Treatt Plc · LSE:TET
Treatt — H1 2020 Earnings Presentation
23 slides from Treatt's earnings presentation, May 2020
Slide 1: Half Year Results for the Period Ended 31 March 2020
he CF TREATT HALF YEAR RESULTS FOR THE PERIOD ENDED 31 MARCH 2020
Slide 2: Executive Summary
EXECUTIVE SUMMARY HALF YEAR RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2020 & No adverse impact from COVID-19 on trading performance to date & Momentum continues in tea, health & wellness and fruit & vegetables categories « Withstood anticipated pressure from prior year fall in citrus prices ® Citrus r
Slide 3: Half Year Results - Highlights at a Glance
HALF YEAR RESULTS - HIGHLIGHTS AT A GLANCE R 1 Profit Earnings evenue Before Tax'23 per Share'?# Dividend +8.2% (5.3%) (2.0%) (3.2%) 164 84p £53.6m £6.1m 8.08p Revenue’ Profit Before Tax and Exceptional Items! £120.0m £14.0m £100.0m £12.0m am £10.0m £80.0m £47.1m £8.0m £60.0m £6.0m £6.1m £40.0m £4.0
Slide 4: H1 2020 Financial Review - Income Statement
H1 2020 FINANCIAL REVIEW - INCOME STATEMENT 2020H1 2019H1 Change (Key Points Year ended 30 September £000 £000! % Revenue 53,604 56,625 5.3% «) _V Fallin citrus oil input prices in prior year impacted total 2 , “ revenue - non-citrus categories continued to perform well Citrus 26,938 31,743 -15.1% N
Slide 5: Cash Flow
CASH FLOW £25.0m 1 Opening net cash includes an adjustment of £6.5m £(0.4)m in respect of the adoption of IFRS 16 | 2 £8.6m relates to the UK Relocation Project (£1.1m) £20.0m ( ) £15.6m! £15.0m £10.0m £11,9m)* Le | | _ || £6.1m (£2.3m) (£0.2m) £5.0m £0.0m Net Cash YE 2019 EBITDA Working Capital Cap
Slide 6: COVID-19 Effect on Treatt
COVID-19 EFFECT ON TREATT 6 China - early impact, and lessons learnt for wider group & Resilient supply chain - no raw material supply issues a *Treatt. Country Manageft’.. ® UK and US stayed open - 50% of workforce still on site Bar GHG ® Social distancing and strict health & safety measures in pla
Slide 7: COVID-19 Impact on Markets
COVID-19 IMPACT ON MARKETS “ Dramatic change in consumption behaviour @ Back to basics - consumers looking for familiar brands @ Health before wealth: @ economical and own-label alternatives over premium brands @ increase in bottled waters, juice and still drinks markets @ Consumer consciousness - c
Slide 8: Strategic Drivers
STRATEGIC DRIVERS DELIVERING SUSTAINABLE GROWTH FOR OUR STAKEHOLDERS 6 Investing for future growth 6 Engaging with our communities @ US capacity now doubled - in time for @ Donations to local hospitals COVID-19 new crop season Appeal @ New UK site construction progressing @ Donation of food items to
Slide 9: Environmental - Social - Governance
ENVIRONMENTAL - SOCIAL — GOVERNANCE CIRCULAR ECONOMY APPROACH “ Environmental performance and strategy “ Governance @ Natural supply chain @ Compliance @ Manage waste & environmental impact - @ Business integrity zero waste to landfill @ Standards @ Purpose-built energy efficient premises (FEMAS BRC
Slide 10: Investing in Our Core Categories
INVESTING IN OUR CORE CATEGORIES ® Investment in value-added products to drive demand through innovation continues ® Strategic focus on key product categories supporting growth plan to 2022 4 Coffee - we continue to built on our platform and explore market entry points « Diversification of portfolio
Slide 11: Strategic Focus - Core Product Categories % Growth in Sales
