Slide 1: Pro-Pac Packaging Limited Half-Year Results 2019
Pro-Pac Packaging Limited Half-Year Results 2019 26 February 2019 Acting CEO / CFO Rick Rostolis
Slide 2: Important Information
Important Information This Presentation contains the summary information about the current activities of Pro-Pac Packaging Limited and its subsidiaries (PPG). It should be read in conjunction with PPG’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exch
Slide 3: Half-Year Performance
HALF-YEAR PERFORMANCE PP
Slide 4: Half-Year Overview
Half-Year Overview ❖ Financial Performance • Sales revenue of $257.3 million up 63% (pcp: $158.0 million) • Includes $99.5 million incremental revenue contribution from acquisitions • EBITDA1 before significant items of $17.3 million up 80% (pcp: $9.6 million) • Statutory NPAT (loss) of $144.3 milli
Slide 5: Safety
Safety ❖ Continued roll-out of safety training and reporting tools Lost Time Injury Frequency Rates across the business ❖ Focus remains on achieving goal of zero harm H1FY19 H2FY18 7.5 7.5 4
Slide 6: Financial Results Summary
Financial Results Summary H1FY19 H1FY19 H1FY18 H1FY18 % Change $A Millions Statutory Pre-significant Statutory Pre-significant From H1FY18 to H1FY19 (Pre- items1 Items significant items) Sales Revenue 257.3 257.3 158.0 158.0 +63% EBITDA/(Loss) (134.4) 17.3 (0.3) 9.6 +80% Depreciation and amortisatio
Slide 7: Industrial & Flexibles Packaging
Industrial & Flexibles Packaging ❖ Industrial & Flexibles packaging manufactures, Change sources and distributes industrial and flexible $A Millions H1FY19 H1FY18 % packaging materials and related products and Sales Revenue1,2 223.7 127.0 +76% services EBITDA1,2 ❖ First-half EBITDA adversely impacte
Slide 8: Rigid Packaging
Rigid Packaging ❖ Rigid Packaging manufactures, sources and Change $A Millions H1FY19 H1FY18 % distributes plastic containers and closures and Sales Revenue1 33.6 30.9 +9% related products and services EBITDA1 4.8 4.4 +9% ❖ Increased sales led by expansion into health and EBITDA Margin 14.3% 14.2% +
Slide 9: H1 FY19 Significant Items
H1 FY19 Significant Items ❖ Non-cash goodwill impairment charge: EBITDA $A Millions / (Loss) • Carrying values of cash generating units (CGUs) EBITDA statutory (134.4) reviewed as part of the Company’s six monthly reporting cycle Significant items Goodwill impairment 149.0 • Carrying value of goodwi
Slide 10: Cash Management
Cash Management Cash Management ❖ Operating cash flow impacted by inventory build- $A Millions H1FY19 H1FY18 up in anticipation of stronger agricultural sales Operating cash flow 6.5 22.2 ❖ Capex includes IT integration projects Total capex expenditure 3.5 4.8 ❖ Second-half working capital reduction
Slide 11: Balance Sheet Metrics
Balance Sheet Metrics Balance Sheet Funding ❖ Bank loan facility maturity - 1 November 2020 $A Millions H1FY19 FY18 ❖ Key metrics within targeted levels Net debt 98.8 101.3 ❖ Short term target to reduce gearing to 3.0x by Gearing 3.4 3.8 30 June 2019 ❖ $59.8 million capital raising supported acquisi
Slide 12: H2 Operational Priorities
H2 Operational Priorities Industrial & Flexibles ❖ Expand share into higher growth and resilient flexible food packaging market ❖ Operational efficiency program targeting: • Improved sales-effectiveness • Working capital reduction • Optimisation of procurement and distribution scale ❖ Identification
Slide 13: Growth & Strategy
GROWTH & STRATEGY 12
Slide 14: Industry Overview
Industry Overview Australian Packaging Market A$20-22 Billion1 Flexibles Rigid Fibre Packaging Packaging Packaging Other Packaging $A2bn1 $A3bn1 ❖ PPG is a segment leader in the manufacture & distribution of soft & ❖ Demand for rigid packaging driven by a growing population and a hard flexible film
