FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct

 
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
Mcpherson’s Limited

FY20
 th
     results release
19    august 2020

                       CREATING BETTER IN

                       Health Wellness & Beauty
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
Agenda
     1   Introduction – LAURIE MCALLISTER
    2    FY2020 Financial results – Paul Witheridge
    3    CORE BRANDS – Donna chan
    4    Channel & CUSTOMER – Lori Pirozzi
    5    Export – DAVID FIELDING
    6    Summary and OUTLOOK – Laurie mcallister

                                                      2
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
HEALTH, WELLNESS & BEAUTY – A $17 billion market

                health                                       WELLNESS                                       beauty
     ($4.9 Billion, +3.9% vs YA)                    ($5.6 Billion, +3.8% vs YA)                  ($6.5 Billion, +2.8% vs YA)
     The intent of enhancing and restoring health    Maintain the state of good health by pro-     The subjective enhancement of physical
              via symptomatic treatment              actively seeking to prevent the onset or       perception for ones own satisfaction
                                                              worsening of conditions

                                                                                                                                            3
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
strategic business imperatives
     Refocus McPherson's on Health,
 1   Wellness & Beauty with                    6    Create a China facing business
     sustainability and people at the core

                                                    Ensure we have our team fit for the
 2   Revitalise our own McPherson’s
     brands
                                               7    future with appropriate expertise,
                                                    capabilities and values

 3   Ensure a healthy balance sheet            8    Stabilize and grow NZ & Singapore and
                                                    expand in Asia & International

 4   Move from transactional to strategic
     partnerships with our top six customers
                                               9    Gain efficiencies and savings across
                                                    Supply Chain infrastructure

 5   Integrate and grow acquired skincare
     brands; Dr. LeWinn’s and A’kin
                                               10   Create a new business team focused
                                                    on significant M&A opportunities
                                                                                            4
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
A’KIN
              Australian Tea Tree Oil Detoxifying Mask
Mcpherson’s

FY2020
FINANCIAL
RESULTS
HIGHLIGHTS

                                                         5
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
FY20 SALES REVENUE BREAKDOWN BY PRODUCT CATEGORY
                                Sales revenue from owned brands increased by 16%
Owned brands:                       FY20 $m   FY19 $m   % change                                Comments

                                                                   • Strong export and domestic sales of Dr. LeWinn’s
Skin, Hair and Body                   63.8      40.0      59%
                                                                   • DLW Export 130% Growth; DLW Domestic 18% Growth

                                                                   •   3% growth in Manicare offset by 6% decline in Lady Jayne
Essential Beauty                      57.3      56.9       1%
                                                                   •   Swisspers in line with prior period
                                                                   •   4% growth in Multix
Household Essentials & others         64.4      63.4       2%
                                                                   •   23% 2H20 growth in Multix on pcp.
Total Owned brands                   185.5     160.3      16%

Agency Brands                         13.1      23.3      (44%)    • Termination of Trilogy and Karen Murrell agencies

Private Label                         23.6      26.8      (12%)    • Reduced volumes in Aldi

Total Sales                          222.2     210.4       6%

Less Terminated Agencies              (0.1)    (11.1)

Total Sales excluding
                                     222.1     199.3      11%
Terminated Agencies                                                                                                               6
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
RAPID GROWTH IN DR. LEWINN’S CHINA REVENUE
                             DLW Export to Total Sales
$45m                                                                                             30%
                                DLW Export      % DLW Export to Total sales
                                                                                         FY20
$40m                                                                                    $38.2m
                                                                                                 25%
$35m

$30m                                                                                             20%

$25m                                                                                    17.2%
                                                                                                 15%
$20m                                                            FY19
                                                               $16.7m
$15m                                                                                             10%

$10m                                                                          7.9%
                                              FY18                                               5%
                                             $3.3m
 $5m           FY16     FY17
              $0.1m    $0.5m
                                                        1.6%
 $0m                                                                                             0%
       0.0%           0.3%
              FY16       FY17                   FY18                   FY19          FY20
                                                                                                       7
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
STRONG GROWTH IN DR. LEWINN’S domestic REVENUE
$25m
                 DLW Domestic to Total Sales                                       20%

                 DLW Domestic Sales       % DLW Domestic to Total Sales            18%
                                                                           FY20
$20m                                                                      $19.3m   16%
                                                               FY19
                                                              $16.3m               14%

$15m                                                                               12%
                                       FY18
        FY16
                 FY17                 $11.4m                                       10%
       $10.9m
                $10.1m
$10m                                                                               8%
                                                                           8.7%
                                                                 7.7%              6%

 $5m                                                                               4%
       4.7%      4.9%                   5.4%
                                                                                   2%

