investor presentation 26 february 2019 - pental …investor presentation for personal use only 26...

Trusted Brands Since 1856 – Pental Limited 1

Pental Limited2019 Interim Results

Investor Presentation

26 February 2019

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Agenda• Pental Overview

• HY19 Business Update

• Outlook

• Interim Financial Performance

Presented by

Charlie McLeish, CEO

Neil Godara, CFO

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PentalOverview

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Our Vision“To be a leading supplier of shelf stable

products to its chosen markets, built around a reputation of delivering quality, innovation

and sustainability to the satisfaction of customer needs whilst enhancing

shareholder value.”

“We are active in developing new products to grow market share and building strong, ongoing relationships with our customers and suppliers.”

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Pental Team

Peter RobinsonNon Executive

Independent Chairman

John RishworthNon Executive

Independent Director

John EtheringtonNon Executive


Kimberlee WellsNon Executive


Oliver CartonCompany Secretary

Senior Executive Management

Charlie McLeishCEO

Substantial Shareholders (1)

Alan Johnstone – 22.21 %

John Homewood – 14.17 %

Allan Gray Australia Pty Ltd (2) - 13.74 %

Elevation Capital Management Ltd – 8.06 %

(1) As at 19 February 2019(2) Allan Gray Australia Pty Ltd has a relevant interest in shares held by a number of

investment institutions including Citicorp Nominees Pty Limited, JP Morgan Nominees Australia Limited and National Nominees Limited amounting to 13.74% of the total issued capital of Pental Ltd.

Neil GodaraCFO

Board of Directors

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Pental Team

Australian manufacturing and warehouse base in Shepparton

120 employees in regional Victoria

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http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiFz5-n5cbgAhVHjLwKHd7oC5UQjRx6BAgBEAU&url=http%3A%2F%2Fwww.backpackaround.com%2Fdestinations%2Fvictoria%2Fshepparton%2Fbackpacking-shepparton.html&psig=AOvVaw1RNCeonndOmMeFHlR1eUr2&ust=1550631120845024


SAFETY#1 Priority

• Build trusted and recognised

brands

• Develop lasting relationships

• Responsive to their needs

• Provide outstanding value

• Pride in delivering the best

products on time

• Zero harm objective

• Proactive in hazard identification

• Maintain clean and safe equipment

• Compassion, honesty and consistency

• Empower, trust and support others

• Encourage positive can-do attitudes

• Work as one team, communication

• Foster personal growth and

career development, success

• Immensely proud of our quality

• Accountability for achieving

business objectives

• Agile, flexible and

welcome change

• Long-term focus and plan

for a sustainable future

• Dare to be different

• Challenge the

status quo

• Encourage fresh

ways of working

• Maximise consumer

insights

CUSTOMERSHeart of OurBusiness

PEOPLETrust & Development

INNOVATIONEmbracingNew Ideas

QUALITYQuality Control

CoreValues

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HY19 Business Update

Business Outlook

Interim Financial Performance

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Highlights

• Net Profit After Tax $1.438 million – 20.1% increase on pcp

• Total Sales Revenue $48.025 million – up 26% on pcp

• EBIT $2.085 million – up 19.6% on pcp

• Basic EPS 1.06 cents

• Interim fully franked dividend 0.70 cents

• Strong cash position with minimal debt

• Overall operating costs remain well controlled

• Working capital improvements impacted by recent Duracell distributorship

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Key Consolidated Income Statement Items • Gross sales have increased by $20.1 million

and net sales have increased by $9.9 million

on previous corresponding period. This was

driven predominantly by addition of Duracell

distributorship

• Excluding Duracell, sales grew in Firelighters,

Cleaners and Fabric Softeners. However,

Toilet category saw price pressure from

competitors

• Personal care sales also dropped in Soaps

and Body wash categories mainly due to

stabilised discounting and focus on

promotions that returned a respectable

margin along with volume uplifts

• Interim Dividend of 0.70 cents. A payout ratio

of 66.33% consistent with prior periods

Dec-18(i)

$’000

Dec-17(i)

$’000

Change

$’000

Change

%

Gross Sales (GSV) 74,190 54,056 20,134 37.25%

Trade Spend & Rebates (26,165) (15,950) (10,215) (64.04%)

Net Sales 48,025 38,106 9,919 26.03%

Trade Spend & Rebates to GSV 35.27% 29.51% (5.76%)

EBIT 2,085 1,743 342 19.62%

EBIT to GSV 2.81% 3.22% (0.41%)

Net profit after tax 1,438 1,197 241 20.13%

Basic earnings per share in cents 1.06 0.88 0.18 20.13%

Interim Dividend Per Share in cents 0.70 0.60 0.10 16.67%

i) Unaudited non-IFRS financial table

• Despite absorbing Duracell distributorship

business, overall operating costs remain well

controlled

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Key Statement of Financial Position Items

• Working capital increased significantly on

June 18 position – however, this is driven by

Duracell distributorship business

• Excluding Duracell working capital, working

capital improved on June 18 position

• No other significant balance sheet

movements

Dec-18

$’000

Jun-18

$’000

Change

$’000

ASSETS

Cash (245) 7,045 (7,290)

Trade and other receivables 28,956 19,280 9,676

Inventories 16,157 10,970 5,187

Property, plant and equipment 23,186 23,688 (502)

Goodwill and other intangible assets 14,665 14,728 (63)

Other 698 503 195

Total Assets 83,417 76,214 7,203

LIABILITIES

Trade and other payables 23,370 16,247 (7,123)

Current tax payable 0 48 48

Employee and other provisions 1,927 1,855 (72)

