Today s Agenda. Pental Overview. Performance Update. Operational Update. Outlook. Appendix. Detailed Profit & Loss Cash Flow

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2 Today s Agenda Pental Overview Performance Update Operational Update Outlook Appendix Detailed Profit & Loss Cash Flow 2

3 Pental Overview 3

4 About Pental Pental brands deliver quality and expertise in home and hygiene products for today s lifestyle. Household products that are efficient and quality-tested to help families live better. Wherever you go in an Australian home today it would be odd not to find at least one Pental product. The Pental tradition of providing our customers with products of superior quality continues with constant product innovation and improvements. Pental trusted by families for generations. 4

5 Who we are Personal Care House- Hold Cleaning NZ Laundry Fire needs Kitchen NZ 5

6 Our business Pental Limited (ASX:PTL) Market Cap: $80 Million (1) Established 62 years ago Headquartered in Melbourne New Zealand 18% Gross Sales by Region Asia 1% Australia 80% Manufacturing facilities Shepparton 90% of products - Soap plant - Bleach plant - Liquids plant - Firelighters plant - New Bulk Plant Supplemented by 3rd party contract manufacturing in NZ Distribution channels ~4,000 supermarkets ~700 pharmacies ~300 petrol & convenience, corner and hardware stores Warehousing Australia 81% Warehouses: Shepparton (Vic), Christchurch (NZ), Auckland (NZ), Shanghai FTZ (China) and Ningbo FTZ (China) (1) As of 6 January

7 Pental people Board of Directors & Company Secretary Peter Robinson Non Executive Independent Chairman Mel Sutton Non Executive Vice Chairman John Rishworth Non Executive Independent Director John Etherington Non Executive Independent Director Kimberlee Wells Non Executive Independent Director Oliver Carton Company Secretary Senior Management Substantial Shareholders (1) Alan Johnstone % Allan Gray Australia % John Homewood % Elevation Capital Management - 8.2% Charlie McLeish CEO Albert Zago CFO (1) As at 6 January

8 Financial Update 8

9 Overview Net Sales up 6.8% (Gross Sales up 6.6%) NPAT up 15.8% to $2.3 million EBITDA up 16.0% to $4.9 million Successful launch of Country Life Liquids Strong growth with White King cleaning ranges Expansion into China continues to grow Bulk Liquid Line commissioned Scoping Soap Automation project 9

10 Key financial results $ 000 Dec 16 Dec 15 Change % Gross Sales (GSV) 57,588 54,046 3, % Net Sales 41,650 38,990 2, % EBITDA 4,900 4, % EBITDA to gross sales 8.5% 7.8% Depreciation (1,594) (1,145) (449) EBIT 3,306 3, % EBIT to GSV 5.7% 5.7% NPAT 2,303 1, % Basic EPS (cents) % Dividend Per Share (cents) % o Australia gross sales up 7.7% (Net Sales up 6.2%) o New Zealand gross sales down 3.3% (net Sales up 1.2%) o Steady gross sales into Asia with $664k in H1 o Targeted trade spend investment including launch of Country Life liquids and on ongoing support for expanding White King range o Increased depreciation as a result of Shepparton capital investment o Underlying EBIT (excluding FX losses was $3.583 million o EBIT up 7.3% o NPAT up 16.0% 10

11 NPAT HY Dec 15 Gross margin before Trade Spend Trade rebates & discounts Employee expenses Freight & distribution Marketing Depreciation & Amortisation Other Expenses & Revenue Finance costs Tax NPAT HY Dec 16 Net profit After tax $'000 5,000 4,500 4,000 3,500 Aust. gross sales up 7.7% NZ gross sales down 3.3% Asia export Sales solid: $664k Continuous Improvement Engineer, Sales support for new channels & manning for consolidated warehousing Additional depreciation from capital investment FX loss $277k vs $201k gain LY H1 Occupancy costs on consolidation of warehouses from January 16 Repairs & Maintenance Effective tax rate 29.9% vs LY H1 34.7% - R&D adjustment 3,000 2,500 2,000 1,500 1, Trade spend increase in line with sales growth. At 27.68% of Gross Sales down 0.18% on LY H1 Ongoing improvement in logistics - 1,985 2,442 (882) (289) 256 (52) (449) (800) ,303 11

