Slide 1: F'19 Half Year Results – December 2018
Ansell Limited F’19 Half Year Results – December 2018 Magnus Nicolin – Chief Executive Officer Neil Salmon – Chief Financial Officer 18 February 2019
Slide 2: Disclaimer
HALF YEAR RESULTS F’19 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 Ansell’s
Slide 3: Contents
01 Business Overview Magnus Nicolin CONTENTS 02 Financial Report Neil Salmon 03 F’19 Outlook Magnus Nicolin 04 Appendix
Slide 4: Business Overview
01 Business Overview Magnus Nicolin
Slide 5: Ansell, The Safety Company – LTIs per 100 Employees
HALF YEAR RESULTS F’19 Ansell, The Safety Company LOST TIME INJURY (LTI) ANSELL SAFETY EXPERTISE 0.8 1. Ansell safety record maintaining world class levels LTIs per 100 Employees per Annum 0.7 0.6 0.5 2. Guardian® safety solutions expanded to address complex 0.4 Chemical hazards, and the best protec
Slide 6: Sales Growth Maintained In Challenging Macro Environment; Transformation Costs Evident
HALF YEAR RESULTS F’19 Sales Growth Maintained In Challenging Macro Environment; Transformation Costs Evident In Reported EBIT & EPS STATUTORY RESULTS US Dollars Millions¹ F’18 H1 F’19 H13 Continuing Discontinued² Total Group Continuing Discontinued² Total Group Sales 722.2 44.2 766.4 725.3 ‐ 725.3
Slide 7: Financial Highlights – Delivering EPS Growth And Strong Cash Flow
HALF YEAR RESULTS F’19 Financial Highlights – Delivering EPS Growth And Strong Cash Flow. Active Capital Management KEY POINTS SALES Adjusted¹ EPS Adjusted¹ ROCE % • Organic Revenue Growth moderated to 2.1% due to weakening European $725.3m 46.1¢ 13.0% market offset by strong USA industrial growth o
Slide 8: Adjusted Margins Lower In H1 On High RM Costs
HALF YEAR RESULTS F’19 Adjusted Margins Lower In H1 On High RM Costs; Benefits In H2 Of Transformation, Price Increase & Share Buyback Driving EPS Gains Continuing Business Analysis F’18 H13 F’19 H12 US Dollars Millions Continuing Continuing % CHANGE CC¹ % CHANGE Sales 722.2 725.3 +0.4% +2.3% EBIT 6
Slide 9: Global Trading Environment
HALF YEAR RESULTS F’19 Global Trading Environment – Some Slowdown In Key Markets Offset By Continued Strength In Others US GDP AND PMI SOLID EUROZONE SHOWS SIGNS OF COOLING EMERGING MARKETS - GDP¹ Annual GDP Growth Rate1; Markit Flash US PMI2 Annual GDP Growth Rate1; Markit Flash Euro PMI2 Region 20
Slide 10: Business Performance
HALF YEAR RESULTS F’19 Balanced Capital Deployment Evident Over Last 2 Years 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 11: Transformation Program And Investments Focused On Four Of Eight Dimensions
HALF YEAR RESULTS F’19 Transformation Program And Investments Focused On Strengthening Four Of Eight Dimensions 7. Engineering, Manufacturing 1. Customer Intimacy with Safety Focus • Closed disadvantaged sites 8. • Conducting large scale chemical safety hazard STRONG 1. • Successful Vietnam, Sri Lan
Slide 12: Transformation Update - On Track to Exceed Planned Efficiencies and Savings
HALF YEAR RESULTS F’19 Transformation Update - On Track to Exceed Planned Efficiencies and Savings CAPITAL INVESTMENTS PLANT CLOSURES SG&A INFRASTRUCTURE GLOBAL SUPPLY CHAIN • Vietnam & Sri Lanka plant • Manufacturing footprint from • Actioned and generating • Plan to improve service expansions comp
Slide 13: Transformation: Increasing Annual Savings Target to $35m
HALF YEAR RESULTS F’19 Transformation: Increasing Annual Savings Target to $35m OBJECTIVES ANSELL TRANSFORMATION PROGRAM P&L savings >$30m SAVINGS COSTS AND SAVINGS Additional cash ACHIEVED AND STATUS benefits > $30m TARGETED VS F’20 Target vs TARGET¹ F’18 H1 FY F’18 F’19 H1 F’19 Forecast $m Base Ye
Slide 14: Growth Indicators Show Strong HGBU and NA Industrial
