Slide 1: Ansell Limited Full Year Results 30th June 2013
Ansell Limited Full Year Results 30th June 2013 Magnus Nicolin – Chief Executive Officer Neil Salmon – Chief Financial Officer August 20, 2013
Slide 2: Disclaimer
Disclaimer The following presentation has been prepared by Ansell Limited for information purposes only. The presentation may contain forward looking statements or statements of opinion No representation or warranty is made regarding the accuracy, completeness or reliability of the forward looking s
Slide 3: F'13 – Results Summary
F’13 – Results Summary Statutory Result in Results in Operating Australian Dollars Currency – US Dollars F’12 F’13 F’12 F’13 A$M A$M US$M US$M Sales 1,218.3 1,340.0 1,255.3 1,372.8 Earnings Before Interest & Taxes (EBIT) 149.4 167.2 153.2 170.5 Profit Attributable (PA) 130.0 136.8 133.0 139.2 Earnin
Slide 4: Agenda
Agenda Business Overview - Magnus Nicolin Financial Report - Neil Salmon F’14 Outlook - Magnus Nicolin US dollars used in all slides unless otherwise specified 4
Slide 5: A Tough Year but We Gained Momentum and Finished Strongly
F’13 – A Tough Year but We Gained Momentum and Finished Strongly F’12 F’13 Change Sales ($M) 1,255 1,373 + 9% EBIT ($M) 153 171 + 11% PA ($M) 133 139 + 5% EPS (¢) 1.01 1.07 + 5% Free Cash ($M) 97 128 + 32% 5
Slide 6: External Environment a Headwind Throughout F13
F’13 – External Environment a Headwind Throughout F13 Foreign Exchange Impact Net Raw Material Costs Manufacturing costs (Labour, utilities, water) Global economy (weighted average) Competitive pressure up Government financial health (healthcare and defence spend) 6
Slide 7: Strong Revenue and Profit Growth Through Delivery Against Strategic Objectives
F’13 – Strong Revenue and Profit Growth Delivered Through Successful Delivery Against Strategic Objectives Successful M&A transactions Significant NPD launches and early wins Solid portfolio optimization with GPADE up 120 BPS Improving manufacturing productivity and capability Continued Em
Slide 8: Results Overview: Positives and Progress
F’13 – Results Overview Positives Progress Very solid development of the Industrial Oracle – Now stable in NA. Final business enhancements to improve efficiency in The Specialty Markets business delivered progress improved returns SAP – To realise synergies quickly at lower Medical busines
Slide 9: All GBUs Achieved EBIT Growth; Regional Sales
F’13 – All GBUs Achieved EBIT Growth. By Region, North America Sales Lower. But All Regions and GBUs Improving strongly in 2H F’13 v SEGMENT SALES $1,372.8m 9.4% 9.4% F’12 EBIT $179.0 MED IND SM SW Total MED IND SM SW Total NA LAC EMEA AP Total > +5% From 0% to +5% < 0% 9
Slide 10: Successful M&A Transactions, Delivering In Line With Expectations
F’13 – Successful M&A Transactions, Delivering In Line With Expectations Even In Challenging External Environment Four transactions completed including the largest deal since 1995 Cost and cash-flow synergies better than plan These transactions collectively contribute to EBIT in line with the
Slide 11: Strong New Product Launches
F’13 – Strong New Product Launches Launch Rate nearly 7 times 50 higher than in Number of New Product Launches 2010 45 40 35 30 25 20 15 10 5 0 2010 2011 2012 2013 11
Slide 12: Improving Manufacturing Profitability & Capability
F’13 – Improving Manufacturing Profitability & Capability “Lean” is delivering significant productivity benefits in F’13 More importantly, these continuous improvement capabilities are yielding strong recurring benefits New material and manufacturing technologies increasingly provide manufactu
Slide 13: Continued Emerging Markets Expansion
F’13 – Continued Emerging Markets Expansion Growth YOY 17% (8% excluding acquisitions) Russia Other EMEA • Growth YOY + 14% • Growth YOY + 8% • 4% of global sales China • 5% of global sales • Growth YOY + 14% (CIS, Turkey, • 4% of global sales Poland, CEE) India • Growth YOY + 14% Latin America & •
Slide 14: Strong EPS/Dividend Growth and Share Price Appreciation
F’13 – Strong EPS/Dividend Growth and Share Price Appreciation Continued in F13 140 40 120 35 100 30 25 EPS (US¢) 80 20 Dividends (A¢) 60 15 40 10 20 5 0 0 F'08 F'09 F'10 F'11 F'12 F'13 75% ANSELL LIMITED NYSE 55% S&P/ASX 200 35% FTSE 100 15% -5% -25% 14
