Slide 1: FY2018 Results Presentation
FY2018 Results Presentation 28th August 2018 Grant Harrod (CEO) | John Cerini (COO) Pro-Pac Packaging Limited. ABN: 36112971874
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. These forward-looking statements reflect Pro-Pac Packaging Limited’s current intentions, plans, expectations, assumptions and beliefs about f
Slide 3: FY2018 Result
FY2018 RESULT Page 3
Slide 4: FY2018 Results Overview
FY2018 Results Overview • Underlying FY18 EBITDA of $16.1 million in line with A$ millions 12 months ending 30 June 2018 guidance; – Volumes up in cotton, food processing and beverage markets. Sales Revenue 371.5 up 62% – Margins and sales impacted by weaker grain bags and silage wrap sales due to d
Slide 5: FY2018 Financial Results Summary
FY2018 Financial Results Summary A$ millions FY2018 FY2017 Movement • EBITDA margins impacted by weaker Ag Sales Revenues 371.5 229.2 142.3 volumes and timing delays recovering increased raw material costs EBITDA* 16.1 12.2 3.9 • NPAT includes higher interest to fund EBITDA margins 4.3% 5.3% (1.0%)
Slide 6: Balance sheet funding growth
Balance sheet funding growth Cash Management Debt Maturity Profile (A$ millions) 100.8 $A millions FY2018 FY2017 Operating cash flow: 20.7 11.4 Capex: 13.5 2.8 5.0 Free cash flow: 7.2 8.6 Operating cash flow conversion: 128% 93% FY19 FY19 Proforma Leverage Ratio 30 June 2018 (adjusted for Q1’19 capi
Slide 7: Group Safety performance
Group Safety performance FY18 FY17 Lost time injury frequency rate (LTIFR) 13.4 17.3 • Pleasing 22.5% reduction in LTIFR, however there is recognition of the need for further improvement • Safety is a core element of all operational excellence programs • Focus is on achieving a zero harm work enviro
Slide 8: Year in Review
YEAR IN REVIEW Page 8
Slide 9: FY2018 Business Update
FY2018 Business Update • Completed merger with Integrated Packaging (6 Nov 2017), to establish growth platform to become a market leader in distribution & flexible packaging sector. • Integration well underway with $6.0m million in annualised synergies identified. • Further acquisitions underway in
Slide 10: Divisional Results
Divisional Results Divisional Results ($ millions): Volumes up in food packaging, cotton and beverage customers. Industrial & Volumes down in grain & grass customers due to unfavourable weather Flexible: conditions. Margins impacted by rising resin costs and weakening A$. Sales 310.0* up 83%
Slide 11: Integration Synergies Update
Integration Synergies Update Integration synergies with IPG substantially ahead of target: – Phase 1 = $1.5 million annualized savings achieved in FY18 results – Phase 2 = $4.5 million annualized savings implemented, including phase 1 & 2 total $6.0 million savings. Following acquisition of Perfecti
Slide 12: FY2019 Strategy & Outlook
FY2019 STRATEGY & OUTLOOK Page 12
Slide 13: Building a diversified business …the new PPG Group
Building a diversified business …the new PPG Group Leader in Distribution & Flexible Packaging markets Distribution: A diversified distribution company, providing primary, secondary & tertiary packaging solutions, across blue chip, distributors and SME clients. MAP Trays Hard Flexible Products s
Slide 14: Strategy for Growth
Strategy for Growth PPG now a vertically integrated industry leader across flexible, industrial & rigid packaging 1. Optimise 2. Margin 3. Expand sales 4. M&A 5. Sustainability platform Expansion Channels • Complete integration • Drive operational • Continue focus on • Fragmented markets, • Become a
Slide 15: Building for the future
Building for the future PPG Board Ahmed Fahour (Non Exec Chair), Rupert Harrington, Darren Brown, Marina Go, Leonie Valentine Chief Executive Officer Grant Harrod Chief Information Chief Commercial Chief Operations Chief Financial Officer & Integration Director GM Rigid Packaging Officer Officer Off
Slide 16: Focus on sustainability
Focus on sustainability ‘Integrated Recycling’, a leading manufacturer of wood composite products using recycled post consumer plastic waste – Products include; decking, benches, bollards, etc. – Launched ‘DURATRACK’ recycled composite replacement railway sleepers (~$320m addressable market in Aust*
