Slide 1: Delivering growth
Delivering growth Interim Results Presentation: February 2019
Slide 2: Agenda
Agenda 1. Headlines 2. Commercial update 3. Financial results 4. Prepared for growth delivery 5. Outlook McBride plc 1 Interim Results Presentation: February 2019
Slide 3: Headlines
Headlines • Growth in underlying revenues +6% • Contribution from business wins offset by high-cost environment • Double digit growth in key categories • Profits/earnings flat vs same period last year • Commissioning of new triple capsule line and new auto dishwash line completed, • Strong operating
Slide 4: Commercial update
Commercial update Rik De Vos McBride plc 3 Interim Results Presentation: February 2019
Slide 5: H1 FY19 saw growth in our biggest markets of the UK, France and Germany
H1 FY19 saw growth in our 3 biggest markets of the UK, France and Germany and continued progress in key categories Group revenue £m 1.9 0.7 0.4 15.3 (5.3) 8.5 (1.4) • Auto dishwash +26.5% 353.2 • Capsules +12.1% 333.1 • Fabric conditioner +47.0% H1 FY18 UK France North South East Aerosols Asia H1 FY
Slide 6: Market update – UK
Market update – UK Overall market 3.2%(1), McBride growth 10.5% • Aldi & Lidl best ever Xmas • Sainsbury’s, M&S & Asda • Price increases achieved mixed performance partly compensating for • Premium lines driven cost increases • relationship/transactional • McBride increasing share • Retailers review
Slide 7: Market update – Germany
Market update – Germany Overall market -1.3%(1), McBride growth 32.2% • Significant growth 32.2% in • Supermarkets ahead of • Price wars driving cost and Germany discounters and drug stores margin pressure • several successes in • store modernisation, • Aldi purchasing collaboration consumer tests –
Slide 8: Market update – France
Market update – France Overall market -3.5%(1), McBride growth 1.0% • McBride growth in France • Listed retailers (Carrefour, • New French law limiting after 3 years of decline Casino) seeing share promotions despite ‘gilets jaunes’ impactslip, renewed PL focus at • accepted in grocery Carrefour and
Slide 9: Financial results
Financial results Chris Smith McBride plc 8 Interim Results Presentation: February 2019
Slide 10: Financial headlines
Financial headlines • Revenues at constant • Adjusted operating profit • Interim payment to currency 10.8% higher of £16.8m in line with prior shareholders 1.5p (2017: 1.5p) at £369.2m, underlying half year, contribution • Strong operating cash flows revenues 6.0% higher from sales growth offset £23
Slide 11: Revenue development
Revenue development Continuing revenues Continuing revenue excluding aerosols Change in continuing revenues £m £m for H1 (at CCY) £m 16.0 +36.1 38.5 42.3 36.1 35.9 +17.5 +16.0 314.7 341.6 298.0 297.2 308.3 307.4 10.3 +2.6 H1 H1 CCY H1 H1 H1 CCY H1 Household Danlind Q1 AA Total 2017/18 2017/18 2018/1
Slide 12: EBITA development
EBITA development Group EBITA Continuing EBITA excluding aerosols ROS £m £m % 16.5 16.8 16.7 16.8 15.8 15.7 5.5% 5.0% 4.8% 4.6% 18.7 4.3% 4.2% 17.9 17.8 -0.3 H1 H1 CCY H1 H1 2017/18 FY 2017/18 H1 2018/19 -1.0 -1.0 2017/18 2017/18 2018/19 Total Group Continuing Discontinued Total Household H1 2017/18
Slide 13: Income statement
Income statement Gross margin Distribution costs Labour costs % of sales and Underlying interest cost £m % % of sales overhead % of gross profit and tax rate % 30.0% 30.0% 29.0% 87.4% 87.1% 1.1 30.0% 85.9% 86.1% 85.4% 34.3% 34.2% 7.6% 84.0% 34.1% 19.9% 0.5 0.4 33.4% 32.8% 7.1% 19.7% 3.4 32.7% 18.4%
Slide 14: Balance sheet and cash flow
