2012/13 INTERIM RESULTS

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Charlotte Fowler
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1 2012/13 INTERIM RESULTS 29 November 2012 RPC Market Leader in Europe

2 AGENDA Financial & Business Review Strategy - Fitter for the Future - Innovation & Investment - Strategic Corporate Development Outlook 2

3 KEY FIGURES Revenue Adjusted operating profit Adjusted basic EPS* p p 1.3p 11.5p p 5.7p 9.6p 11.7p 18.3p 18.4p 08/09 09/10 10/11 11/12 12/13 08/09 09/10 10/11 11/12 12/13 08/09 09/10 10/11 11/12 12/13 Reported in Translation impact of weaker v H1 11/12 All figures (except adjusted basic EPS) in m Adjusted = before restructuring costs, impairment losses and mark to market charges * Restated following Rights Issue in

REVENUE DEVELOPMENT Revenue reduced by 69m to 518m due

reduction in volumes Recessionary Eurozone and UK

originates, impacted activity levels as did the exit

businesses Relatively defensive end markets with 58% of

24% Dairy Products 7% Long shelf-life 8% Spreads 11%

4 REVENUE DEVELOPMENT Revenue reduced by 69m to 518m due to a (38)m translation impact of a weaker and a 3% reduction in volumes Recessionary Eurozone and UK economies, where 87% of the Group s turnover originates, impacted activity levels as did the exit from mainland European vending and automotive businesses Relatively defensive end markets with 58% of revenue in food related packaging Food 58% Other food 24% Dairy Products 7% Long shelf-life 8% Spreads 11% Coffee 8% Non food 42% Other non food 17% Pharma 4% Surface coatings 9% Personal care 12% 4

INPUT COST DEVELOPMENTS Polymer Price Development Global PP Supply/Demand Outlook 1,800 1,600 Tonnes (m) Operating Rate % 1,400 1,200 1,000 per tonne 800 600 400 200 0

5 INPUT COST DEVELOPMENTS Polymer Price Development Global PP Supply/Demand Outlook 1,800 1,600 Tonnes (m) Operating Rate % 1,400 1,200 1,000 per tonne Source: Platts / ICIS HDPE BM PP HOMO Operating Rate Free capacity Demand Source: Chemical Market Associates, Inc Polymer prices very volatile in H1 pass through in place 5

6 CONSOLIDATED INCOME STATEMENT million H1 2012/13 H1 2011/12 VARIANCE Revenue (68.8) Operating profit adjusted Interest charge (6.5) (6.1) (0.4) Profit before tax adjusted Tax on adjusted profit before tax (10.1) (9.8) (0.3) Profit after tax adjusted Exceptional costs (18.5) (4.1) (14.4) Tax relief on exceptionals Mark to market (charges) / credit - (0.1) 0.1 Profit after tax reported (12.4) Basic earnings per share (p) adjusted 18.4p 18.3p 0.1p Basic earnings per share (p) reported 8.4p 16.4p (8.0)p 6

7 EXCEPTIONAL COSTS million H1 2012/13 Strategic exit from MLE vending / automotive components 5.7 Impairment - properties held for sale 1.5 Impairment - goodwill sheet businesses 5.8 Completion phase 1 Superfos synergies 2.5 Fitter for the Future project * Excludes sales value of buildings and release of working capital 7

8 KEY FIGURES Net cash from operating activities Return on Capital Employed* Dividend per share* % % % 10.2p % 18.2% 19.4% 19.3% 8.1p % 13.5% 15.1% 5.1p 5.9p 20 % % 4.2p 4.3p p 2.3p 2.5p % 08/09 09/10 10/11 11/12 12/13 Mar 09 Mar 10 Mar 11 Sep 11 Mar 12 Sep 12 08/09 09/10 10/11 11/12 12/13 Average Capital employed Net cash from operating activities in m * Restated following Rights Issue in 2011 * Restated for new debt definition 8

9 CONSOLIDATED BALANCE SHEET million SEP 2012 MAR 2012 SEP 2011 Property, plant and equipment Goodwill Other non-current assets Assets held for sale Working capital Employee benefit liabilities (LT) (55.5) (56.3) (48.8) Other liabilities (48.6) (54.2) (53.8) Net debt (165.5) (160.0) (200.1) Equity shareholder funds

10 CASH FLOW BRIDGE 2 (15) (179) (74) (160) (11) (166) 140 (11) (20) 71 (30) (14) (17) (8) *Includes exchange rate movements, exceptional spend, provision movements & movement on derivatives 10

