Pz Cussons Plc · LSE:PZC
Pz Cussons — H1 2013 Earnings Presentation
26 slides from Pz Cussons's earnings presentation, Nov 30, 2012
Slide 1: Interim Results
Interim Results Half year to 30 November 2012
Slide 2: Introduction
Introduction Richard Harvey Chairman 2
Slide 3: Highlights
Highlights • Operating profit growth of 13% driven by Australia improvement and robust UK performance, and despite challenges in Nigeria • Supply chain optimisation project on track with margin benefits now being seen • Construction of the palm oil refinery with Wilmar in Nigeria now complete with c
Slide 4: Financials
Financials Brandon Leigh Group Finance Director 4
Slide 5: Financial Highlights – Half Year to 30 November 2012
Financial Highlights – Half Year to 30 November 2012 Half year to Half year to Excluding exchange 30 Nov 2012 30 Nov 2011 impact Revenue £414.8m £414.0m +0.2% £425.2m +2.7% 1 Operating profit £45.3m £40.1m +13.0% £46.1m +15.0% 1 Profit before tax £44.1m £40.2m +9.7% £44.9m +11.7% 1 Effective tax rat
Slide 6: Net sales bridge
Net sales bridge + 0.2% (0.3)% 3.2% (2.7)% 414.0 414.8 H1 Net Sales 2012 Price/Mix Volume Exchange H1 Net Sales 2013 6
Slide 7: Regional Summary
Regional Summary NET REVENUE £m £m Reported Constant H1 2013 H1 2012 Growth % Currency % AFRICA 156.9 162.7 -4% -3% ASIA 81.0 76.8 5% 10% EUROPE 176.9 174.5 1% 5% TOTAL 414.8 414.0 0% 3% OPERATING PROFIT AFRICA 13.0 13.7 -5% -5% ASIA 7.9 2.1 276% 304% EUROPE 24.4 24.3 0% 2% TOTAL 45.3 40.1 13% 15% 7
Slide 8: Operating Profit %
Operating Profit % H1 2013 H1 2012 Variance AFRICA 8.3% 8.4% (0.1pp) ASIA 9.8% 2.7% 7.1pp EUROPE 13.8% 13.9% (0.1pp) TOTAL 10.9% 9.7% 1.2pp 8
Slide 9: Key Commodity Index Tracker
Key Commodity Index Tracker 240 220 200 180 160 140 120 100 80 60 May 07 Nov 07 May 08 Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12 Note: Based on prices paid by PZC Group 9
Slide 10: Regional Summary
Regional Summary Africa • Nigeria revenue and profits lower due to external factors • Revenue and profit in Ghana and Kenya ahead of the same period last year • Group’s holding in listed Nigerian subsidiary increased further from 68.8% to 69.3% Asia • Return to profitability in Australia • Continued
Slide 11: Net (Debt)/Funds Statement
Net (Debt)/Funds Statement £'m Half year to Half year to 30 Nov 2012 30 Nov 2011 Cash from operations 17.4 6.1 Defined benefit pension scheme contributions (2.8) (7.1) Returns on investments & servicing of finance* (7.8) (5.6) Taxation (5.7) (9.0) Capital expenditure (12.0) (7.5) Investment in joint
Slide 12: Net Working Capital as % of Sales
Net Working Capital as % of Sales 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 -5.0% -10.0% Africa Asia Europe Group 12
Slide 13: Financial Summary
Financial Summary • 2.7% revenue growth at constant currency (sterling flat) - Growth in UK, Poland, Indonesia and smaller markets - Decline in Australia due to restructuring and Nigeria due to trading challenges • Profit before tax and exceptional items 15% higher at constant currency (13% sterling
Slide 14: Highlights
Highlights Alex Kanellis Group Chief Executive 14
Slide 15: Africa
Cussons
Slide 16: Africa – Nigeria Macro Overview
Africa – Nigeria Macro Overview • The economic outlook for the country remains optimistic due to: - Stable naira to US dollar exchange rate - Continued government investment into the power sector - Oil production currently at 2.4-2.5 million barrels per day - No further fuel duty related impact is c
Slide 17: Africa - Overview
Africa - Overview Net Sales £156.9m vs. £162.7m (4% decline) • Nigeria’s result impacted in period by three external factors: - Social unrest in the north - Flooding in a large number of states - Fuel duty subsidy reduction earlier in the year impacted consumer disposable income • Despite challenges
Slide 18: Africa – PZ Wilmar JV Update
Africa – PZ Wilmar JV Update • Refinery completed on time and to budget – commissioning underway • First sales of refined oil will be B2B • New consumer brand to be launched by end of financial year 18
Slide 19: Asia
Cussons
Slide 20: Asia – Overview
Asia – Overview Net Sales £81.0m vs. £76.8m (5% growth) Australia • Revenue lower due to focus on fewer main brands: Radiant (Fabric Care) and Morning Fresh (Dish Care) • Return to profitability driven by business improvement initiative • Focus on growing personal care and beauty portfolios • Tradin
Slide 21: Asia – Overview
Asia – Overview Indonesia • Continued positive momentum with another period of growth in revenue and profitability • Profits slightly ahead despite Rupiah weakening 10% in period and government mandated wage increases (further increase in 2013) • Further new product launches in addition to margin im
Slide 22: Europe
Cussons
Slide 23: Europe – Overview
Europe – Overview Net Sales £176.9m vs. £174.5m (1% growth) UK – Washing & Bathing • UK Washing and Bathing division has been robust despite continued high levels of promotional activity within the trade • Imperial Leather, Carex and Original Source all performed well with further product launches d
Slide 24: Europe – Overview
Europe – Overview Cussons Mum & Me product range launched June 2012 • Internally developed Personal Care range specifically designed to take mums on journey from Bump to Baby • Investment being made across all forms of media • Further new product launches planned in addition to new distribution poin
Slide 25: Europe – Overview (cont.)
Europe – Overview (cont.) Beauty Division • Revenue and profitability ahead of prior period • St Tropez adversely affected by poor UK summer, however continued growth in US and Australia • Sanctuary continued growth boosted by new Active Reverse Skin Care range with Darcey Bussell as brand ambassado
Slide 26: Summary & Outlook
Summary & Outlook • Focus remains on driving profitable growth via: - Brand innovation and renovation - Cost optimisation in all areas of the business - New sources of growth • Nigerian market remains fragile although no further fuel duty related impact is currently being seen • Supply chain optimis