Today’s Agenda Pental Overview Performance Update Operational Update Outlook Appendix • Detailed Profit & Loss • Cash Flow 2 Half Year Investor Presentation
Pental Overview 3 Half Year Investor Presentation
About Pental Pental brands Household products that are • efficient and quality-tested to help deliver quality and families live better. expertise in home Wherever you go in an Australian • home today it would be odd not to and hygiene find at least one Pental product. products for The Pental tradition of providing our • customers with products of superior today’s lifestyle . quality continues with constant product innovation and improvements. Pental – trusted by families for • generations. 4 Half Year Investor Presentation
Who we are Personal Care House- Hold Cleaning NZ Laundry Fire needs Kitchen NZ 5 Half Year Investor Presentation
Our business Pental Limited (ASX:PTL) Market Cap: $80 Million (1) Established 62 years ago Headquartered in Melbourne Gross Sales by Region Manufacturing facilities Asia Shepparton – 90% of products • 1% Soap plant - New Zealand Bleach plant - 18% Liquids plant - Firelighters plant - New Bulk Plant - Supplemented by 3rd party contract • manufacturing in NZ Distribution channels ~4,000 supermarkets • Australia ~700 pharmacies • 80% ~300 petrol & convenience, • corner and hardware stores Warehousing Australia Warehouses: Shepparton (Vic), • Christchurch (NZ), Auckland (NZ), 81% Shanghai FTZ (China) and Ningbo FTZ (China) (1) As of 6 January 2017 6 Half Year Investor Presentation
Pental people Board of Directors & Company Secretary Peter Robinson Mel Sutton John Rishworth John Etherington Kimberlee Wells Oliver Carton Non Executive Non Executive Non Executive Non Executive Non Executive Company Secretary Independent Chairman Vice Chairman Independent Director Independent Director Independent Director Substantial Shareholders (1) Senior Management Alan Johnstone - 21.9% Allan Gray Australia - 13.5% John Homewood - 13.0% Elevation Capital Management - 8.2% Charlie McLeish Albert Zago CEO CFO (1) As at 6 January 2017 7 Half Year Investor Presentation
Financial Update 8 Half Year Investor Presentation
Overview Net Sales Successful Bulk Liquid Line launch of up 6.8% EBITDA up commissioned Country Life 16.0% to Liquids (Gross Sales $4.9 up 6.6%) Expansion into China million continues to grow NPAT up Strong growth Scoping 15.8% to with White Soap King cleaning Automation $2.3 million project ranges 9 Half Year Investor Presentation
Key financial results o Australia gross sales $’000 Dec 16 Dec 15 Change % up 7.7% (Net Sales up 6.2%) 57,588 3,542 6.6% 54,046 Gross Sales (GSV) o New Zealand gross sales down 3.3% (net Sales up 1.2%) 41,650 2,660 6.8% 38,990 Net Sales o Steady gross sales 4,900 675 675 16.0% 4,225 into Asia with $664k in EBITDA H1 7.8% o Targeted trade spend EBITDA to gross sales 8.5% investment including launch of Country Life (1,145) liquids and on ongoing Depreciation (1,594) (449) support for expanding White King range 3,306 226 226 7.3% 3,080 EBIT o Increased depreciation as a result of EBIT to GSV 5.7% 5.7% Shepparton capital investment 2,303 NPAT 5,087 318 16.0% o Underlying EBIT (excluding FX losses was $3.583 million Basic EPS (cents) 1.46 16.0% 1.69 o EBIT up 7.3% Dividend Per Share (cents) 1.15 1.00 15.0% o NPAT up 16.0% 10 Half Year Investor Presentation
Net profit After tax • Aust. gross sales up 7.7% Continuous • • FX loss $277k vs NZ gross sales Improvement Additional down 3.3% $201k gain LY H1 Engineer, Sales depreciation • • Occupancy costs Asia export Sales support for new from capital $'000 solid: $664k on consolidation of channels & manning investment warehouses from for consolidated January 16 warehousing 5,000 • Repairs & Maintenance 4,500 Effective tax rate 29.9% vs LY H1 4,000 34.7% - R&D adjustment 3,500 3,000 2,500 2,000 Trade spend increase in line with Ongoing 1,500 sales growth. At improvement in 27.68% of Gross logistics 1,000 Sales – down 0.18% on LY H1 500 - NPAT HY Dec 15 Gross margin before Trade Trade rebates & discounts Employee expenses Freight & distribution Marketing Depreciation & Amortisation Other Expenses & Revenue Finance costs Tax NPAT HY Dec 16 Spend 1,985 2,442 (882) (289) 256 (52) (449) (800) 20 72 2,303 11 Half Year Investor Presentation
