Slide 1: 2023 Interim Results
aS FARLANE GROUP 2023 Interim Results f
Slide 2: Agenda
Agenda 2 • Introducing Macfarlane Group • Results H1 2023 • Q&A
Slide 3: Background
Background 3 • Macfarlane was founded almost 75 years ago and listed on the Premium Segment of the Main market in 1973 • HQ in Glasgow, annual sales c£300m, >1,000 employees operating from 37 sites: UK, Ireland, Netherlands and Germany • Customer base – • 92% UK; 8% Europe • 75% Industrial; 25% Reta
Slide 4: Profit Progression
Profit Progression 4 Pre-tax profit Basic Earnings per share 20 10.00 18 9.00 16 8.00 14 7.00 12 6.00 10 5.00 8 4.00 6 3.00 4 2.00 2 1.00 0 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 5: Growth Building Blocks
Growth Building Blocks 5 UK Organic Quality UK Input Price Improve online Growth Acquisitions offering Management Streamline Organic Growth in Property Europe –”Follow the Quality European Footprint Customer” acquisitions Acquisitions Strengthen Invest in our supplier Supplier Input price ESG Underp
Slide 6: Executive Summary
Executive Summary 6 H1 2023 H1 2022 £m £m £m Operating profit before amortisation (PBITA) 12.8 11.4 Profit before tax 10.0 8.9 • Group sales £141.6m, 2% growth on H1 2022 • PBITA £12.8m, 13% growth on H1 2022; PBT £10.0m, 13% growth on H1 2022 • Distribution sales flat compared to H1 2022; PBITA inc
Slide 7: Resilience
Resilience 7 PBITA Focus and depth of Breadth of customers Value added expertise in protective and markets served proposition…. packagingBank debt Pre-tax ROCE Pension surplus Range of long established supplier Diluted EPS Performance Driven Dividend cover Bespoke product and Culture service range r
Slide 8: Financial Summary – H1 2023
Financial Summary – H1 2023 8 Revenue Profit before tax PBITA Revenue and profit ▲ ▲ ▲ 2% 13% 13% Pre-tax ROCE Bank debt Pension surplus Returns and balance sheet ▲ 18% £3.3m £12.8m Diluted EPS Dividend cover Dividend per share EPS and dividend ▲ ▲ ▲ 9% 5.0x 0.94p
Slide 9: Results
Results 9 H1 2023 H1 2022 £m £m Sales from continuing operations 141.6 139.2 Gross Profit 51.3 [36.2%] 47.1 [33.8%] Overheads (38.5) (35.7) Operating profit before amortisation 12.8 11.4 Amortisation (2.0) (1.8) Operating profit 10.8 9.6 Interest (0.8) (0.7) Profit before tax from continuing operati
Slide 10: Cash Flow
Cash Flow 10 H1 2023 H1 2022 £m £m EBIT 10.8 9.6 DA 6.7 6.4 EBITDA 17.5 16.0 Working Capital 6.4 (5.4) Lease Obligations (3.5) (3.6) Interest (1.1) (0.8) Acquisitions (11.4) (9.3) Disposal - 0.2 Tax (2.2) (2.3) Net capital expenditure (1.3) (2.2) Pension (0.6) (1.3) LTIP adj. 0.3 0.3 Dividend (4.0)
Slide 11: Packaging Distribution
Packaging Distribution 11 £m H1 2023 H1 2022 • Organic sales reduced by 5% versus H1 Revenue 124.0 123.5 2022, with subdued demand in UK and Ireland being offset by good progress in Gross margin 42.4 [34.2%] 39.9 [32.3%] Europe Overheads 33.0 31.0 • Strong performances from Gottlieb acquired in Apri
Slide 12: Packaging Distribution overheads
Packaging Distribution 12 H1 2023 H1 2022 £m % of Sales £m % of Sales Employee costs 17.0 13.7% 16.5 13.4% Transport (excluding employee costs) 3.1 2.5% 3.3 2.7% Utility costs 0.7 0.6% 0.3 0.2% Other 8.8 7.1% 8.6 7.0% Overheads (pre-investments/start-up) 29.6 23.9% 28.7 23.3% IT Investment 1.3 1.0%
