Slide 1: Full Year Results 30th June 2013
For personal use only Ansell Limited Full Year Results 30th June 2013 Magnus Nicolin – Chief Executive Officer Neil Salmon – Chief Financial Officer August 20, 2013
Slide 2: Disclaimer
Disclaimer For personal use only The following presentation has been prepared by Ansell Limited for information purposes only. The presentation may contain forward looking statements or statements of opinion No representation or warranty is made regarding the accuracy, completeness or reliability of
Slide 3: F'13 – Results Summary
F’13 – Results Summary For personal use only Statutory Result in Results in Operating Australian Dollars Currency – US Dollars F’12 F’13 F’12 F’13 A$M A$M US$M US$M Sales 1,218.3 1,340.0 1,255.3 1,372.8 Earnings Before Interest & Taxes (EBIT) 149.4 167.2 153.2 170.5 Profit Attributable (PA) 130.0 13
Slide 4: Agenda
Agenda For personal use only Business Overview - Magnus Nicolin Financial Report - Neil Salmon F’14 Outlook - Magnus Nicolin US dollars used in all slides unless otherwise specified 4
Slide 5: A Tough Year but We Gained Momentum and Finished Strongly
F’13 – A Tough Year but We Gained Momentum and Finished Strongly For personal use only F’12 F’13 Change Sales ($M) 1,255 1,373 + 9% EBIT ($M) 153 171 + 11% PA ($M) 133 139 + 5% EPS (¢) 1.01 1.07 + 5% Free Cash ($M) 97 128 + 32% 5
Slide 6: External Environment a Headwind Throughout F13
F’13 – External Environment a Headwind Throughout F13 For personal use only Foreign Exchange Impact Net Raw Material Costs Manufacturing costs (Labour, utilities, water) Global economy (weighted average) Competitive pressure up Government financial health (healthcare and defence spend) 6
Slide 7: Strong Revenue and Profit Growth Delivered Through Successful Delivery Against Strategic Objectives
F’13 – Strong Revenue and Profit Growth Delivered Through Successful Delivery Against Strategic Objectives For personal use only Successful M&A transactions Significant NPD launches and early wins Solid portfolio optimization with GPADE up 120 BPS Improving manufacturing productivity and cap
Slide 8: Results Overview
F’13 – Results Overview For personal use only Positives Progress Very solid development of the Industrial Oracle – Now stable in NA. Final business enhancements to improve efficiency in The Specialty Markets business delivered progress improved returns SAP – To realise synergies quickly at l
Slide 9: All GBUs Achieved EBIT Growth; Regions Improving in 2H
F’13 – All GBUs Achieved EBIT Growth. By Region, North America Sales Lower. But All Regions and GBUs Improving strongly in 2H For personal use only F’13 v SEGMENT SALES $1,372.8m 9.4% 9.4% F’12 EBIT $179.0 MED IND SM SW Total MED IND SM SW Total NA LAC EMEA AP Total > +5% From 0% to +5% < 0% 9
Slide 10: Successful M&A Transactions, Delivering In Line With Expectations
F’13 – Successful M&A Transactions, Delivering In Line With Expectations Even In Challenging External Environment For personal use only Four transactions completed including the largest deal since 1995 Cost and cash-flow synergies better than plan These transactions collectively contribute to
Slide 11: Strong New Product Launches
F’13 – Strong New Product Launches For personal use only Launch Rate nearly 7 times 50 higher than in Number of New Product Launches 2010 45 40 35 30 25 20 15 10 5 0 2010 2011 2012 2013 11
Slide 12: Improving Manufacturing Profitability & Capability
F’13 – Improving Manufacturing Profitability & Capability For personal use only “Lean” is delivering significant productivity benefits in F’13 More importantly, these continuous improvement capabilities are yielding strong recurring benefits New material and manufacturing technologies increasi
Slide 13: Continued Emerging Markets Expansion
F’13 – Continued Emerging Markets Expansion Growth YOY 17% (8% excluding acquisitions) For personal use only Russia Other EMEA • Growth YOY + 14% • Growth YOY + 8% • 4% of global sales China • 5% of global sales • Growth YOY + 14% (CIS, Turkey, • 4% of global sales Poland, CEE) India • Growth YOY +
Slide 14: Strong EPS/Dividend Growth and Share Price Appreciation
