Slide 1: HY21 Results Release
Mcpherson’s Limited hy21 th results release 17 february 2021 CREATING BETTER IN Health Wellness & Beauty
Slide 2: Agenda
Agenda 1 Introduction – grant peck 2 HY2021 Financial results – Paul Witheridge 3 CORE BRANDS and channel & customer – Donna chan 4 Summary – grant peck 2
Slide 3: Health, Wellness & Beauty – A $15.5 billion market
HEALTH, WELLNESS & BEAUTY – A $15.5 billion market HEALTH & WELLNESS beauty ($7.5 Billion, +5.0% vs YA) ($8.0 Billion, +4.6% vs YA) NATURAL HEALTH HEALTHY SKIN & BEAUTY Immunity & Protection Cosmeceutical Sleep & Mood Australian Natural Joint & Movement Essential Beauty Digestive Health Clean Beauty
Slide 4: Strategic business imperatives
strategic business imperatives Refocus McPherson's on Health, 1 Wellness & Beauty with 6 Create a China facing business sustainability and people at the core Ensure we have our team fit for the 2 Revitalise our own McPherson’s brands 7 future with appropriate expertise, capabilities and values 3 Ens
Slide 5: HY21 update - Key messages
Hy21 update - Key messages 1 STRENGTH OF DOMESTIC PERFORMANCE 2 Balance sheet AND dividend CAPACITY 3 Export update 4 A BROADER SET OF GROWTH OPPORTUNITIES EVIDENT………. 5 CAPACITY FOR M&A BUT CLEAR GUARDRAILS 5
Slide 6: HY2021 Financial Results
A’KIN Australian Tea Tree Oil Detoxifying Mask Mcpherson’s HY2021 FINANCIAL RESULTS HIGHLIGHTS 6
Slide 7: HY21 Sales Revenue Breakdown by Product Category
HY21 SALES REVENUE BREAKDOWN BY PRODUCT CATEGORY SALES REVENUE FROM OWNED BRANDS DECREASED BY 4% DOMESTIC SALES FROM OWNED BRANDS INCREASED BY 7% Owned brands: 1H21 $m 1H20 $m % change Comments • 67% decline in sales to ABM Skin, Hair and Body 17.6 27.6 (36%) • 5% growth in sales of domestic in A’ki
Slide 8: HY21 Sales Revenue Breakdown by Geography
HY21 SALES REVENUE BREAKDOWN BY GEOGRAPHY TOTAL AUSTRALIAN DOMESTIC SALES INCREASED BY 6% Geography: 1H21 $m 1H20 $m % Change Owned Agency & Owned Agency & Total 1H21 Total 1H20 Brands Private Label Brands Private Label Australian Domestic 72.3 16.2 88.5 67.6 15.7 83.3 6% Australian Export (Primaril
Slide 9: Bridge of HY20 to HY21 Sales
BRIDGE OF hy20 TO hY21 SALES $M $110 $105 New Health Increase in Lady Division Jayne $1.1m Increase in $1.4m Multix Others Increase in $100 $1.4m ($0.3m) Manicare $2.2m Decrease in Dr. $95 LeWinn's Export Decrease in Dr. ($9.1m) LeWinn's Domestic ($1.0m) HY20 HY21 $90 $106.0m $101.7m $85 $80 9
Slide 10: Bridge of HY20 to HY21 Underlying PBT
BRIDGE OF hY20 TO hy21 UNDERLYING PBT $M $10 Decrease in $8 Commodity Prices $1.0m Others Increase in Singapore & NZ $0.6m Increase in contribution from PBT Lady Jayne $0.5m Increase in $0.9m Adverse AUD/USD FX $6 contribution Impact from Manicare ($0.9m) $1.5m (Note: very strong FX hedging profile
Slide 11: Balance Sheet
BALANCE SHEET ❑ Net debt excluding lease liabilities has reduced from $19.6m to $3.8m over the last 12 months NET DEBT* ($M - 31 DECEMBER) 45 ❑ $45.9m Equity capital raised in October and November 2020 has funded Global Therapeutics acquisition and 40 will fund future acquisitions 35 ❑ Low gearing o
Slide 12: Cashflow
CASHFLOW ❑ Seasonally low cash conversion of 68% due to: Operating Cashflow before interest i. Relatively high December 20 sales; and and tax ($m) ii. General seasonal increase in stock ahead of Chinese New Year shutdowns ❑ Improved 2H21 cash conversion is forecast Cash Conversion 120% 106% 100% 94%
Slide 13: 1H21 Interim Ordinary Dividend
1H21 INTERIM ORDINARY ❑ Interim ordinary dividend of 3.5 cents per share fully franked (1H20 4.0 cents per share) ❑ Payout ratio of 98% of 1H21 earnings per share ❑ Interim dividend payable 18 March 2021 ❑ Dividend reinvestment plan suspended due to strong balance sheet 13
Slide 14: Core Brands
Mcpherson’s CORE BRANDS Dr. Lewinn’s Ultra R4 Collagen Surge Plumping Gel 14
Slide 15: MCP strongly positioned in traditional channels
MCP strongly positioned in traditional Channels 21% share in the categories we participate in 16.8% in HW&B +6.6% vs YA Total Pharmacy and Grocery market # 2 Australian beauty supplier Ranked #15 total OTC Pharmacy Pharmacy Top 100 suppliers in Grocery Currently Ranked #66 Grocery 15
Slide 16: MCP success in pharmacy channel
MCP success in pharmacy channel MCP OUTPERFORMING PHARMACY GROWTH (EXCEPT DURING 1ST COVID OUTBREAK) AU Pharmacy McP Core brands Performance vs Total OTC Pharmacy Dollars v YA Value Growth % vs YA McP Core Brands Total Defined Pharmacy Total Core McPherson's Brands Dollars 000s Dollars 000s YA $8,84
Slide 17: McPherson's growing ahead of competition in a challenging environment
