Synthomer Plc · LSE:SYNT

Synthomer — FY2012 Earnings Presentation

22 slides from Synthomer's earnings presentation, Mar 15, 2013

  1. Slide 1: 2012 Preliminary Results

    2012 Preliminary Results 15th March 2013

  2. Slide 2: Highlights

    Highlights 2  Another record year: PBT £98.1m (+2.2%); EPS 22.0p (+17%)  Challenging macro-economic environment, particularly in Europe  Adverse currency impact of £5.5m  PolymerLatex integration largely complete  £19m of synergy benefits; on track to deliver £25m target  Full year dividend of

  3. Slide 3: Financial Review

    3 FINANCIAL REVIEW David Blackwood - Finance Director

  4. Slide 4: FY Results: Pro-forma PBT ahead 2.2%

    FY Results: Pro-forma PBT ahead 2.2% 4 2012 2011 % Change Revenue (1) (£m) 1,111.8 1,268.8 (12.4) EBIT (1) (£m) 109.0 109.7 (0.6) PBT (1) (£m) 98.1 96.0 2.2 EPS (2) 22.0p 18.8p 17.0 DPS 5.5p 3.5p 57.1 (1) Underlying pro-forma (2) Underlying (not pro-forma)  Global volumes down 4.9%: Europe down 8.3

  5. Slide 5: Europe & North America (72% Sales, 84% EBIT)

    Europe & North America (72% Sales, 84% EBIT) 5 2012 2011 % Change Sales (£m) 796.9 913.0 (12.7) EBIT (£m) 98.0 85.5 14.6 Volumes (Ktes) 825.9 900.8 (8.3)  EBIT strongly ahead +14.6%  Volumes down 8.3% on soft demand – particularly in Construction  Margin management compensated for volume declines

  6. Slide 6: Asia & RoW (28% Sales, 16% EBIT)

    Asia & RoW (28% Sales, 16% EBIT) 6 2012 2011 % Change Sales (£m) 314.9 355.8 (11.5) EBIT (£m) 19.1 33.0 (42.1) Volumes (Ktes) 347.7 333.7 4.2  EBIT down 42% on nitrile weakness  Non-nitrile polymers business EBIT strongly ahead – up 20%

  7. Slide 7: Free Cash Flow

    Free Cash Flow 7 2012 2011 Underlying operating profit (£m) 104.1 91.6 Depreciation (£m) 18.4 18.8 Movement in working capital (£m) (1.3) (5.0) Capital expenditure (net) (£m) (38.1) (21.9) Tax, interest, pensions* (£m) (44.2) (39.8) Free cash flow (£m) 38.9 43.7 * Also includes minority interest div

  8. Slide 8: Net Cash Flow

    Net Cash Flow 8 2012 2011 Free cash flow (£m) 38.9 43.7 Synergy spend / restructuring(£m) (11.4) (6.2) Acquisitions and disposals net / 2011 rights(£m)** (136.9) Acquisition costs(£m) (0.4) (4.4) Dividends paid(£m) (15.3) (8.4) Exchange / other(£m) (3.3) 11.3 Movement in borrowings (£m) 8.5 (100.9)

  9. Slide 9: Capital Structure / Net Debt

    Capital Structure / Net Debt 9 2012 2011 Net Cash (£m) (1) 38.5 38.8 Term Debt (£m) (194.3) (203.1) Net Debt (£m) (155.8) (164.3) Undrawn Revolver (£m) 60.0 60.0 Net Debt: EBITDA (LTM) 1.2 1.2 Interest Cover (LTM) 11.7 8.3 (1) Includes £5.6m (2011 £5.6m) illiquid financial asset  Conservative balan

  10. Slide 10: Synergy Delivery remains firmly on track

    Synergy Delivery remains firmly on track 10  Synergy delivery of £19m delivered in 2012 (£16m y-o-y)  Balance of £6m to be delivered in 2013  Procurement / contract changes implemented late 2012  Batley closure  Other minor projects  Remaining revenue cash spend to come in 2013 of £6m

  11. Slide 11: Dividend increased by 57.1%

    Dividend increased by 57.1% 11  Full year dividend of 5.5p, in line with announcement at interim results  Dividend cover of 4 times (2011 5.3 times)  Intention remains to move dividend cover to 3 times by 2015

  12. Slide 12: Business Review

    12 BUSINESS REVIEW Adrian Whitfield - Chief Executive Officer

  13. Slide 13: Building On Our Strengths For Future Growth

    Building On Our Strengths For Future Growth 13 Key Strengths Strategy STRUCTURAL STRONG MARKET POSITIONS  Exposed to global mega trends  No. 1 or 2 position in our markets  High water content excludes “out of • No.1 Global Nitrile Latex producer region” competitors • No.2 Aqueous Polymer producer

  14. Slide 14: Key Facets of Synthomer's Aqueous Polymers Business

    Key Facets of Synthomer’s Aqueous Polymers Business 14  Our products typically provide one or both of two critical functions - Provide a barrier - Bind or stick 2 or more components together  We don’t sell a chemical – we sell a formulation - Intimate knowledge of customers’ products/production pr

  15. Slide 15: Operating Review - Europe and North America

    Operating Review - Europe and North America 15 2012  Performance Polymers performed robustly  Construction was the market area most impacted  Margin management again allowed us to optimise results 2013  The final site closure (Batley) will complete in Q2  Due to strong demand for specific range

  16. Slide 16: Operating Review - Asia and Rest Of World: Non-nitrile

    Operating Review - Asia and Rest Of World: Non-nitrile 16 2012  Another year of strong EBIT growth (+20%)  Middle East region particularly strong growth (30%+)  Capacity for Dispersions is effectively full at all 3 SEA locations 2013  Will have SBR paper latex capacity in H2  Actions in hand in

  17. Slide 17: Operational Review - Asia and Rest Of World: Nitrile

    Operational Review - Asia and Rest Of World: Nitrile 17 2012  Market and competitive situation has evolved very much as anticipated at interims  Synthomer volume grew 2 % y-o-y  Margins have stabilised 2013  Launching 2 new grades during 2013  We believe overall industry effective utilisation r

  18. Slide 18: Strong Potential for Future Glove Growth

    Strong Potential for Future Glove Growth 18  Emerging Markets per capita consumption dramatically less than Western markets  As standard of living increases rapid rise in consumption is expected  China national healthcare programme aims to provide everyone in China with affordable and quality med

  19. Slide 19: Progress against strategic objectives

    Progress against strategic objectives 19  No. 1 / No. 2 positions in key markets - Advanced to No.2 in European paper latex market - Launch of “Lithene Ultra” will drive market share - Launch of SBR latex in Asia  Emerging Market Growth - Enhanced latex capacity by 70,000 tes - Expanding Middle Ea

  20. Slide 20: Investing for Future Growth

    Investing for Future Growth 20  2012/13 is a period of dramatic change in Synthomer’s manufacturing capability and capacity  Europe and North America: - Re-structured network to operate with 3 fewer plants - Increased capability to produce a broader range of products in Marl, Worms, Harlow and Sta

  21. Slide 21: Summary & Outlook

    Summary & Outlook 21  Robust performance in a challenging environment  Another record year: PBT £98.1m (+2.2%); EPS 22.0p (+17%)  Nitrile Latex has traded largely as predicted at H1 2012  The macro-economic situation remains challenging in 2013 particularly in Europe  In 2013 we will continue t

  22. Slide 22: 2012 Preliminary Results

    2012 Preliminary Results 15th March 2013

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