Working capital & balance sheet Key balance sheet items o Net cash position of $9.427m o $8.0 million on short term deposit $’000 Dec 16 Jun 16 o Nil debt and substantial borrowing capacity Cash 9,427 12,335 Net assets 83,072 83,177 o Operating cash flow down $3.520 million Net debt / equity o $3.2 million in income tax paid relating to FY16 0% 0% financial year ($2.3 million) and normal monthly tax installment payments (PAYG) Working capital o Increased inventory of $0.372 million vs. Dec 15 $’000 Dec 16 Jun 16 o Shareholders approved repurchase of Shepparton 20,768 23,582 Trade & other receivables properties estimated cost ~ $7.3m (incl. transaction cost & taxes) – settlement expected July/August 2017 Inventories 8,289 8,866 Trade & other payables (13,866) (16,659) o Working capital down $0.598 million on June 16 15,191 15,789 Working Capital 12 Half Year Investor Presentation
Operational Update 13 Half Year Investor Presentation
Delivering on Strategy - 5 key pillars 4 3 New Domestic 1 Sales Channels. Export Growth • Commercial • Continue the Growth in • Industrial MANUFACTURING China. CONTINUOUS • Foodservice • Commence Exporting into IMPROVEMENT other Asian Countries • Enhance preventative maintenance processes 5 • Drive Out Costs 2 IMPLEMENTATION OF NEXT PHASE OF CAPITAL Brands and Development of WORKS New Products • Modernise and increase capacity of the soap plant • Price Increase Recovery and liquid lines • Brand Protection • Private Label Opportunities 14 Half Year Investor Presentation
Investing in brands White King has a strong Increased hold on bathroom distribution and shelf cleaning and is outpacing presence for toilet growth in all major gels has facilitated cleaning categories sales growth Bathroom Cleaning ranges continue to be the star performers for White King White King brand is Future innovation in the performing strongly as cleaning range will expand Bathroom products, Toilet cleaners and Stain White King’s footprint Removers experience For example: significant dollar growth New non bleach cleaning (+6.7% vs YA) products Source: Aztec Scan data, Value, MAT to 11/12/2016 15 Half Year Investor Presentation
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 2017 16 Half Year Investor Presentation
Investing in brands Consumer Giveaway Online Sponsorship Country Life Escape promotion White King sponsor of the Western Bulldogs 17 Half Year Investor Presentation
Investing in brands White King Soakers continue to grow strongly in Woolworths through the implementation of a new key pricing strategy 18 Half Year Investor Presentation
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 Half Year Investor Presentation
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 Half Year Investor Presentation
Investing in brands Pental is the Little Lucifer driving one and only Simplified Jiffy pack category growth via design to focus on key call innovation through firelighter outs and differentiation from individually wrapped manufacturer imported competition: firelighters (+9.9%; Dollar growth vs YA) in Australia • No Kerosene • Burn Time • Odourless • Ease of Use 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 11/12/2016 21 Half Year Investor Presentation
Investing in brands in NZ 22 Half Year Investor Presentation
Outlook 23 Half Year Investor Presentation
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