RPC GROUP PLC. Bringing Packaging to Life. 2014/15 Interim Results 27 November Company of. the Year. Processor of. the Year

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Dwayne Horton
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1 Company of the Year Processor of the Year Bringing Packaging to Life RPC GROUP PLC 2014/15 Interim Results 27 November 2014

2 2 AGENDA Business Review Financial Review Outlook

3 BUSINESS REVIEW PROGRESS: VISION 2020 STRATEGY Continuing

4% like-for-like revenue increase in H1* Focused growth

presence outside Europe Integration of M&H Plastics and

in US organic growth continues Strategic growth potential for

3 3 BUSINESS REVIEW PROGRESS: VISION 2020 STRATEGY Continuing focus on organic growth Further growth in the selected markets 4% like-for-like revenue increase in H1* Focused growth Selective consolidation in Europe Creating a meaningful presence outside Europe Integration of M&H Plastics and Helioplast completed Proposed acquisition of Promens Investment in US organic growth continues Strategic growth potential for Ace confirmed Promens expands geographic footprint *Existing group at constant exchange rates

4 BUSINESS REVIEW MARKET DEVELOPMENTS Food Packaging

Rest of Europe 11% 16% % Group continuing HY 14/15

US 5% 6% Asia 27% UK MARKET SEGMENT Food Packaging

LEVELS COMMENT Generally stable activity levels

surface coatings offset by slower Eurozone sales Growth

in single-serve beverage systems Technical Components

4 4 BUSINESS REVIEW MARKET DEVELOPMENTS Food Packaging 37% 4% 8% 589m +12% 24% Non-Food Packaging Healthcare Rest of Europe 11% 16% % Group continuing HY 14/15 sales Technical Components Personal Care 62% Beverages US 5% 6% Asia 27% UK MARKET SEGMENT Food Packaging Non-Food Packaging Personal Care Beverages ACTIVITY LEVELS COMMENT Generally stable activity levels impacted by the flooding of Troyes factory Growth in UK surface coatings offset by slower Eurozone sales Growth supported through acquisition of M&H Continued growth in single-serve beverage systems Technical Components Growth area with acquisition of Ace Healthcare Volumes up with acquisition of M&H. Promising pipeline of new projects Like-for-like revenues up 4%* *Existing group at constant exchange rates

5 5 BUSINESS REVIEW POLYMER PRICE DEVELOPMENT Polymer price development PER TONNE 1,600 PP polymer Supply/Demand TONNES (M) OPERATING RATE % 90 92% 1, % 1,200 1, % 86% 84% 82% % % Source: Platts / ICIS PP HOMO HDPE BM Operating Rate Actual Demand Free Capacity Forecast Demand Source: Chemical Market Associates, Inc. Adverse time lag in passing through polymer prices in H1 14/15

6 6 BUSINESS REVIEW INTEGRATION RECENT ACQUISITIONS Acquisition: M&H Plastics Acquired December 2013 Sales 80m (mostly personal care) Sites in UK and USA Progress: Integration complete Synergies realised Investing further for continued growth Helioplast Acquired December 2013 Sales 7m (mostly food packaging) Single site in Balkans Ace Acquired June 2014 Sales 104m (mostly technical components) Five manufacturing sites in China with headquarters in Hong Kong Integration complete Synergies realised Growth of 41% in H1 - further growth investment planned Very positive response from customer base (packaging and non-packaging) Integration on track with: Packaging sales team in China recruited Tooling synergies being realised Best practice exchange started Fire at Zhuhai plant will likely impact growth rates in short term In H1 acquisitions contributed 14m of operating profit and 3.5p of EPS

7 BUSINESS REVIEW FITTER FOR THE FUTURE Programme contents: Rationalise manufacturing footprint Programme main work streams: Nordic region - merger of Tenhult into Mullsjö site Merge French dairy