11 FINANCIAL POSITION KPIs SEP 2012 SEP Renewal date main facilities Gearing 63% 74% Net debt ( m) Undrawn facilities ( m) m RCF Net debt to EBITDA ratio 1.32x 1.54x 50 USPP USPP EBITDA to Net Interest ratio 12.3x 15.0x

12 SUMMARY Good first half year underlying profit performance with ROCE improving from 18.2% to 19.3% Recessionary Eurozone and UK economies impacted overall activity levels Increase in exceptional costs due to impairments, completion of strategic exit of MLE vending and automotive businesses and the start of the Fitter for the Future programme Good cash flow generation with robust financial position in place 12

13 STRATEGY DRIVERS OF VALUE FITTER FOR THE FUTURE Optimisation of the European businesses RPC 2010 Superfos acquisition and integration INNOVATION AND INVESTMENT Continued growth in higher added value products STRATEGIC CORPORATE DEVELOPMENT Both in existing and new markets 13

STRATEGY FITTER FOR THE FUTURE (1) Support RPC Group s strategy to deliver a sustainable return through the economic cycle Programme contents: Optimisation European product market combinations

14 STRATEGY FITTER FOR THE FUTURE (1) Support RPC Group s strategy to deliver a sustainable return through the economic cycle Programme contents: Optimisation European product market combinations Realisation medium term Superfos synergies Disposal of redundant production locations Programme impact: P&L exceptional costs of (30)m Cash outflow estimated at (15)m Steady state P&L improvement estimated to be at least 12m pa with the following phasing: m FY 2013/14 FY 2014/15 FY 2015/16 EBIT Impact (0) (10) (20) (30) Cash outflow Fitter for the Future ( m) (30) P&L exceptional costs 3 Non-cash asset impairments Capital expenditure associated with the programme will be funded from on-going investment budgets 4 Working capital release 8 Sale of properties (15) Net cash outflow 14

15 STRATEGY FITTER FOR THE FUTURE (2) Programme contents: Programme current status: Rationalise manufacturing footprint Optimise pan-european thermoforming and injection moulding spreads production including the proposed closure of the Antwerp (Belgium) and Beuningen (Netherlands) sites Fitter for the Future optimisation programme Optimise existing business portfolio Optimise Oakham setup following Superfos benchmarking Major cost efficiency programmes in 4 sites in mainland Europe Focus on supporting higher added value business Realise value redundant properties Sales of Raunds (UK) and Kajarpec (Hungary) negotiated Properties of 2 sold companies currently rented out to buyers Two other properties (Netherlands and UK) being marketed 15

STRATEGY INNOVATION AND INVESTMENT Higher added value products Higher added value products have grown by a

consolidation of the personal care growth achieved in the previous two years whilst cosmetics reduced due

3% Coffee capsules and thin wall/barrier Superfos packaging growing strongly.

16 STRATEGY INNOVATION AND INVESTMENT Higher added value products Higher added value products have grown by a CAGR of 15% between 2009/10 and HY 2012/13 and now represents 31% of the Group s turnover H1 showed a consolidation of the personal care growth achieved in the previous two years whilst cosmetics reduced due to general market circumstances 24.2% 27.2% 29.8% 31.3% Coffee capsules and thin wall/barrier Superfos packaging growing strongly. Investment underway enabling future growth in pharmaceutical products FY 09/10 FY 10/11 FY 11/12 HY 12/13 LTM Sales of higher added value products as % of group revenue (at constant FX rate) 16

17 STRATEGY STRATEGIC CORPORATE DEVELOPMENT (1) Acquisition criteria: EXISTING MARKETS Consolidate and grow core market positions Acquire where: Existing strong market positions can be further enhanced Consolidation can create new strong market positions Available synergies enhance shareholder value NEW GEOGRAPHIES Expand our markets based on technology and higher added value packaging Selectively explore investment partnership, JV, acquisition in order to create / cement strong or differentiated positions and participate in high growth emerging markets 17

STRATEGY STRATEGIC CORPORATE DEVELOPMENT (2) Manuplastics - Acquired 21 November

food segments Will become part of the RPC Bramlage cluster Strong and long-standing

constructed, modern facility (2007) Sales 7.8m (LTM 30 June 2012) 7.

asset Rationale Strategic bolt-on acquisition providing a high quality UK

18 STRATEGY STRATEGIC CORPORATE DEVELOPMENT (2) Manuplastics - Acquired 21 November 2012 Single-site injection moulder based in Wimbledon, London UK Personal care and food segments Will become part of the RPC Bramlage cluster Strong and long-standing relationships with major brands Experienced incumbent management team Recently constructed, modern facility (2007) Sales 7.8m (LTM 30 June 2012) 7.0m purchase consideration (cash free, debt free) includes substantial property asset Rationale Strategic bolt-on acquisition providing a high quality UK manufacturing and sales base for complete range of personal care products Earnings accretive (pre and post synergies) 18

