ANNUAL RESULTS 2011

www1.axisto.co.uk

ANNUAL RESULTS 2011

ANNUAL RESULTS 2011

-1-

2011 Annual Results Presentation


1. Philip Rogerson, Chairman: Welcome

2. Brian May, FD: Financial Results

3. Michael Roney, CEO: Business Review

4. Q&A

-2-

Agenda

2011 Annual Results Presentation


2011 very

strong year

Adjusted

earnings per

share up 13%*

*Before intangible amortisation, acquisition related costs and disposal of business

Well

established

strategy

-3-

Dividend up

13%

Highlights

Announced 10

acquisitions

and 1 disposal

2011 Annual Results Presentation


1. Philip Rogerson, Chairman: Welcome

2. Brian May, FD: Financial Results

3. Michael Roney, CEO: Business Review

4. Q&A

-4-

Agenda

2011 Annual Results Presentation


£m 2011% 2010% Reported

Revenue 5,109.5%

%

-5-

Constant

Exchange

4,829.6% 6 7)

Operating profit* 335.7% 306.7% 9 10)

Margin* 6.6% 6.4%

*Before intangible amortisation and acquisition related costs

Income Statement

Growth %

2011 Annual Results Presentation


£m 2011) 2010) Reported

Operating profit*

Net finance cost

Profit before tax †

Interest cover (x)

Effective tax rate (%)

Adjusted earnings per share † (p)

Dividend per share (p)

Dividend cover (x)

*Before intangible amortisation and acquisition related costs

† Before intangible amortisation, acquisition related costs and disposal of business

335.7)

(29.6)

306.1)

11.3)

27.5)

68.5)

26.35)

2.6)

-6-

306.7)

(30.5)

276.2)

10.1)

29.0)

60.6)

23.35)

2.6)

Income Statement

Growth %

Constant

Exchange

9 10)

11

13

13

11)

13)

2011 Annual Results Presentation


13.3

15.7

CAGR = 10%

17.0

18.7

20.6

-7-

21.6

Dividend per Share (p)

23.4

26.4

2004 2005 2006 2007 2008 2009 2010 2011

Consistently strong dividend growth

2011 Annual Results Presentation


*See Appendix 1

-8-

Balance Sheet

£m 2011) 2010)

Intangibles 1,256.8) 1,244.6)

Tangibles 109.0) 118.1)

Working capital 401.0) 411.1)

Other liabilities (232.9) (208.3)

1,533.9) 1,565.5)

Pension deficit (74.3) (52.3)

Net debt* (652.9) (716.8)

Equity 806.7) 796.4)

Net debt/EBITDA (x) 1.7) 2.1)

Return on average operating capital (%) 57.4) 54.4)

2011 Annual Results Presentation


-9-

Cash Flow

£m 2011)% 2010%)

Operating cash flow* 369.2)% 285.5)%

Interest (30.6)% (31.2)%

Tax (63.4)% (79.7)%

Free cash flow 275.2)% 174.6)%

Dividends (68.9)% (66.1)%

Acquisitions (161.3)% (110.6)%

Disposal 30.6%) --)%

Employee share schemes (12.6)% 11.8)%

Net cash flow 63.0)% 9.7)%

Operating cash flow to operating profit † 110%) 93%)

*See Appendix 2

† Before intangible amortisation and acquisition related costs

2011 Annual Results Presentation


93% 95% 92%

Average Cash Conversion* 98%

103%

92%

102%

93%

Cash Generation and Utilisation

-10-

110%

2004** 2005** 2006 2007 2008 2009 2010 2011

* Operating cash flow after capex to operating profit before intangible

amortisation and acquisition related costs

** 04-05 continuing operations only

Uses of Free Cash † - 2011 (£m)

