McBride plc 2008-09 full year results presentation September 2009 - - PowerPoint PPT Presentation

Passionate about Private Label

McBride plc 2008-09 full year results presentation September 2009

Passionate about Private Label

Introduction Iain Napier - Chairman

2008-09 Full Year Results Presentation Passionate about Private Label 3

Introduction

» A return to:

• organic sales growth
• recovery in operating margins
• improved return on capital employed

» Dividend up 7% » Good start to new year

Passionate about Private Label

Summary Miles Roberts

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Summary

» Private Label grew share in all markets » Organic revenue up 4%, core categories up 7% » Increased investment in NPD, service and efficiency » Margin recovery, expansion in Europe » Strong cash generation » Return on capital employed 17.1% » Dividend up 7% » Good start to new year

Passionate about Private Label

Financial review Paul Bergin - Interim Finance Director

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Financial headlines

2008-09

2007-08

Y/ Y Revenue (£m) 792.4

700.9

+ 13% EBIT (£m) 36.2

27.0

+ 34% EBIT margin 4.6%

3.9%

+ 0.7 pts Profit for the year (£m) 23.2

15.6

+ 49% Diluted earnings per share (pence) 12.8

8.6

+ 49% Dividend per share (pence) 6.0

5.6

+ 7% EBITDA (£m) 60.0

48.8

+ 23% Cash generated from operations (£m) 61.8

49.4

+ 25% Net debt (£m) 82.4

103.3

• 20%

(1) All figures before amortisation of intangible assets and exceptional items

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Financial KPIs

All figures before amortisation of intangible assets and exceptional items (* ) Excluding net cash / debt

2008/09 2007/08 Organic revenue growth + 4%

• 2%

EBIT margin 4.6% 3.9% EPS growth + 49%

• 32%

Net current assets * £6.9m £16.9m ROCE 17.1% 12.8% EBIT margin 4.6% 3.9% Asset turnover 3.7 3.3

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Revenue bridge 2007-08 to 2008-09

500.0 550.0 600.0 650.0 700.0 750.0 800.0 2007-08 Organic growth Currency 2008-09 £m

700.9 792.4 + 64.5 + 27.0

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Income statement

2008-09

2007-08

Y/ Y Revenue 792.4

700.9

+ 13% G ross profit 268.2

230.0

+ 17% G ross margin 33.8%

32.8%

+ 1.0 pts Distribution costs (52.7)

(47.2)

+ 12% Administrative costs (179.3)

(155.8)

+ 15% EBIT 36.2

27.0

+ 34% Net financing costs (5.2)

(5.7)

• 9%

Profit before taxation 31.0

21.3

+ 46%

(1) All figures are before amortisation of intangible assets and exceptional items

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Regional performance

2008-09

2007-08

Y/ Y 2008-09

2007-08

Y/ Y £m

£m

£m

£m

UK 311.4

297.3

+ 5% 16.2

15.2

+ 7% Western Continental Europe 469.8

395.4

+ 19% 20.9

11.4

+ 83% Eastern Continental Europe 33.2

32.1

+ 3% 2.0

2.1

• 5%

Sub-total 814.4

724.8

+ 12% 39.1

28.7

+ 36% Intergroup/ corporate (22.0)

(23.9)

n/ a (2.9)

(1.7)

n/ a Total 792.4

700.9

+ 13% 36.2

27.0

+ 34%

(1) Revenue and operating profit by geographic origin (2) All figures are before amortisation of intangible assets and exceptional items

Revenue( 1 ) Operating profit ( 1 ) ( 2 )

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Movement in net debt June 2008 to June 2009

(1) Other includes tax payments, payments re exceptional items, share issues, asset disposals, acquisitions and return of consideration for a previous acquisition (1)

• 110.0
• 80.0
• 50.0
• 20.0

Opening net debt Cash generated from

• perations

Capital expenditure Dividend payments Interest payments Other Foreign exchange effects Closing net debt

£m (103.3) 61.8 (20.0) (10.1) (0.9) (82.4) (4.7) (5.2)

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Cash Generation 2009

£m 2009 Cash generated from operations 61.8 Other net outflows (25.6) Free cash flow 36.2 Dividends (10.1) Exchange (5.2) Debt reduction (20.9) Opening net debt (103.3) Closing net debt (82.4)

Passionate about Private Label

Business review Miles Roberts

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Agenda » Strategy » Markets » Achievements » Outlook

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Strategy

Commercial leadership Operational leadership Enabling Attractive product categories New product development Category development Growth retail and geographic sectors Customer service excellence I mprove efficiency Continuous cost management Optimise working capital and asset base High performance leadership and culture Leverage increasing scale Develop and leverage technology platform Complementary acquisitions

Lead the growth of Private Label Household and Personal Care products in Europe

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European Household and Personal Care markets

» Household and Personal Care markets in Western Europe worth £59 billion and growing 2% pa » Household and Personal Care markets in Eastern Europe worth £16 billion growing at 13% pa

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McBride is the clear leader in European Private Label Household and Personal Care

