2月财报季预览

1、Deutsche Bank ResearchAustralasiaAustraliaPaper & PackagingIndustryPaper & PackagingDate1 February 2019ResultsFebruary 2019 reporting seasonpreviewPackaging results to be mixed (in-line to slightly disappointing), however, expectations are quite low and raw material costs are easingWe expect the res

2、ults of the Packaging companies in the upcoming reporting period to be mixed with Amcor and Pact Group broadly meeting market expectations, however, Orora could marginally disappoint given challenging conditions in North America. We expect Amcor to reiterate its full year earnings guidance for const

3、ant currency earnings growth, however, we remain of the view that the proposed Bemis acquisition (delayed to the June quarter) will be the key driver of the share price. We expect Pact could upgrade its full year earnings guidance to reect easing raw material costs in both USD and AUD. While this wo

4、nt benet rst half earnings, it should certainly benet the second half. We have Buy ratings on Amcor and Pact, and a Hold rating on Orora.Amcor to report Monday, February 11We expect Amcor to report an underlying net prot of US$336.8m in the 6 months to December, up 2% on pcp. The consensus estimate

5、is US$330m. We expect EBIT of US$515.2m, at on pcp, and the consensus estimate is $US517m. We expect the Amcor result to broadly meet market expectations for the half and we expect the company to reiterate its full year guidance for constant currency earnings growth and solid EBIT growth in both the

6、 Flexibles and Rigid Plastics segments. Raw material costs are easing, we expect North American Beverage volumes to be up modestly, and we expect the emerging markets to remain mixed. Earnings could be impacted by hyperination accounting in Argentina. We believe the proposed Bemis acquisition remain

7、s the key driver of the share price.Orora to report Wednesday, February 13We expect Orora to report an underlying net prot of $109.7m in the 6 months to December, up 4% on pcp. The consensus estimate is $113m. The company has guided to higher constant currency earnings for the full year, subject to

8、global economic conditions. We expect EBITDA of $235.9m, up 4% on pcp, and EBIT of A$171.1m, up 3% on pcp. The consensus estimates are $242m and $184m respectively. We expect Ororas full year result could marginally disappoint given lower than anticipated North American earnings. North American dema

9、nd remains at and the company is experiencing higher labour, freight, and paper costs. OPS remains impacted by the delayed roll-out of the ERP while foregone revenue in OV has been replaced at a lower margin. We expect cash conversion to decline given increased capex and revised aluminium supply arr

10、angements. However, we still expect the company to reiterate its full HYPERLINK mailto:mark.wilson Mark Wilson, CFA Research Analyst+61-2-8258-1564Top picksAmcor Ltd (AMC.AX),AUD13.68BuyPact Group (PGH.AX),AUD3.85BuySource: Deutsche BankCompanies featuredAmcor Ltd (AMC.AX),AUD13.68Buy2018A 2019E 202

11、0EP/E (x)18.514.413.2Div yield (%)3.95.05.5Price/book (x)12.78.97.2Orora (ORA.AX),AUD3.20Hold 2018A 2019E 2020EP/E (x)19.017.816.6Div yield (%)3.94.24.5Price/book (x)2.62.52.4Pact Group (PGH.AX),AUD3.85Buy2018A 2019E 2020EP/E (x)18.713.511.0Div yield (%)4.25.77.0Price/book (x)3.02.52.4Source: Deutsc

12、he BankDeutsche Bank AG/SydneyDistributed on: 01/02/2019 08:54:08 GMTPaper & PackagingDeutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the rm may have a conict of interest that could aect the objectivity of this report.

13、Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 091/04/2018.7T2se3r0Ot6kwoPayear guidance for underlying earnings growth in constant currency terms, subject to global economic

14、 conditions.Pact to report Wednesday, February 20We expect Pact to report an underlying net prot of $38.4m in the 6 months to December, down 24% on pcp. The consensus estimate is $42m. We expect EBITDA of $116.1m, down 4% on pcp and slightly below the consensus estimate of $118m. We expect EBIT of $

15、73.6m, down 15% on pcp. While we expect the result to be broadly in-line with market expectations, we believe the company will likely upgrade its full year earnings guidance to reect easing raw material costs in USD and AUD. We expect the company to provide an update on recent acquisitions, the tran

16、sformation program, and the search for a new CEO.Valuation and RisksOur primary valuation methodology in the sector is DCF, using company specic WACC based on target debt/equity ratios, TG rates in line with GDP and pretax cost of debt based on company corporate lending rates. Key upside/ downside r

17、isks include integration of recent acquisitions, packaged food and beverage demand, currency movements, loss of major customers, changes to the competitive landscape and legislative changes.Amcor1H19 result due Monday, February 11We expect Amcor to report an underlying net prot of US$336.8m in the 6