Reduction in net debt

Dividends

Strong cash flow = Growing dividend + Acquisitions

69

63

161

Acquisitions

† Free cash flow after disposal and employee share schemes

2011 Annual Results Presentation


£m

300

200

100

-

157

23

53

46

152

Committed Facilities Maturity Profile

80

161

32 34

120

40

109

• Diverse sources of funding

• Agreed £350m of bank facilities

• Facilities’ headroom in excess of £600m

50

70

-11-

Financing

Financial strength to take advantage of acquisition opportunities

32

61

Bank facilities - undrawn

Bank facilities - drawn

US dollar and sterling bonds

43 34

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

2011 Annual Results Presentation


Revenue

and

Profit

Capital

management

and Cash flow

EPS and

Dividend

• Revenue growth 7% † , organic growth 4% †

• Operating margin* up 20 bp

• Operating profit* up 10% †

• ROACE improved 300 bp to 57.4%

• Cash conversion remains strong at 110%

-12-

Financial Summary

• Net debt to EBITDA ratio reduced to 1.7x, despite ten acquisitions

• Adjusted EPS** growth 13%

• Dividend per share increases 13%

†At constant exchange rates

*Before intangible amortisation and acquisition related costs

**Before intangible amortisation, acquisition related costs and disposal of business

2011 Annual Results Presentation


1. Philip Rogerson, Chairman: Welcome

2. Brian May, FD: Financial Results

3. Michael Roney, CEO: Business Review

4. Q&A

-13-

Agenda

2011 Annual Results Presentation


1. Operations Review

2. Strategy

3. Market Development Examples

4. Prospects

-14-

Business Review

2011 Annual Results Presentation


£m

5,200

5,100

5,000

4,900

4,800

4,700

4,600

4,500

4,400

4,300

4,200

4,100

4,000

Revenue

FY 10

(FX adjusted)

-15-

Revenue Growth Bridge

4.0% 3.1% (0.5)%

6.6%

4,704 4,830

4,794 5,109

Organic

Acquisitions Disposal Revenue

FY 11

2011 Annual Results Presentation


Non-Food Retail 8%

Safety 8%

Cleaning & Hygiene 14%

Healthcare 7%

Other 4%

-16-

Markets We Serve

Grocery 30%

Foodservice 29%

Diversified by customer markets – 80% resilient

2011 Annual Results Presentation


20%

21%

*Before intangible amortisation and acquisition related and corporate costs

-17-

Business Area Analysis

Revenue Operating profit*

6%

53%

North America Continental Europe UK & Ireland

Rest of the World

17%

27%

Diversified by geography

8%

48%

2011 Annual Results Presentation


Strong management focus

• Winning profitable business

• Margin management

• Operating cost reductions

• Working capital management

• Announced ten acquisitions in 2011

Strong overall performance

-18-

Overview

• North America – strong organic growth / operating margin improvement

• Continental Europe – market consolidating acquisitions / strong growth

• UK & Ireland – improved operating margin and return on operating capital

• Rest of the World – strong growth in revenue and profits

2011 Annual Results Presentation


£m 2011% 2010% Reported

• Higher organic growth

• New business wins, existing customer growth and product price increases

• Operating margin improvement

• Continued expansion in grocery, our largest sector

• Increased activity levels in foodservice

• Netpak acquisition will strengthen food processor sector

• Improvement in return on operating capital

-19-

Constant

Exchange

Revenue 2,727.9% 2,621.0% 4 7)

Operating profit* 169.2% 160.2% 6 9)

Margin* 6.2% 6.1%

Return on operating capital 65.0% 63.6%

*Before intangible amortisation and acquisition related costs

North America

Growth %

2011 Annual Results Presentation


• Good organic revenue growth

• Operating margin improvement

• France cleaning & hygiene returned to sales and profit growth

• France personal protection equipment increased market share

• Benelux bolstered by acquisitions

• 2010 acquisitions in Switzerland and Israel ahead of expectations

-20-

Continental Europe

£m 2011% 2010% Reported

Constant

Exchange

Revenue 1,067.1% 936.4% 14) 12)

Operating profit* 95.6% 79.9% 20) 17)

Margin* 9.0% 8.5%

Return on operating capital 48.0% 46.6%

*Before intangible amortisation and acquisition related costs

Growth %

2011 Annual Results Presentation


£m 2011% 2010% Reported

• Persisting difficult economic conditions affected sales

• Some improvement in horeca sector – own brand development

• Food and non-food retail business performed well – new customer wins

• Ongoing margin pressure in healthcare

• Improved profitability in Ireland

• Two acquisitions in safety and cleaning & hygiene integrated well

• Working capital tightly managed – return on operating capital highest in the Group

-21-

UK & Ireland

Constant

Exchange

Revenue 996.6% 1,007.1% (1) (1)

Operating profit* 60.2% 59.5% 1) 1)

Margin* 6.0% 5.9%

Return on operating capital 66.4% 53.8%

*Before intangible amortisation and acquisition related costs

Growth %

2011 Annual Results Presentation


£m 2011% 2010% Reported

• Australasia

• Good organic revenue growth, improved operating margins

• Largest business performed strongly

• Two acquisitions in catering equipment sector

• Brazil

• Strong overall growth

• Acquisition of Ideal extends business into cleaning & hygiene sector

• Danny expands offering in safety sector

-22-

Rest of the World

Constant

Exchange

Revenue 317.9% 265.1% 20) 12)

