Slide 1: 2021 Interim Results
C MACFARLANE GROUP 2021 Interim Results - EEE EE nn ee 1
Slide 2: Overview
Overview • Executive Summary • H1 2021 Results/Cash Flow • Business Review Packaging Distribution Manufacturing Operations • Pension Scheme • 2021 Key Actions • Conclusions • Appendix 2
Slide 3: Executive Summary
Executive Summary H1 2020 H1 2019 H1 2021 Restated* Restated* Operating profit before amortisation & impairment(‘PBITA’) £11.1m £5.5m £5.9m Profit before tax (‘PBT’) £7.8m £3.5m £3.8m • Group sales £134m, 26% growth on H1 2020 • PBITA £11.1m, 103% growth on H1 2020 ; PBT £7.8m, 121% growth on H1 202
Slide 4: Financial Summary – H1 2021
Financial Summary – H1 2021 Revenue PBT PBITA Revenue and profit ▲ ▲ ▲ 26% 121% 103% Pre-tax ROCE Bank debt Pension in surplus Returns and balance sheet ▲ ▲ 19% £8.7m £4.6m Diluted EPS Dividend cover Dividend per share EPS and dividend ▲ ▲ ▲ 112% 4.4x 0.87p 4
Slide 5: Results £m
Results £m H1 2021 H1 2020 H1 2019 Restated* Restated* Sales 133.5 105.5 107.5 Gross profit 33.9% 45.3 33.0% 34.8 30.9% 33.2 Overheads 34.2 29.3 27.3 Operating profit before amortisation and impairment 11.1 5.5 5.9 Amortisation/impairment 2.6 1.3 1.1 Operating profit 8.5 4.2 4.8 Interest 0.7 0.7 1.0
Slide 6: Cash Flow £m
Cash Flow £m H1 2021 H1 2020 H1 2019 Restated* Restated* EBIT 8.5 4.2 4.8 DA 7.1 5.4 5.4 EBITDA 15.6 9.6 10.2 Working Capital (0.4) 9.9 1.5 Lease Obligations (3.4) (3.2) (3.3) Interest (0.7) (0.6) (0.9) Acquisitions (12.2) (0.9) (2.8) Tax (2.0) (0.8) (0.9) Capital expenditure (0.9) (0.6) (1.3) Pensi
Slide 7: Profit Progression
Profit Progression Profit £m Earnings per share Pre-tax profit Basic Earnings per share 14 7.00 12 6.00 10 5.00 8 4.00 6 3.00 4 2.00 2 1.00 0 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 7
Slide 8: Packaging Distribution - Financial Overview
Packaging Distribution- Financial Overview £m H1 2021 H1 2020 H1 2019 Revenue 111.0 91.5 93.1 Gross margin 32.7% 32.2% 30.0% Overheads 27.2 24.2 22.4 PBITA 9.1 5.3 5.6 PBITA Margin 8.2% 5.8% 6.0% Net Promoter Score 50 52 46 • Results include Carters acquisition which is performing well • Organic sal
Slide 9: Packaging Distribution – Raw Material Movements
Packaging Distribution – Raw Material Movements £1,800 £600 £1,700 £575 £1,600 £550 £1,500 £1,400 £525 £1,300 £500 £1,200 £475 £1,100 £450 £1,000 £900 £425 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Polymer £/tonne £1,090 £1,137 £1,115 £1,046 £1,013 £919 £1,010 £
Slide 10: Packaging Distribution - Operational Overview
Packaging Distribution- Operational Overview • Strong demand from e-commerce retail and medical • Recovery in automotive, home & garden and electronics • Continued weak demand from high street retail and hospitality • Retail c.28% (H1 2020 c.27%) of Distribution revenue with structural shift to on l
Slide 11: Packaging Distribution – Organic Growth
Packaging Distribution – Organic Growth The Significant Six Supported by our Recent Approach Innovation Lab Customer wins Reduce damage Improve the rate speed of packing Reduce logistics Increase costs customer loyalty Reduce storage Reduce admin costs costs 11
Slide 12: Packaging Distribution - Environmental Action Plan
Packaging Distribution- Environmental Action Plan • We support our customers to make an “informed choice” about the packaging they use to reduce their environmental impact • As a distributor we are ideally placed to provide that “informed choice” • Key actions………… Launched an Environmental Impact Ra
Slide 13: Packaging Distribution – Acquisitions 2014 to H1 2021
Packaging Distribution – Acquisitions 2014 to H1 2021 EBITDA Acquisition Location Sales Placing price Integrated multiple Lane Reading £3m 5-6x N/A Network Wolverhampton £9m 5-6x Sep-14 37.5p One Bingham £5m 5x N/A Colton Teesside £3m 5x N/A Edward McNeil Glasgow £3m 5x N/A Nelsons Leicest
Slide 14: Macfarlane Design and Manufacture
Macfarlane Design and Manufacture H1 2020 H1 2019 £m H1 2021 Restated Restated Revenue 13.0 5.5 6.9 Gross Margin 42.7% 37.1% 36.3% PBITA 1.9 0.0 0.2 Sales to Distribution 27% 24% 20% % of base business excluding GWP acquisition • H1 2021 results include GWP acquisition which is performing ahead of e
Slide 15: Macfarlane Labels
Macfarlane Labels H1 2020 H1 2019 £m H1 2021 Restated Restated Revenue 11.4 9.8 8.9 Gross margin 31.5% 32.9% 30.5% PBITA 0.1 0.2 0.1 Self-Ad/Reseal-it % 44/56 53/47 50/50 • Re-sealable labels revenue 17% above H1 2020 and machinery sales higher in H1 2021 • Self-adhesive label sales down 1% versus H
Slide 16: Pension Scheme £m
Pension Scheme £m H1 2021 H1 2020 Opening (deficit) (1.5) (6.5) Ongoing accrual/Interest cost (0.1) (0.1) Contributions 1.3 1.6 Bond yield 0.55% to 1.90% (2020 0.5%) 8.1 (8.2) Investment returns (3.2) 7.0 Net effect of other assumptions 0.0 0.2 Closing surplus / (deficit) 4.6 (6.0) • Increase in
Slide 17: Pension Scheme Details £m
Pension Scheme Details £m Investments H1 2021 H2 2020 Growth assets Diversified Growth Funds 32.6 24.0 Equities 25.5 20.0 European Loan Fund 6.6 6.1 Long-term Property Fund 6.6 6.1 Matching assets Liability-driven Investments 24.9 32.7 Cash 0.3 6.8 Total investments 96.5 95.7 Liabilities Members Act
Slide 18: Profitable Growth in Packaging Distribution
Profitable Growth in Packaging Distribution Growth Proposition Capability Reduce total cost of Expertise, 3PL partnerships Retail packaging and improve and customer referrals sustainability Rationalise packaging supplier UK national network Industrial base to reduce costs and improve sustainability
Slide 19: Profitable Growth in Manufacturing
Profitable Growth in Manufacturing Growth Proposition Capability Leading-edge MOD Aerospace, Medical, Unique protection for high approved design and sector Electronics value, fragile Items expertise Re-sealable Labels Ease of opening, food waste Proven technology reduction and brand integrity Perfor
Slide 20: Conclusions
Conclusions • Strong performance in H1 2021 driven by strength of e-commerce retail and recovery of certain industrial sectors and the benefit of acquisitions • H2 2021 will be challenging with further input price inflation, continuing supply constraints and operating cost increases • Board expects
Slide 21: Macfarlane Business Case
Macfarlane Business Case Strong operating Good market Clear plans A simple and and a track companies positions with flexible record of with growth business model performance differentiated potential propositions 21