Treatt Plc · LSE:TET
Treatt — H1 2021 Earnings Presentation
30 slides from Treatt's earnings presentation, May 2021
Slide 1: Half Year Results for the Period Ended 31 March 2021
HALF YEAR RESULTS FOR THE PERIOD ENDED 31 MARCH 2021 A TREATT
Slide 2: Disclaimer
A DISCLAIMER nm This presentation has been prepared for information purposes only, and does not constitute an offer of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Treatt plc or any of its subsidiary comp
Slide 3: Executive Summary
EXECUTIVE SUMMARY REVENUE! PROFIT BEFORE GROSS MARGIN EARNINGS PER HEALTHIER LIVING TAX!2 GROWTH SHARE! 2 CATEGORIES'? REVENUE = 7}, Ce] <il | & V4 +13.5% +71.4% +880bps +60.0% +571% £60.8m £10.4m 12.93p
Slide 4: Delivering Sustainable Growth
DELIVERING SUSTAINABLE GROWTH Hard Seltzers winning market share from unflavoured beer/wine New Coffee platform providing read across capabilities in Tea Pre-COVID trends remain in natural, better-for-you products 2. Strong growth in ‘healthier living’ categories New extraction technology creating m
Slide 5: ESG Is In Our DNA
ESG IS IN OUR DNA o Strategy: ) é é To maximise potential value of ESG Programme To mitigate risks and explore opportunities in line with our business strategy Embed ESG in the business, recognising the current and forecasted changes in regulations, stakeholder expectations and best practice & H1 Im
Slide 6: Financial Review
FINANCIAL REVIEW A u TREATT
Slide 7: Track Record of PBT Growth
TRACK RECORD OF PBT GROWTH Profit Before Tax’? £20.0m £15.0m £12.7m £13.3m £7.1m £6.9m £10.0m 7 £5.0m £5.0m £6.1m £0.0m 2020 2021 n continuing acti
Slide 8: H1 2021 Financial Review
H1 2021 FINANCIAL REVIEW Year ended 30 September Revenue Gross profit Gross profit % Administrative expenses Operating profit Operating profit % Other gains Net finance costs Profit before tax and exceptional items Exceptional items Profit before taxation Taxation Profit for the period (continuing o
Slide 9: Product Category Performance
PRODUCT CATEGORY PERFORMANCE A % OF REVENUE 2021 q 9 Health & Wellness 7.8% (2020: 6.9%) Citrus 44.5% (2020: 50.2%) Herbs, Spices & Florals 8.6% (2020: 11.4%) % Growth % of 12021 H12020 inSales Revenue Citrus £27.0m £26.9m 0.4% 44.5% Fruit & Vegetables Tea £7.0m £3.6m 93.0% 1.4% 9.7% (2020: 7.5%) Fr
Slide 10: Shifting Citrus Product Mix to Improve Margins
SHIFTING CITRUS PRODUCT MIX TO IMPROVE MARGINS Lower margin, more commoditised, higher volume, co-product of beverage ingredient manufacture <=> Higher margin, more sophisticated ingredients including higher proportion of water-soluble, authentic character extracts
Slide 11: Cash Flow
A CASH FLOW Ty £15.0m £10.0m £5.0m £0.4m bon —— £0.1m (£5.0m) (£0.1m) (£10.01 (£10.0m) <7 (£15.0m) Operating UK Site Financing & Net Cash YE 2020 Cash Flow Working Capital Relocation Capex Other Capex Tax Dividend FX Other Net Debt H1 2021 "
Slide 12: FY21 Financial Guidance
FY21 FINANCIAL GUIDANCE REVENUE EBITDA ADJUSTED EPS NET DEBT GROWTH' GROWTH'2 GROWTH! AT FINANCIAL YEAR END
Slide 13: Market Overview & Strategic Priorities
MARKET OVERVIEW & STRATEGIC PRIORITIES
Slide 14: Growing Addressable Markets
GROWING ADDRESSABLE MARKETS CASE STUDY: HARD SELTZERS EXPERIENCING VERY STRONG GROWTH WHAT VALUE DOES TREATT BRING TO THIS TREND? 4 Supplying across multiple brands and categories 6 High quality ingredients in citrus, fruit & Dominant in US E vegetables and beginning to atural portfolio wee . UK/EL