 $m                                                                                0%
        FY16     FY17                   FY18                   FY19       FY20

                                                                                         8
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
DR. LEWINN’S CHINA JV MCP & ABM

                                  9
FY20 results release 19th august 2020 - Health Wellness & Beauty - Bell Direct
BRIDGE OF FY19 TO FY20 SALES
    $M

    $240

                                                                                                 Increase in Manicare
                                                          Increase in Dr.   Increase in Multix          $1.0m
    $230                              Increase in Dr.                             $1.9m
                                                        LeWinn's Domestic
                                     LeWinn's Export
                                                              $3.0m
                                          $21.5m

    $220                                                                                                                Decrease in Private Label
           Trilogy & Karen Murrell                                                                                                                   Others
                   $11.1m                                                                                                       ($3.2m)             ($1.2m)

    $210

    $200
                                                                                                                                                                FY20
                                                                                                                                                              $222.2m

    $190           FY19
                 $199.3m

    $180

    $170

                                                                                                                                                                        10
BRIDGE OF FY19 TO FY20 UNDERLYING PBT
   $M
   $35
                                                Decrease in
                                                Commodity
                                                  Prices
                                                  $3.3m
                           Increase in Dr
                             LeWinn's
   $30                         Export
                            Contribution
                               $9.6m

                                                              Increase in STI
                                                                                                                              Others
   $25                                                        & LTI expense
                                                                                  Increase in                                 $0.2m
                                                                 ($1.3m)
                                                                                      seed
                                                                                investment in     Decrease in
                                                                                       JVs      Singapore & NZ
         Trilogy & Karen                                                            ($1.4m)           PBT          Adverse
              Murrell
                                                                                                    ($2.3m)      AUD/USD FX
   $20        $1.7m
                                                                                                                    Impact
                                                                                                                   ($4.3m)

                                                                                                                                        FY20
                                                                                                                                       $22.8m
   $15
             FY19
            $17.3m              PBT excluding
                              impact of Trilogy &
                                Karen Murrell

   $10

                                                                                                                                                11
BALANCE SHEET
 ❑ Net debt excluding lease liabilities has remained
   stable at $9.2m over the last 12 months                              Net Debt* ($m - 30 June)

 ❑ Key additional investments in Aware ($3.0m) and
   joint ventures ($2.7m) made over last 12 months
 ❑ Gearing modest at 9.3%, excluding lease liabilities

                         Gearing* % (30 June)

                        29.2%
       32.3%
                                                               49.9

                                                                      36.4

                                    9.9%               9.3%
                                            7.2%

                                                                                 9.8        7.5    9.2

          2016           2017      2018         2019    2020   2016   2017       2018       2019   2020

* Excluding lease liabilities                                                                             12
CASHFLOW
❑ Strong underlying cash conversion of 103%
                                                             Operating Cashflow before interest and tax ($m)
❑ Vastly improved 2H20 underlying cash conversion
  due to seasonal factors
    ➢ Strong second half customer receipts
    ➢ Second half reduction in inventory net of
      trade payables

            Underlying Cash Conversion

                                              103%
                                                      24.9           24.2
                                  117%
             113%
    76%                 82%
                                                                                            19.8       19.3

                                                                                 6.9

     2016     2017       2018      2019        2020   2016           2017        2018       2019       2020
                                                                                                               13
FY20 ORDINARY DIVIDENDS
 ❑   Final ordinary dividend of 7.0 cents per share fully franked (2H19 6.0 cents per share)

 ❑   Full year ordinary dividend of 11.0 cents per share fully franked (FY19: 10.0 cents per
     share and 2.0 cents per share interim special dividend)

 ❑   Payout ratio of 72% of FY20 underlying earnings per share

 ❑   Final dividend payable 24 September 2020

 ❑   Dividend reinvestment plan retained, 2.5% discount to VWAP re-introduced

                                                                                               14
Mcpherson’s

CORE BRANDS

              Dr. Lewinn’s
              Ultra R4 Collagen Surge Plumping Gel
                                                     15
FY20 Core brands IN MARKET PERFORMANCE

   +21% DOMESTIC GROWTH      +1.3 SHARE POINT GAIN   +1 SHARE POINT GAIN

    +1.7 SHARE POINT GAIN   70% SUSTAINABLE SHARE       MAINTAIN SHARE

                                                                           16
RESILIENT PORTFOLIO DURING COVID
                             MCP CORE BRANDS GROWING 1.5X AHEAD OF THE CATEGORIES IT PARTICIPATES IN

 MULTIX +13% DUE TO INCREASED BAKING & COOKING   BEAUTY AT HOME DRIVING +15% GROWTH IN MANICARE   SWISSPERS +11% OUTPACING CATEGORY GROWTH

