RPC THE ESSENTIAL INGREDIENT RPC Group Plc 101 25 November 2015
Agenda Business Review Promens Update Financial Review Outlook PV FD SK PV 102
FOCUSED GROWTH *Proforma Group at constant exchange rates and polymer prices RPC Group Plc Business Review Vision 2020 strategy: Progress to date Continuing focus on organic growth 4% underlying packaging revenue increase in year* Continued innovation in product design and engineering Selective consolidation in Europe Acquisition of Innocan (May 2015) and Depicton (June 2015) Good pipeline of acquisition targets Organisational integration of Promens completed 103 Creating a meaningful presence outside Europe Further investment in USA to expand niche positions 57% increase in non-european sales to 101m or 13% of Group total Investment in greenfield plant in Brazil underway Pursuing added value opportunities in non packaging markets Further investment in electroplating capabilities in China Improved performance in Promens non-packaging businesses Acquisition of Strata Products (November 2015)
Business Review Continuing focus on innovation in product design and process technology Company of the Year 2015 at the UK Packaging Awards for the second year running Shortlisted for Design Team of the Year Products shortlisted Developments in process technology 104 Rigid Plastic Pack of the Year Next Generation High Speed Assembly Best Packaging: New Product Consumer Convenience Award In-Mould Labelling in Thermoforming
Business Review Acquisition of Strata Products Acquisition of Strata: Acquired November 2015 A market leading manufacturer of material handling products including branded products for the horticultural market Good strategic fit Single site located in Nottinghamshire with sales of 29m and strong market positions 105 Manufacturing capabilities include injection moulding, blow moulding and rotational moulding Clear synergies available in terms of purchasing and best practise exchange Meets RPC s financial acquisition criteria
Business Review Market Developments By market segment By production origin 256m 168m 156m 56m 137m 27m 182m 165m Food MARKET SEGMENT Food Packaging ACTIVITY LEVELS COMMENT Continued higher added values growth with barrier solutions such as SuperLock and sauces Non-Food Packaging Overall stable business environment Personal Care Good growth of Bramlage and M&H, following new product launches Beverage Continued growth in single serve beverage systems Technical Components Non-Food Personal Care Beverage Lower tool sales partly off-set by growth in Promens non-packaging components Healthcare Imminent new product introduction Technical Components Healthcare United Kingdom Germany 352m 36m Rest of Europe North America 63m 5m* Asia Africa *Pro-forma sales including JV 106
Business Review Polymer Price Development Development polymer price index PER TONNE 1,800 Capacity utilisation polymer industry TONNES (M) OPERATING RATE % 90 92% 1,600 75 90% 1,400 1,200 1,000 800 60 45 30 88% 86% 84% 82% 107 600 15 80% 400 0 09 10 11 12 13 14 15 16 17 18 19 78% Source: Platts / ICIS PP HOMO HDPE BM Operating Rate Actual Demand Free Capacity Forecast Demand Source: Chemical Market Associates, Inc. Adverse impact from time lag in passing through polymer prices in first half year
Integration Update 108
Integration Update Promens integration: Large scale European consolidation Organisational Restructure Divisional structure in place since March 2015 Purchasing Polymer purchasing synergies higher than originally estimated and realised ahead of schedule 109 Head office Icelandic and Norwegian head office functions closed Manufacturing footprint 8 business closure programmes in progress Production optimisation in several sites, exploiting best practices
Integration Update Promens integration: Large scale European consolidation Steady state cost synergies now expected to be 50m instead of 30m Corporate overhead synergy fully realised Additional manufacturing synergy opportunities identified Total exceptional charges reflect optimisation of manufacturing footprint Associated capital expenditure funded from existing budgets (65)m 110 28m 40m 50m (110)m 20m 25m Forecast 15/16 Forecast 16/17 Forecast 17/18 P&L charge Asset write downs Proceeds, working capital & asset sales Cash costs
Financial Review 111
Financial Review Key figures Sales ( m) Adjusted Operating Profit ( m) Adjusted basic EPS* 507 484 522 633 70.7 +36% +36% 49.2 53.9 44.0 17.3p 15.8p 19.5p 20.8p +13% 112 549 498 525 589 800 46.3 47.6 47.1 60.9 82.8 16.6p 17.0p 17.0p 20.2p 22.9p 11/12 12/13 13/14 14/15 15/16 11/12 12/13 13/14 14/15 15/16 11/12 12/13 13/14 14/15 15/16 For continuing operations Adjusted = before restructuring costs, impairment losses, amortisation of acquired intangibles and pension administration expenses * Restated following the Rights Issue in 2015 H2 H1
Financial Review Profit bridge 19 (2) (2) (7) Gross FX translation Polymer 24 (4) 15 83 113 61 (6) 51 Adjusted operating profit HY 2014/15 FX translation Polymer headwind Underlying operating profit HY 2014/15 Acquisitions Business improvement Inflation Adjusted operating profit HY 2015/16