7 7 BUSINESS REVIEW FITTER FOR THE FUTURE Programme contents: Rationalise manufacturing footprint Programme main work streams: Nordic region - merger of Tenhult into Mullsjö site Merge French dairy operations Refocus Spanish operations Realise value of redundant properties Update: Machine transfer ahead of schedule Production at Troyes ceased in March 2014 Closure of San Roque complete 3 properties remaining to be sold Optimise existing business portfolio Optimisation programme Blow Moulding cluster Optimisation programme Bramlage-Wiko cluster Optimisation of cluster overhead Implementing new structure Eastern European expansion on hold pending Promens completion Completed Review of business portfolio Divestment of Cobelplast cluster Sale of disposable trading business Sale finalised September 2014 Sale finalised May 2014 Programme nearing completion with 13m of benefits realised to date

8 8 FINANCIAL REVIEW KEY FIGURES Revenue ( m) Adjusted operating profit ( m) Adjusted basic EPS* % +29% 18.0p 19.5p 17.7p 22.0p +19% p 18.7p 19.2p 19.1p 22.8p 10/11 11/12 12/13 13/14 14/15 10/11 11/12 12/13 13/14 14/15 10/11 11/12 12/13 13/14 14/15 For continuing operations Adjusted = before restructuring costs, impairment losses, amortisation of acquisition intangibles, pension administration expenses and non-underlying finance costs * Restated following Rights Issue in 2011

9 9 FINANCIAL REVIEW PROFIT BRIDGE ( m) 11 (7) 14 (2) (3) Adjusted Operating Profit Sep 2013 FX Polymer Headwind Other* Amended Operating Profit Sep 2013 Acquisitions Business Improvement Inflation Adjusted Operating Profit Sep 2014 * Includes 1.7m depreciation alignment impact

10 10 FINANCIAL REVIEW KEY FIGURES Net cash from operating activities ( m) Return on net operating assets Dividend per share p 10.6p 11.0p 47 24% 23% 23% 24% 8.1p 17% +11% p 4.2p 4.3p 4.5p 5.0p 10/11 11/12 12/13 13/14 14/15 Mar 11 Mar 12 Mar 13 Sep 13 Sep 14 For continuing operations 10/11 11/12 12/13 13/14 14/15 Restated following Rights Issue in 2011

11 FINANCIAL REVIEW CASHFLOW BRIDGE ( m) Net Debt Mar 2014 EBITDA Working Capital Investing Exceptional Interest Equity Activities Spend & Tax Dividends Raised Acquisitions

11 11 FINANCIAL REVIEW CASHFLOW BRIDGE ( m) Net Debt Mar 2014 EBITDA Working Capital Investing Exceptional Interest Equity Activities Spend & Tax Dividends Raised Acquisitions Other* Net Debt Sep 2014 (265) (318) (6) 87 (44) (16) (12) (21) 74 (119) 4 * Includes discontinued operations, exchange rate movements, provision movements & movement on derivatives

12 FINANCIAL REVIEW FINANCIAL POSITION KPIs Sept 2014 Net debt ( m) 318 400 350 300 Renewal date main facilities 250 Undrawn facilities ( m) 333 m 200 150 100 Net

12 12 FINANCIAL REVIEW FINANCIAL POSITION KPIs Sept 2014 Net debt ( m) Renewal date main facilities 250 Undrawn facilities ( m) 333 m Net debt to EBITDA ratio 1.8x 50 0 Term USPP RCF* USPP * Based on April 2014 RCF of 350m. Does not reflect November 2014 RCF of 490m.

13 13 OUTLOOK Encouraging performance in first half of the year Vision 2020 Focus Growth Strategy making good progress Proposed acquisition of Promens provides attractive opportunity Second half of the year started satisfactorily

14 14 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 Group undertakes no obligation to update these forward-looking statements and nothing in this presentation should be construed as a profit forecast.