Deferred Tax Liabilities 4,225 4,357 132

Total Liabilities 29,522 22,507 (7,015)

NET ASSETS 53,895 53,707 (188)

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Key Consolidated Statement

of Cash Flow Items • The Company was able to fully fund

initial working capital requirements for

Duracell distributorship business without

incurring debts. December position

reflects a peak point of working capital

due to seasonality of the battery business

• The Company remains in a strong cash

position with minimal debt

• Healthy cash flows are projected to

continue into the second half of the year,

enabling the payment of the interim

dividend from operating cash flows while

remaining debt free

Dec-18

$’000

Dec-17

$’000

Change

$’000

(Loss) / Profit after Tax 1,438 1,197 241

Add non cash items (impairment, depreciation, amortisation and

employee share options expense)1,681 1,691 (10)

Change in net working capital (7,740) (1,581) (6,159)

Other balance sheet movements (377) (1,095) 718

Net Cash provided by Operating Activities (4,998) 212 (5,210)

Capital Expenditure (1,066) (7,840) 6,774

Dividend Paid (1,226) (2,861) 1,635

Net increase/(decrease) in cash (7,290) (10,489) 3,199

Net cash position at the beginning of the period 7,045 11,660 (4,615)

Net cash position at the end of the period (245) 1,171 (1,416)

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Business Outlook


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Pressures are likely to impact Pental for the foreseeable future

Private label

growing

Lower brand equity

New retailers

Competitionincreasing

Pricecompression

P

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4

Challenging Retail EnvironmentF

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Delivering on Strategy

DrivingSales Growth

ValueAdded

Projects

Manufacturing Continuous

Improvement

Develop NewProduct and Sales

Channels

ExportMarket

• Grow New Zealand• China Strategy• Vietnam• Explore other

International Market Opportunities

• Defending ourposition

• Investing in FieldSupport

• PromotionalEffectiveness

• Review ProductContributions

• Building StrongTrade Support

• Creating Partnerships• Brand Consolidation• New Technology• New Agencies• New Segments

• Cost Savings• CAPEX to drive

business growth

• Delivering QualityProducts

• Enhance preventative maintenanceprocesses

• Launch NewProducts

• Fill the ideationpipeline

• Brand Protection

• Grow MarginContribution

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Driving Sales Growth

▪ Brand consolidation strategy focused on supporting

key retail brands

▪ Development of new branded products that have

been accepted for ranging in Coles and IGA

▪ Initiated sales support structure to support our brands

and products at store level.

▪ New pack designs and formats developed for Asian

market requirements (smaller, compact)

▪ Packaging redesign with Australian-made branding

completed

▪ Trading conditions remain very price competitive, but

trade promotions proving effective

▪ Jiffy and Little Lucifer firelighters maintain No1

position in Grocery

▪ White King bleach maintains No.1 position in Grocery

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New Products and Sales Channels

▪ Duracell distributorship launched efficiently and seamlessly in Australia & New Zealand in 1H19

▪ New distribution partnership agreed with Australia’s largest pharmacy retail chain Chemist Warehouse - for Pears and Country Life Tradie Soap (on shelf March 2019)

▪ 5th year of partnership with Unilever as exclusive Australian distributor for Pears, highly recognised International brand

▪ Investigating opportunities with other well established and recognised imported brands and products

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Value Added Projects

▪ Strengthened our R&D technical resources to continue developing new products for the market as well as enhancing our current product range

▪ Exploring development of ‘natural’ personal and home hygiene products

▪ Market first innovation in Toilet Cleaners delivering power and efficacy

▪ Our partnerships continue in supplying private label to the major retailers

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New Zealand China

Export Market

ThailandVietnam

▪ Continue journey with expansion into Asia. Pental to retain

relationships with our smaller China distribution partners.

▪ Commenced negotiations with large national distributors

who supply products in the personal care and household

cleaning categories throughout China

▪ Export project into Vietnam has materialised with the

engagement of a key distribution company based in Ho Chi

Min City

▪ Making progress with the potential export of White King,

Softly and Country Life brands into Thailand

▪ Continue strong arrangement with our

NZ based distributor, six year strong

partnership

▪ Four brand focus - Janola, Softly,

Sunlight and Little Lucifer

▪ Upgrade Janola packaging

▪ Innovative new products to provide

incremental growth

▪ New sales channels - pharmacy and

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Manufacturing Continuous Improvements

Distribution Improvements

Delivery

accuracy up

7% on

previous year

Delivering quality

products

Warehouse Improvements

Productivity up 4% on

previous year

100% picking accuracy

warehouse controls

Manufacturing Improvements

New steam boiler to reduce

energy costs

New trade waste system to

reduce chemical usage

Robust preventative maintenance program

Best in Class

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Business Outlook

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Brand Building for the Future

• Targeted consumer NPD

• New soap bars

• Specialised formulations

• Specialised formulations

• Beauty bars

• Product innovation

• New sales channels

Laundry

• Brand consolidation

• Softly

• Huggie

• Maintain market leadership

• Best quality products

• Strengthening positioning

• New White King products

• Advertising support

• In-store activation

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Outlook

• Strong retailer relationships

• Continue brand growth and protection

• In-store merchandising

• Retail market continues to remain highly competitive

• Margin pressure

• Continue to explore new distribution opportunities

• Innovation with both products and processes

• Continued focus on productivity improvements

• Costs out/ down initiatives

Business Outlook In Summary

Pental has consolidated its position for future sustainable profitable growth

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Thank You

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investor presentation 26 february 2019 - pental …investor presentation for personal use only 26...

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