F’13 – Strong EPS/Dividend Growth and Share Price Appreciation Continued in F13 For personal use only 140 40 120 35 100 30 25 EPS (US¢) 80 20 Dividends (A¢) 60 15 40 10 20 5 0 0 F'08 F'09 F'10 F'11 F'12 F'13 75% ANSELL LIMITED NYSE 55% S&P/ASX 200 35% FTSE 100 15% -5% -25% 14
Slide 15: Industrial Overview: Solid Development
F’13 – Industrial Overview : Solid Development 41% of Revenue and 51% of Segment EBIT For personal use only $M F’12 F’13 - HyFlex® 194.1 195.7 1% General Purpose/ Mechanical - Other GP/M 116.0 110.9 -4% - AlphaTec® 8.9 11.4 28% Chemical/Liquid Handling - Other Chemical /LH 69.0 68.1 -1% Comasec - 57
Slide 16: Industrial GBU New Product Development
F’13 - Industrial GBU New Product Development For personal use only HyFlex® 11-927 Gloves HyFlex® 11-818 Gloves A three quarter dipped oil Ultra light weight high Repellant glove with Durability Multi purpose AnsellGrip™ Technology glove with breathable EN3 cut resistance and Coating and EN4 abrasio
Slide 17: Specialty Markets: A New Profit Engine Emerging
F’13 – Specialty Markets : A New Profit Engine Emerging 17% of Revenue and 7% of Segment EBIT For personal use only $M F’12 F’13 - Liquid Resist 52.8 60.0 13% VersaTouch® Food Family - Single Use 26.0 24.1 -7% - Knitted 7.4 9.3 26% - Specialty Apps 2.3 7.1 209% ActivArmr® Family - Military & First 2
Slide 18: Specialty Markets GBU New Product Development
F’13 - Specialty Markets GBU New Product Development For personal use only Oil, Gas & Mining Vertical Retail Vertical ActvArmr® Cold Weather FR ProjeX® 97-885 General Purpose Glove Impact Glove Promotional glove designed to generate First to market flame resistant impact sales volume during late Spr
Slide 19: Medical GBU Overview: Surgical Expansion Continues
F’13 - Medical GBU Overview : Surgical Expansion Continues 25% of Revenue and 23% of Segment EBIT For personal use only $M F’12 F’13 - NRL 187.9 185.9 -1% Surgical - Synthetic 44.8 52.1 16% - NRL 52.0 36.5 -30% Examination - Synthetic 52.3 52.7 1% Surgical Safety Products 19.4 22.3 15% Sales 356.4 3
Slide 20: Medical GBU New Product Development
F’13 – Medical GBU New Product Development For personal use only Gammex® Nitrile Anti Bacterial MicroTouch Denta-Glove Glove A white textured nitrile glove A world first glove designed Designed for dentistry to reduce Cross contamination Designed to avoid latex of micro organisms between Allergy con
Slide 21: Sexual Wellness Overview: Global SKYN Expansion
F’13 – Sexual Wellness Overview : Global SKYN® Expansion 17% of Revenue and 19% of Segment EBIT For personal use only $M F’12 F’13 Condoms Branded 167.2 174.7 4% Tenders/Private Label 26.2 28.6 9% Lube/Devices/Other 23.9 26.4 10% Sales 217.3 229.7 6% Segment EBIT 33.2 34.2 3% H1 F13=12.6% EBIT/Sales
Slide 22: Sexual Wellness GBU – SKYN and New Products
F’13 - Sexual Wellness GBU – SKYN® and New Products Global NPD Launch - Orgazmax® SKYN® Accelerated Growth Plan For personal use only Global Advertising and promotion campaign in major Cities Worldwide consisting of oversized billboards, internet, TV advertising and sampling Result - SKYN® overall M
Slide 23: F'13 - Results
For personal use only F’13 - Results Neil Salmon Chief Financial Officer 23
Slide 24: Sales Growth in Core Products offset by Line Rationalisation and FX
F’13 – Sales Growth in Core Products offset by Line Rationalisation and FX EBIT Up 11% On Acquisitions & Improved GPADE For personal use only 1,255 130 1,373 (16) 23 (20) Sales $M F'12 Line Core FX Acquisitions F'13 Rationalisation Product Rates Growth 18 (7) (1) 11 171 153 (3) EBIT $M F'12 GPADE S&
Slide 25: Solid EPS Growth of 5% on Higher EBIT
F’13 - Solid EPS Growth of 5% on Higher EBIT, Partly Offset By Higher Interest and Tax Rate For personal use only Profit & Loss ($M) F’12 F’13 Notes Sales 1,255.3 1,372.8 Sales up 9%, FX Adjusted Organic Growth 1% 1 GPADE 457.9 517.4 Margin up 300 bps since F’11 SG&A (304.7) (346.9) Includes $30.8
Slide 26: Significantly Improved Performance in H2
F’13 – Significantly Improved Performance in H2 and To Levels Not Delivered Since the Founding of Ansell For personal use only H1 H2 H2 FY ‘13 $’m $’m vs. H1 $’m Sales 648.1 724.7 11.8% 1,372.8 EBIT 68.8 101.7 47.8% 170.5 PA 57.1 82.1 43.8% 139.2 FCF 48.1 79.8 65.9% 127.9 H2 Improvement Goes Beyond
