FY17 Investor Presentation Year ended (53 weeks) 2 July 2017 Charlie McLeish Albert Zago Chief Executive Officer Chief Financial Officer
Agenda About Pental Financial Overview Operational Update Outlook Appendix 2 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
About Pental 3 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
About Pental Household products that are Pental brands • efficient and quality-tested to deliver quality and help families live better. expertise in home and Wherever you go in an • hygiene products for Australian home today it today’s lifestyle . 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 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Who We Are Personal Household Laundry Oral Private Fire Dishwash Care Cleaning Care Care Label Personal Care (New Zealand) Laundry Care Fire Needs (New Zealand) Household Cleaning 5 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Pental People Board of Directors & Company Secretary Oliver Carton Peter Robinson Mel Sutton John Rishworth John Etherington Kimberlee Wells Non Executive Non Executive Non Executive Non Executive Non Executive Company Secretary Independent Chairman Vice Chairman Independent Director Independent Director Independent Director Senior Management Substantial Shareholders (1) Alan Johnstone - 21.9% Allan Gray Australia - 13.8% John Homewood – 12.6% Elevation Capital Management – 8.5% Charlie McLeish Albert Zago (1) As at 16 August 2017 CEO CFO 6 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Our Business Pental Limited (ASX:PTL) Market Cap: $81 Million (1 ) Asia 1% Established 63 years ago Headquartered in Melbourne Manufacturing facilities New Shepparton – 90% of products • Zealand Soap plant - 18% Bleach plant - Liquids and bulk liquids plant - Firelighters plant - Supplemented by 3rd party contract manufacturing in NZ • Distribution Channels ~4,000 supermarkets • ~700 pharmacies • Australia ~300 petrol & convenience, corner & hardware stores • 81% Warehousing Warehouses: Shepparton (Vic), Christchurch (NZ), • Gross Sales by Region Auckland (NZ), Shanghai FTZ (China) and Ningbo FTZ (China) (1) As of 2 July 2017 7 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Our Strategic Focus CREATE A SOLID PLATFORM FOR GROWTH: DRIVE YEAR ON YEAR REAL Nail the basics: Safety, People PRODUCTIVITY Engagement, Environment, SAVINGS Quality & Customer Service Install cost effective high performance capability OUR BRANDS DRIVE INNOVATION NEW CHANNELS Build strategic alliances Establish new sales with category leaders to channels. access customer insights Commercial and and innovation pipeline industrial. Optimise pack and price in the ACCELERATE right Channel OUR CAPABILITY TO GROW THE Drive EXPORT BUSINESS innovation 8 8 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Financial Overview 9 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
FY17 in Review FY17 in Review 28.7% 10.1% 7.4% Manufacturing Labour Net Sales up Underlying EBITDA (net recoveries) down on 9.1% (Gross Sales up 7.0%) up to $11.9m increased volume produced 3.2% $1.1m $1.8m Underlying Profit Delivery Projects Asia sales growing steady EBIT up to $8.5m 6.3% 10.2% Improved profitability Dividend Up White King growth of NZ operations 10 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Key Financial Results $’000 FY17 FY16 Change % Australia gross sales up 7.7% o (Net Sales up 6.3%) 117,660 109,980 7,680 7.0% Gross Sales (GSV) New Zealand gross sales down o 1.3% (net Sales up 4.6%) 85,124 79,223 5,891 7.4% Net Sales Gross sales into Asia $1.8m HY1: o $0.66m & HY2: $1.14m 11,923 10,834 1,089 10.1% Underlying EBITDA (i) Bleach Filler breakdown caused o stock shortage/ DIFOT issues. Underlying EBITDA to gross 10.13% 9.85% Profit impact ~$0.5m plus sales (i) delayed new product launches (2,552) (3,376) (824) Underlying EBIT excluding FX losses Depreciation o (Gains LY) would be up 11.2% or $8.9m. 8,547 8,282 265 3.2% Underlying EBIT (i) ACCC Legal re: Flashable Wipes o still ongoing Underlying EBIT to GSV (i) 7.26% 7.53% EBIT up 3.2%, after increase o