Slide 1: FY20 results release
Mcpherson’s Limited FY20 th results release 19 august 2020 CREATING BETTER IN Health Wellness & Beauty
Slide 2: Agenda
Agenda 1 Introduction – LAURIE MCALLISTER 2 FY2020 Financial results – Paul Witheridge 3 CORE BRANDS – Donna chan 4 Channel & CUSTOMER – Lori Pirozzi 5 Export – DAVID FIELDING 6 Summary and OUTLOOK – Laurie mcallister 2
Slide 3: Health, Wellness & Beauty – A $17 billion market
HEALTH, WELLNESS & BEAUTY – A $17 billion market health WELLNESS beauty ($4.9 Billion, +3.9% vs YA) ($5.6 Billion, +3.8% vs YA) ($6.5 Billion, +2.8% vs YA) The intent of enhancing and restoring health Maintain the state of good health by pro- The subjective enhancement of physical via symptomatic tr
Slide 4: Strategic business imperatives
strategic business imperatives Refocus McPherson's on Health, 1 Wellness & Beauty with 6 Create a China facing business sustainability and people at the core Ensure we have our team fit for the 2 Revitalise our own McPherson’s brands 7 future with appropriate expertise, capabilities and values 3 Ens
Slide 5: FY2020 Financial Results
A’KIN Australian Tea Tree Oil Detoxifying Mask Mcpherson’s FY2020 FINANCIAL RESULTS HIGHLIGHTS 5
Slide 6: FY20 Sales Revenue Breakdown by Product Category
FY20 SALES REVENUE BREAKDOWN BY PRODUCT CATEGORY Sales revenue from owned brands increased by 16% Owned brands: FY20 $m FY19 $m % change Comments • Strong export and domestic sales of Dr. LeWinn’s Skin, Hair and Body 63.8 40.0 59% • DLW Export 130% Growth; DLW Domestic 18% Growth • 3% growth in Mani
Slide 7: Rapid growth in Dr. LeWinn's China revenue
RAPID GROWTH IN DR. LEWINN’S CHINA REVENUE DLW Export to Total Sales $45m 30% DLW Export % DLW Export to Total sales FY20 $40m $38.2m 25% $35m $30m 20% $25m 17.2% 15% $20m FY19 $16.7m $15m 10% $10m 7.9% FY18 5% $3.3m $5m FY16 FY17 $0.1m $0.5m 1.6% $0m 0% 0.0% 0.3% FY16 FY17 FY18 FY19 FY20 7
Slide 8: Strong growth in Dr. LeWinn's domestic revenue
STRONG GROWTH IN DR. LEWINN’S domestic REVENUE $25m DLW Domestic to Total Sales 20% DLW Domestic Sales % DLW Domestic to Total Sales 18% FY20 $20m $19.3m 16% FY19 $16.3m 14% $15m 12% FY18 FY16 FY17 $11.4m 10% $10.9m $10.1m $10m 8% 8.7% 7.7% 6% $5m 4% 4.7% 4.9% 5.4% 2% $m 0% FY16 FY17 FY18 FY19 FY20
Slide 9: Dr. LeWinn's China JV MCP & ABM
DR. LEWINN’S CHINA JV MCP & ABM 9
Slide 10: Bridge of FY19 to FY20 Sales
BRIDGE OF FY19 TO FY20 SALES $M $240 Increase in Manicare Increase in Dr. Increase in Multix $1.0m $230 Increase in Dr. $1.9m LeWinn's Domestic LeWinn's Export $3.0m $21.5m $220 Decrease in Private Label Trilogy & Karen Murrell Others $11.1m ($3.2m) ($1.2m) $210 $200 FY20 $222.2m $190 FY19 $199.3m $
Slide 11: Bridge of FY19 to FY20 Underlying PBT
BRIDGE OF FY19 TO FY20 UNDERLYING PBT $M $35 Decrease in Commodity Prices $3.3m Increase in Dr LeWinn's $30 Export Contribution $9.6m Increase in STI Others $25 & LTI expense Increase in $0.2m ($1.3m) seed investment in Decrease in JVs Singapore & NZ Trilogy & Karen ($1.4m) PBT Adverse Murrell ($2.3
Slide 12: Balance Sheet
