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Vidrala company Presentation 2013

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Vidrala is Western Europe’s fourth glass container manufacturer through six complementary sites located in four countries. Vidrala supplies glass containers for a wide variety of products in the beverages and food industry. Vidrala is a public company listed in the Spanish Stock Exchange.

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Page 1: Vidrala company Presentation 2013

Company Presentation

Page 2: Vidrala company Presentation 2013

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 businessperformance and its results. These forward looking statements refer to our intentions, opinions and futureexpectations, and include, without limitation, statements concerning our future business development andeconomic performance. While these forward looking statements represent our judgment and future expectationsconcerning the development of our business, a number of risks, uncertainties and other important factors couldcause actual developments and results to differ materially from our expectations. These factors include, but arenot limited to, (1) general market, macro-economic, governmental and regulatory trends, (2) movements inlocal 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 worthinessof our customers, obligors and counterparties.The risk factors and other key factors that we have indicated in our past and future filings and reports, includingthose 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 financialperformance. VIDRALA expressly declines any obligation or commitment to provide any update or revision of theinformation herein contained, any change in expectations or modification of the facts, conditions andcircumstances upon which such estimations concerning the future have been based, even if those lead to achange 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 outopinions related to securities issued by VIDRALA and, in particular, by analysts. It is expressly warned that thisdocument may contain not audited or summarised information. It is expressly advised to the readers of thisdocument 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 – ComisiónNacional del Mercado de Valores (CNMV).

2

Page 3: Vidrala company Presentation 2013

-General Overview

- Business Fundamentals

- Relevant Business Figures

Page 4: Vidrala company Presentation 2013

Overview

:

Vidrala is Western Europe’s fourth glass container manufacturer through sixcomplementary sites located in four countries.

Vidrala supplies glass containers for a wide variety of products in the beveragesand food industry, selling more than 3,3 billion bottles and jars per yearamong more than 1,500 clients and managing an annual turnover of morethan EUR 450 million (EUR 457 million in FY 2012).

Vidrala is a public company listed in the Spanish Stock Exchange.

4

Page 5: Vidrala company Presentation 2013

Brief history

Establishment of Vidrerías de Alava S.A.

Vidrala goes public

New Strategic Plan

Acquisition: GALLO VIDRO (Portugal)

Subsidiary CRISNOVA, S.A. set up

Industrial process innovation

Acquisitions: CORSICO (Italy), CASTELLAR (Spain)

OR

GA

NIC

GR

OW

TH

AC

QU

IS

ITIO

NS

Acquisition: MD VERRE (Belgium)

5

Page 6: Vidrala company Presentation 2013

AIALA VIDRIO

LLODIO (ÁLAVA)

CASTELLAR VIDRIO

CASTELLAR DEL VALLÉS (BARCELONA)

GALLO VIDRO

MARINHA GRANDE (PORTUGAL)

CRISNOVA VIDRIO

CAUDETE (ALBACETE)

VIDRALA ITALIA

CORSICO (ITALY)

MD VERRE

GHLIN (BELGIUM)

Manufacturing Structure

6 plants, 13 glass melting furnaces

Page 7: Vidrala company Presentation 2013

A focus on strategic growth

A complementary footprint, a strategic positioning

FOURTH MANUFACTURER IN WESTERN EUROPE

3,400 MILLION UNITS PER YEAR

6 PLANTS IN 4 COUNTRIES

TURNOVER: EUR 457 MILLION IN FY 2012

MORE THAN 1,500 CUSTOMERS

MARKET CAP: EUR 500 MILLION

7

Page 8: Vidrala company Presentation 2013

-General Overview

- Business Fundamentals

- Relevant Business Figures

Page 9: Vidrala company Presentation 2013

Industry Fundamentals

Glass packaging SECTOR: a competitively solid sector.

VIDRALA.

REFERENCE SUPPLIERS IN OUR STRATEGIC MARKETS THROUGH A COMPLEMENTARY FOOTPRINT.

GLASS MANUFACTURING ACTIVITY:ENTRY BARRIERS

GLASS CONTAINER CHARACTERISTICS LIMIT ITS FREIGHT.

OUR CUSTOMERS´PACKAGING ACTIVITY DEMAND SERVICE QUALITY AND SUPPLY FLEXIBILITY.

