Mcbride Plc · LSE:MCB
Mcbride — FY2012 Earnings Presentation
46 slides from Mcbride's earnings presentation, Sep 4, 2012
Slide 1: McBride plc Preliminary Results Presentation
McBride plc Preliminary Results Presentation 4 September 2012 Passionate about Private Label
Slide 2: Introduction
Introduction Iain Napier - Chairman Passionate about Private Label 2
Slide 3: Introduction
Introduction • Revenue growth achieved in a challenging economic environment • Previously announced re-structuring completed as planned • Net debt within Board targets • Dividend re-based to maximise cash available for investment in growth, recommended final dividend 3.0p (2011: 4.8p) Passionate abo
Slide 4: Summary
Summary Chris Bull – Chief Executive Officer Passionate about Private Label 4
Slide 5: Summary
Summary • Revenue growth of 1% on a constant currency basis • Growth in Private Label market shares gains momentum • “Refresh” initiatives completed and further re-organisation announced • Adjusted operating profit(1) up 2% for the year and 118% in second half • Net debt of 1.5 x adjusted EBITDA(1)
Slide 6: Financial review
Financial review Richard Armitage - Chief Finance Officer Passionate about Private Label 6
Slide 7: Financial headlines
Financial headlines Constant Currency 2011-12 2010-11 Y/Y 2010-11 Y/Y Revenue (£m) 813.9 812.4 +0% 802.7 +1% EBITA (£m) 29.5 29.0 +2% EBITA margin 3.6% 3.6% +0 pts Profit before tax (£m) 23.7 22.5 +5% Diluted earnings per share (p) 9.7 9.3 +4% Payments to shareholders per share (p) 5.0 6.8 -26% Cash
Slide 8: Income statement
Income statement 2011-12 2010-11 Y/Y £m £m Revenue 813.9 812.4 +0% Gross profit 255.6 264.8 -3% Gross margin 31.4% 32.6% -1.2pts Distribution costs (52.4) (54.3) -3% Administrative costs (173.7) (181.5) -4% EBIT 29.5 29.0 +2% Net financing costs (5.8) (6.5) -11% Profit before taxation 23.7 22.5 +5%
Slide 9: Regional performance – Revenue
Regional performance – Revenue (1) Constant Currency 2011-12 2010-11 Y/Y 2010-11 Y/Y £m £m £m UK 315.2 310.7 +1% 310.7 +1% Western Continental Europe 405.9 405.7 +0% 399.8 +2% (2) Central and Eastern Europe 135.6 139.7 -3% 135.1 +0% Asia 10.3 9.3 +11% 9.4 +10% Sub-total 867.0 865.4 +0% 855.0 +1% Eli
Slide 10: UK Household Private label Value and Volume share Jan – June 2012
UK Household Private label Value and Volume share Jan – June 2012 Private label momentum accelerated during last quarter 1 in 3 purchases in the quarter were Private Label’s % Private Label 35.0% Value Share Volume Share 30.0% 25.0% 20.0% 15.0% 10.0% Jan 22 2012 Feb 19 2012 Mar 18 2012 Apr 15 2012 M
Slide 11: Good Private Label momentum in Household products across Europe
Good Private Label momentum in Household products across Europe % change vs prior year 12 10 8 6 4 2 0 -2 UK France Italy Germany Spain -4 -6 -8 Market value Private Label value Market volume Private Label volume UK, France, Italy, Germany, data 52 weeks to June 2012 Spain 52 weeks to Dec 2011 Sourc
Slide 12: Regional performance – Operating profit
Regional performance – Operating profit 2011-12 2010-11 Y/Y £m £m UK 16.5 11.9 +39% Western Continental Europe 15.6 15.4 +1% Central and Eastern Europe 4.6 8.9 -48% Asia 0.2 0.0 n/a Corporate costs (7.4) (7.2) -3% Total 29.5 29.0 +2% (1) All figures are before adjusting items. Adjusting items includ
Slide 13: Movement in net debt June 2011 to June 2012
Movement in net debt June 2011 to June 2012 Net cash generated Opening net from (1) Capital Payments to Exceptional Closing net debt operations Other expenditure shareholders items Acquisitions debt -15.0 £m -40.0 9.8 -65.0 (26.4) (11.8) (6.7) (81.2) -90.0 (83.7) 39.5 (1.9) (1) Other includes financ
Slide 14: Oil and oil derivatives have been volatile
Oil and oil derivatives have been volatile … Oil 130 120 110 100 90 • Oil remained at around €80/barrel for 80 70 much of 2011/12, but spiked in early 2012 60 50 driving inflation in Q4 € per Barrel Act/F'cast $ per Barrel Act/F'cast • Oil fell subsequently, but is moving back above €90/barrel durin
Slide 15: Key feed-stocks have also been volatile
Key feed-stocks have also been volatile … PKO PET 2,400 1,900 2,200 1,800 2,000 1,700 1,800 $ / MT € / MT 1,600 1,600 1,500 1,400 1,200 1,400 1,000 1,300 800 1,200 Actual FY11 Average FY12 Average Actual FY11 Average FY12 Average HDPE Testliner 1,700 560 1,600 540 1,500 520 500 € / MT € / MT 1,400 4
