Nwf Group Plc · LSE:NWF
Nwf — H1 2019/20 Earnings Presentation
32 slides from Nwf's earnings presentation, Jan 28, 2020
Slide 1: Delivering Performance and Strategy
DELIVERING PERFORMANCE AND STRATEGY NWF GROUP PLC HALF YEAR RESULTS TO 30 NOVEMBER 2019
Slide 2: Half Year Results Summary
GROUP OVERVIEW HALF YEAR RESULTS SUMMARY Strong results ahead of expectations – increased activity in all three divisions Revenue Headline operating profit Headline profit before tax £348.9m +5.6% £3.5m +34.6% £3.0m +25.0% 2019 £348.9m 2019 £3.5m 2019 £3.0m 2018 £330.5m 2018 £2.6m 2018 £2.4m Headlin
Slide 3: Fuels Operating Highlights
FUELS FUELS OPERATING HIGHLIGHTS Increased sales and acquisitions delivered » Growth of gas oil and heating oil - increased underlying volumes in H1 with additional volume from acquisitions » Lower, stable oil prices in the period » Investment is continuing in systems, people and assets to improve e
Slide 4: Food Operating Highlights
FOOD FOOD OPERATING HIGHLIGHTS Improved operational effectiveness and a major expansion » Continued improvement in operational effectiveness » Significant Brexit additional activity Sept / Oct followed by destocking in Nov / Dec » Increased activity levels – outloads up 4% » Seven customers now util
Slide 5: Feeds Operating Highlights
FEEDS FEEDS OPERATING HIGHLIGHTS Gaining market share and training for the future » NWF volume up 6.5% » Ruminant feeds market volume down 10.8% » NWF sales increases in all channels and regions » Direct to farm, merchants, compounders » Pricing aligned to commodity prices » 16% lower than prior yea
Slide 6: Financial Review: Income statement summary
GROUP OVERVIEW FINANCIAL REVIEW Income statement summary Nov 2019 Nov 2018 May 2019 £m £m £m Revenue Fuels 245.9 222.4 443.0 » Revenue increased by £18.4 million (5.6%): Food 24.4 23.8 47.9 » Increase in activity in all three divisions Feeds 78.6 84.3 180.4 Total revenue 348.9 » £36.9 million from a
Slide 7: Financial Review: Balance sheet summary
GROUP OVERVIEW FINANCIAL REVIEW Balance sheet summary Nov 2019 Nov 2018 May 2019 £m £m £m Fixed assets 74.2 66.9 70.2 » Fixed assets increased due to acquisitions Right of use asset 19.5 - - » Lower net working capital reflecting lower commodity Net working capital 6.1 11.4 6.3 prices » Net debt £0.
Slide 8: Financial Review: Pension summary
GROUP OVERVIEW FINANCIAL REVIEW Pension summary Nov 2019 Nov 2015 May 2019 £m £m £m » Single defined benefit pension scheme Assets 39.4 38.0 Liabilities (56.4) (55.3) » Closed to new members in 2002 and future accrual in 2016 Deficit (17.0) (17.3) » Slight decrease in deficit since May 2019 Related
Slide 9: Financial Review: Cash flow summary
GROUP OVERVIEW FINANCIAL REVIEW Cash flow summary Nov 2019 Nov 2018 May 2019 £m £m £m Cash flows from operating activities Operating profit 3.1 2.6 9.6 » Headline EBITDA* of £5.3 million (2018: £4.9 million) Depreciation and amortisation 2.2 2.3 4.7 » Working capital movement benefited from lower De
Slide 10: Financial Review: Net debt summary
GROUP OVERVIEW FINANCIAL REVIEW Net debt summary Twelve month movement in net debt 14.9 » Facilities of £65.0 million with RBS until October 2023 15.0 14.8 17.6 3.7 » Net debt of £14.9 million at Nov 2019 with substantial 13.0 facility and covenant headroom 11.0 3.1 9.0 Facility Facility Drawn 8.2 7
Slide 11: Financial impact of Fuels acquisitions and expansion of Food
