Verallia SAS · EURONEXT:VRLA

Verallia SAS — Verallia — H1 2022 Earnings Presentation

34 slides from Verallia SAS's earnings presentation, Jul 28, 2022

  1. Slide 1: H1 2022 Results

    July 28th H1 2022 RESULTS 2022

  2. Slide 2: Today's Agenda

    TODAY’S AGENDA 1 INTRODUCTION 2 KEY HIGHLIGHTS 3 H1 2022 FINANCIAL RESULTS 4 2022 GUIDANCE 2 July 28th, 2022

  3. Slide 3: Introduction

    1 INTRODUCTION Patrice LUCAS CEO

  4. Slide 4: A Global Leader in Glass Packaging

    1 INTRODUCTION A GLOBAL LEADER IN GLASS PACKAGING DIVERSIFIED AND BALANCED END-MARKETS 2021 Glass packaging(1) sales split by end-market 1 10,000 11 employees countries 16 N° Food in Europe(2) billion 89% of 2021 sales 2 16% bottles/jars p.a. 36% Still wine 3 N° Soft drinks 11% decoration plants 13%

  5. Slide 5: Key Highlights

    2 KEY HIGHLIGHTS Patrice LUCAS CEO

  6. Slide 6: Capital Structure & Employee Shareholding Offer

    2 KEY HIGHLIGHTS CAPITAL STRUCTURE & EMPLOYEE SHAREHOLDING OFFER SHAREHOLDING STRUCTURE AS OF JULY 2022 NEW SUCCESS FOR THE 7TH EMPLOYEE SHAREHOLDING OFFER  In line with the CSR objective to reach 5% of Treasury Shares shares owned by employees by 2025 Brasil Warrant Administração de Bense 3.9%  K

  7. Slide 7: A Very Good Dynamic for Glass Packaging in Europe in 2021

    2 KEY HIGHLIGHTS A VERY GOOD DYNAMIC FOR GLASS PACKAGING IN EUROPE IN 2021 GLASS PACKAGING SALES GLASS PROGRESSING IN THE F&B MARKET Highest levels recorded in 2021: +6.7% vs 2020 &  In 2021, Glass has gained 1 pt of market share* vs +5.4% vs 2019 (pre-Covid) other packaging Material for Food & Bev

  8. Slide 8: Verallia Accompanies Customers in Decarbonation by Light-Weighing Bottles

    2 KEY HIGHLIGHTS VERALLIA ACCOMPANIES ITS CUSTOMERS IN THEIR COMMITMENT TO DECARBONATION BY LIGHT-WEIGHING BOTTLES Château Anthonic, New Launch in Spain: BD 75 towards a lighter bottle ECV OPTIMA S  The Esfera bottle is produced in France, in Cognac  Weighting 370g after a lightening of 20 g (-5%)

  9. Slide 9: Verallia Design Awards

    2 KEY HIGHLIGHTS VERALLIA PROMOTES CREATION AND INNOVATION THROUGH THE VERALLIA DESIGN AWARDS May 19th June 17th Genever, Stanislas Raba Samy, Jeanne Bonaimé La Torche, Loïc Pellisier Mue, Elise Souchet Bottle Cap, Manon Choux Driping, Group 02 Dualism, Group 03 and Nicolas MIzzon (beer category) (s

  10. Slide 10: Follow-up on Key Industrial Projects

    2 KEY HIGHLIGHTS FOLLOW-UP ON KEY INDUSTRIAL PROJECTS Capacity increase – on track to increase capacity by 400 kt per year by 2024  Jacutinga 2 – Brazil  Factory building on going in line with the plan  Start of production planned for end of 2022  Campo Bom 2 – Brazil  Furnace design and techno

  11. Slide 11: Very Strong First Half

    2 KEY HIGHLIGHTS VERY STRONG FIRST HALF Revenue 1 – H1 2022: +23.4% to €1,639 million and +22.8% organic growth(1) – Q2 2022: +23.0% to €889 million and +21.9% organic growth(1) Adjusted EBITDA 2 – €425 million in H1 2022 (+23.4% compared to H1 2021) – Margin at 26.0% Net Income & EPS(2) 3 – Net Inc