Slide 15: Industrial Overview: Solid Development
F’13 – Industrial Overview : Solid Development 41% of Revenue and 51% of Segment EBIT $M F’12 F’13 - HyFlex® 194.1 195.7 1% General Purpose/ Mechanical - Other GP/M 116.0 110.9 -4% - AlphaTec® 8.9 11.4 28% Chemical/Liquid Handling - Other Chemical /LH 69.0 68.1 -1% Comasec - 57.1 - Touch N Tuff® (TN
Slide 16: Industrial GBU New Product Development
F’13 - Industrial GBU New Product Development HyFlex® 11-927 Gloves HyFlex® 11-818 Gloves A three quarter dipped oil Ultra light weight high Repellant glove with Durability Multi purpose AnsellGrip™ Technology glove with breathable EN3 cut resistance and Coating and EN4 abrasion resistance comfortab
Slide 17: Specialty Markets: A New Profit Engine Emerging
F’13 – Specialty Markets : A New Profit Engine Emerging 17% of Revenue and 7% of Segment EBIT $M F’12 F’13 - Liquid Resist 52.8 60.0 13% VersaTouch® Food Family - Single Use 26.0 24.1 -7% - Knitted 7.4 9.3 26% - Specialty Apps 2.3 7.1 209% ActivArmr® Family - Military & First 22.2 9.9 (55)% Responde
Slide 18: Specialty Markets GBU New Product Development
F’13 - Specialty Markets GBU New Product Development Oil, Gas & Mining Vertical Retail Vertical ActvArmr® Cold Weather FR ProjeX® 97-885 General Purpose Glove Impact Glove Promotional glove designed to generate First to market flame resistant impact sales volume during late Spring season. protective
Slide 19: Medical GBU Overview: Surgical Expansion Continues
F’13 - Medical GBU Overview : Surgical Expansion Continues 25% of Revenue and 23% of Segment EBIT $M F’12 F’13 - NRL 187.9 185.9 -1% Surgical - Synthetic 44.8 52.1 16% - NRL 52.0 36.5 -30% Examination - Synthetic 52.3 52.7 1% Surgical Safety Products 19.4 22.3 15% Sales 356.4 349.5 -2% Segment EBIT
Slide 20: Medical GBU New Product Development
F’13 – Medical GBU New Product Development Gammex® Nitrile Anti Bacterial MicroTouch Denta-Glove Glove A white textured nitrile glove A world first glove designed Designed for dentistry to reduce Cross contamination Designed to avoid latex of micro organisms between Allergy concerns surfaces and Pat
Slide 21: Sexual Wellness Overview: Global SKYN Expansion
F’13 – Sexual Wellness Overview : Global SKYN® Expansion 17% of Revenue and 19% of Segment EBIT $M F’12 F’13 Condoms Branded 167.2 174.7 4% Tenders/Private Label 26.2 28.6 9% Lube/Devices/Other 23.9 26.4 10% Sales 217.3 229.7 6% Segment EBIT 33.2 34.2 3% H1 F13=12.6% EBIT/Sales 15.3% 14.9% H2 F13=17
Slide 22: Sexual Wellness GBU – SKYN and New Products
F’13 - Sexual Wellness GBU – SKYN® and New Products Global NPD Launch - Orgazmax® SKYN® Accelerated Growth Plan Global Advertising and promotion campaign in major Cities Worldwide consisting of oversized billboards, internet, TV advertising and sampling Result - SKYN® overall Market Share in core Co
Slide 23: F'13 Results – Neil Salmon, CFO
F’13 - Results Neil Salmon Chief Financial Officer 23
Slide 24: Sales Growth in Core Products offset by Line Rationalisation and FX
F’13 – Sales Growth in Core Products offset by Line Rationalisation and FX EBIT Up 11% On Acquisitions & Improved GPADE 1,255 130 1,373 (16) 23 (20) Sales $M F'12 Line Core FX Acquisitions F'13 Rationalisation Product Rates Growth 18 (7) (1) 11 171 153 (3) EBIT $M F'12 GPADE S&M R&D G&A M&A F'13 24
Slide 25: Solid EPS Growth of 5% on Higher EBIT
F’13 - Solid EPS Growth of 5% on Higher EBIT, Partly Offset By Higher Interest and Tax Rate Profit & Loss ($M) F’12 F’13 Notes Sales 1,255.3 1,372.8 Sales up 9%, FX Adjusted Organic Growth 1% 1 GPADE 457.9 517.4 Margin up 300 bps since F’11 SG&A (304.7) (346.9) Includes $30.8m from acquisitions 2
Slide 26: Significantly Improved Performance in H2
F’13 – Significantly Improved Performance in H2 and To Levels Not Delivered Since the Founding of Ansell H1 H2 H2 FY ‘13 $’m $’m vs. H1 $’m Sales 648.1 724.7 11.8% 1,372.8 EBIT 68.8 101.7 47.8% 170.5 PA 57.1 82.1 43.8% 139.2 FCF 48.1 79.8 65.9% 127.9 H2 Improvement Goes Beyond Typical Seasonality:
