly coming from Argentina 246 Solid local market in Brazil, esp. for still wine, beer and soft drinks 2018 2019 Good performance in Argentina Revenue(
Slide 12: Sharp adjusted EBITDA growth and margin expansion
Sharp adjusted EBITDA growth and margin expansion Adjusted EBITDA (in €m) Adjusted EBITDA margin 2018 2019 22.5% 23.8% +130 bps Reported growth: +13.2% Organic growth*: +16.0% At constant exchange rates & scope, adjusted EBITDA increased by 16.0%, driven by Verallia’s 3 pillars: (65) (15) 615 1. S
Slide 13: SWE: Strong improvement adjusted EBITDA value and margin
SWE*: Strong improvement adjusted EBITDA value and margin Adjusted EBITDA margin Adjusted EBITDA (no exchange rates impact - in €m) 2018 2019 21.6% 23.5% +184 bps 412 +15.4% Deployment of Verallia’s 3 main improvement drivers 357 1. Volume growth 2. Positive inflation spread 3. Performance Action
Slide 14: NEE: Strong Adjusted EBITDA value and margin expansion
NEE*: Strong Adjusted EBITDA value and margin expansion Adjusted EBITDA (in €m) Adjusted EBITDA margin 2018 2019 +13.4% 125 21.1% 22.0% +87 bps 110 Deployment of Verallia’s 3 main improvement drivers 2018 2019 1. Volume growth 2. Positive inflation spread Adjusted EBITDA at constant exchange rates
Slide 15: Latin America: Adjusted EBITDA margin dampened by currency depreciation
Latin America(*): Adjusted EBITDA margin & value dampened by currency depreciation Adjusted EBITDA (in €m) Adjusted EBITDA margin 2018 2019 +2.8% 79 77 31.2% 29.8% (138) bps Decline in margin due to - Dilutive effect of sharp price increases - Significant currency depreciation 2018 2019 Adjusted E
Slide 16: 2019 Annual Results Agenda
2019 Annual Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion 21/02/2020 16
Slide 17: Higher Capex driven by strategic investments
Higher Capex driven by strategic investments Strategic investments (excluding M&A) Recurring Capex Total Capex 2018 (€m) Total Capex 2019 (€m) 253 46 225 26 Recurring Capex 8.2% 8.0% 207 in % of revenue: 199 2018 2019 Recurring Capex of 8% of 2019 consolidated sales, in line with guidance, mostly
Slide 18: Improved operating cash flow and stable cash conversion
Improved operating cash flow and stable cash conversion In €m 2018 2019 Adjusted EBITDA 543.3 615.2 High operating cash flow due to Total Capex 225.0 252.5 - Sharp EBITDA growth - Significant improvement in Cash conversion 58.6% 59.0% operating WC requirement despite strong sales growth Change in
Slide 19: Continuous strong deleveraging capabilities
Continuous strong deleveraging capabilities(*) In € million 31/12/2018(*) 31/12/2019 Net Debt 1,708.8 1,590.6 LTM Adjusted EBITDA 543.3 615.2 Net Debt / LTM Adjusted EBITDA 3.1x 2.6x 2.6x ratio of net debt over LTM adjusted EBITDA at December 31, 2019: - Net debt at €1,591 million including rights
Slide 20: Verallia's debt structure
Verallia’s debt structure Nominal amount or Final December 31, In € million maximum amount Nominal rate maturity 2019 drawable Term Loan A 1,500 Euribor +1.75% 07/10/2024 1,490.7 Revolving Credit Facility 500 Euribor +1.35% 07/10/2024 - Commercial Papers Neu CP 400 188.2 Other debt 130.9 Total borro
Slide 21: 2019 Annual Results Agenda
2019 Annual Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion 21/02/2020 21
Slide 22: Conclusion
Conclusion Very strong annual results in line with guidance - Illustrating the success of the Group’s strategy based on 4 pillars: • Disciplined growth (profitable and sustainable); • Operational excellence deployment; • Wise investments; • Strong entrepreneurial culture. - And leveraging on Veral
Slide 23: Positive outlook for 2020
