Mc Phe rsons L imite d F ir st Ha lf Re sults F ina nc ia l Ye - - PowerPoint PPT Presentation

Mc Phe rson’s L imite d

F ir st Ha lf Re sults F ina nc ia l Ye a r 2015 Pa ul Ma g uire – Ma na g ing Dire c to r Pa ul Withe ridg e – Chie f F ina nc ia l Offic e r 24 F e b rua ry 2015

MCP 1H F Y2015 F ina nc ia l Ove rvie w

»

1H F Y2015 Sa le s Re ve nue o f $186.6m, 3.3% a b o ve prio r ye a r

– E

xc luding ‘ Mc Phe rso n’ s Ho use wa re s’ , whic h ha s b e e n e q uity a c c o unte d fro m 1 No v 2014 fo llo wing the dive stme nt o f 51% to the F a c ke lma nn Gro up, re ve nue inc re a se d b y 18.1% to $168.7m

– Co mpa ra b le sa le s re ve nue in line with prio r ye a r; i.e . e xc luding

a c q uisitio ns, ne w a g e nc ie s a nd dive stme nts

»

Unde rlying 1H F Y2015 E BI T , PAT & E PS in line with upda te d g uida nc e

– Unde rlying E

BI T

• f $16.3m, 10.2% b e lo w prio r ye a r*

– Unde rlying PAT

• f $9.3m, 12.7% b e lo w prio r ye a r*

– Unde rlying E

PS o f 9.7 c e nts, 17.1% b e lo w prio r *

2

* F ig ure s re fle c t the e a rly a do ptio n o f AASB 9 F inanc ial I nstrume nts

»

‘ Ca sh flo w fro m o pe ra tio ns b e fo re inte re st a nd ta x pa yme nts’ o f $19.8m, sig nific a ntly a b o ve prio r ye a r ($8.5m)

»

E BI T I nte re st Co ve r

1 o f 5.0 time s a nd L

e ve ra g e Ra tio 2 o f 2.2 fo r the 12 mo nths to 31 De c e mb e r 2014

»

I nte rim divide nd o f 6.0 c e nts pe r sha re fully fra nke d

– 63% pa yo ut ra tio o f unde rlying E

PS

– Pa yme nt da te 9 April 2015 – Divide nd Re inve stme nt Pla n (DRP) re ta ine d

»

Co nsiste nt a ppro a c h to F X he dg ing

– Pro po rtio na lly lo we r purc ha se s de no mina te d in USD in F

Y2015 due to He a lth & Be a uty e xpa nsio n

3 1. No rma lise d L T M E BI T / Ne t b o rro wing c o st 2. Ne t De b t / No rma lise d L T M E BI T DA No te tha t no rma lisa tio ns inc lude the full ye a r e ffe c t o f a c q uisitio ns a nd d ive stme nts a nd no n-re c urring ite ms

MCP 1H F Y2015 F ina nc ia l Ove rvie w

ST RAT E GY UPDAT E

Pa ul Ma g uire Ma na g ing Dire c to r

Re ve nue Summa ry by Division (Aus & NZ)

5 % OF T OT AL RE VE NUE

1H F Y2015

RE VE NUE GROWT H

1H F Y15 vs 1H F Y14

RE ASONS OUT L OOK HE AL T H & BE AUT Y

39% 33%* Ne w a g e nc ie s & a c q uisitio ns Gro wth in re ve nue a nd pro fit

HOME APPL IANCE S

18% 31%** Ne w pro duc ts & a c q uisitio ns Gro wth in re ve nue a nd pro fit

HOUSE WARE S

14% (20%) Pro duc t ra ng e ra tio na lisa tio n L

• we r sa le s

b ut impro ve d pro fita b ility

HOUSE HOL D CONSUMABL E S

25% 5% Ma rke t le a de rship ma inta ine d Ong o ing ma rke t le a de rship b ut to ug h tra ding c o nditio ns

OT HE R (e .g . Impulse Me rc ha ndising )

