Annual General Meeting 2007
Annual General Meeting 2007
Annual General Meeting 2007
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<strong>Annual</strong> <strong>General</strong> <strong>Meeting</strong><br />
<strong>2007</strong><br />
3 May <strong>2007</strong>
Rolf Börjesson<br />
Chairman
• Trading statement<br />
• Presentation by Chief Executive Officer<br />
• Employee Share Incentive Schemes<br />
• AGM <strong>2007</strong> Resolutions<br />
AGM <strong>2007</strong>
Trading Statement
Leslie Van de Walle<br />
Chief Executive Officer
• Strong top-line growth<br />
• Difficult environment with high input costs<br />
• Delivered compelling efficiency gains<br />
• Acquisitions integrated successfully<br />
• Strong cash flow performance<br />
• Significant increase in capex programme to fuel future<br />
growth<br />
• Strategy remains consistent and on track<br />
2006 overview
A resilient Group performance<br />
£m 2006 2005 Change%<br />
Sales 1<br />
Underlying operating profit 2<br />
Underlying PBT 2<br />
Free cash flow<br />
Underlying EPS 2<br />
Dividends per share 3<br />
1. Sales from ongoing operations excluding businesses disposed or held for disposal<br />
2. Excluding exceptional items<br />
3. Proposed final dividend of 11.1p plus interim dividend paid of 7.9p<br />
3,647<br />
415<br />
303<br />
173<br />
40.6p<br />
19.0p<br />
3,111<br />
409<br />
307<br />
248<br />
39.5p<br />
18.12p<br />
+17<br />
+1<br />
-1<br />
-30<br />
+3<br />
+5
Beverage Cans<br />
Sales £2,490m +11% Underlying operating profit 1 £292m -7%<br />
• Significant market share gains and<br />
buoyant global can market<br />
• Strong top line growth<br />
– Volumes up 10%<br />
– Capacity utilisation high<br />
– Growth in specialty sizes<br />
• Lower operating profit<br />
– Operating margin fell due to<br />
unprecedented rise in input costs<br />
– Impact of long term sales contract<br />
in North America<br />
1. Before exceptional items<br />
3,500<br />
3,000<br />
2,500<br />
2,000<br />
1,500<br />
1,000<br />
$1,725/tonne $1,900/tonne $2,600/tonne<br />
Average 37%<br />
2004 2005<br />
2006
• Sales trend upwards<br />
– organic growth despite product<br />
launch delays<br />
– acquisitions<br />
• Profits up 44% : 12% organic<br />
• Good performance in Pharma,<br />
Dispensing Systems and high barrier<br />
Food<br />
• Majority of resin and energy cost<br />
increases recovered<br />
• Reorganisation of Make Up division<br />
• Acquisitions performing well<br />
Plastic Packaging<br />
Sales £720m +53% Underlying operating profit 1 £82m +44%<br />
1. Ongoing operations excluding businesses disposed or held for disposal and before exceptional items
• Sales up 8%: price and volume<br />
• Profits impacted by the substantial rise<br />
in energy costs<br />
• Industry capacity in good balance<br />
Glass<br />
Sales £437m +8% Underlying operating profit 1 unchanged at £36m<br />
Divestment of business announced in March for €660m (£449m)<br />
1. Ongoing operations excluding businesses disposed or held for disposal and before exceptional items
Net<br />
borrowings<br />
£m<br />
1,600<br />
1,400<br />
1,200<br />
1,000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
3.9<br />
4.7<br />
Strong financial position<br />
1. Based on underlying operating profit before exceptional items and net interest expense excluding preference dividends<br />
2. As at 1.1.05 incorporating IAS 32 and IAS 39<br />
6.0<br />
5.8<br />
4.8<br />
Dec 2002 Dec 2004<br />
Dec 2003 Dec 2005 Dec 2006<br />
Gearing (%) 245 142 141 2 121 94<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Interest<br />
cover 1<br />
times
Outlook <strong>2007</strong><br />
• Continued beverage can volume growth with<br />
improved product mix<br />
• Price increases in Europe in a tight can market<br />
• Good organic profit growth in Plastic Packaging<br />
• Pressure of high input costs and weak US$<br />
counteract any progress<br />
• A story of two halves
Initial impressions
