Slide 1: F'18 Half Year Results - December 2017
For personal use only Ansell Limited F’18 Half Year Results - December 2017 Magnus Nicolin – Chief Executive Officer Neil Salmon – Chief Financial Officer 12 February 2018
Slide 2: Disclaimer
F’18 H1 For personal use only Disclaimer The following presentation has been prepared by Ansell Limited (Ansell or the company) for information purposes only. The information contained in this presentation is a summary only and does not purport to be complete. It should be read in conjunction with A
Slide 3: Contents
For personal use only 01 Business Overview Magnus Nicolin 02 GBU & Region Performance Magnus Nicolin CONTENTS 03 Financial Report Neil Salmon 04 F’18 Outlook Magnus Nicolin 05 Appendix
Slide 4: Business Overview
For personal use only Business Overview 01 Magnus Nicolin
Slide 5: Ansell, The Safety Company
F’18 H1 For personal use only Ansell, The Safety Company LOST TIME INJURY (LTI) ANSELL GUARDIAN DRIVING VALUE ADDED SERVICES 0.8 LTIs per 100 Employees per Annum 0.7 With 500 trained staff, Ansell conducts Guardians in 15 languages, in over 40 0.6 countries. We complete ~3,000 Guardians per year wit
Slide 6: Sharper Focus; Positive Outcomes
F’18 H1 For personal use only Sharper Focus; Positive Outcomes US Dollars Millions¹ F’17 H1 F’18 H1 Continuing Discontinued² Total Group Continuing Discontinued² Total Group Sales 664.0 111.8 775.8 722.2 44.2 766.4 EBIT 81.8 22.8 104.6 63.7 414.0 477.7 Profit Attributable 53.8 16.0 69.8 66.6 361.6 4
Slide 7: Sales Gains Partially Offset By Temporarily Higher Raw Material Costs
F’18 H1 For personal use only Sales Gains Partially Offset By Temporarily Higher Raw Material Costs F’17 H1 F’18 H1 US Dollars Millions Continuing Continuing % CHANGE CC¹ % CHANGE Sales 664.0 722.2 +8.8% +6.4% EBIT 81.8 63.7 ‐22.1% ‐25.2% Adjusted EBIT Excluding Items Noted Below 81.8 84.3 +3.1% ‐2.
Slide 8: Ansell Strategy Focused on Strong Growth Drivers
F’18 H1 For personal use only Ansell Strategy Focused on Strong Growth Drivers F’18 H1 Results Summary Performance Update • Revenue growth momentum continues • Growth Brands delivering solid organic increase • Organic revenue growth1 up 4.5% (reported revenue from • Industrial Growth Brands up 9% in
Slide 9: Strong Execution of Growth Drivers Delivers Improved Organic Growth
F’18 H1 For personal use only Strong Execution of Growth Drivers Delivers Improved Organic Growth Organic Revenue Growth New Product Success +$31m Growth in F’18 H1 11% 11% 10% 9% In USD $ mil 8% 5% 3% 3% 6.0% $15.3 ‐1% 3.9% 4.5% 2.3% 2.7% $16.1 0.9% $102.6 $99.7 ‐1.6% ‐2.9% ‐3.0% $68.3 F'14 H1 F'14
Slide 10: Strong Emerging Markets Performance
F’18 H1 For personal use only Strong Emerging Markets Performance Though macro economic volatility remains a challenge within Emerging Markets (EM), Ansell’s core product, position and distribution strategies continue to drive underlying penetration and growth. F’18 H1 RESULTS1 RESULTS BY REGION1 F’
Slide 11: Strategic Model for Shareholder Value Creation
F’18 H1 For personal use only Strategic Model for Shareholder Value Creation By Being Ansell will Business Performance Targeting Differentiated Gain Share 3‐5% Organic Growth p.a. (8 dimensions) • Organically through customer focus 5‐10% EPS Growth p.a. • By acquisition Focused ROCE improving to 14‐
Slide 12: Strategy Execution Ongoing
F’18 H1 For personal use only Strategy Execution Ongoing STRATEGIC FOCUS F’18 H1 PROGRESS Drive organic growth and gain Strengthened organic growth rate market share, by being Enhanced differentiation (especially new innovation / regulatory leadership) differentiated, agile Building Emerging M
Slide 13: Delivering Targeted Results
F’18 H1 For personal use only Delivering Targeted Results MID TERM FINANCIAL GOALS F’18 H1 UPDATE COMMENT 3-5% ORGANIC GROWTH PER 4.5% Key elements of growth strategy delivering ANNUM EBIT Growth Held Back By Temporarily High Raw Material Costs 5-10% EPS GROWTH PER ANNUM 8.7% (CC) EPS Growth benefit
