Slide 1: First Half Results Release Financial Year 2017
For personal use only M WE IP Tal le 1k S OINS Est.1860 McPherson's Limited First Half Results Release Financial Year 2017 Laurence McAllister —- Managing Director Paul Witheridge — Chief Financial Officer 21 February 2017
Slide 2: MCP FY2017 - Financial Overview
2 MCP FY2017 - Financial Overview For personal use only Revenue from continuing Closure of Impulse Merchandising Division operations 11.4% Reduction in low margin private label and $149.1m agency sales Adverse AUD/USD currency impact EBIT 6.6% Improved contribution margins $13.5m Reduced selling
Slide 3: Summary Bridge of Underlying PBT from Continuing Operations
3 Summary Bridge of Underlying PBT from Continuing Operations 1HFY16 to 1HFY17 ($m) For personal use only 1.2 Reduction in 1.0 borrowing costs (4.6) Reduction in 1.1 selling costs Reduction in distribution 1HFY16 1.9 costs 1HFY17 $10.9 $11.0 (0.5) FX Impact Reduction Improvement in Home in Contribut
Slide 4: Significant Items
4 MCP FY2017 Financial Overview Significant Items Significant Items A$m FY2017 FY2016 For personal use only Impairment of Home Appliances intangibles (12.0) - Impairment of Revitanail brand (6.0) - Impairment of New Zealand goodwill (1.8) - Restructure costs (0.8) (0.2) Bond buyback cost (0.7) - Pro
Slide 5: MCP 1HFY2017 - Financial Overview
5 MCP 1HFY2017 - Financial Overview (In comparison with 31 December 2015) For personal use only Underlying Cash Conversion* $15.9m operating cash flow before 106% interest and tax payments Strong operating cashflow Net Debt Improved working capital efficiency 55.9% $40.9m Divestment of 49% interes
Slide 6: MCP 1HFY2017 - Financial Overview
6 MCP 1HFY2017 - Financial Overview (In comparison with 31 December 2015) For personal use only Normalised EBIT Interest Cover* 1.4 times EBIT* / Interest* 5.4 times Normalised leverage Ratio* 1.6 times Net Debt / EBITDA* 1.5 times • Interim dividend of 6.0 cents per share fully franked – Payout
Slide 7: Strategy Update
For personal use only Strategy Update
Slide 8: Strategic priorities
• Focussed on Health, Wellness & Beauty Brands stable is the #1 PRIORITY! For personal use only • Deliver quality growth of our MCP Health , Wellness & Beauty business by re- launching our top 5 TM’s: Dr. LeWinn’s, A’kin, Manicare, Lady Jayne & Swisspers • Increase our Australian Health, Wellness &
Slide 9: Focused on Health, Wellness, Beauty
9 Focused on: Health Wellness Beauty For personal use only HAPL 22% • High Growth Net Sales H,W& B Contribution 61% • High Demand Agency 17% • High Margins
Slide 10: 32% of revenue
For personal use only 32% of revenue 10
Slide 11: 18% of revenue
For personal use only 18% of revenue 11
Slide 12: Distribution partners by country
12 Country Partner Target / Sign Date For personal use only Australia Renewed December 2016 Singapore WIP Qtr1 2017 Singapore WIP Qtr1 2017 New Zealand January 2017 Australia Renewed Feb 17 Terminated current distributor Singapore and will transfer distribution to January 17 MCP Expanding ranging wi
Slide 13: Commercial focus across top 6 customers
13 Increase our commercial focus and execution around our capabilities by developing Strategic Joint Business Planning Sy and in-store metrics across the top 6 customers JAHGASN\ MCPHERSON'S Est.1860 TerryWhite Chemmart
Slide 14: Key initiatives
14 For personal use only • Key initiatives being: – Continued focus on cost efficiencies – Securing agency business with target revenue of $1m or greater i.e. Evolu – Driving our core business through collaboration with our key customers i.e. Green Cross Health JBP – Having a high performing and eng
Slide 15: Kingsgrove Warehouse supply chain improvements
15 For personal use only Kingsgrove Warehouse - Total capacity 12,500 pallet spaces Jan 2015 - 200 spaces available 99% full – 1% space available ($43mil Stock holdings) Jan 2017 - 6000 spaces available – 48% capacity opportunity ($28mil Stock holding) 35% reduction in working capital over 2 years b
Slide 16: Dr. LeWinn's - The #1 Cosmecutical brand
16 The #1 Cosmecutical brand For personal use only • • Experts in Anti-Ageing • Currently launching new prestige packaging • We are passionate about addressing skin concerns for women of all ages • Increased R&D investment allows us to − Work with our global suppliers on continued leading edge innov
Slide 17: Introducing Eternal Youth
17 INTRODUCING ETERNAL YOUTH For personal use only FOUR NEW PRODUCTS LAUNCHING APRIL 2017
Slide 18: A'kin Relaunch
