Slide 1: Investing for growth
Investing for growth Results and Strategy Presentation: September 2017
Slide 2: Agenda
Agenda 1. Headlines 2. RPG update – Prepare phase 3. Financial headlines including outlook 4. Preparing for growth 5. RPG timetable 6. Q&A McBride plc 1 Results and Strategy Presentation: September 2017
Slide 3: Headlines – active in change whilst delivering an improved financial position
Headlines – active in change whilst delivering an improved financial position • Repair phase completed, business • Operating profit up 21.0%, underlying executing Prepare phase adjusted operating profit, at constant currency, up 8.5% • Group refinancing completed June 2017, last key Repair action •
Slide 4: Reminder – Repair, Prepare, Grow
Reminder – Repair, Prepare, Grow Time horizon by calendar year • Strategy, objectives and timing unchanged • Prepare Phase launched in year • Repair phase closed 2016 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Repair Prepare • Define and launch the five-year growth plan • Define
Slide 5: Prepare phase… four building blocks
Prepare phase… four building blocks Prepare McBride will invest into its manufacturing assets and optimise its warehousing and distribution network. We will align the new organisational set-up aiming to institutionalise our new way of working with our people. We will provide a clear way forward for
Slide 6: Market trends and commercial results
Market trends and commercial results European groceries market Household segment PCA segment showing slight growth in H2 • Customer Choices effect • Aerosols disposal terminated • Food main driver – volumes completed • Full focus now on and inflationary • Further discontinued low PCA turnaround • Br
Slide 7: Prepare phase – sales strategy/proposition
Prepare phase – sales strategy/proposition Good structural progress in a diverse environment 1 • Improved quality, supply efficiency and innovation power rolled out over Sales strategy/ entire customer base proposition • Key growth categories identified and supporting asset investment plans underway
Slide 8: Prepare phase – asset configuration
Prepare phase – asset configuration Capex spend moving to full momentum 2 • Asset planning and related investment completed supporting: Asset • key growth categories capacity and technology requirements configuration • driving cost and performance efficiencies through consolidation Estaimpuis Strzel
Slide 9: Prepare phase – organisational development
Prepare phase – organisational development Investment in people, skills and organisation 3 • Key strategic positions and functions Organisational • Human capital development and training development • Organisational depth Packaging laboratory investment case study • Packaging increasingly important
Slide 10: Prepare phase – mergers and acquisitions
Prepare phase – mergers and acquisitions First acquisition announced 4 Mergers and acquisitions Company profile Strategic positioning • Family owned company, three • Active in a key growth category (ADW) manufacturing plants in Denmark, • Accelerated access to: 2016 turnover of £58.4 million • addit
Slide 11: Financial headlines
Financial headlines • Operating profit up 21.0%, underlying • Strong cash generation continues with adjusted operating profit, at constant underlying net cash inflow of £21.2 million, currency, up 8.5% resulting in an improved net debt cover ratio to 1.2x (2016: 1.7x) • Further progress on margins,
Slide 12: Income statement
Income statement Revenue Adjusted EBITA Adjusted EBITA by segment Labour costs % of sales and £m £m/ROS% £m overhead % of gross profit 41.5 88.3% 36.2 85.2% 761.3 5.9% 749.7 83.6% 47.2 19.7% 28.5 5.3% 42.7 50.3 704.2 705.2 4.0% 19.0% 19.0% 680.9 2.7 3.4 -0.7 -9.2 -9.2 -8.1 2014/15 2015/16 2016/17 20
Slide 13: Balance sheet and cash flow
Balance sheet and cash flow ROCE Cash flow Net debt £m/ % from operations £m debt cover x 63.3 92.4 90.9 52.5 27.7% 75.7 44.2 1.9 23.4% 1.7 18.8% 1.2 2014/15 2015/16 2016/17 2014/15 2015/16 2016/17 2014/15 2015/16 2016/17 Net debt Debt cover • Working capital • Capital expenditure • Covenants • Refi
Slide 14: Other financials
Other financials Exceptional items Payments to shareholders Group pension liability £m p/dividend cover x £m 42.2 4.3 31.4 32.9 3.6 3.6 17.8 3.1 3.0 13.0 2.3 0.78 0.78 0.73 2.4 1.0 2014/15 2015/16 2016/17 2014/15 2015/16 2016/17 2014/15 2015/16 2016/17 Operating Finance Payments to shareholders Divi
Slide 15: Investing over £100 million in operational excellence
Investing over £100 million in operational excellence • Four-year programme • Key projects: • Forward view: gathering pace: • Strzelce re-set and • run rate for FY18 • project approvals in year upgrade • Danlind impact over £30 million • Estaimpuis capsules • additions capitalised • Bradford Persona
Slide 16: Group refinancing completed in June 2017
Group refinancing completed in June 2017 • Debt structure realigned Before After to strategy Additional accordian • Certainty for future €75m (£66m) • Simple/flexible USPP RCF RCF • Cash efficiency £m £m £m • Mergers and acquisitions • Reduced interest costs 69.3 69.3 123.1 153.9 61.6 £2 million+ pe
