Rpc halfyear pres_2013
-
Upload
company-spotlight -
Category
Investor Relations
-
view
206 -
download
0
description
Transcript of Rpc halfyear pres_2013
Bringing packaging to life
RPC GROUP PLC
2013/14 INTERIM RESULTS
28 NOVEMBER 2013
RPC Group Plc
2013/14 Interim Results
AGENDA
2
● Introduction PV
● Vision 2020 PV
● Business Review PV
● Fitter for the Future SK
● Financial review SK
● Outlook PV
RPC Group Plc
2013/14 Interim Results
VISION 2020
3
● RPC is a leading packaging company creating significant
shareholder value
● Opportunities for focused growth – organically, consolidating in
Europe through acquisitions and expanding our global presence
● Strong European asset base optimised by final phase of Fitter for
the Future
RPC Group Plc
2013/14 Interim Results
● Progressive dividend with 2.5x dividend cover through the cycle
● Continue to target 20% ROCE through the cycle for existing business portfolio
4
VISION 2020
FINANCIAL METRICS
14.1% 16.5% 23.8% 22.3% 23.2%
FY 09/10 FY 10/11 FY 11/12 FY 12/13 HY 13/14
Adjusted operating profit (£m)
Return on sales (%)
Return on net
operating assets
40.9 55.3 94.9 90.4 46.6
6.2%
7.4%
9.0% 9.2%8.9%
FY 09/10 FY 10/11 FY 11/12 FY 12/13 HY 13/14
VISION 2020: At least 20% VISION 2020: At least 8%
Reported figures for continuing operations
RPC Group Plc
2013/14 Interim Results
Focused
growth
Continuing focus on organic growth
Selective consolidation in Europe
Creating a meaningful presence outside Europe
● Rigid plastic packaging market forecast to
grow by 5.5% globally in the next five years
with 2.7% growth in Europe
5
VISION 2020: FOCUSED GROWTH
● Plastic packaging – whilst concentrated in
selective niches – remains a largely
fragmented market
● Rigid plastic packaging is forecast to grow
by 6.5% outside Europe whilst 94% of
RPC’s sales are currently in Europe
Source: Smithers Pira, 2013
RPC Group Plc
2013/14 Interim Results
Focused
growth
Continuing focus on organic growth
Selective consolidation in Europe
Creating a meaningful presence outside Europe
● More than 2% organic growth* achieved
versus last year
6
VISION 2020: FOCUSED GROWTH
PROGRESS
● Several opportunities to acquire being pursued
actively
● Investment in US site of $9m to capture
sales growth
* measured in polymer tonnes converted
RPC Group Plc
2013/14 Interim Results
BUSINESS REVIEW
MARKET DEVELOPMENTS – GROWTH RESUMED
7
MARKET
SEGMENT
ACTIVITY
LEVELS COMMENT
Personal care &
Cosmetics New product developments being converted
into sales
Spreads & Dairy Stable market with trend towards “In-Mould-
Label” Injection moulding
Coffee Continued strong growth in capsules for
single-serve beverage systems
Surface coatings Recovery of the Spanish economy supported
growth
Pharmaceutical Good opportunities in the pipeline, expected
to come to the market in the medium term
Other food Stable market. Overall sales has been
adversely impacted by exit of vending
Other non-food Slight reduction in activity levels to protect
margins in leading market positions
6%
7%
10%
10%
23%
Other
food
Long
shelf-life
Coffee
Spreads
Dairy
Products
Food
56%
4%
9%
15%
16% Other
non-
food
Pharmaceutical
Personal care
and Cosmetics
Surface
coatings Non-
Food
44%
RPC Group Plc
2013/14 Interim Results
BUSINESS REVIEW
SALES MIX CONTINUING TO IMPROVE
8
Higher added value products
24%
27%
30% 30%*
33%*
FY 09/10 FY 10/11 FY 11/12 HY 12/13 HY 13/14
Sales of higher added value products as % of
group revenue (at constant FX rate)
*continuing operations only
● Higher added value products have grown to 33% of the
Group’s turnover in the last four years
● Strong growth in the year of coffee capsules, personal
care and Superfos thin wall/barrier food containers
RPC Group Plc
2013/14 Interim Results
Polymer price development
400
600
800
1,000
1,200
1,400
1,600
BUSINESS REVIEW
POLYMER PRICE PASS THROUGH - TIME LAG EFFECT NEUTRAL IN H1
PP polymer Supply/Demand
78%
80%
82%
84%
86%
88%
90%
92%
0
15
30
45
60
75
90
07 08 09 10 11 12 13 14 15 16 17
TONNES (M) OPERATING RATE %
Source: Chemical Market Associates, Inc.