Slide 16: Opportunities
Opportunities STRONG EXECUTION • ‘Project Refresh’ over-delivers, £8m savings by FY14 • Programme under-spends, £13.3m total exceptional cost and £8.6m total cash cost • Operational Excellence delivering, £1m net delivered in FY12 and on target for £2m net in FY13 • Overheads improvements continue,
Slide 17: Project 'Refresh' update
Project ‘Refresh’ update Chris Bull Passionate about Private Label 17
Slide 18: Agenda
Agenda • Positioning McBride to maximise the opportunity • Project ‘Refresh’ – update • Summary • Q&A Passionate about Private Label 18
Slide 19: Private Label dynamics
Private Label dynamics Positioning McBride to maximise the opportunity • Attraction of lower prices and value for money for consumers • Attraction of higher margin products for our retail customers • Retailer differentiation and loyalty building remains key • Private Label and A Brands gain share at
Slide 20: Consumers expecting to purchase more Private Label
Consumers are expecting to purchase more Private Label’s in the next 12 months and Private Label’s have gained consumer trust I would at least consider the Less (among past month buyers) More I trust supermarket supermarket Private Label Private Label products options for every grocery as much as pr
Slide 21: Refresh Strategy Implementation
Refresh Strategy Implementation Passionate about Private Label 21
Slide 22: What we have done
What we have done: Cost Competitiveness Previously UK Liquids Machine Dishwash Europe Announced Achieved Burnley site closed and Centre of excellence Pre-tax exited on time created in Foetz exceptional £21m £13.3m charges 12 lines transferred 2 lines transferred Cash expenditure £13m £8.6 m
Slide 23: McBride's manufacturing footprint
McBride’s manufacturing footprint 14 Factories across Europe and 3 in Asia 1 Barrow 2 Middleton 15 3 Bradford 17 4 Hull 16 5 Rosporden 1 6 Moyaux 2 3 7 Etain 4 8 Ieper 9 Estaimpuis 8 10 Foetz 9 6 11 11 Strzelce 10 5 12 Sallent 7 14 13 Bergamo 14 Brno 15 McBride Zhongshan China 13 16 Fortune Laborato
Slide 24: Lean manufacturing delivering
Lean manufacturing delivering Lean Manufacturing Reviewed Year 1 target savings of £5m • Direct labour improvements gross / £1m net achieved Lean examples: • Material usage improvement • Overhead savings ‐ Hull – Inventory reduction programme, Saving £900k Estimated cumulative benefit of
Slide 25: McBride: Centres of Excellence
McBride: Centres of Excellence Centres of Excellence based across Europe and China Centre of Excellence – Estaimpuis, Belgium Focus on laundry liquids Zhongshan Estaimpuis Rosporden Foetz Centre of Excellence – Brno Foetz, Luxembourg Focus on machine dishwashing One Centre of Excellence Centre of Ex
Slide 26: McBride: Centres of Excellence
McBride: Centres of Excellence Centres of Excellence now expanded to a further four categories Centre of Excellence – Barrow, UK Zhongshan Focus on laundry powders and tablets Barrow Centre of Excellence – Bradford Middleton, UK Middleton /Ieper Ieper Focus on specialist cleaners Estaimpuis Centre o
Slide 27: A Group R&D team, out-innovating the competition
A Group R&D team, out-innovating the competition Core growth categories Laundry liquids and sachets Specialist cleaners Machine Dishwashing Future growth categories Air care Skin Care Mouthwash Male grooming Passionate about Private Label 27
Slide 28: Winning in Core Growth Categories
Winning in Core Growth Categories: J Sainsbury’s : Trigger Cleaners Category Growth Plan From To Merchandising, Promotion & Channel Plans Own brand share Trigger cleaners 60% 50% 40% 30% 20% 10% 0% Jul 10 2011 Feb 20 2011 Apr 17 2011 May 15 2011 Sep 04 2011 Feb 19 2012 Apr 15 2012 May 13 2012 Aug 07
Slide 29: Category management in action
Category management in action… Before After Own brand share Total Laundry 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Jan 22 2012 Mar 18 2012 Aug 05 2012 Feb 19 2012 Apr 15 2012 May 13 2012 Jun 10 2012 Jul 08 2012 Relaunch Passionate about Private Label 29
Slide 30: Continuing expansion in developing and emerging markets
