Slide 1: Investor Presentation: Full Year 2015 Results
INVESTOR PRESENTATION Full Year 2015 Results 19 FEBRUARY 2016
Slide 2: Agenda
AGENDA 1. Operational Review - Colin Day 2. Financial Review - Stefan Schellinger 3. 2016 Outlook - Colin Day © 2013 ESSENTRA PLC 2
Slide 3: Operational Review
OPERATIONAL REVIEW Colin Day Chief Executive © 2013 ESSENTRA PLC
Slide 4: FY 2015: Highlights
FY 2015: HIGHLIGHTS • Positive result, despite Oil & Gas challenge in Pipe Protection Technologies ‒ Total revenue +27% @ constant FX ‒ LFL revenue +5% ex-PPT, +1% total Group • Strong underlying margin expansion offset by short-term dilution from acquisitions and PPT • Encouraging progress with Clo
Slide 5: Strong Revenue & Profit Growth
STRONG REVENUE & PROFIT GROWTH Revenue (£m) Adjusted Operating Profit** (£m) 180.0 Filter Products Distribution £303m £269m LFL: +3% LFL: +10% 160.0 +20% Group: £1,098m* +27% 140.0 LFL: +1% Ex-PPT: +5% 120.0 Specialist Technologies H&PC £136m Packaging LFL: -18% £394m Ex-PPT: +2% LFL: +2% 100.0 FY14
Slide 6: Distribution
DISTRIBUTION FY 2015 REVENUE: £269M, LFL +10%. OM -90BPS • Growth driven by organic initiatives – Continued improvement in Europe – Strong broad-based growth in Asia – Underlying improvement in execution in Americas in H2 • Encouraging progress in expanding custom injection moulding activities • Lau
Slide 7: Health & Personal Care Packaging
HEALTH & PERSONAL CARE PACKAGING FY 2015 REVENUE: £394M, LFL +2%. OM -500BPS • Accelerating momentum in H2 • Strong result in core H&PC packaging … • … supported by successful product launches … – Serialised cartons to meet regulatory change – Further tamper evidence solutions for brand protection –
Slide 8: Update on Clondalkin SPD Integration
UPDATE ON CLONDALKIN SPD INTEGRATION FROM THIS … … TO THIS 8
Slide 9: Update on Clondalkin SPD Integration
UPDATE ON CLONDALKIN SPD INTEGRATION NEWPORT, UK • Multi-million £ investment in adjacent, state- of-the-art site – Six-fold expansion in current footprint – Receiving business from four Clondalkin sites – Scope for further expansion • Significant upgrade in equipment and capability - Deliver faster
Slide 10: Filter Products
FILTER PRODUCTS FY 2015 REVENUE: £303M, LFL +3%. OM +490BPS • Underlying volumes > FY 2014 – Strong growth in special and non-standard diameter filters • Successful product roll-out and development initiatives – Innovative filters allowing greater visualisation and brand differentiation – More envir
Slide 11: Specialist Technologies
SPECIALIST TECHNOLOGIES FY 2015 REVENUE: £136M, LFL -18% (EX-PPT +2%). OM -380BPS • Result driven predominantly by impact of industry weakness on Pipe Protection Technologies – LFL ex-PPT +2% • Benefit of new contract awards, commercialisation of recent wins and geographical expansion in Porous Tech
Slide 12: PPT in Context
PPT IN CONTEXT 50 23.8 25 3,000 $120 46.4 2,500 $100 40 20 2,000 $80 30 15 £m % 1,500 $60 20 17.1 10 1,000 $40 5.6 10 5 500 $20 0 0 0 $0 Revenue Operating margin FY 2014 FY 2015 Rig counts per month Oil price Significant reduction in revenue and profit © 2013 ESSENTRA PLC © 2013 ESSENTRA PLC 12 © 20
Slide 13: Europe
EUROPE FY 2015 REVENUE: £548M, LFL +6% (+7% EX-PPT) • Strong performance in Health & Personal Care, Furniture and Industrial segments – Supported by Tobacco and Food & Drink • Expansion of metal hardware in existing and export Industrial markets – Boosted by range extensions and early success in cus
Slide 14: Americas
AMERICAS FY 2015 REVENUE: £372M, LFL -9% (+3% EX-PPT) • Growth in underlying Health & Personal Care sector – Continued success in medical foam – Portfolio and channel expansion in speciality wipes • Improved H2 execution in Industrial segment • Household boosted by commercialisation of recent busine
Slide 15: Asia
ASIA FY 2015 REVENUE: £179M, LFL +3% • Growth across majority of categories – Esp. strong in India in the Industrial sector • Mixed dynamics in Tobacco – Strong performance in flavoured and non-standard diameter filters – Joint development activity with key multinational customers – Strong growth in
Slide 16: Financial Review
FINANCIAL REVIEW Stefan Schellinger Group Finance Director © 2013 ESSENTRA PLC
Slide 17: Income Statement - Summary
INCOME STATEMENT - SUMMARY FY 15 FY 14 Growth £m £m Actual Constant FX FX Revenue 1,098.1 865.7 +27% +27% Like-for-like1 +1% Like-for-like1 ex-PPT +5% Operating profit2 171.5 142.5 +20% +20% Operating margin 15.6% 16.5% -90bps -90bps Like-for-like1 16.6% 16.5% +10bps +10bps Like-for-like1 ex-PPT 16.