Slide 14: Transformation Programme Update
F’18 H1 For personal use only Transformation Programme Update PROGRAMME ANSELL TRANSFORMATION PROGRAMME OBJECTIVES SAVINGS ACHIEVED STATUS VS F’18 Costs and Savings F’20 P&L Savings >$30m AND TARGETED $M TARGET H1 Actual H2 Forecast FY Forecast Target Additional Cash Benefits > $30m SG&A $2.3 $3.8
Slide 15: GBU & Region Performance
For personal use only 02 GBU & Region Performance Magnus Nicolin
Slide 16: Healthcare GBU – Good Results Tempered by Raw Material Costs
F’18 H1 Healthcare GBU – Good Results Tempered by Raw Material For personal use only Costs SUMMARY HIGHLIGHTS F’17 H1 F’18 H1 % CC* % SALES • Organic growth +4.4% (CC growth +8.4%) Sales $338.1m $372.8m +10.3% +8.4% • Emerging markets +12.1% driven by expansion in China, MENA and SEA EBIT¹ $50.9m $5
Slide 17: Healthcare Leveraging Synergies to Accelerate Growth
F’18 H1 For personal use only Healthcare Leveraging Synergies to Accelerate Growth GREW SALES & EXPANDED GLOBAL FOOTPRINT 4.4% Overall Organic Sales Growth Increased New Product Sales 11% 12% in Emerging Markets 2.5% in Mature Markets Microflex International Gammex Glove in Gammex Sensoprene Undergl
Slide 18: Industrial GBU – Solid Momentum Continues
F’18 H1 For personal use only Industrial GBU – Solid Momentum Continues SUMMARY HIGHLIGHTS F’17 H1 F’18 H1 % CC* % SALES Sales $325.9m $349.4m +7.2% +4.4% • Organic, constant currency sales growth +4.6% • Emerging markets +12% driven by continued LAC expansion, Central & EBIT¹ $39.2m $38.4m -2.0 % -
Slide 19: Industrial Driving Growth Across Platforms
F’18 H1 For personal use only Industrial Driving Growth Across Platforms Growth Brands Continue Strong Performance +9% YoY + 8.7% YoY +17.1% YoY1 + 48% YoY1 INTERCEPT™ FORTIX™ Launching new Multi‐hazard chemical + Emerging Market Success continues (Proprietary Cut (Durable general Intercept™ Cut pro
Slide 20: Financial Report
For personal use only 03 Financial Report Neil Salmon
Slide 21: Profit & Loss Summary
F’18 H1 For personal use only Profit & Loss Summary PROFIT & LOSS Growth Discontinued: Brands Continue Total Group F’17 H1 Strong Total Group Performance Discontinued: +9% YoY F’18 H1 Transformation F’18 H1 SW Results & & major non (US$M) F’17 H1 SW Results Continuing F’18 H1 Continuing Adjusted Gai
Slide 22: Non Recurring Items Recorded in F'18 H1
F’18 H1 For personal use only Non Recurring Items Recorded in F’18 H1 Growth Brands Continue Strong Performance +9% YoY $M Sales EBIT PA EPS Notes Total Group 766.4 477.7 428.2 295.6¢ Less - Gain on Sale of Sexual Wellness (411.5) (359.9) (248.4)¢ Sale Completed Sept 2017 Less - Stub Period of Sexua
Slide 23: Profit & Loss Summary – Adjusted Comparison
F’18 H1 For personal use only Profit & Loss Summary – Adjusted Comparison PROFIT & LOSS Growth Brands F’17 H1 F’18 H1 Continue F’18 H1 Strong Performance +9% YoY (US$M). Continuing Adjusted CC % Sales 664.0 722.2 +6.4% Organic growth of 4.5% at upper end of target range, plus benefit of Nitritex acq
Slide 24: Additional Financial Disclosures
F’18 H1 For personal use only Additional Financial Disclosures Sexual Wellness Sale • Sale announced in May 2017 and settled 1 September, 2017 • Sale did not include Ansell’s 50% J/V interest in J K Ansell in India (F’18 H2 completion) • Sale price $599.2m, net after cash tax and costs, cash proceed
Slide 25: Raw Material Cost Impact
F’18 H1 For personal use only Raw Material Cost Impact SIGNIFICANT RAW MATERIAL INFLATION IN F’17 H2 IMPACTING F’18 H1; CONTINUED ENERGY & LABOUR COST INFLATION • Nitrile and Natural Rubber prices were relatively steady throughout F’18 H1 • Prices were however still higher than last year, creating a
Slide 26: Operating Cashflow Lower On Loss of SW Earnings
