Slide 1: McBride plc Results Presentation: 28 February 2023
McBride plc Results Presentation: 28 February 2023
Slide 2: Agenda and our speakers today
Agenda Our speakers today 1. Headlines 2. Overview 3. Financial Review Chris Smith Chief Executive Officer 4. Outlook & Wrap-Up 5. Q&A Mark Strickland Chief Financial Officer 1 McBride plc Results Presentation: 28 February 2023
Slide 3: 1. Headlines
1. Headlines 2 McBride plc Results Presentation: 28 February 2023
Slide 4: Headlines
Headlines Strong momentum supporting improved business performance Financial Strategy Growth performance development recovery • Private label growth • Group returned to EBITA • Step up in customer • Inflationary squeeze favouring positive experience our core proposition • Delivery of margin • Maturi
Slide 5: 2. Overview
2. Overview 4 McBride plc Results Presentation: 28 February 2023
Slide 6: McBride at a glance
McBride at a glance Leading European manufacturer of everyday value household cleaning products Business overview Our divisions • McBride is the leading European manufacturer and supplier of private label and contract manufactured products for the domestic household and Key: Liquids 55.8% profession
Slide 7: Investment case
Investment case We manufacture everyday value cleaning products so every home can be clean and hygienic Our Compass operating model What sets us apart Separate divisional Ensures focus Size to scale advantage: #1 volume player strategies Innovation – specialisation and focus, sustainable product exp
Slide 8: Strategy
Strategy Compass actions progressing, Excellence and Transformation initiative launched Our guiding principles Growth • Win/loss ratio positive • Favourable environment for private label • Contract manufacturing gains to deliver from FY24 Focused • Innovation launches, especially packaging growth •
Slide 9: Transformation change
Transformation change Shape of programme forming Our transformation plan consists of seven programmes and is intentionally balanced between sales and margin growth, cost reduction and cash generation Programme management office discipline Environmental transformation Setting out the plan to deliver
Slide 10: Market overview
Market overview Private label share gain but overall volumes lower as consumer behaviour adapts to cost of living challenges Total category Total market: vs 2021: vs pre Covid-19: volumes: vs 2021: vs pre Covid-19: Total market Laundry volumes (6)% (3)% – total (4)% (7)% Branded Cleaners volumes (7)
Slide 11: Business response to inflationary pressures
Business response to inflationary pressures Multiple waves of margin recovery actions • No deflation in overall cost levels RMPI still rising, but some signs of stabilisation • Latest rise due to specific key component inflation • Energy, transport, labour and general inflation becoming increasingly
Slide 12: Divisions – Liquids
Divisions – Liquids Strategic 56% of Group sales priority Liquids generates c.£475m revenue p.a. in a total Cost European market, including branded, of £9bn(1) leadership H1 FY23 revenue split – % of total Return to profit through inflation recovery, tight cost control and private label growth UK FR
Slide 13: Divisions – Unit Dosing
Divisions – Unit Dosing Strategic 26% of Group sales priority Unit Dosing generates c.£220m revenue p.a. in a Product total European market, including branded, of £2bn(1) leadership H1 FY23 revenue split – % of total Strength in private label through improved product offer and new project gains UK F
Slide 14: Divisions – Powders