Slide 17: Danlind a/s – outline financials
Danlind a/s – outline financials Product category Synergy opportunity 39% Powder Balance sheet 53% Tablets • Growth: 8% Liquids • ADW • Institutional and Industrial Customer 33% Contract manufacturing 10.8 Equity • Nordic liquids 29% I&I Fixed 24.8 38% Private label assets • Cost actions: 28.0 Net d
Slide 18: Outlook/forward view – financials
Outlook/forward view – financials • Early months of new financial year satisfactory • Growth expectations from H2 • Raw material input costs stabilised • Currency rates, hedging • Gross margin improvement • H1/H2 weighting reversal • Financing costs lower • Capital expenditure in line with plan • Da
Slide 19: Preparing for Growth
Preparing for Growth Grow McBride will drive a sustainable and profitable growth path based upon a greatly improved cost position and more efficient manufacturing and distribution. This will focus on fewer markets, categories and customers. McBride will develop customer specific value propositions d
Slide 20: Preparing for Growth – mergers and acquisitions
Preparing for Growth – mergers and acquisitions Introducing Danlind a/s 4 Mergers and acquisitions Danlind boosts McBride market position in ADW, a key growth category • Growth ambition accelerated by two years from this acquisition • Growth in Europe at c.4% • Demand growth linked to convenience tr
Slide 21: Preparing for Growth – retail and discount
Preparing for Growth – retail and discount 1 2 Retail Discount Converging models; integrated and complementary propositions • Driving new ADW platform more effectively • Further capitalising upon capsules leadership position • Portfolio sell with cost effective liquids category offer (WUL, fabric co
Slide 22: Preparing for Growth – Contract Manufacturing
Preparing for Growth – Contract Manufacturing 3 Contract Manufacturing Early approach continued • Smaller contract successes across Europe and Asia • Existing contracts growth, demand in ADW and capsules • Discussions ongoing with potential partners • Danlind acquisition; Co-manufacturing category r
Slide 23: Reminder – Repair, Prepare, Grow
Reminder – Repair, Prepare, Grow Time horizon by calendar year 2016 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Key projects delivered or in final stage Repair • customer and SKU simplification • overhead alignment programmes • underperforming businesses identified, progress alr
Slide 24: Questions
Questions Investor day Dates for your diary: • 3 October London • 10 October Estaimpuis/Middleton McBride plc 23 Results and Strategy Presentation: September 2017
Slide 25: Appendices
Appendices 1. Income statement 2. Segmental reporting 3. Exceptional items 4. Balance sheet 5. Cash flow 6. Use of cash 7. Funding headroom McBride plc 24 Results and Strategy Presentation: September 2017
Slide 26: Appendix 1: income statement
Appendix 1: income statement Constant currency(1) 2016/17 2015/16 2015/16 £m £m Y/Y £m Y/Y Revenue 705.2 680.9 3.6% 749.7 (5.9%) Gross profit 252.8 243.8 3.7% 270.6 (6.6%) Gross margin 35.8% 35.8% — 36.1% (0.3ppts) Distribution costs (46.2) (46.5) (0.6%) (50.2) (8.0%) Administration costs (165.1) (1
Slide 27: Appendix 2: segmental reporting
Appendix 2: segmental reporting Constant currency 2016/17 2015/16 2015/16 £m £m Y/Y £m Y/Y Revenue UK 155.4 164.9 (5.8%) 164.9 (5.8%) North 192.8 179.0 7.7% 205.7 (6.3%) South 76.4 69.2 10.4% 79.7 (4.1%) East 131.1 121.9 7.5% 139.9 (6.3%) Household 555.7 535.0 3.9% 590.2 (5.8%) PCA 149.5 145.9 2.5%
Slide 28: Appendix 3: exceptional items
Appendix 3: exceptional items 2017 2016 £m £m Reorganisation and restructuring costs: Supply chain restructuring 0.9 — 2015/2016 reorganisation projects (0.1) (1.0) Customer choices — 2.2 Legal case 0.2 1.2 1.0 2.4 Write back of long-lived assets, property, plant and equipment and inventory: Brno, C
Slide 29: Appendix 4: balance sheet
Appendix 4: balance sheet 2016/17 2015/16 £m £m Y/Y Goodwill and other intangible assets 21.7 20.0 8.5% Property, plant and equipment 140.9 136.2 3.5% Other non-current assets 12.7 22.5 (43.6%) Working capital 22.7 29.7 (23.6%) Net other debtors/(creditors) (4.4) (0.3) 1,366.7% Provisions (4.7) (6.4
Slide 30: Appendix 5: cash flow
Appendix 5: cash flow 2016/17 2015/16 Y/Y £m £m £m Adjusted operating profit 41.5 36.2 5.3 Depreciation 19.4 18.2 1.2 Share-based payments 2.3 1.8 0.5 Additional cash funding of pension scheme (3.0) (3.1) 0.1 Operating cash flow before movements in working capital 60.2 53.1 7.1 Movement in working c
Slide 31: Appendix 6: use of cash
Appendix 6: use of cash 80 Cash generation £71.5m Movement in net debt 70 8.2 Other items 15.2 60 Foreign exchange Cash utilisation total £50.3m 6.0 50 13.2 Exceptionals £m 40 Cash 63.3 generated 6.4 Financing cost from 30 operations 6.4 Taxation 20 17.7 Capital expenditure 10 6.6 Payments to shareh
Slide 32: Appendix 7: funding headroom
Appendix 7: funding headroom 30 June Committed Facility 2017 headroom £m £m £m Committed facilities: – revolving facilities (June 2022) 153.9 (61.6) 92.3 – invoice discounting facilities 47.0 (33.6) 13.4 – other loans 2.0 (2.0) — 202.9 (97.2) 105.7 Uncommitted facilities 66.3 (5.4) Total facilities