Slide 1: Full Year Results to June 2016
For personal use only ANSELL LIMITED Full Year Results to June 2016 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 Magnus Nicolin 1. Business Overview Magnus Nicolin 2. GBU Performance Neil Salmon 3. Financial Report Magnus Nicolin 4. F’17 Outlook 2
Slide 4: Business Overview
For personal use only SECTION 1 :: Magnus Nicolin Business Overview 3
Slide 5: Guidance Achieved on Strong 2H
1. BUSINESS OVERVIEW F’16 FULL YEAR RESULTS Guidance Achieved on Strong 2H For personal use only US Dollars used in all slides unless otherwise specified F’15 F’16 Reported Reported % Change % CC Change1 Sales ($M) 1,645 1,573 -4.4% -0.1% EBIT ($M) 245 237 -3.5% +8.5% PA ($M) 188 159 -15.1% -2.5% EP
Slide 6: Summary
1. BUSINESS OVERVIEW F’16 FULL YEAR RESULTS Summary For personal use only KEY F’16 ACCOMPLISHMENTS / CHALLENGES • Environment remained challenging with moderate demand growth and volatile FX / emerging markets (EM) • Organic growth rate improving in Industrial & Single Use (SU) benefitting from impr
Slide 7: Global Trading Environment
1. BUSINESS OVERVIEW F’16 FULL YEAR RESULTS Global Trading Environment For personal use only The US economy is slowing down, while growth in the Eurozone is slow. Russia and Brazil remain challenges however there are good opportunities in other countries. US FORECASTS WEAKENING SLOW BUT STABLE EUROZ
Slide 8: Fx & Medical Results Impacting Group Sales Growth
1. BUSINESS OVERVIEW F’16 ORGANIC GROWTH Fx & Medical Results Impacting Group Sales Growth For personal use only CC Sales Level with LY, Organic Sales down 1%. Single Use (SU), Industrial and SW Growth Brand success offset by Medical and Russia / Brazil Constant Currency Growth (0)% Organic Constant
Slide 9: Strategic Drivers of Long Term Growth Performing Well
1. BUSINESS OVERVIEW F’16 ORGANIC GROWTH Strategic Drivers of Long Term Growth Performing Well For personal use only The focused areas of investment that will drive long term growth and sustain Ansell’s competitive advantages performed well in F’16 despite currency and geographic headwinds (In Const
Slide 10: Underlying Organic Growth Drivers & Expectations
1. BUSINESS OVERVIEW F’16 ORGANIC GROWTH Underlying Organic Growth Drivers & Expectations For personal use only Underlying growth drivers support healthy long term growth $M F’14 F’15 F’16 MEDIUM TERM (2-3 YR) GOAL Horizontal Axes Scaled for $m & INDUSTRIAL Total GBU 3% 1% Total GBU 3-5% % Mix SINGL
Slide 11: Strong Cash Generation and Effective Capital Deployment
1. BUSINESS OVERVIEW F’16 PROFITABILITY, CASH FLOW & CAPITAL DEPLOYMENT Strong Cash Generation and Effective Capital Deployment For personal use only Excess cost in operations were a temporary set back in F'16, however current strategy continues to deliver long term profitability improvements, stron
Slide 12: GBU Performance
For personal use only SECTION 2 :: Magnus Nicolin GBU Performance 11
Slide 13: Industrial GBU
2. GBU PERFORMANCE F’16 Industrial GBU For personal use only SUMMARY HIGHLIGHTS % in constant currency F’15 F’16 CHANGE CC Sales $668.5m $654.8m -2.1% +3.3% SALES • Organic1 sales up 1% for the year, 2% for 2H EBIT3 $92.7m $89.0m -4.0% +10.1% • Demand environment improved moderately in 2H % EBIT/Sal
Slide 14: Industrial GBU Innovation In Cut & Chemical Protection