18、 months to December, up 2% on pcp. The consensus estimate is US$330m. The company has guided to constant currency earnings growth for the full year, albeit weighted to the second half. We expect EBIT of US$515.2m, at on pcp, and the company has guided to solid earnings growth in constant currency te

19、rms in both Flexibles and Rigid Plastics for the full year, with modest growth in the rst half. The consensus EBIT estimate is $US517m. We expect underlying EPS of US29.1c, up 2% on pcp.We expect the company to report net signicant items of $55m, primarily relating to restructuring costs.We expect t

20、he company to declare an unfranked interim dividend of US22.0cps, US21.0cps in the prior period.We have a Buy rating with the stock trading at an 15% discount to our valuation of A$16.15/share.Key issues and outlook commentaryWe expect the Amcor result to broadly meet market expectations for the hal

21、f and we expect the company to reiterate its full year guidance for constant currency earnings growth and solid EBIT growth in both the Flexibles and Rigid Plastics segments. Raw material costs are easing, we expect North American Beverage volumes to be up modestly, and we expect the emerging market

22、s to remain mixed. Earnings could be impacted by hyperination accounting in Argentina.We expect the company to provide an update on recent acquisitions, the restructuring programs in Flexibles and Rigid Plastics, and the proposed Bemis acquisition. The Bemis Q4 result was in-line with market expecta

23、tions, however, free cash ow was ahead of market expectations. The cost reduction and short run business programs are on track.We expect Flexibles earnings to remain at at US$397m on revenue growth of just 0.3%. In Euro terms, we expect earnings to increase by 2% to 342.6m on a 1.8% increase in sale

24、s revenue. We expect earnings to be impacted by higher raw material costs and restructuring costs.We expect Rigid Plastics earnings to increase by 2% to US$146.2m on a 10% increase in sales revenue. We expect North American Beverage volumes to be up 2% and South American Beverage volumes to be up 4%

25、.We expect corporate costs of US$40m and an AMVIG contribution of US$12m.We expect net operating cashow to decline by 20% to $141.6m and net debt to decline to US$4.2bn.ValuationOur share price target of $16.15 is based on our DCF valuation (WACC 7.0%, equity/debt ratio 70/30, pre-tax cost of debt 5

26、.0%, terminal growth rate of 3%, in line with GDP).RisksKey downside risks include:Integration of acquired businesses, synergy attainment and retention;Packaged food and beverage demand;The extent to which raw material, energy and freight costs are passed through to customers;Customer purchasing pow

27、er or moving in-house;Competitor behaviour;Legislative changes; andCurrency movements. Every 1c move will impact net prot by US$3m.Earnings previewFigure 1:Earnings previewUS$m1H19E1H18% chgSales RevenueFlexibles3176.33166.40%Rigid Plastics1470.31335.810%Other0.00.0naTotal Sales Revenue4646.64502.23

28、%EBITDA691.7695.20%Margin14.9%15.4%-55 bpsD&A176.5181.4-3%EBITFlexibles397.0396.80%Rigid Plastics146.2143.72%Asia12.07.169%Other-40.0-33.818%Total EBIT515.2513.80%Margin11.1%11.4%-32 bpsNet Interest Expense-103.0-101.71%Pre-Tax Profit412.2412.10%Income Tax Expense-70.5-78.2-10%Effective Tax Rate17.1

29、%19.0%-188 bpsMinority Interests-5.0-4.219%Underlying Net Profit336.8329.72%Significant Items-55.00.0naNet Profit281.8329.7-15%EPS (USD cps)29.128.52%Dividend (USD cps)22.021.05%Payout ratio (%)75.7%73.8%189 bpsSource:Deutsche Bank estimatesOrora1H19 result due on Wednesday February 13We expect Oror

30、a to report an underlying net prot of $109.7m in the 6 months to December, up 4% on pcp. The consensus estimate is $113m. The company has guided to higher constant currency earnings for the full year, subject to global economic conditions. We expect EBITDA of $235.9m, up 4% on pcp, and EBIT of A$171

31、.1m, up 3% on pcp. The consensus estimates are $242m and $184m respectively. We expect underlying EPS of A9.0cps, up 4% on pcp.We do not expect the company to report any net signicant items.We expect the company to declare an interim dividend of A6.5cps, 30% franked, which compares to A6.0cps and 30

32、% franked in the prior period.We have a Hold rating with the stock trading at a 7% discount to our valuation of $3.35/share.Key issues and outlook commentaryWe expect Ororas full year result could marginally disappoint given lower than anticipated North American earnings. North American demand remai

33、ns at and the company is experiencing higher labour, freight, and paper costs. OPS remains impacted by the delayed roll-out of the ERP while foregone revenue in OV has been replaced at a lower margin. We expect cash conversion to decline given increased capex and revised aluminium supply arrangement

