Orora Limited

Thank you for standing by, and welcome to the Aurora Limited Fiscal Year 26 half-year results. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. At which time, if you wish to ask a question, you will need to press star 1 on your telephone keypad. I would now like to hand the conference over to your speaker today, Mr. Brian Lowe, Managing Director and CEO. Please go ahead, Brian.

Thank you. Good morning everybody. Thanks for joining us today for the Aurora Group half-year 2026 results presentation. I'm joined by Sean Hughes, our Chief Financial Officer. Today, Sean and I will provide you with an overview of our results for the first half and an update of the operational progress as we reshape the portfolio to be a focused beverage packaging business. At the end of the presentation, I'll conclude with some insights and perspectives for FY26 including our outlook statement. Once concluded, we'll be happy to take your questions. Before I start, please take note of the important information on slide two. Turning to slide four, today we'll be delivering the following team messages. At a group level, we have delivered a robust set of results for the first half of 2026, focused on discipline, execution and controlling the controllables. We achieved volume growth in Cairns and Sabreglass and importantly EBITDA was up in all businesses and we continue to generate strong operating cash flow and cash realisation, a hallmark of Aurora. Our Cairns business grew strongly with volumes up 11.2% as we leveraged the investment in new capacity, noting our growth investments are nearing completion. Operating conditions remain challenging, however, saverglass grew volumes by 2.6% while galler volumes declined slightly. The new global glass executive team is in place and focused on executing their key business priorities. And finally, we completed our 2025 calendar year buyback and our balance sheet remains strong, which supports ongoing shareholder distributions through dividends and on-market buybacks. We bought back $227 million or 110 million shares in calendar 2025 and today we have announced a new $270 million buyback program. Turning to slide 5 and our first half financial highlights. The results you'll see today are for the continuing operations excluding significant items except where noted. Sean will also provide details of our statutory numbers later in his presentation. We delivered a robust operating result underpinned by disciplined execution across the business as we continue to focus on operational efficiency, cost control and customer partnerships and that focus is reflected in our numbers for the half. EBITDA was $218 million, an increase of 14%. with the improvement driven by solid contributions from all businesses. EBIT was $131 million, an increase of 8.5%, with growth primarily driven by Gawler and Cairns, with higher DNA tempering the saverglass EBIT. Underlying NPAT was $78 million, up strongly on the prior period by just over 32%. Operating cash flow was again very strong, up 51% to $190 million and cash realisation of 112% demonstrates our continued focus on managing cash. This cash flow outcome reinforces the strength of our balance sheet with net debt of $387 million and leverage at 0.9 times EBITDA. Our strong balance sheet and commitment to returning funds to shareholders has resulted in the board today declaring an interim dividend of $0.05 per share unfranked. Finally, in line with our disciplined capital allocation framework, we returned $227 million to shareholders through our 2025 calendar year on-market buyback program, which represents approximately 8% of issued shares. Turning to slide 6. Let me now turn to operational performance across our segments for the first half. As you can see, market dynamics varied across the portfolio, but in every part of the business, our teams executed with focus and discipline. Starting with our cans business, which again delivered a very strong performance. Revenue grew to $442 million, up 19%, or 15% excluding pass-through impact of aluminium prices, with EBITDA increasing to $61 million, up 8%. EBIT was $52 million, up 4%, noting that this includes $5 million of corporate costs following the sale of OPS. If we exclude this item, EBIT increased 14.5%. The growth continues to be driven by solid consumer demand for cans, boosted by the rise in new beverage categories and ongoing substrate conversion. We saw volume growth of 11.2% enabled by recent capacity expansion investments. The new Reesby Line 2 supported elevated multi-sized volumes, especially in Queensland. Our Rocklea Queensland investment remains on track. with approximately $100 million spent to date. Turning to Save a Glass. This business continues to operate in a more challenging global demand environment. Pleasingly, volumes were up just under 3 cents compared to the prior corresponding period. This is a solid outcome given overall market softness. The growth in volumes reflects the stronger order book that we've seen since late calendar 2024. and I'll also cover orders and inventory levels in more detail shortly. Revenue was €298 million for the half, down 2.6%, reflecting primarily mixed impacts. EBITDA was €69 million, up 1% for the half, with a revenue decline offset by ongoing cost discipline. EBIT finished at €35 million, which was down €3 million or 9%, negatively impacted by a €4 million increase in DNA. Laser glass earnings reflect the actions we've taken to shore up the cost base, which will also benefit the business as volume grows over time. The Le Havre F4 furnace closure is nearing completion, with the final redundancies taking place during February. The new Global Glass President and new CFO are now in place with focus on executing the Sabre Glass key business priorities, which I'll cover on our next slide. And