Slide 1: Full Year Results to June 2017
For personal use only ANSELL LIMITED Full Year Results to June 2017 Magnus Nicolin – Chief Executive Officer Neil Salmon – Chief Financial Officer
Slide 2: Disclaimer
Disclaimer For personal use only The following presentation has been prepared by Ansell Limited for information purposes only. The presentation may contain forward looking statements or statements of opinion No representation or warranty is made regarding the accuracy, completeness or reliability of
Slide 3: Contents
Contents For personal use only 1. Business Overview Magnus Nicolin 2. GBU Results Magnus Nicolin 3. Financial Report Neil Salmon 4. Transformation Program Magnus Nicolin 5. F’18 Outlook Magnus Nicolin 3
Slide 4: 1. Business Overview
For personal use only 1. Business Overview Magnus Nicolin 4
Slide 5: Statutory Results Showing SW As Discontinued Operation
1. BUSINESS OVERVIEW F’17 Statutory Results Showing SW As Discontinued Operation For personal use only US Dollars Millions F’16 F’17 % Total Group Continuing Discontinued² Total Group Change Sales 1,573 1,375 225 1,600 +1.7% EBIT 236.7 177.8 40.0 217.8 -8.0% Profit Attributable 159.1 147.7 -7.2% EPS
Slide 6: Encouraging Revenue Growth, Strengthening Through H2
1. BUSINESS OVERVIEW F’17 Encouraging Revenue Growth, Strengthening Through H2 For personal use only Consolidated Group including Sexual Wellness US Dollars Millions F’16 F’17 % CHANGE CC² % CHANGE Sales 1,573 1,600 +1.7% +2.6% EBIT 236.7 217.8 -8.0% -6.0% Profit Attributable 159.1 147.7 -7.2% -5.0%
Slide 7: Clear Progress Against Established Strategic Priorities
1. BUSINESS OVERVIEW F’17 Clear Progress Against Established Strategic Priorities – Transformation Agenda to Accelerate Delivery For personal use only ORGANIC GROWTH PROFITABILITY & CASHFLOW CAPITAL DEPLOYMENT Achieve growth above market Efficient manufacturing and High return capex and acquisitions
Slide 8: Summary – Progress Against Strategic Priorities
1. BUSINESS OVERVIEW F’17 Summary – Progress Against Strategic Priorities For personal use only KEY F’17 ACCOMPLISHMENTS / CHALLENGES • Organic revenue up 3.6% for the year, 6% in 2nd Half • All elements of growth strategy delivering: ORGANIC ‒ New products driving success of Growth Brands GROWTH ‒
Slide 9: Strategic Drivers of Long Term Growth Performing Well
1. BUSINESS OVERVIEW F’17 Strategic Drivers of Long Term Growth Performing Well For personal use only 25% NEW PRODUCT SALES ORGANIC GROWTH 9% EMERGING MARKETS • $416m or 26% of sales from • $258m or 16% of sales from new Achieve growth above market emerging markets (up from 24% products (up from
Slide 10: Growth Brands Driving Organic Growth
1. BUSINESS OVERVIEW F’17 Growth Brands Driving Organic Growth For personal use only SUIM Growth Brands ■ Strategic focus and investment in New Products and Brand Marketing have established leading Brand Platforms ■ In F’17, Growth Brands returned to targeted growth levels lifting total SUIM organic
Slide 11: Good Success on Key Initiatives, With Significant Additional Opportunities
1. BUSINESS OVERVIEW F’17 Good Success on Key Initiatives, But With Significant Additional Opportunities Targeted By Transformation Program For personal use only PROFITABILITY & CASHFLOW • HyFlex® insourcing driving large • Customer awards for improved Efficient manufacturing and savings and better
Slide 12: Disciplined, Balanced Approach To Capital Deployment
1. BUSINESS OVERVIEW F’17 Disciplined, Balanced Approach To Capital Deployment & Transformation To Drive ROCE Improvement For personal use only Strong Returns on Capex CAPITAL DEPLOYMENT High ROCE on Nitritex • Early performance of Nitritex High return capex and acquisitions • $18m of investments in