34、s.However, we still expect the company to reiterate its full year guidance for underlying earnings growth in constant currency terms, subject to global economic conditions.We expect the company to update the market on the integration and performance of the Orora Visual acquisitions, the roll-out of

35、the ERP system and recent acquisitions in Orora Packaging Solutions, and the M&A pipeline.We expect Australasian earnings to increase by 2% to $123.6m on a 2% increase in sales revenue with earnings to benet from solid organic growth.We expect North American earnings to increase by 4% to A$62.9m on

36、a 12% increase in sales revenue, primarily driven by the lower AUD. In USD terms, we expect earnings to decline by 2% to US$45.9m on a 5% increase in sales revenue.We expect corporate costs of $15.5m.We expect net debt to increase to $872m and net operating cash ow to decline by 35% to $89.7m.Valuat

37、ionOur share price target of $3.35 is based on our DCF valuation (WACC 8.0%, equity/ debt ratio 70/30, pre-tax cost of debt 6%, terminal growth rate of 3%, in line with GDP).This is also supported by our sum-of-the-parts valuation range of $3.03-3.45/ share. We use an EBITDA multiple range of 9.0-10

38、.0 x for the Australasian division given the strong market positions and improving earnings prole.We use an EBITDA multiple range of 8.0-9.0 x for the Orora Packaging Solutions and Orora Visual businesses given the mix of manufacturing and distribution assets.Figure 2: Orora SOTP valuationEBITDA Mul

39、tipleValuationFY20E EBITDAAdjustmentAdjusted EBITDALowHighLowHighAustralasia3473479103,1243,471Orora Packaging Solutions164164891,3141,478Orora Visual242489195219Corporate costs(27)(27)78(186)(213)Total Enterprise Valuation4,4464,955Net Debt(792)(792)Equity Value3,6554,164Shares on Issue1,2071,207Im

40、plied Price per Share$3.03$3.45Source: Deutsche Bank estimatesRisksKey upside and downside risks include:Ability to retain the targeted cost reduction benets;Ramp-up of the B9 containerboard mill;Gain of a major customer;Changes to packaged food and beverage demand;Ability to recover higher raw mate

41、rial, energy and freight costs;Changes to customer purchasing power or moving in-house;Changes to competitor behavior; andLegislative changesEarnings previewFigure 3: Earnings previewA$m1H19E1H18% chgSales RevenueAustralasia1063.31042.42%Packaging Distribution1039.6916.713.4%IntegraColor143.8138.74%

42、Total Sales Revenue2246.62097.87%EBITDA235.9227.34%Margin10.5%10.8%-33 bpsD&A64.962.05%EBITAustralasia123.6121.12%Packaging Distribution55.148.414%IntegraColor7.811.9-35%Other-15.5-16.1-4%Total EBIT171.1165.33%Margin7.6%7.9%-27 bpsNet Interest Expense-17.8-17.71%Pre-Tax Profit153.3147.64%Income Tax

43、Expense-43.5-41.94%Effective Tax Rate28.4%28.4%2 bpsUnderlying Net Profit109.7105.74%Significant Items0.0-1.9naNet Profit109.7103.86%EPS (Acps)9.08.64%Dividend (Acps)6.56.08%Payout ratio (%)72.5%69.5%296 bpsSource: Deutsche Bank estimatesPact1H19 result due Wednesday, February 20We expect Pact to re

44、port an underlying net prot of $38.4m in the 6 months to December, down 24% on pcp. The consensus estimate is $42m. We expect EBITDA of $116.1m, down 4% on pcp and slightly below the consensus estimate of $118m. We expect EBIT of $73.6m, down 15% on pcp. We expect underlying EPS of A11.4cps, down 31

45、% on pcp.We do not expect the company to report any signicant items.We expect the company to declare an interim dividend of A9.0cps, 65% franked, which compares to A11.5cps and 65% franked in the prior period.We have a Buy rating with the stock is trading at a 31% discount to our valuation of A$5.60

46、/share.Key issues and outlook commentaryWhile we expect the result to be broadly in-line with market expectations, we believe the company could upgrade its full year earnings guidance to reect easing raw material costs in USD and AUD.We expect the company to provide an update on recent acquisitions,

47、 the transformation program, and the search for a new CEO.We expect Australian earnings to decline by 37% to $35.4m on a 5% increase in sales revenue. We expect earnings will be impacted by higher resin and contract manufacturing raw materials costs.We expect International earnings will increase by

48、24% to $38.2m on a 49% increase in sales revenue. Earnings and revenue should benet from a full 6 month contribution from the Asian acquisitions.We expect net debt to increase to $756m and net operating cash ow to decline from $29.9m in the pcp to -$16.1m.ValuationOur share price target of $5.60 is

