Verallia SAS · EURONEXT:VRLA
Verallia SAS — Verallia — H1 2020 Earnings Presentation
35 slides from Verallia SAS's earnings presentation, Jul 30, 2020
Slide 1: H1 2020 Results
H1 2020 Results July 30th, 2020
Slide 2: H1 2020 Results agenda
H1 2020 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2020 Results 30/07/2020 2
Slide 3: H1 2020 Financial Highlights
H1 2020 FINANCIAL HIGHLIGHTS Resilience of the Group in the context of the COVID-19 pandemic Revenue - H1 2020 Reported revenue at €1,275m, down -4.1% vs. H1 2019 - H1 2020 Organic(*) decline of -0.9% (-2.7% excluding Argentina) vs. H1 2019 - Q2 2020 Reported revenue down -9.6% to €630m (-5.4% o
Slide 4: Continued management of the current COVID-19 situation
CONTINUED MANAGEMENT OF THE CURRENT COVID-19 SITUATION Business continuity with all factories operational throughout H1 to continue to serve our customers whose role is essential throughout the food industry supply chain Progressive return to office work in all countries Protocols consistently
Slide 5: Verallia: United and Responsible
VERALLIA: UNITED AND RESPONSIBLE Examples of local partnerships in France Other examples of local donations Covidom is an application for home monitoring of COVID-19 patients with the help of 2,500 volunteers. Verallia will finance a book testifying of this experience Attached to the Saint-Denis Hos
Slide 6: Great success of Verallia's 2020 employee shareholding offer
GREAT SUCCESS OF VERALLIA’S 2020 EMPLOYEE SHAREHOLDING OFFER Close to 3,300 employees took part in the 2020 Employee Shareholding Offer proposed by Verallia in 8 countries Excellent participation level: 42% of eligible employees invested in the offer Employee shareholders rate now reaches appr
Slide 7: 87% opted for the dividend payment in shares
STRONG SUPPORT FROM OUR SHAREHOLDERS: 87% OPTED FOR THE DIVIDEND PAYMENT IN SHARES Estimated Capital Structure post Dividend Payment The June 10, 2020 AGM approved the payment of a dividend of 0.85 euros per share either in cash or in newly issued shares Free Float 87% of the shareholders have e
Slide 8: Transformation plan in France
TRANSFORMATION PLAN IN FRANCE Production capacity adjustment and industrial performance improvement to respond to the changes in the French market: - Decline in domestic still wine market - Competition from imports from more competitive foreign glassmakers operating in neighboring countries - Rece
Slide 9: H1 2020 Results agenda
H1 2020 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2020 Results 30/07/2020 9
Slide 10: Limited revenue decline in H1 despite COVID-19 impact
Limited revenue decline in H1 despite COVID-19 impact Reported revenue in H1 (in €m) Revenue organic variation: - Q1: +4.0% organic* growth - Q2: -5.4% organic* decline with Reported Growth: -4.1% Organic Growth*: -0.9% drop mainly in April and May 1,329 Mix deterioration mainly due to France fo
Slide 11: SWE: revenue decline and most notably in France
SWE*: revenue decline and most notably in France Reported revenue (no exchange rates impact - in €m) Decline in revenue in all countries in Q2 -5.2% Most notable drop over H1 in 928 880 France, where exposure to premium products is greater Dynamism in food jars in all countries Sparkling win
Slide 12: NEE: good resilience
NEE*: good resilience Reported revenue (in €m) +3.1% 275 283 Continued dynamism in jars and non-alcoholic beverages in Q2 after a good Q1 H1 2019 H1 2020 Revenue at constant exchange rates (in €m) Sales price increases compensating lower volumes, +3.4% 284 especially in Eastern Europe 275 H1 201
