Slide 1: Interim Results Presentation: February 2020
McBride plc Interim Results Presentation: February 2020
Slide 2: Agenda
Agenda 1. CEO first thoughts 2. Headlines 3. Commercial update 4. Financial results 5. Key activities and actions 6. Outlook McBride plc 1 Interim Results Presentation: February 2020
Slide 3: CEO introduction
CEO introduction Ludwig de Mot • Appointed November 2019 • Brings strong commercial and operational expertise and a wealth of international experience in manufacturing and selling in many different geographies • ArcelorMittal – President and CEO of the Canadian mining operation • Lhoist Group – Pres
Slide 4: Why McBride?
Why McBride? • Private Label ("PL") is a sizeable and stable • Challenged and fragmented supply base market supports further consolidation opportunities • Long-term market dynamics are supporting • McBride has a growing and expandable PL concept platform in Asia • McBride is the #1 manufacturer of P
Slide 5: 100 day observations
100 day observations What’s working What needs Next steps to improve • Asset and innovation • Top line performance • A strategy review is underway capabilities supported by good • Customer service levels • Output to be communicated geographical footprint improving but below target September 2020 alo
Slide 6: Headlines
Headlines Chris Smith McBride plc 5 Interim Results Presentation: February 2020
Slide 7: First half headlines
First half headlines Second quarter revenues weaker in difficult markets; strategy review underway Business Financial • Revenue growth in South, East and Asia, offset • Household revenues down 1.4% at constant currency by declines in UK, France and North • Marked slowdown in last two months of the p
Slide 8: Commercial update
Commercial update McBride plc 7 Interim Results Presentation: February 2020
Slide 9: Revenue performance H1 FY20 vs H1 FY19
Revenue performance H1 FY20 vs H1 FY19 Group revenues – continuing operations £m European household revenues by category £m Constant currency variances Constant currency variances 1.2 0.5 1.3 1.7 1.3 6.1 (7.1) 2.2 (2.3) (4.3) (4.6) (2.1) (3.2) (11.4) (16.3) (1.7) (6.1) UK France North South East Asi
Slide 10: Market update – UK
Market update – UK Overall PL market -4.3%(1), McBride -7.9% • Household PL decline -4.3% • Big 4 retailers decline; • Discounter Household (+3.3% growth in H1 FY19) discounters and bargain growing stores gaining • Slowdown in sales in • brands faster than PL November/December • E-commerce continues
Slide 11: Market update – Germany
Market update – Germany Overall PL market -1.3%(1), McBride +1.3% • Continued success in STIWA • Supermarkets and • Brand innovations consumer tests drugstores growing, • Sustainability awareness discounters declining • Significant number of new • More blacklisting of product launches/relaunches • R
Slide 12: Market update – France
Market update – France Overall PL market -2.8%(1), McBride -6.8% • Total market down, • McBride revenues impacted • French law limiting grocery particularly in PL by listed retailer declines and promotions aggressive brand activity • Market negatively impacted • Good trading relationships by “gilet
Slide 13: Continued wins in Contract Manufacturing
Continued wins in Contract Manufacturing H1 2018/19 H1 2019/20 Constant currency 21% 24% Total Local £37.6m Multi-national Total Local £42.6m Multi-national 79% 76% • H1 revenue growth of 13.3%: • Contract Manufacturing has grown to 13.2% of total Household sales from 11.4% • auto dishwash, powders
Slide 14: Financial results
Financial results McBride plc 13 Interim Results Presentation: February 2020
Slide 15: Financial headlines
Financial headlines • Revenues at constant • Adjusted profits before tax • Good operating cash flows currency 4.4% lower at from continuing operations £14.8m (2018: £23.2m) £350.4m of £9.7m down on prior year • Proceeds from sale of (2018: £14.5m) • Household revenues at Hull site £3.0m constant cur
Slide 16: Revenue development
Revenue development Continuing revenues Change in continuing revenues Household revenues by half year £m for H1 (at CCY) £m £m 369.2 366.7 27.6 27.4 350.4 341.6 334.4 16.0 332.0 10.9 10.9 10.9 10.5 12.1 12.1 +1.2 39.5 39.9 45.2 82.2 84.2 82.7 -6.1 64.3 57.7 59.4 330.7 328.4 322.3 -11.4 55.3 56.0 52.
