Treatt Plc · LSE:TET
Treatt — H1 2019 Earnings Presentation
21 slides from Treatt's earnings presentation, May 2019
Slide 1: Daemmon Reeve, CEO and Richard Hope, CFO
Daemmon Reeve, Chief Executive Officer Richard Hope, Chief Financial Officer
Slide 2: Executive Summary
EXECUTIVE SUMMARY Half Year results for the 6 months ended 31 March 2019 A “’ Strong performance from our non-citrus categories A “’ Citrus category profits up 6%, citrus revenue down 2% ‘ Gross margin increased by 140bp A “7% increase in PBT from continuing activities A “US expansion completed and
Slide 3: Half Year Results at a Glance
HALF YEAR RESULTS AT A GLANCE Earnings per Share'2 Vi Revenue? 5794 Dividend 9 fe 6.3% 9.7% 8.35p 1.70 £56.6m “ANP Revenue £m Profit Before Tax' £m 140 15 90 10 40 5 -10 2 2 2 ie) 2015 2016 2017 2018 2019 Mon Maa 2015 201% = Mi Hall 2H 2018 1 Excludes exceptional items 2 Excludes discontinued operat
Slide 4: H1 2019 Financial Review: Income Statement
H1 2019 FINANCIAL REVIEW INCOME STATEMENT Key Points Year ended 2019H1 2018H1 Change 30 Septem £000 £000 Revenue 56625 53574 +57%0 | Gross profit 14,143 12,636 +11.9% 2. Gross profit % 25.0% 23.6% +14% @ Administrative expenses (7,832) (6,557) 8 3. Operating profit 6,311 6,079 +3.8% Operating profit
Slide 5: H1 2019 Financial Review: Cash Flow
H1 2019 FINANCIAL REVIEW CASH FLOW 2019 H1 2018 H1 £'000 £'000 Operating cash flow 6,644 8,160 Net working capital 1,733 (6,737) @ Taxation paid (2,106) (892) Net cash from operating activities 6,271 531 Cash flow from investing activities Purchase of tangible and intangible assets (4,937) (2,370) @
Slide 6: H1 2019 Financial Review: Balance Sheet
H1 2019 FINANCIAL REVIEW BALANCE SHEET As at Key Points As at 30 September 30 September 2018 |. Fixed asset increase relates to US expansion Fixed assets £24.3m £20.8m 0 2. Inventory levels reduced Inventories £37.6m £39.6m ©@ Debtors £30.7m £28.8m @ 3. Increase in debtors reflecting strong March pe
Slide 7: Strategy Update
STRATEGY UPDATE
Slide 8: Strategic Focus: Core Product Categories
STRATEGIC FOCUS CORE PRODUCT CATEGORIES 80 60 40 20 % Growth in Sales - H1 2019 v H1 2018 Sirus Sugar Reduction -2% Increasing consumer demand for natural and clean-label products Falling citrus raw material input prices 64% Fruit & Vegetables — Herb, wy & Florals Aroma & HICs ‘ Key growth opportuni
Slide 9: Strategic Focus
STRATEGIC FOCUS Strategic focus on key product categories supporting growth plan to 2022 A “ Harnessing business growth and new product opportunities from increasing consumer demand for natural and clean-label beverages Strategic growth markets: 4 us- continuing growth opportunity in Group's largest
Slide 10: US Expansion
US EXPANSION A “ $14m capacity driven expansion A “ Significant additional manufacturing capacity to meet demand and support future growth in tea and sugar reduction ‘ Modernises and expands our global technical and R&D capabilities ‘ Construction completed March 2019 / fully operational from June 2
Slide 11: UK Site Relocation
UK SITE RELOCATION £35m project - ROI 10-15% - 3 years after completion Planning permission for revised proposal granted April 2019 Construction work to commence summer 2019 with completion summer 2020 —
Slide 12: UK Enhanced Capabilities
UK ENHANCED CAPABILITIES Improved client interaction Multiple operational efficiencies A . . . A . oo ” Technical/Technical collaboration ” Site logistics A A ” Heightened customer experience of Treatt ” Automated warehousing A A ” Collaborative hub space, driving customer ” Computer-controlled stil
Slide 13: How the Customer Relationship Has Evolved 2012-2019
HOW THE CUSTOMER RELATIONSHIP HAS EVOLVED 2012 - 2019 Trading . oo. . : Trusted supplier thinking company from a trading thinking company to added value solution provider of choice | with more customer collaboration | 2017 I I I I In depth market In-house Trend research Significantly analysis / mark
Slide 14: Market Intelligence
MARKET INTELLIGENCE ORANGE Brazil Funcceius publishes its thd crep forecast Update for the 2018/2079 seaech on Tih February at 285 milion bores (nix, a 9 mix ineroase from tei second update ef 276 mix inDecemter 2018 The fina 2018/2019 forecast is scheduled fx Tot April 2019. Athan eureny no off ins
Slide 15: Social Media
SOCIAL MEDIA . “Treatt Srreatnvord Apr 12 ¥ *Davocing teas an aromatic #hlickteo, grown in West Bengal, Ina, Iti often referred to as #thechampagnecftea for its delicate taste and flavours such as rmuscatel. Its also one ofthe most expensive teas due tits unique taste and limited production corse ne
Slide 16: Current Trading & Outlook
CURRENT TRADING & OUTLOOK A “Order books comfortably up year on year A “’Core business remains strong and increasing contribution from key strategic categories A “’ Opportunity pipeline growing A “US expansion to be fully operational June 2019 A “UK construction to commence summer 2019 A “Whilst the
Slide 17: Appendix
APPENDIX
Slide 18: Product Categories
PRODUCT CATEGORIES Citrus © 6 6 $ 6 Sugar Reduction Fruit & Vegetable Herb, Spice & Floral Aroma & HICs Treatt’s largest product category Both natural and synthetic offerings create significant market opportunities Building on know-how and technical expertise for customer benefit Natural flavour of
Slide 19: Interim/Final Earnings per Share
INTERIM/FINAL EARNINGS PER SHARE’ 2015-2019 20 15 10 5 0 2015 2016 2017 2018 2019 2 2 2 Moun Mea 1 Excludes exceptional items 19 2 Excludes discontinued activities
Slide 20: Interim/Final Dividend
INTERIM/FINAL DIVIDEND 2009-2019 2.60p 1.94p ames 1.78 1.66p b es 0.96 1.02 1.10p 2009 2010 2011 2012 2013 “Progressive Dividend Policy” 3.50p 3.35p 3.00p 2.60p 1.70p 5 1.45 1.24p 1.35p 2 2014 2015 2016 2017 2018 2019 Moun Mea 20
Slide 21: Treatt
U TREATT