Interim Results. Half year to 30 November 2011

Transcription

1 Interim Results Half year to 30 November 2011

2 Richard Harvey Chairman 2

3 Highlights Alex Kanellis Group Chief Executive 3

4 Highlights Good revenue growth of 10% for the period, particularly in core markets of UK, Indonesia and Nigeria Profits impacted by high raw material costs, adverse exchange rate movements and challenging trading conditions in other markets, particularly Australia Healthy balance sheet with net funds position maintained at the period end despite higher inventory levels in some markets Interim dividend raised to 2.23p per share from 2.123p per share representing a 5% increase Acquisition of Fudge hair care brand for 25.5m completes today Social and economic environment in Nigeria fragile following removal of fuel subsidy 4

5 Financials Brandon Leigh Group Finance Director 5

6 Financial Highlights Half Year to 30 Nov 2011 Half year to Half year to 30 Nov Nov 2010 Revenue 414.0m 374.8m +10.5% 421.6m +12% Operating profit m 46.0m -12.8% 41.2m -10% Profit before tax m 46.2m -13.0% 41.3m -11% Effective tax rate 1,2 27.1% 28.5% Earnings per share p 7.06p -7.4% 6.72p -5% Dividend per share 2.23p 2.123p +5.0% Net funds 2.4m 12.5m Excluding exchange impact Notes 1 Before exceptional items 2 Effective rate is based on profit before tax excluding the results of joint ventures 6

7 Net sales bridge % 3.9% (2.0)% 8.6% H1 Net Sales 2011 Volume Price /Mix Exchange H1 Net Sales

8 Regional summary NET REVENUE m m H H Reported Growth % Constant Currency % AFRICA % 22% ASIA % -14% EUROPE % 19% TOTAL % 12% OPERATING PROFIT AFRICA % 7% ASIA % -72% EUROPE % 2% TOTAL % -10% 8

9 Operating Profit % H H Variance AFRICA 8.4% 9.6% (1.2pp) ASIA 2.8% 9.9% (7.1pp) EUROPE 13.9% 16.2% (2.3pp) TOTAL 9.7% 12.3% (2.6pp) 9

10 Regional summary Africa Main market Nigeria Strong revenue growth across all business units Personal Care, Home Care, Electricals and Nutrition Margins impacted by high raw material costs Construction of the palm oil refinery with Wilmar in Nigeria on schedule for completion by end of 2012 calendar year Ghana and Kenya performed well with revenue and profit ahead of prior period Asia Competitive trading conditions in Australia have resulted in a reduction in revenue and a loss in the period Continued positive momentum in Indonesia with revenue and profit growth Revenues lower in Thailand due to flooding and results in Middle East impacted by political/social unrest in region Europe Good revenue growth in the UK Washing and Bathing division although high levels of promotional activity and high raw material costs have impacted margins Beauty division has performed well with an increase in revenue and profit despite tough conditions in UK distribution channels Robust performance in Poland whilst trading conditions in Greece remain challenging 10

11 Raw Material Prices 11

12 Key Price Movements H vs. H Note: Movement % based on average price H vs. H

13 Key Commodity Index Tracker 20.0m price impact on COS 13

14 Net funds statement 'm Half year to Half year to 30 Nov Nov 2010 Cash from operations Defined benefit pension scheme contributions (7.1) (3.6) Returns on investments & servicing of finance (5.6) (2.7) Taxation (9.0) (8.1) Capital expenditure (7.5) (12.5) Investment in Joint Ventures (5.1) - Acquisition of minority interest (2.8) (0.8) Acquisitions - (62.5) Equity dividends paid (19.2) (17.0) Net decrease in funds (50.2) (70.1) Opening net funds Exchange difference 0.8 (3.9) Closing net funds

15 Net working capital as % of sales 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov % Africa Asia Europe Group 15

