Treatt Plc · LSE:TET
Treatt — H1 2022 Earnings Presentation
26 slides from Treatt's earnings presentation, May 2022
Slide 1: Half Year Results for the Six Months Ended 31 March 2022
U TREATT HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2022 Daemmon Reeve - Chief Executive Officer Richard Hope — Chief Financial Officer
Slide 2: Disclaimer
A DISCLAIMER TREAT This presentation has been prepared for information purposes only, and does not constitute an offer of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Treatt plc or any of its subsidiary c
Slide 3: Good Revenue Growth; Strong Order Book
GOOD REVENUE GROWTH; STRONG ORDER BOOK * Encouraging revenue growth +9% - Strong performance across diversified portfolio * As previously guided, reversion to historical H1/H2 margin profile - Post COVID-19 return reflecting beverage seasonality - Margin in H2 to be driven by higher margin healthier
Slide 4: Financial Highlights
A FINANCIAL HIGHLIGHTS <p TREAT £66.3m 27.5% £6.3m Revenue Gross Margin Profit Before Tax! +9.0% -750bps -38.9% 8.21p 2.50p Earnings Per Share! Interim Dividend -36.5% +25.0%
Slide 5: Growth Across Category Mix
A GROWTH ACROSS CATEGORY MIX ep TREATT % % of Revenue * Citrus category performing well - added-value and Growth favourable price mix Category H12022 12021 inSales 12022 12021 * Synthetic Aroma - growth benefitted from increased partnering with key customers Synthetic Aroma £13.2m £11.0m 20.4% 19.9%
Slide 6: Financial Review
FINANCIAL REVIEW if } 4 |
Slide 7: Record H1 Revenue
A RECORD H1 REVENUE op TREATT £124.3m 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 mHi wH2
Slide 8: Reversion to Historic H1/H2 Split
REVERSION TO HISTORIC H1/H2 SPLIT Up TREATT PRoFIT BEFORE TAX‘? £20.9m 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 mH1 mH2 Evolution continuing from Traded to Added-Value "Excluding exceptional items 2 Treatt compiled consensus of four analyst forecasts for FY22 profit before tax and exception
Slide 9: Dividend Per Share H1 2022: +25.0%
A DIVIDEND PER SHARE Hi 2022: +25.0% TREATT 7.50p 6.00p 5.50p 5.10p 4.80p 4.35p 4.04p 3.70p 3.84p 3.10p 1.70p 1.84p 1.45p 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 mHi mH2
Slide 10: H1 2022 Financial Review
Hi 2022 FINANCIAL REVIEW > TREATT INCOME STATEMENT Period ended 31 March Ga Poa Change Revenue 66,283 60,827 9.0% Gross profit 18,247 21,287 (14.3%) Gross profit margin 27.5% 35.0% — (750bps) Administrative expenses (11,668) (10,719) 8.9% Operating profit 6,579 10,568 (37.7%) Operating profit margin
Slide 11: Cash Flow
A CASH FLOW UTREATT £0.0m + Working capital outflow result of significant investment in inventory to meet strong H2 order book + Successful disposal of Northern Way premises to realise (£5.0m) : £5.6m in cash * Ongoing spend on business driven projects with strong ROI * Closing net debt to EBITDA =
Slide 12: Guidance
A GUIDANCE TREAT * Full year revenue guidance increased; expected to be up at least 15% on prior year * Profit guidance maintained * Long established Treatt experience in navigating fluctuating raw material prices * Treatt is highly experienced in supply chain - lead times from suppliers impacted; h
Slide 13: Market Overview / Strategic Priorities
MARKET OVERVIEW STRATEGIC PRIORITIES
Slide 14: Strategy & Investing for Future
A STRATEGY & INVESTING FOR FUTURE TREAT Bringing relevance to growing addressable markets Partnering with customers to differentiate brands with authentic, premium extracts Provide flavour molecules for alternative proteins Continued growth in low calorie beverages * Ongoing demand for ready-to-drin
Slide 15: Market Resilience and Growth Opportunities
A MARKET RESILIENCE AND GROWTH OPPORTUNITIES = ©” TREATT In challenging economic times, premium beverages represent an affordable luxury with demand increasing Driven by health-consciousness, the move towards plant-based diets creates opportunity in alternative protein flavours, as well as low/no su
Slide 16: ESG - Our Approach to Sustainability
A ESG - OUR APPROACH TO SUSTAINABILITY TREAT New ESG Framework being finalised with clear vision, objectives & KPI's that expand on this and shape ESG strategy to support our overall Business Strategy Addressing 4 key material issues spanning across 1) People and Culture 2) Environment and Climate C
Slide 17: Outlook
OUTLOOK Strong order book driving H2 performance - Return to H2 weighting - strong start made - Revenue guidance increased - Profit before tax and exceptional items for the current financial year in line with current market consensus Healthier living categories expected to drive higher margins Manuf
Slide 18: Thank You, Any Questions?
A op TREATT THANK YOU Any QUESTIONS? A u TREATT
Slide 19: Appendices
APPENDICES
Slide 20: Product Categories
Botanical ingredients are growing in With a strong and established popularity in several markets as background in citrus, our range of —_ ‘naturalness’ continues to be an natural and synthetic products are AN increasing priority @ well aligned with consumer tastes s —_ ‘Synthetic Aroma Health & Well
Slide 21: Building Long-Term Relationships for Organic Growth with Customers
BUILDING LONG-TERM RELATIONSHIPS FOR ORGANIC GROWTH WITH CUSTOMERS Ranking by No. Years Ranking by Type of . Products asa Categories Revenue Revenue FY21 Customer FY16 1 25 €46646 3 2 25 AA Co) 6 A A 1 & Flavour Fragrance : 3 YY 10 A A Co) 6 A 17 LY Matate Pewee Non-Alcoholic Beverage 7X A A A 2 4 2
Slide 22: 2022 Cash Flow
N 2022 CASH FLOW Uy TREATT H12022 ~—-H1 2021 Period ended 31 March £'000 £'000 Key Points i 7 11,709 . te Operating cash flow ce 70 * Working capital - outflow lead by significant investment in Increase in inventories (9,749) (5,472) inventory to meet H2 order book Increase in receivables (6,498) 6,
Slide 23: 2022 Balance Sheet
2022 BALANCE SHEET As at As at 31March 2022 30 September 2021 Key Points * Fixed asset spend on capital investment programme continues to Fixed assets £68.4m £65.0m progress Inventories £57.8m £47.3m * The group's net debt position has increased largely due to the significant inventory build to meet
Slide 24: Earnings Per Share
EARNINGS PER SHARE” 2013 2014 2015 2016 2017 2018 2019 2020 2021 mH1 mH2 12018 - 2020 EPS is shown from continuing activities,
Slide 25: Investment Infrastructure Phase Timeline
a A INVESTMENT INFRASTRUCTURE PHASE TIMELINE TREAT Initiated £48m Capital Investment Programme 2017 * Equity fund raise £20m US $15m Expansion Complete 2019 ~ caubies our capacity for Health & 88, Fruit & Ve and Tea fables UK build complete (fit-out underway) 2020 TREATT USA Colleagues begin 2021 tr
Slide 26: Treatt
u TREATT