Slide 1: McPherson's Limited Investor Presentation April 2016
For personal use only McPherson’s Limited Investor Presentation April 2016
Slide 2: MCP Financial Update
MCP Financial Update (CFO, Paul Witheridge) Divestment of remaining 49% of Housewares joint venture has For personal use only completed $21.3m in funds generated, inclusive of $2.2m in repaid working capital loans $2.0m profit before tax generated on total divestment $10.0m applied to buybac
Slide 3: Strategy Update
For personal use only Strategy Update Paul Maguire Managing Director
Slide 4: Trading commentary
Trading commentary For personal use only Retail trading conditions favourable with brands performing well Commercial building approvals trending upwards Margins adversely impacted by the weak AUD Easing commodity prices partially offsetting the weak AUD Price increases and other performanc
Slide 5: Corporate Brand Identity
Corporate Brand Identity For personal use only Mission Vision To be a world-class consumer products company Vision Making life easier through Making life easier for 1st choice products for consumers Consumers: through high quality value for money branded and by being a products that improve their li
Slide 6: Company divisions
Company divisions For personal use only Health & Beauty Home Household Appliances Consumables
Slide 7: Divisional revenue summary (Aus & NZ)
Divisional revenue summary (Aus & NZ)* SHARE OF REVENUE For personal use only REVENUE GROWTH REASONS OUTLOOK 1H2016 1H16 vs 1H15 Growth in HEALTH New products and 48% 11% revenue and & BEAUTY new ranging profit Growth in HOME New products and 23% 18% revenue and APPLIANCES new ranging profit Multix
Slide 8: Company transformation
Company transformation McPherson’s is substantially transforming through For personal use only acquisition & divestment and the establishment of new agency partnerships; increasing participation in more profitable categories, channels and markets McPherson’s is a consumer centric organisation commit
Slide 9: Transformation benefits
Transformation benefits Lessened exposure to foreign exchange For personal use only A more profitable channel and customer mix 1H2015 Revenue 1H2016 Revenue Hardware Export Hardware Export 2% 1% 1% 1% Independents 15% Independents 18% Commercial 6% Commercial Grocery Grocery 5% 39% Dept. Stores
Slide 10: Company transformation timeline
Company transformation timeline Diversification achieved through acquisitions, divestments and new agencies For personal use only Divestment McPherson’s Printing Acquisition New Agency Demerger (Fine Fragrances) Acquisition New Agency HOUSEWARES Acquisition Division remaining 49% divested Feb Aug Ma
Slide 11: Transformation progress
Transformation progress For personal use only Acquisitions Partnerships Divestment New Products Performance Improvement 11
Slide 12: Home Appliances
Home Appliances Acquisition ‘Home Appliances’ business acquired, inclusive of the For personal use only Euromaid and Baumatic brands providing growth via diversification into electrical retail, hardware and commercial building 12
Slide 13: Acquisitions
Acquisitions Beauty brands For personal use only Dr LeWinn’s skincare A’kin natural skincare & haircare Leveraging McPherson’s strengths Expansion in Pharmacy channel Significant growth potential 13
Slide 14: Beauty Agency
Beauty Agency Partnership with Trilogy natural skincare For personal use only Partnership 14
Slide 15: Beauty Agency
Beauty Agency Partnership with Procter & Gamble Fine Fragrances For personal use only Partnership 15
Slide 16: New Products
New Products Pipeline of innovative new products across all divisions For personal use only Innovation 16
Slide 17: Performance improvement continuing
