Treatt Plc · LSE:TET
Treatt — FY2023 Earnings Presentation
33 slides from Treatt's earnings presentation, November 2023
Slide 1: Final Results for the Year Ended 30 September 2023
A u TREATT FINAL RESULTS For the Year Ended 30 September 2023 Daemmon Reeve Chief Executive Officer & Ryan Govender Chief Financial Officer
Slide 2: Disclaimer
This presentation has been prepared for information purposes only, and does not constitute an offer of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Treatt plc or any of its subsidiary companies. This pres
Slide 3: Highlights
growth of 5% growth of 14% progression in new markets performance in challenging macro conditions cash generation
Slide 4: Financial Review 2023: Return to Growth
A Ly FINANCIAL REVIEW 2023 Return To Growth
Slide 5: Financial summary
Revenue Gross profit growth encouraging despite destocking in Gross profit margin H2, 3% ahead on constant currency basis Administrative expenses(1) Adjusted Operating profit(1) improvement reflects minimal impact of FX (improved controls), operational efficiencies Adjusted Operating profit margin(1
Slide 6: Revenue by product and customer segment
are 1% up with Citrus price increases offsetting destocking, particularly in Synthetic Aroma volume decline offset by price increase growth driven by Coffee and higher sales to national beverage customers in China Heritage Premium New Total
Slide 7: Gross profit and margin
with improved controls to drive lower cost base to mitigate raw material inflation of low margin citrus 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 8: Administrative expenses and operating profit
Underlying 3yr CAGR: 14% Underlying 8% Depreciation spend increases to £2.3m at 8% relating to salaries and overheads Underlying admin in new UK site drives higher depreciation further 2019 2020 2021 2022 2023 investment in FY24
Slide 9: Net debt and inventory
is strong from the peak of £30.5m in July 2022 results in reduction in inventory volume in the year refinanced : 0.5x YE 2021 H1 2022 YE 2022 H1 2023 YE 2023
Slide 10: Group Strategy: Protect. Accelerate. Grow
A Up GROUP STRATEGY Protect. Accelerate. Grow
Slide 11: Global consumer mindsets driving growth
GLOBAL CONSUMER MINDSETS DRIVING GROWTH NATURAL, PREMIUM WAYS TO AUTHENTIC DRINKING MINIMISE IMPACT INGREDIENTS EXPERIENCES ON THE PLANET RESILIENT AGAINST MACRO-ECONOMIC BACKDROP UW TREATT 11
Slide 12: Strategic priorities and growth ambitions
Single digit growth High single digit growth Double digit growth Maintaining Launching Expanding Investing in our Driving growth Driving volume Scaling with relevance to innovative and capacity and world class with national growth to appropriate grip growing trends cost-effective growing portfolio p
Slide 13: Transformational Value Creation
Transformational Value Creation
Slide 14: Coffee growth opportunity
What: Position us as sourcing and extraction experts, unlocking further customer opportunities Why: Strong continued volume growth for a range of ready to drink applications across North America, the UK, and Europe How: Continue to innovate diverse product range, enhance capacity that will allow us
Slide 15: Expanding into national beverage brands in China
What: Expanding beyond flavour houses into national beverage Photo credit: Simona Loh – Treatt China brand owners Why: Considerable volume opportunity as growing middle class drive appetite for natural, better-for-you, cost effective beverages How: Adding value as Citrus experts, investing in labora
Slide 16: Next generation citrus extracts: TreattZest
What: The next generation of authentic, true to fruit, value-added Citrus extracts Why: Gap in premium citrus beverage market, with growing demand in the UK, Europe, North America, China, and Japan How: Innovation across extraction processes, with a wider relaunch that is aligned closely with custom
Slide 17: Looking Ahead 2024: Drive Growth Momentum
A Up LOOKING AHEAD 2024 Drive Growth Momentum
Slide 18: 2024 outlook and priorities
Growth driven by volume Normalised capex spend, Operational efficiencies Full year effect for rapid returning capex depreciation for UK site Gain wallet share of Improve inventory turn existing customers and Costs focus maintained Maintaining other admin Target 1.5x to 1.8x win in new costs, outside
Slide 19: Summary and key messages
We have returned to growth, our assets are fully invested with available capacity, and have implemented a winning strategy Profit growth driven by sales volume, with investment in sales and innovation to drive growth, new group strategy launched Commercial and innovation led strategy Driven by our w
Slide 20: Any Questions? Thank You
THANK YOU A u TREATT
Slide 21: Appendices
APPENDICES
Slide 22: Medium term targets
Growth driven by sales increase, margin focus and cost discipline Medium term target: 15% 2021 2022 2023 2024 target Capital base fully invested, growth to follow Medium term range: 15-20% 2021 2022 2023 2024 target 1 From continuing activities
Slide 23: ESG progress
of Business Leadership Team are women of permanent group employees are shareholders programme driving positive change 42% reduction in scope 1 & 2 by 2030 waste reduced, recycled, or recovered Enhanced monitoring Executive Director and management team bonus scheme subject to ESG related non-financia
Slide 24: Ten year financial record
Revenue Gross Margin Profit Before Tax 1 Earnings Per Share 1 Dividend 1 Excluding exceptional items and in the case of earnings per share the related tax effect
Slide 25: Revenue history
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 H2
Slide 26: Profit before tax history
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1 Excluding exceptional items 2 Treatt compiled consensus of four analyst forecasts for FY22 profit before tax and exceptional items
Slide 27: Margin history
2013 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 H2
Slide 28: Earnings per share history
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 H1 H2 1 2018 – 2020 EPS is shown from continuing activities
Slide 29: Balance sheet and working capital
Fixed assets reduces by £7.9m driven by Inventories strong disciplines across receivables and stock Receivables management Payables Working capital reduced to £10.4m with record cash generation in the year Taxation Net debt grew in the year by £3.4m, with Pension asset net assets per share increasin
Slide 30: Cash flow and net debt
Year ended 30 September Operating cash flow Decrease/(Increase) in inventories inflow driven by inventory Decrease/(Increase) in receivables management; reduction in receivables due to a return to (Decrease)/Increase in payables more normalised sales phasing Cash generated from/ (used in) operations
Slide 31: Revenue by customer type and region
Direct to Flavour FY23 Brand Owners Houses FY22 FY 23 FY22 Average FY18- FY22 United States Europe Rest of World FY 23 The Americas United Kingdom China 1 From continuing activities The Americas (excluding the US) (17 countries) / Rest of the World (35 countries)
Slide 32: Diverse and growing product range
Botanical ingredients are growing in With a strong and established popularity in several markets as background in citrus, our range of ‘naturalness’ continues to be an natural and synthetic products are well increasing priority aligned with consumer tastes Our synthetic aroma business continues to p
Slide 33: Shift to added-value products
progress in shift away from traded activities on dependency of traded and minimally- processed citrus continues added-value products and solutions through Science & manufacturing technologies and IP in capacity expansion and equipment in the US, and new optimised UK Headquarters provide new manufact