Slide 1: Progress with growth; reinvigorating 'Prepare'
Progress with growth; reinvigorating ‘Prepare’ Results and Strategy Presentation: September 2019
Slide 2: Agenda
Agenda 1. Headlines 2. Commercial and market update 3. Financial results 4. Reinvigorating ‘Prepare’ 5. Outlook McBride plc 1 Results and Strategy Presentation: September 2019
Slide 3: Headlines
Headlines Further progress with 'Prepare' and 'Grow' actions; a tough trading year Strategic Financial • Clear delivery against ‘Prepare’ objectives • Underlying revenues(1) at constant currency 2.7% • Sale of PC Liquids completed higher, 3.7% excluding Aerosols • Consolidation of Aerosols operation
Slide 4: Revenue performance FY19
Revenue performance FY19 Regional bridge of revenues European Household bridge by category Underlying CFX 1.8 Underlying CFX 24.3 3.5 18.6 7.7 (4.9) (5.4) 21.7 2.5 (3.0) 0.0 15.2 9.2 1.2 (3.7) 2.5 (10.6) UK France North South East Asia Aerosols FY19 Auto Bleach, Capsules Cleaners Fabric Laundry Wash
Slide 5: Category focus has driven overall revenue performance
Category focus has driven overall revenue performance Capsules Auto dishwash tablets Fabric conditioner Market CAGR 2015–19(1) +7.5% Market CAGR 2015–19(1) +2.1% Market CAGR 2015–19(1) +0.1% McBride CAGR 2015-19 +10.4% McBride CAGR 2015-19 +7.2% McBride CAGR 2015-19 +5.7% Growth FY19 +4.2% Growth FY
Slide 6: Retailer progress
Retailer progress UK Germany France • Overall Homecare Private • Overall Homecare Private • Overall Homecare Private Label market up 1.1%(1) Label market lower by 1.0%(1) Label market lower by 0.5%(1) Overall McBride growth Overall McBride growth Overall McBride growth +5.6% +29% -3.0% • Market shar
Slide 7: Retailer developments
Retailer developments UK Germany/Poland Italy/Spain France • Discounters power • Discounters to • Mercadona growing • Lidl share growth – up on – Aldi launching take further share, and leading in Spain, to 5.9%, Aldi stable convenience format hypermarkets and now opening in • The independents also •
Slide 8: Competition in European Household
Competition in European Household McBride • Demonstration of McBride's leading position, now focused on Household • Long tail of smaller suppliers • Country specific and ownership dynamics • Margin environment; a challenge for many competitors The opportunity: • Organic growth from poorly funded com
Slide 9: Contract Manufacturing developments
Contract Manufacturing developments 2015 revenues 2019 revenues 30% 30% Total Local £46.3m Multi-national Total Local 70% £77.6m Multi-national 70% • 67% increase since 2015 • Progress with new relationships • Multi-national customer numbers near doubled • Proportion of Household up to 12% from 8% •
Slide 10: Financial results
Financial results David Rattigan Interim Director of Finance McBride plc 9 Results and Strategy Presentation: September 2019
Slide 11: Financial headlines
Financial headlines • Revenues 4.6% higher at £721.3m, Danlind • Interest costs £4.6m, lower by £0.6m adding £16m; underlying revenues 2.7% higher • Adjusted profits before tax on continuing for the full year, with second half -0.3% operations £24.5m, lower by £8.7m • Household underlying revenues u
Slide 12: Input cost pressures
