Ontex Group N.v. · EURONEXT:ONTEX
Ontex — FY2016 Earnings Presentation
28 slides from Ontex's earnings presentation, Mar 8, 2017
Slide 1: FY 2016: Moving forward on our journey
FY 2016: Moving forward on our journey March 8, 2017
Slide 2: Forward looking statements
Forward looking statements This Presentation may include forward-looking statements. Forward-looking statements are statements regarding or based upon our management’s current intentions, beliefs or expectations relating to, among other things, Ontex’s future results of operations, financial conditi
Slide 3: Table of contents
Table of contents Ontex Highlights 04 Financial Review 16 Outlook 22 Q&A 24 Appendix 25 Confidential 3
Slide 4: Ontex Highlights
Ontex Highlights
Slide 5: 2016: Transforming the business for future growth
2016: Transforming the business for future growth Run rate of €2 billion revenue and diversifying business with further acquisitions Maintained top-line while expanding profitability 2016 Proforma • Strong execution in developing markets offset some weakness in developed markets revenues at cc 1 • 4
Slide 6: 2016: Mabe integration update
2016: Mabe integration update Excellent progress in first year People make the difference Continued strong top-line momentum Delivered procurement synergies Integrated supply chain and operations Ensured financial and IT compliance Ontex Highlights Confidential 6
Slide 7: 2016: A successful year for our brands
2016: A successful year for our brands Innovations underpin brand portfolio Healthcare iD for Men voted “Product Mexico of the Year” in Belgium Relaunches supported very positive market share momentum in Babycare Turkey From no. 3 to no. 2 Introduced new innovative position Canbebe driven by nationa
Slide 8: 2016: Navigating a challenging environment
2016: Navigating a challenging environment Market growth was slower across all regions Developed markets Developing markets Leading to lower market growth • Increased political uncertainty • Political volatility impacted specific countries Average market growth • Greater promotional activity below m
Slide 9: Growth driven by Mabe and double-digit LFL in developing markets
Growth driven by Mabe and double-digit LFL in developing markets Volume growth compensated for softer pricing environment Group revenue review Sales bridge FY 2016 (€m) 1,993 1,689 • Reported revenue up +18.0% in FY 2016 (+23.7% in Q4) • Pro-forma revenue +1.7% yoy at constant currency including Gru
Slide 10: Mature Market Retail: 43% of FY reported group sales
Mature Market Retail: 43% of FY reported group sales Remaining disciplined in a heightened promotional environment • LFL revenue decline particularly in H1 LFL Revenue (€m) and sales growth • Improving LFL revenue trends in H2 2016, with positive 904 -5.8% 852 contribution from volumes -3.1% • Inten
Slide 11: Americas Retail: 16% of FY reported group sales
Americas Retail: 16% of FY reported group sales Robust growth at constant currency • Grupo Mabe activities consolidated from March 1 2016 under Pro forma revenue at constant currency (€m) a new Division called “Americas Retail” 8.1% 449 416 • Robust FY performance delivered in Mexico, with market 1.
Slide 12: Growth Markets: 9% of FY reported group sales
Growth Markets: 9% of FY reported group sales Another year of strong growth, well ahead of our markets • Like-for-like revenues +15.3% in FY 2016 (+9.7% in Q4) LFL Revenue (€m) and sales growth +15.3% 183 159 • Another year of strong revenue performance in FY 2016 driven by higher volumes in Russia
Slide 13: MENA: 10% of FY reported group sales
MENA: 10% of FY reported group sales Broad-based growth on the back of increased volumes • Like-for-like revenues +13.9% in FY 2016 (+13.1% in Q4) LFL Revenue (€m) and sales growth +13.9% 221 • Volume-led and broad-based growth, with most markets and 194 categories above 2015 +13.1% 48 55 • Performa
Slide 14: Healthcare: 22% of FY reported group sales
Healthcare: 22% of FY reported group sales Outperforming our markets and optimising production • Like-for-like revenues +1.0% in FY 2016 (+0.1% in Q4), LFL Revenue (€m) and sales growth ahead of market growth 433 +1.0% 437 • LFL revenue growth in Spain and the UK, offset by lower sales in France +0.
