Mcbride Plc · LSE:MCB
Mcbride — FY2015 Earnings Presentation
39 slides from Mcbride's earnings presentation, September 2015
Slide 1: Manufacturing our future
McBride plc Results and Strategy Presentation : September 2015 Manufacturing our future
Slide 2: Agenda
McBride plc Results and Strategy Presentation : September 2015 Agenda 1 Introduction and Headlines 2 Results for the year ended 30 June 2015 3 McBride’s new Strategy - Repair, Prepare, Grow 4 Summary 5 Questions 2 Manufacturing our future
Slide 3: Headlines
McBride plc Results and Strategy Presentation : September 2015 - Headlines • Group revenue + 0.3% (constant currency • Strategy review completed during the second basis); Private Label growth 0.5%. half of the 2015 financial year • Adjusted operating profit (1) up 29.5% to • Outcome of review announ
Slide 4: Financial Headlines
McBride plc Financial Headlines Constant Currency 2014/15 2013/14 Y/Y 2013/14 Y/Y Revenue (£m) 704.2 744.2 (5.4)% 702.2 +0.3% EBITA (£m) (1) 28.5 22.0 +29.5% 19.5 +46.2% EBITA margin (1) 4.0% 3.0% +1.0ppts 2.8% +1.2ppts Operating profit/(loss) 9.7 (13.9) (15.2) Adjusted Profit before taxation (1) 21
Slide 5: Income Statement
McBride plc Income Statement Constant Currency 2014/15 2013/14 2013/14 £m £m Y/Y £m Y/Y Revenue 704.2 744.2 (5.4)% 702.2 +0.3% Gross profit 243.7 244.3 0.0% 231.5 +5.3% Gross margin 34.6% 32.8% +1.8ppts 33.0% +1.6ppts Distribution costs (48.0) (49.0) (2.0)% (47.0) +2.1% Administration costs (167.2)
Slide 6: Segmental performance
McBride plc Segmental performance Constant Currency 2014/15 2013/14 2013/14 Revenues £m £m Y/Y £m Y/Y UK 246.5 259.0 (4.8)% 259.0 (4.8)% Western Europe 396.2 419.5 (5.6)% 382.7 +3.5% Rest of the World 61.5 65.7 (6.4)% 60.5 +1.7% Total 704.2 744.2 (5.4)% 702.2 +0.3% Adjusted operating profit (1) UK 1
Slide 7: Exceptional items – Income Statement
McBride plc Exceptional items – Income Statement 2014/15 2013/14 Cash Impairment Total Cash Impairment Total £m £m £m £m £m £m Functional reorganisation 0.4 — 0.4 2.6 — 2.6 UK restructuring: - Reorganisation costs 0.8 — 0.8 7.9 — 7.9 - Impairment of goodwill and PP&E — — — — 20.7 20.7 0.8 — 0.8 7.9
Slide 8: Balance Sheet
McBride plc Balance Sheet Constant Currency 2014/15 2013/14 2013/14 £m £m Y/Y £m Y/Y Goodwill and other intangible assets 19.7 26.3 (25.1)% 26.7 (26.2)% Property, plant and equipment 129.8 143.3 (9.5)% 132.6 (2.1)% Other non-current assets 21.5 14.6 +47.3% 14.1 +52.5% Working capital 26.7 28.5 (6.3)
Slide 9: Movement in net debt
McBride plc Movement in net debt Net cash Opening net generated from Exceptional Capital Payments to Foreign Closing net debt operations DB Pensions items Financing costs Taxation expenditure shareholders exchange Other debt -10.0 -25.0 £m -40.0 (2.6) -55.0 (10.7) (5.7) -70.0 (6.9) -85.0 (84.7) 46.8
Slide 10: Committed headroom & Net debt
McBride plc Committed headroom & Net debt Committed Facility June 2015 headroom £m £m £m Committed facilities: - US Private Placements (November 2020 and April 2022) 57.2 (57.2) — - Revolving facilities (April 2019) 99.6 (21.3) 78.3 - Invoice discounting facilities 46.3 (30.0) 16.3 - Other loans 2.5
Slide 11: Summary and outlook
McBride plc Summary and outlook • Tough competitive environment impacting key markets of UK, France balanced by growth in Germany. • Costs lower driving profits improvement. • UK profit recovery with restructuring project on track to deliver annualised benefits of £12.0m by 30 June 2016. • Stable fi
Slide 12: Manufacturing our future
McBride plc Strategy Presentation September 2015 Manufacturing our future
Slide 13: Welcome to the new McBride
McBride plc Strategy Presentation September 2015 Welcome to the new McBride …. Our ambition is for McBride to become the leading European manufacturer and supplier of Co-manufactured and Private Label products for the Household and Personal Care market through selected channels and markets. By strea
Slide 14: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 14 Manufacturing our future
Slide 15: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 15 Manufacturing our future
Slide 16: Observations: McBride has become a supplier of all ranges to all customers
McBride plc Strategy Presentation September 2015 Observations : in the drive for sales growth, McBride has become a supplier of all ranges to all customers We have but consequences… • High share with strong positions at most leading • a broad portfolio with high demand on central support retailers •
Slide 17: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 17 Manufacturing our future
Slide 18: External Drivers – channels, customers and branders adapting fast
McBride plc Strategy Presentation September 2015 External Drivers – our channels, customers and the branders are adapting fast, we need to do the same Share of Private Label in 2014 Total retail market – share of channel Brand owners (2015, % of total retail sales by channel) 0% 100% 100% 100% 100%
Slide 19: External Drivers – complex environment for materials and regulation
McBride plc Strategy Presentation September 2015 External Drivers – complex environment for materials and regulation • Oil price • Chemical industry • Supplier numbers • CLP • Biocides • Allergens • ....... ……the companies with scale are best placed to tackle this complexity 19 Manufacturing our fut
Slide 20: External Drivers – competitors have made focused choices
McBride plc Strategy Presentation September 2015 External Drivers – competitors have made focused choices, McBride has not Sales Revenues by competitor • Branders 912 928 McBride • McBride, the Euro millions Approx. total market €5bn largest 372 384 McBride 19% 220 241 • Many small local 117 130 132