Performance improvement continuing >$10 million in annualised benefit from: Performance Improvement For personal use only Price Increases Organisational Redesign Product Cost IT System Savings In progress… …brand consolidation, product rationalisation and digital transformation 17
Slide 18: Digital transformation ongoing
Digital transformation ongoing Digital transformation is technology enabling innovation, For personal use only creativity, and growth Driven by our strategic objectives and consumer expectations Helps build meaningful relationships with consumers based on their actions Leverages McPherson’s
Slide 19: Digital transformation impacts McPherson's across
Digital transformation impacts McPherson’s across: For personal use only Platforms / Technology Syndication Marketing Customer & Consumer Big Data Product Relationships 19
Slide 20: Outlook
For personal use only Outlook
Slide 21: Health and Beauty division
Health and Beauty division Current Status For personal use only Revenue 1H 2016 11% ahead of prior year Successful new products under trusted brands Acquisitions and new agencies boosting McPherson’s presence in Pharmacy and Department Stores and reaffirming McPherson’s beauty industry credent
Slide 22: Household Consumables division
Household Consumables division For personal use only Current Status Multix branded revenue up 1% 1H 2016 and market leadership maintained Profit impacted by: Unfavourable effect of weak AUD Delayed acceptance of price increases Increased ‘promotional support’ required Favourable lower co
Slide 23: Outlook summary remains as per Half Year
Outlook summary remains as per Half Year Price increases, operational initiatives and reduced operational For personal use only expenditure will improve profit in FY2016; however, currency downside risk remains longer term Health & Beauty and Home Appliances to benefit from new products and cont
Slide 24: Home Appliances
Home Appliances Steve Rorie For personal use only Chief Executive Officer April 2016 24
Slide 25: Home Appliances division
Home Appliances division For personal use only Current Status Excellent customer and supplier network New products launched 2H2015 & 1H2016 Commercial building approvals up Revenue up 18% in 1H 2016 but margins adversely affected by weak AUD Uncertainty around Masters 25
Slide 26: Home Appliances – Gross Sales
Home Appliances – Gross Sales Approximately $90 million Key brands: Retail 70% For personal use only • Euromaid • Baumatic • ARC Key Points: Key brands: Commercial 25% • Channel Management • Euromaid Strategy • Baumatic • Product Range • Product displays • Sales representation Key brands: Key points
Slide 27: Home Appliances – Key initiatives
Home Appliances – Key initiatives For personal use only Implemented: Organisational re-design Core ranging of new lines New products launched Visual merchandising updated Supplier consolidation Core ranging – 54cm Wide Ovens 27
Slide 28: Home Appliances – Key initiatives
Home Appliances – Key initiatives For personal use only Implemented: Range rationalisation Supply chain review Internal sales - Service Centre efficiencies Aftersales – Service Centre efficiencies Business margins re-set for lower currency environment Core ranging – Rangehoods 28
Slide 29: Home Appliances - Outlook
Home Appliances - Outlook For personal use only Continued growth from recent new ranges: new products launched 2H 2015 & 1H 2016 Uncertainty around Masters Strong building approvals benefiting commercial Kitchen channel sales bolstered Supply chain savings Savings from Service Centre e
Slide 30: Donna Chan Marketing Director
Donna Chan Marketing Director April 2016 For personal use only
Slide 31: Market Growth
MARKET GROWTH For personal use only BEAUTY CATEGORY MARKET VALUE Key growth drivers: $ Retail (M) • Drop in AUD kept shoppers at home. • Prestige segment +10.8%. • High volume of purchasing from Chinese consumers. • Internet (+18%) and Specialist (+16%) represented the fastest growing channels. Sour