Slide 13: Latin America: volume and price contribution offset by exchange rates
Latin America*: volume and price contribution offset by unfavorable exchange rates Reported revenue (in €m) -12.2% 126 111 Increase in volumes in still wine in Argentina and Chile, offsetting a softening Brazilian market starting at the end of Q1 Continued sales price increases, H1 2019 H1 2020
Slide 14: Slight decline in adjusted EBITDA margin to 23.4%
Slight decline in adjusted EBITDA margin to 23.4% Adjusted EBITDA margin H1 2020 H1 2019 Adjusted EBITDA (in €m) 23.4% 23.5% (9) bps Reported Growth: -4.5% Adjusted EBITDA almost flat excluding Organic Growth*: -0.3% forex (-€13m), thanks to 1. Contained volume decrease 313 (13.2) 2. Positive pric
Slide 15: SWE: decline due to France
SWE: decline due to France, despite good resilience in Spain, Portugal and Italy Adjusted EBITDA margin Adjusted EBITDA (no exchange rates impact - in €m) H1 2020 H1 2019 22.2% 23.7% (143) bps 220 -10.9% Good resilience in Spain, Portugal and Italy, showing a stable adjusted EBITDA in H1 196 Mar
Slide 16: NEE: strong adjusted EBITDA value and margin expansion
NEE: strong adjusted EBITDA value and margin expansion Adjusted EBITDA margin Adjusted EBITDA (no exchange rates impact - in €m) H1 2020 H1 2019 24.3% 21.8% +251 bps 69 Margin improvement thanks to: +15.1% - Sales price increases especially in Eastern Europe 60 - Improvement in industrial H1 2019
Slide 17: Latin America: strong adjusted EBITDA margin improvement
Latin America: strong adjusted EBITDA margin improvement Adjusted EBITDA (in €m) Adjusted EBITDA margin H1 2020 H1 2019 +2.5% 34 30.6% 26.2% +440 bps 33 Margin improvement thanks to the continuous deployment of Verallia’s 3 main improvement drivers H1 2019 H1 2020 Adjusted EBITDA at constant excha
Slide 18: H1 2020 Results agenda
H1 2020 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2020 Results 30/07/2020 18
Slide 19: Tight control of investments
Tight control of investments Total Booked Capex H1 2020 (€m) Total Booked Capex H1 2019 (€m) 91.5 97.4 8.9 27.2 Recurring Capex 6.7% 88.5 in % of revenue: 5.1% 64.4 H1 2020 H1 2019 Strategic investments (excluding M&A) Recurring capex Lower recurring capex in H1 2020: different timing of furnace r
Slide 20: Solid cash flow fundamentals with high cash conversion
Solid cash flow fundamentals with good WCR management and continued high cash conversion In €m H1 2020 H1 2019 Adjusted EBITDA 298.7 312.8 Operating cash flow impacted by Total Capex 91.5 97.4 - Adjusted EBITDA decrease - Expected increase in Capex Cash conversion 69.4% 68.8% cash-out relating esp
Slide 21: Continuous deleveraging capabilities
Continuous deleveraging capabilities In € million 30/06/2019(*) 31/12/2019 30/06/2020 Net Debt 1,689.5 1,590.6 1,475.7 LTM Adjusted EBITDA 590.7 615.2 601.1 Net Debt / LTM Adjusted EBITDA 2.9x 2.6x 2.5x 2.5x ratio of net debt over LTM adjusted EBITDA at June 30, 2020: - Net debt at €1,475.7 millio
Slide 22: Verallia's net debt: €1,475.7 million at June 30, 2020
Verallia’s net debt: €1,475.7 million at June 30, 2020 Nominal amount or Final In € million maximum amount Nominal rate June 30, 2020 maturity drawable Term Loan A 1,500.0 Euribor +1.75% 07/10/2024 1,495.8 Revolving Credit Facility 1 500.0 Euribor +1.35% 07/10/2024 200.8 Revolving Credit Facility 2
