Mcbride Plc · LSE:MCB
Mcbride — FY2010 Earnings Presentation
36 slides from Mcbride's earnings presentation, Sep 2, 2010
Slide 1: Full Year Results 2009-10
2009-10 Full Year Results 2 September 2010
Slide 2: Introduction - Iain Napier, Chairman
Introduction Iain Napier - Chairman Passionate about Private Label
Slide 3: Introduction
Introduction • Strategy consistently and successfully applied • Record level of – Revenue – Operating profit – Cash generation • Continued improvement in Return on Capital Employed • Proposed final dividend up 12% to 4.8p (2009: 4.3p) 3
Slide 4: Summary - Chris Bull
Summary Chris Bull Passionate about Private Label
Slide 5: Summary
Summary • Revenue growth of 1% on constant currency basis • Profit and margin growth at all divisions • Increases in raw materials prices in H2 • Price increase recovery plan on track • 3 acquisitions completed; 2 of which in strategic Personal Care categories • Strong cash generation and net debt r
Slide 6: Financial review - Richard Armitage
Financial review Richard Armitage - Finance Director 6 Passionate about Private Label
Slide 7: Financial headlines
Financial headlines 2009-10 2008-09 Y/Y Revenue (£m) 812.2 792.4 +2% EBIT (£m) 50.0 36.2 +38% EBIT margin 6.2% 4.6% +1.6pts Profit before tax (£m) 44.4 31.0 +43% Diluted earnings per share (pence) 18.1 12.8 +41% Dividend per share (pence) 6.8 6.0 +13% Cash generated from operations (£m) 85.1 61.8 +3
Slide 8: Income statement
Income statement 2009-10 2008-09 Y/Y £m £m Revenue 812.2 792.4 +2% Gross profit 296.8 268.2 +11% Gross margin 36.5% 33.8% +2.7pts Distribution costs (54.0) (52.7) +2% Administrative costs (192.8) (179.3) +8% EBIT 50.0 36.2 +38% Net financing costs (5.6) (5.2) +8% Profit before taxation 44.4 31.0 +43
Slide 9: Regional performance
Regional performance Revenue(1 ) (4 ) Operating profit (1 )(2 )(3 ) 2009-10 2008-09 Y/Y 2009-10 2008-09 Y/Y £m £m £m £m UK 316.9 308.4 +3% 22.1 17.5 +26% Western Continental Europe 461.6 452.4 +2% 34.6 23.3 +48% Eastern Continental Europe 33.7 31.6 +7% 2.5 1.8 +39% Asia (0.4) (0.4) +0% Corporate cos
Slide 10: Movement in net debt June 2009 to June 2010
Movement in net debt June 2009 to June 2010 (1) (2) 0.0 (24.3) (8.5) (11.4) (5.9) (12.6) (60.0) (82.4) 85.1 (1) Acquisitions includes £8.4m net cash consideration and £0.1m debt acquired (2) Other includes tax payments, payments re exceptional items, share issues, repurchase of own shares, asset dis
Slide 11: Cash Generation 2010
Cash Generation 2010 2009-10 2008-09 £m £m (1) Cash generated from operations 85.1 61.8 Other net outflows (51.8) (25.6) Free cash flow 33.3 36.2 Dividends (11.4) (10.1) Exchange 0.5 (5.2) Debt reduction 22.4 20.9 Opening net debt (82.4) (103.3) Closing net debt (60.0) (82.4) (1) Cash generated from
Slide 12: Exceptional items 2009-10
Exceptional items 2009-10 WCE UK Total £m £m £m Redundancy 3.8 1.6 5.4 Asset write off 3.5 1.5 5.0 Other* 1.9 0.5 2.4 Total 9.2 3.6 12.8 * Other includes external consultancy, logistics and storage costs • Restructuring programmes at Solaro plant in Italy (WCE) and at St Helens and Middleton in the
Slide 13: Material Purchases
Material Purchases e.g. Recycled paper and pulp e.g. Triggers, pumps 13% Chemicals & bases e.g. Aluminium, tinplate 4% 28% Surfactants 5% Fragrances Polymers, solvents 12% Bottles, caps, tubes, lids Aerosols Components 13% 20% Cartons and labels 5% e.g. HDPE, PET, PP e.g. Ethylene oxide, Vegetable o
Slide 14: Managing Material costs is a core skill
Managing Material costs is a core skill 150 • An increased Procurement team, organised on a Group basis, with c.50% new high-quality 140 staff 130 • Development of procurement strategies for key categories that leverage McBride’s scale 120 • Hard negotiation • Improved forecasting 110 • Product re-e
Slide 15: Historical ROS and ROCE
Historical ROS and ROCE McBride 30.0% 8.4% 25.0% 30% J 25.9% 22.1% Lo 20.0% IN 17.1% 15.0% ROS 2.8% <= ROCE 10.0% 59 t) aa % 5.0% k , 6.2% ‘0 0.0% 2005 2006 2007 2008 2009 2010
Slide 16: Business review - Chris Bull
Business review Chris Bull Passionate about Private Label
Slide 17: Agenda
Agenda • Project Refresh • Acquisitions • Private Label opportunities – Global trends – Household and Personal care – main markets • Summary 17
Slide 18: McBride strategy
McBride strategy Driving superior shareholder value by: • being the leading provider of household and personal care products of exceptional value and performance to our customers and their consumers • being the supplier of choice to all retailers in our chosen markets • To do this we: • Focus on our
Slide 19: Project Refresh
Project “Refresh” Objective • To sharpen focus to create an even more robust business model • Category review • Ways of Working • Supply chain efficiency / effectiveness • Geography and acquisitions 19