Slide 13: 2. GBU Results
For personal use only 2. GBU Results Magnus Nicolin 13
Slide 14: Industrial GBU – Organic Growth Accelerating
2. GBU RESULTS F’17 Industrial GBU – Organic Growth Accelerating (Continuing Business) For personal use only ANALYSIS OF SALES VARIANCES COMPARING F’17 TO F’16 SUMMARY HIGHLIGHTS Organic Constant Currency Growth 5.2% • Organic sales +5.2% (CC up 1.0%) 654.8 35.2 655.9 3.0 • Global channel partner pr
Slide 15: Industrial Innovation In Cut, Chemical, Hand and Body Protection
2. GBU RESULTS F’17 Industrial Innovation In Cut, Chemical, Hand and Body Protection For personal use only Record New Product Sales Delivered Growth Brands Up a Record 13% $ 128m+ Over $235m Over $21m Over $13m up 13% YoY up 16% YoY1 Grounded in the expansion of exclusive technology up 80% YoY1 Inte
Slide 16: Single Use GBU – H2 Fight Back
2. GBU RESULTS F’17 Single Use GBU – H2 Fight Back (Continuing Business) For personal use only ANALYSIS OF SALES VARIANCES COMPARING F’17 TO F’16 SUMMARY HIGHLIGHTS Organic Constant Currency Growth 3.1% • CC sales up 6.7% assisted by Nitritex 10.2 319.0 acquisition; 10.5 309.4 0.6 301.7 • 3.1% organ
Slide 17: Single Use GBU Continued Global Expansion
2. GBU RESULTS F’17 Single Use GBU Continued Global Expansion For personal use only Launching Differentiated Technologies Expanding Single Use Sales Internationally Building a new category of 34% 19% 38% overall growth Chemical Resistant ROW outside of NA ROW Disposable Gloves 66% 62% • Rapid growth
Slide 18: Medical GBU – Surgical Recovers
2. GBU RESULTS F’17 Medical GBU – Surgical Recovers (Continuing Business) For personal use only ANALYSIS OF SALES VARIANCES COMPARING F’17 TO F’16 SUMMARY HIGHLIGHTS Organic Constant Currency Growth 1.1% • CC sales up 1.1% on Surgical recovery 17.2 offset by declines in exams 399.6 396.3 395.2 12.8
Slide 19: Medical GBU Poised for Continued Growth
2. GBU RESULTS F’17 Medical GBU Poised for Continued Growth For personal use only CORE GROWTH BRAND SALES +7% CUSTOMER ENGAGEMENT FOCUS +10% +27% +9% +$75m NEW PRODUCT SALES growing +17% OPERATIONAL EXCELLENCE Over the last two years, surgical synthetic and powder-free capacity has increased by +3
Slide 20: Sexual Wellness GBU – Strong Final Year
2. GBU RESULTS F’17 Sexual Wellness GBU – Strong Final Year (Discontinued Business) For personal use only ANALYSIS OF SALES VARIANCES COMPARING F’17 TO F’16 SUMMARY HIGHLIGHTS Organic Constant Currency Growth 4.1% • Organic growth of 4.1% in spite of 10.7 225.2 challenges in India (demonetization),
Slide 21: Sexual Wellness GBU Strong Final Year
2. GBU RESULTS F’17 Sexual Wellness GBU Strong Final Year For personal use only +31% +21% Sales growth #1 Sales growth in Brazil NON-LATEX CONDOM in China ACROSS THE WORLD Strong portfolio Growth behind SKYN Olympics HIGHEST EVER MARKET Activation SHARES IN MAJOR MARKETS; E-commerce is now GROWTH TH
Slide 22: 3. Financial Report
For personal use only 3. Financial Report Neil Salmon 22
Slide 23: Profit & Loss Summary – Total Group
3. FINANCIAL REPORT F’17 Profit & Loss Summary – Total Group For personal use only F’17 PROFIT & LOSS (US$M) F’16 F’17 CC % Adverse FX of $13.2m, net M&A reduction of $15.0m Sales 1,572.8 1,599.7 +2.6% (Onguard divestment and French Retail and Military exits partially offset by Nitritex acquisition)
Slide 24: Fundamentals Driving Sales Growth in Mixed Environment
3. FINANCIAL REPORT F’17 Fundamentals Driving Sales Growth in Mixed Environment For personal use only Strong result from growth brands in Industrial and a return to growth in Medical surgical, partially offset by weaker Medical exam sales explaining decline in “all other” Constant Currency Growth 2.