Slide 23: H1 2020 Results agenda
H1 2020 Results 1. Financial highlights and key initiatives 2. Financial results 3. Cash performance 4. Conclusion Verallia H1 2020 Results 30/07/2020 23
Slide 24: Conclusion: Resilient H1
Conclusion: Resilient H1 Revenue decrease limited to -4.1% on a reported basis (-0.9% organic*) in H1 2020 Slight decline in adjusted EBITDA margin to 23.4% vs. 23.5% in H1 2019 due to France Further deleveraging to 2.5x LTM adjusted EBITDA (-0.1x vs. end of Dec 2019) Transformation plan in
Slide 25: 2020 Outlook
2020 Outlook Persistent uncertainty linked to the duration of the crisis making 2020 forecast still difficult, yet: - Q2 should be a low point in terms of sales volumes drop - Full year 2020: volumes expected down around -5% compared to 2019 - Adjusted EBITDA 2020: should be slightly above that of
Slide 26: Mid-term guidance from the IPO - update
MID-TERM GUIDANCE FROM THE IPO - UPDATE Mid-term (2020-2022F) • Negative impact of Covid-19 on sales volumes in 2020 • Lower expected sales price increase with ORGANIC SALES GROWTH(1) +3-5% CAGR NO LONGER VALID: more moderate inflation in production costs than initially anticipated over the period A
Slide 27: Appendices
H1 2020 Results Appendices Verallia H1 2020 Results 30/07/2020 27
Slide 28: Glossary
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 average exchang
Slide 29: 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 30: Reconciliation of operating profit to adjusted EBITDA
Reconciliation of operating profit to adjusted EBITDA In € million H1 2020 H1 2019 Operating profit 134.1 159.1 Depreciation and amortisation (i) 139.6 141.2 Restructuring costs (ii) 19.1 1.9 Acquisition, M&A 0.0 0.0 IAS 29 Hyperinflation (Argentina) (iii) 0.7 (0.3) Management share ownership plan a
Slide 31: Key figures by quarter
Key figures by quarter In € million Q1 2020 Q1 2019 Revenue 644.8 632.9 Reported growth +1.9% Organic growth +4.0% Adjusted EBITDA 151.3 142.0 Adjusted EBITDA margin 23.5% 22.4% In € million Q2 2020 Q2 2019 Revenue 629.9 696.4 Reported growth -9.6% Organic growth -5.4% Adjusted EBITDA 147.4 170.8 Ad
Slide 32: Consolidated profit and loss
CONSOLIDATED PROFIT AND LOSS In € million H1 2020 H1 2019 Revenue 1,274.6 1,329.4 Cost of sales (1,002.9) (1,057.4) Selling, general and administrative expenses (80.1) (77.9) Acquisition‐related items (30.4) (30.8) Other operating income and expenses (27.1) (4.2) Operating profit 134.1 159.1 Net fin
Slide 33: Consolidated balance sheet
CONSOLIDATED BALANCE SHEET 30 June 31 Dec. In € million 2020 2019 ASSETS Goodwill 531.7 550.9 Other intangible assets 461.1 499.2 Property, plant and equipment 1,234.2 1,299.3 Investments in associates 0.6 0.6 Deferred tax 37.5 42.3 Other non‐current assets 34.7 37.5 Non‐current assets 2,299.8 2,429
Slide 34: Consolidated cash flow statement
In € million H1 2020 H1 2019 CONSOLIDATED Net profit (loss) Share of net profit of associates, net of dividends received 79.3 ‐ 71.7 (0.5) CASH FLOW STATEMENT Depreciation, amortisation and impairment of assets 139.6 141.2 Gains and losses on disposals of assets 2.2 (1.8) Interest expense on financi
Slide 35: Disclaimer
Disclaimer Certain information included in this presentation are not historical facts but are forward-looking statements. These forward-looking statements are based on current beliefs, expectations and assumptions, including, without limitation, assumptions regarding present and future business stra