Slide 1: Results for Year Ended 30 June 2012
For personal use only McPherson’s Limited Results for Year Ended 30 June 2012 20 August 2012 Paul Maguire – Managing Director Paul Witheridge – Chief Financial Officer
Slide 2: Agenda
Agenda For personal use only Full Year Overview Strategy Update Financial Performance Outlook Questions
Slide 3: Headlines - Financial Year 2012
Headlines - Financial Year 2012 For personal use only McPherson’s Printing Group demerged, effective end January 2012 Sales from continuing operations declined by 4.7% and pre-tax profit declined by 29.1%, in line with guidance, due to: – a subdued retail sales environment, increased promotional
Slide 4: Category Summary
Category Summary For personal use only % of 2012 % Growth Reasons Outlook Revenue 2012 vs 2011 Growth through Housewares 32% (11%) Range deletions new ranges Growth through Personal New product 28% 4% new ranges and Care development acquisitions Household Competition and 33% (3%) Steady state Consum
Slide 5: Strategy Update
Strategy For personal use only Update Paul Maguire
Slide 6: Corporate Brand Identity
Corporate Brand Identity For personal use only Mission Vision Vision Making life easier Making life easier To be a world-class consumer products company Proposition for through Category management experts Consumers: through easy to use functional branded 1st choice products for consumers consistentl
Slide 7: Corporate Brand Identity
Corporate Brand Identity For personal use only Vision Proposition Category management experts consistently Proposition delivering innovative quality products through trusted brands into the hands of consumers Proof Points Benefits Culture Values
Slide 8: McPherson's Consumer Products Business Model
McPherson’s Consumer Products Business Model MCP For personal use only Grocery G MCP adds value through, I L C and derives a competitive N O Discount O advantage from: Department Stores S N B I S A Operational excellence G Department U People Stores H L - M - Processes T E - IT Systems Independent
Slide 9: Existing Product Categories
Existing Product Categories For personal use only Strength through a multiplicity of products, brands, categories and channels
Slide 10: Operational Excellence
Operational Excellence Strategies For personal use only Productivity & Efficiency • Substantial process improvement; and • Significant enhancement of IT Systems to enable the automation of processes Culture • Establish a culture of continuous improvement • Attract and retain high achievers through t
Slide 11: Operational Excellence - Current & Planned Initiatives
Operational Excellence Current & Planned Initiatives For personal use only Radio Frequency technology installed in the Kingsgrove warehouse • significantly boosting productivity and thus warehouse capacity ERP system upgrade to IBS Version 7 underway • rolled out to New Zealand, Hong Kong & Singapor
Slide 12: Operational Excellence - Current & Planned Initiatives
Operational Excellence Current & Planned Initiatives For personal use only A superior, and automated, NPD process • inclusive of a post-launch review phase Sourcing review • continuing the establishment of low cost, high quality, supply options Inventory review • a program of product rationalisation
Slide 13: MCP Growth Strategies - Tier
MCP Growth Strategies – Tier 1 For personal use only • Focused on innovating our major brands in both existing and new categories INNOVATION • Product Marketing teams and an Innovation & Business Development team AGENCIES/ • New agency partners chosen to strengthen ranging LICENCES INTERNATIONAL • A
Slide 14: Innovation
For personal use only Innovation
Slide 15: The Innovation Ambition Matrix
The Innovation Ambition Matrix For personal use only SERVE ADJACENT CUSTOMERS TARGET NEW CUSTOMER NEEDS Transformational ENTER ADJACENT MARKETS, CREATE NEW MARKETS, Developing breakthroughs and inventing things for markets that don’t yet exist WHERE TO PLAY Adjacent Expanding from existing business
Slide 16: Agencies/Licences
For personal use only Agencies/Licences
Slide 17: Agencies/Licences
Agencies/Licences For personal use only New agencies and licences are partnered with if: – their product offering and brands complement MCP’s existing portfolio – they extend MCP’s presence and make us more significant to our customers – the relationship drives positive financial outcomes for both
