Slide 1: Treatt plc Interim Results
Treatt plc Interim Results for six months ended 31 March 2016 Daemmon Reeve - Chief Executive Officer Richard Hope - Finance Director
Slide 2: Agenda
• Our Strategy • Results at a glance • Executive Summary • Financial Review • Commercial Review • Future Developments • Current Trading & Outlook Agenda 2
Slide 3: Growth Map
Ingredient Solutions Solving Customer Challenges Sugar Reduction Beer R&D Sales Applications Ingredients Imitating Customer Success Teams Nature Fast Reactions Delighting Customers Spirit Flavours Unlocking Further Opportunities Growth Map 3
Slide 4: 2020 Strategic Plan
“Sustainable growth in profits in the flavour, fragrance and FMCG markets” Happy Staff Culture + Engaged Differential Customer Advantage Intimacy Team = Innovative Investing Align Successful Behind Solution for the Customer Business Selling Future Need 2020 Strategic Plan 4
Slide 5: Results at a Glance
6 Months Ended 31 March 2015 2016 Revenue £'m 90 Revenue £41.4m £40.9m 80 £44.5m £42.1m 70 £38.0m £40.5m EBITDA* £4.0m £4.5m 60 2H 50 1H Profit before tax * £2.9m £3.4m 40 £41.4m £40.9m 30 £36.0m £33.6m £37.1m Earnings per share * 4.21p 4.72p 20 10 Dividends per share 1.28p 1.35p 0 2012 2013 2014 20
Slide 6: Executive Summary
• 2020 strategic plan on track • Improved margins • Better Q1 than prior year, very strong March • Adverse FX impact of £0.6m • Year on year cash flow improvement • Continuing growth in wellness and beer Executive Summary 6
Slide 7: 2016 Half Year Review: Income Statement
2015 Change 2016 Key Points £'000 % £'000 1. Stronger margins through increased Revenue 41,408 -1.2% 40,893 added-value and process improvement Gross Profit 9,142 9,622 2. Lower average borrowings Gross Profit % 22.1% 23.5% 3. Exceptional costs re. Earthoil Earnout Administrative expenses (5,837)
Slide 8: 2016 Half Year Review: Cash Flow
2015 2016 Key Points £'000 £'000 • H1 cash outflow as expected due to Net cash from operating activities 1,277 (839) higher RM costs and increasing order book Cash flow from investing activities • March 2016 net debt lower than 12 Purchase of property, plant and equipment (376) (322) months earlier
Slide 9: 2016 Half Year Review: Balance Sheet
As at 31 March 2015 2016 Key Points Goodwill £1.1m £1.1m 1. Inventory levels higher due to Q3 order book plus higher RM Fixed Assets £11.9m £11.6m prices Inventories £26.4m £30.2m 2. Pension accounting deficit of £3.4m but actuarial surplus Debtors £18.8m £19.0m 3. £0.9m FX gain on US assets Credi
Slide 10: Interim/Final Earnings per Share
“Consistent Profitable Growth” 14p 12p 7.51p 10p 6.07p 8p 5.78p 4.88p 6p 4p 4.72p 4.21p 3.88p 2p 2.82p 2.02p p 2012 2013 2014 2015 2016 MONTHS 1H 2H Interim/Final Earnings per Share 2012-2016 10
Slide 11: Interim / Final Dividends
“Progressive Dividend Policy” 5p 4p 2.76p 2.60p 2.60p 3p 2.08p 1.94p 1.78p 1.66p 2p 1.46p 1.52p 1.28p 1.35p 1p 1.24p 1.02p 1.10p 0.96p 0.74p 0.82p 0.70p 0.72p p 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 MONTHS 1H 2H Interim / Final Dividends 2007-2016 11
Slide 12: Commercial Review
• Ongoing commitment to R&D investment • New business wins in price-stable ingredient solutions • Enhanced margins through strategic focus on added-value • Emphasis on people, staff engagement and culture continues to deliver • Yield improvements from Kenya through productivity gains • China expansi
Slide 13: Customer Industry Sectors
3% 2% 1% 16% 25% 53% Flavour & Fragrance Beverage Personal Care Chemicals Breweries Pharmaceutical Customer Industry Sectors Sales 13
Slide 14: Future Developments
Over next 2-3 years continue to invest to drive our growth: • UK site relocation – land negotiations underway • Enhanced customer facing technical infrastructure in US • Increased headcount investment in revenue driving areas • Increased sales focus on China – dedicated technical and sales team Futu
Slide 15: UK Site Relocation
• In advanced discussions for 10 acre site in Bury St Edmunds • Planning and regulatory consent expected to take 6-9 months • Update shareholders as plans progress • Up and running on new site by late 2018 • Total project costs of: £20.0m - £25.0m for relocation, land and build £3.0m - £5.0m for
Slide 16: Current Trading & Outlook
• Q3 started well, more even split between H1 and H2 • Underlying growth, but steady sales due to falling prices of some key raw materials • H1 FX impact to reverse • Strong opportunity pipeline over 18 months – 2 years • Earthoil growth from increased capacity • Favourable product mix, margin impro
Slide 17: www.treatt.com
a WD TREATT www.treatt.com