Slide 1: F'18 Full Year Results – June 2018
Ansell Limited F’18 Full Year Results – June 2018 Magnus Nicolin – Chief Executive Officer Neil Salmon – Chief Financial Officer 20 August 2018
Slide 2: Disclaimer
FULL YEAR RESULTS F’18 Disclaimer The following presentation has been prepared by Ansell Limited (Ansell or the company) for information purposes only. The information contained in this presentation is a summary only and does not purport to be complete. It should be read in conjunction with Ansell’s
Slide 3: Contents
01 Business Overview Magnus Nicolin CONTENTS 02 Financial Report Neil Salmon 03 F’19 Outlook Magnus Nicolin 04 Appendix
Slide 4: Business Overview
01 Business Overview Magnus Nicolin
Slide 5: Ansell, The Safety Company
FULL YEAR RESULTS F’18 Ansell, The Safety Company LOST TIME INJURY (LTI) ANSELL SAFETY EXPERTISE 0.8 Innovative products and Ansell Guardian® expertise combine to keep workers safe LTIs per 100 Employees per Annum 0.7 0.6 New multi-layer single use technology Chemical Guardian® 0.5 now protectin
Slide 6: Transformational Year; Positive Outcomes
FULL YEAR RESULTS F’18 STATUTORY RESULTS Transformational Year; Positive Outcomes US Dollars Millions¹ F’17 F’18 Continuing Discontinued² Total Group Continuing Discontinued² Total Group Sales 1,374.5 225.2 1,599.7 1,489.8 57.7 1,547.5 EBIT 177.8 40.0 217.8 157.8 399.2 557.0 Profit Attributable 119.
Slide 7: Financial Highlights – EPS exceeds F'17 Total Company
FULL YEAR RESULTS F’18 Financial Highlights – EPS¹ exceeds F’17 Total Company; Dilution from SW Sale has been offset Continuing Business SALES Adjusted¹ EPS Adjusted¹ ROCE % KEY POINTS • Delivering sustainable Sales & EBIT $1,489.8m 102.0¢ 12.9% growth 8.4% Reported & 5.1% CC² 25.9% Reported & 18% C
Slide 8: Sales Gains & Margin Recovery in H2 driving EBIT & EPS Growth
FULL YEAR RESULTS F’18 Sales Gains & Margin Recovery in H2 driving EBIT & EPS Growth Continuing Business Analysis F’17 F’18 US Dollars Millions Continuing Continuing % CHANGE CC¹ % CHANGE Sales 1,374.5 1,489.8 +8.4% +5.1% EBIT 177.8 157.8 (11.2%) (13.7%) Adjusted EBIT Excluding Items Noted Below 177
Slide 9: Strategic Model for Shareholder Value Creation
FULL YEAR RESULTS F’18 Strategic Model for Shareholder Value Creation By Being Ansell will Business Performance Targeting Differentiated Gain Share 3‐5% Organic Growth p.a. (8 dimensions) • Organically through customer focus 5‐10% EPS Growth p.a. • By acquisition Focused ROCE improving to 14‐15% ran
Slide 10: Significant Capacity to Invest through Financial Flexibility
FULL YEAR RESULTS F’18 S ignificant Capacity to Invest through Financial Flexibility CAPACITY UP TO TARGET LEVERAGE RATIO DIVIDENDS TARGET NET DEBT 1.5 – 2.0 x EBITDA PROGRESSIVE DIVIDEND POLICY TO CONTINUE Current net cash position provides substantial investment Track record of dividend growth
Slide 11: Increasing Investment To Develop Ansell's Market Leadership
FULL YEAR RESULTS F’18 Increasing Investment To Develop Ansell’s Market Leadership In Innovation, Manufacturing & Supply Chain Excellence CAPEX RISING TO $60-$65M P.A. for F’19 & F’20 M&A ACTIVITY – NO MATERIAL F’18 SPEND FIRST INVESTMENT PRIORITY IS IN BASE BUSINESS TARGETING SUCCESS WITH 1‐2 BOLT