BALANCE SHEET ❑ Net debt excluding lease liabilities has remained stable at $9.2m over the last 12 months Net Debt* ($m - 30 June) ❑ Key additional investments in Aware ($3.0m) and joint ventures ($2.7m) made over last 12 months ❑ Gearing modest at 9.3%, excluding lease liabilities Gearing* % (30 Ju
Slide 13: Cashflow
CASHFLOW ❑ Strong underlying cash conversion of 103% Operating Cashflow before interest and tax ($m) ❑ Vastly improved 2H20 underlying cash conversion due to seasonal factors ➢ Strong second half customer receipts ➢ Second half reduction in inventory net of trade payables Underlying Cash Conversion
Slide 14: FY20 Ordinary Dividends
FY20 ORDINARY DIVIDENDS ❑ Final ordinary dividend of 7.0 cents per share fully franked (2H19 6.0 cents per share) ❑ Full year ordinary dividend of 11.0 cents per share fully franked (FY19: 10.0 cents per share and 2.0 cents per share interim special dividend) ❑ Payout ratio of 72% of FY20 underlying
Slide 15: Core Brands
Mcpherson’s CORE BRANDS Dr. Lewinn’s Ultra R4 Collagen Surge Plumping Gel 15
Slide 16: FY20 Core Brands In Market Performance
FY20 Core brands IN MARKET PERFORMANCE +21% DOMESTIC GROWTH +1.3 SHARE POINT GAIN +1 SHARE POINT GAIN +1.7 SHARE POINT GAIN 70% SUSTAINABLE SHARE MAINTAIN SHARE 16
Slide 17: Resilient Portfolio During COVID
RESILIENT PORTFOLIO DURING COVID MCP CORE BRANDS GROWING 1.5X AHEAD OF THE CATEGORIES IT PARTICIPATES IN MULTIX +13% DUE TO INCREASED BAKING & COOKING BEAUTY AT HOME DRIVING +15% GROWTH IN MANICARE SWISSPERS +11% OUTPACING CATEGORY GROWTH STRONG CHINA EXPORT DEMAND CONTINUES for DR. LEWINN’S DELIVER
Slide 18: Innovation Success driving sustainable growth
Innovation SUCCESS driving sustainable growth MCP Core Brands NPD Cumulative Share % Rolling 3FY 28.3% 20.5% 15.3% #1 FACIAL SKINCARE NPD PHARMACY #1 HAIR BRUSH NPD PHARMACY 10.4% FY17 FY18 FY19 FY20 11 13 3 6 R&D R&D R&D R&D AUSTRALIA & EXPORT CHINA NPD FIRST TO MARKET LASH NPD Foreign market regis
Slide 19: Leverage macro trends to drive future growth
LEVERAGE MACRO TRENDS to drive future growth CHINA PROACTIVE SUSTAINABLE COVID EXPORT BEAUTY SOLUTIONS NEW NORM The little iron 八胜肽小 熨斗 • +133% Dr. LeWinn’s China Export • Convergence of Wellness & Beauty • Multix #1 Sustainable brand in Bags, • 46% working from home Sales Growth vs YA Wraps & Foil
Slide 20: Think Beyond Growth Opportunities
THINK BEYOND GROWTH OPPORTUNITIES Mcpherson’s think beyond team Everyday hygiene new product development ▪ 12 KEY PROJECTS ▪ AGILE WORKING TEAM MEETING FORTNIGHTLY ▪ CROSS FUNCTIONAL REPRESENTATION ▪ Leadership Team ▪ Marketing ▪ R&D Incremental channel & portfolio expansion ▪ Sales ▪ Supply Chain ▪
Slide 21: Channel & Customer
Mcpherson’s Channel & customer 21
Slide 22: MCP performance FY20 in traditional channels
MCP performance FY20 in traditional Channels MCP Growth X1.5 AHEAD Of Essential Beauty Categories Total Pharmacy and Grocery market MCP Growth X4.5 AHEAD of Pharmacy Facial skincare category Dr. Lewinn’s shelf presence increase +33% in Priceline +25% Chemist Warehouse Pharmacy MCP SWISSPERS Growth X
Slide 23: Continued Focus on Execution Driving Sustainable Growth
