De-premiumisation bites

Research evidence excerpt

De-premiumisation bites

Macquarie Equity Research Orora

A word on the structural vs cyclical debate

• Much has been written about alcohols "big tobacco" moment and the structural decline of

what has historically been considered a resilient sector. The argument centres on whether

consumer preferences have meaningfully changed or, if recent declines in consumption are

tied to cost of living pressures with cyclical rebound prospects as consumer confidence

returns and real income levels improve. This debate will only be settled definitively ex post;

in our revised view both structural and cyclical forces are at play.

Figure 13 - Spirits cos have traditionally traded Figure 14 - ORA PE of ~13.7x (MQe) below

at a premium to tobacco co's; similar multiple in historical average of 16.0x. Similar to 2yr 13.8x

recent months

ORA PE Ratio (NTM)

EV/EBITDA - 20 yr history 22

30.0

25.0

20.0

16 15.0

10.0 14

5.0 12 LTA

- 5yr avg

Jul-06 Jul-10 Jul-14 Jul-18 Jul-22 Jul-26 2yr avg

Spirits: EV/EBITDA LTA 8

Jul-16 Jul-18 Jul-20 Jul-22 Jul-24 Jul-26 Tobacco: EV/EBITDA LTA

Source: FactSet, Macquarie Research, July 2026

• Since the SaverGlass acquisition was announced in late 2023 and over the following period

of substantial revenue declines, our view has been cyclical forces (first de-stocking and

then cost of living pressures on end consumer demand) were the dominant drivers for

volume weakness. Global tariffs and ME war have also exacerbated these impacts. However

structural headwinds have become impossible to ignore and grown in magnitude - we

expect overall market demand/vols for spirits/wine will continue to be pressured in future.

The two are also likely interlinked, cyclically-driven cut backs by consumers have opened

the door to meaningfully less alcohol consumption (i.e.