Slide 15: Category review
Category review Strong retail performance in adult incontinence • Babycare LFL revenue down 1.3% in FY 2016: LFL sales growth % FY reported group sales1 58% 30% 10% • Baby diaper revenue down while baby pants revenue 4.0% 3.4% was higher 1.3% • Outperformed our markets in developing countries -1.3%
Slide 16: Financial Review
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Slide 17: FY 2016 highlights
FY 2016 highlights Continued margin expansion on a higher revenue base FY 2016 Stable LFL revenue • Reported Group revenues of €1,993.0 million for FY 2016, +18.0% on a reported basis Pro-forma • FY pro-forma revenue1 +1.7% and double-digit constant currency growth in developing markets revenues1 +1
Slide 18: Adjusted EBITDA margin
Adjusted EBITDA margin Another year of margin expansion while continuing our transformation Key margin drivers Gross margin expansion of 123 bps to 29.4% for FY 2016 • Significant efficiency gains and savings in 2016, including synergies from the Grupo Mabe acquisition • Market prices of some commod
Slide 19: Non-recurring costs
Non-recurring costs 2016 mainly impacted by acquisition related expenses In millions of Euro FY 2016 FY 2015 1 Non recurring income and expenses 12.9 6.8 Factory Closure 0.1 0.1 Business restructuring 2.1 1.3 Acquisition related expenses 4.3 4.0 Asset impairment 0.8 - IPO costs - 0.3 Refinancing cos
Slide 20: Adjusted free cash flow
Adjusted free cash flow Higher Adjusted EBITDA partly offset by increased investment In millions of Euro FY 2016 FY 2015 % Adjusted EBITDA 248.7 209.1 18.9% Changes in working capital Inventories (6.9) (0.7) N.M. Trade and other receivables 1 (20.2) (7.6) N.M. Trade and other payables 11.5 2.7 N.M.
Slide 21: Net debt and liquidity
Net debt and liquidity Reported debt position and liquidity as of December 31, 2016 Net Debt (€m) and leverage (x) Net Debt Calculation (€m) 900 849.2 6.00 Gross debt 877.7 800 5.00 Cash & cash equivalents (212.8) 700 660.2 664.9 Net debt 664.9 4.90x 565.9 585.1 4.00 600 504.7 Leverage Calculation (
Slide 22: Outlook
Outlook
Slide 23: Outlook
Outlook Strategic progress and priorities • Anticipate to grow revenue ahead of our markets in all Divisions in 2017 • Supported by commercial investments behind our brand portfolio and our retail partners’ brands • Following the acquisition of Hypermarcas personal hygiene, Ontex has a significantly
Slide 24: Q&A
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Slide 25: Appendix
Appendix
Slide 26: Performance overview for Q4 & FY 2016
Performance overview for Q4 & FY 2016 % as % as In millions of Euro Q4 2016 Q4 2015 % LFL FY 2016 FY 2015 % LFL reported reported Per Division Mature market retail 214.2 219.6 (2.5%) (3.1%) 854.6 903.9 (5.5%) (5.8%) Americas retail 98.4 - N.A. N.A. 328.5 - N.A. N.A. Growth markets 50.0 44.3 12.9% 9.
Slide 27: Delivering sustainable profitable growth
Delivering sustainable profitable growth In millions of Euro FY 2016 FY 2015 % Revenues 1,993.0 1,689.3 18.0% Like-for-like (LFL) revenues1 1,692.9 1,689.3 0.2% Gross margin 585.5 475.6 23.1% Gross margin as % of sales 29.4% 28.2% 122 bps Adjusted EBITDA2 248.7 209.1 18.9% Adjusted EBITDA margin 12.
Slide 28: Reconciliation based on new revenue structure
Reconciliation based on new revenue structure Revenue - 2016 structure In millions of Euro Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Mature markets retail 213.5 212.2 214.6 214.2 854.6 Americas retail 33.8 98.4 97.8 98.4 328.5 Growth markets 36.9 42.9 45.2 50.0 174.9 MENA 59.8 48.3 45.5 52.0 205.5 Hea