Slide 15: Growth Strategy
Growth Strategy Performance Margin Mergers & Customer Sustainability Optimisation Expansion Acquisitions ❖ Implement new leadership ❖ Clear and consistent focus ❖ Leverage sales excellence ❖ Identify and engage ❖ Become a leader in and management on operational disciplines to respond to strategic M&
Slide 16: Company Footprint
Company Footprint Australia & New Zealand Sites PPG has 26 sites across Australia and New Zealand1 1 Manufacturing 2 Distribution 1 Manufacturing 1 Distribution 4 Manufacturing 2 Distribution 1 Manufacturing 1 Distribution 7 Manufacturing 4 Distribution 2 Manufacturing ___________________ 116 manufa
Slide 17: H1FY19 Acquisitions - Update
H1FY19 Acquisitions - Update PolyPak Plastics (Acquired July 2018) ❖ New Zealand specialist soft flexibles packaging manufacturer & distributor of high-quality polyethylene bags, film and tubes ❖ PolyPak holds a niche position in specific categories of the soft flexible packaging market, including c
Slide 18: A Strong Platform for the Future
A Strong Platform for the Future ❖ Strategy to transform company into a more resilient and diverse business with an objective of becoming a leader in flexible, rigid and distribution packaging ❖ Profit improvement plan (integration, scale optimisation, cost down/out) and working capital reduction in
Slide 19: H2 Trading Update & Outlook
H2 TRADING UPDATE & OUTLOOK 18
Slide 20: H2 Trading Update & Outlook
H2 Trading Update & Outlook ❖ H1FY19 EBITDA (before significant items) in line with internal expectations following 26 November 2018 trading update ❖ Anticipate sector sales growth in food and beverage markets offset by weaker contribution from agricultural ❖ New management (including appointment of
Slide 21: Appendix
APPENDIX 20
Slide 22: Reconciliation of Statutory Profit & Loss
Reconciliation of Statutory Profit & Loss $A Millions H1FY19 H1FY18 Statutory profit / (loss) before income tax (142.4) (4.0) Add: Net finance expenses 4.0 1.6 EBIT (after significant items) (138.3) (2.4) Add: Significant items 151.7 9.9 EBIT (before significant items) 13.3 7.5 Add: Depreciation and
Slide 23: Reconciliation of Statutory Cash Flows
Reconciliation of Statutory Cash Flows $A Millions H1FY19 H1FY18 Reported net cash flows (used in) / from operating activities (1.6) 14.5 Add: income tax paid 1.7 1.0 Add: Significant items (cash impact) 2.4 5.2 Add: Net finance expenses 4.0 1.5 Operating cash flow 6.5 22.2 22
Slide 24: Segment Information
Segment Information Operating Segment Results ($A Millions) before significant items Change ❖ First-half EBITDA adversely impacted by: Industrial & Flexibles H1FY19 % • Lower than anticipated agricultural sales; Revenue 223.7 +76% • Unfavourable foreign exchange movements; and • Higher input costs (
Slide 25: Gearing Reconciliation
Gearing Reconciliation $A Millions H1FY19 FY18 EBITDA H1FY18 9.5 EBITDA H2FY18 6.6 6.6 EBITDA H1FY19 17.3 EBITDA before significant items 23.9 16.1 Add: H1FY18 pre acquisition EBITDA1 8.7 Add: H2FY18 pre acquisition EBITDA2 4.2 - Add: H1FY19 pre acquisition EBITDA2 1.3 EBITDA Pro-forma 29.4 24.8 Net
Slide 26: Definitions of Non-IFRS Financial Measures
Definitions of Non-IFRS Financial Measures Capex represents capital expenditure payments for property, plant and equipment EBITDA refers to EBITDA before significant items. EBITDA is defined as earnings before net finance costs, tax, depreciation and amortisation - refer to page 5 for a reconciliati