Slide 25: Underlying EBIT Impacted By Raw Materials Inflation
3. FINANCIAL REPORT F’17 Underlying EBIT Impacted By Raw Materials Inflation For personal use only F’17 EBIT growth impacted by H2 inflation in raw material prices, as well as cycling one-off incentive reversals in F’16. Constant Currency Growth -6.0% EBIT Benefit of Sales Growth less RM Inflation 1
Slide 26: Additional Financial Disclosures
3. FINANCIAL REPORT F’17 Additional Financial Disclosures For personal use only Sexual Wellness Sale • Sale announced in May 2017 and expected to settle no later than 30 September, 2017 • Sale does not include Ansell’s 50% J/V interest in J K Ansell in India, nor patent infringement litigation • Sal
Slide 27: Raw Material Cost Impact in F'17 Was $12m
3. FINANCIAL REPORT F’17 Raw Material Cost Impact in F’17 Was $12m For personal use only SIGNIFICANT RAW MATERIAL INFLATION IN H2 AND CONTINUED ENERGY & LABOUR COST INFLATION • Nitrile and Natural Rubber prices increased significantly in price during the year, with some moderation at year end. Price
Slide 28: Balance Sheet Strength Sustained Through M&A And Buyback Activity
3. FINANCIAL REPORT F’17 Balance Sheet Strength Sustained Through Continued M&A And Buyback Activity. Leverage At Low End Of Targeted Range For personal use only BALANCE SHEET ($M) F’16 F’17 Fixed Assets 245.0 217.9 Intangibles 1,077.3 1,049.8 Other Assets/Liabilities (105.5) (98.7) Working Capital
Slide 29: Enhanced Return Profile on F'17 Capital Expenditure
3. FINANCIAL REPORT F’17 Enhanced Return Profile on F’17 Capital Expenditure With Focus On Attractive Growth And Profit Improvement Initiatives For personal use only F'17 Capital Expenditure reduced on completion of several significant profit improvement and IT system projects. Expansion expenditure
Slide 30: Continued Strong Cash Flow Generation
3. FINANCIAL REPORT F'17 Continued Strong Cash Flow Generation For personal use only F'17 350 ($M) 300 250 (9.1) 0.0 (1.6) 200 (48.9) 150 262.7 (21.3) 253.6 253.6 252.0 252.0 (35.8) (60.7) 100 203.1 181.8 50 146.0 146.0 (60.7) 14.9 0 29.2 (56.1) (8.7) (5.6) 14.9 F’16 350 11.8 ($M) 300 250 (6.7) 200
Slide 31: 4. Transformation Program
For personal use only 4. Transformation Program Magnus Nicolin 31
Slide 32: Continuing the Ansell Journey
F’18 TRANSFORMATION Continuing the Ansell Journey For personal use only • Significant reshaping work successful particularly in strengthening platform for sustained growth • New transformation program to further invest behind growth while delivering substantial manufacturing and supply chain benefit
Slide 33: Portfolio Review and Reorganization
F’18 TRANSFORMATION Portfolio Review and Reorganization For personal use only • Transformation announced in July 2017, organized around four priorities: – A simplified, lower cost organization structure that is more agile and responsive to customer needs – Global supply chain excellence – Increased
Slide 34: Accelerated Investment for Growth & Productivity
4. TRANSFORMATION F’18 TRANSFORMATION Accelerated Investment for Growth & Productivity For personal use only Transformation total cash investment of $70-100m over 3 years KEY INITIATIVES KEY INITIATIVES 2 GBUs Industrial & Healthcare Smaller flexible dipping lines Simplified, lower cost organization
