Slide 1: 2012 Interim Results
2012 Interim Results September 2012
Slide 2: Contents
Contents • Executive Summary • H1 2012 Results and Cash Flow • Business Review Packaging Distribution Manufacturing Operations • Pension Scheme Deficit • 2012 Key Priorities • Market Outlook and Conclusions
Slide 3: Executive Summary
Executive Summary 2012 2011 Profit before exceptional items £1.5m £0.9m Continuing challenge for all businesses from lower demand Sales are flat across the range of Group activities Profit increase from improved margin in all businesses and from reduced property costs Pension deficit management acti
Slide 4: Results £m
Results £m H1-12 H1-11 H2-11 Sales 68.0 68.5 76.1 Gross profit (32.1%) 21.8 (30.1%) 20.6 (30.4%) 23.1 Overheads 19.8 19.3 19.7 EBIT (RoS 2.9%) 2.0 (1.9%) 1.3 (4.4%) 3.4 Interest 0.5 0.4 0.4 PBT 1.5 0.9 3.0 Tax 0.5 0.2 0.3 (use of losses) Profit for period 1.0 0.7 2.7 EPS 0.93p 0.62p 2.39p Subdued sa
Slide 5: Cash £m
Cash £m H1-12 H1-11 H2-11 EBIT 2.0 1.3 3.4 DA 0.6 0.6 0.8 EBITDA 2.6 1.9 4.2 Working capital 0.1 (2.5) 1.5 Interest (0.2) (0.2) (0.3) Capex (0.4) (0.5) (0.8) Pensions (1.1) (0.9) (1.3) Dividend (1.2) (1.2) (0.6) Movement in debt (0.2) (3.4) 2.7 Our traditionally stronger H2 cash flow is again antici
Slide 6: Distribution
Distribution H1-12 H1-11 Sales 55.0 54.8 Gross profit (30.4%) 16.7 (29.2%) 16.0 Overheads 15.0 14.7 EBIT (RoS 3.1%) 1.7 (2.3%) 1.3 Sales volume +1% +2% Sales price -2% +5% New business £2.8m £2.6m 3PL £4.8m £4.1m PRP £0.9m £0.7m Electronic sales £5.6m £5.5m Base £40.9m £41.9m
Slide 7: Distribution: Raw material price movements
Distribution Raw material price movements £1,100 £500 £1,050 £450 £1,000 £400 £950 £350 £900 £300 £850 £250 £800 £200 2006 2007 2008 2009 2010 2011 2012 Polymer £/tonne £833 £840 £1,020 £871 £1,056 £1,063 £1,052 Paper £/tonne £275 £316 £337 £290 £384 £460 £403
Slide 8: Manufacturing Operations: Labels
Manufacturing Operations Labels sales revenue down 5% vs. 2011, volume down 3% Recovery of price increases from own-brand producers, benefiting self-adhesive label margins Exiting lower margin business Improved production efficiencies Better customer and product mix US customer demand for ReSeal-it
Slide 9: Manufacturing Operations: Packaging Manufacturing
Manufacturing Operations Packaging Manufacturing sales 2% below H1 2011 • Manufacturing customers’ export-driven growth strong Exiting lower margin business • Design-led work has helped increase gross margins • Distribution partnership is 23% total sales (2011 – 24%) • Both sites profitable and prof
Slide 10: Pension Deficit £m
Pension Deficit £m Deficit at 1-Jan-12 (20.5) Interest cost ( 0.2) Contributions 1.1 Contributions agreed Pension Increase Exchange 1.9 Exercise completed Bond yield 0.2% to 4.6% ( 2.1) Inflation (RPI) 0.1% to 2.9% 0.9 Spouse’s pension assumption 1.6 Evidence from PIEx Deficit at 30-Jun-12 (17.3) (S
Slide 11: Distribution 2012 Key priorities
Distribution 2012 Key priorities Focus on customer retention, product penetration & new business Gross margin protection continues to be key 3PL, PRP and internet retail offer growth opportunities Optimise benefit of www.macfarlanepackaging.com Ongoing attention to cost reduction continues Develop N
Slide 12: Manufacturing Operations 2012 Key priorities
Manufacturing Operations 2012 Key priorities Maintain Labels margin through more beneficial customer mix Continue to improve operational efficiencies Further develop Reseal-it in US/other geographies Optimise benefit of recent Reseal-it entry to UK market Packaging Manufacturing focus on higher marg
Slide 13: Market Outlook and Conclusions
Conclusions Market Outlook and Conclusions Cautious on overall demand - mixed outlook by sector Trading agenda to drive profits Protect margins and continue strategic initiatives Build ReSeal-It and recover self-adhesive margins Busy balance sheet agenda Continued focus on pension deficit actions Ca
Slide 14: Appendix 1: Pension Scheme details
Appendix 1 Pension Scheme details Investments comprise UK Corporate Bonds/Gilts £22.6m Overseas Equities – tracker funds £ 6.3m Diversified Growth Funds £12.5m UK equities – actively managed £ 6.6m Cash £ 0.6m Total £48.6m Liabilities comprise Active members ( 30) £ 5.9m Deferred members (339) £29.2
Slide 15: Appendix 2: NovuPak partner companies
Appendix 2 Boxon Moonen Founded 1932 Founded 1955 Helsingborg, Sweden Weert, Holland Serving Scandinavia Market - Benelux Sales Euro 100m Sales Euro 40m 150 Employees 85 Employees Transpak Macfarlane Founded 1975 Founded 1949 Solms, Germany Coventry UK Germany & Central Europe UK market Sales Euro 8