Treatt Plc · LSE:TET
Treatt — FY2015 Earnings Presentation
19 slides from Treatt's earnings presentation, December 2015
Slide 1: Preliminary Results for the year ended 30 September 2015
Preliminary Results for the year ended 30 September 2015 Daemmon Reeve Chief Executive Officer / Richard Hope Finance Director www.treatt.com
Slide 2: Agenda
Agenda > Our Products > Results at a glance > Executive Summary > Key Performance Indicators > Financial Review > Commercial Review > Future Developments > Current Trading & Outlook www.treatt.com Preliminary Results – December 2015 2
Slide 3: Our Products
Our Products Wellness Natural & Aroma Chemicals Solutions for lower calorie and Our range of aroma, natural and health-conscious products, as high impact specialty chemicals formulators seek to reduce the sugar work well in a number of flavour and content in their products, whilst fragrance applicat
Slide 4: Results at a Glance
Results at a Glance Revenue £'m 90 Year ended 30 September 2014 2015 80 £44.5m £42.1m 70 Revenue £79.2m £85.9m £38.7m £38.0m £40.5m 60 £35.6m 50 EBITDA* £9.0m £10.1m 2H 40 £41.4m 1H 30 £35.8m £36.0m £37.1m Profit before tax * £6.9m £8.0m 20 £27.7m £33.6m 10 Earnings per share * 10.0p 11.9p 0 2010 20
Slide 5: Executive Summary
Executive Summary > 2012 three year strategic plan objectives delivered > Good revenue growth across all product sectors > Strongest growth from FMCG customers > Free cash flow – up by £4.9m to £6.2m > Operating margin greater than 10% - highest for 10 years > Strategic new business wins in wellness
Slide 6: Key Performance Indicators
Key Performance Indicators 15% 20% 2015 £8.0m 2015 11.9p 2014 £6.9m 2014 10.0p Profit Before Tax Earnings per share 2014 2015 Net operating margin 9.6% 10.1% Return on capital employed 19.9% 22.1% Average net debit to EBITDA 0.99 x 0.78 x www.treatt.com Preliminary Results – December 2015 6
Slide 7: 2015 Financial Review: Income Statement
2015 Financial Review Income Statement 2014 Change 2015 Key Points £'000 % £'000 1. Underlying sales growth of 6% Revenue 79,189 +8.5% 85,934 Gross Profit 17,971 18,979 2. Margins slightly down due to long-term contracts Gross Profit % 22.7% 22.1% Administrative expenses (10,343) (10,289) 3. Exc
Slide 8: 2015 Financial Review: Cash Flow
2015 Financial Review Cash Flow 2014 2015 £'000 £'000 Key Points Net cash from operating activities 1,976 7,198 Cash flow from investing activities • Free cash flow: +£6.2m (2014: +£1.2m) Purchase of property, plant and equipment (538) (924) • Improved inventory turn Purchase of intangible assets (2
Slide 9: 2015 Financial Review: Balance Sheet
2015 Financial Review Balance Sheet As at 30 September 2014 2015 Key Points Goodwill £1.1m £1.1m 1. Inventory levels reduced due to Fixed Assets £11.7m £11.7m improved stock turn efficiencies Inventories £28.0m £25.8m 2. Debtors higher due to strong sales Debtors £14.5m £17.6m in Q4 Creditors (£
Slide 10: Interim/Final Earnings per Share
Interim/Final Earnings per Share 2010-2015 14p 12p 7.73p 10p 6.07p 8p 3.36p 5.78p 4.88p 6p 4.22p 5.14p 4p 4.21p 3.88p 2p 2.82p 1.88p 2.02p p 2010 2011 2012 2013 2014 2015 MONTHS 1H 2H www.treatt.com Preliminary Results – December 2015 10
Slide 11: Interim / Final Dividends
Interim / Final Dividends 2007-2015 5p 4p 2.76p 2.60p 2.60p 3p 2.08p 1.94p 1.78p 1.66p 2p 1.46p 1.52p 1p 1.24p 1.28p 1.02p 1.10p 0.96p 0.74p 0.82p 0.70p 0.72p p 2007 2008 2009 2010 2011 2012 2013 2014 2015 MONTHS 1H 2H www.treatt.com Preliminary Results – December 2015 11
Slide 12: Commercial Review
Commercial Review > Growth in R&D investment – short and long term product innovation > New business wins in wellness, beer and tea > Margin optimisation through process improvement > Delivering success through cultural change > Portfolio growth at largest customer > Additional Earthoil capacity in
Slide 13: Growth Map
Growth Map Ingredient Solutions Solving Customer Challenges R&D Sales Applications Customer Success Teams Fast Reactions Delighting Customers Unlocking Further Opportunities www.treatt.com Preliminary Results – December 2015 13
Slide 14: Customer Intimacy
Customer Intimacy www.treatt.com Preliminary Results – December 2015 14
Slide 15: Strategy 1.1
Strategy 1.1 “Grow profitability in a Happy Engaged sustainable manner to Successful Staff Team the flavour, fragrance Business and consumer goods markets” Differential Culture advantage Align behind Innovative Customer the customer solution selling intimacy need Logistics HR Marketing Planning Tech
Slide 16: Customer Industry Sectors
Customer Industry Sectors Sales 2% 1% 13% 28% 56% Flavour & Fragrance Beverage Personal Care Chemicals Pharmaceuticals www.treatt.com Preliminary Results – December 2015 16
Slide 17: Future Developments
Future Developments > Over next 2-3 years continue to invest to drive our growth > UK site relocation > Enhanced technical infrastructure in US > Increased headcount investment in revenue driving areas > China expansion www.treatt.com Preliminary Results – December 2015 17
Slide 18: UK Site Relocation
UK Site Relocation > New potential site identified > estimated £15-£20m net of disposal proceeds from our existing site > existing freehold site to be sold/redeveloped once move complete > working with property & planning consultants and local authorities to build precise plans, specifications and c
Slide 19: Current Trading & Outlook
Current Trading & Outlook > Steady start to Q1 – better than prior year > Underlying growth, but steady sales due to falling prices of some key raw materials > Strong opportunity pipeline over 18 months – 2 years > Margin improvement expected > Earthoil growth www.treatt.com Preliminary Results – De