Slide 1: Investor Presentation: Half Year 2016 Results
INVESTOR PRESENTATION Half Year 2016 Results 29 JULY 2016
Slide 2: Agenda
AGENDA 1. Operational Review - Colin Day 2. Financial Review - Stefan Schellinger 3. 2016 Outlook - Colin Day © 2013 ESSENTRA PLC 2
Slide 3: Operational Review
OPERATIONAL REVIEW Colin Day Chief Executive © 2013 ESSENTRA PLC
Slide 4: HY 2016: Summary
HY 2016: SUMMARY • Result impacted by a number of challenges ‒ Notably in Filter Products and Health & Personal Care Packaging ‒ Many are temporary in nature and / or showing improvement in line with expectations • Additional cost savings initiatives already implemented • Further progress with Clond
Slide 5: Component Solutions
COMPONENT SOLUTIONS HY 2016 REVENUE: £147M, LFL -4% (-1% EX-PPT). OM -370BPS • Broad-based Components growth in Continental Europe and Asia – BUT greater challenges in US and UK • Launch of category marketing materials in all geographic regions – 20 new access solutions platforms also introduced • C
Slide 6: Health & Personal Care Packaging
HEALTH & PERSONAL CARE PACKAGING HY 2016 REVENUE: £217M, LFL -5%. OM -190BPS • Significant progress in addressing less profitable activities • Business wins in H&PC packaging – Further commercialisation of new leaflets and cartons – “Freshness” labels in FMCG segment • Progress with Clondalkin SPD i
Slide 7: Filtration Products
FILTRATION PRODUCTS HY 2016 REVENUE: £184M, LFL -13%. OM -80BPS • Underlying filter volumes < HY 2015 … – Sizeable European contract not offset by new business – De-stocking in China – Short-term disruption in India • … BUT continued recognition of innovation capabilities – Successful commercialisat
Slide 8: Regional Summary
REGIONAL SUMMARY EUROPE AMERICAS ASIA HY 2016 REVENUE: £266M, LFL -7% HY 2016 REVENUE: £192m, LFL -7% HY 2016 REVENUE: £87m, LFL -10% (-5% EX-PPT) • Result impacted by decline in • Result driven by Tobacco segment Tobacco segment • Gains in Industrial general • Benefit in Household from protection p
Slide 9: Financial Review
FINANCIAL REVIEW Stefan Schellinger Group Finance Director © 2013 ESSENTRA PLC
Slide 10: Income Statement - Summary
INCOME STATEMENT - SUMMARY HY 16 HY 15 Growth £m £m Actual Constant FX FX Revenue 545.2 550.4 -1% -5% Like-for-like1 -7% Operating profit2 70.1 81.9 -14% -18% Operating margin 12.9% 14.9% -200bps -200bps Profit before tax2 63.1 76.6 -18% -21% Adjusted earnings2 50.5 59.0 -14% -18% Adjusted earnings
Slide 11: Revenue by SBU
REVENUE BY SBU HY 16 HY growth £m Constant FX Health & Personal Care Packaging 216.7 +2% Like-for-like1 201.4 -5% Component Solutions 147.1 -4% Component Solutions ex-PPT 141.7 -1% Filtration Products 183.7 -13% Eliminations (2.3) Group 545.2 -5% Group – at actual FX -1% 1 At constant exchange rates
Slide 12: Operating Profit – Key Movements
OPERATING PROFIT – KEY MOVEMENTS 1 3.3 (6.2) 81.9 (2.5) 0.6 (5.0) (2.0) 70.1 £m HY 2015 Currency Filtration Tear Tape Net pricing Other: Impact of PPT HY 2016 Products: impact volume, mix volume volume, mix decrease 1Adjusted to exclude intangible amortisation and exceptional operating items 12
Slide 13: Operating Profit by SBU
