Slide 1: Norcros plc - Interim Results, Six months to 30th September 2008
Norcros plc - Interim Results Six months to 30th September, 2008
Slide 2: Introduction
Introduction John Brown Chairman 2
Slide 3: 2008 H1: Highlights
2008 H1 : Highlights Difficult trading environment and sharp increase in energy costs Revenue lower – 6.8% Profit before tax and exceptionals of £3.8m (2007: £6.1m) Strong focus on cost base and debt reduction Management initiatives delivering planned benefits £3.7m realised from disposal of investm
Slide 4: Financial Review
Financial Review Nick Kelsall Group Finance Director 4
Slide 5: Financial Highlights
Financial Highlights Revenue and profit • Revenue of £78.6m, -5.8% at constant currency (2007: £84.3m) • Trading profit of £4.7m, -48.4% at constant currency (2007: £9.2m) • Cost reduction measures implemented; benefits to be realised in H2 Profit before tax and exceptionals of £3.8m (2007: £6.1m) R
Slide 6: Summary Income Statement
Summary Income Statement H1 2008 H1 2007 Change £m £m £m % Revenue 78.6 84.3 - 5.7 - 6.8 Group trading profit 4.7 9.2 - 4.5 - 48.9 Exceptional operating income 0.4 - Other operating income - 0.1 Group operating profit 5.1 9.3 - 4.2 - 45.2 Share of (loss)/ profit from associates (0.4) 0.1 Net finance
Slide 7: Revenue
Revenue RoW £3.7m (£3.2m) SA £27.2m (£27.6m) Overall - £4.8m*; -5.8%* UK £47.7m (£53.5m) UK - £5.8m; -10.8% SA + £1.0m*; +3.8%* As reported - 6.8% RoW £3.7m (£3.7m) RoW flat* SA £27.2m * At constant currency (£26.2m) UK £47.7m (£53.5m) At constant currency – 5.8% 7
Slide 8: Analysis of Revenue
Analysis of Revenue - £5.7m - 6.8% - £5.7m + 3.3% + £2.8m Price/Mix + 3.3% - 9.1% £84.3m £78.6m - £7.6m Volume - 9.1% - 1.0% - £0.9m Currency - 1.0% H1 2007 H1 2008 8
Slide 9: Trading Profit Bridge
Trading Profit Bridge 2.5 £9.2m (4.1) (0.4) 0.3 (2.5) £6.9m UK (0.1) (0.1) (0.1) £4.7m £5.0m UK £2.4m SA SA £(0.1)m £(0.1)m RoW RoW £(0.2)m H1 2007 Price / Volume SA Retail SA Store Energy Costs Less RoW Exchange H1 2008 Mix Changes Expansion Disposals Costs Efficiencies 9
Slide 10: Summary Cash Flow
Summary Cash Flow 6 months 6 months 12 months September September March 2008 2007 2008 £m £m £m Cash generated from operations 4.1 10.8 13.7 Capex – Purchase of SA leaseholds - (3.8) (3.8) Capex - other (2.5) (2.6) (6.6) Disposal of businesses 4.0 - - Net asset disposals & Div’s rec’d 1.0 0.3 0.1 Fr
Slide 11: Cash conversion
Cash conversion 6 months 6 months 12 months September September March 2008 2007 2008 £m £m £m Cash generated from operations 4.1 10.8 13.7 Trading profit 4.7 9.2 16.0 Cash conversion 87% 117% 86% 11
Slide 12: Capex H1 2008
Capex H1 2008 RoW (£0.1m, 4%) Highlights • Investment in Inkjet technology - UK tiles UK • Selective investment in new product tooling (£1.3m, 52%) & efficiency improvements SA (£1.1m, 44%) • Fit out costs/ refurbishments for new & existing SA retail stores 12
Slide 13: Balance Sheet Highlights
Balance Sheet Highlights September September March 2008 2007 2008 Capex *1 2.5 2.6 6.6 Depreciation 3.0 2.8 5.5 Capex / Depreciation *1 0.8x 0.9x 1.2x Net bank debt (£m) 45.2 44.5 46.5 Net bank debt/ Ebitda 2.6x 2.0x 2.2x *1 Excludes strategic purchase of SA leaseholds 13
Slide 14: Summary
Summary Backdrop of very challenging market conditions and input cost increases Cost cutting programme and pricing actions implemented with increased benefits in H2 Continued emphasis on selective revenue generating investment to strengthen market positions Ongoing focus on cost base management and
Slide 15: Operating Review
Operating Review Joe Matthews Group Chief Executive 15
Slide 16: Market Environment
Market Environment Shower Market • Retail destocking continued • Overall market –12.2% • Electric showers –2.1% • Mixer shower –24.9% • Irish market –15.1% Tile Market • Overall UK market –10.6% • Trade holding up better than retail • Substantial excess capacity impacting prices South Africa • Tile
Slide 17: UK Revenue
UK Revenue -10.8% Triton • Overall revenue -13.7% UK -14%; Exports -12.7% • UK driven by volume decline in retail caused by destocking; trade more resilient • Leading position in electrics maintained. Mixer Triton market share increased H&R Johnson • Overall tile revenues -9.5% UK -10.2%; Exports -5
Slide 18: UK Profits
UK Profits Triton able to mitigate profit effect of market Sept 08 Sept 07 Change decline % • Flexing of cost structure • Cost reduction initiatives • New product programme Trading 5.0 6.9 -27.5 Profit (£m) • Price increases Profit margins in line with expectations and cash ROS % 10.5 12.9 -18.6 gen
Slide 19: South Africa Revenue
South Africa Revenue +3.8%* Tile Africa revenues +2.8%* • Like for like sales -8.4% • Benefits of new stores 2007/08 • 2 new stores H1; 2 new stores H2 • Disposal of Pietermaritzburg and Somerset West Johnson Tiles revenue +4.2%* TAF TAF • Lower volumes offset by price increases • Improved product o
Slide 20: South Africa Profits
South Africa Profits Tile Africa profits lower • Decline in like for like sales Sept 08 Sept 07 Change % • Cost of new store openings • Higher distribution costs Trading (0.1) 2.3* -104.3 Profit (£m) Johnson Tiles operated at a significant loss • Substantial increases in energy costs and ROS % -0.4
Slide 21: Twin-Track Strategy
Twin-Track Strategy Price / Cost Initiatives Product Development Triton Triton Agency labour reduced: -45 employees Safeguard T100. Innovative care product (May Reduction in administrative staff: -15 employees 2008) – positive feed-back Ongoing value analysis of sourced components Inscriptions. Insp
Slide 22: Outlook
Outlook Market outlook remains tough • Further softening in demand • Impact of weaker Pound and Rand Emphasis on operational efficiency and market opportunities Cost reduction actions delivering benefits; further measures in progress Capex adjusted to reflect lower demand environment Opportunities •
Slide 23: Q&A
&A Q 23 NOFCFOs