Vidrala S.A. — Investor Presentation 2020

Sep 24, 2020

CREDIT METRICS

SEPTEMBER 2020

• 1. GENERAL OVERVIEW
• 2. BUSINESS FUNDAMENTALS
• 3. FINANCIALS
• 4. CREDIT METRICS
• 5. ANNEXES

SUPPLIER OF REFERENCE IN THE PACKAGING INDUSTRY

• Vidrala manufactures glass containers for a wide variety of products in the food and beverage industry.
• We are one of the main glass container manufacturer in Western Europe, leaders in the Iberian market, co-leaders in the British market and supplier of reference in Italy and France, through eight complementary sites located in five different countries.
• We sell more than 8.3 billion bottles and jars per year, among more than 1,600 customers.
• Vidrala is a public listed company, with a market capitalization over EUR 2.0 billion.

MAIN FIGURES FY 2019

SALES 1,010.8 EUR million +5.5% YoY organic EBITDA 274.6 EUR million 27.2% EBITDA margin EARNINGS 5.27 EUR per share +24.0% YoY FREE CASH FLOW 121.1 EUR million 12.0% FCF over sales

CREATING VALUE AND FUTURE IN A SUSTAINABLE WAY

OUR HISTORY

CUSTOMER, COMPETITIVENESS & CAPITAL THE GUIDELINES ON WHICH WILL BE SUSTAINED OUR AMBITIOUS FUTURE

OPERATING PROFILE

NET SALES.

Since 2000, EUR million.

EBITDA MARGIN.

Since 2000, as percentage of sales.

STRATEGIC DIVERSIFICATION & COHERENT GROWTH STABILITY OF MARGINS, RESILIENT TO INTEGRATIONS AND ECONOMIC CYCLES

CASH PROFILE

EBITDA.

Since 2011, EUR million.

FREE CASH FLOW.

Since 2011, EUR million.

CASH CONVERSION 51% OF EBITDA 2011-2019

VALUE CREATION, MATERIALISED IN A SUSTAINED CASH GENERATION

FINANCIAL SOLVENCY.

Year-over-year evolution of debt since 2015, EUR million and times EBITDA.

ON THE BASIS OF A SOLVENT FINANCIAL STRUCTURE

BUSINESS FUNDAMENTALS

Understanding the european glass packaging industry

INDUSTRY FUNDAMENTALS

LOGISTICS. Local sales nature.

1

• Natural characteristics of hollow glass containers limit logistics.
• Customers' packaging activity demands service on time and supply flexibility.
• Proximity to the customer and service quality determines sales capabilities.

2 CONTINUOUS PROCESS. Capital intensive.

• Glass manufacturing is based on a continuous 24/365 activity.
• Production process is intensive in cost (labour and energy) and capital (periodical replacements). Technological development demands constant and complex adaptation.

High utilization rates are crucial for profitability.

NOTEWORTHY ENTRY BARRIERS

DEMAND FUNDAMENTALS

THE GLASS PACKAGING MARKET A MATURE AND STABLE DEMAND

PRODUCT FUNDAMENTALS

GLASS, THE BEST OPTION

Enviromentally friendly

Glass is a 100% recyclable material that can be shaped over and over again without losing any of its properties or advantages.

The healthiest type of packaging

It is a completely hygienic material, impervious to gases, vapour, and liquid, thereby protecting and preserving the flavour and properties of the food within.

Premiumisation trend

Glass is seen by consumers as a guarantee of quality and reliability. Brands design containers, bestowing them with different shapes and colours to give their product its own personality.

GLASS, THE PREFERRED MATERIAL ENVIRONMENTAL, HEALTH & BRAND PERCEPTION BENEFITS

VIDRALA FUNDAMENTALS

Vidrala's commercial positioning is focused on geographic regions and product segments of long term strategic value. Vidrala sells its products to a strong customer base composed of a solid balance between blue chip customers, multinational brand owners and domestic packagers.

TOWARDS A STRATEGIC POSITIONING IN OUR KEY MARKETS

FINANCIALS

Latest earnings release

SALES. YoY change, EUR million. 507.5 474.4 -6.5% -0.0% 100 200 300 400 500 600 H1 2019 Organic change FX effect H1 2020 -6.5% YoY

H1 2020 RESULTS. EBITDA.

EBITDA.

YoY change, EUR million.

H1 2020 RESULTS. EBITDA margin.

EBITDA MARGIN.

28%

NET DEBT.

YoY evolution, in EUR million and times EBITDA.

H1 2020 MAIN HIGHLIGHTS

RESILIENT TOP-LINE PERFORMANCE AMID THE PANDEMIC

Sales during the first six months 2020 amounted to EUR 474.4 million, showing an organic decline of 6.5%.

SOLID OPERATING MARGINS

Operating profit, EBITDA, was EUR 122.4 million representing an operating margin of 25.8%.

FURTHER DELEVERAGING, STRENGHTENING FINANCIAL POSITION

Debt at June 30, 2020 stood at 1.1 times last twelve months EBITDA, reflecting a year-on-year reduction of 27%.

