Rpc halfyear pres_2013

Bringing packaging to life

RPC GROUP PLC

2013/14 INTERIM RESULTS

28 NOVEMBER 2013

RPC Group Plc

2013/14 Interim Results

AGENDA

2

● Introduction PV

● Vision 2020 PV

● Business Review PV

● Fitter for the Future SK

● Financial review SK

● Outlook PV

RPC Group Plc


VISION 2020

3

● RPC is a leading packaging company creating significant

shareholder value

● Opportunities for focused growth – organically, consolidating in

Europe through acquisitions and expanding our global presence

● Strong European asset base optimised by final phase of Fitter for

the Future

RPC Group Plc


● Progressive dividend with 2.5x dividend cover through the cycle

● Continue to target 20% ROCE through the cycle for existing business portfolio

4

VISION 2020

FINANCIAL METRICS

14.1% 16.5% 23.8% 22.3% 23.2%

FY 09/10 FY 10/11 FY 11/12 FY 12/13 HY 13/14

Adjusted operating profit (£m)

Return on sales (%)

Return on net

operating assets

40.9 55.3 94.9 90.4 46.6

6.2%

7.4%

9.0% 9.2%8.9%

FY 09/10 FY 10/11 FY 11/12 FY 12/13 HY 13/14

VISION 2020: At least 20% VISION 2020: At least 8%

Reported figures for continuing operations

RPC Group Plc


Focused

growth

Continuing focus on organic growth

Selective consolidation in Europe

Creating a meaningful presence outside Europe

● Rigid plastic packaging market forecast to

grow by 5.5% globally in the next five years

with 2.7% growth in Europe

5

VISION 2020: FOCUSED GROWTH

● Plastic packaging – whilst concentrated in

selective niches – remains a largely

fragmented market

● Rigid plastic packaging is forecast to grow

by 6.5% outside Europe whilst 94% of

RPC’s sales are currently in Europe

Source: Smithers Pira, 2013

RPC Group Plc


Focused

growth

Continuing focus on organic growth

Selective consolidation in Europe

Creating a meaningful presence outside Europe

● More than 2% organic growth* achieved

versus last year

6

VISION 2020: FOCUSED GROWTH

PROGRESS

● Several opportunities to acquire being pursued

actively

● Investment in US site of $9m to capture

sales growth

* measured in polymer tonnes converted

RPC Group Plc


BUSINESS REVIEW

MARKET DEVELOPMENTS – GROWTH RESUMED

7

MARKET

SEGMENT

ACTIVITY

LEVELS COMMENT

Personal care &

Cosmetics New product developments being converted

into sales

Spreads & Dairy Stable market with trend towards “In-Mould-

Label” Injection moulding

Coffee Continued strong growth in capsules for

single-serve beverage systems

Surface coatings Recovery of the Spanish economy supported

growth

Pharmaceutical Good opportunities in the pipeline, expected

to come to the market in the medium term

Other food Stable market. Overall sales has been

adversely impacted by exit of vending

Other non-food Slight reduction in activity levels to protect

margins in leading market positions

6%

7%

10%

10%

23%

Other

food

Long

shelf-life

Coffee

Spreads

Dairy

Products

Food

56%

4%

9%

15%

16% Other

non-

food

Pharmaceutical

Personal care

and Cosmetics

Surface

coatings Non-

Food

44%

RPC Group Plc


BUSINESS REVIEW

SALES MIX CONTINUING TO IMPROVE

8

Higher added value products

24%

27%

30% 30%*

33%*

FY 09/10 FY 10/11 FY 11/12 HY 12/13 HY 13/14

Sales of higher added value products as % of

group revenue (at constant FX rate)

*continuing operations only

● Higher added value products have grown to 33% of the

Group’s turnover in the last four years

● Strong growth in the year of coffee capsules, personal

care and Superfos thin wall/barrier food containers

RPC Group Plc


Polymer price development

400

600

800

1,000

1,200

1,400

1,600

BUSINESS REVIEW

POLYMER PRICE PASS THROUGH - TIME LAG EFFECT NEUTRAL IN H1

PP polymer Supply/Demand

78%

80%

82%

84%

86%

88%

90%

92%

0

15

30

45

60

75

90

07 08 09 10 11 12 13 14 15 16 17

TONNES (M) OPERATING RATE %

Source: Chemical Market Associates, Inc.