McPherson’s growing ahead of competition in a challenging environment Top 50 Manufacturers Ranked 51-100 Ranked 101-200 Ranked 201+ Ranked #15 $117M 72% 11% 7% 6% $ share -3.2% $ share -0.2% $ share 0.4% $ share 10.6% Dollars Dollars Dollars Dollars Source: IRI OTC Pharmacy MarketEdge, MAT To 06/09/
Slide 18: Strong results for core owned brands
Strong results for core owned brands +2.4 SHARE POINT GAIN +1.9 SHARE POINT GAIN +1.3 SHARE POINT GAIN Maintain share +0.5 SHARE POINT GAIN +6% GROWTH 18
Slide 19: Innovation success driving sustainable growth
Innovation SUCCESS driving sustainable growth MCP Core Brands NPD Cumulative Share % (over 3 years) Ex. Factory Statutory Sales 33.1% 28.3% 20.5% 15.3% EXPANSION INTO BEAUTY NUTRITION #1 NATURAL HAIRCARE NPD 10.4% FY17 FY18 FY19 FY20 HFY21 11 13 3 6 R&D R&D R&D R&D PREMIUM NPD DRIVING CATEGORY GROWT
Slide 20: Leverage macro trends for future growth
leverage macro trends for FUTURE growth NATURAL SELF CARE PRO-ACTIVE BEAUTY AUSTRALIAN BEAUTY BEAUTY AT HOME SUSTAINABLE LIVING • 78% of Australians have • Custodians of your own • Shoppers are gravitating • Consumers opting for in- • 87% of Shoppers are more purchased at least one form skin health.
Slide 21: McPherson's health division established
mcpherson’s health division established NATURAL SELF CARE • Herbal and traditional products gaining increased popularity • 100% of Global Therapeutics Employees transitioned • High customer engagement & continuity of supply maintained • Complementary distribution network to broaden reach across port
Slide 22: #1 Australian cosmeceutical brand in pharmacy
#1 Australian cosmeceutical brand in pharmacy PRO-ACTIVE BEAUTY • Expansion into adjacent category with clinically proven beauty nutrition • Fuel China demand with innovation • Boost clinical claims to drive brand penetration • Target international expansion NEW 22
Slide 23: Powerful Australian natural beauty
Powerful Australian natural beauty Australian beauty • Compelling brand proposition appealing to Millennials • Grocery channel expansion driving accessibility and awareness • New scientifically proven haircare • New clinically proven skincare NEW 23
Slide 24: On trend tanning & skincare for Gen Z
On trend tanning & skincare for gen z Australian beauty Sustainable & Pandemic Australian Sensitive Skin Eco-friendly Pampering 62% of Gen Z prefer Consumers opting for in- 88% of Australians in Sensitive Skin the to buy from home beauty and skin January were more likely second highest desired Susta
Slide 25: Leading brands driving category growth
Leading brands driving category growth Beauty at home • Innovative premium skincare tools • Fashion collaboration and runway collections to attract Millennial shopper • On-line DIY education • Continued merchandising investment 25
Slide 26: Leading sustainable innovation
Leading sustainable innovation Sustainable living Fuelling high growth sustainable segments • Innovation • Education • Larger pack sizes • Company wide commitment to reduce environmental impact 26
Slide 27: Increased investment in digital
INCREASED INVESTMENT in digital amplify engage convert E-learning • 77.5M digital ad impressions YTD • +216% increase in social • +54% increase for online sales New E-Learning platform: engagement (MAT vs LY) to key pharmacy customer • +42% increase in social reach • Cloud Based retailer training (M
Slide 28: Channel & Customer
Mcpherson’s Channel & customer 28
Slide 29: Macro retail trends shaping MCP sales strategy
MACRO Retail trends shaping MCP Sales Strategy CHANNEL SHIFT GLOBALISATION RETAILER BRAND FOCUS SHOPPER ENGAGEMENT • Shift to Grocery from Pharmacy • 64.8% of Top 250 retailers • Over 120 exclusive/pseudo • 53% of shoppers are likely have foreign operations brands available within to change their mi
Slide 30: Delivering on MCP channel and customer H1 strategy
Delivering on MCP channel and customer H1 Strategy CHANNEL PRESENCE STRATEGIC DIFFERENTIATION SHOPPER ENGAGEMENT AND EXPANSION PARTNERSHIPS • A’kin Grocery Expansion ANZ • Akin and Revitanail now • 17 First to market • Off location investment with presence China Bricks products/Exclusive +24% YTD •
Slide 31: ANZ business operational imperatives
ANZ business operational imperatives Overview Investment optimisation Brand share growth Expansion Continued PORTFOLIO MANAGEMENT Drive growth from CORE AND New Category share gains Innovation Promotional effectiveness New Channel Penetration DATA Led BUSINESS PLANNING INCREASE in ONLINE INVESTMENT
Slide 32: Summary
Mcpherson’s A’Kin Natural Australian Skincare SUMMARY 32
Slide 33: HY21 update - Key messages
Hy21 update - Key messages 1 STRENGTH OF DOMESTIC PERFORMANCE 2 Balance sheet AND dividend CAPACITY 3 Export update 4 A BROADER SET OF GROWTH OPPORTUNITIES EVIDENT………. 5 CAPACITY FOR M&A BUT CLEAR GUARDRAILS 33
Slide 34: Q&A
Q&A 34 —