Treatt Plc · LSE:TET
Treatt — H1 2017 Earnings Presentation
17 slides from Treatt's earnings presentation, May 2017
Slide 1: Treatt plc Interim Results
Treatt plc Interim Results for the 6 months ended 31 March 2017 Daemmon Reeve - Chief Executive Officer Richard Hope - Finance Director
Slide 2: Agenda
Agenda • Executive Summary • Results at a glance • Financial Review • Our Strategy • Commercial Review • Future Developments • Current Trading & Outlook 2
Slide 3: Executive Summary
Executive Summary • 3 years ahead of schedule on 2020 strategic plan financial targets • Key product categories all performing well • Strong Q1 • Momentum continued into Q2 • Cash outflow due to order book build 3
Slide 4: Results at a Glance
Results at a Glance 6 Months Ended 31 March 2016 2017 Revenue £'m 110 Revenue £40.9m £51.8m 100 £85.9m £88.0m 90 £79.2m 80 £74.1m £47.1m 2H Operating profit £3.7m £5.9m 70 £42.1m £44.5m £40.5m 60 1H Profit before tax* £3.4m £5.5m 50 £51.8m 40 £41.4m £40.9m 30 £37.1m Earnings per share* 4.72p 7.69p 2
Slide 5: 2017 Half Year Review: Income Statement
2017 Half Year Review Income Statement 2016 Change 2017 Key Points £'000 % £'000 Revenue 40,893 +26.6% 51,788 1. Strong revenue driven by citrus, tea, sugar reduction Gross Profit 9,622 12,384 2. FX: +£3m to revenue and +£0.8m to PBT in Gross Profit % 23.5% 23.9% constant currency Administrative
Slide 6: 2017 Half Year Review: Cash Flow
2017 Half Year Review Cash Flow 2016 2017 Key Points £'000 £'000 1. Cash outflow normal in H1 Net cash from operating activities (839) (1,574) Cash flow from investing activities 2. £7.2m increase in working capital Investments in subsidiaries - (900) 3. Relatively low cap ex due to UK site Purchase
Slide 7: 2017 Half Year Review: Balance Sheet
2017 Half Year Review Balance Sheet As at 31 March 2016 2017 Key Points Goodwill £1.1m £2.7m 1. Increase in Goodwill following Earthoil settlement Fixed Assets £11.6m £12.0m 2. Inventory levels higher due to Inventories £30.2m £40.4m strong order books Debtors £19.0m £21.0m 3. Pension accounting
Slide 8: Interim/Final Earnings per Share
Interim/Final Earnings per Share* 2013-2017 “Consistent Profitable Growth” 14p 8.12p 12p 7.73p 10p 6.07p 8p 5.78p 7.69p 6p 4p 4.72p 4.21p 3.88p 2p 2.82p p 2013 2014 2015 2016 2017 1H 2H * All adjusted measures exclude exceptional items in prior years 8
Slide 9: Interim / Final Dividends
Interim / Final Dividends 2008-2017 “Progressive Dividend Policy” 5p 3.00p 4p 2.76p 2.60p 2.60p 3p 2.08p 1.94p 1.78p 1.66p 2p 1.52p 1.45p 1.28p 1.35p 1p 1.24p 1.02p 1.10p 0.96p 0.72p 0.74p 0.82p p 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H 2H 9
Slide 10: Key Strategic Focus
Key Strategic Focus AROMA & FRUIT & R&D HIGH IMPACT VEGETABLE Unlocking HEALTH & Further WELLNESS Ingredient Opportunities Solutions Sales Beverage Giving & Customer Marketing Flavour & Advantage Fragrance Houses Cosmetics HERB, SPICE & FLORAL Applications CITRUS TEA 10
Slide 11: 2020 Strategic Plan
2020 Strategic Plan “To deliver sustainable growth in profits in the flavour, fragrance and consumer product markets” COLLABORATIVE CULTURE 11
Slide 12: Commercial Review
Commercial Review • Emphasis on people, staff engagement and culture - key drivers of business success • Significant new business wins delivering growth • First re-brand in searchable history of Treatt • China expansion continues • Earthoil performing well • Margin gain due to favourable product mix
Slide 13: Customer Industry Sectors
Customer Industry Sectors Sales Sales Trader or Distributor Chemicals 2% Food Other Personal Care 3% 2% 2% 20% Flavour & Fragrance Beverages 48% 23% 13
Slide 14: Future Developments
Future Developments • Business driven capacity investment at Treatt USA • Excellent growth in sugar reduction and tea • UK relocation and expansion 14
Slide 15: UK Relocation & Expansion
UK Relocation & Expansion From this: To this (architect’s impression): Land, buildings, and move costs £20m - £26m • Planning and regulatory consent expected to take 6-9 months Capital projects held back over the last three years £3m - £5m Upgraded plant and machinery and new technologies £3m - £5m
Slide 16: Current Trading & Outlook
Current Trading & Outlook • Q3 started strongly and momentum continuing • Positive top line growth driven by higher order books • Strong cash inflow expected in H2 • Promising opportunity pipeline over 18 months - 2 years • Earthoil momentum continues • Favourable product mix, margin improvements to
Slide 17: www.treatt.com
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