F’18 H1 For personal use only Operating Cashflow Lower On Loss of SW Earnings F'18 H1 660 ($M) 560 0.4 (34.5) 460 (72.5) (7.3) 360 527.1 260 497.6 440.0 160 (399.0) 60 27.2 (22.5) 76.5 (21.0) (9.2) (19.1) -40 F’17 H1 140 120 ($M) 100 (10.6) 80 (15.9) 60 127.0 (29.5) 100.5 (10.8) 40 (16.6) 4.8 10.9 2
Slide 27: Balance Sheet Flexibility Enhanced by SW Sale Proceeds
F’18 H1 For personal use only Balance Sheet Flexibility Enhanced by SW Sale Proceeds BALANCE SHEET ($M) F’17 H1 F’17 F’18 H1 Fixed Assets 244.9 217.9 228.2 Intangibles 1,058.7 1,049.8 1,042.4 Other Assets/Liabilities (81.1) (98.7) (65.8) Working Capital 339.5 308.7 323.8 Net Assets Held For Sale 0.0
Slide 28: Update vs Capital Deployment Targets
F’18 H1 For personal use only Update vs Capital Deployment Targets TARGET LEVERAGE RATIO DIVIDENDS NET DEBT 1.5 – 2.0 x EBITDA PROGRESSIVE DIVIDEND POLICY TO CONTINUE • Currently in net cash position following receipt of SW • Dividend increased again, 15th successive year of Proceeds increases Inves
Slide 29: F'18 Outlook
For personal use only F’18 Outlook 04 Magnus Nicolin
Slide 30: EPS Guidance Update
F’18 H1 For personal use only F’18 EPS Guidance Update ■ Revised F’18 EPS for continuing businesses expected in the F'18 EPS GUIDANCE range of 96-106 cents, this compares to original guidance (EPS ¢) range of 91-101 cents 106¢ ■ Underlying business performance in line with original guidance 102¢ 101
Slide 31: Takeaways
F’18 H1 For personal use only Takeaways ANSELL SHAREHOLDER VALUE CREATION MODEL KEY TAKEAWAYS • Organic growth momentum reflects solid execution. Sales growth is expected to continue • High cost commodities absorbed in F’18 H1; Limited price increases to mitigate; Much improved margin expected in F’
Slide 32: Appendix
For personal use only 05Appendix
Slide 33: Strategy: Leverage Dimensions of Differentiation
F’18 H1 For personal use only Strategy: Leverage 8 Dimensions of Differentiation STRONG BALANCE SHEET & CASH CUSTOMER INTIMACY & SAFETY FOCUS :: CONVERSION :: Selling solutions & services for improved Low gearing, strong cash conversion and performance and injury avoidance (Ansell deliberate but agg
Slide 34: FX – Revenue & EBIT Impact of FX Movements
F’18 H1 For personal use only FX – Revenue & EBIT Impact of FX Movements Change in average rates of major revenue and cost currencies Currency Impact Comment Revenue EBIT F’18 H1 vs The US$ was weaker against most revenue and cost currencies $14.9 m $7.6m F’17 H1 creating currency gains at both the
Slide 35: Ansell Fact Sheet
F’18 H1 For personal use only Ansell Fact Sheet KEY FIGURES • Booked Tax Losses at 31 December, 2017 $41.6m (Aust. $33.8m) • Unbooked Tax Losses at 31 December, 2017 $13.5m (Tax Effected) (Aust. $0.0m) • Unbooked Capital Losses at 31 December, 2017 $55.0m • Average Borrowing Cost at 31 December, 201
Slide 36: Constant Currency
F’18 H1 For personal use only Constant Currency Constant Currency The presentation of constant currency information is designed to facilitate comparability of reported earnings by restating the prior period’s results at the exchange rates applied in determining the results for the current period. Th
Slide 37: Segment History – Indicative Segments Of Continuing Businesses
F’18 H1 For personal use only Segment History – Indicative Segments Of Continuing Businesses F’13 F’14 F’15 F’16 F’17 H1 F’17 H2 F’17 F’18 H1 GBU US$m US$m US$m US$m US$m US$m US$m US$m Sales 650.2 716.5 668.5 654.8 325.9 330.0 655.9 349.4 Industrial EBIT 89.1 90.5 89.0 82.8 39.2 40.6 79.8 38.4 % Ma
Slide 38: Glossary
F’18 H1 For personal use only Glossary APAC – Australia & Pacific GBP – Great British Pound OLAC – Other Latin America & Caribbean ANZ – Australia & New Zealand GPADE – Gross Profit After Distribution Expenses OTIF – On Time In Full Order Fulfillment AUD – Australian Dollar GDP – Gross Domestic Prod
Slide 39: Ansell
Ansell 2 < © @ D = © ‘= O DH) = @ oe = © UL HyFlex’ GAMMEX Alphalec’ MICR@FLEX