2. GBU PERFORMANCE F’16 Industrial GBU Innovation In Cut & Chemical Protection For personal use only POWERFUL FAMILY OF GROWTH BRANDS +13% Double 8 PRODUCTS LAUNCHED Digit with Growth GROUND BREAKING technology Exclusive Ansell Owned & Branded Technology $15M INTERCEPT Global Sales • Strong adoption
Slide 15: Single Use GBU
2. GBU PERFORMANCE F’16 Single Use GBU For personal use only SUMMARY HIGHLIGHTS % in constant currency F’15 F’16 CHANGE CC Sales $312.4m $301.7m -3.4% -1.1% SALES • Sales down 1% on pricing reflecting lower raw material EBIT2 $59.7m $64.6m +8.2% +14.9% costs while volume grew 2.5% % EBIT/Sales 19.1%
Slide 16: Single Use GBU Continued Global Expansion
2. GBU PERFORMANCE F’16 Single Use GBU Continued Global Expansion For personal use only Significant room to grow outside North America 20% 7% $2.7M NA Market ROW Market International Share Share Expansion Product Sales $80m achieved in SU Life Sciences global sales 13% Sales Growth in Emerging Marke
Slide 17: Medical GBU
2. GBU PERFORMANCE F’16 Medical GBU For personal use only SUMMARY HIGHLIGHTS % in constant currency F’15 F’16 CHANGE CC Sales $447.2m $396.3m -11.4% -8.3% SALES • Surgical sales lower by 8% (6% in 2H), primarily on weak EBIT2 $70.6m $52.3m -25.9% -17.5% emerging market demand in Russia and SE Asia %
Slide 18: Medical GBU Strong Synthetic Surgical Portfolio
2. GBU PERFORMANCE F’16 Medical GBU Strong Synthetic Surgical Portfolio For personal use only Ansell has developed a strongly differentiated Synthetic Surgical portfolio to take advantage of the fastest growing segment of the approximately $1.3b Global Surgical Market. ANSELL INTRODUCES A REVOLUTION
Slide 19: Sexual Wellness GBU
2. GBU PERFORMANCE F’16 Sexual Wellness GBU For personal use only SUMMARY HIGHLIGHTS % in constant currency F’15 F’16 CHANGE CC Sales $217.0 $220.0 +1.4% +8.2% SALES • Sales growth of 8% driven by strong growth in emerging EBIT2 $26.1 $31.0 +18.8% +41.0% markets (especially China) and continued succ
Slide 20: Sexual Wellness continues healthy growth
2. GBU PERFORMANCE F’16 Sexual Wellness continues healthy growth: Sales 8% up organic For personal use only #1 Sales growth Sales growth NON-LATEX CONDOM +28% in China +11% in India ACROSS THE WORLD PENETRATION & AWARENESS & EQUITY Strong portfolio GROWTH SUPPORTED BY Strong e-commerce growth with g
Slide 21: Financial Report
For personal use only SECTION 3 :: Neil Salmon Financial Report 20
Slide 22: Cost Reduction Driving CC EBIT Growth, Offset By Higher Tax Rate
3. FINANCIAL REPORT F’16 Cost Reduction Driving CC EBIT Growth, Offset By Higher Tax Rate For personal use only PROFIT & LOSS F’15 F’16 % % CC1 NOTES (US$M) Sales 1,645.1 1,572.8 -4.4% -0.1% Constant Currency GPADE flat with operational losses offset GPADE 629.3 576.5 -8.4% -0.8% by lower raw materi
Slide 23: Other Key Financial Points
3. FINANCIAL REPORT F’16 Other Key Financial Points For personal use only Tax Rate Higher • As forecast the DTA/NOTI* benefit in F’16 was nil compared to $3.5m or 2.3¢ EPS in F’15. Australian tax losses have been fully recognized for accounting purposes. • The tax rate of 24.5% was higher than the f
Slide 24: Balance Sheet Further Strengthened With Good Liquidity
