H1 2024 results

25 July 2024

Summary

01

02

03

04

Introduction

Key

H1 2024

2024 guidance

highlights

financial results

H1 2024 RESULTS

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2

INTRODUCTION

Patrice LUCAS

CEO

H1 2024 RESULTS

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A global leader in glass packaging

DIVERSIFIED AND BALANCED END-MARKETS

2023 Glass packaging(1) sales split by end-market(2)

Food

17%

Still wine

31%

Soft drinks

11%

2023

Beer

12%

12%

16%

Sparkling wine

Spirits

countries 12

decoration 5 plants

glass 35 plants

customers

~10,000

~11,000 employees

16+ bottles/jars

billion p.a.

19

cullet

recycling

N°1 N°2 N°3

64

centers

in Europe(3)

in Latin America(4)

Globally

90% of 2023 sales

10% of 2023 sales

furnaces

Note: Footprint as of July 2024 post-acquisition of Vidrala's glass operations in Italy.

Sources:

Companies public information, management estimates and Advancy (IPO related study).

Notes:

(1) For bottles and jars only (98% of total Verallia sales). (2) The consolidated financial statements are presented in millions of euros, with amounts rounded up or down to the nearest million. So rounding

differences could be present in some graphics or tables, mainly if presented in percentage without digits after the comma. (3) Based on 2022 sales; "Europe" using each company's definition/management

estimates. (4) Based on 2022 volumes in Argentina, Brazil and Chile.

H1 2024 RESULTS

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KEY HIGHLIGHTS

Patrice LUCAS

CEO

H1 2024 RESULTS

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Verallia successfully completes the acquisition of Vidrala's Italian glass activities

€230 million enterprise value, financed with a

3-yearTerm Loan set up with a pool of international banks (1)

Confirms Verallia's strategy to continue investing in key markets

Allows Verallia to expand its glass container offering

to the food and beverage industry in Italy

for the benefit of all its customers

In 2023, the company generated revenue of €131 million and EBITDA of €33 million (2)

One production site in Corsico near Milan with two furnaces (225Kt/year capacity)

Strong positioning,

especially in the beer, food and spirits markets

Nearly 200 employees will strengthen Verallia's expertise

Corsico Lonigo

Villa

Poma

Dego

Carcare

Gazzo

Pescia Veronese

VERALLIA'S ITALIAN GLASS PRODUCTION FOOTPRINT

(1)

This loan was entirely made available to the company on July 1, 2024 and the payment of the transaction took place on July 4, 2024.

H1 2024 RESULTS

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(2)

Figure as of 31 December 2023

H1 2024: recovery in activity confirmed but slower than anticipated - solid profitability with 24.4% adjusted EBITDA margin

REVENUE

  • -17.6%yoy to €1,765m
  • -10.4%yoy organic growth

NET DEBT

  • Leverage: 1.9x LTM adj.
    EBITDA
    vs 1.2x end of Dec. 23

ADJUSTED EBITDA

  • €431m, -34.6%vs. H1 2023
  • Margin at 24.4% vs. 30.8% in H1 2023 (-631 bps)

NET INCOME

  • €123m (-61.3% vs H1 2023)
  • €1.06 EPS / €1.25
    EPS ex-PPA

H1 2024 RESULTS

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2023 slump exceeds all recent downturns including 2020 Covid

European domestic F&B glass container sales: YoY change (%) and total (mT) - FEVE perimeter

2023: -12.0%

15%

H1: -9.5%

25

H2: -14.5%

10%

6,9%

20

5%

1,6%

1,6%

3,6%

3,0%

2,4%

3,0%

1,9%

15

0%

-0,5%

-1,5%

10

-5%

-10%

5

-15%

-12,0%

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

YoY change (%, LHS)

Market (mT, RHS)

  • 2023 drop unprecedented in a historically stable market (-1.5% only in 2020 despite covid crisis)
  • 2023 downturn comes after a decade of steady growth (>2% CAGR from 2012-22)
  • 2023 decline in glass demand was mostly led by destocking

Source:

Internal elaboration based on FEVE Data.

Note:

Total domestic food & beverage glass container sales for EU27, Switzerland, Turkey and UK.

Comparable FEVE data not available prior to 2012.

H1 2024 RESULTS

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2024 end consumption forecast revised down from Mid-23 to Mid-24, leading to longer-than-expected destocking period

2023-24 CHANGE IN END CONSUMPTION IN EUROPE (UNITS, GLASS):

COMPARISON BETWEEN MID-2023 AND MID-2024 SCENARII(1)

6%

4,8%

5%

4%

3%

2,2%2,2%

2%

1,8%

1,6%

1,5%

1,7%

1,2%

1,1%

1,0%

1%

0,5%

0,4%

0%

-0,4%

-1%

-1,3%

-2%

NAB

Sparkling Spirits & RTD

Food

Beer & Cider Still Wine

Verallia

Wine

Weighted

Average

2024 vs 2023 forecast (Mid-2023)

2024 vs 2023 forecast (Mid-2024)

COMMENTS

  • 2024 Europe consumption forecasts revised down between mid-2023 and mid-2024 in all categories except food and sparkling wines
    1. Poor weather conditions also affecting WE consumption
  • -1.3%downward revision over 12 months when applied to VRLA's revenue split
  • Negative end consumption leading to longer-than-expected destocking period across the chain

(1) Euromonitor International, comparison between Alcoholic Drinks 2023 edition (Mid-2023) and 2024 edition (Mid-2024) (Beverage Packaging

updated in Mid-2024). Delta calculated on million units baseline; Glass Packaging

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Activity main takeaways

  • Unprecedented decline in glass demand in 2023 (Europe -12% and LatAm -5%), led by destocking
  • Post-covidsupply chain disruption (supply shortages in 2021/2022) has driven low short-termvisibility in a usually predictable industry
  • 2024 gradual recovery in glass demand confirmed but at a slower pace than expected with softer end consumption leading to destocking end point delayed
  • Glass demand expected to return to more stable growth as it reconnects with end consumption

Source: Company estimates.

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Disclaimer

Verallia SA published this content on 25 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 July 2024 07:13:09 UTC.