Slide 17: Operating profit development
Operating profit development HY19 vs HY20 Continuing EBITA Continuing EBITA – sequential EBITDA (excluding IFRS 16) £m £m £m 16.8 16.6 16.8 25.8 25.5 11.6 12.1 11.6 20.2 H1 H1 CCY H1 H1 H2 H1 H1 H1 CCY H1 2018/19 2018/19 2019/20 2018/19 2018/19 2019/20 2018/19 2018/19 2019/20 • Volume decline, • H1
Slide 18: Income statement
Income statement Gross margin ROS Labour costs % of sales and Continuing adjusted % % overhead % of gross profit interest cost and tax rate 33.9% 90.8% £m 4.6% 90.2% 30% 33.7% 87.1% 90.4% 29% 4.2% 86.1% 27% 3.4% 20.3% 32.8% 3.3% 3.3% 32.7% 18.7% 19.2% 0.4 0.3 0.3 18.1% 18.0% 1.9 1.8 1.6 H1 2018/19 H
Slide 19: Balance sheet and cash flow
Balance sheet and cash flow ROCE (excluding IFRS 16) Cash flow from operations before Net debt £m/cover x times % exceptional items £m 28.7 120.9 113.5 25.3 2.6 98.0 2.8 17.8 20.8% 14.3 1.8 15.3% 13.4% 0.4 H1 H2 H1 2017/18 2018/19 2019/20 Dec 2018 Jun 2019 Dec 2019 2018/19 2018/19 2019/20 Net debt H
Slide 20: Other financials
Other financials Exceptional items Payments to shareholders Group pension liability £m pence £m 9.5 6.9 30.8 31.1 31.8 2.9 2.8 2.4 1.8 80% 80% 3.0 79% 2.1 2.1 2.4 1.2 1.4 1.5 1.5 0.8 H1 FY H1 FY FY FY FY FY H1 FY H1 2018/19 2019 2019/20 2016 2017 2018 2019 2020 2018/19 2019 2019/20 Cash flow Interim
Slide 21: Costs update
Costs update Overall raw materials price index Transport costs as % of sales 102 100 98 8.0% 8.4% 7.0% 96 94 Jul 18 Dec 18 Jun 19 Dec 19 FY18 FY19 H1 FY20 Recycled plastics Positive Negative • Testliner • Natural surfactants 34% 50% 64% • Virgin plastics • Salts/carbonates 66% 50% • Recycled plastic
Slide 22: Key activities and actions
Key activities and actions Ludwig de Mot McBride plc 21 Interim Results Presentation: February 2020
Slide 23: Key improvement activities and actions
Key improvement activities and actions Despite senior leadership team changes, we have continued to make progress on key strategic initiatives Markets Assets Processes People • Segmentation • Factory footprint • Digital update • Upgrade HR processes • M&A • Logistics network • Integrated business pl
Slide 24: Key improvement activities and actions (continued)
Key improvement activities and actions (continued) Segmentation Customers • New product development focus • Customer prioritisation • Product portfolio choices • Technical resource priority Products M&A • Acquisition of assets in key markets • More consolidation likely in the markets over time Categ
Slide 25: Key improvement activities and actions (continued)
Key improvement activities and actions (continued) Factory footprint – Barrow closure • Laundry powder decline • Consultation now complete • Production transfers to France and Luxembourg • Plant expected to close in summer 2020 Logistics network • Network study mostly complete • Logistic management
Slide 26: We continue to drive more sustainable solutions for our customers
We continue to drive more sustainable solutions for our customers Packaging situation today Formulation situation today • 99% by weight of packaging is recyclable, • Wide range of Eco-certified products more customer awareness needed • RSPO certified palm products in all • Plastic recycled content i
Slide 27: Outlook
Outlook Ludwig de Mot McBride plc 26 Interim Results Presentation: February 2020
Slide 28: Second half performance consistent with January full year guidance
Second half performance consistent with January full year guidance, strategy review underway • Third quarter revenue run rates as expected • Barrow closure in summer 2020, exceptional costs in second half • H2 outlook in line, however markets remain challenging • Net debt levels in line with expecta
Slide 29: Q&A
Q&A McBride plc 28 Interim Results Presentation: February 2020
Slide 30: Appendices
Appendices 1. Income statement 2. Segmental reporting 3. Exceptional items 4. Balance sheet 5. Cash flow 6. Use of cash and reconciliation of net debt 7. Funding headroom 8. IFRS 16 transition McBride plc 29 Interim Results Presentation: February 2020
Slide 31: Appendix 1: income statement
Appendix 1: income statement Constant currency(1) H1 2019/20 H1 2018/19 H1 2018/19 Continuing operations £m £m Y/Y £m Y/Y Revenue 350.4 369.2 (5.1%) 366.7 (4.4%) Gross profit 118.0 121.0 (2.5%) 120.2 (1.8%) Gross margin 33.7% 32.8% 0.9 ppt 32.8% 0.9ppt Distribution costs (28.7) (28.0) 2.5% (27.8) 3.