• Sound strategic direction<br />
• Significant growth opportunities<br />
• Customer relationship and innovation<br />
• Operational excellence<br />
• Management strength<br />
Initial impressions<br />
A company with significant opportunities for profitable growth
Significant growth<br />
opportunities
Cash generation<br />
• Beverage cans cash<br />
flow<br />
• Proceeds from Glass<br />
disposal<br />
Improving the growth profile<br />
Higher growth areas<br />
• Growth capex:<br />
especially beverage<br />
cans<br />
• Emerging markets<br />
• Plastic Packaging<br />
acquisitions
Global beverage can market<br />
volume 2006<br />
37%<br />
Rexam<br />
Ball<br />
17%<br />
Source: Rexam estimates<br />
24%<br />
Further consolidation opportunities<br />
21%<br />
Crown<br />
Local players<br />
Rexam No 1<br />
Global rigid plastic packaging<br />
market $93bn (£46bn)<br />
84%<br />
Rexam No 4<br />
Amcor<br />
Graham<br />
Aptar<br />
Source: Rexam estimates and annual accounts; proforma sales as at June 2006<br />
Rexam<br />
Berry<br />
Plastipak<br />
Pactiv<br />
Alcan<br />
Alcoa<br />
Consolidated
Precise<br />
US<br />
Delta<br />
US<br />
Plastic Packaging<br />
Beverage Cans<br />
Airspray<br />
US &<br />
Netherlands<br />
Ecanco<br />
Egypt<br />
2005 and 2006 acquisitions<br />
£450m 450m<br />
FangXin<br />
China<br />
HTW<br />
Beverage Can<br />
JV<br />
India<br />
True Pack<br />
India
Dispensing Systems<br />
New plant<br />
Lacrost<br />
New line<br />
Whitehouse<br />
Food<br />
Plant<br />
extension<br />
Union<br />
Plastic Packaging<br />
Beverage Cans<br />
New plant<br />
Cuiabá<br />
Pharma<br />
Plant expansion<br />
Offranville/<br />
Neuenberg<br />
New Cap Can<br />
line<br />
Elk Grove<br />
Jacarei<br />
re-opened<br />
2006 and <strong>2007</strong> growth capex<br />
Home & Personal<br />
Care<br />
New plant<br />
Poland<br />
2nd line<br />
Egypt<br />
New line<br />
Moscow<br />
New plant<br />
for Red Bull<br />
Austria<br />
New plant JV<br />
India<br />
New plant<br />
Argayash
A company focused<br />
on innovation for its<br />
customers…
Wine in cans Best food industry supplier award<br />
Stackable wine bottles<br />
Mineral salt in cans First ready-to-consume<br />
distilled based Tequila<br />
Under-the-Tab<br />
promotion<br />
Innovative products<br />
Invisible dip tube<br />
Clean, airless dispenser<br />
Air-tight<br />
lipstick case
Adding innovation to manufacturing excellence<br />
• Moving from intermittent to robust<br />
innovation approach<br />
• Bringing structure to management<br />
of innovation<br />
– emulating successful Lean<br />
Enterprise approach<br />
Profitable growth
Looking further ahead<br />
• Significant organic profit growth commencing<br />
2008 from current capex investment programme<br />
• Plastic Packaging growth<br />
• Efficiency savings coming through consistently<br />
• Sharper focus on innovation and customer<br />
relationships<br />
• Acquisition opportunities<br />
Significant opportunities for profitable growth
AGM special business<br />
Rolf Börjesson
AGM special business<br />
• Electronic communication with shareholders<br />
• Renewal of share incentive arrangements on broadly the<br />
same terms as the existing arrangements<br />
– Long Term Incentive Plan <strong>2007</strong><br />
– Executive Share Option Scheme <strong>2007</strong><br />
– All employee Savings Related Share Option Schemes in the<br />
UK and Republic of Ireland
AGM questions
Resolutions
Resolution 1<br />
To receive and adopt the <strong>Annual</strong> Report for the year ended<br />
31 December 2006<br />
Shares<br />
% of votes cast<br />
For<br />
Against<br />
Withheld<br />
376,902,699<br />
567,522<br />
394,775<br />
99.7<br />
0.2<br />
0.1
To approve the Remuneration Report<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
345,684,274<br />
25,200,704<br />
6,980,018<br />
Resolution 2<br />
% of votes cast<br />
91.5<br />
6.7<br />
1.8
