Slide 1: Metro Performance Glass FY18 Results Presentation
Metro Performance Glass FY18 Results Presentation 24 May 2018 Strictly confidential and not for public release
Slide 2: Disclaimer
Disclaimer This presentation (“Presentation”) has been prepared by Metro Performance Glass Limited (Company Number 5267882) (“Metro Performance Glass”). Please do not read this Presentation in isolation This presentation contains some forward looking statements about Metro Performance Glass and the
Slide 3: Agenda
Agenda 1. FY18 highlights 2. Financial results 3. Market conditions 4. FY19 outlook and financial targets 5. Strategy update 6. Q&A session Strictly confidential and not for public release 2
Slide 4: 1. Market conditions & FY18 highlights
1. Market conditions & FY18 highlights Strictly confidential and not for public release 3
Slide 5: FY18: Full year result highlights
FY18: Full year result highlights 1 Group revenue of $268.3m (+10%) including a full 12 months of trading from AGG. EBIT of $28.0m (‐15%) and NPAT of $16.3m (‐16%) impacted by significant items 2 Strong operating cash flow of $33.6 million (+92%); net debt flat at $94.3m 3 Soft NZ construction ac
Slide 6: Manufacturing performance and the FY18 capital programme
Manufacturing performance and the FY18 capital programme Capital programme aimed at delivering improved capability and efficiency at the Group’s existing six processing plants as well as establishing the seventh plant in Hobart, Tasmania (photos below) New Zealand’s installation programme was execut
Slide 7: Operational highlights
Operational highlights Maintained leadership position and NZ glass category share Transitional year for AGG as it invested significantly in double above 55% glazing capacity, moved to an international glass import model and opened its third plant Capital program successfully completed. Plant perform
Slide 8: 2. Financial results
2. Financial results Strictly confidential and not for public release 7
Slide 9: FY18: Group revenue
FY18: Group revenue Metroglass Group revenue (NZ$ million)1,2 (0%) (NZ) +10% 268.3 244.3 (2%) (5%) +25% 143.2 145.6 48.2 51.0 55.4 21.5 30.5 17.2 Residential (NZ) Commercial Glazing Retrofit (NZ) Australian Glass Group Metroglass Group (NZ) (12 months; 7 months) FY18 FY17 Notes: 1. The allocation of
Slide 10: FY18: Full year results summary
FY18: Full year results summary Metroglass Group (NZ$m) FY18 FY17 % chg Segment results (NZ$m) FY18 FY174 % chg Revenue 268.3 244.3 10 New Zealand Revenue 212.9 213.8 (0) EBITDA before significant items1 43.3 44.9 (3) Segmental EBIT1 29.2 31.9 (8) Depreciation & amortisation 12.4 11.0 13 EBIT before
Slide 11: FY18: EBIT summary
FY17 EBIT 33.9 before significant items NZ profit improvement 2.9 South Island pricing 1.4 FY18: EBIT summary NZ factory labour 1.7 EBIT before significant items bridge: FY17 to FY18 ($m) NZ electricity costs 0.8 NZ Advertising 0.4 Consultancy costs 1.2 AGG Segmental EBIT 2.0 (5 extra months) AGG pr
Slide 12: FY18: Summary cash flow & balance sheet
FY18: Summary cash flow & balance sheet Key cash flow items (NZ$m) FY18 FY17 Operating cash flow + 92% or $16.1m, with improved working capital management and lower tax payments in the year EBIT before significant items 30.9 33.9 Group inventory increased $1.1m to $23.5m as AGG Operating cash flows
Slide 13: 3. Market conditions
3. Market conditions Strictly confidential and not for public release 12
Slide 14: Macro conditions in New Zealand
Macro conditions in New Zealand While strong economic and demographic fundamentals Metroglass maintained New Zealand glass category share4 (migration, interest rates, underbuilt Auckland, KiwiBuild) of greater than 55% (rolling 6 months) continue to support strong activity, supply‐side constraints (
Slide 15: Residential and non-residential activity remains supportive
Residential and non‐residential activity remains supportive but growth in New Zealand was less than previously anticipated New Zealand – # of residential consents1 South East Australia – # of detached dwelling approvals3 • Residential dwelling 70,548 • Double glazing 30,626 31,392 68,827 consents fo
Slide 16: 4. FY19 outlook and financial targets
4. FY19 outlook and financial targets Strictly confidential and not for public release 15
Slide 17: Outlook for FY19
Outlook for FY19 Future market conditions are always difficult to predict. Our current expectations are: • New Zealand: Activity to remain close to the current levels for the coming 12 months, with further Canterbury declines being offset by growth in other regions • Australia: activity in AGG’s tar
Slide 18: 5. Strategic Review
5. Strategic Review Strictly confidential and not for public release 17
Slide 19: Why was the strategic review conducted?
