Slide 1: Filtrona plc Half Year 2012 Results
Filtrona plc Investor Presentation Half Year 2012 Results 1st August 2012
Slide 2: Agenda
Agenda 1. Operational Review - Colin Day 2. Financial Review - Steve Crummett 3. Vision 2015 Objectives & 2012 Outlook - Colin Day 2
Slide 3: Operational Review
Operational Review Colin Day, Chief Executive 3
Slide 4: HY 2012: summary
HY 2012: summary Revenue growth across all principal divisions Supported by increased gross and operating margins Further improvement in tax rate and net working capital ratio Interim dividend per share increased by 18% to 3.9p Successful completion of three value-adding acquisitions Wel
Slide 5: Revenue growth across all principal divisions
Revenue growth1 across all principal divisions Protection & Finishing Revenue 61% Op Margin 190bps Op Profit 49% GROUP Coated & Security • Porous Technologies Revenue 14% Revenue 24% Revenue 1% Op Margin 40bps Gross Margin 50bps Op Margin 20bps Op Profit 17% Op Margin 30bps Op Profit Unchanged Op Pr
Slide 6: Q1 and Q2 2012 performance
Q1 and Q2 2012 performance 16% 14% 12% LFL Revenue Growth 10% 8% 6% 4% 2% 0% Protection & Finishing Porous Technologies Coated & Security Filter Products Group Products Products Q1 Q2 Consistent delivery through the period Note: LFL = like-for-like, at constant FX, adjusted for acquisitions and disp
Slide 7: Protection & Finishing Products
Protection & Finishing Products Vision 2015 140 30% Range development and improved marketing 120 effectiveness 25% Benefit from new sites 100 20% Moss Austria, Alliance Express Jacksonville and Duraco East 80 15% New MSI facility opened 60 Doubles previous capacity 10% Operational levera
Slide 8: Porous Technologies
Porous Technologies Vision 2015 Growth led by healthcare and 60 30% printer systems H&PC impacted by soft sales in European air care market 50 25% Continued weak consumer trends in writing instruments 40 20% Successful completion of two value-adding acquisitions 30 15% Asian presence stren
Slide 9: Coated & Security Products
Coated & Security Products Vision 2015 Broad-based growth across the 50 25% division Tear tape growth in tobacco & wrapped food categories 40 20% Increase in labels driven by tobacco segment Strong progress with Blue Badge 30 15% contract in the UK Acquisition of Securit increases 20 10% s
Slide 10: Filter Products
Filter Products Vision 2015 Underlying volumes ahead vs P/Y 120 14% Substantial value component from strong growth in special filters 12% 100 Successful launches, 10% development initiatives and 80 service offerings 8% Premium filter innovations 60 Further additions to the RYO range 6% I
Slide 11: Key operational developments
Key operational developments Protection & Finishing Products Coated & Security Products New sites opened in Austria, Jacksonville and New Investment in state-of-the-art label printing press at Jersey Payne Cardiff Porous Technologies Filter Products Investment in porous plastics technology at Richmo
Slide 12: Key commercial developments
Key commercial developments Protection & Finishing Products Coated & Security Products New catalogues with range expansion at Moss China Promotional tape solution for Imperial Tobacco in and Alliance Plastics Ukraine Porous Technologies Filter Products Commercial expansion of products using porous N
Slide 13: Financial Review
Financial Review Steve Crummett, Group Finance Director 13
Slide 14: Income statement - summary
Income statement - summary HY 12 HY 11 Growth £m £m Actual Constant FX FX Revenue 324.8 268.6 +21% +24% Like-for-like1 +9% Gross margin 36.9% 36.2% +70bps +50bps Operating profit2 54.1 43.6 +24% +26% Operating margin 16.7% 16.2% +50bps +30bps Profit before tax2 49.1 39.5 +24% +26% Adjusted earnings2
Slide 15: Revenue growth – volume / mix / price
Revenue growth – volume / mix / price % Volume / mix +7 Price +2 Like-for-like +9 Acquisitions +15 Constant FX growth +24 Exchange (3) Reported growth +21 High quality revenue growth, driven by volume 15
