Slide 1: 2014 Interim Results
Co MACFARLANE 2014 Interim Results
Slide 2: Contents
Contents • Executive Summary • 2014 Results/Cash Flow • Business Review • Packaging Distribution • Manufacturing Operations • Pension Scheme Deficit • 2014 H2 Key Actions • Conclusions
Slide 3: Executive Summary
Executive Summary 2014 2013 Profit before exceptional items £1.2m £1.6m Group sales 3% ahead of 2013 with improving trend Highly competitive market place caused margin pressure in Distribution Internet retailer volume loaded towards H2 UK economy recovering but retail market turbulence affecting Lab
Slide 4: 2014 Results £m
2014 Results £m £m 2014 H1 2013 H1 2013 H2 Sales 70.2 68.1 75.8 Gross Profit 30.6% 21.5 31.9% 21.7 30.6% 23.2 Overheads 19.8 19.5 19.1 EBIT 2.4% 1.7 3.2% 2.2 5.2% 4.1 Interest 0.5 0.6 0.6 Profit before exceptionals 1.2 1.6 3.5 Exceptional charges 0.0 0.2 0.2 PBT 1.2 1.4 3.3 Tax 0.2 0.4 0.9 Profit fo
Slide 5: 2014 Cash Flow £m
2014 Cash Flow £m £m 2014 H1 2013 H1 2013 H2 EBIT 1.7 2.2 4.1 DA 0.6 0.7 0.6 EBITDA 2.3 2.9 4.7 Working Capital (0.7) (0.9) 0.4 (1.0) Interest (0.2) (0.2) (0.2) Tax (0.4) (0.3) (0.4) Capex (0.2) (0.4) (0.3) Acquisition (1.2) (1.2) Pensions (2.5) (3.9) (1.5) (1.0) Dividend (1.2) (1.2) (0.6) Movement
Slide 6: Packaging Distribution
Packaging Distribution Growth % H1 H1 H2 £m 2014 2013 Volume Price 2013 Revenue 57.0 54.9 2.9 0.9 61.4 Gross margin 28.6% 29.8% 28.5% Operating Profit* 1.5 1.6 3.4 Margin* 2.7% 2.9% 5.5% Sales increase in 2014 of 3.8% Jan-Apr sales 2.5%, May-Jun sales 5.2%, >5% sales growth being maintained Gross ma
Slide 7: Packaging Distribution
Packaging Distribution • Some demand increases – but offset by competitive pricing • 3PL sales down 2% (2013 +6%) • National Accounts growth 7% (2013 +7%) • Internet retail ca. 16% of Distribution business but H2 loaded. Full year > 20% • Good new business increase of £2.3m and strong pipeline of op
Slide 8: Raw Material Movements
Raw Material Movements £ 1,200 £5 00 £ 1,150 £4 50 £ 1,100 £4 00 £ 1,050 £ 1,000 £3 50 £950 £3 00 £900 £2 50 £850 £800 £2 00 2007 2008 2009 201 0 201 1 20 12 20 13 20 14 Polymer £/ tonne £840 £1,020 £871 £1,056 £1,063 £1,062 £1,180 £1,171 Pa per £/ tonne £316 £337 £290 £384 £460 £39 8 £4 29 £4 56
Slide 9: Packaging Design and Manufacture
Packaging Design and Manufacture Distribution Sales H1 H1 H2 £m 2014 2013 2014 2013 2013 Revenue 6.2 6.6 26% 23% 6.5 Gross Margin 38.9% 39.3% 36.9% Operating profit 0.2 0.3 0.3 • Sales impacted by one-off projects in H1 2013 and a significant customer moving offshore • Focus on value-added products
Slide 10: Macfarlane Labels
Macfarlane Labels Self Adhesive Reseal-It H1 H1 H2 £m 2014 2013 2013 Revenue 8.6 8.2 59% 41% 8.9 Operating Profit* 0.0 0.3 0.4 Net Margin 0.0% 3.7% • Good Reseal-it growth of 13% • Self-adhesive sales down by 9% and market is intensely competitive • Strong resealable systems sales in Europe • Additi
Slide 11: Pension Scheme Deficit £m
Pension Scheme Deficit £m H1 2014 2013 Deficit at 1 January (15.9) (18.9) Ongoing accrual/Interest cost ( 0.4) ( 0.9) Contributions 4.0 2.7 Bond yield 0.2% to 4.3% (2013 0.1% to 4.5%) (2.4) 1.2 Investment performance 1.2 1.5 Net effect of other assumptions 0.3 (1.5) Deficit at 30 June (2013 - 31 Dec
Slide 12: Pension Scheme details
Pension Scheme details Investments H1 2014 2013 Diversified Growth Funds £15.5m £16.4m UK Corporate Bonds/Gilts £10.1m £22.5m Liability-driven Investments £18.0m £ 0.0m UK Equities £ 5.5m £ 5.7m Overseas Equities £ 9.6m £ 9.4m Cash £ 0.2m £ 0.2m Total £58.9m £54.2m Liabilities Active members 23 £ 5.
Slide 13: Manufacturing 2014 Key Actions
Manufacturing 2014 Key Actions LABELS Focus on higher added value products and services Continue to improve operational efficiencies Increase Reseal-it penetration in key markets through improved retailer focus Strengthen position in Ireland through new facility PACKAGING DESIGN AND MANUFACTURE Focu
Slide 14: Distribution 2014 Key Actions
Distribution 2014 Key Actions Improve customer retention, product penetration & new business, through tailored approaches to key customer segments Focus on growth opportunities in Internet Retail, 3PL, and National Accounts Improve on line visibility and capability through www.macfarlanepackaging.co
Slide 15: Acquisitions
Acquisitions Recent history •2006-2008 Three acquisitions in Packaging Distribution •Sales of £20m Acquisition prices totalled £11m •Average EBITDA multiple of 6.0 •Gloucester, Hayes, Wakefield •Efficient integration process Lane Packaging •May 2014 acquisition of Lane Packaging •Based in Reading wi
Slide 16: Conclusions
Conclusions • Some improvement in demand • Competitor price focus impacting margins • Trading agenda: • Distribution focus on identified growth opportunities – Internet retail, 3PL and National Accounts • Manufacturing focus on higher added value products and services • Ongoing focus on cost reducti