  12. Slide 12: H1 2022 Financial Results

    3 H1 2022 FINANCIAL RESULTS Nathalie DELBREUVE CFO

  13. Slide 13: Strong Organic Growth Fueled by Volumes and Price Increases

    3 H1 2022 FINANCIAL RESULTS STRONG ORGANIC GROWTH FUELED BY GOOD VOLUMES AND PRICE INCREASES IN LINE WITH INFLATION REPORTED REVENUE (IN €M)  Volumes Reported Growth: +23.4% Organic Growth(1): +22.8% – Up by around +10% in Q1 1,639 – Strong basis of comparison in Q2 8.6 261.5  Price / mix – Around

  14. Slide 14: SWE: Strong Organic Growth

    3 H1 2022 FINANCIAL RESULTS SWE1: STRONG ORGANIC GROWTH REPORTED REVENUE (IN €M) 1,136 +22.5%  Volume growth in all product categories, except beers notably in France and in Italy 928 H1 2021 H1 2022  Strong growth continued in spirits  Jars volumes well-oriented especially in France REVENUE AT C

  15. Slide 15: NEE: Volume Growth Despite Geopolitical Turmoil

    3 H1 2022 FINANCIAL RESULTS NEE1: VOLUME GROWTH DESPITE GEOPOLITICAL TURMOIL REPORTED REVENUE (IN €M) +19.3% 308  Volume growth in H1, especially in still wine and jars in Germany 258  Ukraine update: H1 2021 H1 2022 – 1 furnace restarted mostly for jars REVENUE AT CONSTANT EXCHANGE RATES (IN €M)

  16. Slide 16: LATAM: Strong Growth and Positive Forex

    3 H1 2022 FINANCIAL RESULTS LATAM1: STRONG GROWTH AND POSITIVE FOREX REPORTED REVENUE (IN €M) 195 +37.3%  Strong volume growth continued in Brazil and in Chile 142 H1 2021 H1 2022  Argentinian volumes impacted by a planed furnace repair over the semester REVENUE AT CONSTANT EXCHANGE RATES(2) (IN €

  17. Slide 17: Adj. EBITDA: Strong Performance

    3 H1 2022 FINANCIAL RESULTS ADJ. EBITDA: STRONG PERFORMANCE ADJUSTED EBITDA (IN €M AND % OF SALES)  Activity / Operating leverage – Positive volume impact over H1 Reported Growth: +23.4% – Positive impact of stock variation: lower Organic Growth(1): +22.8% 26.0% destocking than H1’21 and stock valu

  18. Slide 18: SWE: Improvement in Value and Margin

    3 H1 2022 FINANCIAL RESULTS SWE1: IMPROVEMENT IN VALUE AND MARGIN +20bps ADJUSTED EBITDA (NO EXCHANGE RATES IMPACT - IN €M) H1 2022 H1 2021 Adjusted EBITDA margin 25.2% 25.0% 286  Rising sales volumes +23.4%  Positive product mix 232  H1 inflation spread slightly negative but became positive in Q

  19. Slide 19: NEE: Challenging Geopolitical Environment

    3 H1 2022 FINANCIAL RESULTS NEE1: CHALLENGING GEOPOLITICAL ENVIRONMENT -314bps ADJUSTED EBITDA (IN €M) H1 2022 H1 2021 Adjusted EBITDA margin 19.5% 22.6%  Growth in volumes in H1 +2.7% 60  Adjusted EBITDA margin impacted negatively by the 58 Ukrainian conflict  One of the two furnaces operating i

  20. Slide 20: LATAM: Outstanding Margin Expansion

    3 H1 2022 FINANCIAL RESULTS LATAM1: OUTSTANDING MARGIN EXPANSION +229bps ADJUSTED EBITDA (IN €M) H1 2022 H1 2021 Adjusted EBITDA margin 40.8% 38.5% 79 +45.5% 55  Impressive margin expansion thanks to the continuous deployment of VRLA’s main improvement drivers H1 2021 H1 2022 1. Sales volume growth