16 Financial Summary Good revenue growth of 10% for the period, particularly in core markets of UK, Indonesia and Nigeria Profits impacted by high raw material costs, adverse exchange rate movements and challenging trading conditions in other markets, particularly Australia Healthy balance sheet with net funds position Interim dividend increased by 5% Year end outlook dependent on Nigeria out-turn Appetite to pursue further strategic investment opportunities 16

17 Commercial Overview Alex Kanellis Group Chief Executive 17

18 AFRICA 18

19 Africa Nigeria Macro overview Election process completed in April 2011, seeing the re-election of Goodluck Jonathan Nigerian Naira currency vs. US$ relatively stable although gradual depreciation during and subsequent to the period GDP growth of 7 to 8% in 2010 and 2011 Foreign exchange reserves over US$33bn Inflation running at around 10% Oil production currently just over 2 million barrels per day Brent crude $ per barrel Naira vs. USD May 08 Aug 08 Nov 08 Feb 09 May 09 Aug 09 Nov 09 Feb 10 May 10 Aug 10 Nov 10 Feb 11 May 11 Aug 11 Nov 11 0 Brent Crude $ per barrel Naira vs USD 19

20 Africa Nigeria Macro update Social instability over the Christmas period led to state of emergency being declared in a number of northern states adversely affecting sales in those areas Removal of 100% of the fuel duty subsidy led to a week long national strike and civil disruption in early January Sales and production affected during these peak trading periods Part of fuel subsidy now re-instated impact on consumer disposable income Risk of further social instability and fiscal reform short term impact but medium/long term positive for economy 20

21 Africa Overview Personal Care and Home Care H1 Net Sales 162.7m vs m (14% growth) Recently launched Personal and Homecare products driving growth Margins impacted by high raw material costs Increased stake in Nigerian listed subsidiary further from 66.8% to 67.4% at a cost of 2.8m 21

22 Africa Overview Electricals/Nutrition Electricals Nutrition Growth across all product ranges Highest growth category with good progress in newer UHT product range Higher levels of raw material prices impacted margins 22

23 Africa Wilmar Joint Venture Construction of palm oil refinery on schedule with completion due by the end of the 2012 calendar year PZC share of capital investment USD 27m ( 17m) over two years 5m invested in H1 23

24 ASIA 24

25 Asia Overview H1 Net Sales 76.8m vs. 86.1m (11% decline) Indonesia Another period of revenue and profit growth driven largely by the market leading Cussons Baby range Australia Competitive trading conditions in the retailers, higher promotional activity and higher raw material costs have resulted in a loss in the period Thailand: Disruption to sales due to flooding MESA: Impacted by social/political unrest 25

26 EUROPE 26

27 Europe Overview H1 Net Sales 174.5m vs m (19% growth) Beauty division has performed well with revenue and profit growth Expansion of St Tropez product range in US and Australia progressing well UK Washing and Bathing division has experienced good growth despite tough trading conditions Margins impacted by high levels of trade promotions and high raw material costs New product launches well received 27

28 Acquisition of Fudge brand Established in 1991, Fudge is a leading premium hair care brand, sold predominantly through salon distribution in the UK, Australia and New Zealand Brand and associated inventory acquired on 24 January for 25.5m Excellent fit with Beauty division s existing portfolio Revenue for the year ended 30 June 2011 was 15.7m. Approx. 50% of Fudge sales currently in UK/Europe and 50% in Australia/New Zealand Opportunity to develop Fudge s international potential 28

29 Summary and Outlook Trading environment expected to continue to be difficult in some markets Nigeria remains fragile, with risk of further disruption in H2 Positive H1 growth rates especially UK, Indonesia and Nigeria reflect success of continued brand innovation Input costs now stabilising, albeit at higher levels Continued significant focus on further margin improvements Fudge acquisition will help drive further growth in Beauty Recent investments (acquisitions and capital projects) an important element of longer term growth plans Strong balance sheet enables continued investment in growth opportunities 29

30 Thank you 30