Slide 18: Revenue Growth – by SBU
REVENUE GROWTH – BY SBU FY 15 FY growth FY growth £m Constant LFL1 FX Distribution 268.6 +11% +10% Health & Personal Care Packaging 394.4 +141% +2% Filter Products 302.6 +3% +3% Specialist Technologies ex-PPT 118.4 +2% +2% PPT 17.1 -65% -65% Eliminations (3.0) Group 1,098.1 +27% +1% Group – at actua
Slide 19: Operating Profit – Key Movements
OPERATING PROFIT – KEY MOVEMENTS 1 14.8 183.3 (11.8) 27.7 (6.0) 171.5 £m 4.2 0.1 142.5 FY 2014 Filters closure Currency Acquisitions Net sales Volume, mix, FY 2015 Impact of PPT FY 2015 (2014) incl synergies pricing impact efficiency Excluding volume savings PPT decrease 1Adjusted to exclude intangi
Slide 20: Operating Profit by SBU
1 OPERATING PROFIT BY SBU FY 15 Growth Margin £m Constant FX Distribution 60.3 +7% 22.4% Health & Personal Care Packaging 52.2 +71% 13.2% Filter Products 55.4 +43% 18.3% Specialist Technologies ex-PPT 18.8 -3% 15.9% PPT 1.0 -92% 5.6% Central Services (16.2) Group 171.5 +20% 15.6% Group – at actual F
Slide 21: Income Statement – Continued
INCOME STATEMENT – CONTINUED FY 15 Growth £m Actual Constant FX FX Operating profit1 171.5 +20% +20% Net finance charge (10.3) Higher net debt post-Clondalkin SPD Profit before tax1 161.2 +21% +21% Taxation (36.8) Tax rate down - Underlying tax rate 22.8% 210bps Net income1 124.4 +24% +23% Adjusted
Slide 22: Exceptional Operating Items
EXCEPTIONAL OPERATING ITEMS FY 15 £m Acquisition fees 0.2 Acquisition integration & restructuring costs 34.1 Other1 4.8 Total exceptional operating items 39.1 1 Being a charge of £11.5m associated with the closure of the Filters site in Jarrow, offset by a release of £1.9m in respect of warranty obl
Slide 23: Exceptional Operating Items (Cont.)
