Investor Presentation FY14

Transcription

1 Investor Presentation FY14 Charlie McLeish Chief Executive Officer Albert Zago Chief Financial Officer Investor Presentation FY14

2 Strategic Achievements A year of consolidation On target with strategy Relocation & upgrade of bleach plant (stages 1 & 2) completed Cemented our position as No.1 supplier of liquid bleach New packaging launched reinforcing Australia Made and Owned Velvet soap successfully repositioned as a beauty bar Invested in people and systems to deliver future growth R&D on new high speed liquid line completed Installation planned for end FY15 -> to drive future growth Closure of Speciality Chemicals business completed 2

3 Financial Overview NPAT increased by $3.4m to $5.3m Early exercise of Loyalty Options raised $5.705m (net of costs & tax) Net Debt reduce to effectively zero from June 2012 of $61m Strong Balance Sheet - no gearing - substantial capacity New normalised and competitive banking arrangement Reinstatement of interim and final dividend payments full year dividend of 0.12 cents per share (fully franked) record date of 12 September 2014 (i.e. after expiry of Loyalty Options) payable on 30 September 2014 Approximately 40% of NPAT 3

4 Financial Headlines $ m FY14 FY13 (ii) Change % Gross Sales % Underlying EBITDA (i) % Underlying EBITDA to gross sales (i) Depreciation & Amortisation 8.9% 8.9% - - (1.8) (1.1) (0.7) Underlying EBIT (i) (0.6) -7.06% Underlying EBIT to gross sales (i) 7.2% 7.9% Profits after Tax % Basic EPS (cents) % Net Cash/ (Debt) 0.0 (8.2) (8.2) +100% (i) Before significant items (ii) Based on continuing operations Consumers Products business Key Points Focused on maintaining/growing margins rather than participating in aggressive price reduction campaigns Underlying EBITDA marginally above LY, after absorbing: rental cost of $0.8m Shepparton sale & leaseback & relocated corporate office increased cost of raw materials not recoverable through price increases One off costs $0.5m: o bed down relocated/upgraded bleach plant o phasing in new private label bleach business from Feb 14 o outsourced some of bleach production during the relocation/upgrade EBIT down on LY due to additional depreciation from new capital investment Finance costs down $4.7 million to $1.0 million (incl. $0.15m to exit GE facility) NPAT increased by $3.4m to $5.3m 4

5 Improved Net Profit Before Tax (Continuing Operations) One off income includes sale of Close-Up brand & Sunlight trademark (Pacific Islands only): Profit $0.4m 5

6 Maintaining Solid Market Share Homebrand Bleach 11% Coles Smart Buy Bleach 10% BLEACH WOOL WASH BAR SOAPS Dollars Share White King Bleach 79% Coles Smart Buy Wool Wash 7% Earth Choice Wool Wash 27% Australian Pure Wool Wash 8% Dollars Share Homebrand Wool Wash 2% Martha Gardener Woolmix 20% Softly Wool Wash 36% Private Label 6% Other Mfrs 9% Unilever 34% Dollars Share Reckitt Benckiser 4% Pental Products P/L 17% Colgate Palmolive 20% Johnson & Johnson 2% Pz Cussons 8% Ecostore 1% MANUAL TOILET CLEANER Coles Smart Buy 1% Domestos 1% Earth Choice 7% Harpic 41% Coles 5% Dollars Share Homebrand 1% Woolworths Select 2% White King 23% Duck 18% Total Redheads Cubes 37% FIRELIGHTERS Total Homebrand Cubes 14% Dollars Share Total Jiffy Cubes 25% Total Little Lucifier Cubes 14% Total Coles Cubes 10% DISHWASH - NZ Down To Earth 6% Palmolive 46% Ecostore 6% Sunlight 21% Morning Fresh 21% Source: Aztec data - market share in the major grocery channel 6

7 New Product Launches

8 White King - New Look 8

9 Building Growth via Robust Innovation Process 9

10 Marketing Strategy 3 Year innovation pipeline focused on delivering brand growth Targeting younger consumers Tailoring products for new channels Improving and adding value on current best sellers Investing in marketing communication on our key brands Building category strategy to deliver growth on the fabric care portfolio Supported by Australian Made & Owned credentials 10

11 Investing in Key Brands White King Brand TV Commercial to run from October- December 2014 White King Community partnership with Western Bulldogs Velvet PR Campaign, Print Ad & Consumer promotion Win $10,000 or $100 Swarovski voucher every day with Velvet from 27th October to 21st December 2014 Pental is the official sponsor of the Prostate Cancer Foundation Australia Big Aussie Barbie event - to be communicated on our Little Lucifer packs and included in all the Big Aussie Barbie launch events and PR releases as well as their website and all participants sponsorship pages. 11

12 Sales Strategy Re-aligned sales structure Industry Best Practice Sales structure to build Brands and Private Label growth opportunities New Pharmacy Sales Partner with aggressive growth targets Best practise planning system New sales/trade spend planning/forecast system implemented late June 2014 streamline processes improving return on investment of promotional spend Strong business plans with key customers Private label growth plans with Coles & Aldi Brand focused business plans in Metcash with all Banners Groups 12