9

Operating Rate Actual Demand Free Capacity Forecast Demand

Forecasts indicate favourable supply-demand going forward

€ PER TONNE

Source: Platts / ICIS

HDPE BM PP HOMO

RPC Group Plc


“Fitter for

the Future”

optimisation

programme

Rationalise manufacturing footprint

Optimise existing business portfolio

Realise value

redundant properties

● Closure of 2 European locations and transfer of

business to other RPC sites

10

FITTER FOR THE FUTURE

PHASE 1 OVERVIEW

● Optimisation and efficiency programmes at 4 sites in

Europe

● Value to be realised from 6 properties

RPC Group Plc


(30)

(20)

(10)

(0)

P&Lexceptional

costs

Non-cashasset

impairments

Workingcapital

release

Sale ofproperties

Net cashoutflow


PHASE 1 – UPDATE

11

● Estimated cumulative P/L impact of at least:

* annualised £10m on continuing basis excluding

discontinued Cobelplast business

● Overall project within budget

● Savings delivered earlier than anticipated

● Progress on Oakham optimisation is showing

results in line with plan

● 2 properties sold in period

2 properties rented

2 properties being marketed for sale

£ million ACTUAL FORECAST

2012/13 2013/14 2014/15

EBIT Impact 2 6 9*

Cash outflow Fitter for the Future – HY 2013/14 (£m)

Incurred to date Remaining spend

(28)

(12)

3

4

8

(2)

(3)

RPC Group Plc


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

RONOA < 10% RONOA 10%–19% RONOA >= 20%


FINAL PHASE RATIONALE

12

Final phase

Fitter for the

Future

2008/09 2009/10 2010/11 2011/12 2012/13

Business unit RONOA weighted by annual sales

RPC Group Plc



FINAL PHASE

13

Programme main work streams:

Rationalise manufacturing footprint

Optimise existing business

portfolio

Review of business portfolio ● Intended divestment of Cobelplast cluster

● Intended sale of disposable trading business

● Nordic region - merger of Tenhult into Mullsjö

● Merge French dairy operations

Programme contents:

● Strategic refocus Spanish operations

● Optimisation of overhead following internal re-organisation

RPC Group Plc


(40)

(30)

(20)

(10)

0

P&L exceptional costs Non-cash assetimpairments

Working capitalrelease

Sale of business &property


FINANCIAL OVERVIEW

14

Estimated cumulative P/L EBIT impact of the

complete programme of at least:

£ million ACTUAL FORECAST

2012/13 2013/14 2014/15 2015/16 2016/17

F4F Phase 1* 2 6 9 10 10

F4F Final Phase - - 3 5 7

F4F Total 2 6 12 15 17

* annualised £10m on continuing basis excluding

discontinued Cobelplast business

P&L and Cash outflow Fitter for the Future Final Phase (£m)

(40)

23

17

Capital expenditure associated with the programme to be

funded from on-going investment budgets

RPC Group Plc


FINANCIAL REVIEW

KEY FIGURES

15

8.8p 11.8p

18.6p 18.4p 18.2p

12.3p

17.7p

19.3p 17.0p

09/10 10/11 11/12 12/13 13/14

18.1 22.0

46.0 47.0 46.6

22.8

33.3

48.9 43.4

09/10 10/11 11/12 12/13 13/14

Adjusted basic EPS*

All figures in £m (except adjusted basic EPS) and continuing operations

Adjusted = before restructuring costs, impairment losses and mark to market charges

* Restated following Rights Issue in 2011

Adjusted operating profit Revenue

323 351

549 484 525

338

401

507

498

09/10 10/11 11/12 12/13 13/14

RPC Group Plc


FINANCIAL REVIEW

KEY FIGURES

16

2.5p 3.4p

4.2p 4.3p 4.5p

5.9p

8.1p

10.2p 10.6p

09/10 10/11 11/12 12/13 13/14

14.1% 16.5%

23.8% 22.3% 23.2%

Mar 10 Mar 11 Mar 12 Mar 13 Sep 13

28 22 21

31

51

37 47

79 55

09/10 10/11 11/12 12/13 13/14

Net cash from

operating activities (£m) Dividend per share* Return on

net operating assets

ROCE 13.5% 14.9% 20.2% 19.1% 20.0%

Dividend Cover 2.5 2.6 2.6 2.4

* Restated following Rights Issue in 2011 For continuing operations

RPC Group Plc


FINANCIAL REVIEW

CASHFLOW BRIDGE

17

(171)

(100) (100) (109)

(138) (156) (161) (165)

71

0

(9)

(29)

(18) (5)

(4)

* Includes discontinued operations, exchange rate movements, provision movements & movement on derivatives

Net Debt

Sep 2013 EBITDA

Working

Capital

Interest

& Tax

Investing

Activities Dividend Other* Net Debt

Mar 2013

Exceptional

Spend

RPC Group Plc


FINANCIAL REVIEW

FINANCIAL POSITION

18

KPIs SEP 2013

Gearing 65%

Net debt (£m) 165

Undrawn facilities (£m) 345

Net debt to EBITDA ratio 1.2x

0

50

100

150

200

250

2014 2015 2016 2017 2018 2019 2020 2021

Renewal date main facilities

US

PP

US

PP

RC

F

Te

rm

£m

RPC Group Plc


OUTLOOK

FINANCIAL POSITION

19

Vision 2020 to

deliver profitable

growth going

forward

Second half of

financial year has

started well

Continued

investment in

second half to

capture growth

Group is well

placed to benefit

from economic

recovery in

Europe

RPC Group Plc


FORWARD LOOKING STATEMENTS

20

This presentation contains forward-looking statements, which:

● have been made by the directors in good faith based on the information available to them up to the

time of their approval of this presentation; and

● should be treated with caution due to the inherent uncertainties, including both economic and

business risk factors, underlying such forward-looking information.