THUS, OUR BUSINESS IS GLOBAL BUT OF LOCAL NATURE: BEING NEAR TO THE SUPPLY AREA DETERMINES CUSTOMERS´LOYALTY.

GLASS PACKAGING SECTOR: LOCAL NATURE

GLASS CONTAINERS ARE MANUFACTURED THROUGH MELTING FURNACES IN A CONTINUOUS PROCESS: FACILITIES MUST BE PERIODICALLY REFURBISHED.

CONSTANT ADAPTATION TO TECHNOLOGICAL DEVELOPMENTS AND INNOVATION ALONG WITH THE KNOW-HOW AND THE INDUSTRIAL EXPERIENCE ARE A MUST FOR ASSURING PRODUCTIVITY.

THUS, GLASS CONTAINERS MANUFACTURING ACTIVITY IS HIGHLY INTENSIVE IN CAPITAL (SPECIFIC AND MAINTENANCE CAPEX ARE HIGH).

THEREFORE NEW COMPETITORS ENTRANCE IS LIMITED.

VIDRALA. BET FOR INNOVATION AS A GUARANTEE OF COMPETITIVENESS .

VIDRALA GROUP TODAY

6 PLANTS

13 MELTING FURNACES

43 MANUFACTURING LINES

OUR STRATEGIC AIM IS TO CONSOLIDATE OURTECHNOLOGICAL ADAPTATION LEVEL AND ESTABLISHAN OPTIMUM STRUCTURE IN ORDER TO GUARANTEEOUR COMPETITIVENESS IN THE LONG-TERM.

10

Page 10: Vidrala company Presentation 2013

Market Fundamentals

Glass packaging MARKET: a mature and stable market.

Demand for food and beverage packaging in WE (2003-2012e)

In thousands of million euros. Source: Datamonitor

SOLID MARKET

THE GLASS CONTAINER MARKET IS A MATURE AND STABLE MARKET. LINKED TO CONSUMPTION PRODUCTS, IT SHOWS LOW VOLATILITY IN TERMS OF ORGANIC DEMAND VARIATION.

GEOGRAPHICAL OPTIMIZATION

OUR NATURAL MARKETS, SPAIN,FRANCE, ITALY, PORTUGAL, ARE ALSO OUR STRATEGIC MARKETS. PREMIUM CONSUMPTION PRODUCTS FOSTER GLASS AS PREFERRED PACKAGING MATERIAL.

Market fundamentals per country.

Glass packaging production per capita VS GDP per capita.

10

20

30

40

50

60

70

0 10 20 30 40 50 60

GLA

SS

PA

CK

AG

IN

G P

RO

DU

CT

IO

NP

ER

CA

PIT

A (

KG

)

GDP PER CAPITA ($000)

Iberia

FranceItaly

Germany

USAUK

JapanBrazil

China

0

10

20

30

40

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e

11

Page 11: Vidrala company Presentation 2013

Credit Fundamentals

COMPETITIVE POSITIONING:reference player in a stable market

WESTERN EUROPE MAIN PLAYERS

VIDRALA: SECOND MANUFACTURER OF IBERIAN PENINSULA, FOURTH OF WESTERN EUROPE IN GLASS PACKAGING INDUSTRY, STABLE SECTOR WITH HIGH ENTRY BARRIERS (INTENSIVE CAPEX).

OPERATING STRENGTH:History of efficiency and competitive advantage

VIDRALA: STABLE OPERATING MARGINS AND CONTINUOUSLY HIGHER THAN MAIN COMPETITORS DESPITE NEW ACQUISITIONS AND CURRENT HIGHLY INFLATIONARY ENVIRONMENTS.

2012 OPERATING MARGIN (EBIT)MAIN PLAYERS

Vidrala BUSINESS STRUCTURE: competitive and solid.

VIDRALA: OPERATING MARGINS (EBIT) 2005-2012

O-I

SG VERALLIA

ARDAGH GLASS

VIDRALA

10,9% 11,3% 11,4%

14,3%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

SG VERALLIA O-I EUROPE ARDAGH GLASS VIDRALA

13

14,7%

14,0% 13,9%

15,4%

14,4%

15,5%

14,1%14,3%

10,0%

11,0%

12,0%

13,0%

14,0%

15,0%

16,0%

`05 `06 `07 `08 `09 `10 `11 `12

Page 12: Vidrala company Presentation 2013

Credit Fundamentals

SOLID CASH-FLOW GENERATION

EBIT/SALES vs EBITDA–CAPEX/SALES2011-2012

VIDRALA: FOCUS ON MAXIMIZING ASSETS, CASH-FLOW GENERATION AND RETURN ON CAPITAL EMPLOYED (ROCE). LONG-TERM MAINTENANCE CAPEX NOT HIGHER THAN AMORTIZATIONS.