To declare the 2006 final dividend on the ordinary shares<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
377,837,224<br />
5,523<br />
22,249<br />
Resolution 3<br />
% of votes cast<br />
100.0<br />
-<br />
-
To elect Leslie Van de Walle as a director<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
372,580,239<br />
1,845,310<br />
3,439,447<br />
Resolution 4<br />
% of votes cast<br />
98.6<br />
0.5<br />
0.9
To elect Jean-Pierre Rodier as a director<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
376,767,829<br />
1,013,028<br />
84,139<br />
Resolution 5<br />
% of votes cast<br />
99.7<br />
0.3<br />
-
To elect Wolfgang Meusburger as a director<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
377,432,955<br />
341,908<br />
90,133<br />
Resolution 6<br />
% of votes cast<br />
99.9<br />
0.1<br />
-
To re-elect Michael Buzzacott as a director<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
376,818,335<br />
983,998<br />
62,663<br />
Resolution 7<br />
% of votes cast<br />
99.7<br />
0.3<br />
-
To re-elect Carl Symon as a director<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
376,496,046<br />
1,309,432<br />
59,518<br />
Resolution 8<br />
% of votes cast<br />
99.6<br />
0.4<br />
-
To re-appoint PricewaterhouseCoopers LLP as auditor and<br />
authorise the directors to determine its remuneration<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
373,608,515<br />
534,544<br />
3,721,937<br />
Resolution 9<br />
% of votes cast<br />
98.9<br />
0.1<br />
1.0
To adopt the Long Term Incentive Plan <strong>2007</strong><br />
For<br />
Against<br />
Withheld<br />
Shares<br />
334,507,718<br />
34,072,197<br />
9,285,081<br />
Resolution 10<br />
% of votes cast<br />
88.5<br />
9.0<br />
2.5
To adopt the Executive Share Option Scheme <strong>2007</strong><br />
For<br />
Against<br />
Withheld<br />
Shares<br />
346,322,769<br />
29,756,244<br />
1,785,983<br />
Resolution 11<br />
% of votes cast<br />
91.6<br />
7.9<br />
0.5
To adopt the Savings Related Share Option Scheme <strong>2007</strong><br />
For<br />
Against<br />
Withheld<br />
Shares<br />
377,190,623<br />
302,510<br />
371,863<br />
Resolution 12<br />
% of votes cast<br />
99.8<br />
0.1<br />
0.1
To adopt the Savings Related Share Option Scheme <strong>2007</strong><br />
(Republic of Ireland)<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
377,171,746<br />
310,125<br />
383,125<br />
Resolution 13<br />
% of votes cast<br />
99.8<br />
0.1<br />
0.1
Resolution 14<br />
To grant authority to the directors to establish share schemes for<br />
employees outside the UK<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
376,758,617<br />
711,066<br />
395,313<br />
% of votes cast<br />
99.7<br />
0.2<br />
0.1
Resolution 15<br />
To approve the reclassification of the unissued unclassified shares<br />
into unissued ordinary shares<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
377,676,473<br />
101,613<br />
86,910<br />
% of votes cast<br />
100.0<br />
-<br />
-
To grant authority to the directors to allot relevant securities<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
376,715,722<br />
1,092,715<br />
56,559<br />
Resolution 16<br />
% of votes cast<br />
99.7<br />
0.3<br />
-
Resolution 17<br />
To grant authority to the directors to allot equity securities for cash<br />
For<br />
Against<br />
Withheld<br />
Shares<br />
377,654,140<br />
159,242<br />
51,614<br />
% of votes cast<br />
100.0<br />
-<br />
-
Resolution 18<br />
To grant authority to the Company to purchase its own ordinary<br />
shares<br />
Shares<br />
% of votes cast<br />
For<br />
Against<br />
Withheld<br />
377,683,942<br />
135,093<br />
45,961<br />
100.0<br />
-<br />
-
Resolution 19<br />
To grant authority to the Company to use electronic means for<br />
shareholder communication<br />
Shares<br />
% of votes cast<br />
For<br />
Against<br />
Withheld<br />
377,551,470<br />
162,445<br />
151,081<br />
100.0<br />
-<br />
-
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