Slide 12: Transformation Program Delivering Above Plan
FULL YEAR RESULTS F’18 Transformation Program Delivering Above Plan PROGRAM OBJECTIVES ANSELL TRANSFORMATION PROGRAM P&L Savings >$30m SAVINGS ACHIEVED Costs and Savings Additional Cash Benefits AND TARGETED STATUS VS TARGET¹ F’20 Target vs > $30m $M F’18 F’19 Forecast Base Year Business Units Agile
Slide 13: Transformation Program and Investments Focused on Strengthening Three of Eight Dimensions
FULL YEAR RESULTS F’18 Transformation Program and Investments Focused on Strengthening Three of Eight Dimensions STRONG BALANCE SHEET INDUSTRY LEADING CUSTOMER INTIMACY & CASH CONVERSION & SAFETY FOCUS 8. STRONG 1. BALANCE CUSTOMER SHEET INTIMACY WORLD-CLASS MANUFACTURING 2. BROADEST PRODUCT RANGE &
Slide 14: Global Economy & Trade Update
FULL YEAR RESULTS F’18 Global Economy & Trade Update Trade Disputes & Potential Tariffs Economic Indicators are Solid Raw Materials and FX May Impact Input Costs & Growth NA economy strong with annualised GDP Recent public proposals related to NRL has eased from late F’17 pricing in USA above
Slide 15: Execution of strategy delivering results
FULL YEAR RESULTS F’18 Execution of strategy delivering results F’18 Results Summary – Continuing Operations Performance Update • Revenue growth momentum continues • Growth Brands delivering solid organic increase • Organic revenue growth1 up 4.0% (reported revenue up 8.4%) • Industrial Growth Brand
Slide 16: Ansell Key Indicators and Recent Trends are solid
FULL YEAR RESULTS F’18 Ansell Key Indicators and Recent Trends are solid ORGANIC GROWTH GROWTH BRAND EVOLUTION EMERGING MARKET TRENDS 11% 11% Growth Brands expressed as a % of total sales 10% 9% 8% 8% F’17 F’18 % Org 5% $M $M Growth 3% 3% ‐1% 6.0% 3.9% 4.5% Emerging 2.3% 2.7% 3.6% Markets $280.6m $3
Slide 17: Numerous awards as Distributor Deals and Channel Partnership scope expands
FULL YEAR RESULTS F’18 Numerous awards as Distributor Deals and Channel Partnership scope expands RECENT WINS CONTRIBUTING CUSTOMER RECOGNITION GOING FORWARD – OPTIMISE RESULTS • Partnerships contributing to improved growth • Multiple Industry Awards recognising • Further expansion and deepening of
Slide 18: Healthcare GBU – Solid Results despite low Surgical Growth & Higher Raw Materials
FULL YEAR RESULTS F’18 Healthcare GBU – Solid Results despite low Surgical Growth & Higher Raw Materials SUMMARY HIGHLIGHTS F’17 F’18 % CC % SALES Sales $718.6m $774.3m +7.8% +5.2% • Organic constant currency growth +3.0% • Emerging markets +8.6% with expansion in China, Korea, SEA, OLAC, India EBIT
Slide 19: Healthcare Leveraging Synergies to Accelerate Growth
FULL YEAR RESULTS F’18 Healthcare Leveraging Synergies to Accelerate Growth SALES GROWTH & EXPANDED GLOBAL FOOTPRINT NEW PRODUCT SALES 3.0% Strong Growth >100% Recent Launches Overall Organic • Microflex® High Chem • Microflex® High Chem Clean Sales Growth • GAMMEX® PI Hybrid™ • Microtouch® DENTA‐GL
Slide 20: Industrial GBU – Strong Momentum Continues
FULL YEAR RESULTS F’18 Industrial GBU – Strong Momentum Continues SUMMARY HIGHLIGHTS F’17 F’18 % CC % SALES Sales $655.9m $715.5m +9.1% +5.0% • Organic, constant currency sales growth +5.2% EBIT¹ $79.8m $86.9m +8.9% +4.3% • Emerging markets +11.7% driven by continued LAC expansion, Central & Eastern