Slide 17: FY2019 Outlook
FY2019 OUTLOOK Page 17
Slide 18: Growth Platform for the Future
Growth Platform for the Future • FY18 was a period of transforming the business. • More diverse business servicing high growth resilient markets. • Well placed to become the leader and drive consolidation of core markets. • Strong focus on operational effectiveness with ongoing synergy savings. • Re
Slide 19: Trading Update
Trading Update Following the changes undertaken in FY2018, the PPG Group is now on track to achieve higher revenue and earnings in FY2019. The Group expects: • It will benefit from the strong outlook in the fresh & dry foods, logistics, industrial and beverage markets, • achieve additional synergies
Slide 20: Outlook
Outlook Given the ongoing uncertainty of the drought, energy prices and foreign exchange, the company has updated its FY2019 underlying EBITDA to a range of $37 million to $42 million, including acquisitions with the upper end dependent upon a more favourable macro environment. Reflecting its confid
Slide 21: Appendix
APPENDIX Page 21
Slide 22: Australian Packaging Industry Overview
Australian Packaging Industry Overview Pro-Pac will be a leading player in the $2.2 billion Flexible Packaging segment. Australian Packaging A$20-22 billion1 Flexible Packaging Fibre Packaging Rigid Packaging Other Packaging ~$2.2 billion1 PPG is a segment leader in manufacture & distributor of so
Slide 23: Growth in Flexibles
Growth in Flexibles • PPG future growth to largely be driven by flexible packaging market Flexible segment growing faster than GDP and the overall packaging sector Relatively fragmented with further consolidation opportunities Flexible packaging industry in Australia estimated to be worth $2.2
Slide 24: Hard flexible film market overview
Hard flexible film market overview Hard flexible packaging film make up the majority of the flexibles market Flexibles market1 ($1.3b of $2.2b market1) Includes polypropylene printed film (BOPP), which may be laminated Soft Flexibles (PPG current (e.g. with foils) Hard focus) $0.9b flexibles Use
Slide 25: Appendix 4E: Statutory Profit & Loss
Appendix 4E: Statutory Profit & Loss Consolidated Consolidated 2018 2017 $000’s $000’s Revenue Sales of goods 371,455 229,244 Interest income 222 149 Total Revenue 371,677 229,393 Expenses Raw materials and consumables used 236,499 153,498 Employee benefits expense 63,174 33,134 Other expenses from
Slide 26: Reconciliation to Appendix 4E Statutory Accounts
Reconciliation to Appendix 4E Statutory Accounts Slide 4 & 5 – NPAT FY2018 FY2017 Var (Loss)/Profit before income tax for the year (6,337) 6902 Acquisition, rationalisation, relocation expenses 11,671 914 Profit before income tax expense and acquisition, rationalisation, relocation and restructuring
Slide 27: Balance Sheet
Balance Sheet 30 June 2018 30 Jun 2017 As at: ($m) ($m) Commentary Cash & equivalents 3.2 12.3 Trade & other receivables 83.3 37.7 Inventories 95.5 35.1 Inventory increase with IPG acquisition PPE 36.5 15.2 Increase with IPG acquisition Intangibles 184.7 71.3 Goodwill increase with IPG acquisition O
Slide 28: One off costs associated with acquisition rationalisation, relocation and restructuring
One off costs associated with acquisition rationalisation, relocation and restructuring. ($000’s) FY2018 FY2017 Discontinued and redundant stock lines: 3,440 Onerous leases and exit costs: 2,600 Redundancy costs: 112 Fixed asset disposals and write offs: 1,075 Third party consultants, temporary staf
Slide 29: Project Wrap capital raise - sources and uses
Project Wrap capital raise - sources and uses • $48.1m of the placement proceeds will primarily be used to fund the cash component of acquisitions of Polypak and Perfection Packaging • In addition, $9.96m of consideration to be issued to the Perfection Packaging vendors in the form of PPG shares • S
Slide 30: Thank You
Thank You PRO-PAC PACKAGING LIMITED SUITE 2.02, 657 PACIFIC HIGHWAY ST. LEONARDS, NSW, 2065 T: (02) 8781 0500 F: (02) 8781 0599 WWW.PPGAUST.COM.AU Page 30