1 OPERATING PROFIT BY SBU HY 16 Growth Margin Margin £m Constant HY 16 HY 15 FX Health & Personal Care 22.1 -14% 10.2% 12.1% Packaging Component Solutions ex- 28.2 -13% 19.9% 22.9% PPT PPT (1.8) n/m (33.0)% 2.3% Filtration Products 29.5 -17% 16.1% 16.9% Central Services (7.9) Group 70.1 -18% Group –
Slide 14: Income Statement – Continued
INCOME STATEMENT – CONTINUED HY 16 Growth £m Actual Constant FX FX Operating profit1 70.1 -14% -18% Net finance charge (7.0) Higher average net debt Profit before tax1 63.1 -18% -21% Taxation (12.6) Tax rate down - Underlying tax rate 20.0% 300bps Net income1 50.5 -14% -18% Adjusted earnings1 50.2 -
Slide 15: Cash Flow
CASH FLOW1 £m 100.0 16.4 Operating Cash Conversion = 59% (26.9) (HY 2015 = 51%) 80.0 70.1 (18.3) 60.0 41.3 (8.5) 40.0 (6.5) 0.5 26.8 20.0 0.0- Operating Non-cash Working Net capex Operating Tax Interest paid Pension Free cash profit1 items capital cash flow 1 contributions flow1 1 Adjusted to exclud
Slide 16: Net Debt Reconciliation
NET DEBT RECONCILIATION £m As at 1 January 2016 374 FX 44 As at 30 June 2016 434 Change in net debt after FX 16 Of which: Free cash flow (27) Acquisitions - Dividends 38 Exceptionals 7 Net cashflow from employee trust shares (2) 16 Net debt / EBITDA ratio of 2.2x NOTE: 16 Negative numbers denote a c
Slide 17: Dividend
DIVIDEND 7.0 6.3 6.3 6.0 5.7 5.0 4.8 Pence 3.9 4.0 3.0 2.0 1.0 0.0 HY12 HY13 HY14 HY15 HY16 Dividend maintained, notwithstanding HY challenges 17
Slide 18: 2016 Outlook
2016 OUTLOOK Colin Day Chief Executive © 2013 ESSENTRA PLC
Slide 19: 2016 Priorities & Outlook
2016 PRIORITIES & OUTLOOK GROUP • Benefit from implemented cost reduction initiatives • Drive cash generation and conversion • Complete strategic review of Porous Technologies • Continue to nurture the M&A pipeline Component Solutions H&PC Packaging Filtration Products • Complete site consolidation
Slide 20: Appendices
APPENDICES © 2013 ESSENTRA PLC
Slide 21: Income Statement – Reported Basis
INCOME STATEMENT – REPORTED BASIS HY 16 Growth Actual Constant £m FX FX Adjusted operating profit 70.1 -14% -18% Intangible amortisation (15.9) Exceptional operating items (4.6) Reported operating profit 49.6 -2% -6% Net finance charge (7.0) Profit before tax 42.6 -6% -10% Taxation (8.5) - Underlyin
Slide 22: Revenue Growth – by Region
REVENUE GROWTH – BY REGION 1 HY16 HY growth HY growth £m Constant LFL2 FX Europe 266.0 -5% -7% Americas 192.3 -3% -7% Americas ex-PPT 187.4 -1% -5% Asia 86.9 -10% -10% Group 545.2 -5% -7% Group – at actual FX -1% 1 Revenue by destination 2 At constant exchange rates, adjusted for the acquisitions of
Slide 23: Exchange Rates
EXCHANGE RATES Six months ended 30 June 2016 Average Closing US $/£ 1.43 1.33 Euro €/£ 1.28 1.20 Impact of a one cent change Op. Profit (£m) US $/£ 0.2 Euro €/£ 0.1 Six months ended 30 June 2015 Average Closing US $/£ 1.53 1.57 Euro €/£ 1.36 1.41 23
Slide 24: Disclaimer
DISCLAIMER IMPORTANT LEGAL NOTICE THIS DOCUMENT IS STRICTLY CONFIDENTIAL TO THE RECIPIENT AND HAS BEEN SUBMITTED TO YOU SOLELY FOR YOUR INFORMATION. THE RECIPIENT MAY NOT REPRODUCE OR REDISTRIBUTE ANY PART OF THIS DOCUMENT TO ANY PERSON IN ANY FORM. THIS DOCUMENT AND THE PRESENTATION TO WHICH IT REL
Slide 25: Investor Presentation: Half Year 2016 Results
INVESTOR PRESENTATION Half Year 2016 Results 29 JULY 2016