Ansell Limited · ASX:ANN
Ansell — H1 FY2020 Earnings Presentation
40 slides from Ansell's earnings presentation, Feb 18, 2020
Slide 1: ASX cover letter: Results Presentation
ANSELL LIMITED Level 3, 678 Victoria Street Richmond VIC 3121 Tel: (03) 9270 7270 18 February 2020 Market Announcements ASX Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam Results Presentation – for the half year ended 31 December 2019 Attached is the Ansell Limited Results Presenta
Slide 2: F'20 Half Year Results – December 2019
Ansell Limited F’20 Half Year Results – December 2019 Magnus Nicolin – Chief Executive Officer Zubair Javeed – Chief Financial Officer 18 February 2020
Slide 3: Disclaimer and Non-IFRS Measures
HALF YEAR RESULTS F'20 Disclaimer and Non-IFRS Measures The following presentation has been prepared by Ansell Limited (Ansell or the company) for information purposes only. The information contained in this presentation is a summary only and does not purport to be complete. It should be read in con
Slide 4: Contents
01 Business Overview Magnus Nicolin CONTENTS 02 Financial Report Zubair Javeed 03 F'20 Outlook Magnus Nicolin 04 Appendix
Slide 5: Business Overview
01 Business Overview Magnus Nicolin
Slide 6: LTIs per 100 Employees per Annum
HALF YEAR RESULTS F'20 Ansell, The Safety Company LOST TIME INJURY (LTI) ANSELL SAFETY EXPERTISE Ansell’s manufacturing safety focus includes: • Ongoing safety training and raised awareness LTIs per 100 Employees per Annum • Digital scanning to better monitor total hours worked and adequate rest d
Slide 7: Sales Growth Delivered; Transformation Savings Have Favourable Impact in Reported Earnings
HALF YEAR RESULTS F'20 Sales Growth Delivered; Transformation Savings Have Favourable Impact in Reported Earnings STATUTORY RESULTS (US $million)¹ ² F’19 H1 F'20 H1 % CC³ % Sales 725.3 753.3 3.9% 5.3% EBIT 60.7 91.8 51.2% 80.6% Profit Attributable 39.5 65.8 66.6% 115.2% EPS (US¢) 28.6¢ 50.1¢ 75.2
Slide 8: Sales Growth, Acquisitions, Transformation Benefits and Share Buyback Driving EPS Gains. FX a Headwind
HALF YEAR RESULTS F’20 Sales Growth, Acquisitions, Transformation Benefits and Share Buyback Driving EPS Gains. FX a Headwind F’20 H1 RESULTS ARE NOT ADJUSTED F’19 H1 RESULTS WERE ADJUSTED AS PER BELOW ($million)¹ ² F’19 H1 F'20 H1 % CC³ % Sales 725.3 753.3 3.9% 5.3% Statutory EBIT 60.7 91.8 51.2
Slide 9: Financial Highlights – Sales Growth Despite Weaker Macro Indicators
HALF YEAR RESULTS F'20 Financial Highlights – Sales Growth Despite Weaker Macro Indicators Strong EPS Growth and Cash Flow Generation SALES EPS¹ ROCE %¹ ² KEY POINTS • Delivered 2.4% Organic⁶ Revenue Growth led $753.3m 50.1¢ 13.3% by continued HGBU momentum at +3.4% and +3.9% Growth, +8.7% Growth Up
Slide 10: Solid Progress Against Long Term Targets
HALF YEAR RESULTS F’20 Solid Progress Against Long Term Targets FINANCIAL GOALS F’20 H1 RESULT KEY COMMENTS +2.4% Organic, Industrial recovery, particularly in EMEA and solid 3-5% ORGANIC GROWTH performance from Healthcare PER ANNUM +5.3% CC Full half year contribution from Ringers & Digitcare Stron
Slide 11: Macro Headwinds Recently Softening; New Uncertainty with Coronavirus
HALF YEAR RESULTS F’20 Macro Headwinds Recently Softening; New Uncertainty with Coronavirus GLOBAL PULSE MACROECONOMIC ENVIRONMENT EMERGING MARKETS • 2019 Global GDP ~3% slowest since 2009; Global GDP Growth Stabilising Manufacturing weakness 7.0% • Economic growth appears to be stabilising 6.0% • U
Slide 12: Coronavirus Update
HALF YEAR RESULTS F’20 Coronavirus Update Ansell Partnership Activities to Keep China Safe Implications to Ansell • Ansell is heavily engaged in supporting efforts to produce Personal • Ansell global leadership is closely monitoring this issue, and is Protective Equipment (PPE) to keep people safe l
Slide 13: Improved Organic Growth with Continued HGBU Momentum and Modest IGBU Growth Recovery