finally, for Gawler, revenue was flat at $155 million, with EBITDA increasing 54% to just under $35 million and EBIT up 94% to $17 million. This improvement reflects the impact of the G3 furnace rebuild in the prior corresponding period. Our G3 furnace is outperforming expectations, delivering 31% energy efficiency improvements versus the prior furnace, demonstrating the benefit of disciplined capital execution. And we continue to progress plans to shift surplus volume to the UAE. strengthening the long-term competitiveness of our glass business. Turning to slide seven and our savour glass priorities. With the new executive team now in place, they're focused on six key priorities, which are to drive business growth, expand margins and strengthen cash flow generation in a challenging global wine and spirits market. The key priorities are, firstly, to accelerate the new business pipeline by delivering volume and revenue growth in target markets, strengthen global and key account management, enhance the pipeline build and rebalance sales resources towards new business pursuits. Secondly, by improving our time to market for NPD. We'll shorten the lead time for NPD to deliver benchmark performance with tailored solutions to match the customer opportunity. Work is well underway to streamline processes, lift design capability and create a digital innovation centre for our customers. The next priority is pricing transformation. We will review pricing architecture, build global and regional pricing capability and invest in dedicated tools. This will improve speed of responsiveness and ensure we capture full value for our premium products. For inventory management, we're aimed to materially reduce inventory through tighter customer supply chain integration, expanded vendor-managed inventory and optimised production planning, unlocking cash and improving service. Next, we will be targeting a reduction in SG&A. We'll automate more, simplify processes, remove costs and establish a shared services centre. This will reduce central overheads and make SaviGlass faster and more efficient. And finally, for operational efficiency, we'll build on the strong quality focus to embed productivity and lean methodologies within the operations. We will continue to deploy Industry 4.0 with the integration of digital technologies into manufacturing to make our plants smarter, more efficient and more automated. These six priorities give Saveabath a clear path to enable new business growth and the performance expected from the business. As part of this refocus on Saveabath's key priorities, we have undertaken a corporate restructure resulting in €7.8 million after-tax costs, which will deliver €6 million of annual EBIT savings from late FY26. In relation to Lahav F4, now that we've finalised the closure of the F4 furnace, there is an incremental after-tax cost of €2.8 million. Importantly, we are confident in the annualised run rate benefit of €9 million EBIT per annum with the full benefits to flow from February 2026. Turning to slide 8. As mentioned, our Saverglass order intake has further strengthened. We've seen a solid uplift in demand through the first seven months of FY26, with order intake showing strong momentum compared to the prior corresponding period. Average monthly orders for the seven months to January year-to-date are up 18% from the prior corresponding period, reflecting improved customer sentiment and a return to more normal ordering behaviour. Consistent with our previous years, the first half was again skewed to spirits, with the mix-up approximately 4 percentage point versus the first half of last year. This was more evident in Q2 than Q1. For the second half of FY26, we expect the seasonal skew to shift back towards premium wine and champagne in line with the northern hemisphere harvests. As always, timing of conversion From orders to sales can vary depending on customer lead times, which typically run between four and six months. On the right-hand side of the slide is an update of our inventory levels. The position remains well managed and aligned with the improvement we're seeing in orders. Sales volumes were up 2.6 for the first half, with a total inventory level stable versus the prior period. David Glass-owned inventory increased slightly, which is consistent with a stronger order intake and expected sales into the second half. Importantly, customer-owned inventory has continued to trend down. At December 2025, customer-owned inventory was 18% lower than the prior year, or 15% lower at January 2026, another sign that the destocking cycle is behind us. Overall, the combination of stronger orders, stable inventory and declining customer-held stock gives us confidence in the momentum we're seeing as we head into the second half of FY26. Now turning to slide nine and an update on Rockley. Our Rockley expansion continues to progress as planned and is a key part of building a more flexible and high-capacity CAHMS network. Construction of the new 375mm can line is well underway and remains on schedule for completion by the end of FY26, with commissioning during the first half of FY27. Once operational, it will lift network capacity by approximately 13%. The project remains on schedule and close to the original budget, with approximately $100 million spent to date and approximately $40 million to go in the second half. When complete, Rocklea will be central to our expanded network, supporting major Queensland customers and increasing resilience, flexibility and service. The total expansion program is expected to deliver more than $50 million of incremental EBIT once fully ramped up, in addition to the 1% to 2% organic EBIT growth we expect per annum. As shown on the right, our broader Cairns investments across Ballarat, Dandenong, Reesby and Rocklea totals approximately $360 