Balance sheet and cash flow ROCE Cash flow from operations Net debt £m/ % £m debt cover x times 34.4 28.9 28.7 122.8 114.3 25.3 98.0 2.3 22.5% 14.3 2.1 20.6% 20.8% 1.8 H1 2017/18 FY 2017/18 H1 2018/19 2016/17 2017/18 2018/19 Dec 2017 Jun 2018 Dec 2018 ROCE H1 H2 Net debt Debt cover • Impact of PC Li
Slide 15: Other financials
Other financials Exceptional items Payments to shareholders Group pension liability £m pence £m 0.3 37.2 30.9 30.8 2.9 2.8 1.9 2.4 21.7 0.3 0.79 0.79 0.77 8.7 1.7 1.4 1.5 1.5 1.2 2.1 H1 2017/18 FY 2017/18 H1 2018/19 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 H1 2017/18 FY 2017/18 H1 2018/19 Operating F
Slide 16: Inflationary pressures
Inflationary pressures • Raw materials Oil (per bbl) Oil (Brent) $ – actual Oil (Brent) € – actual Ethylene €/mt 90 1400 • internal purchasing index 80 70 60 1300 1200 – highest level in 5 years 1100 50 40 1000 30 900 20 800 July Oct Jan April July Oct Jan July Oct Jan April July Oct Dec • feedstock
Slide 17: Prepared for growth delivery
Prepared for growth delivery Rik De Vos/Chris Smith • Fixing problems • Platform preparedness • Growth McBride plc 16 Interim Results Presentation: February 2019
Slide 18: The story of the past 4 years
The story of the past 4 years • Significant retail price deflation • Efficiencies and cost savings delivering improved profits • Raw materials broadly neutral Trading profit bridge Overhead £m inflation Translation Danlind FY 2014 FY 2018 Prices/ RMs Repair choices price actions • Additionally, adju
Slide 19: Taking action to fix under-performing segments
Taking action to fix under-performing segments Asia Aerosols PCA Europe profit £m and ROS % trend at cfx • Break even and little growth • 2 loss-making factories in 2015 • Over capacity, high cost base • 3 factories reduced to 2 • Limited alignment to HH • Now operating at 8% and for customers, mate
Slide 20: Our 'Prepare' actions to support growth were multi-streamed
Our ‘Prepare’ actions to support growth were multi-streamed Prepare phase – what does it look like? Capacity increase delivery Aligned capex strategy Product category focus Factory performance drive Geography/channel ambitions Channel strategies Geographic priorities Manufacturing choices McBride pl
Slide 21: Efficiency, capacity improvements and savings to deliver growth
Efficiency, capacity improvements and savings to deliver growth and mitigate external cost factors Productivity improvements Capacity investment Costs and headcount • Improved throughputs • Volumes up in all formats • Overheads lower across the per hour(1) except laundry powder business (lfl basis)
Slide 22: Focused acquisition strategy; Danlind integration almost completed
Focused acquisition strategy; Danlind integration almost completed • Danlind acquired • Early actions post acquisition • Ex-Danlind senior October 2017 management part of • small liquids production Group Exec • Key category of auto closed and transferred to dishwash, primary driver McBride sites • R
Slide 23: Our contract manufacturing ambitions are being re-aligned
Our contract manufacturing ambitions are being re-aligned as branders’ requirements are shifting • Original ambition: to grow equally CoMan • Branders’ key objectives for CoMan shifted and PL revenues over the past 18 months • Branders continue to outsource limited • local-for-local restricting sing
Slide 24: Focus on key growth categories and response to channel dynamics
Our focus on key growth categories and response to channel dynamics is delivering retailer growth ahead of expectations • Key categories providing • Asia providing strong growth • E-commerce launch of accelerated growth building upon our European subscription based homecare category position: produc
Slide 25: Innovation agenda driven by social/environmental themes