Slide 27: The Major Raw Material Costs Slightly Lower
F’13 – The 6 Major Raw Material Costs Slightly Lower For personal use only Key raw material costs trended downward in H1 and remained low in H2 Index US$ 30% 4.00 3.50 20% 3.00 10% 2.50 Packaging (Index) Advanced Synthetic Latex (Index) 0% 2.00 Engineered Yarns (Index) 1.50 Cotton (Lb) -10% NR Latex
Slide 28: Capital Expenditure – Investment in the Future
F’13 – Capital Expenditure – Investment in the Future For personal use only US$m 45.0 ERP Oracle investment being fine 40.0 tuned. SAP being launched across EMEA 35.0 Acquisitions have added 4 plants, 30.0 SAP platform, significant new capacity Growth/expansion investments have 25.0 focused on addin
Slide 29: Base Ansell Working Capital Improved Through 2H
F’13 – Base Ansell Working Capital Improved Through 2H. WC At Acquired Entities Improving. Further Gains Targeted In F14 For personal use only $M 30 June 30 June Movement F’13 vs. F’12 2012 2013 Inventory 213.4 260.0 46.6 Acquisitions 34.4 Debtors 175.9 224.3 48.4 Acquisitions 40.3 Creditors (13
Slide 30: Balance Sheet Remains Strong
F’13 - Balance Sheet Remains Strong For personal use only Balance Sheet ($m) F’12 F’13 Fixed Assets 151.2 186.7 Intangibles 391.2 541.4 Other Assets/Liabilities (15.3) (33.6) Working Capital 252.6 314.5 Net Operating Assets 779.7 1,009.0 Net Interest Bearing Debt 56.1 235.5 Shareholders’ Funds 723.6
Slide 31: Strong EBIT Growth Drives Free Cash Flow
F’13 – Strong EBIT Growth Drives Free Cash Flow For personal use only US$m F'13 27.0 (4.9) (39.8) 170.5 (9.2) (15.7) 127.9 (45.6) (49.5) (3.6) (208.6) (179.4) EBIT Depn Work CAPEX INT Taxes FCF Other DIV Share Acq./ Net Debt /WO Cap Issues/ Invest. Mvt. B/Back F'12 21.6 (16.8) (37.6) 153.2 (5.4) (17
Slide 32: Debt Maturity Profile Significantly Extended
F’13 – Debt Maturity Profile Significantly Extended To 4.8 Years (From 1.2 Years 18 Months Ago) For personal use only US$M Undrawn credit lines $165m 120 Average maturity of drawn 26 28.5 debt is 4.8 years 100 40.8 Approximately 73% of all 80 50 Committed Undrawn Debt Facilities borrowings hav
Slide 33: Closing Financial Summary
F’13 – Closing Financial Summary For personal use only Achievements Four acquisitions completed with integration progressing well Margin improvement on NPD success, product rationalisation, and lower RMs Guidance achieved Free cash flow excellent Challenges Global markets weak Competitio
Slide 34: F'14 - Outlook
For personal use only F’14 - Outlook Magnus Nicolin Chief Executive Officer 34
Slide 35: Ansell Value Drivers
F’13 – Ansell Value Drivers For personal use only Market Leadership Ansell is No 1 or 2 globally in everything it wants to compete in Innovation Leadership Ansell is a leader in its field of innovation and has launched a stream of new products in the last two years Strong Brands Ansell has a n
Slide 36: The Globalisation of Ansell continues
F’13 - The Globalisation of Ansell continues For personal use only Growth strategy defined in 2010 was designed to globalize products, capabilities, systems and staff – this has been very successful Sales continue to expand in emerging markets, new markets, new adjacencies and new verticals whil
Slide 37: F'14 – Outlook - Externally
F’14 – Outlook - Externally For personal use only Challenging macro environment – no growth in Europe, slowing Asia Pacific Some revival and growth in North America and Latin America & Caribbean FX Volatility negatively affecting sales and to a lesser extent EBIT Continued rapid labo
Slide 38: F'14 – Outlook - Ansell
F’14 – Outlook - Ansell For personal use only Industrial - Comasec 1st full year - New products launched in F’13 benefit - Weak industrial production numbers Specialty Markets - Comasec/Hercules 1st full year - GBU developing a profitable clothing protection business - Positioned to
Slide 39: F-14 Guidance
F’13 – F-14 Guidance For personal use only Although some improvement in the global economic environment is seen in North America and Latin America / Caribbean it is being offset by weakness in EMEA and APAC Ansell therefore anticipates a challenging environment in FY 14 but still expects to deli