3. FINANCIAL REPORT F’16 Balance Sheet Further Strengthened With Good Liquidity For personal use only BALANCE SHEET ($M) F’15 F’16 Fixed Assets 231.2 245.0 Intangibles 1,116.0 1,077.3 Other Assets/Liabilities (91.8) (105.5) Working Capital 374.1 341.9 Net Operating Assets 1,629.5 1,558.7 Net Interes
Slide 25: Capital Expenditure Reducing; Still Delivering High Returns
3. FINANCIAL REPORT F’16 Capital Expenditure Reducing; Still Delivering High Returns For personal use only F'16 Capital Expenditure on maintenance and IT systems implementations reducing. Investment continues to drive profit improvement and sustain growth. Some profit improvement initiatives planned
Slide 26: Consistent Strong Cash Flow Generation
3. FINANCIAL REPORT F’16 Consistent Strong Cash Flow Generation For personal use only F'16 350 ($M) 300 11.8 (6.7) 250 (17.7) 200 (65.2) 150 (22.3) 274.7 262.1 41.5 (29.8) 100 144.8 (88.1) (61.2) 3.9 50 40.9 0 EBITDA Working cap Restructure Other Cash Net Receipts Capex Int Taxes Op Cash Dividend Di
Slide 27: F'17 Outlook
For personal use only SECTION 4 :: Magnus Nicolin F’17 Outlook 26
Slide 28: Strategic Focus Remains
4. F’17 OUTLOOK OUTLOOK Strategic Focus Remains For personal use only ORGANIC GROWTH PROFITABILITY & CASHFLOW CAPITAL DEPLOYMENT Achieve growth above market Efficient manufacturing and High return capex and acquisitions rates in selected verticals where reliable global supply chain strengthening mar
Slide 29: Priorities, Goals and Expectations
4. F’17 OUTLOOK OUTLOOK Priorities, Goals and Expectations For personal use only PROFITABILITY & ORGANIC GROWTH CAPITAL DEPLOYMENT CASH FLOW Business • Channel Partnerships • Reduce waste in • Acquisition pipeline more Priorities • Continued New Product manufacturing active Success • Realize Capex p
Slide 30: F'17 Guidance
4. F’17 OUTLOOK OUTLOOK F’17 Guidance For personal use only F'17 EPS Guidance Reported EPS anticipated to be in (EPS ¢, % Growth) the range of US$0.98 – US$1.12 An underlying increase of between 112¢, 17% 105 2% - 17% 96 4 5 98¢, 2% • Partly offset by: – Dilution on Onguard® divestment vs post tax g
Slide 31: Portfolio Optimisation
4. F’17 OUTLOOK OUTLOOK Portfolio Optimisation For personal use only • We continually review our existing portfolio of businesses in a disciplined way. • This process will continue in F’17 and will include consideration of options for the Sexual Wellness business and opportunities to enhance our pos
Slide 32: Take-aways
4. F’17 OUTLOOK Take-aways For personal use only • Strong cash flow in a tough year • Improving momentum through 2H across Single Use, Industrial and Medical businesses • Consistently strong growth of Sexual Wellness • Strategic focus areas contributing to share gain through Innovation, Emerging Mar
Slide 33: Appendix: Supplemental Information to Results Presentation
For personal use only APPENDIX: Supplemental Information to Results Presentation 32
Slide 34: F'08 to F'16 Financial Performance
APPENDIX 1 F’16 F’08 to F’16 Financial Performance For personal use only CAGR’S % 2008- $1,645 2016 HIGHLIGHTS $1,590 $1,573 $245 $1,373 $237 • Acquisitions and Growth $1,255 Sales 4.4% $1,207 $206 brands1 driving Sales Growth $1,116 $1,086 $1,003 $171 $153 • 5 yrs of EBIT Margin $137 EBIT 9.9% $127
Slide 35: GBU Summary