Slide 21: Internal Drivers – huge customer base, complex SKU range
McBride plc Strategy Presentation September 2015 Internal Drivers – huge customer base, complex SKU range … 33,000 materials for 6,500 SKUs ….for 500 customers… • Service and quality • Complex inventory • Customer profitability Top 50 customers represent 90 % of our CGP • Overhead productivity • Pur
Slide 22: Result – McBride cannot quickly re-configure its asset footprint
McBride plc Strategy Presentation September 2015 Result – McBride cannot quickly re-configure its asset footprint … 10% of McBride output produced on 1 of our machines • # locations 40% of Group volumes • Transport & produced in 2 locations logistics • Factory • Sales office • Underperforming units
Slide 23: McBride's future opportunity lies in maximising benefits of scale
McBride plc Strategy Presentation September 2015 McBride’s future opportunity lies in maximising the benefits of scale through internal efficiency Our market has structural challenges and offers limited growth We have a broader and deeper asset and skill set than our competitors but to deliver the a
Slide 24: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 24 Manufacturing our future
Slide 25: Strategic Positioning
McBride plc Strategy Presentation September 2015 McBride future Strategic Positioning McBride is Europe’s leading European provider of Private Label Household and Personal Care products, developing, producing and selling our products to leading retailers throughout Europe and beyond. Our ambition is
Slide 26: McBride Activity chain
McBride plc Strategy Presentation September 2015 McBride will need to focus on every step in its activity chain McBride Logistics & Raw Material Formulation Mixing & Packaging Activity Sourcing Skills Filling & Labelling Customer Sales Service chain Discount channel: Technical cost and breadth skill
Slide 27: We will implement through a three phased approach
McBride plc Strategy Presentation September 2015 We will implement through a three phased approach • Simplify • Lower costs • Streamline • Invest • Upgrade organisation • Underperfoming sectors • Upgrade skills • Channel offerings • Focused targets 27 Manufacturing our future
Slide 28: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 28 Manufacturing our future
Slide 29: "Repair" phase – key actions
McBride plc “Repair” phase – key actions • Focus commercial efforts to approximately 20% of our Customers existing customers • SKU reduction of 30% • Simplified business model Overhead • Cost reduction • Simpler product ranges leading to scale benefits in buying Purchasing • Develop purchasing as va
Slide 30: "Prepare" phase – key actions
McBride plc “Prepare” phase – key actions • Complete organisation re-design Organisation • Develop and deliver skills & training program • Deliver further cost savings across the business Overhead • Invest in project management resources • Design and implement revised Poland expansion Assets • Focus
Slide 31: "Grow" phase – key actions
McBride plc “Grow” phase – key actions • Develop customer specific value proposition Sales teams • Improve marketing and sales skills • Appropriate customer and market intelligence Targeted growth • Optimise through focus on markets and categories Co- • Review relationships with structural partners
Slide 32: We embark on a challenging mission
McBride plc Strategy Presentation September 2015 We embark on a challenging mission… supported by… • platform of core competencies and fundamentals in place 1 • the “Repair, Prepare, Grow” strategy is clearly and fully aligned with market dynamics • McBride has market leadership, but does not fully
Slide 33: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 33 Manufacturing our future
Slide 34: Value improvement
McBride plc Strategy Presentation September 2015 Value improvement Effective implementation of this new model and the transformation of the Company to the new way of working is set to deliver sustainable returns permitting reinvestment to continue our market leadership as well as provide shareholder
Slide 35: Financial implications
McBride plc Strategy Presentation September 2015 Financial implications • Revenue development • 2 year cash cost of reorganisation: £15m – Initial impact of “customer choice” – Growth from FY18 • Additional capex initiatives: +25% • Benefits of simplification • Dividend Policy – Savings programmes –
Slide 36: We expect to return to revenue growth in years time
McBride plc Strategy Presentation September 2015 We expect to return to revenue growth in 2 years time 2015 2016 2017 2018 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 Establish strategy & Leadership Team Repair Organisation & define “customer choice” Implement savings post “custo
Slide 37: Agenda
McBride plc Strategy Presentation September 2015 Agenda 1 Observations 2 Drivers 3 McBride’s new positioning 4 Repair, Prepare, Grow 5 Targets and milestones 6 Summary 37 Manufacturing our future
Slide 38: We will be manufacturing our future
McBride plc Strategy Presentation September 2015 …… we will be manufacturing our future Simplified product range A new direction Fewer customers “Repair, Prepare, Grow” Investment in asset upgrading Sustainable profits Focused on selected To be market/channels to permit ongoing re- investment to ret
Slide 39: Thanks for listening – Question time
McBride plc Strategy Presentation September 2015 Thanks for listening Question time… 39 Manufacturing our future