Divisions – Powders Strategic 10% of Group sales priority Powders generates c.£90m revenue p.a. in a total Cost European market, including branded, of £1bn(1) leadership H1 FY23 revenue split – % of total Cost leadership and technical step-up securing wins UK FR DE NL BE Other • Powders market decli
Slide 15: Divisions – Aerosols
Divisions – Aerosols Strategic 5% of Group sales priority Aerosols generates c.£40m revenue p.a. with its Product current focus on the French market and new use ideas leadership H1 FY23 revenue split – % of total Expanding reputation as a specialist supplier • Strong customer partnerships UK FR DE E
Slide 16: Divisions – Asia Pacific
Divisions – Asia Pacific Strategic 3% of Group sales priority Asia Pacific generates c.£25m revenue p.a. and is a Cost and value high growth region for personal care and household leadership H1 FY23 revenue split – % of total Performance recovering, with increased contract manufacturing growth ambit
Slide 17: ESG
ESG Environmental • Corporate carbon footprint measured for H1 Selected KPIs 2025 target FY22 FY21 and FY22 FY23 • Emission hotspots are chemicals, packaging, FSC® sourced 100% 91.4% 90.6% logistics and energy 100% recyclable 100% 98.5% 98.7% • Near-term emission targets being defined for our 50% PC
Slide 18: 3. Financial Review
3. Financial Review 17 McBride plc Results Presentation: 28 February 2023
Slide 19: Group revenue bridge
Group revenue bridge £m 97.1 3.7 426.3 (2.5) 323.4 4.6 H1 FY22 Volume Pricing Mix FX H1 FY23 revenue revenue • Revenue increased by 31.8% vs H1 FY22 • Pricing actions: mainly due to price actions – £97.1m in-year benefit • Volume growth contributed £4.6m – c.94% of the revenue growth – private label
Slide 20: Group adjusted operating loss bridge
Group adjusted operating loss bridge £m Impacting gross profit Impacting distribution costs and administrative expenses 97.1 (0.7) 3.9 (72.8) 1.3 (14.8) (0.5) (1.3) (14.8) H1 FY22 adjusted Volume Pricing Mix Raw material Compass Inflationary Incentives H1 FY23 adjusted operating loss input costs sav
Slide 21: Compass cost reduction progress
Compass cost reduction progress • On track to save £20m annualised savings by the end of FY23 • H1 FY23 realised cost savings £8.9m (H1 FY22: £5.0m): – operations £6.0m – divisional overheads £2.5m – distribution £0.4m • FY23 cost savings expected to be c.£18m (FY22: £11.6m) 20 McBride plc Results P
Slide 22: Divisional performance bridges
Divisional performance bridges Revenue £m Adjusted operating loss £m 0.6 2.8 426.3 0.8 5.5 2.6 0.2 9.9 29.8 (1.1) (1.3) 10.4 54.9 323.4 (14.8) H1 FY22 Liquids Unit Powders Aerosols Asia H1 FY23 H1 FY22 Liquids Unit Powders Aerosols Asia Corporate H1 FY23 Dosing Pacific Dosing Pacific • Group revenue
Slide 23: Divisional performance
Divisional performance Revenue £m Adjusted operating (loss)/profit £m 237.7 2.2 0.8 182.8 0.2 0.2 — (0.4) (0.8) (1.4) (1.2) (2.2) 111.4 (3.3) 81.6 42.7 32.8 15.8 21.3 10.4 13.2 (10.2) H1 FY22 H1 FY23 H1 FY22 H1 FY23 H1 FY22 H1 FY23 H1 FY22 H1 FY23 H1 FY22 H1 FY23 H1 FY22 H1 FY23 H1 FY22 H1 FY23 H1 F
Slide 24: Costs
Costs Divisional input costs index – largest divisions Distribution costs as Administrative (overhead) % of sales costs as % of sales 0.7% 0.6% 3.6% 3.3% 0.8% 3.4% 2.9% 8.2% 9.5% 9.5% 9.0% 18.7% 17.6% 14.6% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2021 2021 2021 2021 2
Slide 25: Other financials
Other financials Exceptional costs £m Capex and depreciation £m Pensions(1) £m 11.4 10.8 2.0 2.0 1.9 1.0 23.4 24.7 0.7 8.5 8.4 0.5 8.2 8.1 16.1 4.3 3.5 3.0 0.87 0.87 0.78 (0.4) (0.2) H1 FY22 H2 FY22 H1 FY23 (1.4) Capex – intangibles H1 FY22 FY22 H1 FY23 H1 FY22 FY22 H1 FY23 Capex – PP&E Liability Ca
Slide 26: Cash flow and net debt bridge