4% (11%) Distrib utio n c ha ng e s Pro fita b le g ro wth thro ug h ne w ra ng ing

* He a lth & Be a uty sa le s e xc luding a c q uisitio ns & a g e nc ie s in line with prio r ye a r **Ho me Applia nc e g ro wth ra te e xc luding a c q uisitio ns = 8.6%

Mc Phe r son’s state d str ate gy is:

“to substantially tr

ansfor m thro ugh

ac quisitio n/ dive stme nt, the e stablishme nt o f ne w age nc y partne rships and c hanne l e xpansio n ........dive r

sifying away fro m margin c o nstraine d

c hanne ls and inc re asing partic ipatio n in c hanne ls with gre ate r pro fit po te ntial”

6

T ra nsforma tion Stra te g y

Ove r the past two ye ar s we have …

... suc c e ssfully inte g ra te d 8 E a rning s Pe r Sha re (E PS) a c c re tive a c q uisitio ns; a c c e ssing syne rg y b e ne fits a nd pro viding g ro wth in pro fita b le c ha nne ls ... e sta b lishe d a g e nc y pa rtne rships with two pre stig e Be a uty b usine sse s ... dive ste d ‘ Cro wn Gla sswa re ’ , e xiting the lo w ma rg in fo o dse rvic e c ha nne l ... e sta b lishe d a Ho use wa re s pa rtne rship with F a c ke lma nn (Ge rma ny) ... la unc he d c o mpre he nsive ne w inno va tive pro duc t ra ng e s; and ... upg ra de d I T syste ms, b o o ste d distrib utio n c e ntre e ffic ie nc y & c a pa c ity, ra tio na lise d pro duc t ra ng e s a nd imple me nte d pric e inc re a se s

7

T ra nsforma tion Ac hie ve me nts

Ma r 2014 ‘Crown Gla sswa re ’ dive stme nt HAPL a c quisition Ma r 2013 Cosme x a c quisition E ylure & Monta g ne Je une sse Ag e nc ie s F

• otc a re

Inte rna tiona l a c quisition Aug 2012 F ine F ra g ra nc e s Ag e nc y: Guc c i Dolc e &Gabbana Hugo Boss Aug 2014 A’Kin & Al’c he my a c quisition Jul 2014 L e ma ir a c quisition Apr 2014 T rilog y Ag e nc y Jun 2014 Mc Phe rson’s Printing Group (MPG) de me rg e d F e b 2012 Dr L e Winn’s & Re vita na il a c quisition T hink Applia nc e s a c quisition Ma se ur a c quisition Oc t 2013 Jul 2013

8

T ra nsforma tion T ime line

Signific ant dive r sific ation ac hie ve d sinc e the de me r ge r

• f Mc Phe r

son’s Pr inting in 2012

Applia nc e Ag e nc y De c 2014 Nov 2014 HOUSE WARE S Pa rtne rship with F a c ke lma nn (Ge rma ny)

T ra nsforma tion Be ne fits

»

T ra nsfo rming thro ug h dive rsific a tion re duc e s risk:

–

L e sse ne d e xposure to fore ig n e xc ha ng e USD purc ha se s will re duc e to 68% o f to ta l purc ha se s in F Y2015, do wn fro m 85% in F Y2014

–

A more profita ble c ha nne l a nd c ustome r mix I n F Y2015, the mix o f b usine ss a c ro ss the c ha nne ls will c o ntinue to impro ve

9

F Y2014 F Y2015

Gro c e ry 48% Pha rma c y 16% Disc . De pt. Sto re s 10% De pt. Sto re s 4% Co mme rc ia l 5%

I nd e p e nd e nts 14%

Ha rdwa re 1% Re ta il Outle ts 2% Gro c e ry 44% Pha rma c y 22% Disc . De pt. Sto re s 7% De pt. Sto re s 4% Co mme rc ia l 5%

I nd e p e nd e nts 14%

Ha rdwa re 2% Re ta il Outle ts 1% E xpo rt 1%

Be a uty Ac quisitions De live ring Growth

»