Positive outlook for 2020 The Group is expecting for 2020 - Consolidated revenue organic growth(*) from 3% to 5% in line with the 2020-2022 outlook. Selling price increases will be more moderate, in line with lower inflation in costs; - Adjusted EBITDA(**) above €650m, compared to €615m in 2019; -
Slide 24: Appendices
2019 Annual Results Appendices 21/02/2020 24
Slide 25: Glossary
Glossary Organic growth: corresponds to revenue growth at constant exchange rates and scope. Revenue growth at constant exchange rates is calculated by applying the average exchange rates of the comparative period to revenue for the current period of each Group entity, expressed in its reporting c
Slide 26: Consolidated Profit and Loss
Consolidated Profit and Loss Year ended 31 December (in € million) 2018 2019 Revenue 2,415.8 2,585.9 Cost of sales (1,973.2) (2,043.6) Selling, general and administrative expenses (144.7) (170.8) Acquisition‐related items (61.8) (59.4) Other operating income and expenses (14.9) (17.0) Operating prof
Slide 27: Consolidated Balance Sheet
Consolidated Balance Sheet 31 December 31 December 31 December 31 December (in € million) (in € million) 2018 2019 2018 2019 ASSETS EQUITY & LIABILITIES Goodwill 552.0 550.9 Share capital 137.5 400.2 Other intangible assets 559.3 499.2 Consolidated reserves (114.4) (14.0) Property, plant and equipme
Slide 28: Consolidated Cash Flow Statement
Year ended 31 December (in € million) Consolidated 2018 2019 Cash Flow Net profit (loss) for the year 48.5 124.6 Share of net profit of associates, net of dividends received 1.7 0.7 Statement Depreciation, amortisation and impairment of assets Gains and losses on disposals of assets Interest expense
Slide 29: Reconciliation of Operating income to adjusted EBITDA
Reconciliation of Operating income to adjusted EBITDA In € million 2018 2019 Operating income 221.2 295.1 Depreciation and amortization (i) 298.2 283.5 Restructuring costs 7.2 2.9 Acquisition and M&A costs 0.2 (2.1) IAS 29 Hyperinflation (Argentina) (ii) 2.5 1.6 Management share ownership plan and a
Slide 30: Reconciliation of Cash conversion to adjusted EBITDA
Reconciliation of Cash conversion to adjusted EBITDA In € million 2018 2019 Adjusted EBITDA 543.3 615.2 Capex (225.0) (252.5) Cash flows 318.3 362.7 Cash conversion 58.6% 59.0% Adjusted EBITDA and Cash conversion are alternative performance indicators within the meaning of AMF position n ° 2015‐12.
Slide 31: Confirmation of the 2020-2022 Outlook
Confirmation of the 2020-2022 Outlook Over the 2020-2022 period, assuming moderate inflation in raw material and energy costs and an effective tax rate going down from 30% to 26%, the Group aims to achieve the following: Consolidated revenue organic growth(*) at a compound annual growth rate (CAGR
Slide 32: Impact of IFRS 16 Leases
Impact of IFRS 16 “Leases” Verallia has applied IFRS 16 since January 1, 2019 using the simplified retrospective transition method. IFRS 16 (Leases) eliminates the distinction between operating and finance leases and requires the lessee to recognize an asset (the right to use the leased asset) and a
Slide 33: IAS 29: Hyperinflation in Argentina
IAS 29: Hyperinflation in Argentina Since the second half of 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
Slide 34: Disclaimer
Disclaimer Verallia’s consolidated financial statements for the financial year ended December 31, 2019 have been approved by the Board of Directors on February 20, 2020. Audit procedures are being finalized. Certain information included in this presentation are not historical facts but are forward-l