APPENDIX 2 F’16 GBU Summary For personal use only INDUSTRIAL SINGLE USE MEDICAL SEXUAL WELLNESS Sales $m 655 302 396 220 (% of Ansell) 42% 19% 25% 14% EBIT Margin 13.6% 21.4% 13.2% 14.1% (EBIT % of 38% 27% 22% 13% Ansell) Global market #1 #1 #1 #2 position vs in hand protection in differentiated in
Slide 36: Business Sustainability Assisted By Well Diversified Portfolio
APPENDIX 3 Business Sustainability Assisted By Well Diversified Portfolio For personal use only ANSELL’S DIVERSE END MARKETS BALANCE ECONOMIC CYCLES • Ansell’s portfolio is generally well balanced • Though some verticals are more correlated, other drivers including regulation, compliance, shifts in
Slide 37: FX – Revenue & EBIT Impact of FX movements
APPENDIX 4 F’16 FX – Revenue & EBIT Impact of FX movements For personal use only Change in average rates of major revenue and cost currencies Modelled Annualized Currency Impact Comment Revenue EBIT F’16 vs Revenue lower on strengthening US$ vs major revenue currencies ~ $(70)m ~ $(4)m F’15 partiall
Slide 38: Raw Material Costs
APPENDIX 5 F’16 Raw Material Costs For personal use only Natural Rubber Latex Continues to Reduce as a % of Raw Material Costs. SPEND MIX FOR RAW MATERIAL COMPONENTS COMPONENTS OF COGS F’16 COMPARED TO F’10 Energy 100% Depreciation 4% 2% Fibres & Fibres & Factory 90% Engineered Engineered Overhead Y
Slide 39: Regional Performance By GBU
APPENDIX 6 F’16 Regional Performance By GBU For personal use only F’16 v F’15 SALES $ 1,572.8m -4.4% Segment EBIT $236.9 m -4.9% MED IND SU SW Total MED IND SU SW Total NA NA LAC LAC EMEA EMEA AP AP TOTAL TOTAL > +5% 0% to 5% < 0% 38
Slide 40: Ansell Fact Sheet
APPENDIX 7 F’16 Ansell Fact Sheet For personal use only KEY FIGURES • Booked Tax Losses at 30 June, 2016 $45.4m • Unbooked Tax Losses at 30 June, 2016 $14.3m (Aust. $0.0m) • Average Borrowing Cost at 30 June, 2016 3.22% • F’16 Interim Dividend US20¢ a share: F’16 Final Dividend US23.5¢ a share • Sha
Slide 41: Segment History
APPENDIX 8 F’16 Segment History For personal use only F’10 F’11 F’12 F’13 F’14 F’15 F’16 GBU US$m US$m US$m US$m US$m US$m US$m Sales 650.2 716.5 668.5 654.8 Industrial EBIT For F’10-F’12, 89.8 93.6 92.7 89.0 % Margin Single Use & Industrial are 13.8% 13.1% 13.9% 13.6% Sales equivalent to the combin
Slide 42: Operating Cash Flow
APPENDIX 9 F’16 Operating Cash Flow For personal use only Operating Cash Flow Compared to Previous Free Cash Flow Format $M F'16 F'15 F'14 EBITDA 274.8 280.7 241.6 Movement in Working Capital ex FX 11.8 (35.5) 32.9 Restructuring Payments (6.70) (15.4) 0.0 Other cash & Non cash (17.7) (12.6) (7.5) (5
Slide 43: Previous Free Cash Flow Format
APPENDIX 10 F’16 Previous Free Cash Flow Format For personal use only $m F'16 F'15 F'14 EBIT 236.8 245.3 206.4 Depreciation/Amortisation 38.0 35.4 35.2 EBITDA 274.8 280.7 241.6 Movement in Working Capital ex FX 11.8 (35.5) 32.9 Capex net of disposals (65.2) (61.8) (53.0) Interest (22.3) (21.3) (17.3
Slide 44: Constant Currency
APPENDIX 11 F’16 Constant Currency For personal use only Constant Currency Constant currency financial reporting is supplemental information. It is provided using the best estimate of the prior year results translated at the foreign currency exchange rates applicable to the current period and compar
Slide 45: For personal use only
For personal use only 44