Slide 32: Appendix 2: segmental reporting
Appendix 2: segmental reporting Constant currency H1 2019/20 H1 2018/19 H1 2018/19 £m £m Y/Y £m Y/Y Continuing revenue UK 82.3 89.4 (7.9%) 89.4 (7.9%) France 59.4 64.3 (7.6%) 63.7 (6.8%) North 52.7 55.3 (4.7%) 54.8 (3.8%) South 45.2 39.5 14.4% 39.1 15.6% East 82.7 82.2 0.6% 81.4 1.6% Household Europ
Slide 33: Appendix 3: exceptional items
Appendix 3: exceptional items H1 H1 2019/20 2018/19 £m £m Continuing operations Danlind acquisition costs — 0.2 UK Aerosols reorganisation 0.1 — Factory footprint review 1.2 — Efficiency based restructuring 0.8 — Other — 0.1 Total charged to operating profit from continuing operations 2.1 0.3 Discou
Slide 34: Appendix 4: balance sheet
Appendix 4: balance sheet 31 Dec 30 Jun 31 Dec 2019 2019 2018 £m £m Change £m Change Goodwill and other intangible assets 29.1 29.5 (1.4%) 30.0 (3.0%) Property, plant and equipment 128.1 136.0 (5.8%) 134.9 (5.0%) Right‑of‑use assets 6.7 — n/a — n/a Other non‑current assets 12.5 11.6 7.8% 12.9 (3.1%)
Slide 35: Appendix 5: cash flow
Appendix 5: cash flow H1 2019/20 H1 2018/19 £m £m Y/Y Adjusted operating profit 11.6 16.5 (29.7%) Depreciation 8.6 9.0 (4.4%) Depreciation right‑of‑use assets 1.7 — n/a Share‑based payments 0.2 0.3 (33.3%) Additional cash funding on pension scheme (2.0) (1.5) 33.3% Profit on disposal of property, pl
Slide 36: Appendix 6: use of cash and reconciliation of net debt
Appendix 6: use of cash and reconciliation of net debt 35 Movement in net debt £7.4 (excluding IFRS 16 liability) 30 Proceeds from £0.2 sale of property, £2.0 Foreign £5.1 exchange plant and equipment 25 £2.5 Other items Working capital £1.3 movement £2.2 Exceptionals Net proceeds £2.2 from sale £1.
Slide 37: Appendix 7: funding headroom
Appendix 7: funding headroom Committed Facility Drawn headroom £m £m £m Committed facilities: – revolving facilities (June 2022) 148.9 (96.1) 52.8 – invoice discounting facility 27.5 (27.5) — – other loans — — — – finance leases 8.2 (8.2) — Total committed facilities 184.6 (131.8) 52.8 Uncommitted f
Slide 38: Appendix 8: IFRS 16 transition
Appendix 8: IFRS 16 transition As at As at 30 June IFRS 16 1 July 2019 adjustment 2019 £m £m £m Non-current assets Right-of-use assets — 7.9 7.9 Liabilities Lease liability — 9.4 9.4 Provisions 7.9 (2.1) 5.8 Net assets 64.2 0.6 64.8 Equity Accumulated loss (97.9) 0.6 (97.3) Total equity 64.2 0.6 64.