Interim Results 6 September 2007. John Neilson Finance Director.
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Transcript of Interim Results 6 September 2007. John Neilson Finance Director.
Interim Results6 September 2007
John Neilson
Finance Director
Sales analysis 2007Sales change vs 2006
1st half
Volume 3.8%
Price / Mix(3.0)%
Operations0.8%
Exchange(3.4)%
Total(2.6)%
Regional sales by destination 2007Change vs 2006
1st Half 2007 (£m) Volume Price / Mix Operations Exchange Total
Europe 43.2 (0.2)% (2.1)% (2.3)% (1.0)% (3.3)%
Americas 14.2 (1.4)% 2.0% 0.6% (9.2)% (8.6)%
Asia/Pacific 15.9 22.4% (12.2)% 10.2% (4.4)% 5.8%
Total 73.3 3.8% (3.0)% 0.8% (3.4)% (2.6)%
Income statement6 months to June 2007
£m2007
1st half2006
1st half
Group sales73.3 75.2
Operating profit before exceptional items8.1 9.0
Operating margin 11.0% 12.0%
Exceptional items(0.3) (1.0)
Net interest(1.3) (0.9)
Profit before tax6.4 7.1
Tax1.9 2.0
Profit for the year4.5 5.1
Earnings and Dividend6 months to June 2007
20071st half
20061st half
Earnings per share
Basic 2.8p 3.1p
Diluted 2.8p 3.1p
Before exceptional items 3.0p 3.6p
Dividend per ordinary share 1.425p 1.425p
Balance sheet
£mJune2007
December 2006
Non-current assets109.6 118.9
Net current assets30.7 22.3
Non-current liabilities(55.7) (68.0)
84.6 73.2
Share capital and reserves68.2 70.7
Retained earnings16.4 2.5
84.6 73.2
Net debt(36.7) (27.0)
Gearing43.4% 36.9%
Cash flow6 months to June 2007
£m2007
1st half2006
1st half
Net cash inflow from operating activities4.8 6.5
Net interest paid(1.2) (0.9)
Tax paid(2.5) (3.1)
Capital expenditure(5.3) (9.6)
Equity dividend paid(4.9) (4.9)
Exchange(0.6) 0.3
Increase in net debt(9.7) (11.7)
Interest cover* 6.4 10.0
*Calculated on operating profits before exceptional items
Peter Page
Chief Executive
Key features6 months to June 2007
Developed markets– UK: slow 6 months– USA: technology changes in beefstick sector– Australia & NZ: mixed sales
Strong volume growth in emerging markets– China: benefit of Cutisin investments
– Russia: selling all products through various channels
Manufacturing– Negative impact of product changes
– Positive impact of recent investments in Czech Republic
Adverse foreign exchange impact– Currencies hedged to maximum practicable level
Financial highlights6 months to June 2007
£m2007
1st half2006
1st half
Group sales73.3
75.2
Operating profit before exceptional items8.1
9.0
Operating margin 11.0%
12.0%
Exceptional items(0.3)
(1.0)
Net interest(1.3)
(0.9)
Profit before tax6.4
7.1
Earnings per share2.8p
3.1p
Earnings per share before exceptional items3.0p
3.6p
Dividend per share1.425p
1.425p
Fresh sausage marketsNorth America, United Kingdom, Ireland, Australia, New Zealand
Traditional area of strength for the Devro brand
Mature markets, customer consolidation, price pressure
New products aimed at the gut market
Maintain position in market with continuing improvement in customer productivity
Total Gut Market
Total Collagen Market
Other
Devro Sales 2006
Processed sausage marketsGermany, Eastern Europe, Japan
Cutisin Fine product leading brand outside the Japanese market
Gut sector not easily converted because of traditional consumer and retail attitudes
Devro Plus also to be used to develop new market opportunities
Total Gut Market
Total Collagen Market
Devro Sales 2006
Other
Developing marketsLatin America, Russia, China, other Asia
Increasing market share in 2007, particularly China
Significant gut conversion opportunities based on productivity of Cutisin Fine and Devro Plus
Total Collagen Market
Total Gut Market
Devro Sales 2006
Other
Collagen marketsCustomer Concentration
4
Supplied byDevro Group
4UK & Ireland
Producers accounting for 50% of market
57USA
11China
55Australia
Strength and depth of technology
Global market leader
Summary
Strong market position
Confident about long term prospects
Analyst and Investor update by mid January 2008