Cash flow and net debt bridge £m 12.2 (2.0) 8.8 (6.8) (3.6) (2.2) (158.0) (164.4) (11.4) (169.4) Net debt at Adjusted Working capital Pensions Capital expenditure less Interest on borrowing Non-cash movements Net debt Exceptional items Net debt at 30 Jun 2022 EBITDA proceeds from the sale and lease
Slide 27: Liquidity
Liquidity £m 80 70 60 50 40 30 20 10 0 Jun Jul Aug Sep Oct Nov Dec 2022 2022 2022 2022 2022 2022 2022 Actual liquidity Headroom • Group refinancing reset minimum • 31 December 2022 available liquidity £58.9m liquidity covenant from £40m to £15m at => £43.9m headroom vs minimum liquidity 29 September
Slide 28: 4. Outlook & Wrap-Up
4. O utlook & Wrap‑Up 27 McBride plc Results Presentation: 28 February 2023
Slide 29: Outlook
Outlook Full-year expectations on track Overall demand levels encouraging Margin recovery ongoing Customer proposition continues to strengthen Inflationary pressures steadying Transformation journey launched Significant liquidity headroom 28 McBride plc Results Presentation: 28 February 2023
Slide 30: Wrap-Up
Wrap-Up Strong momentum, improving business performance, ambition back in view Financial Strategy Growth performance development recovery • Private label growth • Group returned to EBITA • Step up in customer • Inflationary squeeze favouring positive experience our core proposition • Delivery of mar
Slide 31: 5. Q&A
5. Q&A 30 McBride plc Results Presentation: 28 February 2023
Slide 32: Appendices
1. Income statement 2. Segmental reporting 3. Exceptional items 4. Balance sheet Appendices 5. Cash flow 6. Funding headroom 31 McBride plc Results Presentation: 28 February 2023
Slide 33: Appendix 1: Income statement
Appendix 1: Income statement Constant currency H1 FY23 H1 FY22 H1 FY22 Continuing operations(1) £m £m Change £m Change Revenue 426.3 323.4 31.8% 327.1 30.3% Gross profit 115.1 90.2 27.6% 91.3 26.1% Gross margin 27.0% 27.9% (0.9) ppt 27.9% (0.9) ppt Distribution costs (38.5) (30.8) 25.0% (31.1) 23.8%
Slide 34: Appendix 2: Segmental reporting
Appendix 2: Segmental reporting Constant currency H1 FY23 H1 FY22 H1 FY22 Revenue £m £m Change £m Change Liquids 237.7 182.8 30.0% 184.3 29.0% Unit Dosing 111.4 81.6 36.5% 82.5 35.0% Powders 42.7 32.8 30.2% 33.2 28.6% Aerosols 21.3 15.8 34.8% 16.0 33.1% Asia Pacific 13.2 10.4 26.9% 11.1 18.9% Group
Slide 35: Appendix 3: Exceptional items
Appendix 3: Exceptional items H1 FY23 H1 FY22 £m £m Factory footprint review — (1.5) Review of strategy, organisation and operations — (0.1) Logistics transformation programme — 0.1 UK Aerosols closure — 0.1 Total charged to continuing operating (loss)/profit — (1.4) Finance costs – Group refinancin
Slide 36: Appendix 4: Balance sheet
Appendix 4: Balance sheet 31 Dec 30 Jun 31 Dec 2022 2022 2021 £m £m Change £m Change Goodwill and other intangible assets 26.3 27.0 (2.6)% 27.3 (3.7)% Property, plant and equipment 121.1 122.9 (1.5)% 122.1 (0.8)% Right-of-use assets 9.9 11.3 (12.4)% 11.8 (16.1)% Other non-current assets 36.7 31.6 16
Slide 37: Appendix 5: Cash flow
Appendix 5: Cash flow H1 FY23 H1 FY22 £m £m Change Adjusted operating (loss)/profit (1.3) (14.8) 91.2% Depreciation property, plant and equipment 8.2 8.5 (3.5)% Depreciation right-of-use assets 1.9 2.0 (5.0)% Share-based payments 0.5 0.5 0.0% Additional cash funding on pension scheme (2.0) (2.0) 0.0
Slide 38: Appendix 6: Funding headroom and liquidity
Appendix 6: Funding headroom and liquidity Committed Facility Drawn headroom At 31 December 2022 £m £m £m Committed facilities: – revolving facilities (Sep 2026) 155.2 (120.0) 35.2 – invoice discounting facility 44.7 (44.7) — – overdraft facilities (Sep 2024) 18.3 (2.8) 15.5 – leases 10.6 (10.6) — T