EXCEPTIONAL OPERATING ITEMS (CONT.) Health & Personal Care Filter Products Packaging • Integration & restructuring • Jarrow site closure – Charge = £31m – Charge = £12m • Mainly for 9 Clondalkin • Of which £7m cash cost sites to be closed – Savings = £3-4m pa from – Savings = c. £16m 2016 (US$24m) p
Slide 24: Cash Flow
CASH FLOW1 £m 220.0 34.72 (52.8) 200.0 180.0 171.5 160.0 (54.8) 140.0 120.0 98.6 (15.7) 100.0 (9.4) 80.0 (5.1) 68.4 60.0 40.0 20.0 0.0- Operating Non-cash Working Net capex Operating Tax Interest paid Pension Free cash profit1 items capital cash flow 1 contributions flow1 1 Adjusted to exclude intan
Slide 25: Net Debt Reconciliation
NET DEBT RECONCILIATION £m As at 1 January 2015 62 FX 8 As at 31 December 2015 374 Change in net debt after FX 304 Of which: Free cash flow (68) Acquisitions 305 Dividends 49 Exceptionals 22 Net cashflow from employee trust shares (4) 304 Net debt / EBITDA ratio of 1.8x NOTE: 25 Negative numbers den
Slide 26: Dividend
DIVIDEND 24.0 +13% 20.7 20.0 18.3 16.0 15.4 Pence 12.5 12.0 10.5 8.0 4.0 0.0 FY11 FY12 FY13 FY14 FY15 Dividend doubled in the last five years 26
Slide 27: 2016 Outlook
2016 OUTLOOK Colin Day Chief Executive © 2013 ESSENTRA PLC
Slide 28: 2016 Organisational Structure
2016 ORGANISATIONAL STRUCTURE FROM THIS … … TO THIS Health & Filtration H&PCP Personal Products Distribution Current H&PCP Care Filter Products Packaging Speciality Tapes Porous Tech. Component Filter Specialist Solutions Products Technologies Components PPT Extrusion Security Evolving the structure
Slide 29: 2016 Priorities & Outlook
2016 PRIORITIES & OUTLOOK Distribution H&PC Packaging • Drive further organic growth • Successfully deliver Clondalkin initiatives SPD synergies • Further improvement in North • Maintain efforts to address less American Components profitable activities • Commercialise custom injection GROUP • Contin
Slide 30: Appendices
APPENDICES © 2013 ESSENTRA PLC
Slide 31: Income Statement – Reported Basis
INCOME STATEMENT – REPORTED BASIS FY 15 Growth Actual Constant £m FX FX Adjusted operating profit 171.5 +20% +20% Intangible amortisation (31.7) Exceptional operating items (39.1) Reported operating profit 100.7 -7% -8% Net finance charge (10.3) Profit before tax 90.4 -9% -10% Taxation (21.7) - Unde
Slide 32: Revenue Growth – by Region
REVENUE GROWTH – BY REGION 1 FY 15 FY growth FY growth £m Constant LFL2 FX Europe 547.7 +31% +6% Americas 371.6 +35% -9% Americas ex-PPT 355.5 +56% +3% Asia 178.8 +4% +3% Group 1,098.1 +27% +1% Group – at actual FX +27% 1 Revenue by destination 2 At constant exchange rates, adjusted for the acquisit
Slide 33: Exchange Rates
EXCHANGE RATES Year ended 31 December 2015 Average Closing US $/£ 1.53 1.57 Euro €/£ 1.37 1.41 Impact of a one cent change per annum Op. Profit (£m) US $/£ 0.4 Euro €/£ 0.2 Year ended 31 December 2014 Average Closing US $/£ 1.65 1.56 Euro €/£ 1.24 1.28 33
Slide 34: Revised Organisational Structure FY 2015 Restated
REVISED ORGANISATIONAL STRUCTURE FY 2015 RESTATED £m Component Health & Filtration Elims. Central TOTAL Solutions Personal Products Services GROUP Care Packaging Revenue 286.2 422.6 394.4 (5.1) - 1,098.1 Operating 58.1 57.5 72.1 - (16.2) 171.5 profit Operating 20.3% 13.6% 18.3% n/a n/a 15.6% margin
Slide 35: Disclaimer
DISCLAIMER IMPORTANT LEGAL NOTICE THIS DOCUMENT IS STRICTLY CONFIDENTIAL TO THE RECIPIENT AND HAS BEEN SUBMITTED TO YOU SOLELY FOR YOUR INFORMATION. THE RECIPIENT MAY NOT REPRODUCE OR REDISTRIBUTE ANY PART OF THIS DOCUMENT TO ANY PERSON IN ANY FORM. THIS DOCUMENT AND THE PRESENTATION TO WHICH IT REL
Slide 36: Investor Presentation: Full Year 2015 Results
INVESTOR PRESENTATION Full Year 2015 Results 19 FEBRUARY 2016