CREDIT METRICS

Key financial ratios

Financial profile

	2012	2013	2014	2015*	2016	2017*	2018	2019	H1 2020**
FCF/Sales	10.9%	12.0%	15.4%	11.0%	13.3%	13.2%	10.6%	12.0%	15.5%
FCF/Debt	31.0%	48.0%	106.0%	21.8%	31.8%	22.3%	24.6%	36.2%	51.6%
Debt/EBITDA	1.5x	1.0x	0.6x	2.5x	1.9x	2.2x	1.7x	1.2x	1.1x
EBITDA/Financial expenses	16.8x	23.4x	32.1x	15.1x	17.8x	28.8x	35.8x	59.5x	59.6x

Operating profile

	2012	2013	2014	2015*	2016	2017*	2018	2019	H1 2020**
EBITDA margin	22.6%	24.1%	23.2%	20.1%	22.1%	23.8%	25.1%	27.2%	27.2%
EBITDA/Tangible assets	30.0%	34.4%	33.3%	24.6%	28.8%	28.6%	35.0%	39.7%	38.8%

*Proforma figures. **Last 12 months figures.

	V ï
۱ I	$\frac{1}{2}$

	2012	2013	2014	2015	2016	2017	2018	2019	H1 2020
Assets (EUR in millions)	695	700	669	1200	1096	1405	1407	1458	1484
Current Assets	239	256	242	434	388	451	449	489	524
Fixed Assets	456	444	427	766	708	954	958	969	960
Liabilities and shareholders´ equity (EUR in millions)	695	700	669	1200	1096	1405	1407	1458	1484
Equity	338	375	404	477	475	528	610	723	744
GROSS DEBT	160	118	68	420	323	529	434	364	376
Current liabilities	135	135	129	211	202	249	263	271	264
Other non-current liabilities	62	72	68	93	96	99	100	100	100
SOLVENCY RATIOS	2012	2013	2014	2015*	2016	2017*	2018	2019	H1 2020**
Debt/Ebitda	1.5x	1.0x	0.6x	2.5x	1.9x	2.2x	1.7x	1.2x	1.1x
Debt/Equity	0.5x	0.3x	0.2x	0.8x	0.7x	0.9x	0.7x	0.5x	0.4x
Ebitda/Financial Expenses	17.0x	23.4x	32.1x	15.1x	17.8x	28.8x	35.8x	59.5x	59.6x

*Proforma figures. **Last 12 month figures.

Source: Audited anual and semiannual reports. Available at www.vidrala.com

CASH PROFILE

EBITDA CASH CONVERSION BRIDGE AND CASH ALLOCATION

As a percentage of sales (Last 12 months as at June-20)

CHANGE IN DEBT BRIDGE

EUR million

FY 2020 OUTLOOK (oficially released on July 2, 2020)

BUSINESS UPDATE

• Sales volumes during Q2 standalone down approx. -15%, as expected
• Operating margins year-to-date consolidated at levels above 25% EBITDA over sales
• Financial position remains solid, debt reduction approx. -25% year-on-year

STRATEGIC GUIDELINES UNDER THE PANDEMIC

OUR VIEW, ON THE FUTURE

• Invest more now, for our business future
• With our customer in mind
• To further improve our competitiveness
• Selectively allocating capital in strategic projects
• CapEx 2020 reaffirmed at levels of EUR 130 million, approx. 14% of sales

SECURING A SOLID FINANCIAL POSITION

• Current leverage ratio below 1.2x EBITDA
• No maturities until end of 2023
• Total current cost of debt below 1% annual
• Strong committed liquidity, currently in excess of 1.0x EBITDA
• Disciplined protection of our cash, gradually balancing production with real demand

FULL YEAR 2020 OUTLOOK

• FY 2020 sales volumes expected to decline in the range of 5-10% vs. 2019
• FY 2020 operating margins expected to remain solid around 25% EBITDA over sales
• FY 2020 earnings expected to drop in the range of 15-25% vs. 2019
• FY 2020 cash after capex to exceed dividend payments and to be used for further debt reduction
• o Uncertainty high amid the pandemic, macro context weak, business conditions changing
• o Prudency and time needed before defining new mid-term business targets
• o STRATEGIC INTERNAL ACTIONS WILL REMAIN FIRMLY COMMITTED TO OUR LONG TERM BUSINESS PRINCIPLES: CUSTOMER, COST AND CAPITAL

Current financing structure As at June 30, 2020 Average maturity ≈ 4 years Estimated cost, all-in < 1.0% annual Debt / EBITDA ratio ≈1.1x

DISCLAIMER

This presentation includes or may include representations or estimations concerning the future about intentions, expectations or forecasts of VIDRALA or its management. which may refer to the evolution of its business performance and its results. These forward looking statements refer to our intentions, opinions and future expectations, and include, without limitation, statements concerning our future business development and economic performance. While these forward looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macro-economic, governmental and regulatory trends, (2) movements in local and international securities markets, currency exchange rates and interest rates as well as commodities, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties.

The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the regulatory and supervisory authorities (including the Spanish Securities Market Authority – Comisión Nacional del Mercado de Valores - CNMV), could adversely affect our business and financial performance. VIDRALA expressly declines any obligation or commitment to provide any update or revision of the information herein contained, any change in expectations or modification of the facts, conditions and circumstances upon which such estimations concerning the future have been based, even if those lead to a change in the strategy or the intentions shown herein.

This presentation can be used by those entities that may have to adopt decisions or proceed to carry out opinions related to securities issued by VIDRALA and, in particular, by analysts. It is expressly warned that this document may contain not audited or summarised information. It is expressly advised to the readers of this document to consult the public information registered by VIDRALA with the regulatory authorities, in particular, the periodical information and prospectuses registered with the Spanish Securities Market Authority – Comisión Nacional del Mercado de Valores (CNMV).

VIDRALA, S.A.

Treasury Tel: +34 94 671 98 85 financiero@vidrala.com www.vidrala.com