million, generating an attractive 15% plus return and more than $50 million of annual EBIT. We've now spent 88% of the capital but realised only 38% of the EBIT given the expected three-year ramp-up cycle. This means we are entering a period of significant earnings and cash flow leverage for the Cairns business. Once ROCLE is completed and fully commissioned, we'll have capacity to support approximately 5% annual volume growth without further major capital expansion until after 2030. With that, I'll now cover an update for you on safety and sustainability. I'll turn to slide 11 and safety. Our global health and safety strategy continues to deliver strong results. Our recordable case frequency rate has declined again with fewer recordable injuries over the past 12 months and we recorded no serious injuries or fatalities. Our lost time frequency rate is up for the first half of FY26 with most injuries concentrated in a few glass sites and our focus remains on driving these health and safety programs across the business to achieve a sustained improvement in lost time injury frequency rate, with strengthened incident management, governance and root cause analysis helping us identify and address hazards earlier. The FY26 to FY28 safety strategy builds on our previous program and will further embed consistent global standards. Our safety leadership tours continue to demonstrate senior leadership commitment and reinforce our safety culture. The health, safety and wellbeing of our people remains fundamental and we will keep driving improvements through our key targeted programs. Now turning to sustainability and our promise to the future on slide 12. Aurora has continued work towards achieving its climate change targets. At a group level we're targeting a 41% reduction in Scope 1 and Scope 2 greenhouse gas emissions by FY35 from a FY19 baseline and for Scope 3 greenhouse gas emissions a 31% reduction by FY35. Scope 3 progress will be reported for the first time at the end of FY26. The global glass business is progressing towards its 68% recycle content target by FY35, building on the 44% achieved in FY25. The focus globally has been on sourcing more recycled colour and improving energy efficiency. The new G3 oxygen furnace at Gawler is a positive contributor to energy reduction and we are exploring areas such as the potential for biomethane to displace some natural gas usage. Similarly, in Cairns, there's been a focus on examining ways to better measure and manage energy efficiency onsite while focusing on closer management of aluminium flat sheet recycled content as we pursue higher recycled content levels. As a result, the Cairns business continues to progress towards its target of a minimum of 80% recycled content by FY30, building on the 78% already achieved in FY25. I'll now hand you to Sean to discuss the group and segment financial results.

Thanks, Brian, and good morning, everyone. I'm on slide 14. I'll start with the group results before I cover the segment financial performance. This slide summarises the group's underlying and statutory earnings results for the first half of FY26. The numbers I will initially focus on are for the continuing operations and they exclude significant items. Our statutory numbers are shown at the bottom of the page and further detail is included on slide 30. I'm pleased to report that overall we delivered a solid set of results underpinned by EBITDA growth across all of our operating segments and strong operating cash flow performance. At a group level, revenue increased 9.7% to $1.13 billion, driven primarily by strong performance in Cairns. Group EBITDA increased 14.4% to $218 million, reflecting broad-based growth across all divisions, including a strong contribution from Gawler, which was up $12 million. This also includes a currency benefit in our Saberglass reported numbers. Depreciation and amortisation increased, as expected, up 24.7% to $87.1 million following the investment cycle in FY25, including the G3 rebuild at Gawler and recent Cairns growth investments. Net finance costs were lower at $26.7 million, reflecting the repayment of debt from the receipt of the OPS sales proceeds in December 2024, partially offset by the on-market buyback. NPAT before significant items increased 32% to $77.8 million, highlighting the strength of earnings and lower net finance costs. EPS pre-significant items was $0.062 per share, up 40.6%, reflecting the growth in NPAT and the benefit of the on-market share buyback. Statutory NPAT was $58.9 million and reflects the impact of the $18.9 million of after-tax significant items relating to the Saberglass restructuring costs that Brian covered in his presentation. Moving now to Aurora CAN's business on slide 15. CAN's revenue grew 18.6% to $442 million, or 15% growth excluding aluminium pass-through. This reflects strong customer demand with volume growth in the half of 11.2%. supported by new filling investments in Queensland, with demand continuing to be driven by ongoing substrate shift and the growth of new categories. EBITDA increased 8.1% to $60.7 million. As previously flagged, the first half includes the allocation of $5 million of corporate overheads following the sale of OPS. Adjusted for this, EBITDA was up 17%, reflecting underlying earnings strength. EBIT increased 4.4% to $51.6 million with higher interstate freight costs and DNA tempering the growth in EBIT. Adjusting to the $5 million in corporate costs, EBIT increased 14.5%. Total capex was $62.8 million and this will decrease in further periods as the Rockley expansion concludes in late FY26. Turning to slide 16. Savourglass volumes were up 2.6% for the first half with the spirits mix growing versus the prior period. The growth was driven primarily by the tequila and vodka categories. Savourglass posted revenue of €298 million