Investor Presentation HY13 FINAL...

Interim Results

Half year to 30 November 2012

2

Introduction

Richard Harvey

Chairman

3

Highlights

• Operating profit growth of 13% driven by Australia improvement and robust UK performance, and despite challenges in Nigeria

• Supply chain optimisation project on track with margin benefits now being seen

• Construction of the palm oil refinery with Wilmar in Nigeria nowcomplete with commissioning underway

• Challenging markets being addressed in H2 by new product launches in all portfolios and geographies

• Balance sheet remains strong

• New Executive Committee structure being created

• Remain confident of return to profitable growth for full year

4

Financials

Brandon Leigh

Group Finance Director

5

Financial Highlights – Half Year to 30 November 2012

Half year to Half year to 30 Nov 2012 30 Nov 2011

Revenue £414.8m £414.0m +0.2% £425.2m +2.7%

Operating profit1 £45.3m £40.1m +13.0% £46.1m +15.0%

Profit before tax1 £44.1m £40.2m +9.7% £44.9m +11.7%

Effective tax rate1 26.5% 27.1%

Earnings per share1 7.03p 6.54p +7.5% 7.15p +9.3%

Dividend per share 2.35p 2.23p +5.4%

Net (debt)/funds (£55.2m) £2.4m

Notes1 Before exceptional items

Excluding exchange impact

6

H1 Net Sales 2012 Price/Mix Volume Exchange H1 Net Sales 2013

Net sales bridge

414.0 414.8

+ 0.2%

(2.7)%(0.3)%3.2%

7

Regional Summary

NET REVENUE £m £mH1 2013 H1 2012

AFRICA 156.9 162.7 -4% -3%

ASIA 81.0 76.8 5% 10%

EUROPE 176.9 174.5 1% 5%

TOTAL 414.8 414.0 0% 3%

OPERATING PROFIT

AFRICA 13.0 13.7 -5% -5%

ASIA 7.9 2.1 276% 304%

EUROPE 24.4 24.3 0% 2%

TOTAL 45.3 40.1 13% 15%

Reported Growth %

Constant Currency %

8

Operating Profit %

H1 2013 H1 2012

AFRICA 8.3% 8.4% (0.1pp)

ASIA 9.8% 2.7% 7.1pp

EUROPE 13.8% 13.9% (0.1pp)

TOTAL 10.9% 9.7% 1.2pp

Variance

9

Key Commodity Index Tracker

Note: Based on prices paid by PZC Group

60

80

100

120

140

160

180

200

220

240

May 07 Nov 07 May 08 Nov 08 May 09 Nov 09 May 10 Nov 10 May 11 Nov 11 May 12 Nov 12

10

Regional SummaryAfrica

• Nigeria revenue and profits lower due to external factors

• Revenue and profit in Ghana and Kenya ahead of the same period last year

• Group’s holding in listed Nigerian subsidiary increased further from 68.8% to 69.3%

Asia

• Return to profitability in Australia

• Continued positive momentum in Indonesia

Europe

• Robust performance in the UK Washing and Bathing division

• Significant investment in Cussons Mum & Me

• Beauty division revenue and profitability ahead of the prior period

• Strong trading in Poland, lower profitability in Greece

11

Net (Debt)/Funds Statement£'m Half year to Half year to

30 Nov 2012 30 Nov 2011

Cash from operations 17.4 6.1

Defined benefit pension scheme contributions (2.8) (7.1)

Returns on investments & servicing of finance* (7.8) (5.6)

Taxation (5.7) (9.0)

Capital expenditure (12.0) (7.5)

Investment in joint ventures (3.7) (5.1)

Acquisition of minority interest (2.3) (2.8)

Equity dividends paid (19.2) (19.2)

Net decrease in funds (36.1) (50.2)

Opening net funds (17.9) 51.8

Exchange difference (1.2) 0.8

Closing net (debt)/funds (55.2) 2.4

* Consists of (2012/2011): Net finance expense/income (£1.2m/£0.1m), MI dividend (£2.1m/£3.6m), ESOT share purchase (£4.5m/£2.1m)