Slide 27: The 6 Major Raw Material Costs Slightly Lower
F’13 – The 6 Major Raw Material Costs Slightly Lower Key raw material costs trended downward in H1 and remained low in H2 Index US$ 30% 4.00 3.50 20% 3.00 10% 2.50 Packaging (Index) Advanced Synthetic Latex (Index) 0% 2.00 Engineered Yarns (Index) 1.50 Cotton (Lb) -10% NR Latex (wkg) 1.00 Nitrile La
Slide 28: Capital Expenditure – Investment in the Future
F’13 – Capital Expenditure – Investment in the Future US$m 45.0 ERP Oracle investment being fine 40.0 tuned. SAP being launched across EMEA 35.0 Acquisitions have added 4 plants, 30.0 SAP platform, significant new capacity Growth/expansion investments have 25.0 focused on adding new dipping lines, k
Slide 29: Base Ansell Working Capital Improved Through 2H
F’13 – Base Ansell Working Capital Improved Through 2H. WC At Acquired Entities Improving. Further Gains Targeted In F14 $M 30 June 30 June Movement F’13 vs. F’12 2012 2013 Inventory 213.4 260.0 46.6 Acquisitions 34.4 Debtors 175.9 224.3 48.4 Acquisitions 40.3 Creditors (136.7) (169.8) (33.1)
Slide 30: Balance Sheet Remains Strong
F’13 - Balance Sheet Remains Strong Balance Sheet ($m) F’12 F’13 Fixed Assets 151.2 186.7 Intangibles 391.2 541.4 Other Assets/Liabilities (15.3) (33.6) Working Capital 252.6 314.5 Net Operating Assets 779.7 1,009.0 Net Interest Bearing Debt 56.1 235.5 Shareholders’ Funds 723.6 773.5 Gearing % (NIBD
Slide 31: Strong EBIT Growth Drives Free Cash Flow
F’13 – Strong EBIT Growth Drives Free Cash Flow US$m F'13 27.0 (4.9) (39.8) 170.5 (9.2) (15.7) 127.9 (45.6) (49.5) (3.6) (208.6) (179.4) EBIT Depn Work CAPEX INT Taxes FCF Other DIV Share Acq./ Net Debt /WO Cap Issues/ Invest. Mvt. B/Back F'12 21.6 (16.8) (37.6) 153.2 (5.4) (17.8) 97.2 (38.8) (46.6)
Slide 32: Debt Maturity Profile Significantly Extended To 4.8 Years
F’13 – Debt Maturity Profile Significantly Extended To 4.8 Years (From 1.2 Years 18 Months Ago) US$M Undrawn credit lines $165m 120 Average maturity of drawn 26 28.5 debt is 4.8 years 100 40.8 Approximately 73% of all 80 50 Committed Undrawn Debt Facilities borrowings have fixed 60 Debt - Draw
Slide 33: Closing Financial Summary
F’13 – Closing Financial Summary Achievements Four acquisitions completed with integration progressing well Margin improvement on NPD success, product rationalisation, and lower RMs Guidance achieved Free cash flow excellent Challenges Global markets weak Competition Foreign Exchange h
Slide 34: F'14 Outlook – Magnus Nicolin
F’14 - Outlook Magnus Nicolin Chief Executive Officer 34
Slide 35: Ansell Value Drivers
F’13 – Ansell Value Drivers Market Leadership Ansell is No 1 or 2 globally in everything it wants to compete in Innovation Leadership Ansell is a leader in its field of innovation and has launched a stream of new products in the last two years Strong Brands Ansell has a number of globally reco
Slide 36: The Globalisation of Ansell continues
F’13 - The Globalisation of Ansell continues Growth strategy defined in 2010 was designed to globalize products, capabilities, systems and staff – this has been very successful Sales continue to expand in emerging markets, new markets, new adjacencies and new verticals while weeding and feeding
Slide 37: F'14 Outlook - Externally
F’14 – Outlook - Externally Challenging macro environment – no growth in Europe, slowing Asia Pacific Some revival and growth in North America and Latin America & Caribbean FX Volatility negatively affecting sales and to a lesser extent EBIT Continued rapid labour and utility cost in
Slide 38: F'14 Outlook - Ansell
F’14 – Outlook - Ansell Industrial - Comasec 1st full year - New products launched in F’13 benefit - Weak industrial production numbers Specialty Markets - Comasec/Hercules 1st full year - GBU developing a profitable clothing protection business - Positioned to benefit from NPD and L
Slide 39: F-14 Guidance
F’13 – F-14 Guidance Although some improvement in the global economic environment is seen in North America and Latin America / Caribbean it is being offset by weakness in EMEA and APAC Ansell therefore anticipates a challenging environment in FY 14 but still expects to deliver EBIT growth of hig