Continuing expansion in developing and emerging markets Seed for future China Sales in Malaysia Malaysia +9% Indonesia Core markets Thailand UK Vietnam Sales in Vietnam Australasia +32% France Italy Growth engine Netherlands Germany Spain Poland Sales in Poland Belgium Czech +23% Hungary Romania Rus
Slide 31: Group Re-organisation
Group Re-organisation • Commercial Business Units, focused on generating revenue and profit growth • A Group R&D team, out-innovating • A Group Category Team prioritising the competition key Group projects, measured on profitable market share growth • Logistics and warehousing delivering excellent c
Slide 32: The Executive Management Team (EMT)
The Executive Management Team (EMT) Chief Executive Officer Chris Bull Chief Operating Chief Commercial Chief R&D Chief Finance Chief HR Strategic Company Officer Officer Development Officer Officer Officer Secretary Director Colin Greg Matthias Richard Carole Malcolm Tim McIntyre Krol Kreysel Armit
Slide 33: KPIs
KPIs 2010-11 2011-12 Organic revenue growth 0% 1% Private Label Penetration (1) 31.3% 32.5% Growth (2) % Revenue from D&E Geographies 8.8% 9.1% % Revenue from Core & Future Growth Categories 45% 47% Overheads % Sales 22.3% 21.3% Efficiency Fixed Asset Turnover 4.4 4.4 Operating Margin (3) 3.6% 3.6%
Slide 34: Summary
Summary Passionate about Private Label 34
Slide 35: Summary
Summary • Revenue growth of 1% at constant currency • Results in-line with expectations with strong recovery in second half • Project Refresh is fully on-track and delivering – £8m savings in FY14 from restructuring – Operational Excellence gaining momentum – Category teams are delivering innovation
Slide 36: Passionate about Private Label
Passionate about Private Label 36
Slide 37: Q&A
Q&A Passionate about Private Label 37
Slide 38: Appendix
Appendix Passionate about Private Label 38
Slide 39: Project Refresh: From Good to Great
Project “Refresh”: From Good to Great A Fundamental Business Review... Key Strategic Actions Competitive Competitive advantage & advantage & Acquisitions growth potential growth by category potential by • Organisational Change category Supply chain Acquisitions efficiency & • Category review footpri
Slide 40: Our planned business
Our planned business Growth markets with scope for market share gain Robust business model with strong product offerings and expertise Strong balance sheet enabling acquisitions and geographic expansion Plus: A rationalised and enhanced operating platform Increased customer responsiveness and flexib
Slide 41: Business model
Business model Passionate about Private Label 41
Slide 42: Private Label forecast to grow in all markets
Private Label forecast to grow in all markets Note: Based on selected mature and emerging markets; f - forecast. Estimated shares of MGD sales; may exclude fresh produce. Passionate about Private Label Source: Planet Retail Ltd - www.planetretail.net; partly based on Nielsen and GfK 42 42
Slide 43: Private Labels benefit in times of recession
Private Labels benefit in times of recession Private Labels gain and continue to grow share during and after recessions % Private Label share of UK packaged groceries 45 40 35 30 25 20 15 79 80 81 82 89 90 91 92 93 06 07 08 09 Passionate about Private Label Source Kantar, Datamonitor 43 43
Slide 44: Personal care Private Label share France UK
Personal care Private Label share UK France % Private Label share % Private Label share 25 30 20 25 20 15 15 10 10 5 5 0 0 2010/11 2011/12 2010/11 2011/12 Value share Volume share Value share Volume share • Total UK Personal Care market grew 1.8% in • Total France Private Label Personal Care market
Slide 45: The Private Label opportunity
The Private Label opportunity Private Label share Private Label Growth Drivers Western European markets % Value Share Consumers seek value for money 18 16 Retailers continually looking to 14 differentiate offer and build loyalty 12 10 Major retailers require price-competitive 8 products to improve v
Slide 46: Household Private Label growth continues to outperform across Europe
Household Private Label growth continues to outperform across Europe Western Europe Eastern Europe Value growth trends % 5.0% 40.0% 35.0% 4.0% 30.0% 25.0% 3.0% 20.0% 2.0% 15.0% 10.0% 1.0% 5.0% 0.0% 0.0% 2006-07 2007-08 2008-09 2009-10 2010-11 2006-07 2007-08 2008-09 2009-10 2010-11 Market Western Eu