Slide 21: Industrial Delivering Sales Expansion through Guardian & Innovation
FULL YEAR RESULTS F’18 Industrial Delivering Sales Expansion through Guardian & Innovation STRONG SALES GROWTH & GLOBAL EXPANSION HYFLEX SALES AT ~$275M 5.2% Overall Organic Sales Growth +9% 3.1% in Mature Markets 11.7% in Emerging Markets 9.6% in Growth Brands ALPHATEC ACCELERATION CONTINUED GLOBAL
Slide 22: Delivering Targeted Results
FULL YEAR RESULTS F’18 D elivering Targeted Results FINANCIAL GOALS F’18 RESULT COMMENT 3-5% ORGANIC GROWTH PER 4.0% (CC) Focused growth strategy delivering ANNUM EBIT Growth Muted By Temporary High Raw Material Costs in F18 H1; Margins restored in F18 H2 18% (CC) Adjusted 5-10% EPS GROWTH PER ANNUM
Slide 23: Financial Report
02 Financial Report Neil Salmon
Slide 24: Profit & Loss Summary
FULL YEAR RESULTS F’18 Profit & Loss Summary PROFIT & LOSS Growth Total Group Brands Continue Discontinued: F’17 Strong Performance Total Group +9% YoY Discontinued: F’18 Transformation F’18 SW Results & & major non (US$M) F’17 SW Results Continuing F’18 Continuing Adjusted Gain on Sale cash items S
Slide 25: Non Recurring Items Recorded in F'18
FULL YEAR RESULTS F’18 Non Recurring Items Recorded in F’18 Growth Brands Continue Strong Performance +9% YoY $M Sales EBIT PA EPS Notes Total Group 1,547.5 557.0 484.3 336.8¢ Less - Gain on Sale of Sexual Wellness (398.2) (344.8) (239.8)¢ Sale Completed Sept 2017 Less - Stub Period of Sexual Wellne
Slide 26: Profit & Loss Summary – Adjusted Comparison
FULL YEAR RESULTS F’18 Profit & Loss Summary – Adjusted Comparison PROFIT & LOSS Growth Brands F’17 F’18 Continue F’18 Strong Performance +9% YoY (US$M) Continuing Adjusted CC % Sales 1,374.5 1,489.8 +5.1% Organic growth of 4.0% at mid-point of target range, plus benefit of Nitritex acquisition Marg
Slide 27: Additional Financial Disclosures
FULL YEAR RESULTS F’18 Additional Financial Disclosures Sexual Wellness Sale • Sale announced in May 2017 and settled 1 September, 2017 • Sale now includes a moderate loss on Ansell’s 50% J/V interest in JK Ansell in India (to complete in early F’19) • Sale price $600.2m, net after cash tax and cost
Slide 28: Raw Material Cost Impact
FULL YEAR RESULTS F’18 Raw Material Cost Impact SIGNIFICANT RAW MATERIAL INFLATION IN F’17 H2 IMPACTED F’18 H1; MARGIN RECOVERY DELIVERED IN F’18 H2 • Previously, Nitrile and Natural Rubber raw materials in aggregate represented ~41% of raw material mix. For Ansell Continuing Operations, these compo
Slide 29: Capex Spending
FULL YEAR RESULTS F’18 Capex Spending Capex by Category ($ million) Operations Capex by GBU Key Points 60.0 Exam, $2, 4% Growth/Expansion capex accounts for 46% of 50.0 $48.9 total spend 3.4 $45.4 5.8 Investments include Vietnam expansion, 40.0 11.5 Surgical, additional Surgical capacity; 10.6 $
Slide 30: Ansell Strong Cash Position Enabled Debt Paydown & Buyback Funding
FULL YEAR RESULTS F’18 Ansell Strong Cash Position Enabled Debt Paydown & Buyback Funding 600 500 400 (92.3) (25.9) F'18 300 ($m) 522.2 434.8 200 (25.0) 235.2 (19.0) (2.0) (62.8) 100 189.2 (45.4) (14.6) (35.6) 93.6 0 300 250 (9.1) 0.0 (1.6) 200 (48.9) (60.7) 150 (21.3) F’17 262.7 253.6 253.6 252.0 2