Slide 16: Revenue growth – by division
Revenue growth – by division HY 12 Growth £m Constant FX Protection & Finishing Products 124.3 +61% LFL1 growth +13% Porous Technologies 40.7 +1% LFL1 growth +3% Coated & Security Products 41.4 +14% LFL1 growth +8% Filter Products 108.1 +10% LFL1 growth +10% Other2 11.8 -8% Eliminations (1.5) Group
Slide 17: Gross margin
Gross margin1 38.0% 36.9% 36.4% 36.0% 35.5% +50 bps GM improvement Operational leverage impact from higher volume % 34.0% Continued cost improvement / efficiency initiatives 32.9% Manufacturing efficiencies 32.0% from continued machinery 32.0% upgrade programme Positive pricing impact 30.0
Slide 18: Operating profit – key movements
Operating profit1 – key movements •1.6 2.9 54.1 5.9 43.6 (0.6) 5.3 (3.0) £m Increased profit AND investment in future growth 1 Adjusted to exclude intangible amortisation and exceptional operating items 18
Slide 19: Operating profit by division
Operating profit1 by division Adjusted1 operating profit HY 12 Growth Margin £m Constant FX Protection & Finishing Products 27.9 +49% 22.4% Porous Technologies 10.5 - 25.8% Coated & Security Products 8.3 +17% 20.0% Filter Products 13.1 +12% 12.1% Other2 0.9 - 7.6% Central Services (6.6) Group 54.1 +
Slide 20: Income statement – continued
Income statement – continued HY 12 Growth £m Actual Constant FX FX Operating profit1 54.1 +24% +26% Net finance charge (5.0) Higher fee amortisation and Profit before tax1 49.1 +24% +26% lower pension credit Taxation (14.5) - Underlying tax rate 29.4% Tax rate down 100bps Net income1,2 34.6 +26%
Slide 21: Cash flow
Cash flow1 •1.6 13.0 (8.7) (22.1)2 Net working capital / 54.1 revenue3 ratio down 100bps to 13.4% 36.3 (10.2) •4.5 “Underlying” capex = c.£13m £m (4.5) (3.8) •0.6 17.8 84% “underlying” cash conversion 1 Adjusted to exclude intangible amortisation and exceptional operating items 2 Darker shading
Slide 22: Net debt reconciliation
Net debt reconciliation £m As at 1 January 2012 145 As at 30 June 2012 183 Change in net debt 38 Of which: Free cash flow (18) Acquisitions 36 Dividends 15 Other (inc.FX) 5 38 Change in net debt ~ acquisition spend NOTE: Negative numbers denote a cash inflow, positive numbers a cash outflow 22
Slide 23: Dividend
Dividend +18% 4.0 3.9 3.3 3.0 3.0 2.7 2.7 2.0 1.0 0.0 HY08 HY09 HY10 HY11 HY12 Dividend growth in line with profit growth 23
Slide 24: Vision 2015 Objectives & 2012 Outlook
Vision 2015 Objectives & 2012 Outlook Colin Day, Chief Executive 24
Slide 25: Vision 2015 – how are we doing so far?
Vision 2015 – how are we doing so far? Progressive dividend HY 2012: +18% ≥100% profit conversion to cash HY 2012: 67% Volume leverage to drive GM expansion HY 2012: +50bps1 c. 50% conversion to OM HY 2012: +30bps1 LFL revenue growth: ≥ mid single-digit CAGR HY 2012: +9% Delivering balanced profitab
Slide 26: 2012 outlook
2012 outlook Well positioned for continued balanced growth Positive momentum maintained into H2 2012 Focus on successful integration of recent acquisitions Continued strong underlying cash flow FY 2012 capex of £35-40m Continued improvement in net working capital FY 2012 tax rate c.100
Slide 27: Appendices
Appendices 27
Slide 28: Income statement – reported basis
Income statement – reported basis HY 12 Growth £m Actual Constant FX FX Adjusted operating profit 54.1 +24% +26% Intangible amortisation (3.7) Exceptional operating items (4.6) Reported operating profit 45.8 +9% +11% Net finance charge (5.0) Profit before tax 40.8 +8% +10% Taxation (12.4) - Underlyi
Slide 29: Disclaimer
Disclaimer IMPORTANT LEGAL NOTICE THIS DOCUMENT IS STRICTLY CONFIDENTIAL TO THE RECIPIENT AND HAS BEEN SUBMITTED TO YOU SOLELY FOR YOUR INFORMATION. THE RECIPIENT MAY NOT REPRODUCE OR REDISTRIBUTE ANY PART OF THIS DOCUMENT TO ANY PERSON IN ANY FORM. THIS DOCUMENT AND THE PRESENTATION TO WHICH IT REL
Slide 30: Filtrona plc Half Year 2012 Results
Filtrona plc Investor Presentation Half Year 2012 Results 1st August 2012