Slide 35: 5. F'18 Outlook
For personal use only 5. F’18 Outlook Magnus Nicolin 35
Slide 36: F'18 EPS Guidance
5. F’18 OUTLOOK OUTLOOK F’18 EPS Guidance For personal use only ■ Underlying F’18 EPS for continuing F'18 EPS GUIDANCE – CONTINUING BUSINESS businesses expected in the range of (EPS ¢) 91-101 cents ■ Selling price increases expected to cover additional RM cost inflation in F’18 vs F’17 102¢, ■ 3 to
Slide 37: Take-aways
5. F’18 OUTLOOK OUTLOOK Take-aways For personal use only • Improved organic growth momentum is encouraging. Expect it to continue • Portfolio review a significant positive for Ansell ‒ Good outcome on SW ‒ Significant potential available with B2B portfolio benefiting from sharper focus • Excellent e
Slide 38: Appendix
For personal use only Appendix 38
Slide 39: Regional Performance
APPENDIX F’17 APPENDIX 1 Regional Performance For personal use only F’17 v F’16 > +5% 0% to 5% < 0% SALES $1,599.7m +2.0% Segment EBIT $229.9m -3.0% MED IND SU SW Total MED IND SU SW Total NA NA LAC LAC EMEA EMEA APAC APAC TOTAL TOTAL • NA Industrial up after excluding Onguard divestment impac
Slide 40: FX – Revenue & EBIT Impact of FX movements
APPENDIX F’17 APPENDIX 2 FX – Revenue & EBIT Impact of FX movements For personal use only Change in average rates of major revenue and cost currencies Currency Impact Comment Revenue EBIT Revenue lower on strengthening US$ vs major revenue currencies partially F’17 vs F’16 ~$(13)m ~$(3)m offset at E
Slide 41: Segment History
APPENDIX F’17 APPENDIX 4 Segment History For personal use only F’10 F’11 F’12 F’13 F’14 F’15 F’16 F’17 GBU 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 Industrial EBIT For F’10-F’12, 89.8 93.6 92.7 89.0 79.8² % Margin Single Use & Industrial are 13.8% 13.1% 13.9% 13.6%
Slide 42: Segment History – Indicative Segments Of Continuing Businesses
APPENDIX F’17 APPENDIX 5 Segment History – Indicative Segments Of Continuing Businesses For personal use only F’13 F’14 F’15 F’16 F’17 GBU US$m US$m US$m US$m US$m Sales 650.2 716.5 668.5 654.8 655.9 Industrial EBIT 89.8 93.6 92.7 89.0 79.8¹ % Margin 13.8% 13.1% 13.9% 13.6% 12.2% Sales 349.5 419.9 4
Slide 43: Ansell Fact Sheet
APPENDIX F’17 APPENDIX 6 Ansell Fact Sheet For personal use only KEY FIGURES • Booked Tax Losses at 30 June, 2017 $36.7m (Aust. $35.1m) • Unbooked Tax Losses at 30 June, 2017 $13.8m (Tax Effected) (Aust. $0.0m) • Unbooked Capital Losses at 30 June, 2017 $54.8m • Average Borrowing Cost at 30 June, 20
Slide 44: Constant Currency
APPENDIX F’17 APPENDIX 7 Constant Currency For personal use only Constant Currency The presentation of constant currency information is designed to facilitate comparability of reported earnings by restating the prior period’s results at the exchange rates applied in determining the results for the c
Slide 45: Glossary
APPENDIX F’17 APPENDIX 8 Glossary For personal use only APAC – Australia & Pacific IND – Industrial GBU ANZ – Australia & New Zealand IT – Information Technology AUD – Australian Dollar LAC – Latin America & Caribbean CAGR – Compound Annual Growth Rate M&A – Mergers & Acquisitions Capex – Capital Ex
Slide 46: For personal use only
For personal use only 46