9
Operating Rate Actual Demand Free Capacity Forecast Demand
Forecasts indicate favourable supply-demand going forward
€ PER TONNE
Source: Platts / ICIS
HDPE BM PP HOMO
RPC Group Plc
2013/14 Interim Results
“Fitter for
the Future”
optimisation
programme
Rationalise manufacturing footprint
Optimise existing business portfolio
Realise value
redundant properties
● Closure of 2 European locations and transfer of
business to other RPC sites
10
FITTER FOR THE FUTURE
PHASE 1 OVERVIEW
● Optimisation and efficiency programmes at 4 sites in
Europe
● Value to be realised from 6 properties
RPC Group Plc
2013/14 Interim Results
(30)
(20)
(10)
(0)
P&Lexceptional
costs
Non-cashasset
impairments
Workingcapital
release
Sale ofproperties
Net cashoutflow
FITTER FOR THE FUTURE
PHASE 1 – UPDATE
11
● Estimated cumulative P/L impact of at least:
* annualised £10m on continuing basis excluding
discontinued Cobelplast business
● Overall project within budget
● Savings delivered earlier than anticipated
● Progress on Oakham optimisation is showing
results in line with plan
● 2 properties sold in period
2 properties rented
2 properties being marketed for sale
£ million ACTUAL FORECAST
2012/13 2013/14 2014/15
EBIT Impact 2 6 9*
Cash outflow Fitter for the Future – HY 2013/14 (£m)
Incurred to date Remaining spend
(28)
(12)
3
4
8
(2)
(3)
RPC Group Plc
2013/14 Interim Results
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RONOA < 10% RONOA 10%–19% RONOA >= 20%
FITTER FOR THE FUTURE
FINAL PHASE RATIONALE
12
Final phase
Fitter for the
Future
2008/09 2009/10 2010/11 2011/12 2012/13
Business unit RONOA weighted by annual sales
RPC Group Plc
2013/14 Interim Results
FITTER FOR THE FUTURE
FINAL PHASE
13
Programme main work streams:
Rationalise manufacturing footprint
Optimise existing business
portfolio
Review of business portfolio ● Intended divestment of Cobelplast cluster
● Intended sale of disposable trading business
● Nordic region - merger of Tenhult into Mullsjö
● Merge French dairy operations
Programme contents:
● Strategic refocus Spanish operations
● Optimisation of overhead following internal re-organisation
RPC Group Plc
2013/14 Interim Results
(40)
(30)
(20)
(10)
0
P&L exceptional costs Non-cash assetimpairments
Working capitalrelease
Sale of business &property
FITTER FOR THE FUTURE
FINANCIAL OVERVIEW
14
Estimated cumulative P/L EBIT impact of the
complete programme of at least:
£ million ACTUAL FORECAST
2012/13 2013/14 2014/15 2015/16 2016/17
F4F Phase 1* 2 6 9 10 10
F4F Final Phase - - 3 5 7
F4F Total 2 6 12 15 17
* annualised £10m on continuing basis excluding
discontinued Cobelplast business
P&L and Cash outflow Fitter for the Future Final Phase (£m)
(40)
23
17
Capital expenditure associated with the programme to be
funded from on-going investment budgets
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
KEY FIGURES
15
8.8p 11.8p
18.6p 18.4p 18.2p
12.3p
17.7p
19.3p 17.0p
09/10 10/11 11/12 12/13 13/14
18.1 22.0
46.0 47.0 46.6
22.8
33.3
48.9 43.4
09/10 10/11 11/12 12/13 13/14
Adjusted basic EPS*
All figures in £m (except adjusted basic EPS) and continuing operations
Adjusted = before restructuring costs, impairment losses and mark to market charges
* Restated following Rights Issue in 2011
Adjusted operating profit Revenue
323 351
549 484 525
338
401
507
498
09/10 10/11 11/12 12/13 13/14
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
KEY FIGURES
16
2.5p 3.4p
4.2p 4.3p 4.5p
5.9p
8.1p
10.2p 10.6p
09/10 10/11 11/12 12/13 13/14
14.1% 16.5%
23.8% 22.3% 23.2%
Mar 10 Mar 11 Mar 12 Mar 13 Sep 13
28 22 21
31
51
37 47
79 55
09/10 10/11 11/12 12/13 13/14
Net cash from
operating activities (£m) Dividend per share* Return on
net operating assets
ROCE 13.5% 14.9% 20.2% 19.1% 20.0%
Dividend Cover 2.5 2.6 2.6 2.4
* Restated following Rights Issue in 2011 For continuing operations
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
CASHFLOW BRIDGE
17
(171)
(100) (100) (109)
(138) (156) (161) (165)
71
0
(9)
(29)
(18) (5)
(4)
* Includes discontinued operations, exchange rate movements, provision movements & movement on derivatives
Net Debt
Sep 2013 EBITDA
Working
Capital
Interest
& Tax
Investing
Activities Dividend Other* Net Debt
Mar 2013
Exceptional
Spend
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
FINANCIAL POSITION
18
KPIs SEP 2013
Gearing 65%
Net debt (£m) 165
Undrawn facilities (£m) 345
Net debt to EBITDA ratio 1.2x
0
50
100
150
200
250
2014 2015 2016 2017 2018 2019 2020 2021
Renewal date main facilities
US
PP
US
PP
RC
F
Te
rm
£m
RPC Group Plc
2013/14 Interim Results
OUTLOOK
FINANCIAL POSITION
19
Vision 2020 to
deliver profitable
growth going
forward
Second half of
financial year has
started well
Continued
investment in
second half to
capture growth
Group is well
placed to benefit
from economic
recovery in
Europe
RPC Group Plc
2013/14 Interim Results
FORWARD LOOKING STATEMENTS
20
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.