Slide 20: Category Review
Category Review • McBride has focussed on 5 growth Categories – Laundry liquids – Machine dishwashing – Specialist cleaners – Air care – Personal Care • Review to be completed by Q1 2011 – Changes in growth category status – Review of category extension opportunities 20
Slide 21: Ways of working
Ways of working Objective : Leverage size, scale and capabilities • Building strategic relationships with customers • Exploit geographic footprint to respond to international customer developments • More effectively deploy our R & D capability across geographies - speed to market 21
Slide 22: Supply chain effectiveness / efficiency
Supply chain effectiveness / efficiency • Review optimum supply chain footprint • Lowest cost to serve • Continue to drive our operational efficiency 22
Slide 23: Acquisitions
Acquisitions 2009-10 Profitable Niche Brand • Acquisition of Homepride Limited, a supplier of Specialist household cleaning products at net cash paid of £4.7m Entry into Asia • Acquisition of Fortlab Holdings Shd Bhd, a Malaysian based manufacturer of Personal Care products at net cash cost of £3.7m
Slide 24: Acquisitions
Acquisitions Strategic entry into Skincare • Acquisition of Dermacol, a Czech manufacturer of skincare products , Expected consideration £8m for 70% plus earn-out in 2017 • Established Private Label product range in the largest sector of the European Personal Care market • Base for future growth in
Slide 25: Private Label is forecast to grow in all markets
Private Label is 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. Source: Planet Retail Ltd - www.planetretail.net; partly based on Nielsen and GfK 25
Slide 26: Private Label growth outperforming top Global Household Care Companies
Private Label growth outperforming top 5 Global Household Care Companies Company 2008 2009 Trend in Market share Procter & Gamble 18.7% 18.6% Unilever 10.2% 10.1% Reckitt Benckiser 8.9% 8.7% Henkel 7.0% 6.6% Private Label 6.3% 6.4% SC Johnson 6.3% 6.2% Colgate Palmolive 3.7% 3.8% Kao Corp 2.0% 2.3%
Slide 27: Private Label Personal Care enters Global Top Ten rankings
Private Label Personal Care enters Global Top Ten Personal Care and beauty rankings Company 2008 2009 Trend in Market share Procter & Gamble 11.9% 11.7% L’Oreal 10.4% 10.1% Unilever 6.6% 6.8% Colgate Palmolive 3.7% 3.7% Avon 3.4% 3.4% Beiersdorf 3.3% 3.3% Estee Lauder 3.2% 3.1% Johnson & Johnson 2.9
Slide 28: Private label performance
Private label performance • UK Household Private Label share dipped mid year as a result of prolonged deep – cut branded promotional activity but finished with volume share in line with prior year at 31% Private Label Personal Care volume share ended slightly lower compared to the prior year at 20.2
Slide 29: Growth opportunities
Growth opportunities CHANNEL SHARE OF ADDED SALES (2010-2013) Private Label strong New growth opportunities Source: Kantar Retail 29
Slide 30: Private Label opportunities
Private Label opportunities • Private Label gaining globally • Consumers are increasingly price sensitive and willing to switch purchases • Retailers re-emphasising Private Label ranges • Further growth opportunities for Private Label in customising for new channel developments 30
Slide 31: Summary
Summary • Proposed final dividend up 12% to 4.8p (2009: 4.3p) • Revenue growth of 1% on constant currency basis • Profit and margin growth at all divisions • Increases in raw materials prices in H2 • Price increase recovery plan on track • 3 acquisitions completed; 2 of which in strategic Personal C
Slide 32: Thank you
Thank you
Slide 33: Appendices
Appendices
Slide 34: FortLab Malaysia / Vietnam
FortLab Malaysia / Vietnam • Why Fortlab/Newlane? • Talented team • Product Range similar to McBride Kuala Lumpur, Malaysia • Good customer relationships • Good Research & Product Development capability • Capacity to grow sales / production Ho Chi Minh, Vietnam
Slide 35: Fortlab product expertise: Malaysia / Vietnam
Fortlab product expertise: Malaysia / Vietnam: • Personal Care: • Health Foods: – Shampoo – Liquid & Powder – Shower Gels / Crème Health Supplements – Body Lotions – Anti Ageing – Moisturisers – Detox – Baby Care – Slimming • Skin Care: • Pharma: – Whitening – Mouthwash – Anti Ageing – Cracked Heel
Slide 36: Dermacol skincare capabilities
Dermacol skincare capabilities Over 650 Formulations Facial Skincare, including • Emulsions, including creams, milks cleansers, moisturisers, and sun protection products with serums, face washes & scrubs organic and inorganic filters and self tans • Toners, with & without alcohol • Hydro gels • Gel