HALF YEAR RESULTS F'20 Improved Organic Growth with Continued HGBU Momentum and Modest IGBU Growth Recovery; EM Growth Continues ORGANIC GROWTH EMERGING MARKETS Organic Growth F’19 H1 F'20 H1 % Org $M $M Growth 6.0% Emerging Markets $147.9m $157.4m 5.0% 4.5% % Sales 20.4% 20.9% 3.6% 2.4% 2.1% 0.9% 1
Slide 14: Healthcare GBU – Sales Momentum with Margin Improvements
HALF YEAR RESULTS F’20 Healthcare GBU – Sales Momentum with Margin Improvements SUMMARY HIGHLIGHTS SALES F’19 H1 F’20 H1 % CC % • Organic constant currency growth +3.4% F’19 H1: +3.8% Sales $383.1m $394.9m +3.1% +4.1% • Emerging markets +7.1% (China, India and OLAC F’19 H2: +4.2% strong performers)
Slide 15: Healthcare Delivers Continued Sales Momentum & EBIT Growth
HALF YEAR RESULTS F’20 Healthcare Delivers Continued Sales Momentum & EBIT Growth SALES GROWTH & EXPANDED GLOBAL FOOTPRINT NEW PRODUCT SALES 13.7% OF SALES +3.4% Strong Growth & Innovation Leadership Overall Organic EXAM / SINGLE USE GROWTH Sales Growth • MICROFLEX® 93‐260 • MICROFLEX® MidKnight™ XT
Slide 16: Industrial GBU – Sales Recovery in EMEA & Strong APAC
HALF YEAR RESULTS F'20 Industrial GBU – Sales Recovery in EMEA & Strong APAC SUMMARY HIGHLIGHTS SALES F’19 H1 F’20 H1 % CC % • Organic constant currency growth +1.3% F’19 H1: +0.3% Sales $342.2m $358.4m +4.7% +6.5% • Strong performance from EMEA +5.1 and APAC +5.0% F’19 H2: ‐1.0% more than offset co
Slide 17: Industrial Strategies On Track
HALF YEAR RESULTS F'20 Industrial Strategies On Track SUCCESS FROM NEW TECHNOLOGIES RINGERS ACQUISITION ON TRACK • Continued growth and success with FORTIXTM • F’20 H1 Organic growth +13.5% for Ringers brand • Dramatically extends working life & improves • Best‐in‐class portfolio of impact protectio
Slide 18: A Responsible and Responsive Strategy
HALF YEAR RESULTS F’20 A Responsible and Responsive Strategy Our Ultimate Goal A Corporate Social Responsibility and Sustainability program engineered and operated through these 9 distinct perspectives and embedded within the organisation’s operational cadence and culture will ensure our differentia
Slide 19: Improvement in Labour Standards
HALF YEAR RESULTS F’20 Improvement in Labour Standards • Ansell remains committed to leading the PPE and Healthcare industries in responsible human rights, environmental and governance practices • We created specific action plans to enhance our processes, including: ‒ Implemented digital tracking to
Slide 20: Financial Report
02 Financial Report Zubair Javeed
Slide 21: Profit & Loss Summary
HALF YEAR RESULTS F'20 Profit & Loss Summary F’19 H1 F'20 H1 Total Group Transformation Adjusted Total Group Sales 725.3 - 725.3 753.3 GPADE 240.7 - 240.7 257.2 SG&A (180.0) (26.9) (153.1) (165.4) EBIT 60.7 26.9 87.6 91.8 Net Interest (5.9) - (5.9) (7.9) Taxes (14.7) (2.8) (17.5) (17.5) Minority Int
Slide 22: Profit & Loss Summary
HALF YEAR RESULTS F'20 Profit & Loss Summary F’19Growth H1 Brands Continue Strong Performance +9% YoY F'20 H1 CC % Notes Adjusted Sales 725.3 753.3 5.3% Organic growth of 2.4% with continued solid growth in HGBU & recovery in IGBU, particularly in EMEA Margin growth driven by Transformation saving
Slide 23: Raw Material Cost Impact
HALF YEAR RESULTS F'20 Raw Material Cost Impact RAW MATERIAL COSTS IN H1 WERE POSITIVELY IMPACTED BY LOWER NITRILE PRICES • The largest raw material category is Fibres & Engineered Yarns at 35%, which continues to grow as % of total raw materials. • F'20 H1 benefited from lower Nitrile prices, down
Slide 24: Consistent Strong Cash Generation
HALF YEAR RESULTS F'20 Consistent Strong Cash Generation 160.0 119.7 (5.4) (14.3) 110.0 100.0 (11.3) (25.4) F’20 H1 (6.9) (8.6) 60.0 47.8 (0.2) (34.5) ($m) (40.1) 10.0 (44.4) (17.4) (40.0) EBITDA* Working Others Net Lease Net Capex Int Taxes Op Cash Acq/ Dividend Buyback Others NIBD Mvt Cap Receipts
Slide 25: Balance Sheet Strength – Improving ROCE
HALF YEAR RESULTS F'20 Balance Sheet Strength – Improving ROCE BALANCE SHEET¹ ($M) F’19 H1 F’19 F'20 H1 KEY POINTS Fixed Assets 224.7 229.8 237.4 Intangibles 1,024.6 1,082.6 1,084.7 • Strong Balance Sheet provides significant flexibility for further Right of Use Assets - - 44.4 strategic expansion a