18 A’kin Relaunch One Global A'kin Haircare and Skincare For personal use only • Brand • New highly appealing natural, contemporary packaging • Innovator in Natural with pure, authentic, efficacious products such as – Coconut Water & Green Tea Hydration Range – Rosehip + Vitamin C – Natural Dry Sham
Slide 19: NPD, Visual Identity and Creative
NPD, Visual Identity and Creative 19 For personal use only
Slide 20: Manicare
20 • Distribution expansion in supermarkets • Maintain loyalists whilst attracting younger consumers via Glam innovation For personal use only & engagement • Glam growing at +23%* with 98k Facebook fans • Available to purchase on-line • Exciting innovations in high growth segments • Catwalk trends,
Slide 21: For personal use only
Li (19) eas T.G.1.F LASH iy VQ i ! al ] @ | 21 V
Slide 22: Lady Jayne
22 • Convert high brand For personal use only awareness into strong growth through: – Distribution expansion in supermarkets and ecommerce • Contemporise Lady Jayne brand through packaging relaunch and differentiated innovation WIP
Slide 23: New Visual Identity (WIP)
23 For personal use only New Visual Identify (WIP)
Slide 24: Multix delivering at top & bottom line
24 Multix delivering at top & bottom line #1 For personal use only Brand in Australia for the total of Australian households B/W/F category have at least one Multix We’ve had successful *Market leader at 34.3% share ($) total plastic bags/wraps/foils MAT to 11/01/17 Aztec product in their home tacti
Slide 25: HAPL and second half outlook
25 • HAPL underlying retail business remains very solid. • Retail Channel: All key retail partners ahead of plan and prior For personal use only year, excluding the negative impact of; – Masters store format Closure – Loss of Laundry business in Harvey Norman • Commercial/Kitchen: Building project d
Slide 26: Consumer engagement objectives
26 Primary Objective For personal use only • Build one on one relationships with new and existing consumers to increase brand awareness, brand engagement, brand loyalty and drive offline and online sales. • Retail store locator functionality has been added to our website, with over five thousand ret
Slide 27: Export and international partners
27 For personal use only • Specialise in natural, good value – mid tier skincare and health brands • Working together to drive A’kin in • 5 star Tmall TP store operator the UK and EU • Secured the opening of Akin’s Official Tmall store. • Targeted purchases of $1m in Year 1 • A’kin has been position
Slide 28: For personal use only
pRLewiINNS —-[ Akin | AEE — tatu Jayne ~— swisspers
Slide 29: Appendix: Financial Performance
For personal use only APPENDIX McPherson’s Limited - Financial Performance Results for the Half Year Ended 31 December 2016
Slide 30: Group Financial Summary for H1 FY2017
30 Group Financial Summary for H1 FY2017 Continuing operations*, excluding non-recurring items For personal use only 1H2016* 1H2017* ($A million) ($A million) Sales 168.3 149.1 11.4% Sales decrease EBITDA 15.8 15.0 Depreciation & amortisation (1.3) (1.5) EBIT 14.5 13.5 6.6% EBIT decrease Interest (3
Slide 31: Group Financial Summary - Statutory
31 Group Financial Summary for 1H FY2017 Statutory (i.e. including non-recurring items) For personal use only 1H2016 1H2017 ($A million) ($A million) NPBT excluding non-recurring items 10.9 11.1 Non-recurring items: - Impairment of intangibles - (19.8) - Restructuring costs (0.2) (0.8) - Bond buybac
Slide 32: Group Operating Cash Flows
32 Group Operating Cash Flows 1H2016 1H2017 For personal use only ($A million) ($A million) Cash flows from operations Receipts from customers (inclusive of GST) 186.4 164.7 Payments to suppliers and employees (inclusive of GST) (185.5) (148.9) Net cash inflows from operations before interest and ta
Slide 33: Group Investing and Financing Cash Flows
33 Group Investing and Financing Cash Flows 1H2016 1H2017 For personal use only ($A million) ($A million) Cash flows from investing activities Payments for acquisition of business assets (6.7) - Payments for purchase of property, plant and equipment (1.9) (0.7) Payments for purchase of intangibles (
Slide 34: Non-IFRS measures and disclaimer
McPherson's Limited SS < Non-lFRS measures O The non-lIFRS measures used by the Company are relevant because they are consistent with f @) measures used internally by management to MCPHERSON'’S W assess the operating performance of the business. The non-IFRS measures have not been subject to —— audi