      STRONG CHINA EXPORT DEMAND CONTINUES for DR. LEWINN’S DELIVERING +140% GROWTH DURING ABM 6.6 FESTIVAL

                                                                                                                                             17
Innovation SUCCESS driving sustainable growth
                       MCP Core Brands NPD Cumulative Share %
                                     Rolling 3FY
                                                                28.3%

                                                 20.5%

                                  15.3%

                                                                        #1 FACIAL SKINCARE NPD PHARMACY   #1 HAIR BRUSH NPD PHARMACY
   10.4%

    FY17                           FY18           FY19           FY20

                                                  11             13
     3                              6
   R&D                             R&D           R&D            R&D
                                                                         AUSTRALIA & EXPORT CHINA NPD      FIRST TO MARKET LASH NPD
           Foreign market registrations

                                                                            220 PROJECTS IN THE INNOVATION FUNNEL
                                                                                                                                       18
LEVERAGE MACRO TRENDS to drive future growth
                 CHINA                              PROACTIVE                              SUSTAINABLE                                  COVID
                EXPORT                               BEAUTY                                 SOLUTIONS                                 NEW NORM

   The little
     iron
   八胜肽小
    熨斗

 • +133% Dr. LeWinn’s China Export     • Convergence of Wellness & Beauty       • Multix #1 Sustainable brand in Bags,   • 46% working from home
   Sales Growth vs YA                                                             Wraps & Foil growing +36%
                                       • NEW Dr. LeWinn’s Inner Beauty                                                   • +121% increase in Multix social
 • #1 Hero Product Triple Action Day     Collagen Shot                          • Swisspers #1 Sustainable brand in        engagement
   Defence Winning Awards in China                                                Cotton Tips growing +133%
                                       • 64% look to purchase products which                                             • Rise of DIY Beauty delivering +95%
 • New China Hero’s developed via        contain the most natural ingredients   • Expanding sustainability footprint       increase in MCP Video Views
   NPD                                                                            with NPD
                                       • NEW Scientifically Proven                                                       • +270% increase in digital reach
                                         A’kin Volumising Haircare

                                                                                                                                                                19
THINK BEYOND GROWTH OPPORTUNITIES
            Mcpherson’s think beyond team    Everyday hygiene new product development

  ▪ 12 KEY PROJECTS

  ▪ AGILE WORKING TEAM MEETING FORTNIGHTLY

  ▪ CROSS FUNCTIONAL REPRESENTATION
      ▪   Leadership Team

      ▪   Marketing

      ▪   R&D                                Incremental channel & portfolio expansion
      ▪   Sales

      ▪   Supply Chain

      ▪   Commercial Finance

  ▪ $50K - $3M INCREMENTAL OPPORTUNTIES

                                                                                         20
Mcpherson’s

Channel &
customer

              21
MCP performance FY20 in traditional
                                                                   Channels
                                  MCP Growth X1.5 AHEAD Of Essential Beauty Categories

  Total Pharmacy and
    Grocery market

                                MCP Growth X4.5 AHEAD of Pharmacy Facial skincare category
                       Dr. Lewinn’s shelf presence increase +33% in Priceline +25% Chemist Warehouse

      Pharmacy

                               MCP SWISSPERS Growth X 1.6 AHEAD OF Grocery cotton Category
                               Portfolio management driving profitability in Grocery Channel

                                                                                                       22
       Grocery
Continued focus on Execution DRIVING
                                                Sustainable Growth

     Category Solutions   IN STORE REALESTATE           Share of Shelf Gains

                             Add images

      Customer first to   Innovation success               ONLINE Focus
      market launches
                                                                               23
Demonstrated Agility and RESILIENCE DURING
                                                                                     Covid
                                       INCREMENTAL RANGING                             INVESTMENT
     Accelerated FOCUS ONLINE RETAIL               Oz Hair & Beauty
                                          25 skus A’kin | 24 skus Dr. LeWinn’s

        NEW CUSTOMERS
                                                      Active Skin
                                                     10 skus A’kin

                                           Discount Vitamin Express (DVE)
                                                    21 skus A’kin
                                                                                    + 30%
                                                                                    INVESTMENT TO CUSTOMER
                                                       Catch
                                                                                    ONLINE PLATFORMS VIA
                                              42 skus Multix & Swisspers            TRADING TERMS VS FY19

                                       A’KIN IN GROCERY NZ                       CORE RANGE DISTRIBUTION
     Incremental Channel EXPANsION

           NEW CHANNELS
                                                                                    + 10%
                                                                                    INCREASE IN CORE
                                                                                    RANGE COMPLIANCE VS FY19
                                                                                    INDEPENDENT CHANNELS
             WOOLWORTHS B2B