Slide 18: International Business
International Business For personal use only
Slide 19: International Business
International Business For personal use only MCP has international operations in New Zealand and Singapore A third party distribution model is used in other countries, e.g. Canada and South Africa Total revenue and EBIT generated outside of Australia in FY2012 was approx’ $40 million (14% of r
Slide 20: For personal use only
For personal use only
Slide 21: Acquisitions - Objectives
Acquisitions - Objectives For personal use only MCP is interested in acquiring companies or brands in order to: – Increase scale – Leverage existing resources • (eg ‘pick to light’ facility) – Extract synergy benefits – Diversify, and thus reduce risk • (e.g. via access to new channels) – Enhance
Slide 22: Acquisitions Criteria
Acquisitions Criteria For personal use only EPS accretive and acceptable ROFE Good strategic fit Synergy potential and scale benefits Market power – strong brands Leverage potential Growth potential - in existing & new categories, channels and markets Resistance to competition and chan
Slide 23: MCP Growth Strategies - Tier
MCP Growth Strategies – Tier 2 For personal use only • The creation of a Field Services arm • to provide field services to other companies as a result of introducing a mobile Customer Relationship Management (CRM) system to our existing network of field personnel FIELD SERVICES • The establishment o
Slide 24: Financial Performance
McPherson’s Limited For personal use only Financial Performance Year Ended 30 June 2012 Paul Witheridge Chief Financial Officer
Slide 25: Group Financial Summary for 2012
Group Financial Summary for 2012 Continuing Operations For personal use only 12 Months to 12 Months to June June 2011 2012 ($A million) ($A million) Sales 289.9 276.2 4.7% Sales decline EBITDA 45.8 34.4 Depreciation & amortisation (2.3) (2.4) EBIT 43.5 32.0 26.4% EBIT decline Interest (6.7) (6.0) In
Slide 26: Overview of Group Balance Sheet
Overview of Group Balance Sheet Continuing Operations For personal use only 12 Months to 12 Months to June 2011 June 2012 ($A million) ($A million) Inventories 54.3 52.9 2.6% Inventory decline Receivables & prepayments 52.1 55.6 6.7% Receivables increase Trade & other payables (30.4) (30.1) Net work
Slide 27: Group Operating Cashflow
Group Operating Cashflow Continuing Operations For personal use only 12 Months to 12 Months to June 2011 June 2012 ($A million) ($A million) Cash flows from operations Receipts from customers (inclusive of GST) 320.0 301.9 Payments to suppliers and employees (inclusive of GST) (268.7) (270.0) Net ca
Slide 28: Group Operating Cashflow
Group Operating Cashflow Continuing Operations For personal use only 12 Months to 12 Months to June 2011 June 2012 ($A million) ($A million) Cash flows from investing activities Payments for purchase of property, plant and equipment (2.2) (2.4) Capex in line with depreciation Payments for acquisitio
Slide 29: Capital Management
Capital Management For personal use only The Group’s current syndicated debt facility comprises: – $76m in core term debt – $20m in working capital finance – $1m in overseas facilities The current core debt facility expires 31 August 2013 The Group is well advanced in discussions with financie
Slide 30: FX Hedging (Australia)
FX Hedging (Australia) For personal use only Comprehensive FX hedging program in place using Options, Forward Exchange Contracts (FECs) and Collars: – Options Protect downside with premium cost but allow upside benefit – FECs Fixed rate with lost forward points – Collar Improved downside protectio
Slide 31: Outlook
For personal use only Outlook Paul Maguire
Slide 32: Outlook
Outlook For personal use only Trading conditions expected to remain challenging but improved financial performance is expected over the coming year Significant new product launches scheduled to support McPherson’s Consumer Products strong brand portfolio Efficiency and productivity gains expec
Slide 33: Non-IFRS measures and Disclaimer
Non-IFRS measures The non-IFRS measures used by the Company are relevant because they are consistent with measures used internally by management to assess the operating performance of the business. The non-IFRS measures have not been subject to audit or review. For personal use only Disclaimer State