Nwf Group Plc · LSE:NWF
Nwf — H1 2018 Earnings Presentation
28 slides from Nwf's earnings presentation, Jan 30, 2018
Slide 1: Investing in Future Growth – Half Year Results to 30 November 2017
INVESTING IN FUTURE GROWTH HALF YEAR RESULTS TO 30 NOVEMBER 2017
Slide 2: Results summary: Diversified business model delivered growth
GROUP OVERVIEW Results summary: Diversified business model delivered growth Revenue Headline operating profit* Headline profit before tax* £295.8m +15.6% £2.4m +9.1% £2.2m +10.0% 2017 £295.8m 2017 £2.2m 2016 £255.9m 2016 £2.0m Headline earnings per share* Net debt Interim dividend per share 3.6p +9.
Slide 3: Key highlights – development continued as planned
GROUP OVERVIEW Key highlights – development continued as planned » Revenue growth in Feeds and Fuels » Feeds: commodity price increases and increased traded product sales » Fuels: volume growth and higher oil prices » Strategic investment in Feeds delivering expected returns - lower operating costs
Slide 4: Feeds - Operating Highlights
FEEDS - OPERATING HIGHLIGHTS Investment delivering returns » Market conditions positive » Milk prices increased, up 25.6% to 31.9ppl » Milk production up 6.5% » Ruminant feed market volumes up 11.2% » Spot commodities up 12% in half year » Volume as expected – concentrating on delivery within our op
Slide 5: Food - Operating Highlights
FOOD - OPERATING HIGHLIGHTS Focus on business development » Lower storage levels as anticipated » Over 15,000 pallet spaces of new business won in the first half including Arla UHT three year contract » Ensures continued full utilisation of Wardle » More diverse customer base » Increased customer st
Slide 6: Fuels - Operating Highlights
FUELS - OPERATING HIGHLIGHTS Growth across the depot network » Record first half volume » Additional business development resources increased commercial sales at key depots with growth in road diesel and gas oil » Home Counties delivered to plan – over 15 million litres in first half » Brent crude i
Slide 7: Financial Review: Income statement summary
FINANCIAL REVIEW Income statement summary Nov 2017 Nov 2016 May 2017 £m £m £m Revenue Feeds 77.8 65.1 158.2 Food 19.5 20.1 39.0 » Revenue increased by 15.6% – increased Fuels 198.5 170.7 358.6 commodity prices in Feeds and Fuels and Total revenue 295.8 255.9 555.8 volume growth in Fuels Operating pr
Slide 8: Financial Review: Balance sheet summary
FINANCIAL REVIEW Balance sheet summary Nov 2017 Nov 2016 May 2017 £m £m £m Fixed assets 68.6 68.3 69.4 » Fixed assets increased to £68.6 million as a result of Net working capital 8.0 9.1 3.3 replacement capex spend Assets employed 76.6 77.4 72.7 » Working capital decreased by £1.1 million versus Pe
Slide 9: Financial Review: Pension summary
FINANCIAL REVIEW Pension summary Movement in pension scheme deficit Nov 2017 Nov 2015 May 2017 £m £m » Single defined benefit pension scheme £m Assets 37.9 39.5 Liabilities (56.9) (59.4) » Closed to new members in 2002 and future Deficit (19.0) (19.9) accrual in 2016 Related deferred tax asset 3.2 3
Slide 10: Financial Review: Cash flow summary
FINANCIAL REVIEW Cash flow summary Nov 2017 Nov 2016 May 2017 £m £m £m Cash flows from operating activities » EBITDA £4.7 million (2016: £3.9 million) Operating profit 2.4 1.8 7.8 Depreciation and amortisation 2.3 2.1 4.2 » Seasonal working capital outflow lower than Working capital (4.7) (5.6) 0.2
Slide 11: Financial Review: Net debt summary
FINANCIAL REVIEW Net debt summary » Facilities of £65.0 million with RBS until October 2019 Movement in net debt 25.0 » November 2017 net debt £16.3 million, substantial facility and covenant headroom 20.0 19.1 8.1 Facility Facility Drawn 1.6 16.3 Invoice Discounting £50.0m £12.8m 15.0 0.7 0.5 3.1 1
Slide 12: Development Strategy: Solid platform for growth
GROUP DEVELOPMENT STRATEGY Solid platform for growth – good track record » Diversified source of earnings delivers resilient growth » Solid cash generative businesses in large stable markets » Feeds development: improve efficiency, consolidate the market and broaden offer » Food development: custome
Slide 13: Feeds - Development Strategy
FEEDS - DEVELOPMENT STRATEGY Investing in development Principal feed mills » Operational platform completed » Market prospects underpinned by good milk prices » Agriculture an attractive market for the Group » National player with a strong track record Longtown Development Strategy » Improve operati
Slide 14: Food - Development Strategy