Input cost pressures Raw materials Purchasing index FY18 – FY19 • Oil and ethylene pricing driving increases in plastics and chemicals • Some offset from lower ‘naturals’ • Paper packaging higher in year • USD/EUR exchange rate impact Transport June 17 December 17 June 18 December 18 June 19 • Rates
Slide 13: Revenue development
Revenue development Group revenues Continuing revenues Change in continuing revenues £m £m by half year £m 755.0 752.0 743.2 35.9 721.3 34.7 689.8 686.6 47.7 53.1 52.6 16.0 23.6 17.9 16.0 16.0 636.7 634.0 657.6 5.7 2.0 N/A 65.2 65.4 -1.2 21.9 2018 2018 CFX 2019 -4.9 Household Household -6.9 Total Gr
Slide 14: EBITA development
EBITA development Group EBITA Group EBITA – continuing Change in EBITA – continuing £m £m by half year £m 37.7 37.5 46.7 46.5 36.2 36.0 39.4 0.3 -7.6 0.5 N/A -0.8 -1.0 0.1 -0.3 28.1 28.9 -1.5 -1.5 -0.8 N/A N/A 0.5 -2.2 -2.2 -4.0 -6.8 -6.8 -7.0 Total Group Continuing Discontinued Household Household
Slide 15: Income statement
Income statement Gross margin ROS Labour costs % of sales and Continuing adjusted % % overhead % of gross profit interest cost and tax rate £m 5.9% 91.4% 91.6% 5.5% 31% 35.5% 30% 34.2% 88.0% 86.5% 28% 83.6% 33.3% 4.8% 33.4% 4.0% 19.7% 0.9 3.8% 18.8% 1.1 0.7 19.0% 18.6% 6.0 3.4 3.7 FY 2017 FY 2018 FY
Slide 16: Balance sheet and cash flow
Balance sheet and cash flow ROCE Cash flow from operations £m Net debt £m/cover x % 120.9 114.3 63.3 2.6 90.9 52.5 2.1 43.0 75.7 1.7 27.7% 1.2 22.5% 25.7 23.4% 15.3% 2015/16 2016/17 2017/18 2018/19 2015/16 2016/17 2017/18 2018/19 2015/16 2016/17 2017/18 2018/19 ROCE Net debt Debt cover • Reduced tra
Slide 17: Other financials
Other financials Exceptional items Payments to shareholders Group pension liability £m p/dividend cover x £m 0.3 4.3 4.3 42.2 21.7 3.3 31.1 31.1 13.0 3.0 2.9 4.1 2.8 0.8 0.78 0.73 5.4 1.0 2016/17 2017/18 2018/19 2016/17 2017/18 2018/19 2016/17 2017/18 2018/19 Operating Finance Tax Payments to shareh
Slide 18: Strategy update
Strategy update McBride plc 17 Results and Strategy Presentation: September 2019
Slide 19: Rapid growth in H1 impacted our 'Prepare' delivery
Rapid growth in H1 impacted our ‘Prepare’ delivery Significant contract wins successfully absorbed, despite early challenges Internal factors External pressures • Production planning and inventory • Raw material pricing and availability • Warehousing capacities, locations • Distribution availability
Slide 20: Completing 'Prepare': great progress, but more to do
Completing ‘Prepare’: great progress, but more to do We closed out many actions, identified when we started 'Repair, Prepare, Grow' • PC Liquids • Aerosols consolidation • Integration of Danlind • Category choices and investments • Talent development But… we have delayed others McBride plc 19 Result
Slide 21: Our environment has moved on in the meantime
Our environment has moved on in the meantime We have new initiatives and are reinvigorating the 'Prepare' activity Prepare our Prepare our Prepare our Prepare our Markets Assets Processes People • Segmentation • Factory footprint • Digital update • Upgrade HR • Integrated business processes • M&A •
Slide 22: Reinvigorating the delivery of 'Prepare'
Reinvigorating the delivery of ‘Prepare’ to secure business opportunities Segmentation Digital update Customers Products Asset investment Warehouse/logistics footprint McBride plc 21 Results and Strategy Presentation: September 2019