19 OUTLOOK Immediate outlook impacted by challenging macro-economic conditions in Europe affecting overall activity levels and competitive intensity Group remains well positioned through its strong market positions and 58% exposure to food related packaging whilst growth in high added value products is expected to continue Weaker euro will continue to impact on the results reported in sterling Fitter for the Future business optimisation programme launched to sustain and ultimately improve current profitability levels 19

20 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, which: have been made by the directors in good faith based on the information available to them up to the time of their approval of this presentation; and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. The Company undertakes no obligation to update these forward-looking statements and nothing in this presentation should be construed as a profit forecast. 20

21 APPENDICES 21

22 SEGMENTAL ANALYSIS - IFRS 8 BASIS million HY 2012/13 HY 2011/12 VARIANCE Injection Moulding Thermoforming Blow Moulding Revenue* (40.2) Operating profit ** Return on sales ** 10.7% 9.3% 1.4% Return on net operating assets ** 27.9% 25.5% 2.4% Revenue* (24.2) Operating profit ** Return on sales ** 7.0% 4.7% 2.3% Return on net operating assets ** 20.0% 22.7% (2.7)% Revenue* (4.4) Operating profit ** (0.5) Return on sales ** 6.6% 6.8% (0.2)% Return on net operating assets ** 20.2% 21.0% (0.8)% * External sales only ** Based on adjusted operating profit before closure and restructuring costs, impairment losses and other exceptional items 22

23 SEGMENTAL ANALYSIS - GEOGRAPHICAL million H1 2012/13 H1 2011/12 VARIANCE UK Revenue (5.7) Operating profit * Return on sales 9.9% 7.6% 2.3% Mainland Europe (including USA) Revenue (63.1) Operating profit * (0.6) Return on sales 8.8% 7.8% 1.0% * Based on adjusted operating profit before closure and restructuring costs, impairment losses and other exceptional items 23

24 PENSIONS UPDATE million SEP 2012 MAR 2012 SEP 2011 Retirement benefit liability UK DB (27.6) (29.0) (22.6) Other retirement benefit obligations (22.9) (21.9) (20.8) Termination benefits (1.8) (2.0) (2.0) Other employee benefit liabilities (3.2) (3.4) (3.4) Total employee benefit liability (LT) (55.5) (56.3) (48.8) 24

25 GROUP STRUCTURE / MANAGEMENT TEAM Executive Board Members Chief Executive Ron Marsh British 25 years Finance Director Pim Vervaat Dutch 5 years Group Purchasing Darin Evans British 15 years Business Improvement Frank Doorenbosch Dutch 23 years Cluster Managers Superfos 8sites UK Injection Moulding 6 sites Bramlage Wiko 9 sites Blow Moulding 12 sites Bebo 7 sites Tedeco-Gizeh 3 sites Cobelplast 2 sites René Valentin Danish 21 years Bruce Margetts British 25 years Alfons Böckmann German 37 years Stephan Bühl German 18 years Thomas Wahlmeyer German 31 years Albert de Bruin Dutch 20 years Attilia Menghini Italian 37 years Philippe Van Troost Belgian 22 years Years experience in the plastic packaging industry 25

26 PRODUCT MARKET COMBINATIONS Niche (21%) Weak Competitive position Strong 1% 1% 12% 3% 2% 7% 8% 7% 4% 2% 1% 3% Sectors to be de-emphasised 9% 6% 9% Strong sectors 8% 7% 3% 4% 2% Commodity strong (75%) Commodity (4%) % of HY12/13 revenue Low Market attractiveness High 26

27 INPUT COST DEVELOPMENTS 1, , % 70.0% 1, % 50.0% 36% 37% 35.6% 40.0% % 30% % 20.0% 10.0% 0.0% 0.0 FY 08/09 FY 09/10 FY 10/11 FY 11/12 HY12/ % Revenue Polymer costs Polymer costs % of revenue 27

2011/12 RESULTS. 12 June RPC Market Leader in Europe

2011/12 RESULTS. 12 June RPC Market Leader in Europe 2011/12 RESULTS 12 June 2012 RPC Market Leader in Europe AGENDA Financial Review Business Review Outlook 2 FINANCIAL REVIEW KEY FIGURES Revenue Adjusted operating profit Adjusted basic EPS* 74.3* 1,130