Mcbride Plc · LSE:MCB
Mcbride — FY2016 Earnings Presentation
29 slides from Mcbride's earnings presentation, September 2016
Slide 1: Preparing for growth
Preparing for growth McBride plc Results and strategy presentation: September 2016
Slide 2: Agenda
Agenda 1. Welcome 2. Headlines & strategic progress 3. Financial results 4. Market developments & the way forward 5. UK Referendum and McBride 6. Conclusion 7. Appendices McBride plc 1 Results and Strategy Presentation: September 2016
Slide 3: Headlines
Headlines • Significant progress on • Strategic purchasing • Operating margin up to Repair phase of our strategy initiatives launched, over 5.3% (2015: 4.0%) with £5m benefit realised in year adjusted operating profit • New segmentation: 27% higher Household and • Savings programmes Personal Care &
Slide 4: Looking back a year…
Looking back a year… McBride plc 3 Results and Strategy Presentation: September 2016
Slide 5: Repair: five key objectives were defined
Repair: five key objectives were defined Repair McBride will substantially simplify its activities, covering customers, products, processes and organisation. We will launch a broad range of purchasing driven saving initiatives, in further support of the simplification and rightsize the overhead base
Slide 6: Divisional overview
Divisional overview Household (HH) division Personal Care & Aerosols (PCA) division • 79% Group revenues in 2016 • 21% Group revenues in 2016 • Four regional teams • Comprises European and Asian operations • Focusing on private label and contract • European management team installed Jan 2016 manufac
Slide 7: Financial headlines
Financial headlines • Revenues lower by 1.9% at constant currency • Cash generated from operations before exceptional items £52.5m (2015: £44.2m) • Adjusted EBITA 27% higher, 29% at constant currency • Underlying net cash inflow of £13.9m, offset by adverse FX impact in last week of June • Operating
Slide 8: Income statement
Income statement Revenue Adjusted EBITA Adjusted EBITA by segment Labour costs % of sales and £m £m/ROS% £m overhead % of gross profit £m % 744.2 2.7 40.0 6.0 36.2 91.0% 35.0 88.3% 5.3% 5.0 30.0 28.5 85.2% 19.8% 704.2 4.0 19.7% 25.0 37.8 37.5 42.7 22.0 4.0% 692.7 694.4 20.0 3.0 680.9 3.0% 15.0 19.0%
Slide 9: Balance sheet and cash flow
Balance sheet and cash flow Cash flow Net debt £m/ ROCE % from operations £m debt cover x 23.4% 1.9 92.4 52.5 90.9 1.9 1.9 18.8% 44.2 40.6 84.7 12.7% 1.7 2013/14 2014/15 2015/16 2013/14 2014/15 2015/16 2013/14 2014/15 2015/16 Net debt Debt cover • Net assets • Debt cover and covenants • FX impact on
Slide 10: Other financials
Other financials Payments to shareholders p Exceptional items £m /dividend cover x Group pension liability £m 34.5 32.9 5.0 31.4 3.6 3.6 30.4 17.8 3.1 2.3 2.4 1.1 2013/14 2014/15 2015/16 2013/14 2014/15 2015/16 2013/14 2014/15 2015/16 Payments to shareholders Dividend cover • Exceptional items, limi
Slide 11: We are leaving the Repair phase behind
We are leaving the Repair phase behind Prepare McBride will invest into its manufacturing assets and optimise its warehousing and distribution network. We will align the new organisational set-up aiming to institutionalise our new way of working with our people. We will provide a clear way forward f
Slide 12: Looking forward: market developments
Looking forward: market developments • Channel dynamics • Promotional pressure reduced, especially in the UK, EDLP strategies • Branders divesting and/or outsourcing minor & regional brands • Expectation of inflation towards end of 2016, accelerated by UK Referendum McBride plc 11 Results and Strate
Slide 13: Preparing for Growth
Preparing for Growth Grow McBride will drive a sustainable and profitable growth path based upon a greatly improved cost position and more efficient manufacturing and distribution. This will focus on fewer markets, categories and customers. McBride will develop customer specific value propositions d
Slide 14: Investing over £100 million in operational excellence
Investing over £100 million in operational excellence • UK Middleton new line – • Group-wide capital • Waste and efficiency completed planning and optimisation improvement initiatives well underway underway at many sites • Poland phase 1 underway • Distribution and logistics • Key category Laundry r
Slide 15: Time horizon – by calendar year
Time horizon – by calendar year 2016 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Key projects delivered or in final stage Repair • customer and SKU simplification • overhead alignment programmes • underperforming businesses identified, progress already in Asia • Embed culture sh
