Slide 1: 2013 Interim Results
on * MACFARLANE 2013 Interim Results
Slide 2: Contents
Contents • Executive Summary • 2013 H1 Results/Cash Flow • Business Review • Packaging Distribution • Manufacturing Operations • Pension Scheme Deficit • 2013 H2 Key Actions • Conclusions
Slide 3: Executive Summary
Executive Summary 2013 2012 Profit before exceptional items: £1.6m £1.3m * Sales levels flat due to subdued demand/price deflation but sales trend is improving Good sales growth in our target areas Profit increase driven mainly by improved cost control Pension deficit down by £2.1m – benefit of high
Slide 4: 2013 H1 Results
2013 H1 Results £m 2013 H1 2012 H1 2012 H2 Sales 68.1 68.0 73.8 Gross Profit 31.9% 21.7 32.0% 21.8 31.9% 23.5 Overheads 19.5 19.8 19.7 EBIT 3.2% 2.2 2.9% 2.0 5.2% 3.8 Interest 0.6 0.7 0.6 Profit before exceptionals 1.6 1.3 3.2 Exceptional charges/(credits) 0.2 (1.7) 0.7 PBT 1.4 3.0 2.5 Tax 0.4 0.8 0
Slide 5: 2013 H1 Cash Flow
2013 H1 Cash Flow £m 2013 H1 2012 H1 2012 H2 EBIT 2.2 2.0 3.8 DA 0.7 0.6 0.7 EBITDA 2.9 2.6 4.5 Working Capital 0.4 0.2 0.1 Interest (0.2) (0.2) (0.3) Tax (0.3) 0.0 (0.9) Capex (0.4) (0.4) (0.4) Pensions (1.5) (1.2) (1.4) Dividend (1.2) (1.2) (0.6) Movement in Net Debt (0.3) (0.2) 1.0
Slide 6: Packaging Distribution
Packaging Distribution £m 2013 H1 2012 H1 2012 H2 Sales 54.9 55.0 59.8 Gross Profit 29.8% 16.4 30.4% 16.7 30.1% 18.0 Overheads 14.8 15.0 14.8 EBIT before exceptional items 2.9% 1.6 3.1% 1.7 5.3% 3.2 Sales volume 1.0% 0.8% -2.0% Sales price -1.1% -2.0% 1.5%
Slide 7: Packaging Distribution
Packaging Distribution Subdued demand – competitive pricing 3PL (third-party logistics) growth of 6% National Accounts growth of 7% Internet retail is ca. 20% of Distribution business Recent Internet retail wins include The Hut, ASOS, Feel Unique Sales split H1/H2 is 47.5%/52.5% for the last four ye
Slide 8: Raw Material Movements
Raw Material Movements £1,200 £500 £1,175 £475 £1,150 £1,125 £450 £1,100 £425 £1,075 £1,050 £400 £1,025 £375 £1,000 £975 £350 £950 £325 £925 £900 £300 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Polymer £/tonne £1,136 £1,165 £993 £948 £1,063 £1,118 £987 £1,082 £1,
Slide 9: Macfarlane Labels
Macfarlane Labels Labels Growth H1 2013 Growth 2012 Self-adhesive (2.9%) (6.4%) Reseal-it 13.0% 9.1% Sales flat albeit improved customer/product mix, H1 contract renewals Reseal-it growth is lead by machine sales – forerunner of label sales Strong US customer demand for Reseal-it expected in H2 2013
Slide 10: Macfarlane Design & Manufacture
Macfarlane Design & Manufacture Packaging Design & Manufacture sales at similar levels to 2012 Focus on design-led composite packs - added value business Good growth from higher margin segments Distribution partnership is 23% of total sales (same as 2012) Profitability £0.3m ahead 2013 vs. 2012
Slide 11: Pension Scheme Deficit
Pension Scheme Deficit £m 2013 H1 2012 Deficit at start of period 18.9 20.5 Ongoing accrual/Interest cost 0.5 1.1 Own shares £0.2m Contributions (1.5) (2.6) Pension Increase Exchange 0.0 (1.9) Increase 0.2% to 4.6% Bond yield (2.1) 4.2 Increase 0.5% to 3.4% RPI/CPI assumptions 0.6 0.7 Mortality assu
Slide 12: Pension Scheme
Pension Scheme Investments H1 2013 2012 Diversified Growth Funds £13.4m £13.0m UK Corporate Bonds/Gilts £22.3m £23.5m UK Equities £ 7.6m £ 7.5m Overseas Equities £ 8.2m £ 7.0m Cash £0.6m £0.3m Total £52.1m £51.3m Liabilities Active members 27 £ 5.7m £ 6.2m Deferred members 324 £28.8m £30.7m Pensione
Slide 13: Key Actions - Distribution
Key Actions - Distribution Improve customer retention, product penetration and new business, through new customer segmentation Growth opportunities in Internet Retail, 3PL and National Accounts Optimise benefit of www.macfarlanepackaging.com and Customer Connect Minimise impact of price increases on
Slide 14: Key Actions - Manufacturing
Key Actions - Manufacturing Labels Focus on higher added value products and services Continue to improve operational efficiencies Extend Reseal-it product range Build on new strategic Irish location with Labels and Packaging offering Packaging Design & Manufacture Focus on design led activity Increa
Slide 15: Conclusions
Conclusions • Demand outlook remains subdued – H2 sales have seasonal benefit • Trading agenda: • Distribution focus on identified growth opportunities – Internet Retail, 3PL and National Accounts • Infill acquisitions being considered • Manufacturing focus on higher added value products and service