Dr L e Winn’ s & Re vita na il

– I

c o nic skinc a re b ra nd

– Be a uty tre a tme nt b ra nd – L

e ve ra g ing MCP stre ng ths

– Sig nific a nt g ro wth po te ntia l

»

A’ kin & Al’ c he my

– Na tura l skinc a re (A’ kin) a nd

na tura l ha irc a re (Al’ c he my)

– L

e ve ra g ing MCP stre ng ths

– Sig nific a nt g ro wth po te ntia l

10

Be a uty Ag e nc y De live ring Growth

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Pre stig e Ag e nc y De live ring Growth

12

Home Applia nc e Ac quisition Growth

»

T hink Applia nc e s

– Ba uma tic , Ve nini & D’ Ama ni – F

urthe r dive rsific a tio n; inc re a sing b usine ss in e le c tric a l re ta il, ha rdwa re & c o mme rc ia l ho me b uilding »

L e ma ir

– Nic he white g o o ds b ra nd

13

Home Applia nc e Ag e nc y Growth

14

Premium Italian cookers New agency December 2014

House wa re s Pa rtne rship

»

Ho use wa re s jo int ve nture pa rtne rship e sta b lishe d 1 No v 2014 with the F ACK E L MANN Gro up (F MG) fro m Ge rma ny; (F MG 51% : MCP 49%)

»

F ACK E L MANN is a g lo b a l ma nufa c ture r a nd distrib uto r

• f kitc he n, b a king , ho me & le isure pro duc ts,
• pe ra ting 35 ma nufa c turing & distrib utio n c e ntre s

15

»

‘ Mc Phe rso n’ s Ho use wa re s’ is b e ne fiting sub sta ntia lly fro m:

– Ma nufa c turing a nd sha re d so urc ing c a pa b ility – L

e ve ra g ing sc a le , c o mb ine d pro duc t a sso rtme nts a nd b ra nds

– I

nte g ra ting infra struc ture a nd re duc ing o ve rhe a ds

He a lth a nd Be a uty

Curre nt Sta tus

»

YT D Sa le s g ro wth 33% (e xc l’ a c q uisitio ns & ne w a g e nc ie s sa le s in line with prio r ye a r)

»

Suc c e ssful ne w pro duc t la unc he s unde r truste d b ra nd s

»

Ac q uisitio ns a nd ne w a g e nc ie s b o o sting pre se nc e in Pha rma c y a nd De pa rtme nt Sto re s a nd re a ffirming Mc Phe rso n’ s b e a uty industry c re de ntia ls: – Dr L e Winn’ s a nd Re vita na il No v 2013 – T rilo g y, A’ kin a nd Al’ c he my July 2014 – Guc c i, D&G a nd Hug o Bo ss Aug 2014

Outlook

»

Syne rg ie s fro m re c e nt b ra nd a c q uisitio ns

»

Co ntinue d g ro wth thro ug h: – ne w pro duc t de ve lo pme nt – re c e nt a c q uisitio ns a nd a g e nc ie s – po te ntia l ne w a c q uisitio ns a nd a g e nc ie s, with c a pa c ity fo r >1500 ne w pro d uc t line s in the ‘ pic k to lig ht’ DC

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Home Applia nc e s

Curre nt Status

»

Ho me Applia nc e s is pro viding c usto me r a nd c ha nne l dive rsific a tio n; in e le c tric a l re ta il, ha rdwa re & c o mme rc ia l

»

1H F Y2015 a dve rse ly a ffe c te d b y pro duc t ra tio na lisa tio n & inve nto ry c le a ra nc e po st the T hink a c q uisitio n

»

Sa le s in Ma ste rs a nd the K itc he n Cha nne l slo we r tha n e xpe c te d

»

Ne w pro duc ts la unc he d in 1H F Y2015

Outlook

»

Be ne fits fro m o pe ra tio na l initia tive s a nd ne w pro duc ts la unc he d in 1H F Y2015

»