12

Net Working Capital as % of Sales

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12

Africa Asia Europe Group

13

Financial Summary

• 2.7% revenue growth at constant currency (sterling flat)

- Growth in UK, Poland, Indonesia and smaller markets

- Decline in Australia due to restructuring and Nigeria due to trading challenges

• Profit before tax and exceptional items 15% higher at constant currency (13% sterling)

• Strong balance sheet with small net debt position

• Increase in operating cash-flow in period despite outflow due to supply chain optimisation costs

• Adjusted EPS growth of 7.5%

• Dividend growth of 5.4%

14

Highlights

Alex Kanellis

Group Chief Executive

Africa

16

Africa – Nigeria Macro Overview• The economic outlook for the country remains optimistic due to:

- Stable naira to US dollar exchange rate- Continued government investment into the power sector- Oil production currently at 2.4-2.5 million barrels per day- No further fuel duty related impact is currently being seen

0

20

40

60

80

100

120

140

May08

Aug08

Nov08

Feb09

May09

Aug09

Nov09

Feb10

May10

Aug10

Nov10

Feb11

May11

Aug11

Nov11

Feb12

May12

Aug12

Nov12

Bre

nt c

rude

$ p

er b

arre

l

0

20

40

60

80

100

120

140

160

180

Nai

ra v

s. U

SD

Brent Crude $ per barrel Naira vs USD

17

Africa - Overview

• Nigeria’s result impacted in period by three external factors:- Social unrest in the north- Flooding in a large number of states- Fuel duty subsidy reduction earlier in the year impacted consumer disposable income

• Despite challenges revenue and profits only slightly lower than prior period due to: - Continued focus on brand innovation- Development of new distribution points- Benefit of margin improvement projects

Net Sales £156.9m vs. £162.7m (4% decline)

18

Africa – PZ Wilmar JV Update• Refinery completed on time and to budget –commissioning underway

• First sales of refined oil will be B2B

• New consumer brand to be launched by end of financial year

Asia

20

Asia – OverviewNet Sales £81.0m vs. £76.8m (5% growth)

Australia• Revenue lower due to focus on fewer main brands: Radiant (Fabric Care) and Morning Fresh (Dish Care)

• Return to profitability driven by business improvement initiative

• Focus on growing personal care and beauty portfolios

• Trading environment remains competitive

• Production facility closed. All products now sourced from PZC Indonesia/Thailand or third parties

21

Asia – Overview

Indonesia

• Continued positive momentum with another period of growth in revenue and profitability

• Profits slightly ahead despite Rupiah weakening 10% in period and government mandated wage increases (further increase in 2013)

• Further new product launches in addition to margin improvement initiatives planned for H2

Europe

23

Europe – OverviewNet Sales £176.9m vs. £174.5m (1% growth)

UK – Washing & Bathing

• UK Washing and Bathing division has been robust despite continued high levels of promotional activity within the trade

• Imperial Leather, Carex and Original Source all performed well with further product launches due in H2

• Distribution points for all three brands being expanded

24

• Internally developed Personal Care range specifically designed to take mums on journey from Bump to Baby

• Investment being made across all forms of media

• Further new product launches planned in addition to new distribution points for H2

• Early sales rates are encouraging

Europe – OverviewCussons Mum & Me product range launched June 2012

25

Europe – Overview (cont.)Beauty Division

• Revenue and profitability ahead of prior period

• St Tropez adversely affected by poor UK summer, however continued growth in US and Australia

• Sanctuary continued growth boosted by new Active Reverse Skin Care range with Darcey Bussell as brand ambassador

• Fudge performed well post acquisition; e-commerce platform launched

• Charles Worthington portfolio redesign will launch in H2

26

Summary & Outlook

• Focus remains on driving profitable growth via: - Brand innovation and renovation

- Cost optimisation in all areas of the business

- New sources of growth

• Nigerian market remains fragile although no further fuel duty related impact is currently being seen

• Supply chain optimisation benefits now flowing through

• Strong balance sheet, well placed to pursue growth opportunities

• Confident of return to profitable growth in current year