down 2.6% versus the prior period. Pleasingly EBITDA was up €0.7 million or 0.9% to €69.1 million driven by a stronger spirits mix and ongoing cost containment measures. DNA was up year-on-year by €3.9 million as we cycle the one-off benefits in the prior period from the realignment of mould amortisation policies. EBIT of €34.9 million reflects this higher DNA compared to the prior period. CAPEX was €11.8 million. and this includes mould sets and early works for the Glen Furnace rebuild of approximately €1 million. Returning to slide 17, revenue for Gawler grew slightly up 0.3% as contracted price increases offset softer beer and wine volumes. Volumes for the seasonally higher first half were marginally below internal expectations, reflecting ongoing market softness. EBITDA and EBIT both grew strongly, up $12 million and $8.4 million respectively, benefiting from the move to a two-furnace operation and the completion of the G3 rebuild. Depreciation rose $3.7 million, reflecting completion of the G3 rebuild and oxygen plant and post these investments, minimal capex will be required for Gawler going forward. Turning to slide 18. The group delivered a strong cash result with a significant uplift in cash flow available to shareholders and strong cash realisation, demonstrating disciplined working capital management. Now looking at the components of this cash result in more detail. Aurora has delivered operating cash flow for continuing operations of $189.7 million, an increase of 51% driven by higher cash EBITDA and lower base CAPEX. A reduction in total working capital of $26.8 million improves cash flows and this reflects a reduction in receivables, a modest increase in inventories largely offset by higher Cairns Trade creditors as a result of higher aluminium prices and purchases to support increased production and sales. Base capex and growth capex were both down compared to the prior period with growth capex of $57.8 million largely relating to the final major Cairns CapEx project at Rockley of approximately $50 million. Net interest payments of $19.8 million were lower than the prior corresponding period, reflecting the receipt of funds in December 2024 from the completion of the OPS sale, partially offset by 2025 calendar year buyback. The strong operating cash flow performance after CapEx interest and tax has flowed through available to shareholders of $74.9 million, up $96 million compared to the prior period. This will further increase for FY26 and beyond, with only the Rockley project remaining in our CAHNS CAPEX program. With cash realisation at 112% for the first half, this demonstrates our strong working capital discipline and highlights our commitment to cash management. Turning to slide 19. Total capex was $90 million this half, down from $157 million in the prior period. This reflects the completion of our major projects in Gawler and Reesby. There is no change to our forecast FY26 total capex of approximately $200 million, with base capex consistent with our long-term target range. Importantly, only the Rockley Cairns expansion for Queensland remains, and this will complete this financial year. Beyond FY26, you can see that base capex will be $70 to $95 million per year, and the decarbonisation capex for favour glass will be $15 to $25 million per year, for a total of $85 to $120 million per year. For clarity, there will continue to be some modest growth investment each year for productivity or new customer moulds, for example, but these will bring new earnings as well. Consistent with our recent messaging, we are not expecting to add any new network capacity until the next decade. And importantly, any new addition in capacity will be clearly flagged and will be subject to our investment hurdles. DNA was 87 million for the half. DNA is expected to be in the range of 180 to 185 million as newly commissioned projects are now included in base depreciation, Second half DNA will increase reflecting the timing of commissioning of new projects. Favourglass depreciation is expected to be in the low €70 million range in FY26. Slide 20 highlights Aurora's strong balance sheet and net debt position which is underpinned by strong liquidity of over €1.2 billion as at 31 December net debt was €386 million with leverage at 0.9 times net debt to EBITDA. The modest increase in net debt since 30 June reflects the impact of the buyback with just over $100 million invested in the buyback in the first half. This will increase in the second half as we continue to execute our new on-market buyback program announced today. Net finance costs in the first half were $26.7 million with no change to our FY26 guidance of approximately $55 to $60 million. This assumes that 10% of shares will be bought back on market within calendar 2026. That is, we expect to complete a further 5% in the second half of FY26, with the remainder of the 10% announced today expected to be completed in the first half of FY27. As a reminder, our finance costs comprise more than just interest and include the following items. Interest on our gross drawn debt at approximately 4.5%, ROU interest for leased assets of approximately $9 million and other items such as commitment fees payable for undrawn facilities and working capital financing. Turning to slide 21. The Board has declared an interim dividend of $0.05 per share representing a 79% payout ratio which is within the target range of 60 to 80% of NPAT. The interim dividend is unfranked. As Brian mentioned, we announced a new on-market buyback today of up to 10% of issued shares, or approximately $270 million. This will commence after the customary waiting periods of approximately two weeks. This follows the successful completion of the 2025 buyback program, where 110 million shares or 8% of shares on issue were purchased. I will now hand back to Brian.