Slide 32: Pharmacy Channel
PHARMACY CHANNEL PHARMACY MAT 03/01/2016 For personal use only Dollars Growth Dollars ($M) % YA 69% of MCP H&B Total Beauty Department $ 2,388 11.5 sales within Total Baby Care $ 264 37.1 Pharmacy Channel Total Beauty Accessories $ 108 7.3 Total Beauty Accessories Cosmetic Tools $ 52 20.0 Total Frag
Slide 33: Pharmacy Channel
PHARMACY CHANNEL PHARMACY MAT 03/01/2016 For personal use only Dollars Growth Dollars ($M) % YA Total Beauty Department $ 2,388 11.5 Total Baby Care $ 264 37.1 MCP leads the Total Beauty Accessories $ 108 7.3 category with 43% Total Beauty Accessories Cosmetic Tools $ 52 20.0 market share Total Frag
Slide 34: Pharmacy Channel
PHARMACY CHANNEL PHARMACY MAT 03/01/2016 For personal use only Dollars Growth Dollars ($M) % YA Total Beauty Department $ 2,388 11.5 Total Baby Care $ 264 37.1 Total Beauty Accessories $ 108 7.3 Total Beauty Accessories Cosmetic Tools $ 52 20.0 Total Fragrances $ 441 3.2 Total Hair Care $ 286 5.0 Al
Slide 35: Pharmacy Channel
PHARMACY CHANNEL PHARMACY MAT 03/01/2016 For personal use only Dollars Growth Dollars ($M) % YA Total Beauty Department $ 2,388 11.5 Total Baby Care $ 264 37.1 Total Beauty Accessories $ 108 7.3 Total Beauty Accessories Cosmetic Tools $ 52 20.0 Total Fragrances $ 441 3.2 Total Hair Care $ 286 5.0 To
Slide 36: Pharmacy Channel
PHARMACY CHANNEL PHARMACY MAT 03/01/2016 For personal use only Dollars Growth Dollars ($M) % YA Total Beauty Department $ 2,388 11.5 Total Baby Care $ 264 37.1 Total Beauty Accessories $ 108 7.3 Total Beauty Accessories Cosmetic Tools $ 52 20.0 Total Fragrances $ 441 3.2 Fast growing categories: Tot
Slide 37: MCP H&B Growth Plan
MCP H&B GROWTH PLAN Fewer, Bigger Brands For personal use only ADVANCED NATURAL ESSENTIAL BEAUTY BEAUTY BEAUTY
Slide 38: MCP Strategic Priorities
MCP STRATEGIC PRIORITIES STRATEGIC CATEGORY KEY BRANDS VISION For personal use only INTENT ADVANCED To be the renowned leader in Anti- High Growth BEAUTY Ageing NATURAL To be the market leader in Natural High Growth BEAUTY Beauty ESSENTIAL To be the leading player in Essential Selective Growth BEAUT
Slide 39: Beauty Advanced
For personal use only BEAUTY A D VA N C E D
Slide 40: Pharmacy Facial Skincare: MCP #2
PHARMACY FACIAL SKINCARE: MCP #2 For personal use only Top 10 Facial Skincare Manufacturers MAT $ Value, Share and Growth AU Pharmacy Facial Skincare Sales ($Ms) +$4.3M MAT To 08/03/15 MAT To 06/03/16 $54 +$7.3M MCP is the #2 Facial Skincare Manufacturer and delivering the highest $ growth vs. YA in
Slide 41: Dr LeWinn's Ranked #4
Dr LeWinn’s RANKED #4 Top 10 Facial Skincare Brands For personal use only MAT $ Value, Share and Growth AU Pharmacy Facial Skincare Sales ($Ms) MAT To 08/03/15 MAT To 06/03/16 $29 $24 $20 $18 $17 $16 $16 $12 $11 $10 Total Dermo Total Sukin Total Olay Total Dr Total Nivea Total Total Garnier Total Tr
Slide 42: Vision – Dr LeWinn's
VISION – Dr LeWinn’s For personal use only To be the renowned leader in Anti-Ageing. • Engage consumers at every touch-point • Increase trial & penetration • Grow through leading edge innovation
Slide 43: New Brand Communications
NEW BRAND COMMUNICATIONS Ownable Brand Idea based on strong foundations and insights For personal use only
Slide 44: Leading Edge New Products
LEADING EDGE NEW PRODUCTS Insight led innovation For personal use only Highly experienced R&D team Intriguing ingredient Known ingredients Visible Results stories
Slide 45: Market Expansion
MARKET EXPANSION For personal use only AUSTRALIA NEW ZEALAND SINGAPORE PRIORITY GROWTH Growth Plan Growth Plan MARKET KOREA UK CHINA Licensing Agreement Venture to secure Developing e-commerce DLW trademark go to market plan
Slide 46: By end 2017, Dr LeWinn's will have....
