Slide 1: Results for the Year Ended 30 June 2014
McPherson’s Limited For personal use only Results for the Year Ended 30 June 2014 Paul Maguire – Managing Director Paul Witheridge – Chief Financial Officer 19 August 2014
Slide 2: MCP FY2014 Financial Overview
MCP FY2014 Financial Overview For personal use only Sales Revenue of $353.4m, 18.1% above prior year – Comparable sales approx’ in line with prior year, i.e. excluding acquisitions Underlying FY2014 EBIT, PAT & EPS in line with guidance – Underlying EBIT of $27.3m, 8.2% above prior year* – Under
Slide 3: MCP FY2014 Financial Overview
MCP FY2014 Financial Overview For personal use only Underlying EPS of 15.9 cents, 5.9% below prior year due to the issuance of new equity to fund acquisitions Recent acquisitions all generating annualised ROFE > 20% ‘Cash flow from operations before interest and tax payments’ of $34.0m, 23.2%
Slide 4: MCP FY2014 Financial Overview
MCP FY2014 Financial Overview For personal use only Final dividend of 5 cents per share fully franked; total dividend of 11 cents – 69% payout ratio of underlying EPS – Payment date of 11 November 2014 – Dividend Reinvestment Plan (DRP) retained Consistent approach to FX hedging – Proportionally
Slide 5: Strategy Update
For personal use only STRATEGY UPDATE Paul Maguire Managing Director
Slide 6: Divisional revenue summary (Aus & NZ)
Divisional revenue summary (Aus & NZ) % OF TOTAL REVENUE For personal use only REVENUE GROWTH REASONS OUTLOOK FY2014 FY14 vs FY13 Growth in HEALTH New products 31% 13%* revenue and & BEAUTY & acquisitions profit Full year effect of Growth in HOME initial acquisition 17% 523%** revenue and APPLIANCES
Slide 7: Company transformation
Company transformation For personal use only McPherson’s stated strategy is “to substantially transform through acquisition/divestment, the establishment of new agency relationships and channel expansion; diversifying away from margin constrained channels and increasing participation in channels wit
Slide 8: What has been achieved so far... Operational Excellence Initiatives
What has been achieved so far... For personal use only Operational Excellence Initiatives Systems and processes improved; IT System upgraded and Continuous Improvement initiatives introduced Capacity for 2000+ additional product lines created at the Sydney ‘pick to light’ distribution centre S
Slide 9: What has been achieved so far... Growth Initiatives
What has been achieved so far... For personal use only Growth Initiatives Innovative new product ranges brought to market across all divisions Eight EPS accretive acquisitions successfully integrated; delivering scale, synergies, diversification and solid returns, with full year financial benefi
Slide 10: Company transformation timeline
Company transformation timeline Diversification achieved via acquisitions & new agencies since McPherson’s Printing demerger For personal use only Think ‘Crown Glassware’ McPherson’s Appliances Printing Group divestment acquisition P&G Agency (MPG) demerged Maseur Trilogy Agency Footcare acquisition
Slide 11: Company transformation benefits
Company transformation benefits For personal use only Transforming the company through diversification assists in better managing risk: – Lessened exposure to foreign exchange * USD purchases will reduce to 65% of total purchases in FY2015, down from 83% in FY2013 – Improved channel mix * In FY201
Slide 12: Health & Beauty acquisitions
Health & Beauty acquisitions For personal use only Dr LeWinn’s & Revitanail – Annual revenue approx’ $20m – Iconic skincare brand & beauty treatment brand – Leveraging McPherson’s infrastructure and strength in the pharmacy channel A’kin & Al’chemy – Annual revenue approx’ $8m – A range of natur
Slide 13: Home Appliance acquisitions
Home Appliance acquisitions For personal use only Think Appliances – Annual revenue approx’ $30m – Baumatic, Venini and D’Amani brands – Further diversifying McPherson’s by increasing business in the electrical retail, hardware and commercial (home building) channels Lemair – Annual revenue appr
Slide 14: Housewares proposed partnership
Housewares proposed partnership An opportunity to partner with an accomplished global player in the For personal use only Housewares industry; the FACKELMANN Group (FMG) from Germany Proposed new venture, FMG 51% : MCP 49%, intended to be established 1 Nov 2014 The FACKELMANN Group is a global
Slide 15: New Agency Partners for FY2015 - Trilogy
New Agency Partners for FY2015 For personal use only Trilogy – Trilogy is a highly regarded and well recognised natural skincare brand in the Pharmacy and Beauty channels, with a strong heritage in the marketplace – McPherson’s provides the Trilogy business with a single, integrated approach to di
Slide 16: New Agency Partners for FY2015 - P&G Fine Fragrances
New Agency Partners for FY2015 For personal use only Extract from the Proctor & Gamble Fine Fragrances Trade Announcement: ‘This is to inform you that McPherson’s Consumer Products Pty Ltd has been appointed as the Distributor in the Australian domestic market for the P&G Fine Fragrance Brands – Guc