Slide 26: F'20 Outlook
03 F'20 Outlook Magnus Nicolin
Slide 27: F'20 EPS Guidance – Reaffirmed
HALF YEAR RESULTS F’20 F’20 EPS Guidance – Reaffirmed EPS RATIONALE F’20 GUIDANCE – EPS¢ In the second half of calendar 2019, there were continued EPS in US¢ Estim YoY uncertainties around global economies and trade. There are now 10% -20% YoY CC 122.0 tentative signs that global growth may be sta
Slide 28: Takeaways
HALF YEAR RESULTS F’20 Takeaways ANSELL SHAREHOLDER VALUE CREATION MODEL WHAT TO EXPECT FROM ANSELL Organic growth showing improvement and Ansell remains well positioned for further growth Continued margin expansion driven by commercial and operational excellence Positive impact from Transform
Slide 29: Capital Markets Day Reminder
Capital Markets Day Reminder 28
Slide 30: Appendix
Ansell HyFlex’ GAMMEX Alphalec’ MICR@FLEX
Slide 31: Ansell Group Performance Summary
HALF YEAR RESULTS F'20 Ansell Group Performance Summary Operating Cash Sales EBIT¹ Profit Attributable¹ EPS¹ ROCE¹ Flow¹ ² Reported 3.9% Improved by Reported 3.5% Reported 8.7% Improved Cash Conversion CC 5.3% +11bps CC 19.7% CC 25.7% by +30bps 92.9%² Organic 2.4% to 12.1% from 12.2% $725.3m $753.3m
Slide 32: Statutory Reconciliation for Items Previously Adjusted in F'19
HALF YEAR RESULTS F’20 Statutory Reconciliation for Items Previously Adjusted in F’19 Growth Brands Continue Strong Performance +9% YoY F’19 H1 F’20 H1 US$m Sales EBIT PA EPS Sales EBIT PA EPS Total Group 725.3 60.7 39.5 28.6¢ 753.3 91.8 65.8 50.1¢ Add Back - Transformation Costs 26.9 24.1 17.5¢ - -
Slide 33: Currency Has Been a Negative Headwind in F'20 H1
HALF YEAR RESULTS F’20 Currency Has Been a Negative Headwind in F’20 H1 EXCHANGE RATES CURRENCY MIX COMMENTARY 115 Revenue Currencies • Ansell is a US$ reporting entity with a Others AUD 8% majority of its commercial operations 4% transacting in US$ 110 GBP 4% CAD • However, Ansell also has substant
Slide 34: FX – Revenue & EBIT Impact of FX Movements
HALF YEAR RESULTS F'20 FX – Revenue & EBIT Impact of FX Movements Change in average rates of major revenue and cost currencies Currency Impact from Continuing Operations Comment Revenue Adjusted EBIT¹ Predominantly due to lower Euro and GBP vs. USD and F'20 H1 vs F’19 H1 $(9.7)m $(7.9)m appreciating
Slide 35: Constant Currency
HALF YEAR RESULTS F'20 Constant Currency CONSTANT CURRENCY RESTATED PRIOR PERIOD ($m) The presentation of constant currency information is designed to facilitate Prior Period Sales IGBU HGBU HO Total comparability of reported earnings by restating the prior period’s results at Reported Sales 342.2
Slide 36: Impact of AASB Leasing Standard
HALF YEAR RESULTS F'20 Impact of AASB 16 Leasing Standard COMMENTARY IMPACT ON INCOME STATEMENT (F’20 H1) Ansell transitioned from AASB 117 to AASB 16 on 1 July 2019, not restating AASB 117 AASB 16 comparatives for practical reasons (as permitted). Operating Lease Expenses (9.7) AASB 16 brings m
Slide 37: Ansell Fact Sheet
HALF YEAR RESULTS F'20 Ansell Fact Sheet KEY FIGURES • Booked Tax Losses at 31 December 2019: $23.1m (Australia $19.6m) • Unbooked Tax Losses at 31 December 2019: $7.9m (Tax Effected) (Australia $nil) • Unbooked Capital Losses at 31 December 2019: $60.2m • Interest Rate on Borrowings for F’20 H1: 3.
Slide 38: Segment History – Continuing Businesses
HALF YEAR RESULTS F'20 Segment History – Continuing Businesses F’14 F’15 F’16 F’17 F’18 F’19 F’18 H1 F’19 H1 F'20 H1 Sales 716.5 668.5 654.8 655.9 715.5 703.7 349.4 342.2 358.4 Industrial EBIT 90.5 89.0 82.8 79.8 86.9 98.7 38.4 45.2 44.4 % Margin 12.6% 13.3% 12.6% 12.2% 12.1% 14.0% 11.0% 13.2% 12.4%
Slide 39: Glossary
HALF YEAR RESULTS F'20 Glossary APAC – Asia Pacific FX – Foreign Exchange NRL – Natural Rubber Latex ANZ – Australia and New Zealand GBU – Global Business Unit OEI – Outside Equity Interest AUD – Australian Dollar GBP – Great British Pound OLAC – Other Latin America and Caribbean CAGR – Compound Ann
Slide 40: Ansell
Ansell HyFlex’ cAMMEX Alphalec’ MICR@FLEX’