Building a ppro va ls a t a 5 ye a r hig h

»

Pric e inc re a se s in 2H F Y2015

»

Co ntinue d g ro wth thro ug h: – ne w pro duc t la unc he s in 2H F Y2015 – e xpa nsio n within e xisting & ne w c a te g o rie s a nd c ha nne ls – the po te ntia l fo r furthe r a c q uisitio ns

17

House hold Consuma ble s

Curre nt Status

»

YT D Sa le s 5% a he a d o f prio r ye a r

»

Pro fit impa c te d b y: – pro tra c te d ne g o tia tio ns prio r to the a c c e pta nc e o f pric e inc re a se s – pro duc t c o st inc re a se s e x-Asia – AUD de c line & hig h ra w ma te ria l c o sts – inc re a se d ‘ c usto me r suppo rt’ re q uire d

Outlook

»

Ma rke t le a de rship ma inta ine d

»

Sa le s stre ng the ne d b y ne w pro duc ts

»

So urc ing initia tive s to unde rpin pro fita b ility

»

Sig nific a nt pric e inc re a se s re q uire d to mitig a te AUD de c line

18

Outlook

»

Consiste nt tra ding c o nditio ns a ntic ipa te d

»

Unde rlying pre -ta x pro fit fo r the full ye a r 5% - 10% a bove F Y2014

»

AUD c urre nc y de va lua tion will re q uire mitig a tio n thro ug h pric e inc re a se s

»

He a lth & Be a uty a nd Home Applia nc e s to b e ne fit fro m the full ye a r e ffe c t

• f a c q uisitio ns, ne w a g e nc ie s a nd ne w pro duc ts

»

House hold Consuma ble s to ma inta in b ra nd le a de rship in to ug h c o nditio ns

»

House wa re s to b e ne fit fro m Mc Phe rso n’ s/ F

a c ke lma nn pa rtne rship

»

Pipe line o f inno va tive ne w produc ts suppo rting ma rke t le a ding b ra nds

»

K e y o pe ra tio na l initia tive s b o o sting pro duc tivity a nd improving profita bility

»

F urthe r dive rsific a tion via a c q uisitio ns a nd ne w a g e nc ie s

19

Mission

T

• b e a wo rld c la ss c o nsume r pro duc ts c o mpa ny

thro ugh

1st c ho ic e bra nds for c onsume rs

and by be ing a

1st c ho ic e pa rtne r for c ustome rs a nd supplie rs 1st c ho ic e e mploye r for e mploye e s 1st c ho ic e inve stme nt for sha re holde rs

Mc Phe rson’s L imite d

Re sults for the Ha lf Ye a r E nde d 31 De c e mbe r 2014

Pa ul Ma g uire – Ma na g ing Dire c tor Pa ul Withe ridg e – Chie f F ina nc ia l Offic e r

APPE NDIX Mc Phe rson’s L imite d F ina nc ia l Pe rforma nc e Re sults for the Ha lf Ye a r E nde d 31 De c e mbe r 2014

Pa ul Withe ridg e Chie f F ina nc ia l Offic e r

Gr

• up F

ina nc ia l Summa r y for H1 F Y2015 E xc luding non- r e c ur r ing ite ms

De c e mbe r 2013* ($A million) De c e mbe r 2014* ($A million)

Sa le s 180.6 186.6 E BIT DA 19.6 17.7 De pre c ia tio n & a mo rtisa tio n (1.4) (1.4) E BIT

18.2 16.3

Inte re st (3.3) (3.3) NPBT

14.8 13.0

T a x (4.2) (3.7) NPAT

10.6 9.3

Ope ra ting c a sh flo w (b e fo re inte re st a nd ta x) 8.5 19.8 E PS e xc luding no n-re c urring ite ms (c e nts) 11.7 9.7 E PS (c e nts) (77.4) 10.4 T

• ta l d ivid e nd (c e nts – fully fra nke d )

