Slide 1: Interim Results
INTERIM RESULTS For the 6 months ended 31 March 2018 Daemmon Reeve, Chief Executive Officer Richard Hope, Chief Financial Officer
Slide 2: Executive Summary
EXECUTIVE SUMMARY • Encouraging start to new 5 year strategy • Key geographical & product categories all performing well • Strong growth in earnings per share – boosted by US tax changes • Momentum continued into Q3 • Disposal of Earthoil Plantations • Capital secured to support investment 2
Slide 3: Results at a Glance
RESULTS AT A GLANCE Profit Earnings Interim Revenue2 Before Tax1,2 per Share1,2 Dividend 14% 20% 30% 10% £53.6m £5.8m 8.58p 1.60p Revenue £’m Profit Before Tax1 £’m 110 12 100 11 £54.2m £5.9m 90 10 £47.1m 9 80 £44.5m £42.1m £5.4m 8 70 £5.0m 7 60 £4.1m 6 50 £53.6m £5.8m 5 £47.1m 40 £4.8m £41.4m £40.9
Slide 4: 2018 Half Year Review – Income Statement
2018 HALF YEAR REVIEW INCOME STATEMENT 2018 H1 2017 H1 Change Key Points £’000 £’000 % 1. In constant currency, revenue growth of 18% following strong Revenue 53,574 47,132 13.7% Gross Profit 12,636 11,501 growth in UK and US Gross Profit % 23.6% 24.4% 2. Gross margins affected by FX Administrati
Slide 5: 2018 Half Year Review – Cash Flow
2018 HALF YEAR REVIEW CASH FLOW 2018 H1 2017 H1 Key Points £’000 £’000 1. Growth in EBITDA driving cash flow growth Operating cash flow 8,160 7,096 Net working capital (6,737) (7,158) 2. Working capital outflow of £6.7m – includes increase in trade Taxation paid (892) (1,512) receivable due to s
Slide 6: 2018 Half Year Review – Balance Sheet
2018 HALF YEAR REVIEW BALANCE SHEET As at 31 As at 30 Key Points March September 2018 2017 1. On like-for-like basis adjusting for Earthoil, inventory up £1.5m Goodwill - £2.7m 2. Net cash at period end in advance of capex investment programme Fixed Assets £16.1m £15.4m Inventories £39.0m £42.9m 3
Slide 7: Strategic Focus – Core Product Areas
STRATEGIC FOCUS – CORE PRODUCT AREAS % Growth in Sales – 2017 H1 v 2018 H1 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Citrus Tea Sugar Reduction Citrus Tea Sugar Reduction 7
Slide 8: Strategic Update
STRATEGIC UPDATE u TREATT
Slide 9: Strategic Focus
STRATEGIC FOCUS 5-year growth plan now in place, driven by citrus, sugar reduction and tea – backing winners: 1. US expansion progressing 2. Performance culture and employee engagement strategy – pulse surveys and tailored training 3. Winning business in successful products – strong progress with ex
Slide 10: Sale of Earthoil Plantations
SALE OF EARTHOIL PLANTATIONS • Fair trade and organic cosmetic ingredients business • Identified as non-core to group activities • Consideration of £11m (subject to adjustment) receivable in cash 1. 90% on Completion; 2. Deferred payment of 10% twelve months after Completion • Proceeds used to stren
Slide 11: US Expansion
US EXPANSION New production Progressing as capacity needed planned for to meet demand completion and support December 2018 future growth Breakdown of Costs* Land and Buildings US$8.8m Plant and Machinery US$2.9m Contingency US$2.3m Total budget US$14.0m * Estimate 11
Slide 12: UK Relocation
UK RELOCATION Enhanced capabilities: Step-change in capacity Project cost £35m Improved client interaction Operational efficiencies Main contractor to Target return on Full planning be appointed and investment of 10- permission granted construction to 15% in medium early 2018 commence mid term 2018
Slide 13: Current Trading & Outlook
CURRENT TRADING & OUTLOOK • Encouraging start to Q3 • Further growth in key product categories citrus, sugar reduction and tea expected • Capital investment programme on track • Board confident that the Group will meet its expectations for the financial year ending 30 September 2018 13
Slide 14: Appendix
APPENDIX
Slide 15: Product Categories
PRODUCT CATEGORIES Citrus Sugar Reduction • Treatt’s largest product category • Natural flavour of sugar – without carbs or calories • Both natural and synthetic offerings create significant market • Sugar tax / obesity agenda leading opportunities to strong customer demand and growth in size of mar
Slide 16: Interim/Final Earnings per Share
INTERIM/FINAL EARNINGS PER SHARE 1 2014 - 2018 “Consistent Profitable Growth” 18 16 9.83p 14 12 8.12p 7.51p 10 6.07p 8 8.58p 6 6.58p 4 4.72p 4.21p 3.88p 2 0 2 2 2014 2015 2016 2017 2018 1H 2H 1 Excludes exceptional items 16 2 Excludes discontinued activities
Slide 17: Interim/Final Dividend
INTERIM/FINAL DIVIDEND 2008 - 2018 “Progressive Dividend Policy” 6 5 3.35p 3.00p 4 2.76p 2.60p 2.60p 3 2.08p 1.94p 1.78p 1.66p 2 1.52p 1.60p 1.45p 1.28p 1.35p 1 1.24p 1.02p 1.10p 0.96p 0.74p 0.82p 0.72p 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H 2H 17
Slide 18: Treatt
U TREATT