By end 2017, Dr LeWinn’s will have.... For personal use only • Transformed into a brand with a strong positioning and purpose • Acquired the attention & hearts of skin care users • Improved margins to fuel investment in top-line growth • Own an exciting, viable platform to expand into new categories
Slide 47: Beauty Natural
For personal use only BEAUTY N AT U R A L
Slide 48: High Growth Category
HIGH GROWTH CATEGORY For personal use only AU Pharmacy Natural Skincare AU Pharmacy MCP Natural Natural Skincare Scorecard Sales $000s Skincare Sales 30 $000s 25 27% 117,31 51% 21.4 2 15,700 20 92,598 15 12.6 13.4 12.5 10,378 10.0 10.4 10.8 10.1 9.9 9.6 9.5 9.9 9.3 10 6.3 2.9 3.7 5 1.6 0.9 0.9 0.9 0
Slide 49: Brand Heritage
BRAND HERITAGE For personal use only • 1987: One man’s vision to pioneer advances in natural chemisty to create pure and natural products free of chemicals, containing more than a drop of concentrated goodness to deliver effective results. • 1994: Al’chemy haircare was launched. • 2002: A’kin natura
Slide 50: Vision – A'kin
VISION – A’kin For personal use only To be recognised as a leading natural skincare & haircare brand. • Extend appeal and reach to a wider group of consumers • Transform with a relevant and distinctive brand proposition • Increase awareness and trial • Build a global brand (AU, NZ and Asia)
Slide 51: A'kin Brand Transformation
A’KIN BRAND TRANSFORMATION Natural Heritage + Pure, Fresh, Efficacious + New Pack Design + Loved by Consumers For personal use only ONE BRAND Beautiful skin & hair image Fresh ingredients Beautiful skin & from the ground hair image image
Slide 52: Market Expansion
MARKET EXPANSION For personal use only AUSTRALIA NEW ZEALAND PRIORITY GROWTH Growth Plan MARKET CHINA SINGAPORE Developing e-commerce Growth Plan go to market plan
Slide 53: Beauty Essential
For personal use only BEAUTY ESSENTIAL
Slide 54: Clear Market Leader: Beauty Accessories Scorecard
CLEAR MARKET LEADER For personal use only Beauty Accessories Scorecard AU Pharmacy AU Pharmacy Trended Brand Share Beauty Sales MCP Beauty AU Pharmacy $000s Sales $000s 50 44.5 44.1 44.3 45.1 44.9 7% 11% 46,939 4541.1 41.6 43.0 42.7 43.4 41.7 41.9 42.9 42,244 40 108,77 101,73 9 35 8 30 25 20 13.6 15
Slide 55: Clear Market Leader: Hair Accessories Scorecard
CLEAR MARKET LEADER For personal use only Hair Accessories Scorecard AU Pharmacy AU Pharmacy Trended Brand Share Hair Sales $000s MCP Hair Sales AU Pharmacy $000s 47.3 47.4 47.4 47.5 -0.4 5045.9 46.5 46.3 45.4 45.7 46.6 45.4 46.9 44.9 -1.8 45 31,185 31,049 40 14,665 14,401 35 30 25 21.6 20 15 16.5 1
Slide 56: Vision: Essential Beauty
VISION Essential Beauty For personal use only To be the leading player in the Essential Beauty market. • Attract younger consumers to Manicare and Lady Jayne through innovation and re-invention • Increase brand relevance and conversion to purchase • Drive advocacy and endorsement across multiple tou
Slide 57: Fashion Collaboration
FASHION COLLABORATION New news on top selling core beauty and For personal use only • hair accessories • Attract the attention of younger consumers
Slide 58: Consumer Advocacy
CONSUMER ADVOCACY For personal use only • Awards voted by consumers leveraged on -pack, on-line and in-store • Reviews and ratings • Digital marketing campaigns featuring blogger amplification
Slide 59: Channel Expansion
CHANNEL EXPANSION For personal use only Source: Beauty Update Market Report 2015
Slide 60: Channel Expansion
CHANNEL EXPANSION For personal use only Source: Beauty Update Market Report 2015
Slide 61: MCP H&B Growth Plan
MCP H&B GROWTH PLAN Fewer, Bigger Brands For personal use only ADVANCED NATURAL ESSENTIAL BEAUTY BEAUTY BEAUTY
Slide 62: McPherson's Limited
For personal use only McPherson’s Limited