6.0 6.0 3.3% Sa le s inc re a se (10.2)% E BIT d e c re a se

Inte re st c o ve r 5.0 time s

12.7% NPAT d e c re a se 12.1% PBT d e c re a se

22

* F ig ure s re fle c t the e a rly a do ptio n o f AASB 9 F inanc ial I nstrume nts

Gr

• up F

ina nc ia l Summa r y for 1H F Y2015 Sta tutory (i.e . inc luding non- re c urring ite ms)

De c e mbe r 2013* ($A million) De c e mbe r 2014* ($A million) NPBT e xc luding non- re c urring ite ms

14.8 13.0

Non- re c urring ite ms:

• Impa irme nt o f inta ng ib le s

(80.0)

• Re struc turing c o sts

(1.1) (1.4)

• Co nting e nt c o nside ra tio n a djustme nt
• 1.7
• Othe r no n-re c urring ite ms

(0.6) (0.1) Sta tuto ry NPBT

(66.9) 13.2

Inc o me ta x e xpe nse (3.2) (3.3) Sta tuto ry NPAT

(70.1) 9.9

Sta tuto ry E PS (c e nts pe r sha re )

(77.4) 10.4

23

* F ig ure s re fle c t the e a rly a do ptio n o f AASB 9 F inanc ial I nstrume nts

Non- Re c urring Ite ms

De c e mbe r 2013 ($A million) De c e mbe r 2014 ($A million)

Impa irme nt o f inta ng ib le s (80.0)

• Co nting e nt c o nside ra tio n a djustme nt
• 1.7

Re struc turing c o sts – ho use wa re s dispo sa l, re dunda nc ie s a nd inve nto ry c le a ra nc e (1.1) (1.4) Ac q uisitio n c o sts (0.6) (0.1) T

• ta l no n-re c urring ite ms b e fo re ta x

(81.7) 0.2

T

• ta l no n-re c urring ite ms a fte r ta x

(80.7) 0.7

T he fo llo wing no n-re c urring ite ms a re inc lude d in sta tuto ry pro fit b e fo re ta x:

24

Ove rvie w of Group Ba la nc e She e t

De c e mbe r 2013 ($A million) De c e mbe r 2014* ($A million)

Inve nto rie s 72.8 60.2 Re c e iva b le s 74.7 63.4 Asse ts he ld fo r sa le (inve nto rie s)

• 17.0

Pa ya b le s (46.9) (70.3) Ne t wo rking c a pita l

100.6 70.3

Pro pe rty, pla nt & e q uipme nt 7.3 5.9 Inve stme nt in jo int ve nture

• 7.9

Inta ng ib le s 113.4 89.9 Asse ts he ld fo r sa le 2.1 19.3 Pro visio ns & o the r ne t lia b ilitie s (23.1) (11.4) T

• ta l funds e mplo ye d

200.3 181.9

Ne t fina nc ia l d e b t (91.7) (68.8) Ne t ta x b a la nc e s (10.5) (4.8) Sha re ho ld e rs’ funds

98.1 108.3

Ge a ring [Ne t de b t / (Ne t de b t + Sha re ho ld e rs’ funds)] 48.3 38.8 ROF E (unde rlying E BIT / T

• ta l funds e mplo ye d ^)

7.8% 8.2% ROSF (unde rlying PAT / Sha re ho ld e rs’ funds^) 5.9% 5.6%

^

T

• ta l funds e mplo ye d a nd sha re ho lde rs’ funds e xc lude the $50.0m no n-c a sh impa irme nt o f inta ng ib le s e xpe nse d a t 30 June 2013 a nd the $80.0m no n-c a sh

impa irme nt o f inta ng ib le s e xpe nse d a t 31 De c e mb e r 2013.