Slide 16: Forward view – financials
Forward view – financials • Early months of new financial year • Raw material input costs • Currency rates, hedging • Gross margins • Overhead costs • Financing costs • Capital expenditure • Payments to shareholders McBride plc 15 Results and Strategy Presentation: September 2016
Slide 17: UK Referendum and McBride
UK Referendum and McBride • Foreign exchange • UK raw materials • translation of overseas profits and assets to GBP • European-based exporters to UK retail – competitiveness • USD-denominated debt, hedged • Interest rates – borrowings, pension valuation • Import/export tariffs and border controls •
Slide 18: Conclusion
Conclusion • Significant progress on the • Concluding Repair phase; Repair phase of our strategy, Prepare phase underway one year after the launch • Growth ambition, related • Encouraging financial results action plans and supporting for last year investments in development • New divisional structur
Slide 19: Questions
Questions McBride plc 18 Results and Strategy Presentation: September 2016
Slide 20: Appendices
Appendices 1. Chairman introduction 2. Income statement Segmental reporting Exceptional items Balance sheet Cash flow Use of cash Funding headroom 3. B Share scheme McBride plc 19 Results and Strategy Presentation: September 2016
Slide 21: Appendix 1: Chairman introduction
Appendix 1: Chairman introduction “I am delighted to have John brings considerable joined the Board of McBride, experience holding office as a in part because it feels a Non‑Executive Director in various companies across multiple little like coming home. market sectors, including retail I started my
Slide 22: Appendix 2: income statement
Appendix 2: income statement Constant currency(1) 2015/16 2014/15 2014/15 £m £m Y/Y £m Y/Y Revenue 680.9 704.2 (3.3%) 694.4 (1.9%) Gross profit 243.8 243.7 — 240.5 +1.4% Gross margin 35.8% 34.6% +1.2ppts 34.6% +1.2ppts Distribution costs (46.5) (48.0) (3.1%) (47.3) (1.7%) Administration costs (161.1
Slide 23: Appendix 2: segmental reporting
Appendix 2: segmental reporting Constant currency 2015/16 2014/15 2014/15 £m £m Y/Y £m Y/Y Revenue UK 164.9 180.5 (8.6%) 180.5 (8.6%) North 179.0 183.9 (2.7%) 180.7 (0.9%) South 69.2 68.7 0.7% 67.6 2.4% East 121.9 119.3 2.2% 116.5 4.6% Household 535.0 552.4 (3.1%) 545.3 (1.9%) PCA 145.9 151.8 (3.9%)
Slide 24: Appendix 2: exceptional items
Appendix 2: exceptional items 2015/16 2014/15 Total Total £m £m Functional reorganisation — (0.4) UK restructuring costs 0.3 (0.8) Group reorganisation 0.7 (3.1) CLP — (3.7) Customer choices (2.2) — Legal case (1.2) — French and Chinese Aircare PP&E impairment — (4.2) Italian goodwill impairment — (
Slide 25: Appendix 2: balance sheet
Appendix 2: balance sheet 2015/16 2014/15 £m £m Y/Y Goodwill and other intangible assets 20.0 19.7 +1.5% Property, plant and equipment 136.2 129.8 +4.9% Other non-current assets 22.5 21.5 +4.7% Working capital 29.7 26.7 +11.2% Net other debtors/(creditors) (0.3) (2.7) (88.9%) Provisions (6.4) (8.0)
Slide 26: Appendix 2: cash flow
Appendix 2: cash flow 2015/16 2014/15 Y/Y £m £m £m Adjusted operating profit 36.2 28.5 7.7 Depreciation 18.2 19.6 (1.4) Share-based payments 1.8 — 1.8 Additional cash funding of pension scheme (3.1) (2.6) (0.5) Operating cash flow before movements in working capital 53.1 45.5 7.6 Movement in working
Slide 27: Appendix 2: use of cash
Appendix 2: use of cash 60 Cash generation Movement in net debt Foreign exchange 1.5 50 52.5 12.4 Cash utilisation total £38.6m 40 4.2 Exceptionals 5.2 Financing cost £m 30 8.2 Taxation 20 12.8 Capital expenditure 10 5.8 Payments to shareholders 2.4 Other 0 McBride plc 26 Results and Strategy Presen
Slide 28: Appendix 2: funding headroom
Appendix 2: funding headroom 30 June Committed Facility 2016 headroom £m £m £m Committed facilities: – US Private Placements (November 2020 and April 2022) 67.0 (67.0) — – revolving facilities (April 2019) 115.7 (16.5) 99.2 – invoice discounting facilities 49.8 (21.5) 28.3 – other loans 2.4 (2.4) —
Slide 29: Appendix 3: B Share scheme
Appendix 3: B Share scheme • McBride, similar to some other companies, has a B Share scheme to accelerate the recovery of the Group’s unrealised surplus Advance Corporate Tax (ACT), which will significantly improve future cash flows, to the benefit of all shareholders • The B Shares issued to shareh