depreciation of $0.8m – capital investment Reported NPAT 5,850 5,628 222 3.9% Dividends up 10.2% o Basic EPS (cents) 4.29 4.13 3.8% Dividend Per Share (cents) 3.25 2.95 10.2% (i) Before one-off: ACCC legal costs 11 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Financial Overview Manufacturing Labour • Aust. Gross (after recoveries) sales up 7.7% down 28.7% Offset by • NZ gross sales Continuous Improvement down 4.6% (or • Outsourced Customer Engineer, Sales support for 2.1% in NZD) Service new channels & manning • Asia export Additional • In field merchandising for consolidated steady grow depreciation 12,000 • Occupancy costs on warehousing from capital consolidation of investment warehouses LY Effective tax rate • Reduced R&D claim 10,000 29.9% vs LY H1 31.5% - R&D adjustment 8,000 6,000 Trade spend Refocus activity 4,000 increase in line Ongoing in Promotional/ with sales growth. improvement in FX loss $385k ACCC Trade spend & At 27.7% of Gross logistics even with vs $252k gain Dispute – delayed launch Sales vs LY 28.0% increased sales LY Legal Costs 2,000 of new products volume Development & FX (loss)/gain Finance costs Gross margin Trade rebates One off costs Amortisation before trade & discounts distribution expenses & NPAT FY16 NPAT FY17 Employee expenses Marketing Freight & revenue spend Other Tax 5,628 4,073 1,789 279 184 403 824 866 637 160 20 97 5,850 12 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Working Capital + Balance Sheet Key Balance Sheet Items Net cash position of $11.7m $’000 FY17 FY16 Nil debt o Cash 11,660 12,335 ~$7.4m to be utilised to repurchase Shepparton o property – settlement occurred on 2 August 2017 Net assets 84,960 83,177 Major capital works to come – Staged soap plant o Net debt / equity 0% 0% upgrade and non-bleach liquids Working Capital Banking facility of $5 million Substantial capacity to redraw more as required $’000 o FY17 FY16 Trade & other receivables 23,613 23,582 Working capital increased by $0.9m: Increased safety stocks after DIFOT issues in second half o 10,297 8,866 Inventories Increased stock to cover additional promotional o activities in 1 st Qtr. FY18 Trade & other payables (17,242) (16,659) Working capital 16,668 15,789 13 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Cashflow $’000 FY17 FY 16 Change Cash from operating profit after tax 9,259 8,264 995 Decrease/(increase) in working capital & other (812) 857 (1,669) Increase/(decrease) in net tax liability (1,832) 2,138 (3,970) Cash flow from operating activities 6,615 11,259 (4,644) Capital expenditure (3,066) (6,148) (3,082) Dividend paid (4,224) (3,816) (408) Net increase/(decrease) in cash (675) 1,295 (1,970) Net cash position at end of year 11,660 12,335 (675) FY16 tax liability of $2.3m tax paid in FY17 Capital expenditure includes: & monthly payment of FY17 tax estimate o Completion of bulk line o Soap cutting and wrapping equipment Working capital increase mainly due to o General replacement and upgrade of increased safety stocks after DIFOT issues in second half and additional stock to cover plant and IT equipment promotional activities in 1 st Qtr. FY18 14 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Operational Update 15 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
FY17 Operational Scorecard WIP Living Our Values: Eliminate low value Safety activities & drive DIFOT Customers costs out Now back Innovation On track and on track People continues to be a key focus Quality Capital Production Lines Preventative Efficiency Work Maintenance Progressively Business case Plant reliability needs to improve must be solid improving 16 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
Growing our Brands Strong Growth: White King 6.3% Toilet Cleaner 11.9% White King Soakers continue to grow strongly in Household 5.9% Woolworths through the implementation of a new key pricing strategy 24.3% growth *Source: Aztec Scan data, Value, MAT to 28/5/2017 17 Manufactured locally for Australia, New Zealand and Beyond – FY17 Investor Presentation
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