GROUP OVERVIEW FINANCIAL REVIEW Financial impact of Fuels acquisitions and expansion of Food Aggregate impact of recent growth initiatives: » Acquisition of Caldo and Darch expected to add around £0.5 million to Fuels profitability in FY19/20 » Initial start-up costs associated with new Food warehou
Slide 12: Development Strategy Summary
GROUP OVERVIEW DEVELOPMENT STRATEGY Summary » Diversified source of earnings » Cash generative businesses » Experienced, capable Board » Group operates in large stable markets » Focus on total shareholder return » Strong track record Fuels Food Feeds » Consolidate a highly fragmented » Optimise the
Slide 13: Fuels Development Strategy: Market consolidation potential
FUELS FUELS DEVELOPMENT STRATEGY Very attractive market with significant consolidation potential » Fragmented market for oil distribution » Top 10 players only 25%, over 150 small players » NWF No. 3 with 2% market share » Stable demand for oil supply » Customers purchase fuel from local depots, exp
Slide 14: Fuels Development Strategy: Acquisition activity
FUELS FUELS DEVELOPMENT STRATEGY Acquisition activity » Last 12 months’ activity: Annualised Fuels Volume (million litres) volume » Acquired five businesses across the UK 700 » Over 150 million litres of business added (30%) 600 » £13 million consideration paid 500 » Clear post acquisition integrati
Slide 15: Fuels Development Strategy: Acquisition process
FUELS FUELS DEVELOPMENT STRATEGY Acquisition process 25 Fuel depots » Targeting oil distribution businesses in the UK » Clear valuation and pricing strategy » Effective transaction process: » Established legal, environmental and financial due diligence process and advisors » In-house operational and
Slide 16: Food Development Strategy: Major expansion
FOOD FOOD DEVELOPMENT STRATEGY Major expansion – backed by customer contracts » Significant expansion announced with a major customer contract increasing capacity by 37,000 pallet spaces » Close to M6 Junction 16 » 240,000 ft2 » Six months to fully utilise facility » Expansion backed by new customer
Slide 17: Investment Summary
GROUP OVERVIEW INVESTMENT SUMMARY The NWF proposition Strong management team Growth opportunities Asset backing Focus on return on capital Good cash generation Growing dividend NWF GROUP PLC HALF YEAR RESULTS TO 30 NOVEMBER 2019 17
Slide 18: Summary and Outlook
GROUP OVERVIEW SUMMARY AND OUTLOOK Good platform for development » Strong result in the first half year » First half ahead, increased activity across the Group » Demonstrable delivery of strategic plan with five fuels acquisitions in the last 12 months » Strong balance sheet with long term funding i
Slide 19: Additional Information
GROUP OVERVIEW ADDITIONAL INFORMATION » Leadership team » Business summary » Analyst coverage and consensus forecasts » Business overview » Locations » Organisation » Main site photo » Group financial performance » Divisional track record » Additional market data NWF GROUP PLC HALF YEAR RESULTS TO 3
Slide 20: Leadership Team
GROUP OVERVIEW LEADERSHIP TEAM Richard Whiting Chris Belsham Chief Executive Group Finance Director Key skills Key skills » Strategy and leadership » Finance » Sales and marketing » Mergers and acquisitions » Operations » Strategy » Finance » Mergers and acquisitions Joined as Group Finance Director
Slide 21: Business Summary
GROUP OVERVIEW BUSINESS SUMMARY Summary » NWF is a specialist distributor of fuel, food and feed across the UK » Strong track record of delivering increased shareholder returns » Group operates in large, stable markets » Strongly cash generative with track record of dividend growth » Clear growth st