Slide 31: Balance Sheet Strength – Improving ROCE
FULL YEAR RESULTS F’18 Balance Sheet Strength – Improving ROCE KEY POINTS BALANCE SHEET ($M) F’17 F’18 • ROCE improvement a major focus, improved 60bps in F’18 with Fixed Assets 217.9 230.4 transformation program to benefit further in F’19 and F’20 Intangibles 1,049.8 1,028.4 • Exceptionally strong
Slide 32: F'19 Outlook
03 F’19 Outlook Magnus Nicolin
Slide 33: F'19 EPS Guidance Update
FULL YEAR RESULTS F’18 F’19 EPS Guidance Update EPS RATIONALE F’19 GUIDANCE – EPS¢ External market conditions in F’19 are expected to remain generally supportive to top line growth; However, we also anticipate inflationary impacts from upwards pressure on some raw 112.0 materials while the impact
Slide 34: Takeaways
FULL YEAR RESULTS F’18 Takeaways ANSELL SHAREHOLDER VALUE CREATION MODEL KEY TAKEAWAYS Organic growth momentum is based on solid execution of strategic imperatives in innovation, emerging market growth, distribution partnership and brand power. High cost commodities absorbed in F’18 H1 with marg
Slide 35: Appendix
Ansell HyFlex’ GAMMEX Alphalec’ MICR@FLEX
Slide 36: Ansell Group Performance Summary–Continuing Operations
FULL YEAR RESULTS F’18 Ansell Group Performance Summary–Continuing Operations Sales Adjusted¹ EBIT Adjusted¹ Profit Attributable Adjusted¹ EPS Adjusted¹ ROCE $1,489.8m $193.1m $146.7m 102.0¢ 12.9% Reported 8.4% Reported 8.6% Reported 22.8% Reported 25.9% 60bps CC 5.1% CC 4.9% CC 15.2% CC 18.0% Organ
Slide 37: FX – Revenue & EBIT Impact of FX Movements
FULL YEAR RESULTS F’18 FX – Revenue & EBIT Impact of FX Movements Change in average rates of major revenue and cost currencies Currency Impact from Continuing Operations Comment Adjusted Revenue EBIT The US$ was weaker against most revenue and cost currencies F’18 vs F’17 $42.9m $12.3m creating curr
Slide 38: Ansell Fact Sheet
FULL YEAR RESULTS F’18 Ansell Fact Sheet KEY FIGURES • Booked Tax Losses at 30 June, 2018 $40.4m (Aust. $33.2m) • Unbooked Tax Losses at 30 June, 2018 $8.0m (Tax Effected) (Aust. $0.0m) • Unbooked Capital Losses at 30 June, 2018 $63.5m • Average Borrowing Cost at 30 June, 2018 3.36% • F’18 H1 Interi
Slide 39: Constant Currency
FULL YEAR RESULTS F’18 Constant Currency CONSTANT CURRENCY ADJUSTED & ORGANIC CONSTANT CURRENCY The presentation of constant currency information is designed to facilitate Adjusted constant currency is constant currency information (as described comparability of reported earnings by restating th
Slide 40: Segment History – Indicative Segments Of Continuing Businesses
FULL YEAR RESULTS F’18 Segment History – Indicative Segments Of Continuing Businesses F’13 F’14 F’15 F’16 F’17 F’18 GBU US$m US$m US$m US$m US$m US$m Sales 650.2 716.5 668.5 654.8 655.9 715.5 Industrial EBIT 89.1 90.5 89.0 82.8 79.8 86.9 % Margin 13.7% 12.6% 13.3% 12.6% 12.2% 12.1% Sales 492.9 661.0
Slide 41: Glossary
FULL YEAR RESULTS F’18 Glossary APAC – Asia Pacific GBU – Global Business Unit OEI – Outside Equity Interest ANZ – Australia & New Zealand GBP – Great British Pound OLAC – Other Latin America & Caribbean AUD – Australian Dollar GPADE – Gross Profit After Distribution Expenses OTIF – On Time In Full
Slide 42: Ansell
Ansell HyFlex’ cAMMEX Alphalec’ MICR@FLEX’