Slide 1: 2010 Interim Results
2010 Interim Results August 2010
Slide 2: Contents
Contents • Executive Summary • 2010 Results & Cash Flow (Facility usage) • Business Review Packaging Distribution Manufacturing Operations • Pension Scheme Deficit actions in progress • 2010 Strategic Agenda • Market Outlook and Conclusions
Slide 3: Executive Summary
Executive Summary 2010 2009 Packaging Distribution operating profit £1.2m £1.2m Manufacturing Operations operating profit £0.1m (£0.1m) Interest charge (£0.6m)(£0.6m) Profit before exceptional items £0.7m £0.5m Exceptional credit of £1.2m in 2010 relating to pension deficit – other actions in progre
Slide 4: Results H1 2010
RESULTS H1 2010 H1 2009 H2 2009 Sales £m 64.1 59.1 64.5 Sales growth Distribution 9% ( 7%) (4%) Manufacturing 7% (11%) (11%) GP % 31.2% 32.2% 32.7% Operating profit % 2.0% 1.8% 3.0% Pre-exceptional profit £m 0.7 0.5 2.7 Exceptional items 1.2 (0.5) (0.2) Pre-tax profit £ m 1.9 0.0 2.5 Tax charge (cre
Slide 5: Cash Flow
CASH FLOW H1 2010 H1 2009 H2 2009 Operating profit 2.4 0.8 2.9 Depreciation 0.7 0.7 0.7 Working capital (2.7) (2.4) 1.8 Interest and Tax (0.2) (0.5) (0.3) Pensions scheme payments (1.3) (0.7) (1.6) Net disposals/(acquisitions) 0.0 1.1 (0.5) Net capital expenditure (0.2) (0.3) (0.1) Dividends (1.1) (
Slide 6: H1 2010 – Distribution
H1 2010 – Distribution Distribution sales 9% >H1 2009 price 7% volume 2% Gross margin reduced to 29.9% vs. 31.3% H1 2009 Concentrated effort to pass through price increases Recovery in margin in H2 has already commenced New business at similar levels to H1 2009 • Overhead costs show a 5% increase vs
Slide 7: H1 2010 – Distribution Margin
H1 2010 – Distribution Margin Period Top 30 % Total Remainder % Total H1 08 26.0% 21 30.4% 79 H2 08 28.2% 21 31.3% 79 H1 09 29.5% 21 31.8% 79 H2 09 28.8% 23 32.1% 77 H1 10 26.9% 25 30.9% 75 Similar position seen in 2008 Margin recovery takes longer with Top 30 Inherently growing part of the business
Slide 8: H1 2010 – Manufacturing Operations
H1 2010 – Manufacturing Operations Labels sales revenue up 1% vs 2009 – sales mix changes 2009 raw material cost increases not all passed through Good growth in ReSeal-it – US customer demand Good wins in major own-brand customers eg. McBrides Profitable but reduced level of profitability vs. H1 200
Slide 9: Pension Deficit
Pension Deficit Investments £40.6m (Dec-09 £40.6m), Liabilities £60.6m (£61.0m), Deficit £20.0m (£20.4m) Freezing pensionable salaries reduced liabilities £1.2m Decrease in discount rate from 5.75% to 5.50% offset this Investment values have shown recovery since 30-Jun-10 Deficit contributions £2m p
Slide 10: 2010 Strategic Agenda – Distribution
2010 Strategic Agenda – Distribution Focus on customer retention/product penetration Increase new business activity Focus on growth sectors eg. 3PL, given UK coverage Accelerate development of presentational packaging www.macfarlanepackaging.com relaunch Oct-10 Continue best practice to ensure deliv
Slide 11: 2010 Strategic Agenda - Manufacturing
2010 Strategic Agenda - Manufacturing Labels Identify opportunities to rebuild margins through a more beneficial sales mix Continue to improve operational efficiencies Further develop ReSeal-It in US/other geographies Packaging Manufacturing Build sales momentum in target sectors eg. Aerospace Impro
Slide 12: Market Outlook and Conclusions
Market Outlook and Conclusions Cautious on overall demand - mixed outlook by sector Bank facilities of £12.5m renewed until February 2011 Security of supply and certainty important for businesses Busy trading agenda to drive profits Busy balance sheet agenda to reduce pension deficit A strong platfo