Vidrala BUSINESS STRUCTURE: cash-flow generation and financial strength

FREE CASH FLOW /SALES2010-2011-2012

NET DEBT2010-2011-2012

12,5%11,1% 11,0%

0,0%

5,0%

10,0%

15,0%

2010 2011 2012

218,8

189,3

159,6

100,0

150,0

200,0

250,0

2010 2011 2012

14,1%14,3%

14,7%

15,6%

13,0%

13,5%

14,0%

14,5%

15,0%

15,5%

16,0%

2011 2012

EBIT/SALES EBITDA-CAPEX/SALES

14

Page 13: Vidrala company Presentation 2013

Principles

IN THE PRODUCT

IN THE MARKET

IN OUR INDUSTRY

IN OUR PROJECT

WE BELIEVE:

15

Page 14: Vidrala company Presentation 2013

Glass is identified with the concepts of health (safety, purity, inertity),convenience (flexibility, versatility), sustainability (respect to the environment)and premium image.

Quality: Glass is natural, transparent, impermeable, nonporous, sanitary and completely inert.Safeguards against moisture and oxygen invasion. Is resistant, can be used to process foods and otherproducts at high temperatures. It does not deteriorate, corrode, stain or fade maintaining the taste andquality of the original products.

Image: Glass is attractive, providing a image of quality for products. Can be labeled, colored andformed into various sizes and shapes enabling high product differentiation. More than 70% ofconsumers believe that glass packaging suggest quality.

Ecological: Glass has intrinsic and unique features that make it the only fully and infinitelyrecyclable packaging material. A used bottle can be employed to make a new bottle again and againwithout any loss in quality or quantity. Glass recycling saves energy, reduces emissions and helps topreserve natural resources also extending furnace life and reducing manufacturing costs.

The Product

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Page 15: Vidrala company Presentation 2013

Glass: the preferred packaging material

SUSTAINABILITY

HEALTH

QUALITY

IMAGE

Pure and natural, 100% recyclable endlessly

Inert and impermeable, safe, no chemicals, no interference

Warranty of product preservation

Modern, atractive, versatile, premium.

CONSUMERS PREFER GLASSRESULTS OF THE ‘EUROPEAN PACKAGING SURVEY’. SEPTEMBER 2010

The Product

ITS UNIQUE CHARACTERISTICS IN IMAGE, TRANSPARENCY, ATTRACTIVE SHAPES AND COLOURS,VERSATILITY AND FLEXIBILITY HAVE BOOSTED GLASS AS A KEY MARKETING INSTRUMENT. GLASSPACKAGING IS PART OF MODERN LIFE.

17

Page 16: Vidrala company Presentation 2013

Glass: ecologically unique

The Product

SOURCE: FEVE.ORG 18

Page 17: Vidrala company Presentation 2013

The Market

Source: DATAMONITOR, FEVE, EUROMONITOR, VIDRALA

Breakdown of beverage containers by material in Western Europe 2012

Annual demand growth prospects 2010-2014By item

Glass container productionIn Western Europe (2002-2012e)In million tonnes

European glass container industry: CAGR 2003-2012: +2%

Demand for food and beverage packagingIn Western Europe (2003-2012e)Thousands of million EUR

The glass packaging industry: a resilient market

GLASS

PAPER & BOARD

OTHERS

PLASTIC

METAL

2.7%

2.8%

2.7%

1.8%

Glass containers worldwide demand growth

Beverage containers worldwide demand growth

Food containers worldwide demand growth

Total containers European demand growth

0

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e

0

10

20

30

40

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e

19

Page 18: Vidrala company Presentation 2013

SPAIN47%

ITALY44%

SPAIN41%

ITALY18%

REST OF MEDITERRANEAN

AREA

37%

Our Natural Markets: unique market fundamentals

The Market

Source: OIV - Organisation Internationale de la Vigne et du Vin

Source: Consejo Oleícola Internacional

ITALY18%

FRANCE16%

SPAIN13%

PORTUGAL3%

ITALY19%

FRANCE15%

SPAIN19%

PORTUGAL3%

World wine production World wine exports

World olive oil production World olive oil exports

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Page 19: Vidrala company Presentation 2013