100 200 300 400 500 600 700 800 900 1000

M c B r i d e D a l l i P e r s a n P r

• p

a c k B u d e l p a c k M a x i m E l y s e e L u h n s M i b e l l e J e y e s D e c

• S

a r b e c M a n n & S h r

• e

d e r R

• v

a l T h u r n N O P A M i f a D a n L i n d V a n d e p u t t e L i n a s a S w a l l

• w

f i e l d N i c h

• l

s P i z z

• l
• t

t

• W

i t t

• l

D

• m

a l I n c a s a I n q u i b a B e r

• m

i n D r e c

• Annual revenue (€m)

McBride Others PL/ Contract revenue

Estimated Private Label business

In liquidation

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Private Label is growing in all markets

» Private Label products give best balance between performance and price » Consumers are increasingly price sensitive and willing to switch purchases » Retailers re-emphasising Private Label ranges » Private Label gaining share in all markets » Higher growth in McBride’s priority categories

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McBride’s growth product categories - attractive growth potential

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Household products Specialist cleaners Air care Personal care Automatic dishwashing tablets Laundry liquids Total market Private Label market

Source: Euromonitor Compound annual growth rates for various product categories in Western Europe (2003-2008)

McBride’s growth product categories

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Consumers accept that Private Label Household products are equivalent to the leading brands

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Germany Italy France UK Far Inferior Slightly Inferior Identical - no difference Slightly Superior Far Superior Don’t Know

Household Cleaning products Question: All things considered, how similar are store brands (e.g supermarket own brands) in the following categories compared to well know leading famous brands Source : Datamonitor Consumer Survey April 2009

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British consumers buying more Private Labels

4% 14% 19% 55% 3% 1% 3%

Only ever buy Private Label Buying Private Label a lot more Buying Private Label a little more No change Buying brands a little more Buying brands a lot more I only ever buy brands

Branded products Supermarket Private Label products

4% 33%

1% Don’t know Source: IGD Consumer Unit, 2009

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Private Label Household products growth

• utperforming the market
• 2
• 1

1 2 3 4 5 6 UK Italy France Germany % Value growth Market PL

Sources: UK TNS to June 09 France TNS to June 09 Italy IRI to June 09 Germany Gfk to March 09

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15 20 25 30 35 40 45

79 80 81 82 89 90 91 92 93 06 07 08 09

% Private Label share of UK packaged groceries

Private Labels benefit in times of recession

Source TNS, Datamonitor

Private Labels gain and continue to grow share during and after recessions

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4 7 4 3 3 7 3 2 3 1 2 9 2 7 2 4 2 5 2 3 2 2 1 3 1 2 1 4 1 1 8 6 5 5 4 4 3 9 3 4 2 9 2 8 2 7 2 4 2 1 2 1 2 0 1 9 1 2 1 1 1 0 8 6 4 3 3 3 4 6 2

Sw itzerland UK Germany Spain Belgium France Netherlands Canada Australia W ORLD AVERAGE USA New Zealand I taly I ndia South Africa Brazil Japan Mexico China Russia LATI N AMERI CA

Private Label penetration is generally highest in Europe and lower in emerging markets, but poised to grow fast. Note: Based on selected mature and emerging markets; e – estimate; f - forecast. Source: Planet Retail Ltd - www.planetretail.net; partly based on AC Nielsen

2012f (% ) 2007e (% )

Private Label is forecast to gain share worldwide

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Achievements

»

Organic growth +4%, core categories +7%

»

New business wins

»

High potential territories - Central and Eastern Europe

»

Small acquisition of sachet assets

»

Evaluating further acquisition opportunities

»

Innovative NPD

• sachets, gels, automatic dishwashing, Personal Care

»

R&D spend up to £7m

»

Focus NPD on product performance, value, packaging and eco

»

Restructuring and efficiency initiatives

• closure of Coventry, Warrington

»

WCE overhead restructuring

»

Further efficiencies from Lean and asset rationalisation

»

Customer Service Level up to 97%

»

Scale advantages from pan European supply, NPD, systems, purchasing, people

»

Capital investment Growth Efficiency Scale Innovation

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Achievements

»

Performance and talent management processes

»

Strengthened new divisional MD’s

»

Employee morale up by 4%

»

Waste recycled, recovered and reused up 1% to 67%

»

Water consumption reduced by 8% year on year

»

Total waste generated fell 3%

»

Energy consumption and CO2 emissions fell by 6%

»

Margins recovering, asset turnover improved

»

Net debt down to £82.4m

»

ROCE up to 17.1% People Finance Sustainability

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Key objectives

To enhance returns to shareholders through: » Further investment in NPD of core categories » Focus in high growth markets » Target improved customer service » Further efficiency improvements » Continue to seek suitable acquisitions

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Conclusion and Outlook

» Continuing Private Label growth in all markets » Strategy consistently applied » Benefiting from stronger and larger business » Recovery of margins and ROCE » Good start to current year

Passionate about Private Label

McBride plc “Passionate about Private Label”