  21. Slide 21: Smart Capex Policy Supporting Organic Growth and ESG Roadmap

    3 H1 2022 FINANCIAL RESULTS SMART CAPEX POLICY SUPPORTING ORGANIC GROWTH AND ESG ROADMAP Total booked capex 8.2% 5.9% as % of sales 109 11 96 27 98 69 H1 2021 H1 2022 Recurring Capex (€m) Strategic Capex (€m)  Recurring Capex: – Lower than last year due to timing effects in the projects from one se

  22. Slide 22: Very Strong Cash-Flow Generation

    3 H1 2022 FINANCIAL RESULTS VERY STRONG CASH-FLOW GENERATION In €m H1 2022 H1 2021 Adjusted EBITDA 425.4 344.7  Growth in adjusted EBITDA Total Capex 96.3 109.4  Lower CAPEX due to timing Cash Conversion 77.4% 68.3%  High level of cash conversion Change in operating working capital (15.4) (23.7)

  23. Slide 23: Continued Deleveraging to 1.5x

    3 H1 2022 FINANCIAL RESULTS CONTINUED DELEVERAGING TO 1.5x In € million 30/06/2022 31/12/2021 30/06/2021 Net Debt 1,146.6 1,268.4 1,266.2 LTM Adjusted EBITDA 758.8 678.1 671.7 Net Debt / LTM Adjusted EBITDA 1.5x 1.9x 1.9x  1.5x ratio of net debt over LTM adjusted EBITDA as of June 30, 2022: – Net d

  24. Slide 24: Optimized Financial Structure

    3 H1 2022 FINANCIAL RESULTS OPTIMIZED FINANCIAL STRUCTURE NOMINAL AMOUNT OR In € million MATURITY NOMINAL RATE 30 June 2022 MAX. AMOUNT DRAWABLE Sustainability-Linked Bond – May 2021 (1) 500.0 May 2028 1.625% 498.4 Sustainability-Linked Bond – November 2021 (1) 500.0 November 2031 1.875% 498.0 Term

  25. Slide 25: 2022 Guidance

    4 2022 GUIDANCE Patrice LUCAS CEO

  26. Slide 26: 2022 EBITDA Guidance Upgraded

    4 2022 GUIDANCE 2022 EBITDA GUIDANCE UPGRADED(1) In the absence of significant gas rationing for Verallia in Europe, the Group expects for the full year 2022: 1 Revenue 2 Adjusted EBITDA  Double-digit growth in annual revenue  Adjusted EBITDA target to between with markets that remain promising €7

  27. Slide 27: Q&A

    Q&A

  28. Slide 28: Appendices

    APPENDICES

  29. Slide 29: Our Purpose: Re-imagine Glass for a Sustainable Future

    APPENDICES OUR PURPOSE Re-imagine glass for a sustainable future ESG more than ever at the heart of Verallia's purpose and strategy 29 July 28th, 2022

  30. Slide 30: Disciplined and Dynamic Risk Hedging Policy

    APPENDICES DISCIPLINED AND DYNAMIC RISK HEDGING POLICY ENERGY CO2 EXCHANGE RATES  Disciplined fuel, gas and electricity  Disciplined carbon emission quotas  Very limited transactional FX risk with hedging policy limiting energy cost hedging policy in Western Europe ca 2% of the Group’s receivable

  31. Slide 31: Reconciliation of Operating Profit to Adjusted EBITDA

    APPENDICES RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA In €m H1 2022 H1 2021 Operating profit 277.4 207.1 Depreciation, amortisation and impairment (i) 142.3 136.2 Restructuring costs 0.5 (2.7) IAS 29 Hyperinflation (Argentina) (ii) (0.3) (0.7) Management share ownership plan and associate

  32. Slide 32: IAS 29: Hyperinflation in Argentina

    APPENDICES IAS 29: HYPERINFLATION IN ARGENTINA • Since 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 gain o

  33. Slide 33: Glossary

    APPENDICES 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 aver

  34. Slide 34: 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 Verallia's present and future bu

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