12 Working capital & balance sheet Key balance sheet items $ 000 Dec 16 Jun 16 Cash 9,427 12,335 Net assets 83,072 83,177 Net debt / equity 0% 0% Working capital $ 000 Dec 16 Jun 16 Trade & other receivables 20,768 23,582 Inventories 8,289 8,866 Trade & other payables (13,866) (16,659) o Net cash position of $9.427m o $8.0 million on short term deposit o Nil debt and substantial borrowing capacity o Operating cash flow down $3.520 million o $3.2 million in income tax paid relating to FY16 financial year ($2.3 million) and normal monthly tax installment payments (PAYG) o Increased inventory of $0.372 million vs. Dec 15 o Shareholders approved repurchase of Shepparton properties estimated cost ~ $7.3m (incl. transaction cost & taxes) settlement expected July/August 2017 o Working capital down $0.598 million on June 16 Working Capital 15,191 15,789 12

13 Operational Update 13

14 Delivering on Strategy - 5 key pillars 1 MANUFACTURING CONTINUOUS IMPROVEMENT Enhance preventative maintenance processes Drive Out Costs 3 Export Growth Continue the Growth in China. Commence Exporting into other Asian Countries 4 New Domestic Sales Channels. Commercial Industrial Foodservice 5 2 Brands and Development of New Products Price Increase Recovery Brand Protection Private Label Opportunities IMPLEMENTATION OF NEXT PHASE OF CAPITAL WORKS Modernise and increase capacity of the soap plant and liquid lines 14

15 Investing in brands White King has a strong hold on bathroom cleaning and is outpacing growth in all major cleaning categories Increased distribution and shelf presence for toilet gels has facilitated sales growth Bathroom Cleaning ranges continue to be the star performers for White King White King brand is performing strongly as Bathroom products, Toilet cleaners and Stain Removers experience significant dollar growth (+6.7% vs YA) Future innovation in the cleaning range will expand White King s footprint For example: New non bleach cleaning products Source: Aztec Scan data, Value, MAT to 11/12/

16 New White King Cleaning Range Positioning: - Non bleach formulation for frequent use - Contains an advanced polymer: - repels dirt, grease & soap scum - makes ongoing cleaning easier - Antibacterial kills 99.9% of germs - Comparative product testing indicates high efficacy In Store - March

17 Investing in brands Sponsorship White King sponsor of the Western Bulldogs Consumer Giveaway Online Country Life Escape promotion 17

18 Investing in brands White King Soakers continue to grow strongly in Woolworths through the implementation of a new key pricing strategy 18

19 Country Life campaign Message: Escape Everyday with Country Life Campaign objective: Drive awareness and consumer engagement, incentive trial and purchase Media: Social media 600,000 impressions (1,253 Facebook likes) Digital presence 600,000 impressions Consumer giveaways Sampling campaign 100,000 person reach 19

20 Investing in brands Instore & Off location Dedicated retailer support has lead to primary shelf positioning and Brand blocking, ensuring Pental's brands have maximum impact on consumers. 20

21 Investing in brands Pental is the one and only firelighter manufacturer in Australia Simplified Jiffy pack design to focus on key call outs and differentiation from imported competition: No Kerosene Burn Time Odourless Ease of Use Little Lucifer driving category growth via innovation through individually wrapped firelighters (+9.9%; Dollar growth vs YA) Little Lucifer re-positioned to target the Foodie trend allowing for extensive NPD pipeline for FY17 and beyond Source: Aztec Scan data, Value, MAT to 11/12/

22 Investing in brands in NZ 22

23 Outlook 23

24 Entering New Domestic Sales Channels New range of industrial-sized cleaning products: 5 to 15 litres Over 1000 potential customers contacted and solid expression of interest Thick Bleach Gel Hospital Grade Non Caustic Non Ammonia Streak Free Gloss Retention Suitable for all Floors Spotless Drying Streak Free Non Caustic Suitable Ovens / Grills Hospital Grade Lemon Scent Long-term expansion objective into new channels with our power brands on target Bulk filling line commissioned in September 2016 Biodegradable Lemon Scent Streak Free Antibacterial Automatic Dishwashing Plant Based With Aloe Vera 24

