Ansell Limited · ASX:ANN
Ansell — H1 FY2014 Earnings Presentation
28 slides from Ansell's earnings presentation, Feb 11, 2016
Slide 1: Ansell Limited Half Year Results to Dec 2013
Ansell Limited Half Year Results to Dec 2013 Magnus Nicolin - Chief Executive Officer Neil Salmon - Chief Financial Officer
Slide 2: Disclaimer
Disclaimer The following presentation has been prepared by Ansell Limited for information purposes only. The presentation may contain forward looking statements or statements of opinion. No representation or warranty is made regarding the accuracy, completeness or reliability of the forward looking
Slide 3: F'14 H1 – Agenda
F’14 H1 – Agenda Business Overview - Magnus Nicolin Financial Report - Neil Salmon Full Year Outlook - Magnus Nicolin US dollars used in all slides unless otherwise specified. 3
Slide 4: F'14 H1 – Sales & EBIT
F’14 H1 – Sales & EBIT F’13 H1 F’14 H1 % Change Sales ($M) 648.1 703.6 9% EBIT ($M) 68.8 82.7 20% PA ($M) 57.1 65.6 15% EPS (US¢) 43.7 49.6 14% Adjusted EPS (US¢) (excluding Dec share issue 43.7 50.2 15% prior to BSSI acquisition) Dividend A16¢ US17¢ 4
Slide 5: Global Recovery Mixed: US leads the way
F’14 H1 – Global Recovery Mixed: US leads the way 60 Purchasing Managers US Expanding Contracting Indices (PMI) 55 Germany Eurozone 50 Brazil Russia France, Australia 45 40 35 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 PMI Covers: Production Levels, New Orders, Speed of Supplier, Deliveries and Employment L
Slide 6: The half in brief - a very solid half for Ansell overall
F’14 H1 – The half in brief- a very solid half for Ansell overall with strong EBIT growth Key Positives Head Winds • B2B organic growth rates • Australia, Russia, Turkey and improving driven by a 20% growth Brazil weaker in NPD sales • Sexual Wellness sales dip on FX, • Strong performance in Medical
Slide 7: Growth trends improving in NA and strong in LAC. APAC down
F’14 H1 – Growth trends improving in NA and strong in LAC. APAC down on ANZ decline, good growth in Asia. Sales $703.6 M Segment EBIT $82.0 M Med Ind SM SW Total Med Ind SM SW Total Asia Pac* EMEA Nth Am LAC Total > +5% From 0% to +5% < 0% * Asia Pac significantly affected by Australian economic wea
Slide 8: Acquisition Strategy guided by Three Priorities
F’14 H1 – Acquisition Strategy guided by Three Priorities. Recent Acquisitions collectively on Target and Expected to Exceed Return Hurdles 1 ECONOMIES 2. NEW TECHNOLOGIES 1. ECONOMIES OF SCALE BENEFITS OF SCALE AND CAPABILITIES ACHIEVED DELIVERED • US$75m specialist clothing business created • Coma
Slide 9: Acquisitions Integration
F’14 H1 – Acquisitions Integration Update on Prior Acquisitions • Comasec, Trelleborg (APS) and Hercules integration activities are far advanced with many aspects of acquired businesses now fully absorbed within the core organization • They collectively are meeting our business case projections and
Slide 10: 20% growth in sales of new products gives clear evidence of momentum
F’14 H1 – 20% growth in sales of new products gives clear evidence of building momentum in our innovation strategy Key Successes • Strong wins on new Hyflex® products • New TNT products growing well • Our leading Oil&Gas fire resistant range well aligned to industry trends and winning major conversi
Slide 11: Industrial Overview
F’14 H1 – Industrial Overview : 42% of Revenue and 51% of Segment EBIT $M F’13 H1 F’14 H1 - HyFlex® 97.0 100.0 3% General Purpose/ Mechanical - Other GP/M 70.7 76.0 7% - AlphaTec® 5.4 6.5 20% Chemical/Liquid Handling - Other Chemical /LH 37.5 41.2 10% - Touch N Tuff® (TNT) 38.1 45.1 19% Single Use -
Slide 12: IGBU NPD Success Widespread and Building Momentum
IGBU NPD Success Widespread and Building Momentum Fully Launched Fully Launched Fully Launched Fully Launched September 2012 November 2013 December 2013 December 2012 11-518 11-840 11-927 EDGE® Ultralight weight general purpose Light duty multi-purpose glove Ideal combination of enhanced oil Dependa
Slide 13: Specialty Markets
F’14 H1 – Specialty Markets : 17% of Revenue and 7% of Segment EBIT $M F’13 H1 F’14 H1 VersaTouch® Food Family 44.8 47.0 5% - Specialty Application 3.9 5.8 49% ActivArmr® Family - Military / First Responders 6.4 1.8 (72%) Consumer Retail / DIY 28.4 35.1 24% Clothing/ Fall / Other 19.1 31.2 63% Sales
Slide 14: Industry Leading Oil & Gas Range Is Gaining Traction