Slide 23: Growth prospects: current financial year and beyond
Growth prospects: current financial year and beyond • Household Europe expected to be flat in current year • New contract wins secured showing promising progress against 2.0-2.5% target • Auto dishwash, fabric conditioner and capsules in Private Label leading the way • Losses from recent 'pricing ac
Slide 24: 2019 outlook
2019 outlook • Sales performance • Certain input costs stabilising, roll-through effect • Category investments • Overheads • Competitor environment • 'Prepare' actions McBride plc 23 Results and Strategy Presentation: September 2019
Slide 25: Q&A
Q&A McBride plc 24 Results and Strategy Presentation: September 2019
Slide 26: Appendices
Appendices 1. Income statement 2. Segmental reporting 3. Exceptional items 4. Balance sheet 5. Cash flow 6. Use of cash 7. Funding headroom McBride plc 25 Results and Strategy Presentation: September 2019
Slide 27: Appendix 1: income statement
Appendix 1: income statement Constant currency(1) 2018/19 2017/18 2017/18 Continuing operations £m £m Y/Y £m Y/Y Revenue 721.3 689.8 4.6% 686.8 5.0% Gross profit 240.4 235.6 2.0% 234.6 2.5% Gross margin 33.3% 34.2% (0.9ppt) 34.2% (2.4%) Distribution costs (56.6) (48.9) 15.7% (48.7) 16.2% Administrat
Slide 28: Appendix 2: segmental reporting
Appendix 2: segmental reporting Constant currency 2018/19 2017/18 2018/19 £m £m Y/Y £m Y/Y Continuing revenue UK 173.1 163.9 5.6% 163.9 5.6% France 122.0 125.8 (3.0%) 125.1 (2.5%) North 111.3 108.5 2.6% 108.1 3.0% South 79.4 77.3 2.7% 76.9 3.3% East 166.4 141.6 17.5% 140.6 18.3% Asia 21.4 19.6 9.2%
Slide 29: Appendix 3: exceptional items
Appendix 3: exceptional items 2019 2018 £m £m Continuing operations Reorganisation and restructuring costs: Acquisition of Danlind 0.7 1.6 UK Aerosols re-organisation (1.2) 2.9 Efficiency-based restructuring 0.8 — Other 0.1 — Total charged to operating profit 0.4 4.5 Group refinancing: Danlind finan
Slide 30: Appendix 4: balance sheet
Appendix 4: balance sheet 2018/19 2017/18 £m £m Y/Y Goodwill and other intangible assets 29.5 29.9 (1.3%) Property, plant and equipment 136.0 135.6 0.3% Other non-current assets 11.6 13.6 (14.7%) Working capital 58.6 41.9 39.9% Net other debtors/(creditors) (5.0) (6.5) (23.1%) Provisions (7.9) (7.2)
Slide 31: Appendix 5: cash flow
Appendix 5: cash flow 2018/19 2017/18 Y/Y £m £m £m Adjusted operating profit 28.1 36.2 (22.4%) Depreciation 18.4 19.1 (3.7%) Share-based payments (0.2) (0.4) (50.0%) Additional cash funding of pension scheme (4.2) (3.0) 40.0% Operating cash flow before movements in working capital 42.1 51.9 (18.9%)
Slide 32: Appendix 6: use of cash
Appendix 6: use of cash 70 Foreign £0.8 £0.7 exchange Other items 60 Movement in £6.6 £0.8 Proceeds from £6.9 Exceptionals net debt sale of Hull Financing £4.3 cost 50 £12.5 Proceeds from sale of Liquids £7.2 Taxation £1.6 Proceeds from sale of Solaro 40 £16.4 £m Working capital movement 30 £42.1 Ca
Slide 33: Appendix 7: Funding headroom
Appendix 7: Funding headroom Committed Facility Drawn headroom £m £m £m Committed facilities: – Revolving facilities (June 2022) 156.9 (91.8) 65.1 – Invoice discounting facility 29.7 (29.7) — – Other loans 1.2 (1.2) — Total committed facilities 187.8 (122.7) 65.1 Uncommitted facilities 58.6 (13.4) (