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Fiberweb plc Full Year Results - 2011

Fiberweb plc Full Year Results - 2011. Daniel Dayan, CEO Dan Abrams, CFO. Fiberweb plc – Full Year Results 2011. Highlights Daniel Dayan. Financial Review Dan Abrams. Outlook Daniel Dayan. A Challenging Transitional Year. Extreme raw material increases in H1

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Fiberweb plc Full Year Results - 2011

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  1. Fiberweb plcFull Year Results - 2011 Daniel Dayan, CEODan Abrams, CFO

  2. Fiberweb plc – Full Year Results 2011 Highlights Daniel Dayan Financial Review Dan Abrams Outlook Daniel Dayan

  3. A Challenging Transitional Year • Extreme raw material increases in H1 • Creation of Geosynthetics Division • £20m Terram; £15m Bodds; £8m Tubex; £30m US • Rationalisation at Terram (H1), Berlin (H2) • Creation of Technical Fabrics Division • £130m ‘old’ Industrial; £90m Drier Sheet and Hygiene • Restructuring following hygiene disposal

  4. A Year of Strategic Transformation • £300 million, more tightly-focused, specialty industrial and construction materials business • Focus areas: Filtration, Geosynthetics, Specialty Construction, Medical • Net cash c£10 million after disposal expenses • Significant US post-retirement benefit changes • Dividend maintained in-line with expectations • 2p final, 3p total

  5. Strategy To deliver superior shareholder returns through becoming a global leader in the intelligent application of materials technology • New medium-term financial goals: • Sales growth: 2xGDP • Return on sales: 8-10% • Return on capital employed: >15%

  6. ‘New’ Fiberweb Portfolio High Filtration £40m Tech. Specialities £50m Geospec. £45m Innovate, invest and grow MARGIN Drier Sheet £40m Construction £45m Selectively develop Hygiene £50m Landscape+ £20m Low Protect and improve Low SHORT-TERM GROWTH POTENTIAL High

  7. Financial Review Dan Abrams, CFO

  8. Hygiene Disposal Eliminated Net Debt £m Cash proceeds ($260m @ $1.5543) 167.3 Vendor loan note 16.7 Net assets disposed (199.2) Disposal costs (8.8) Tax arising on disposals (7.4) Recycling of FX differences from reserves 32.9 Profit on disposal 1.5 Exit multiples: 6.2x 2010 adjusted EBITDA 14.6x 2010 adjusted EBIT

  9. Transformed Balance Sheet £m 31 Dec 2011 PPE & Intangibles 135.5 Working Capital 46.1 Trade Working Capital/Sales 15.4% Net Cash 22.0 Net Assets 178.8 ROCE 5.6%

  10. Financing Secure • Net cash of £22 million at 31 December 2011 • Transaction/Swap costs of £9 million • Multi-currency facility of £50 million; $40 million and €30 million, expires July 2013 • Covenants: Gearing 2.75x, Interest cover 5.00x • 2012 financing charge expected c£2 million • $26 million 6% vendor note – receivable 31 December 2012

  11. Improvement in Pension Position £m Assets Liabilities Net liability At 1 January 2011 35.0 (70.5) (35.5) PRMB changes - 9.3 9.3 - 5.9 5.9 Disposed (0.5) (8.8) (9.3) Actuarial loss Interest 1.9 (3.4) (1.5) Other changes 1.4 3.2 4.6 At 31 December 2011 37.8 (64.3) (26.5)

  12. Continuing Benefit of Historic Tax Losses £m 2011 Underlying PBT £(5.1)m Underlying Tax Credit £0.8m Deferred Tax £3.0m Underlying EPS (0.8)p Cash Tax Paid £3.4m • Deferred tax credit in respect of US, UK, Italian losses: £3.0m (2010: £3.6m) • Tax losses: US $35m, UK £15m

  13. Group Cashflow Dominated by Disposals £m 2011 Cash from continuing operations 20.5 (23.4) Group capex (9.4) Net interest paid Dividends (6.0) Acquisitions (9.7) 23.8 Rights issue Other 0.1 Net proceeds on disposals 179.5 Hygiene £161.2m net, Other £18.3m 175.4 Total cashflow (151.2) Net debt b/fwd Exchange differences & facility fee amortisation (2.2) Net cash c/fwd 22.0

  14. Raw Materials – Net Adverse Impact £3.8m £m Raw material cost impact (16.0) 13.1 Pricing actions (82% recovery) (2.9) Net raw material cost impact (0.9) Hedging loss 1) (3.8) Net impact • Continuing business polymer mix: • 25kt PET, 40kt PP, 35kt others (mainly PP/PET fibres) • Contractual pass-through continues on circa 40% of continuing sales • 1) 2010 hedging profit £5.4 million

  15. A New Base for Profit Growth 2011 as reported 2011Normalised1) £m Revenue 297.8 297.8 Underlying operating profit 10.8 10.8 Underlying operating profit margin % 3.6% 3.6% Interest (full Group charge) (15.9) (2.0) Underlying (loss)/profit before tax (5.1) 8.8 Underlying tax 3.8 (2.9) Underlying earnings (0.8)p 3.4p Dividend 2p final, 3p total • 1) Normalised applies the debt and tax structure pertaining post-disposal to the underlying 2011 numbers

  16. Outlook Daniel Dayan, CEO

  17. Strategic Programmes COST REDUCTION Q5Zero Conversion Costs Central Costs MARGIN GROWTH Pricing Mix Innovation SALES GROWTH Market Share Innovation Emerging Markets

  18. Cost Reduction Plans Well-Advanced COST REDUCTION Q5Zero Conversion Costs Central Costs • Technical Fabrics • New line at Terno d’Isola replacing 3 smaller lines • Full-year impact of Königswinter rationalisation • Upgrade/expansion of Aschersleben specialty laminate line • Global organisation replacing regional overheads • Geosynthetics • Needlepunch commissioning Q2 2012 at Maldon • Final Pontypool closure mid-2012 • Full-year impact of Tubex • Conversion centre rationalisation at Old Hickory • SG&A reduction in US • Central • Headcount reduction in central functions • Tax planning opportunities

  19. Margin Growth from Mix and Pricing MARGIN GROWTH • Technical Fabrics • Pricing notice periods reduced • More pass-through contracts • Selective growth in hygiene • Clear focus on filtration and technical specialties • Transatlantic synergies • Meltblown from Europe to NA • PET from NA to Europe • Geosynthetics • Pricing notice periods reduced • Increased export efforts for geospecialties • Solution selling for grass/soil reinforcement • High-speed rail solutions Pricing Mix Innovation

  20. Innovation and Share Gain Driving Growth • Technical Fabrics • Steady growth in polyethylene fabrics with unique properties • New filtration products based on unique technologies • Several medical initiatives in specialty patient sheets, ostomy, face masks • Biodegradable crop covers • Geosynthetics • Sustained share gain in housewrap • Renewed NA roofing range • Biodegradable tree shelters • Enhanced efforts in MidEast/India/Russia SALES GROWTH Market Share Innovation Emerging Markets

  21. Looking Forward with Confidence • More focused Group with new management structure • Group more agile on pricing • Cost reductions ongoing during Q1-Q3 2012 • Focus on innovation, flexibility, margin • Opportunity to leverage brand strengths • Expect significant progress towards our medium-term financial goals

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