Industry Leading Oil & Gas Range Is Gaining Traction within Specialty Markets FLAME RESISTANCE IMPACT HI-VISIBILITY / GRIP THERMAL 97-200 / 97-201 97-210 / 97-321 97-100 / 97-012 /97-013 97-011 80-813 / 46-111 Best in Class Impact protection w/Grip Second skin cut protection with high General purpos
Slide 15: Medical GBU Overview
F’14 H1 - Medical GBU Overview : 26% of Revenue and 27% of Segment EBIT $M F’13 H1 F’14 H1 - NRL 89.1 92.9 4% Surgical - Synthetic 23.6 29.1 23% - NRL 18.6 14.2 (24%) Examination - Synthetic 24.3 29.8 23% Healthcare Safety Solutions 9.7 12.4 28% Sales 165.3 178.4 8% Segment EBIT 17.2 22.2 29% EBIT/S
Slide 16: Medical GBU – New Product Traction
F’14 H1 – Medical GBU – New Product Traction GAMMEX® Non-Latex Accelerator Free GAMMEX® Latex Powder-Free Antimicrobial with with SENSOPRENE formulation AMT technology Accolades & Awards Recent Publications: • In the US, won silver in the Excellence in • New Antimicrobial gloves could prevent SSIs;
Slide 17: Sexual Wellness Overview
F’14 H1 – Sexual Wellness Overview : 15% of Revenue and 15% of Segment EBIT $M F’13 H1 F’14 H1 Condoms Branded 87.8 83.1 (5%) Tenders/Private Label 14.9 12.7 (15%) Lube/Devices/Other 12.1 12.2 1% Sales 114.8 108.0 (6%) Segment EBIT 14.5 12.1 (17%) EBIT/Sales 12.6% 11.2% Comments Overall sales growth
Slide 18: SKYN Performance
SKYN® Performance SKYN® sales grew by 17% vs LY SKYN® became the number one condom brand for Ansell in sales value SKYN® Intense Feel launched – world first PI textured condom. Delivers truly natural feeling for him and intense stimulation for her. During H1 SKYN® media investment was SKYN® launched
Slide 19: Financial Results
Financial Results Neil Salmon Chief Financial Officer 19
Slide 20: Organic Growth and Acquisitions Supporting Results
F’14 H1 – Organic Growth and Acquisitions Supporting Results $M F’13 H1 F’14 H1 Sales 648.1 703.6 Up 9%, organic growth up 1% GPADE 238.8 267.2 Margin up 1% YOY SG&A (170.0) (184.5) Includes $9.4m from acquisitions EBIT 68.8 82.7 EBIT margin up 120bps Net Interest (4.3) (6.9) Acquisition interest co
Slide 21: Organic Sales Growth Supported by Acquisitions up 9%. EBIT up 20%
F’14 H1 – Organic Sales Growth Supported by Acquisitions up 9%. EBIT up 20% on Acquisitions and Improved GPADE 49.0 14.0 (5.1) 703.6 648.1 (2.4) Sales $M H1 F'13 FX Acquisitions MISM* Organic SW Destocking H1 F'14 Sales Growth Sales EBIT 12.2 0.3 0.5 (6.4) 7.3 82.7 $M 68.8 F'13 GPADE S&M R&D G&A M&A
Slide 22: Balance Sheet – Remains Strong and Liquid
F’14 H1 – Balance Sheet – Remains Strong and Liquid $M F’13 H1 F’13 F’14 H1 Fixed Assets 182.1 186.7 195.6 Intangibles 481.3 541.4 545.8 Other Assets/Liabilities 11.7 (33.6) (6.9) Working Capital 305.8 314.5 327.2 Net Operating Assets 980.9 1,009.0 1,061.7 Net Interest Bearing Debt 202.2 235.5 (75.4
Slide 23: Free Cash Flow moderately lower on higher interest expense
F’14 H1 –Free Cash Flow moderately lower on higher interest expense and timing of tax payments. $'M F'14 H1 15.6 (4.7) (19.5) 82.7 (6.7) (12.8) (8.4) 46.2 (35.5) (26.7) (48.8) (32.8) EBIT Depn Work Capex INT Taxes Hercules Other DIV Acq./ Net Debt /WO Cap Earn Out FCF Invest. Mvt. $'M F'13 H1 14.1 4
Slide 24: Dividend Reinvestment Plan
F’14 H1 – Dividend Reinvestment Plan Dividend Reinvestment Plan (DRP) As a way of providing shareholders with a cost effective and convenient mechanism to acquire shares where they prefer to do so instead of receiving a dividend cash payment, Ansell has decided to implement a dividend reinvestment p
Slide 25: Financial Wrap-up
F’14 H1 – Financial Wrap-up Achievements Midas Acquisition bringing technology and manufacturing competency BarrierSafe acquisition on 2 Jan 2014 – transformational to NA region Strong EBIT growth of 20% EMEA SAP live on Feb 3rd. Early in go-live operation, but good progress so far Challenges Variab
Slide 26: Full Year Outlook
Full Year Outlook Magnus Nicolin Chief Executive Officer 26
Slide 27: Keys to H2 Success
F’14 – Keys to H2 Success Our expectation for H2 performance is based upon: Continued modest improvement in US and Eurozone economies Emerging markets mixed. Softness continuing (Russia, Turkey, Brazil, Argentina) Acceleration in NPD sales, based on strong pipelines Turn around in Sexual Wellness in
Slide 28: F'14 Guidance
F’14 H1 – F’14 Guidance As previously guided when announcing the BarrierSafe acquisition, Ansell reconfirms: – Reported F’14 EPS expected to be in the range of US$1.10 to US$1.16 – including a positive impact of Net Deferred Tax Asset/Non Operational Tax (DTAs/NOTIs) adjustments of US3¢ - US5¢ 28