fiberweb plc full year results - 2011 daniel dayan, ceo dan abrams, cfo 1 march 2012
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Fiberweb plcFull Year Results - 2011
Daniel Dayan, CEODan Abrams, CFO
1 March 2012
Fiberweb plc – Full Year Results 2011
HighlightsDaniel Dayan
Financial ReviewDan Abrams
OutlookDaniel Dayan
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
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
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%
Landscape+£20m
Drier Sheet£40m
Filtration£40m
Geospec.£45m
Tech. Specialities
£50m
Construction£45m
Hygiene£50m
High
MARGIN
Low
Low HighSHORT-TERM GROWTH POTENTIAL
Innovate, invest and
grow
Selectively develop
Protect and improve
‘New’ Fiberweb Portfolio
Financial Review
Dan Abrams, CFO
1 March 2012
Hygiene Disposal Eliminated Net Debt
£m
Cash proceeds ($260m @ $1.5543)
Vendor loan note
Net assets disposed
Disposal costs
167.3
16.7
(199.2)
(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 EBITDA14.6x 2010 adjusted EBIT
Transformed Balance Sheet
ROCE
31 Dec 2011
135.5
46.1
15.4%
22.0
178.8
5.6%
£m
PPE & Intangibles
Working Capital
Trade Working Capital/Sales
Net Cash
Net Assets
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
Improvement in Pension Position
£m Assets Liabilities Net liability
At 31 December 2011 37.8 (64.3) (26.5)
At 1 January 2011 35.0 (70.5) (35.5)
PRMB changes - 9.3 9.3
Actuarial loss
- 5.9 5.9Disposed
(0.5) (8.8) (9.3)
Interest 1.9 (3.4) (1.5)
Other changes 1.4 3.2 4.6
Continuing Benefit of Historic Tax Losses
£(5.1)m
£0.8m
£3.0m
(0.8)p
£3.4m
£m 2011
Underlying PBT
Underlying Tax Credit
Deferred Tax
Underlying EPS
Cash Tax Paid
• Deferred tax credit in respect of US, UK, Italian losses: £3.0m (2010: £3.6m)
• Tax losses: US $35m, UK £15m
Group Cashflow Dominated by Disposals
Net proceeds on disposals
£m
Net debt b/fwd
Hygiene £161.2m net, Other £18.3m
Total cashflow
Net cash c/fwd
Exchange differences & facility fee amortisation
20.5
(23.4)
(9.4)
(9.7)
179.5
2011
23.8
0.1
(151.2)
175.4
22.0
(2.2)
Cash from continuing operations
Group capex
Net interest paid
Dividends
Acquisitions
Rights issue
Other
(6.0)
Raw Materials – Net Adverse Impact £3.8m
• 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
£m
(16.0)
13.1
(2.9)
(3.8)
Raw material cost impact
Pricing actions (82% recovery)
Net raw material cost impact
Hedging loss 1)
Net impact
(0.9)
A New Base for Profit Growth
1) Normalised applies the debt and tax structure pertaining post-disposal to the underlying 2011 numbers
2011 as reported
£m
Revenue
Underlying operating profit
Underlying operating profit margin %
Interest (full Group charge)
Underlying (loss)/profit before tax
297.8
10.8
3.6%
(15.9)
(5.1)
Underlying tax 3.8
Underlying earnings (0.8)p
Dividend
2011Normalised1)
297.8
10.8
3.6%
(2.0)
8.8
(2.9)
3.4p
2p final, 3p total
Outlook
Daniel Dayan, CEO
1 March 2012
Strategic Programmes
MARGIN GROWTH
Pricing Mix
Innovation
SALES GROWTH
Market Share Innovation
Emerging Markets
COST REDUCTION
Q5Zero Conversion Costs
Central Costs
Central• Headcount reduction in
central functions• Tax planning opportunities
COST REDUCTION
Q5Zero Conversion Costs
Central Costs
Cost Reduction Plans Well-Advanced
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
MARGIN GROWTH
Pricing Mix
Innovation
Margin Growth from Mix and Pricing
Geosynthetics
• Pricing notice periods reduced
• Increased export efforts for geospecialties
• Solution selling for grass/soil reinforcement
• High-speed rail solutions
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
SALES GROWTH
Market Share Innovation
Emerging Markets
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
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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