Slide 1: 2011 Interim Results
f\ MACFARLANE GROUP 2011 Interim Results www.macfarlanegroup.net www.macfarlanepackaging.com
Slide 2: Contents
Contents • Executive Summary • 2011 Results and Cash Flow • Business Review Packaging Distribution Manufacturing Operations • Pension Scheme Deficit • 2011 Strategic Agenda • Market Outlook and Conclusions
Slide 3: Executive Summary
Executive Summary 2011 2010 Profit before exceptional items £0.9m £0.7m Continuing challenge for all businesses from the inflationary pricing environment Sales growth of 7% across the range of Group activities Net debt £10.4m up £3.4m vs. Dec-10 due to working capital increase – strong cash generati
Slide 4: Results £m
RESULTS £m H1 2011 H1 2010 H2 2010 Sales 68.5 64.1 71.4 Sales growth Distribution 7% 9% 10% Manufacturing 7% 7% 7% GP % 30.1% 31.2% 30.7% Operating profit % 1.9% 2.0% 2.9% Pre-exceptional profit 0.9 0.7 2.7 Exceptional items 0.0 1.2 (0.4) Pre-tax profit £ m 0.9 1.9 2.3 Tax charge 0.2 0.5 0.7 Post ta
Slide 5: Cash Flow £m
CASH FLOW £m H1 2011 H1 2010 H2 2010 Operating profit 1.3 1.3 3.3 Depreciation 0.6 0.7 0.6 Exceptional items 0.0 1.1 (0.3) Working capital (2.5) (2.7) 1.6 Interest and Tax (0.2) (0.2) (0.3) Pension scheme payments (1.0) (1.3) (1.3) Net capital expenditure (0.5) (0.2) (0.2) Dividends (1.2) (1.1) (0.6
Slide 6: H1 2011 – Distribution
H1 2011 – Distribution Distribution sales 7% >H1 2010 price 5% volume 2% Gross margin reduced to 29.2% vs. 29.9% in H1 2010 Margin similar in H2-10 & H1-11 continued lag effect New business is 5% ahead of H1 2010, Unipart, GSi Commerce, Garmin and Honda Logistics • Overhead costs show a 4% increase
Slide 7: H1 2011 – Manufacturing Operations
H1 2011 – Manufacturing Operations Labels sales revenue up 6% vs. 2010 – 2% volume Recent raw material cost increases not fully recovered Own-brand producers see pressure from major retailers, impacting self-adhesive label sales Good growth in ReSeal-it – US customer demand and entry into the UK mar
Slide 8: Pension Deficit
Pension Deficit Investment values at Jun-11 £45.7m vs. £45.3m in Dec-10 Liabilities at Jun-11 £61.2m vs. £61.0m in Dec-10 Deficit at Jun-11 of £15.6m vs. £15.7m in Dec-10, broadly similar given unchanged assumptions Deficit reduction contributions continue at £2.0m p.a. until conclusion of May-11 va
Slide 9: 2011 Strategic Agenda – Distribution
2011 Strategic Agenda – Distribution Focus on customer retention/product penetration Gross margin recovery and protection continue to be key Build on new business momentum Focus on growth sectors e.g. 3PL and internet retail Accelerate development of presentational packaging Optimise benefit of www.
Slide 10: 2011 Strategic Agenda - Manufacturing
2011 Strategic Agenda - Manufacturing Rebuild Labels margin through more beneficial customer mix Improve supplier price recovery performance Continue to improve operational efficiencies Further develop ReSeal-It in US/other geographies Optimise benefit of recent ReSeal-It entry to UK market Building
Slide 11: Market Outlook and Conclusions
Market Outlook and Conclusions Cautious on overall demand - mixed outlook by sector Trading agenda to drive profits Protect margins and continue strategic initiatives Build ReSeal-It and recover self-adhesive margins Busy balance sheet agenda to reduce debt Focus on reduction in inventories Regular