13 Manufacturing Strategy Bleach Plant relocation & upgrade completed in FY14 Improve speed and capacity of Bleach Line B completed August 14 Foundations completed with growth & cost reductions forecast in FY15 R&D on new High Speed Liquid Line completed Installation by late FY15 Allows for growth in new product categories & reduce costs in FY16 Soap plant evaluation underway Safety comes first Modernisation and consolidation of soap lines Lean Manufacturing Program Reduce Waste Reduces cost to produce, grow Private label & reduces operational risks Working with industry experts to deliver the right solutions 13

14 Supply Chain Strategy Example: Soap produced from either tallow or sustainable palm raw materials Flexibility in raw materials & to achieve customer needs Benchmarking in Australia and globally Lowest Cost & Mitigation of Supply Risk Ensure processes & costs are continually evaluated Working with suppliers to ensure minimal or no cost increase Interstate & New Zealand freight review being targeted to deliver savings 14

15 Outlook Solid pipeline of innovative new products to drive growth Evolving our key brands into new categories and channels Growth expected through increasing demands of private label Investing in manufacturing capability for future growth: High speed liquid line o Installed during FY15 -> drive future growth Modernisation & consolidation soap manufacturing plant o Reduce costs & maintain niche position of being Australia s largest soap manufacturer Conversion of options and strong cash flows will fund CAPEX investment 15

16 Outlook Increased marketing planned for FY15 to grow our key brands Trading conditions expected to remain consistent with the past year Pursuing all avenues of growth that will improve shareholder returns including value-creating acquisitions or distributorship opportunities Plan to reinstate a position of paying regular interim & final dividends subject to performance and outlook of the business Share consolidation - Subject to shareholder approval at AGM 16

17 Appendix Financial Performance for the year (52 weeks) ended 29 June 2014 Summary of Loyalty and Piggy back Options 17

18 Profit and Loss $ m FY 14 FY 13 % Change Gross Sales % Trade rebates and discounts (28.7) (28.8) 0.61% Gross margin (incl. trade rebates) % Freight expenses (8.8) (9.1) 3.04% Employee expenses (11.6) (10.9) -6.37% Marketing expenses (3.2) (2.9) -7.36% Other expenses & other revenue (4.3) (4.2) -2.13% Underlying(1) EBITDA % Depreciation & amortisation (1.8) (1.1) % Underlying (1) EBIT % % to Gross Sales: Sales rebates and discounts 26.20% 26.72% Gross Margin (incl. trade rebates) 34.34% 34.08% Freight and distribution costs 8.04% 8.41% Marketing costs 2.89% 2.73% Key Points Sales up 1.38% focused on maintaining/growing margins rather than participating in aggressive price reduction campaigns Gross margin improved on last year by 0.26% to 34.1% Prior year initiatives from consolidation of distribution arrangements embedded in the business Employee costs increased as a result of enhancement to leadership team - R&D, procurement/supply chain and private label management Depreciation up on LY mainly from relocation/upgrade of bleach plant (1) Underlying result excludes significant one-off items - in FY14 this was the profit ($0.4m) on sale of Close Up brand 18

19 Balance Sheet $ m FY 14 FY 13 Net Assets Net Debt Working Capital Property, Plant and Equipment Goodwill Other Intangibles: Brand Names & Software Net Debt / Equity 0.0% 13.2% Key Points Successful equity raising of net $5.7m (net of cost) via options schemes Net debt reduced to nil Cash of $0.025m Borrowings: Repayment of fixed terms debt Changed to a multi-option facility of $16m Facility expires 28 February 2017 Interest rate of 3.82% plus 0.9% line fee GE receivable finance facility discontinued Reduction in working capital of $0.6m due to improved working capital management. 19

20 Cash Flow Key Points $ m FY 14 FY 13(1) Cash in/(out) flow from operating activities 7.0 (2.9) Capital expenditure (5.0) (2.4) Proceeds from sale of brand name & property, plant and equipment Net Proceeds from issue of shares Net Repayment of borrowings (12.6) (42.1) Net increase/(decrease) in Cash (4.3) 0.6 Capital expenditure included: Relocation/upgrade of the bleach plant Upgrade of ERP system and new promotional planning/forecasting system Packaging equipment for individually wrapped firelighters Bottle sleeve equipment for bleach line Sale of Close-Up brand & Sunlight trademark (Pacific Islands only) $0.6m LY s net cash position in the Statement of Cash Flows does not included $12.6m of debt Net cash position at end of year (1) Consumers Products and Specialty Chemicals businesses 20

21 Loyalty Options Loyalty Options expire on 11 September 2014 Options traded on ASX as PTLO (traded at $0.013 on 21 August 2014) Exercise price $0.02 Early exercise of the Loyalty Options raised $5.7m (net of costs and tax) Options exercised between 29 June 2014 and 29 August $0.5m Options in the money, but not exercised at 29 August 2014 amount to $1.2m 21

22 Piggy Back Options Exercise period: 6 December June 2015 (expiry date) Exercise price $0.03 Options traded on ASX as PTLOA (traded at $0.005 on 21 August 2014) As at 29 June million piggy back options on issue valued at $8.6m 22

23 Disclaimer The material in this presentation is a summary of the results of Pental Limited (Pental) for the year (52 weeks) ended 29 June 2014 and an update on Pental s activities and is current at the date of preparation, 29 August Further details are provided in the Company s full year accounts and results announcement released on 22 August 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, 23