STRATEGIC Focus — CoRE PRODUCT CATEGORIES 50 % GROWTH IN SALES — Hi 2020 v Hi 2019 +475% 40 30 419.9% 20 10 +9.4% +9.4% aE [] Ex) <aiex . | -10 -20 + From contiwing operations Citrus Tea Health & Wellness Fruit & Vegetables —_ Herbs, Spices & Florals Aroma & HICs H1 2019 H1 2020 H1 % of Revenue nN E
Slide 12: Strategy Has Decoupled the Historic Link of Group Profits to Orange Oil Price
STRATEGY HAS DECOUPLED THE HISTORIC LINK OF GROUP PROFITS TO ORANGE OIL PRICE £14.0m $14/kg £12.0m $12/kg £10.0m $10/kg £8.0m i $8/kg | J 3 5 a oO “on _y 2 8 £4.0m J S4/kg £2.0r > s2/kg £0.0m s/kg 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Group Profit Before Tax and Exceptional Items* Financ
Slide 13: Product Diversification
PRODUCT DIVERSIFICATION PLAYING A CRUCIAL ROLE IN KEY SUPPLY CHAINS 4 Beverage ® Food supply # Cleaning products @ Use of citrus by-products
Slide 14: UK Site Relocation
UK SITE RELOCATION # £36m project on budget - ROI 10-15% - 3 years after completion ® Includes £17m investment in plant & machinery, laboratories and new technologies # Commenced construction in September 2019 & Completion delayed due to COVID-19 - move expected in 2021
Slide 15: UK Enhanced Capabilities
UK ENHANCED CAPABILITIES Improved client interaction Technical collaboration with customers Heightened customer experience of Treatt Collaborative hub space driving customer interaction, partnership-based model and product innovation Attractive design and feel to showcase Treatt’s full capacity Scie
Slide 16: Current Trading & Outlook
CURRENT TRADING & OUTLOOK 4 Strong finish to H1, momentum building into H2 ® Consumer behaviour materially different due to COVID-19 @ Possible impact on customer demand and new product innovation @ any slowdown offset by taking market share and winning new customers in current categories whilst pro
Slide 17: Appendices
APPENDICES
Slide 18: Product Categories
Citrus Health & Wellness PRODUCT CATEGORIES © 6 6 6 6 6 Tea Coffee Fruit & Vegetables Herbs, Spices & Florals Aroma & HICs Natural flavour of sugar - without carbs or calories Treatt’s largest product category Both natural and synthetic offerings create significant market opportunities Sugar tax / o
Slide 19: H1 2020 Financial Review - Cash Flow
H1 2020 FINANCIAL REVIEW — CASH FLOW 2020 H1 2019 H1 Key Points £'000 £'000! Operating cash flow 6,473 6,644 1) Lower inventories — benefit from ongoing measures to reduce stock and improve turn: lower citrus prices Decrease in inventories 2,244 2,303) (Increase) in trade and other receivables (4,95
Slide 20: H1 2020 Financial Review - Balance Sheet
H1 2020 FINANCIAL REVIEW — BALANCE SHEET As at As at Key Points As at 30 September 31 March 2020 30 September 2019 £'000 £'000! 1) Fixed asset spend on capital investrnent programme Fixed assets £41.5m £30.7m a) Inventories £34.3m £36.8m (2) 2) Inventory turn improved, £1.5m lower citrus inventory D
Slide 21: Interim/Final Earnings per Share 2016-2020
INTERIM/FINAL EARNINGS PER SHARE! 2016-2020 20 18 16 14 12 10 2016 2017 2018 20197 2020 mHi mH2 1 From continuing operations, excluding exceptional items 1 2 Restated for the adoption of IFRS 16, ‘Leases’ Dn : min « nS
Slide 22: Interim/Final Dividend 2010-2020
2010 INTERIM/FINAL DIVIDEND 2010-2020 3.50p 2.60p 1.45p 2011 2012 2013 2014 2015 2016 2017 2018 2019 mHi mH2 ne E 2020 22
Slide 23: Slide 23