RPC Group Plc
2013/14 Interim Results
Supplementary material
21
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
CONSOLIDATED INCOME STATEMENT
22
£ million H1 2013/14 H1 2012/13 Variance
Revenue 524.7 483.8 40.9
Operating profit – adjusted 46.6 47.0 (0.4)
Interest charge (7.0) (6.7) (0.3)
Profit before tax – adjusted 39.6 40.3 (0.7)
Tax on adjusted profit before tax (9.5) (10.0) 0.5
Profit after tax – adjusted 30.1 30.3 (0.2)
Exceptional items (9.5) (11.1) 1.6
Discontinued operations (16.1) (7.7) (8.4)
Tax relief on exceptional items & discontinued operations 1.5 2.0 (0.5)
Profit after tax – reported 6.0 13.5 (7.5)
Basic earnings per share (p) – adjusted & continuing 18.2p 18.4p (0.2)p
Basic earnings per share (p) – reported & continuing 13.4p 12.9p 0.5p
Co
nti
nu
ing
op
era
tio
ns
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
EXCEPTIONAL COSTS
23
£ million H1 2013/14
Fitter for the Future project 5.4
Impairment – properties held for sale 0.8
Impairment – Assets held for sale 2.4
Other 0.9
9.5
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
SEGMENTAL ANALYSIS - IFRS 8 BASIS (Continuing operations)
24
* External sales only
** Based on adjusted operating profit before restructuring costs and impairment losses
£ million H1 2013/14 H1 2012/13 Variance
Injection Moulding
Revenue* 341.1 302.1 39.0
Operating profit ** 32.2 32.2 -
Return on sales ** 9.4% 10.7% (1.3)%
Return on net operating assets ** 27.6% 26.7% 0.9%
Thermoforming
Revenue* 90.2 92.5 (2.3)
Operating profit ** 8.2 8.9 (0.7)
Return on sales ** 9.1% 9.6% (0.5)%
Return on net operating assets ** 28.1% 29.0% (0.9)%
Blow Moulding
Revenue* 93.4 89.2 4.2
Operating profit ** 6.2 5.9 0.3
Return on sales ** 6.6% 6.6% -
Return on net operating assets ** 19.5% 19.0% 0.5%
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
SEGMENTAL ANALYSIS - IFRS 8 BASIS (Continuing operations)
25
£ million H1 2013/14 H1 2012/13 Variance
UK
Revenue 123.1 116.2 6.9
Operating profit * 12.8 11.5 1.3
Return on sales 10.4% 9.9% 0.5%
Mainland Europe (including USA)
Revenue 401.6 367.6 34.0
Operating profit * 33.8 35.5 (1.7)
Return on sales 8.4% 9.7% (1.3)%
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
CONSOLIDATED BALANCE SHEET
26
£ million SEP 2013 MAR 2013 SEP 2012
Property, plant and equipment 372.7 395.3 364.8
Goodwill 90.3 93.1 87.5
Other non-current assets 27.9 33.1 28.4
Working capital 33.4 37.8 47.5
Employee benefit liabilities (LT) (64.8) (62.7) (56.2)
Assets/liabilities held for sale excluding debt 8.7 4.7 5.1
Other assets & liabilities (48.7) (58.2) (48.6)
Net debt (165.3) (171.4) (165.5)
Equity shareholder funds 254.2 271.7 263.0
RPC Group Plc
2013/14 Interim Results
FINANCIAL REVIEW
PENSIONS UPDATE
27
£ million SEP 2013 MAR 2013 SEP 2012
Retirement benefit liability UK DB 37.5 33.5 27.6
Other retirement benefit obligations 23.4 24.5 23.6
Termination benefits 1.2 1.6 1.8
Other employee benefit liabilities 2.7 3.1 3.2
Total employee benefit liability (LT) 64.8 62.7 56.2