Why was the strategic review conducted? Review purpose: To ensure that the company’s business model continues to be effective and efficient for the two countries in which it operates, and that the best opportunities to improve customer experience and financial returns to our shareholders are priorit
Slide 20: Reflecting on our journey
Reflecting on our journey Metroglass has grown strongly, diversified its revenue base and increased its product and service offerings, but experienced material growing pains, and customer experience was negatively impacted Developed and expanded the businesses while market conditions allowed, in ord
Slide 21: Investing in capacity and modernised manufacturing was required
Investing in capacity and modernised manufacturing was required to meet the rapid evolution of glass and build Metroglass’ market position Metroglass Group capital expenditure (NZ$ million) Investments in NZ’s first double glazing growth cycle including an expanded presence in commercial glazing and
Slide 22: Metroglass' four strategic objectives
Metroglass’ four strategic objectives Following extensive reviews, we have confidence that Metroglass’ purpose to be a customer‐dedicated organisation that delivers market‐differentiated glass products and glazing services remains valid. However, the focus has shifted from expansion and diversificat
Slide 23: Delivering market leading service to our customers
Delivering market leading Developing our organizational 1 2 service to our customers capabilities Service is a key differentiator for our customers Improving our ability to execute against these and critical to their success and profitability strategic initiatives is critical The New Zealand and Aus
Slide 24: Maintaining our scale position via product and channel leadership
3 Maintaining our scale position via product and channel leadership Metroglass has grown to service more than 55% of the NZ flat‐glass market. Scale is an important advantage in this market, providing significant manufacturing, procurement and distribution advantages Glass is a rapidly evolving prod
Slide 25: Leveraging our scale and assets to deliver lowest total delivered cost
4 Leveraging our scale and assets to deliver lowest total delivered cost A persistent focus on increasing efficiency and automation and lowering costs is essential for the long‐term sustainability of our business, and to enable us to compete successfully against imports and changing industry dynamic
Slide 26: What does the next 24 months look like?
What does the next 24 months look like? Re‐dedicated to a focus on excellent service to our core customer groups (but not all things to all people) We are committed to our product leadership position, and we choose to maintain a broad product offering, our existing routes to market, and our current
Slide 27: Managing for success
Managing for success The composition of Metroglass’ board has changed significantly over the past 12 months – Peter Griffiths elected as Chair following Sir John Goulter’s retirement – Angela Bull and Rhys Jones appointed as independent directors – CEO / Executive Director Nigel Rigby departed the b
Slide 28: 6. Q&A session
6. Q&A session Strictly confidential and not for public release 27
Slide 29: Appendix: Explanation of non-GAAP profit measures
Appendix: Explanation of non‐GAAP profit measures Non‐GAAP financial information Group results are reported under NZ IFRS. This presentation includes non‐GAAP FY18 FY17 financial measures which are not prepared in accordance with NZ IFRS, being: Full year to 31 March ($M) ($M) – EBITDA: Earnings bef
Slide 30: Contact information
Contact information Metro Performance Glass Limited John Fraser‐Mackenzie – Chief Financial Officer john.fraser‐mackenzie@metroglass.co.nz 5 Lady Fisher Place, East Tamaki (+64) 027 551 6751 Auckland 2013 New Zealand Andrew Paterson – Investor Relations Manager Ph: + 64 9 927 3000 andrew.paterson@me