Slide 1: Final Results for the year ended 30 September 2018
FINAL RESULTS for the year ended 30 September 2018 Daemmon Reeve, Chief Executive Officer Richard Hope, Chief Financial Officer
Slide 2: Executive Summary
EXECUTIVE SUMMARY First year of 5 year strategy delivered Solid sales growth across all product categories Strong EPS growth from continuing activities Capital investment programme progressing well Disposal of Earthoil Plantations 2
Slide 3: Results at a Glance
RESULTS AT A GLANCE Profit Earnings Revenue2 Before Tax1,2 per Share1,2 Dividend 10.8% 8.1% 9.8% 6.3% £112.2m £12.6m 18.02p 5.10p Revenue £’m Profit Before Tax1 £’m Net Operating Margin1 / Return on Capital Employed1 140 14 30.0% 120 12 £6.8m 24.6% 25.0% £6.9m 22.1% 22.1% £58.6m 100 10 19.4% 19.9% £
Slide 4: 2018 Financial Review: Income Statement
2018 FINANCIAL REVIEW INCOME STATEMENT Year ended 2018 2017 Change Key Points 30 September £’000 £’000 % Revenue 112,163 101,250 +10.8% 1. Revenue growth in constant currency – 14.1% Gross profit 27,756 25,265 +9.8% 2. Margins impacted by FX and new business at Gross profit % 24.7% 25.0% -0.3% i
Slide 5: 2018 Financial Review: Cash Flow
2018 FINANCIAL REVIEW CASH FLOW Year ended 2018 2017 Key Points 30 September £’000 £’000 Operating cash flow 16,243 16,017 1. £10m increase in receivables – strong end to Increase in inventories (1,175) (13,607) year plus longer terms from major customers Increase in trade and other receivables (9,9
Slide 6: 2018 Financial Review: Balance Sheet
2018 FINANCIAL REVIEW BALANCE SHEET As at 30 September 2018 2017 Key Points Goodwill - £2.7m 1. Fixed asset increase – US expansion Fixed assets £20.8m £15.4m 2. Inventory levels steady Inventories £39.6m £42.9m 3. Significant increase in debtors Debtors £28.8m £20.0m Creditors (£15.3m) (£17.8
Slide 7: Strategic Update
STRATEGIC UPDATE
Slide 8: Strategic Focus: Core Product Areas
STRATEGIC FOCUS CORE PRODUCT AREAS % Growth in Sales – 2017 v 2018 70 63% 60 50 40 30 20 10 8% 9% 0 Citrus Tea Sugar Reduction New FMCG business wins Growth in market share 8
Slide 9: Routes to Market and Geographical Breakdown of Sales
ROUTES TO MARKET GEOGRAPHICAL BREAKDOWN OF SALES Direct Indirect 2017: 2% 4% 2% 3% 2017: 2% 2017: 3% 2017: 4% 3% 2017: 35% 35% 37% 2017: 39% 2017: 22% 24% 53% 2017: 48% 2017: 5% 5% 2017: 19% 12% 2017: 7% 7% 10% 2017: 9% 6% 2017: 7% Indirect via Flavour Houses Personal Care Beverage Chemicals US UK G
Slide 10: Strategic Focus
STRATEGIC FOCUS 5-year growth plan driven by citrus, sugar reduction and tea: US expansion progressing well – on time and on budget Performance culture and employee engagement strategy – recognition through winning awards Important business wins with global beverage companies Increased investment in
Slide 11: US Expansion
US EXPANSION $14m capacity driven expansion Support growth in tea and sugar reduction Enhancing technical and R&D capabilities On-time, on budget – construction to be completed by end of 2018 with operations commencing in early 2019 11
Slide 12: UK Enhanced Capabilities
UK ENHANCED CAPABILITIES £35m project – ROI 10-15% 3 years after completion Construction work expected to commence mid 2019 with completion mid 2020 Improved client interaction Multiple operational efficiencies Technical/Technical collaboration Site logistics Heightened customer experience of Treatt
Slide 13: Sale of Earthoil Plantations
SALE OF EARTHOIL PLANTATIONS Identified as non-core to group activities Consideration of £11.3m in cash Deferred payment of 10% due June 2019 Transitional services agreement ends 30 November 2018 Strengthened balance sheet & provides growth capital 13
Slide 14: Current Trading & Outlook
CURRENT TRADING & OUTLOOK Steady start to new financial year Encouraging opportunity pipeline US expansion due to complete end 2018 / fully operational early 2019 The Group continues to perform in line with the Board’s expectations for the full year 14
Slide 15: Appendix
APPENDIX
Slide 16: Product Categories
PRODUCT CATEGORIES Citrus Sugar Reduction Tea Fruit & Vegetable Herb, Spice & Floral Aroma & HICs Treatt’s largest Natural flavour of Natural tea flavours Aqueous distillates – 100% natural Extensive portfolio of product category sugar – without carbs 100% natural ingredients made speciality high im
Slide 17: Interim/Final Earnings per Share
INTERIM/FINAL EARNINGS PER SHARE1 2014-2018 “Consistent Profitable Growth” 20 18 9.44p 16 9.83p 14 12 8.12p 7.51p 10 6.07p 8 8.58p 6 6.58p 4 4.72p 3.88p 4.21p 2 0 2 2 2014 2015 2016 2017 2018 1H 2H 17 1 Excludes exceptional items 2 Excludes discontinued activities
Slide 18: Interim/Final Dividend
INTERIM/FINAL DIVIDEND 2008-2018 “Progressive Dividend Policy” 6 5 3.50p 3.35p 3.00p 4 2.76p 2.60p 2.60p 3 2.08p 1.94p 1.78p 1.66p 2 1.52p 1.60p 1.35p 1.45p 1 1.24p 1.28p 1.02p 1.10p 0.96p 0.72p 0.74p 0.82p 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H 2H 18
Slide 19: Treatt
U TREATT