15 15 SUPPLEMENTARY MATERIAL

16 16 FINANCIAL REVIEW CONSOLIDATED INCOME STATEMENT million H1 2014/15 H1 2013/14 FY 2013/14 Revenue ,046.9 Operating profit adjusted Interest charge (6.1) (5.9) (11.8) Profit before tax adjusted Tax on adjusted profit before tax (13.1) (9.7) (21.2) Profit after tax adjusted Exceptional items restructuring and impairments (16.1) (9.5) (26.7) Amortisation of acquired intangibles, pension administration expenses and non-underlying finance costs (3.9) (1.8) (3.8) Tax relief on above items Profit after tax reported Basic earnings per share (p) adjusted 22.8p 19.1p 41.1p Basic earnings per share (p) reported 13.3p 13.4p 26.5p For continuing operations

17 17 FINANCIAL REVIEW SEGMENTAL ANALYSIS - IFRS 8 BASIS million H1 2014/15 H1 2013/14 FY 2013/14 Revenue* Injection Moulding Operating profit ** Return on sales ** 9.7% 9.6% 9.9% Return on net operating assets ** 23.1% 26.6% 25.5% Revenue* Thermoforming Operating profit ** Return on sales ** 12.4% 9.1% 10.5% Return on net operating assets ** 37.1% 31.0% 34.3% Revenue* Blow Moulding Operating profit ** Return on sales ** 10.8% 6.6% 8.1% Return on net operating assets ** 27.7% 21.2% 25.9% For continuing operations * External sales only ** Based on adjusted operating profit before restructuring costs and impairment losses, amortisation of acquired intangibles and pension administration expense

18 18 FINANCIAL REVIEW SEGMENTAL ANALYSIS - GEOGRAPHICAL million H1 2014/15 H1 2013/14 FY 2013/14 Europe Revenue* Operating profit** Return on sales** 9.6% 8.9% 9.4% Rest of World Revenue* Operating profit** Return on sales** 16.1% 10.8% 15.3% For continuing operations * External sales only ** Based on adjusted operating profit before restructuring costs and impairment losses, amortisation of acquired intangibles and pension administration expense

19 19 FINANCIAL REVIEW CONSOLIDATED BALANCE SHEET million SEP 2014 SEP 2013 MAR 2014 Property, plant and equipment Goodwill Other non-current assets Working capital Employee benefit liabilities (LT) (88.9) (64.8) (72.5) Provisions, including deferred consideration (79.2) (2.0) (11.6) Other assets & liabilities (77.5) (57.5) (57.8) Assets held for sale (excluding debt) Net debt (318.0) (164.1) (265.2) Equity shareholder funds

20 20 FINANCIAL REVIEW PENSIONS UPDATE million SEP 2014 SEP 2013 MAR 2014 Retirement benefit liability UK DBs Other retirement benefit obligations Termination benefits Other employee benefit liabilities Total employee benefit liability (LT)

21 21 BUSINESS REVIEW PREDICTED GROWTH IN RIGID PLASTIC PACKAGING Rigid plastic packaging set to grow (million tonnes) Rigid plastic packaging grows across all regions: BRIC region (million tonnes) The BRIC countries show strong growth: 9.8% 12.0% % 2.3% % 5.2% 6.1% 15.2% 5.3% Europe North America South & Central America 2013 Predicted 2018 Forecast Asia Rest of World X% CAGR Brazil Russia India China 2013 Predicted 2018 Forecast X% CAGR Source: Smithers Pira, 2013

22 22 BUSINESS REVIEW FITTER FOR THE FUTURE F4F 2014/15 Exceptional Spend Estimated cumulative EBIT impact of programme ( m): Costs remaining 9.0m 8.8m Incurred in H1 14/15 excl. loss on sale of businesses m 9 Loss on sale of businesses 2 FY 12/13 FY 13/14 HY 14/15 FY 14/15 FY 15/16

Bringing packaging to life RPC GROUP PLC 2012/13 RESULTS 05 JUNE 2013

Bringing packaging to life RPC GROUP PLC 2012/13 RESULTS 05 JUNE 2013 2 AGENDA Introduction Business review Fitter for the Future Financial review Strategic development PV PV FD SK PV 3 BUSINESS REVIEW