Mcpherson's Limited · ASX:MCP
Mcpherson's — ASX Small to Mid Cap Conference 2019
25 slides from Mcpherson's's conference presentation, Sep 5, 2019
Slide 1: McPherson's Limited presentation to the Annual ASX Small to Mid Cap Conference
ASX Release (ASX: MCP) For personal use only 5 September 2019 McPherson’s Limited presentation to the Annual ASX Small to Mid Cap Conference McPherson’s Limited (ASX: MCP) Managing Director Laurie McAllister today presented at the Australian Stock Exchange’s (ASX) Annual Small to Mid Cap Conference
Slide 2: McPherson's Limited ASX Small and Mid-Cap Conference
For personal use only MCPHERSON’S LIMITED ASX SMALL AND MID-CAP CONFERENCE Thursday 5 September 2019 Presented by Laurie McAllister, Managing Director
Slide 3: Leading supplier of Health, Wellness and Beauty products in Australasia
McPherson’s was established in 1860 and is now a leading supplier of Health, Wellness and For personal use only Beauty products in Australasia HEALTH WELLNESS BEAUTY ($4.9 Billion in 2018) ($5.7 Billion in 2018) ($6.5 Billion in 2018) Maintain the state of good health by The subjective enhancement o
Slide 4: Strategic priorities: refocus on Health, Wellness and Beauty
For personal use only 1 Refocus our business purely on Health, Wellness and Beauty 2 Revitalise our own McPherson’s brands 3 Ensure a healthy balance sheet 4 Move from transactional to strategic partnerships with our top six customers 5 Integrate and grow acquired skincare brands; Dr. LeWinn’s and A
Slide 5: Management team
For personal use only David Fielding Laurence McAllister Paul Witheridge Donna Chan Strategy, Planning & Innovation Managing Director Chief Financial Officer Marketing Director Director Lori Pirozzi Brett Owers Mary Pearce Mark Brady Sarah Tully International Sales Director Commercial Finance R&D Di
Slide 6: Board of directors
For personal use only Graham Cubbin Jane McKellar Grant Peck Chairman Non-Executive Director Non-Executive Director Geoffrey Pearce Alison Mew Laurence McAllister Non-Executive Director Non-Executive Director Managing Director 5
Slide 7: Number one market positions across categories
For personal use only #1 position in #1 position in #1 position in Australian beauty tools hair accessories cosmeceutical skincare #1 position in Aspire to grow to top 5 #1 in cotton products Bags, Wraps and Foil in natural skincare 6
Slide 8: Australia Pharmacy growth
Australia Pharmacy For personal use only Dollars Growth % YA Total Defined Pharmacy Total McP Core brands 14.0 11.9 12.0 10.8 9.6 10.0 9.0 8.0 6.0 4.0 3.1 2.7 2.0 1.2 0.4 0.0 Qtr To 16/09/18 Qtr To 16/12/18 Qtr To 17/03/19 Qtr To 16/06/19 7 Source: IRI Pharmacy Scan 6mm to 24/02/2019
Slide 9: National grocery growth
For personal use only National Dollars Growth % YA Total Grocery excl. Tobacco Mcphersons Cons Prod 12.0 10.0 9.7 8.0 6.0 6.6 5.7 4.0 1.9 2.0 1.4 2.2 0.9 0.0 -2.0 -4.0 -5.7 -6.0 -8.0 Qtr To 01/07/18 Qtr To 30/09/18 Qtr To 30/12/18 Qtr To 31/03/19 8 Source: IRI Grocery Scan Qtr to 06.01.19
Slide 10: Innovation, execution, partnerships, expansion
For personal use only INNOVATION EXECUTION PARTNERSHIPS EXPANSION • +80% increased R&D • +45% increase in • Strategic alignment • 12 New Countries in FY19 investment to fuel merchandising investment differentiation • Trading Terms optimisation • +10% increase in A&P • Building category solutions in
Slide 11: #1 Australian Cosmeceutical Brand
#1 Australian Cosmeceutical Brand Facial Skincare Pharmacy Channel For personal use only 125% Revenue Growth FY19 10 Source: IRI Market Measurement – Scan, Data to: MAT Value To 23/06/19 Australian Pharmacy: FY19 ex. Factory Sales Revenue
Slide 12: Dr. LeWinn's accelerating growth
Accelerating Growth +26% (outpacing the category 4x) For personal use only The most successful Anti-aging Core Rejuvenation The #1 NPD mask launch Reversaderm range Facial Skincare Launch 6 Masks sold every minute since launch Sales 7x versus prior relaunch +60% R4 Growth Contributing 30% to Dr. LeW