Operating profit* 28.4% 23.8% 19) 13)

Margin* 8.9% 9.0%

Return on operating capital 60.3% 61.8%

*Before intangible amortisation and acquisition related costs

Growth %

2011 Annual Results Presentation


*

GDP+

Organic

Growth

Operating

Model

Efficiencies

ROIC

Acquisition Growth

17.3%

Consistent and proven strategy

-23-

Acquisition

Growth

Strategy

2011 Annual Results Presentation


Business Acquired Country Sector Revenue*

Omega March Australia Horeca £3m*

Cannon March UK Cleaning & Hygiene £15m*

King España May Spain C&H/Horeca £24m*

SIG Safety May UK Safety £25m*

Hospitality

Depot

May Australia Horeca £14m*

Netpak July Canada Food Processor £7m*

Majestic August Netherlands Safety £63m*

D-Care September Netherlands Healthcare £5m*

Ideal September Brazil Cleaning & Hygiene £17m*

Danny November Brazil Safety £27m*

*Annualised and converted at average exchange rates

Ten acquisitions announced

-24-

Acquisition Growth - 2011

2011 Annual Results Presentation


Acquisition Growth - Track Record

2004 2005 2006 2007 2008 2009 2010 2011

Number of Acquisitions 7 7 9 8 7 2 9 10

Acquisition Spend (£m) 302 129 162 197 123 6 126 185

Annualised Acquisition

Revenue (£m)

04-05 continuing operations only

430 270 386 225 151 27 154 204

Average acquisition spend £154m p.a.

-25-

2011 Annual Results Presentation


Foodservice

Retail

Cleaning &

Hygiene

Healthcare

Safety

Revenue

Hopa

Gelpa

1994 2004 2005 2006 2007 2008 2010 2011

-26-

Acquisition Growth - Benelux

King

Benelux

Van’t Veer

Global Net

Worldpack

D-Care

Majestic

CAGR of 24% since market entry in 1994

2011 Annual Results Presentation


2008

2011

2011

2010

• Acquisition of Protcap

• Entry into safety sector

-27-

Acquisition Growth - Brazil

2008 – Market Entry

2010 – AM Supply

• Expansion in safety sector

2011 – Ideal

• Entry into cleaning and

hygiene sector

2011 – Danny

• Expansion in safety sector /

own label

2011 Annual Results Presentation


Safety

Cleaning &

Hygiene

Foodservice

Healthcare

Retail

Revenue

Prot-Cap

AM Supply

2008 2010 2011

-28-

Acquisition Growth - Brazil

Ideal

Danny

CAGR of 25%+ since market entry in 2008

2011 Annual Results Presentation


Benelux

Acquisition Growth - Summary

• Revenue CAGR of 24% since market entry in 1994

• Eight acquisitions

Brazil

• Revenue CAGR of over 25% since market entry in 2008

• Four acquisitions made in two sectors

• Further acquisition opportunities

Models for future growth

-29-

2011 Annual Results Presentation


Revenue (£bn)

04-05 continuing operations only

4.6

4.8

5.1

Before amortisation and acquisition

related and corporate costs

4.2

04-05 continuing operations only

259

3.3

3.6

218

241

2.9

2.4

183

2004 2005 2006 2007 2008 2009 2010 2011

Adjusted eps (p)

As reported

32.1

38.7

41.7

45.1

52.7

55.9

60.6

68.5

2004 2005 2006 2007 2008 2009 2010 2011

-30-

Financial Track Record

Operating profit (£m)

297

312

323

353

2004 2005 2006 2007 2008 2009 2010 2011

Dividend per share (p)

As reported

13.3

15.7

17.0

18.7

20.6

21.6

23.4

26.4

2004 2005 2006 2007 2008 2009 2010 2011

All CAGRs greater than 10%

2011 Annual Results Presentation


Overall

North

America

Continental

Europe

UK &

Ireland

Rest of

the World

Acquisitions

• Resilient business model

• Strong market position

• Strong organic growth

• Margin stability

• Lower organic growth

• Full year benefit from acquisitions

• Continuing difficult economic conditions

• Improved performance

• Strong organic growth

• Full year impact from acquisitions

• Promising pipeline

-31-

Prospects

2011 Annual Results Presentation


• Only global player

• Compounding growth

• High internal cash generation

• Increased dividends

• Promising acquisition pipeline

• High return on capital

-32-

Summary

Proven track record to increase shareholder value

2011 Annual Results Presentation


ANNUAL RESULTS 2011

-33-

2011 Annual Results Presentation

More magazines by this user
Similar magazines