Our Natural Markets: unique fundamentals

The Market

0%

25%

50%

75%

100%

WORLD SPAIN FRANCE ITALY PORTUGAL

GLASS BOTTLE

PLASTIC

DRAUGHT

CAN

BEER. PACKAGING MIX BY COUNTRY

0

2

4

6

8

10

WESTERN EUROPE NORTHAMERICA WORLD

SPIRITS

BEER

WINE

PER CÁPITA CONSUMPTION BY REGION . LPA PER ANNUM

Source: PIRA, EUROMONITOR, WORLD PACKAGING ORGANISATION.

21

Page 20: Vidrala company Presentation 2013

10

20

30

40

50

60

70

0 10 20 30 40 50 60

The Market

GLASS PACKAGING PRODUCTION PER CÁPITA vs GDP PER CAPITA

OUR NATURAL MARKETS, OUR STRATEGIC MARKETS

GLA

SS

PA

CK

AG

IN

G P

RO

DU

CTIO

NP

ER

CA

PITA

(K

G)

GDP PER CAPITA ($000)

Iberia

FranceItaly

Germany

USAUK

JapanBrazil

China

22

Page 21: Vidrala company Presentation 2013

The Industry: Europe

VIDRALA: 4th player

7% market share

Source: Vidrala

European market: EU15´s + Switzerland + Turkey

The European industry. Main producers

15%

6%

18%25%

36% OTHERS

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Page 22: Vidrala company Presentation 2013

The Industry: Europe

Plants locations

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Page 23: Vidrala company Presentation 2013

-General Overview

- Business Fundamentals

- Relevant Business Figures

Page 24: Vidrala company Presentation 2013

Business performance. FY 2012

NET SALES

ANNUAL ACCUMULATED SINCE 2008EUR millions

387.2 382.4

405.9

433.3

456.9

300

350

400

450

2008 2009 2010 2011 2012

26

Page 25: Vidrala company Presentation 2013

OPERATING PROFIT

EBIT ANNUAL ACCUMULATED SINCE 2008EUR millions

Business performance. FY 2012

59.7

55.0

62.961.0

65.3

40

45

50

55

60

65

70

2008 2009 2010 2011 2012

27

Page 26: Vidrala company Presentation 2013

EBIT and EBITDA AFTER CAPEX

SINCE 2011EUR millions and % of sales

Business performance. FY 2012

61.0

65.3

63.9

71.1

2011 2012

EBIT EBITDA after Capex

(% of sales) 14.1% 14.8% 14.3% 15.6%

28

Page 27: Vidrala company Presentation 2013

WORKING CAPITAL/SALES

SINCE 2010% of sales

Business performance. FY 2012

30.5%

27.2%

22.8%

31 Dec 2010 31 Dec 2011 31 Dec 2012

29

Page 28: Vidrala company Presentation 2013

CASH ALLOCATION

2012EUR millions

Business performance. FY 2012

46.5

49.9

NET INCOME

FREE CASH FLOW

13.4

DIVIDEND PAYMENT

6.8

SHARE BUYBACKS

29.7

DEBT REDUCTION

30

Page 29: Vidrala company Presentation 2013

NET DEBT

SINCE 2009EUR millions

Business performance. FY 2012

NET DEBT/LTM EBITDA 2.9x 2.2x 1.9x 1.5x

GEARING 102% 76% 61% 47%

256.6

218.8

189.3

159.6

100

150

200

250

DEC 2009 DEC 2010 DEC 2011 DEC 2012

31

Page 30: Vidrala company Presentation 2013

Business performance. FY 2012

EPS (EUR/SHARE)

2012

ROCE

2012

1.791.94

0,00

0,50

1,00

1,50

2,00

2011 2012

10.0%10.5%

6,0%

7,0%

8,0%

9,0%

10,0%

11,0%

2011 2012

32

Page 31: Vidrala company Presentation 2013

Our Project

A solid industrial project:

Based on clear business and market definitions,

with a vocation to customers service,

supported by an optimal financial structure,

and a strategy focused on our Shareholders interests.

We Know and understand: The industryThe packaging marketThe glass sectorOur natural marketsOur competitorsOur customers

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Page 32: Vidrala company Presentation 2013

www.vidrala.com