Innovation agenda driven by social/environmental themes Earlier reported trends confirmed and accelerating Branders invest in eco-friendly brands and sustainable McBride has won the 2019 HH packaging, through outsourcing and acquisition Tesco Sustainability Award Retailers developing PL-dedicated Ec
Slide 26: Outlook
Outlook Rik De Vos McBride plc 25 Interim Results Presentation: February 2019
Slide 27: Current outlook
Current outlook Observations • Growth expectations confirmed with additional opportunities in the pipeline • Profitability 10-15% lower due to: • raw material pricing (outlook shows moderate improvement) • distribution and logistics challenges • growth in part leading to capacity constraints at some
Slide 28: Appendices
Appendices 1. Income statement 2. Segmental reporting 3. Group revenue bridge 4. Exceptional items 5. Balance sheet 6. Cash flow 7. Use of cash 8. Funding headroom McBride plc 27 Interim Results Presentation: February 2019
Slide 29: Appendix 1: income statement
Appendix 1: income statement Constant currency(1) H1 2018/19 H1 2017/18 H1 2017/18 Continuing operations £m £m Y/Y £m Y/Y Revenue 369.2 334.1 10.5% 333.1 10.8% Gross profit 121.0 114.7 5.5% 114.4 5.8% Gross margin 32.8% 34.3% (1.5 ppt) 34.3% (1.5 ppt) Distribution costs (28.0) (22.6) 23.9% (22.5) 24
Slide 30: Appendix 2: segmental reporting
Appendix 2: segmental reporting Constant currency H1 2018/19 H1 2017/18 H1 2017/18 £m £m Y/Y £m Y/Y Continuing revenue UK 89.4 80.9 10.5% 80.9 10.5% France 64.3 63.5 1.3% 63.3 1.6% North 55.3 46.8 18.2% 46.7 18.4% South 39.5 41.0 (3.7%) 40.9 (3.4%) East 82.2 65.8 24.9% 65.4 25.7% Household 330.7 298
Slide 31: Appendix 3: Group revenue bridge
Appendix 3: Group revenue bridge Group revenue £m 21.9 (1.1) 16.0 1.9 0.7 (28.2) 0.4 391.1 15.3 (5.3) 8.5 (1.4) (6.0) 368.4 367.3 353.2 333.1 H1 FY18 Foreign H1 FY18 PCA Brno H1 FY18 UK France North South East Aerosols Asia H1 FY19 Danlind PCA H1 FY19 (reported) exchange (constant Liquids (underlyin
Slide 32: Appendix 4: exceptional items
Appendix 4: exceptional items H1 2018/19 H1 2017/18 Exceptional items £m £m Danlind acquisition and integration 0.2 0.5 GMP equalisation 0.2 — Gain on sale of Solaro (0.1) — Continuing operations 0.3 0.5 Loss on disposal of European Personal Care Liquids 0.6 — PCA strategic review 1.2 7.1 Sale of Br
Slide 33: Appendix 5: balance sheet
Appendix 5: balance sheet 31 Dec 31 Dec 2018 2017 £m £m Y/Y Goodwill and other intangible assets 30.0 27.7 8.3% Property, plant and equipment 134.9 151.6 (11.0%) Other non current assets 12.9 13.0 (0.8%) Working capital 42.0 50.1 (16.2%) Net other debtors/(creditors) (7.3) (6.2) (17.7%) Provisions (
Slide 34: Appendix 6: cash flow
Appendix 6: cash flow H1 2018/19 H1 2017/18 Y/Y £m £m £m Adjusted operating profit 16.5 15.8 0.7 Depreciation 9.0 9.7 (0.7) Share based payments 0.3 0.7 (0.4) Additional cash funding on pension scheme (1.5) (1.5) — Operating cash flow before movement in working capital 24.3 24.7 (0.4) Movement in wo
Slide 35: Appendix 7: use of cash
Appendix 7: use of cash 40 Movement in net debt Proceeds from £1.6 sale of Solaro Proceeds from £10.4 sale of £11.5 European 30 Personal Care £16.3 Liquids £25.3 Foreign exchange £0.8 £2.1 Exceptionals £m 20 £1.7 Interest £1.6 Taxation Cash generated £57 from operations £25.3 before £8.8 Capital exc
Slide 36: Appendix 8: funding headroom
Appendix 8: funding headroom 31 Dec Committed Facility 2018 headroom £m £m £m Committed facilities: – Revolving facilities (June 2022) 156.5 (73.7) 82.8 – Invoice discounting facility 37.8 (37.8) — – Other loans 1.4 (1.4) — Total committed facilities 195.7 (112.9) 82.8 Uncommitted facilities 62.4 (1