25 Exporting to New Markets o Sales to Asia $0.664 million for the Half Year change to Chinese customs import regulations had slowed down clearance process o Direct relationships with Chinese retailers o Using Free Trade Zones for Warehousing and Distribution o Distribution channels Bricks & Mortar: Bailian Century Mart, InTime and Choice Supermarkets E-commerce: FTZmall.com.cn, yhd.com, Kaola.com, Pharmacy o Launched into Eastern China o Sales enquires continue to be solid Brands into Asia include: Country Life & Velvet Soaps White King Products Softly Laundry Products 25

26 Exporting to New Markets 26

27 What's in the Pipeline NPD Bars & Liquids In-store activation Social Media New Fragrances Consumer Promo Export NPD Toilet, Bathroom and Household In-Store Activation Export Opening New Channels Industrial & Commercial Expanding Pharmacy NPD Firelighters, Woodchips Strengthening Positioning NZ Distribution Push New Export Range In-store Activation NPD Bars & Washes NPD Liquids Fragrance Tactical Support Sales NZ Distribution Push Push into new ranges 27

28 Summary: Strategy Moving Forward - 5 key pillars 1 MANUFACTURING CONTINUOUS IMPROVEMENT Enhance preventative maintenance processes Drive Out Costs 3 Export Growth Continue the Growth in China. Commence Exporting into other Asian Countries 4 New Domestic Sales Channels. Commercial Industrial Foodservice 5 2 Brands and Development of New Products Price Increase Recovery Brand Protection Private Label Opportunities IMPLEMENTATION OF NEXT PHASE OF CAPITAL WORKS Modernise and increase capacity of the soap plant and liquid lines 28

29 Appendix 29

30 Profit & loss $ 000 Dec 16 Dec 15 % Change Gross sales (GSV) 57,588 54, % Trade spend (15,938) (15,056) 5.9% Net Sales 41,650 38, % Raw materials, consumables & change in inventory (1) (21,994) (20,894) 5.3% Freight out & distribution (1) (3,147) (3,403) -7.5% Employee expenses (6,404) (6,115) 4.7% Marketing expenses (1,617) (1,565) 3.3% Other expenses (3,455) (3,134) 10.2% Other revenue % FX gain/(loss) (280) % EBITDA 4,900 4, % Depreciation & amortisation (1,594) (1,145) 39.2% EBIT 3,306 3, % % to Gross Sales Trade spend 27.7% 27.9% -0.2% Freight-out & distribution costs 5.5% 6.3% -0.8% Marketing costs 2.8% 2.9% -0.1% (1) Previous corresponding period figures have been adjusted to include freight in costs and exclude selling expenses as part of purchasing raw materials and consumables. 30

31 Cash flow $ 000 Dec16 Dec 15 Increase/ (Decrease) Operating activities (before tax) cash flow 5,185 5,670 (485) Income tax paid (3,179) (144) (3,035) Cash flow from operating activities 2,006 5,526 (3,520) Capital expenditure (2,257) (2,911) 654 Dividend paid (2,657) (2,453) (204) Net increase/(decrease) in cash (2,908) 162 (3,070) Net cash position at end of year 9,427 11,202 (1,955) Operating cash flow down $3.520 million mainly due to: o $3.2m in income tax paid relating for FY16 financial year ($2.3 million) and normal monthly tax installment payments (PAYG) o Increased inventory of $0.372 million vs. Dec 15 31

32 Disclaimer The material in this presentation is a summary of the results of Pental Limited (Pental) for the year (52 weeks) ended 25 December 2016 and an update on Pental s activities and is current at the date of preparation, 20 February Further details are provided in the Company s full year accounts and results announcement released on 20 February No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation ( forward-looking statements ). Such forward looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of Pental and its Directors) which may cause the actual results or performance of Pental to be materially different from any future results or performance expressed or implied by such forward-looking statements. This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Due care and consideration should be undertaken when considering and analysing Pental s financial performance. All references to dollars are to Australian Dollars unless otherwise stated. To the maximum extent permitted by law, neither Pental nor its related corporations, Directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation should be read in conjunction with other publicly available material. Further information including historical results and a description of the activities of Pental is available on our website, 32

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