                                                                                                               24
24
ANZ business Growth Pillars
                                                        Outlook
                                         Drive growth from CORE AND
                                         Innovation

  Range and                              DATA Led BUSINESS PLANNING

  Investment                             Strategic participation In Private
  Optimisation                           Label                                Expansion
     Continued PORTFOLIO MANAGEMENT                                             NZ Brand Expansion into Grocery

     Promotional effectiveness                                                  New Channel Penetration

     INCREASE in ONLINE INVESTMENT                                              KOTIA Distribution Expansion
                                      EXECUTION
     RESHAPE TRADING TERMS
                                      & Innovation                              A’kin in Woolworths

                                                                                                                  25
CHANNEL EXPANSION Driving visibility and SCALE
                                                                                   Naturals in Grocery AU

                                                               $100M Category +44% vs YA
Pharmacy                      Dept Stores   ONLINE   Grocery             Grocery Natural Offering - Value
                                                                    $48,438,298
                                                                                        $34,902,754

                                                                                                          $13,456,798
                                                                                                                          $3,452,296

                                                                 Natural Facial    Natural Hair Care   Natural Soap &     Natural
                                                                   Skincare                LY   TY      Body Wash       Deodorants

                                                                                  Grocery Partnerships ANZ

                                                                                                             + 5000
                                                                                                                   DISTRIBUTION
 POWERFUL AUSTRALIAN BEAUTY                                                                                              POINTS
                                                                                                                           26
                                                                                                                                       26
Mcpherson’s

export

              Dr lewinn’s
              Line Smoothing Complex S8
                                          27
Dr. lewinn’s          Strategy
   1   DELIVER SUSTAINABLE GROWTH – DR. LEWINN’S +133% vs FY19

   2   Expand Hero product scope – 3 skus in fy19 to 5 skus in fy20

   3   Launch new products and accelerate innovation pipeline – 4 new skus introduced in fy20

   4   Expand marketing touch points – NEW PLATFORMS, TMALL FLAGSHIP STORE, INFLUENCER endorsements

   5   BUILD ENGAGEMENT WITH ABMERS – MONTHLY EVENTS, BRAND DAY, TOP SELLER REWARDS

                                                                                                      28
Milestones

  ABM 3 RD        1,200        5 million     ONLINE TO    Expansion
ANNIVERSARY   employees in   people in the    OFFLINE     across nz,
               4 locations       abm                        north
                               network                     America,
                                                         Europe & SEA

                                                                        29
DR. LEWINN’S
               Year on Year Growth

  FY17          FY18           FY19          FY20
  $500k         $3.1m          $16m          $37m
  1 hero        529% growth    413% growth   133% growth
  product       2 hero         3 hero        5 hero
                products       products      products

                                                           30
CHINA
                   Top Performer
                                      Wechat search
                      DR. LEWINN’S
                                      history shows
                   RETAINS A TOP 3
                                      building
                    POSITION IN THE
                                      awareness in
                    ABM PORTFOLIO
                                      china

  SKU MIX IS DE-
  RISKED AS HERO
  PRODUCT SCOPE
  GROWS STRONGER
                                                      31
Event Results
DAIGOU FESTIVAL JUNE 2020
NO. 3 BRAND
TOP PRODUCTS #6 & #7
More than 500,000 units sold
Purchases from 9 countries & 879 cities

                                          32
EXPORT              The Aware Group
                                      IN May 2020    IN FY20 MCP PROGRESSIVELY
                             Aware produced the          INCREASED THEIR EQUITY
                               1 millionth unit of    STAKE IN THE AWARE GROUP
                                      dr. lewinn’s                       TO 10%

                          Over 50 skus
  Aware manufactures
                          HAVE Successfully
  over 25% of all
                          undergone a tech
  dr. lewinn’s products
                          transfer
                                                                                  33
A’Kin
              Natural Australian Skincare
Mcpherson’s

SUMMARY AND
OUTLOOK

                                            34
SUMMARY AND OUTLOOK
 1   STrONG brand and channel MIX –OWNED brands +16% vs FY19

 2   Exceptional demand for Dr. LeWinn’s in domestic / export channels 75%

      Strategic JV with ABM secures china growth.
 3    Aware investment supporting supply chain

 4   Investments in key capabilities supporting innovation agenda

 5   Growth through M&A is a strategic priority –experienced new business team
     laser focussed on h,w & b targets
 6   Extremely healthy balance sheet / Low gearing ( 9%), facilitating dividend
     payout ratio of 72%

 7   Management Closely monitoring coronavirus situation

 8   FIT FOR THE FUTURE; SHORT, MEDIUM & LONG TERM
                                                                                  36
Q&A

37 —
You can also read
Next slide ... Cancel