25

Group Ope ra ting Ca sh F lows

De c e mbe r 2013* ($A million) De c e mbe r 2014 ($A million) c a sh flows from ope ra tions

Re c e ipts fro m c usto me rs (inc lusive o f GST ) 182.1 203.2 Pa yme nts to supplie rs a nd e mplo ye e s (inc lusive o f GST ) (173.6) (183.4) Ne t c a sh inflo ws fro m o pe ra tio ns b e fo re inte re st a nd ta x 8.5 19.8 Ne t inte re st a nd b o rro wing c o sts pa id (3.3) (4.0) Inc o me ta x pa id (2.7) (2.9) Ne t c a sh inflo ws fro m o pe ra tio ns 2.5 12.9

26

Group Inve sting a nd F ina nc ing Ca sh F lows

De c e mbe r 2013 ($A million) De c e mbe r 2014* ($A million) c a sh flows from inve sting a c tivitie s

Pa yme nts fo r a c q uisitio n o f b usine ss a sse ts (23.0) (8.0) Pa yme nts fo r purc ha se o f pro pe rty, pla nt a nd e q uipme nt (0.8) (1.5) Pa yme nts fo r purc ha se o f inta ng ib le s (0.6) (0.7) Pro c e e ds fro m sa le o f b usine ss a sse ts

• 6.6

Ne t c a sh o utflo ws fro m inve sting a c tivitie s (24.4) (3.6)

c a sh flows from fina nc ing a c tivitie s

Ne t pro c e e d s fro m c a pita l ra ising 4.7

• Ne t pro c e e ds fro m (re pa yme nt o f) b o rro wing s

22.1 1.5 Divid e nd s pa id (ne t o f DRP pa rtic ipa tio n) (4.8) (3.3) Ne t c a sh inflo ws (o utflo ws) fro m fina nc ing a c tivitie s 22.0 (1.8) Ne t inc re a se in c a sh he ld 0.1 7.5

27

F X He dg ing (Austra lia )

»

Co mpre he nsive F X he dg ing pro g ra m in pla c e using Optio ns, F

• rwa rd E

xc ha ng e Co ntra c ts (F E Cs) a nd Co lla rs:

Options

Pro te c t do wnside with pre mium c o st b ut a llo w upside b e ne fit

F E C’s

F ixe d ra te with lo st fo rwa rd po ints

Colla r

I mpro ve d do wnside pro te c tio n in e xc ha ng e fo r limiting upside

Curre nt Polic y

* He dg e 8 mo nths fo rwa rd o n a ro lling b a sis fo r 100% o f USD re q uire me nts * Optio ns to c o mprise a t le a st 50% o f 8 mo nth re q uire me nt. Optio ns, F

E C’ s a nd tunne l c o lla rs to b e use d fo r re ma ining 50%

* F

E C’ s pla c e d c o ve ring :

• Ne xt 30 da ys whe re strike is 8 c e nts a b o ve the pro te c te d ra te ; a nd
• Ne xt 31 to 90 da ys whe re strike is 10 c e nts a b o ve the pro te c te d ra te

28

Mc Phe rson’s L imite d

F ir st Ha lf Re sults F ina nc ia l Ye a r 2015

Non-IF R S me asur e s T he no n-I F RS me a sure s use d b y the Co mpa ny a re re le va nt b e c a use the y a re c o nsiste nt with me a sure s use d inte rna lly b y ma na g e me nt to a sse ss the o pe ra ting pe rfo rma nc e o f the b usine ss. T he no n-I F RS me a sure s ha ve no t b e e n sub je c t to a udit o r re vie w. Disc laime r Sta te me nts c o nta ine d in this pre se nta tio n, pa rtic ula rly tho se re g a rding po ssib le o r a ssume d future pe rfo rma nc e , e stima te d c o mpa ny e a rning s, po te ntia l g ro wth o f the c o mpa ny, industry g ro wth o r

• the r tre nd pro je c tio ns a re o r ma y b e fo rwa rd lo o king sta te me nts. Suc h sta te me nts re la te to future

e ve nts a nd e xpe c ta tio ns a nd the re fo re invo lve risks a nd unc e rta intie s. Ac tua l re sults ma y diffe r ma te ria lly fro m tho se e xpre sse d o r implie d b y the se fo rwa rd lo o king sta te me nts.