Financial Review Key figures Net Cash from Operating Activities ( m) Return on net operating assets Dividend per share 22.7% 79 55 49 51 74 21.2% 21.6% 22.0% 9.1p 9.4p 9.8p 11.0p +18% 114 21 31 51 42 20.5% 3.7p 3.8p 4.0p 4.4p 5.2p 11/12 12/13 13/14 14/15 15/16 H2 H1 11/12 12/13 13/14 14/15 15/16 Historical periods restated to include acquisitions on a proforma basis. 11/12 12/13 13/14 14/15 15/16 * Restated following the Rights Issue in 2015
Financial Review Net debt bridge (431) (4) (53) (439) 115 120 (12) (28) (16) (15) Net Debt Mar 2015 EBITDA Working Capital Investing Activities Interest & Tax Dividends Exceptional Items Other* Net Debt Sep 2015 * Includes discontinued operations, exchange rate movements, provision movements & movement on derivatives
Term USPP USPP RCF RPC Group Plc Financial Review Financial position KPIs SEP 2015 m 500 Renewal date main facilities Net debt ( m) 439 450 400 350 300 116 Headroom ( m) 371 250 200 150 Net debt to EBITDA ratio 1.95x 100 50 0 2015 2016 2017 2018 2019 2020 2021
Outlook 117
Outlook Performance in the first half year encouraging Second half year started in line with management expectations Further trading improvements expected as polymer prices ease and Promens-related synergies are realised Vision 2020 strategy continues to generate further growth opportunities 118
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. 119
Supplementary Material 120
Setting the scene RPC Group Plc Business Review Global reach 89 manufacturing sites in 24 countries and 18 design & engineering centres Where we manufacture Where we sell RPC sites Over 15,000 employees Largest European rigid plastic converter Industry leading innovator Listed on London Stock Exchange - 1993 Member of the FTSE 250 121 North America Europe Asia
Business Review Experienced international management team Executive Board Members Group Purchasing Business Improvement Corporate Development Pim Vervaat Simon Kesterton Darin Evans Frank Doorenbosch Tom Saunderson 9 years 13 years 20 years 27 years 6 years Chief Executive Group Finance Director Superfos Bramlage Promens Bebo Ace 122 René Valentin Alfons Böckmann Alistair Herd Michael Stegeman Jack Yeung 26 years 41 years 29 years 17 years 16 years Key focus areas Injection moulded product range for consumer and industrial markets Personal and healthcare, single serve beverage systems Blow moulded product range for consumer and industrial markets, speciality vehicles, rotational moulding Thermoforming product ranges for food market and single serve beverage systems Asian precision engineering growth platform including mould making Experienced international management team with over 200 years' experience in the plastic conversion industry
Financial Review Consolidated income statement million H1 2015/16 H1 2014/15 FY 2014/15 Revenue 799.8 588.9 1,222.4 Operating profit adjusted 82.8 60.9 131.6 Interest charge (7.3) (6.1) (12.8) Share of investment 0.3 0.1 0.2 Profit before tax adjusted 75.8 54.9 119.0 Tax on adjusted profit before tax (18.2) (13.2) (28.6) 123 Profit after tax adjusted 57.6 41.7 90.4 Exceptional items restructuring and impairments (29.7) (16.1) (42.9) Amortisation of acquired intangibles, pension administration expense and employee benefit net finance expense (5.6) (3.9) (9.0) Tax credit on above items 6.0 2.6 7.3 Profit after tax continuing operations 28.3 24.3 45.8 Basic earnings per share (p) adjusted 22.9p 20.2p 41.0p
Financial Review New segmental analysis IFRS 8 basis million H1 2015/16 H1 2014/15 FY 2014/15 Revenue 663.2 552.8 1,107.3 Packaging Non-packaging Operating profit 64.9 54.4 110.7 Return on sales 9.8% 9.8% 10.0% Return on net operating assets* 23.7% 23.0% 23.5% Revenue 136.6 36.1 115.1 Operating profit 17.9 6.5 20.9 Return on sales 13.1% 18.0% 18.2% Return on net operating assets* 23.8% 19.4% 21.7% 124 * Restated for acquisitions made during FY 2014/15
Financial Review Geographical revenue and adjusted operating profit by origin million H1 2015/16 H1 2014/15 FY 2014/15 Revenue 698.7 524.4 1,064.4 Europe Rest of World Operating profit 66.4 50.5 103.0 Return on sales 9.5% 9.6% 9.7% Revenue 101.1 64.5 158.0 Operating profit 16.4 10.4 28.6 Return on sales 16.2% 16.1% 18.1% 125
Financial Review Consolidated balance sheet million SEP 2015 SEP 2014 MAR 2015 Property, plant and equipment 630.6 479.8 629.3 Goodwill 497.5 323.4 494.0 Other non-current assets 140.8 82.7 156.0 Working capital 101.1 48.1 96.1 Employee benefit liabilities (LT) (92.1) (88.9) (109.3) 126 Provisions, including deferred consideration (118.8) (79.2) (124.1) Other assets & liabilities (125.9) (77.5) (133.6) Assets held for sale 3.2 2.6 4.0 Net debt (439.4) (318.0) (431.3) Equity shareholder funds 597.0 373.0 581.1
Financial Review Pension update million SEP 2015 SEP 2014 MAR 2015 Retirement benefit liability UK DBs 58.1 62.7 69.6 Other retirement benefit obligations 31.3 23.2 36.7 Termination benefits 0.7 1.1 0.8 Other employee benefit liabilities 2.0 1.9 2.2 Total employee benefit liability (LT) 92.1 88.9 109.3 127
Financial Review Exceptionals update million H1 2015/16 H1 2014/15 FY 2014/15 Fitter for the Future 1.2 8.2 19.6 Acquisition related expenditure 5.3 5.0 17.3 Integration costs 21.4-4.4 Other exceptional items 1.8 2.9 1.6 29.7 16.1 42.9 128 Tax credit on above items (4.5) (2.0) (6.0) 25.2 14.1 36.9