HALF YEAR RESULTS F’19 Growth Indicators Show Strong HGBU and NA Industrial Offsetting Weaker EMEA And Mixed Emerging Markets SALES SUMMARY ORGANIC GROWTH COMMENTARY EMERGING MARKET TRENDS Organic Growth Targeting to maintain organic growth in • HGBU: Encouraging results with 3.8% F’19 3‐4% range fo
Slide 15: Healthcare GBU – Sales Growth Momentum
HALF YEAR RESULTS F’19 Healthcare GBU – Sales Growth Momentum; Temporary Margin Pressures Expected To Improve In H2 SUMMARY HIGHLIGHTS F’18 H11 F’19 H1¹ % CC % SALES • Organic constant currency growth +3.8% F’18 H1: 4.4% Sales $372.8m $383.1m +2.8% +4.2% • Emerging markets +2.8% F’18 H2: 1.7% • New
Slide 16: Healthcare: Delivering on M&A strategy
HALF YEAR RESULTS F’19 Healthcare: Delivering on M&A strategy STRATEGIC FOCUS ACTIONS WINS Target assessment is focused on Nitritex: Acquired to provide full Life Science product range • Sales increased by 9% globally, opportunities to achieve: with cleanroom manufacturing & strong customer know-how
Slide 17: Industrial GBU – Strong NA Growth And Solid Margin Improvement
HALF YEAR RESULTS F’19 Industrial GBU – Strong NA Growth And Solid Margin Improvement Offsetting Weak EMEA In Q1 – With Some Recovery In Q2 SUMMARY HIGHLIGHTS F’18 H1¹ F’19 H1¹ % CC % SALES F’18 H1: 4.6% Sales $349.4m $342.2m (2.1)% +0.2% • Organic sales growth was flat for F’19 H1 F’18 H2: 5.7% • S
Slide 18: Industrial: Delivering On M&A Strategy
HALF YEAR RESULTS F’19 Industrial: Delivering On M&A Strategy STRATEGIC FOCUS ACTIONS WINS Target assessment is focused on Microgard: Acquired for its technologies, manufacturing • Adding material science capability to opportunities to achieve: capabilities and innovative range of chemical clothing;
Slide 19: Ringers Acquisition – Strong Synergies; Accelerating Growth
HALF YEAR RESULTS F’19 Ringers Acquisition – Strong Synergies; Accelerating Growth COMPANY OVERVIEW STRATEGIC RATIONALE IMPLICATIONS GLOBAL SALES $34m • Highly Synergistic • $70m Purchase Price • Fills important gap in mechanical • Anticipate growth of acquired portfolio KEY Specialty Impact Protect
Slide 20: In Summary; Strategy Progressing Well, Strengthened FY EPS Guidance
HALF YEAR RESULTS F’19 In Summary ; Strategy Progressing Well, Strengthened FY EPS Guidance F’19 H1 Results Summary Performance Update • Revenue growth momentum slower mostly due to EU & EM • Growth Brands delivering solid organic increase • Organic revenue growth1 up 2.1% • Industrial Growth Brands
Slide 21: Financial Report
02 Financial Report Neil Salmon
Slide 22: Profit & Loss Summary
HALF YEAR RESULTS F’19 Profit & Loss Summary F’18 H1 F’19 H1 Discontinued Transformation PROFIT & LOSS Total Group SW Results & Continuing & major non Adjusted Total Group Transformation Adjusted US$m Gain on Sale cash items Sales 766.4 44.2 722.2 - 722.2 725.3 - 725.3 GPADE 263.6 22.2 241.4 - 241.4
Slide 23: Non Recurring Items Recorded in F'18 H1 vs F'19 H1
HALF YEAR RESULTS F’19 Non Recurring Items Recorded in F’18 H1 vs F’19 H1 F’18 H1 F’19 H1 Growth Brands Continue Strong Performance +9% YoY US$m Sales EBIT PA EPS Notes Sales EBIT PA EPS Total Group 766.4 477.7 428.2 295.6¢ 725.3 60.7 39.5 28.6¢ Sale Completed Sept Less - Gain on Sale of Sexual Well
Slide 24: Profit & Loss Summary – Adjusted Comparison
HALF YEAR RESULTS F’19 Profit & Loss Summary – Adjusted Comparison PROFIT & LOSS Growth F’18 H1 F’19Brands H1 Continue F’19 H1 Strong Performance +9% Notes YoY US$m Adjusted Adjusted CC % CC revenue growth includes organic growth of 2.1% plus benefit of Digitcare acquisition. Solid Sales 722.2 725.3
Slide 25: Raw Material Cost Impact
HALF YEAR RESULTS F’19 Raw Material Cost Impact RAW MATERIAL COSTS IN H1 WERE NEGATIVELY IMPACTED BY THE HIGHER NITRILE PRICES • The largest raw material category is Fibres & Engineered Yarns at 32% (vs 29% in F’18 H1). • Nitrile and Natural Rubber raw materials now represent ~35% of raw material mi