Slide 13: Create a China facing business
Create L I NaEChina S M facing O O T business HING AUSTRALIA For personal use only COMPLEX 澳大利亚 Dr. LeWinn’s Domestic vs Export Domestic Export #1 range for Dr.LeWinn’s driven by FY17 FY18 FY19 China demand 排名#1 莱文医生系列 CHINA 12 中国 Source: MCP Ex. Factory Sales Revenue
Slide 14: Access China's forecast
Access China’s Forecast Secured for $5m by year end For personal use only HAIR CARE SKIN CARE PERSONAL CARE 100,000 LSC 3pk Masks 7,000 Ageless Trinity Packs 15% Domestic Revenue Growth FY19 1313 Source: Ex. Factory FY19
Slide 15: Growth through innovation and proven clinical trials
GROWTH THROUGH INNOVATION & PROVEN CLINICAL TRIALS For personal use only Core Rejuvenation Category Expansion High Growth Mask Category Clinically proven Age Defy range Clinically proven Natural Deodorant 100% Natural Eucalyptus Fibres +182% vs YA +241% vs YA Australian Ingredients 14 14 Source: IRI
Slide 16: Beauty and hair accessories leadership
For personal use only #1 BEAUTY ACCESSORIES #2 BEAUTY ACCESSORIES #1 HAIR ACCESSORIES +$2.5M retail sales growth #1 Lash Brand during Party Season Extending Pharmacy leadership to 48% Extending market leadership to 25.2% +$808K incremental retail sales +4915 distribution points 15 Source: IRI Market
Slide 17: Multix household products
For personal use only $135M +12% #1 54% MAT Value Growth Aluminium Foil, Kitchen Tidy, of Australian Households Retail Sales Value Outpacing Category Growth 5% Garbage Bags, Baking Paper have purchased a Multix product within and Freezer Bags the last year 16 Source: IRI Market Measurement – Scan, D
Slide 18: Expand geographically with a focus on Asia
Continue to expand our presence geographically with a focus on Asia For personal use only 17
Slide 19: M&A and investment approach
For personal use only Non-Controlling Smaller Bolt On Strategic Investments Joint Ventures Significant M&A Deal Acquisition • Enhance MCP’s capacity • Access to early stage • Smaller uncomplicated deals • Well positioned to complete a and capabilities brand/technology opportunities significant M&A t
Slide 20: New ventures and investments
For personal use only • Anti-Aging Skincare • NZ Deer Milk Hero Ingredient • China & European potential • Tanning and Skincare • Targeting fast growing, high-spending Millennial consumers • Recruiting young consumers to MCP portfolio • E-Commerce • Health and Wellness focused • Target fast growing g
Slide 21: Supply chain capacity and efficiency
ADAPTABLE & AVAILABLE CAPACITY DAILY DELIVERIES STAFF RETENTION FLEXIBLE For personal use only +40% 5,000+ 80+ SIGNIFICANT HEADROOM 1,600 Australian Postcodes Tenure > 18 Years EFFICIENCY SUPPLY CHAIN COSTS HARD SAVINGS WORKING CAPITAL -40% -56% $7.5 Mill Last 2 Years Last 5 Years FUTURE TRUSTED PAR
Slide 22: FY19 results and sales breakdown
For personal use only Sales Breakdown by Reporting Category Results from continuing operations FY19 $m FY18 $m % change (excluding Coty Fine Fragrances*) 13% Total sales 210.3 196.2 7% 19% 11% Underlying EBIT 19.9 18.8 6% Underlying PBT 19.0 16.3 17% 27% 30% Underlying Profit After Tax 13.7 10.2 35%
Slide 23: Cash conversion, net debt and dividends
$m NET DEBT ($M - 30 JUNE) For personal use only DIVIDENDS (CPS) 100 14.00 80 12.00 60 2 10.00 40 77.2 Cents per share 20 49.9 8.00 36.4 2 2 2.5 6 0 9.8 7.5 6.00 2015 2016 2017 2018 2019 4.00 Cash Conversion 6 6 6 2.00 4 150% 118% 113% 117% 0.00 100% 82% FY16 FY17 FY18 FY19 77% Special Final Interim
Slide 24: High quality of FY19 earnings and FY20 guidance
For personal use only High quality of FY19 earnings indicated by: ❑ Increase in proportion of “owned brand” sales from 69% in FY18 to 76% in FY19 ❑ Reduction in proportion of sales in Grocery, increase in Pharmacy ❑ Absence of “significant items” in FY19 ❑ Very strong operating cash conversion – 117
Slide 25: Thank you and Q&A
For personal use only THANK YOU AND Q & A