Slide 13: Packaging Distribution – Raw Material Movements
Packaging Distribution – Raw Material Movements 13 £2,100 £850 £825 £2,000 £800 £775 £1,900 £750 £725 £1,800 £700 £675 £1,700 £650 £625 £1,600 £600 £575 £1,500 £550 £1,400 £525 £500 £1,300 £475 £450 £1,200 £425 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Polymer £
Slide 14: Packaging Distribution Action Plan for 2023-2025
Packaging Distribution Action Plan for 2023-2025 14 Delivering The Base Business Environmental Recruitment and Benefits of New Salary Inflation Plastic Tax Performance Challenge Working Flexibility Software Introductions Sustain the Base Business Improve productivity to Manage the impact the Demonst
Slide 15: Manufacturing Operations
Manufacturing Operations 15 • Strong performance from Suttons acquired in February 2023 £m H1 2023 H1 2022 • Organic sales flat versus 2023 with strong Revenue* 20.2 17.7 growth in the aerospace sector offset by weakness in other sectors Gross margin 8.9 [44.2%] 7.2 [40.5%] • New business wins in H1
Slide 16: Manufacturing Operations Action Plan for 2023-2025
Manufacturing Operations Action Plan for 2023-2025 16 Business Environmental Recruitment And GWP in-house Salary Inflation Plastic Tax Performance Challenge Working Flexibility Growth Opportunities Sustain the business Improve productivity to Manage the impact the Demonstrate we are Improve our rete
Slide 17: Acquisitions Overview
Acquisitions Overview 17 Acquisition Location Year Sales EBITDAx Placing price Integrated Distribution Lane Reading 2014 £3m 5-6x N/A Network Wolverhampton 2014 £9m 5-6x Sep-14 37.5p One Bingham 2015 £5m 5x N/A Colton Teesside 2016 £3m 5x N/A Edward McNeil Glasgow 2016 £3m 5x N/A Nelsons L
Slide 18: H1 2023 ESG Progress
18 H1 2023 ESG Progress Reducing our Supporting our Supporting our Governance - Environmental Customers Colleagues and Doing things right Impact Communities * 5 fully electric trucks * Northern Innovation Lab * Diversity/inclusion training * Board 33% female added to the fleet opened to all managers
Slide 19: Pension Scheme - £12.8m Surplus
Pension Scheme - £12.8m Surplus 19 £m H1 2023 H1 2022 2022 Opening surplus 10.2 8.3 8.3 Ongoing accrual/interest income 0.3 0.1 0.1 Past service costs (H2 2022: Scheme Closure) - - (0.1) Contributions 0.6 1.3 2.0 Change in actuarial assumptions 3.5 22.9 29.4 (Bond yield 0.50% to 5.30% (H1 2022 1
Slide 20: Pension Scheme Details
Pension Scheme Details £m 20 Investments (£m) H1 2023 H1 2022 2022 Members No. Growth assets Active - Equities 21.6 20.5 20.3 Deferred 168 Multi-asset Diversified Fund 12.3 27.1 12.7 Pensioners 367 Multi-asset Credit Fund 1.0 - - 535 European Loan Fund 5.6 6.3 6.5 Long-term Property Fund 7.0 7.3 5.7
Slide 21: Conclusions
Conclusions 21 • Resilient and flexible business with strong market positions: • Solid performance in H1 2023 against backdrop of slowdown in certain customer demand • Executed two high quality acquisitions- Gottlieb (Distribution) & Suttons (Manufacturing Operations) • Continued good progress in Eu
Slide 22: Macfarlane Business Case
Macfarlane Business Case Strongly focused A simple, Good market A track record operating flexible and positions with of performance companies with resilient growth and clear plans differentiated business model potential to sustain growth propositions