FOOD - DEVELOPMENT STRATEGY Delivering service and efficiency » Market for ambient groceries challenging but stable » Working under contracts with blue chip brands and retailers » Delivering products across the UK » Warehousing remains in short supply Development Strategy » Maintain service and impr
Slide 15: Fuels - Development Strategy
FUELS - DEVELOPMENT STRATEGY Adding depots to a successful network » Third largest oil distributor in the UK » 2% market share, over 150 smaller players » Network built predominantly by acquisition » Strong track record » Low ROS, high ROCE > 20% Development Strategy » Targeting better business bala
Slide 16: NWF Investment summary
GROUP OVERVIEW NWF Investment summary Strong management team Growth opportunities Asset backing Focus on returns Good cash generation Growing dividend NWF Group plc HALF YEAR RESULTS TO 30 NOVEMBER 2017 16
Slide 17: Summary and outlook
GROUP OVERVIEW Summary and outlook » Continuing to perform as planned since period end, trading in line with the Board’s expectations » Feeds customers optimise performance with higher milk prices, albeit recent falls » Continued focus on nutrional advice, feed price increases implemented » Food foc
Slide 18: Additional information
GROUP OVERVIEW Additional information » Business overview » Locations » Organisation » Main site photo » Group financial performance » Divisional track record » Additional market data NWF Group plc HALF YEAR RESULTS TO 30 NOVEMBER 2017 18
Slide 19: Business Overview: Feeds
BUSINESS OVERVIEW Feeds Supply of feed to ruminants in the UK – principally dairy » National player – feeds one in six dairy cows in the UK, Nº2 in the market » 589,000 tonnes per annum » Feed for dairy, beef and sheep » Sell added value products including minerals, supplements and fertiliser » 4,75
Slide 20: Business Overview: Food
BUSINESS OVERVIEW Food Consolidation of ambient grocery products to UK Supermarkets » 100,000 pallet spaces » 800,000ft2 of warehousing in Wardle » Market leader in the North West » 464 people » 106 trucks, 229 trailers » 99.5% service level » 200 customers including Arla & Typhoo » Packing room for
Slide 21: Business Overview: Fuels
BUSINESS OVERVIEW Fuels Supply of fuels and fuel cards to commercial, domestic and retail customers across the UK » Third largest oil distributor in the UK » 58,000 customers » 209 people » 19 depots across the UK » Supply 30 retail petrol stations » 93 tankers » Fuel card marketing » 513 million li
Slide 22: Business Locations
GROUP OVERVIEW Business Locations Feeds Aspatria Longtown Wardle* Wixland Food Wardle* Fuels Ammanford Babbinswood Bangor Boston Burnley Burwell Droitwich Dyserth Fishers Pond Great Yarmouth Home Counties Kenilworth Long Marston Mansfield Martlet Staffordshire Fuels Stoke Wardle* Yate * Wardle = Hea
Slide 23: Organisation
GROUP OVERVIEW Organisation Chief Executive Non Executives Richard Whiting Chairman: Philip Acton Yvonne Monaghan David Downie Finance Director Company Secretary Chris Belsham Rob Andrew Feeds Food Fuels Andrew Downie Keith Forster Kevin Kennerley 198 employees 464 employees 209 employees NWF Group
Slide 24: Wardle – Main operating site
GROUP OVERVIEW Wardle – Main operating site NWF Group plc HALF YEAR RESULTS TO 30 NOVEMBER 2017 24
Slide 25: Track record
GROUP OVERVIEW Track record Revenue Headline PBT 600 540.2 545.8 537.7 555.8 9 8.5 8.1 8.3 8.5 7.7 492.3 8 500 465.9 7 400 6 5.1 5 300 £m £m 4 200 3 2 100 1 - - 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Headline EPS Dividend 16 7 13.6 14.0 6.0 14 13.1 13.2 6 5.7 12.4 5.4 5.1 12 5 4
Slide 26: Divisional track record
GROUP OVERVIEW Divisional track record Feeds Food 180 50 3.5 4.0 160 45 3.0 3.5 40 140 3.0 35 2.5 120 Operating profit £m Operating profit £m 30 Revenue £m Revenue £m 2.5 2.0 100 25 80 2.0 1.5 20 60 1.5 15 1.0 40 1.0 10 0.5 20 0.5 5 - - - - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 27: Fuels additional market data
GROUP OVERVIEW Fuels additional market data Oil Prices - Brent crude $ per barrel Oil Market Journal 70 65 60 55 50 45 40 35 $ 30 25 20 15 10 5 0 02/01/17 02/02/17 02/03/17 02/04/17 02/05/17 02/06/17 02/07/17 02/08/17 02/09/17 02/10/17 02/11/17 NWF Group plc HALF YEAR RESULTS TO 30 NOVEMBER 2017 27
Slide 28: Feeds additional market data
Price per tonne $ Price per tonne £ 03 /0 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 0 50 100 150 200 250 300 350 400 450 500 1/ 17 201 /0 7 02/01/2017 1/ 31 201 /0 7 14/01/2017 1/ 14 201 /0 7 26/01/2017 2/ 28 201 07/02/2017 /0 7 2/ 14 201 19/02/2017 /0 7 3/ 28 201 03/03/2017 /0 7