Slide 15: Adding Value to Future Beverage Trends
ADDING VALUE TO FUTURE BEVERAGE TRENDS @ We anticipate strong interest in beverages that are... e Sustainable e Trend What Consumer Wants What Treatt Offers @ Clean-label @ 100% natural Authentic @ Natural ingredients @ True to raw ingredients 4@ Recognisable source 4 Traceable and stable supply cha
Slide 16: Partnership Model
PARTNERSHIP MODEL Ranking by Type of No. Years Ranking by Revenue eee asa Categories Revenue H1 FY21 Customer FY15 1 70 A 66 A 21 2 25 A46644 2 >25 646644 1 SO60d6 4 2 60AA 66 6 70 A 20 A46644 18 64664 33 9 25 = A4O6O44 6 10 al 20 & 6644 7 me oe =Fe om Categories: A AA MM
Slide 17: UK Site Relocation
UK SITE RELOCATION 4 POSITIONING OURSELVES FOR FUTURE GROWTH 4 Net £36m project - RO! 10-15% - 3 years after completion 4 Remaining spend of approximately £8.0m of capital expenditure and £1.9m of exceptional relocation costs 4 Includes £17m investment in plant & machinery, laboratories and new tech
Slide 18: Enhancing The Customer Experience
Slide 19: First Floor Collaboration Space
= | ‘ ee First Floor Collaboration Space = = ‘a 2 Ge whe <a)
Slide 20: Automated Warehouse
Automated, Warehouse | SS (Var MULTIPLE IMPROVED EFFICIENCIES =
Slide 21: Current Trading & Outlook
CURRENT TRADING & OUTLOOK 4 6 Strong trading momentum continues into H2 6 Demand to grow as on-trade and hospitality re- open 4 China subsidiary to open later this FY to drive further growth in region 4 Health trends driving growth in higher margin categories 4 Strengthening management team to suppo
Slide 22: Questions?
QUESTIONS? A u TREATT
Slide 23: Appendices
APPENDICES A u TREATT
Slide 24: Product Categories
Herbs, Spices & Florals Citrus 100% natural ingredients made from the Treatt’s largest product category named food Both natural and synthetic offerings create significant market opportunities La " Building on know-how and technical expertise for customer benefit Source, manufacture and supply over 5
Slide 25: 2021 Cash Flow
2021 CASH FLOW Period ended 31 March Operating cash flow (Increase)/Decrease in inventories Increase in trade and other receivables Other working capital Cash generated from operations Taxation paid Net cash from operating activities Purchase of property, plant & equipment Purchase of intangible ass
Slide 26: 2021 Balance Sheet
2021 BALANCE SHEET Deb! Creditors Working capital Taxation Pension deficit Other net assets/ Shareholder funds As at 31 March 2021 £58.0m £40.2m £28.6m (£17.4m) £51.4m (£1.6m) (£5.1m) (£7.6m) £0.3m £95.4m As at 30 September 2020 £24.2m (£12.4m) £47.5 £0.1m £1.1m (£10.2m) 0) 2) 3) 4) Continued spend
Slide 27: Earnings Per Share
EARNINGS PER SHARE! A 20.00p 18.00p 16.00p 14,00p 12.00p 10.00p 8.00p 6.00p 4,00p 2.00p 0.00p 2017 2018 2019 2020 2021 mHi mw H2 27 1 From continuing operations, excluding exceptional items
Slide 28: Dividend Per Share
DIVIDEND PER SHARE 7.00p 6.00p 5.00p 3.50p 3.35p 4.00p 3.00p 2.76p 2.60p 2.60p 3.00p 2.08 1.94p 2.00p 2.00p 1.45p 1.00p 1.249 0.00p 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 mH wH2 28
Slide 29: Investment Infrastructure
INVESTMENT INFRASTRUCTURE PHASE TIMELINE 2017 - initiated £48m Capital Investment Programme Equity fund raise £20m 2019 - US $15m expansion complete Doubles our capacity for Health & Wellness, Fruit & Vegetables and Tea - currently 29% of Group revenue 2020 - UK build complete (fit-out underway) 202
Slide 30: Treatt
uw TREATT