● The Company undertakes no obligation to update these forward-looking statements and nothing in

this presentation should be construed as a profit forecast.

RPC Group Plc


Supplementary material

21

RPC Group Plc


FINANCIAL REVIEW

CONSOLIDATED INCOME STATEMENT

22

£ million H1 2013/14 H1 2012/13 Variance

Revenue 524.7 483.8 40.9

Operating profit – adjusted 46.6 47.0 (0.4)

Interest charge (7.0) (6.7) (0.3)

Profit before tax – adjusted 39.6 40.3 (0.7)

Tax on adjusted profit before tax (9.5) (10.0) 0.5

Profit after tax – adjusted 30.1 30.3 (0.2)

Exceptional items (9.5) (11.1) 1.6

Discontinued operations (16.1) (7.7) (8.4)

Tax relief on exceptional items & discontinued operations 1.5 2.0 (0.5)

Profit after tax – reported 6.0 13.5 (7.5)

Basic earnings per share (p) – adjusted & continuing 18.2p 18.4p (0.2)p

Basic earnings per share (p) – reported & continuing 13.4p 12.9p 0.5p

Co

nti

nu

ing

op

era

tio

ns

RPC Group Plc


FINANCIAL REVIEW

EXCEPTIONAL COSTS

23

£ million H1 2013/14

Fitter for the Future project 5.4

Impairment – properties held for sale 0.8

Impairment – Assets held for sale 2.4

Other 0.9

9.5

RPC Group Plc


FINANCIAL REVIEW

SEGMENTAL ANALYSIS - IFRS 8 BASIS (Continuing operations)

24

* External sales only

** Based on adjusted operating profit before restructuring costs and impairment losses


Injection Moulding

Revenue* 341.1 302.1 39.0

Operating profit ** 32.2 32.2 -

Return on sales ** 9.4% 10.7% (1.3)%

Return on net operating assets ** 27.6% 26.7% 0.9%

Thermoforming

Revenue* 90.2 92.5 (2.3)

Operating profit ** 8.2 8.9 (0.7)

Return on sales ** 9.1% 9.6% (0.5)%

Return on net operating assets ** 28.1% 29.0% (0.9)%

Blow Moulding

Revenue* 93.4 89.2 4.2

Operating profit ** 6.2 5.9 0.3

Return on sales ** 6.6% 6.6% -

Return on net operating assets ** 19.5% 19.0% 0.5%

RPC Group Plc


FINANCIAL REVIEW

SEGMENTAL ANALYSIS - IFRS 8 BASIS (Continuing operations)

25


UK

Revenue 123.1 116.2 6.9

Operating profit * 12.8 11.5 1.3

Return on sales 10.4% 9.9% 0.5%

Mainland Europe (including USA)

Revenue 401.6 367.6 34.0

Operating profit * 33.8 35.5 (1.7)

Return on sales 8.4% 9.7% (1.3)%

RPC Group Plc


FINANCIAL REVIEW

CONSOLIDATED BALANCE SHEET

26

£ million SEP 2013 MAR 2013 SEP 2012

Property, plant and equipment 372.7 395.3 364.8

Goodwill 90.3 93.1 87.5

Other non-current assets 27.9 33.1 28.4

Working capital 33.4 37.8 47.5

Employee benefit liabilities (LT) (64.8) (62.7) (56.2)

Assets/liabilities held for sale excluding debt 8.7 4.7 5.1

Other assets & liabilities (48.7) (58.2) (48.6)

Net debt (165.3) (171.4) (165.5)

Equity shareholder funds 254.2 271.7 263.0

RPC Group Plc


FINANCIAL REVIEW

PENSIONS UPDATE

27

£ million SEP 2013 MAR 2013 SEP 2012

Retirement benefit liability UK DB 37.5 33.5 27.6

Other retirement benefit obligations 23.4 24.5 23.6

Termination benefits 1.2 1.6 1.8

Other employee benefit liabilities 2.7 3.1 3.2

Total employee benefit liability (LT) 64.8 62.7 56.2

Date post:	29-Jun-2015
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Rpc halfyear pres_2013

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