49、based on our DCF valuation (WACC 8.0%, equity/ debt ratio 70/30, pre-tax cost of debt 6%, terminal growth rate of 3%, in line with GDP)This is also supported by our sum-of-the parts valuation range of $4.98-5.74. We use an EBITDA multiple range of 9.0-10.0 x for the Australian and International divi

50、sions given the strong market positions, superior EBITDA margins and cashow generation.Figure 4: Pact SOTP valuationEBITDA multipleValuationAustraliaFY19 EBITDA161.9Low9.0High10.0Low1,457High1,619International99.19.010.0892991Enterprise valuation2,3502,611Net debt(634)(634)Equity valuation1,7151,976

51、Number of shares344.3344.3Value per share$4.98$5.74Source: Deutsche Bank estimatesRisksKey downside risks include:the loss of a major customer or contractchanges to the competitive landscapethe ability to pass through cost increases in a timely mannerchanges to industry sectors and/or consumer prefe

52、rencesacquisition and integration riskregulatory risks; andmovements in foreign currency.Earnings previewFigure 5: Earnings previewA$m1H19E1H18% chgSales RevenueAustralia676.8642.85.3%International246.8165.349.3%Total Sales Revenue923.6808.114.3%EBITDA116.1120.7-3.8%Margin %12.6%14.9%-237 bpsD&A-42.

53、5-33.925.3%EBITAustralia35.456.1-36.9%International38.230.724.4%Other0.00.0NATotal EBIT73.686.8-15.2%Margin %8.0%10.7%-277 bpsNet Interest Expense-19.6-16.221.0%Pre-Tax Profit54.070.6-23.5%Income Tax Expense-15.5-20.1-22.6%Effective Tax Rate28.8%28.5%33 bpsMinority Interests0.00.0naUnderlying Net Pr

54、ofit38.450.5-23.9%Significant Items0.0-6.4-100.0%Net Profit38.444.1-12.8%EPS (Acps)11.416.5-30.6%Dividend (Acps)9.011.5-21.7%Payout ratio (%)78.7%69.7%8.9%Source: Deutsche Bank estimatesModel updated: 24 January 2019Fiscal year end 30-Jun2016201720182019E2020E2021ERunning the numbersFinancial Summar

55、yAustralasiaDB EPS (USD)0.570.600.620.680.740.81AustraliaReported EPS (USD)0.210.410.510.430.620.450.640.500.740.540.810.58Paper & PackagingBVPS (USD)0.680.710.881.101.371.67Amcor LtdValuation MetricsReuters: AMC.AXBloomberg: AMC AUPrice/Sales (x) P/E (DB) (x)P/E (Reported) (x)1.317.848.71.419.022.3

56、1.418.518.51.214.315.31.213.113.11.112.1P/BV (x)16.117.212.78.97.15.8BuyFCF yield (%)6.65.55.46.57.78.5Price (30 Jan 19)AUD 13.54Dividend yield (%)4.03.83.95.15.56.0 DPS (USD)12.1 EV/Sales1.61.91.91.61.51.4Target PriceAUD 16.15EV/EBITDA10.811.912.19.99.28.5 EV/EBIT14.415.816.012.911.810.9Market cap

57、(m)AUDm 15,681Income Statement (USDm)USDm 11,280Sales9,4219,1019,3199,4329,67310,109EBITDA1,4091,4471,4421,5281,6231,722Company ProfileEBITPre-tax profit1,0554091,0887661,0868811,1739071,2591,0591,3421,157Amcor is an international integrated packaging companyoffering global packaging solutions suppl

58、ying a broad rangeNet income244597724741867941of rigid plastics & flexible packaging products into the food,beverage, healthcare, home and personal care and tobaccoCash Flow (USDm)packaging industries.Cash flow from operations1,0991,0279371,1401,2781,395Net Capex-319-296-216-401-413-431Free cash flo

59、w781731722739866964Equity raised/(bought back)-310-60-4700052 Week rangeAUD 12.71 - 15.28Price Performance171615141312Jul 17Jan 18Jul 18Jan 19Dividends paid-480-489-527-532-596-648Net inc/(dec) in borrowings481212-145-206-270-316Other investing/financing cash flows-661-34856000Net cash flow-2558-100

60、00Balance Sheet (USDm)Change in working capital37159183612Cash and cash equivalents516562621621621621Property, plant and equipment2,6912,7652,6982,7452,7932,844Goodwill1,7902,0332,0372,0372,0372,037Amcor LtdALL ORDINARIES (Rebased)Margin Trends1816141210Other assets3,6853,7233,6913,7293,8123,961Tota