Slide 17: Health and Beauty
Health and Beauty Current Status For personal use only Health & Beauty Full Year sales excluding acquisitions 2.5% ahead of prior year Successful new product launches under trusted brands Acquisitions and new agencies boosting McPherson’s presence in Pharmacy and Department Stores and reaffirm
Slide 18: Home Appliances
Home Appliances For personal use only Current Status Home Appliances acquired Apr 2013, Think Appliances Nov 2013 & Lemair May 2014 Diversification for McPherson’s into electrical, hardware & commercial channels Successful new product launches under numerous trusted brands Price increases im
Slide 19: Housewares
Housewares For personal use only Current Status Rationalisation and clearance of 30% of the product range leading to overhead reductions and a focus on major brands Profit adversely affected by growth in private label, product cost increases ex Asia and additional support required by customers
Slide 20: Household Consumables
Household Consumables For personal use only Current Status YTD Sales in line with prior year Profit impacted by: – protracted negotiations prior to the acceptance of price increases – product cost increases ex-Asia – AUD decline – increased ‘customer support’ required – customers’ reduced invent
Slide 21: Outlook
Outlook For personal use only Trading conditions expected to remain consistent with the past year Continued strong performances from Health & Beauty and Home Appliances – boosted by the full year effect of recent acquisitions and new agency relationships Profit optimisation initiatives improvi
Slide 22: McPherson's Limited Mission
MCPHERSON’S LIMITED For personal use only RESULTS FOR THE YEAR ENDED 30 JUNE 2014 Paul Maguire – Managing Director Paul Witheridge – Chief Financial Officer Mission To be a world class consumer products company through 1st choice products for consumers and by being a 1st choice partner for customers
Slide 23: Appendix - Financial Performance
For personal use only APPENDIX MCPHERSON’S LIMITED – FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2014 Paul Witheridge Chief Financial Officer
Slide 24: Group Financial Summary for FY2014 (Underlying)
Group Financial Summary for FY2014 Underlying (i.e. excluding non-recurring items) For personal use only June 2013* June 2014* ($A million) ($A million) Sales 299.2 353.4 18.1% Sales increase EBITDA 27.9 30.2 Depreciation & amortisation (2.7) (2.9) EBIT 25.2 27.3 8.2% EBIT increase Interest (6.5) (6
Slide 25: Group Financial Summary for FY2014 (Statutory)
Group Financial Summary for FY2014 Statutory (i.e. including non-recurring items) For personal use only June 2013* June 2014* ($A million) ($A million) PBT excluding non-recurring items 18.7 20.7 Non-recurring items: - Impairment of intangibles (50.0) (80.0) - Restructuring costs (1.6) (1.5) - Other
Slide 26: Non-Recurring Items
Non-Recurring Items The following non-recurring items are included in statutory loss before tax: For personal use only June 2013 June 2014 ($A million) ($A million) Impairment of intangibles (50.0) (80.0) Contingent consideration adjustment 3.5 - Restructuring costs – redundancies and inventory clea
Slide 27: Overview of Group Balance Sheet
Overview of Group Balance Sheet For personal use only June 2013 June 2014 ($A million) ($A million) Inventories 67.6 45.5 Receivables 56.8 63.3 Assets held for sale (inventories) - 26.1 Payables (38.9) (50.6) Net working capital 85.5 84.3 Property, plant & equipment 7.7 6.0 Intangibles 168.1 88.3 As
Slide 28: Group Operating Cash Flows
Group Operating Cash Flows For personal use only June 2013 June 2014 ($A million) ($A million) cash flows from operations Receipts from customers (inclusive of GST) 334.5 379.1 Payments to suppliers and employees (inclusive of GST) (306.9) (345.1) Net cash inflows from operations before interest and
Slide 29: Group Investing and Financing Cash Flows
Group Investing and Financing Cash Flows For personal use only June 2013 June 2014 ($A million) ($A million) cash flows from investing activities Payments for purchase of property, plant and equipment (2.3) (1.3) Payments for acquisition of business assets (21.2) (23.7) Payments for purchase of inta
Slide 30: FX Hedging (Australia)
FX Hedging (Australia) For personal use only Comprehensive FX hedging program in place using Options, Forward Exchange Contracts (FECs) and Collars: Options Protect downside with premium cost but allow upside benefit FEC’s Fixed rate with lost forward points Collar Improved downside protection in
Slide 31: Non-IFRS measures and Disclaimer
McPherson’s Limited For personal use only Non-IFRS measures The non-IFRS measures used by the Company are relevant because they are consistent with measures used internally by management to assess the operating performance of the business. The non-IFRS measures have not been subject to audit or revi