Slide 22: Analyst Coverage and Consensus Forecasts
GROUP OVERVIEW ANALYST COVERAGE AND CONSENSUS FORECASTS Actual Consensus forecasts Analysts 2019 2020 2021 2022 Peel Hunt* Charles Hall Revenue £671.3m £791.2m £772.8m £766.8m Panmure Adrian Gordon Kearsey Headline operating £10.2m £10.5m £10.8m £11.0m Shore Capital Akhil Patel profit * Corporate br
Slide 23: Business Overview: Fuels
GROUP OVERVIEW BUSINESS OVERVIEW NWF Fuels is a leading distributor of fuel oil and fuel cards delivering over 600 million litres across the UK to 90,000 customers. It is one of the largest authorised distributors of Texaco and is a major customer of other fuel suppliers including Shell and Jet. Key
Slide 24: Business Overview: Food
GROUP OVERVIEW BUSINESS OVERVIEW Boughey Distribution is a leading consolidator of ambient grocery products to UK supermarkets with over I million ft² of warehousing and significant distribution assets. It works with over 200 customers including Arla and Typhoo. Key figures 100,000 595 124 247 PALLE
Slide 25: Business Overview: Agriculture
GROUP OVERVIEW BUSINESS OVERVIEW NWF Agriculture has grown to be a leading national supplier of ruminant animal feed to 4,750 customers in the UK, feeding 1 in 6 dairy cows in Britain. It operates from sites in Cumbria, Lancashire, Cheshire and Devon. Key figures 600,000 226 38 14 TONNES PEOPLE TRUC
Slide 26: Business Locations
GROUP OVERVIEW BUSINESS LOCATIONS Feeds Aspatria Longtown Wardle* Wixland Food Crewe Wardle* Fuels Immingham Ammanford Babbinswood Crewe Bangor Boston Burnley Burwell Droitwich Dyserth Fishers Pond Glastonbury Great Yarmouth Home Counties Immingham Kenilworth Kirkby Lonsdale Glastonbury Long Marston
Slide 27: Organisation
GROUP OVERVIEW ORGANISATION Non Executives Chief Executive Chairman: Philip Acton Richard Whiting Yvonne Monaghan David Downie Group Finance Director Company Secretary Chris Belsham Rob Andrew Fuels Food Feeds Richard Huxley Keith Forster Andrew Downie 279 employees 595 employees 226 employees NWF G
Slide 28: Wardle – Main Operating Site
GROUP OVERVIEW WARDLE – MAIN OPERATING SITE NWF GROUP PLC HALF YEAR RESULTS TO 30 NOVEMBER 2019 28
Slide 29: Track Record
GROUP OVERVIEW TRACK RECORD Revenue Headline PBT 800 12 671.3 10.2 700 9.7 611.0 10 600 537.7 555.8 8.1 8.3 8.5 492.3 7.7 465.9 8 500 £m £m 400 6 300 4 200 2 100 - - 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Headline EPS Dividend 18 16.7 7 6.6 15.8 6.3 6.0 16 14.0 6 5.7 13.5 5.4 14
Slide 30: Divisional Track Record
GROUP OVERVIEW DIVISIONAL TRACK RECORD Fuels Food 500 8.0 60 3.5 450 7.0 50 3.0 400 6.0 Operating profit £m Operating profit £m 350 2.5 40 Revenue £m Revenue £m 300 5.0 2.0 250 4.0 30 200 1.5 3.0 150 20 2.0 1.0 100 1.0 10 0.5 50 - - - - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201
Slide 31: Group Overview: Fuels additional market data
06 /0 $ 1/ 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 0 5 20 06 18 /0 2/ 06 201 /0 8 3/ GROUP OVERVIEW 20 06 18 /0 4/ 20 06 18 /0 Oil Market Journal 5/ 20 06 18 /0 6/ 20 Fuels additional market data 06 18 /0 7/ 20 06 18 /0 GROUP OVERVIEW Oil Prices - Brent crude $ per barrel 8/ NWF GROUP
Slide 32: Group Overview: Feeds additional market data
Price per tonne $ Price per tonne £ 01 /1 100 150 200 250 300 350 400 450 500 50 0 2/ 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 180.0 190.0 200.0 210.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 0.0 22 201 /1 7 2/ 01/12/2017 12 201 /0 7 13/12/2017 1/ 02 201 25/12/2017 /0 8 06/01/2018 2/ 23 2