Continued focus on Execution DRIVING Sustainable Growth Category Solutions IN STORE REALESTATE Share of Shelf Gains Add images Customer first to Innovation success ONLINE Focus market launches 23
Slide 24: Demonstrated Agility and Resilience During Covid
Demonstrated Agility and RESILIENCE DURING Covid INCREMENTAL RANGING INVESTMENT Accelerated FOCUS ONLINE RETAIL Oz Hair & Beauty 25 skus A’kin | 24 skus Dr. LeWinn’s NEW CUSTOMERS Active Skin 10 skus A’kin Discount Vitamin Express (DVE) 21 skus A’kin + 30% INVESTMENT TO CUSTOMER Catch ONLINE PLATFOR
Slide 25: ANZ business Growth Pillars Outlook
ANZ business Growth Pillars Outlook Drive growth from CORE AND Innovation Range and DATA Led BUSINESS PLANNING Investment Strategic participation In Private Optimisation Label Expansion Continued PORTFOLIO MANAGEMENT NZ Brand Expansion into Grocery Promotional effectiveness New Channel Penetration I
Slide 26: Channel Expansion Driving visibility and Scale
CHANNEL EXPANSION Driving visibility and SCALE Naturals in Grocery AU $100M Category +44% vs YA Pharmacy Dept Stores ONLINE Grocery Grocery Natural Offering - Value $48,438,298 $34,902,754 $13,456,798 $3,452,296 Natural Facial Natural Hair Care Natural Soap & Natural Skincare LY TY Body Wash Deodora
Slide 27: Export
Mcpherson’s export Dr lewinn’s Line Smoothing Complex S8 27
Slide 28: Dr. LeWinn's Strategy
Dr. lewinn’s Strategy 1 DELIVER SUSTAINABLE GROWTH – DR. LEWINN’S +133% vs FY19 2 Expand Hero product scope – 3 skus in fy19 to 5 skus in fy20 3 Launch new products and accelerate innovation pipeline – 4 new skus introduced in fy20 4 Expand marketing touch points – NEW PLATFORMS, TMALL FLAGSHIP STOR
Slide 29: Milestones
Milestones ABM 3 RD 1,200 5 million ONLINE TO Expansion ANNIVERSARY employees in people in the OFFLINE across nz, 4 locations abm north network America, Europe & SEA 29
Slide 30: Dr. LeWinn's Year on Year Growth
DR. LEWINN’S Year on Year Growth FY17 FY18 FY19 FY20 $500k $3.1m $16m $37m 1 hero 529% growth 413% growth 133% growth product 2 hero 3 hero 5 hero products products products 30
Slide 31: China Top Performer
CHINA Top Performer Wechat search DR. LEWINN’S history shows RETAINS A TOP 3 building POSITION IN THE awareness in ABM PORTFOLIO china SKU MIX IS DE- RISKED AS HERO PRODUCT SCOPE GROWS STRONGER 31
Slide 32: Event Results
Event Results DAIGOU FESTIVAL JUNE 2020 NO. 3 BRAND TOP PRODUCTS #6 & #7 More than 500,000 units sold Purchases from 9 countries & 879 cities 32
Slide 33: Export The Aware Group
EXPORT The Aware Group IN May 2020 IN FY20 MCP PROGRESSIVELY Aware produced the INCREASED THEIR EQUITY 1 millionth unit of STAKE IN THE AWARE GROUP dr. lewinn’s TO 10% Over 50 skus Aware manufactures HAVE Successfully over 25% of all undergone a tech dr. lewinn’s products transfer 33
Slide 34: Summary and Outlook
A’Kin Natural Australian Skincare Mcpherson’s SUMMARY AND OUTLOOK 34
Slide 35: Summary and Outlook
SUMMARY AND OUTLOOK 1 STrONG brand and channel MIX –OWNED brands +16% vs FY19 2 Exceptional demand for Dr. LeWinn’s in domestic / export channels 75% Strategic JV with ABM secures china growth. 3 Aware investment supporting supply chain 4 Investments in key capabilities supporting innovation agenda
Slide 36: Q&A
Q&A 37 —