Slide 26: Ansell Strong Cash Generation While Accelerating Buyback
HALF YEAR RESULTS F’19 Ansell Strong Cash Generation While Accelerating Buyback 180 130 9.9 Includes $5m for conversion (8.4) of Performance Share Rights 80 (31.2) (33.6) 106.7 85.4 (173.8) 30 (20.5) (4.9) (9.4) 50.6 F'19 H1 ‐20 ($m) ‐70 (159.4) 5.8 ‐120 ‐170 EBITDA* Working F'18 One Other Net Capex
Slide 27: Balance Sheet Strength – Improving ROCE
HALF YEAR RESULTS F’19 Balance Sheet Strength – Improving ROCE BALANCE SHEET ($M) F’18 H1 F’18 F’19 H1 KEY POINTS Fixed Assets 228.2 230.4 224.7 • Strong Balance Sheet to enable further expansion Intangibles 1,042.4 1,028.4 1,024.6 • Working Capital lower vs June F’18 from: Other Assets/Liabilities
Slide 28: F'19 Outlook
03 F’19 Outlook Magnus Nicolin
Slide 29: F'19 EPS Guidance Strengthened to Upper Half Of Previous Range
HALF YEAR RESULTS F’19 F’19 EPS Guidance Strengthened to Upper Half Of Previous Range EPS RATIONALE F’19 GUIDANCE – EPS¹¢ Revised adjusted F’19 EPS¹ guidance in the range US$1.06 to $1.12, compared to 112.0 112.0 prior range of US$1.00 to $1.12. Although external market conditions continue to be
Slide 30: Takeaways
HALF YEAR RESULTS F’19 Takeaways ANSELL SHAREHOLDER VALUE CREATION MODEL KEY TAKEAWAYS IGBU organic growth setback due to EMEA deceleration; Even so, IGBU delivered growth in ALL other regions: NA +5%, LAC +5% & APAC +9% HGBU at 3.8% delivered organic growth Mitigating plans to deliver enhance
Slide 31: Appendix
= a Ansell HyFlex GAMMEX Alphalec’ MICR@FLEX
Slide 32: Ansell Group Performance Summary–Continuing Operations
HALF YEAR RESULTS F’19 Ansell Group Performance Summary–Continuing Operations Sales Adjusted¹ EBIT Adjusted¹ Profit Attributable Adjusted¹ EPS Adjusted¹ ROCE $725.3m $87.6m $63.6m 46.1¢ 13.0% Reported 0.4% Reported 3.9% Reported 1.1% Reported 6.2% 90bps CC 2.3% CC (1.4)% CC (2.3)% CC 2.5% Organic 2.
Slide 33: FX – Revenue & EBIT Impact of FX Movements
HALF YEAR RESULTS F’19 FX – Revenue & EBIT Impact of FX Movements Change in average rates of major revenue and cost currencies Currency Impact from Continuing Operations Comment Revenue Adjusted EBIT F’19 H1 vs F’18 H1 $(13.1)m $(1.4)m The US$ was stronger against most revenue and cost currencies. N
Slide 34: Ansell Fact Sheet
HALF YEAR RESULTS F’19 Ansell Fact Sheet KEY FIGURES • Booked Tax Losses at 31 December, 2018 $32.8m (Australia $29.1m) • Unbooked Tax Losses at 31 December, 2018 $8.1m (Tax Effected) (Australia $0.0m) • Unbooked Capital Losses at 31 December, 2018 $61.1m • Average Borrowing Cost at 31 December, 201
Slide 35: Constant Currency
HALF YEAR RESULTS F’19 Constant Currency CONSTANT CURRENCY RESTATED PRIOR PERIOD (US$m) The presentation of constant currency information is designed to facilitate Prior Period Sales IGBU HGBU HO Total comparability of reported earnings by restating the prior period’s results at Reported Sales 349
Slide 36: Segment History – Continuing Businesses
HALF YEAR RESULTS F’19 Segment History – Continuing Businesses F’13 F’14 F’15 F’16 F’17 F’18 H1 F’18 H2 F’18 F’19 H1 GBU US$m US$m US$m US$m US$m US$m US$m US$m US$m Sales 650.2 716.5 668.5 654.8 655.9 349.4 366.1 715.5 342.2 Industrial EBIT 89.1 90.5 89.0 82.8 79.8 38.4 48.5 86.9 45.2 % Margin 13.7
Slide 37: Glossary
HALF YEAR RESULTS F’19 Glossary APAC – Asia Pacific FX – Foreign Exchange NRL – Natural Rubber Latex ANZ – Australia and New Zealand GBU – Global Business Unit OEI – Outside Equity Interest AUD – Australian Dollar GBP – Great British Pound OLAC – Other Latin America and Caribbean CAGR – Compound Ann
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