Analyst presentation.pdf

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PRESENTATION TO INVESTORS & ANALYSTS

Half year results and outlook

David Banfield - Group CEO Deidre Campbell - Group CFO July – December 2015 versus July – December 2014

Good progress on sales, profits and new international distribution

Highlights

for the six months ended 31 December 20151 • Net Profit After Tax (NPAT) increased 26.8% to $4.7m (18.2% constant currency). • Total Group sales growth of 8%. • 8% sales growth and market share growth in NZ. • 6.4% sales growth and market share growth in Australia. • Aio™ range supporting growth and continuing to win awards. • New international distribution agreement in 5 test markets leveraging global IP. • Heshan factory performing in line with expectation. Leadership transition completed. • New Group leadership team complementing existing capability to help drive performance. 1. Following our change of balance date last year. all references are to our new half year the six months ended 31 December 2015 and comparatives are to the six months ended 31 December 2014 –3–

Highlights (cont’d)

for the six months ended 31 December 20151 • Strong net operating cashflow of $6.6m • Net debt reduced by 9.7%. • Fully imputed interim dividend of 4.0 cps to be paid on 31 March 2016. • Full year guidance maintained. NPAT growth expected to be towards the top end of range (15-25%).

1. Following our change of balance date last year. all references are to our new half year the six months ended 31 December 2015 and comparatives are to the six months ended 31 December 2014 –4–

Group financial performance for the six months ended 31 December 2015

Sales, profits and Debt in line with expectations

• Sales up 8.0% to $52.9m and up 4.1% in constant currency • NPAT increased 26.8% year-on-year to $4.7m (18.2% constant currency) • NPAT % improved by 1.3 ppts • Net Debt3 reduced by $2.3m to $21.4m (9.7%) 2. EBIT is earnings before interest and tax - refer Slide 28 for reconciliation to EDITDA 3. Refer to reconciliation of Net Debt on Slide 27 –5–

Group financial performance Net Debt -9.7%, turns maintained

• Net Debt down 9.7% • Capex reduction timing related • WC impacted by FX and inventory • Comfortably within banking covenants • Bank facility renewed further 3 years

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Business Review Our Goals in FY16 Revenue growth in NZ

On track

Strong sales and profit growth in UK

Earnings yes/Revenue 2H

Profitable growth in Australia

On track

Successful launch of Aio™ incremental to Satinjet®

On track

Deliver at least US$2 million annualised earnings from Heshan

On track

Successful relocation of our Manufacturing and Head office in NZ

On track

130 year plans implemented to underpin brand equity and relevance

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September launch

Fully imputed Dividend at 4.0 cps

Dividend • Fully imputed interim dividend of 4.0 cps to be paid on 31st March 2016 • Additional to special dividend 3.0 cps paid in December 2015 • Reflects growth in earnings and confidence in outlook Gross dividend yield is calculated using the closing share price on balance date.

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Markets

Market review – NZ

Our Goals in FY16 Increase our Revenue

On track

Grow sale and share of Tapware

On track

Successful launch of Aio™ incremental to Satinjet®

On track

130 year plans implemented to underpin brand equity and relevance Win online

September launch On track

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Market review – AU

Our Goals in FY16 Profitable revenue growth

On track

Grow sales and share of Tapware

New range launched Nov15

Successful launch of Aio™ incremental to Satinjet®

On track

130 year plans implemented to underpin brand equity and relevance Win online

September launch On track

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Market review – UK

Our Goals in FY16 Strong sales and profit growth

Earnings yes/Revenue 2H

Launch with one new major UK customer

On track

Successful launch of Aio™ incremental to Satinjet®

New distribution 2H16

130 year plans implemented to underpin brand equity and relevance Win online

September launch On track

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Market review – China

Our Goals in FY16 New business model to deliver profitable growth

On track

Successful launch of Aio™ incremental to Satinjet®

Activity to start in 2H

Enhanced Branded presence in China Market

Activity to start in 2H

Online sales test

Activity to start in 2H

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Group Operations segment

• Includes: ⁻ Both NZ and China manufacturing operations ⁻ Includes Aio manufacturing margin ⁻ R&D and other Group support functions ⁻ External export sales out of NZ • EBIT increase reflects full half of acquisition earnings and success of Aio • Heshan utilisation 30% of potential capacity – 15 –

Methven 130 goals • Grow revenue from $96m to $130m • Extend international footprint to better leverage IP • Focus on innovation developed by our Auckland-based team • Increase utilisation of Heshan • EBIT target 16-18% of sales (current 13.5%) • Grow NPAT from 5.9% towards our longer term goal of 10% • Debt reduction driven by earnings, growth and working capital improvement

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STRIDES Goals – June 2018 Methven 130 – Our Goals Revenue

$130 Million

NPAT

Towards 10% of revenue

Supply & Operations

$6 – $8M stock reduction

Technology Retail

NPD sales of $10M New markets and customers delivering $6 – $8M of sales

Insight

Improved NPS across key influencers

Digital & Data

# 1-2-3 in search

Employees

Employees as shareholders

Sustainability

Significant reduction in carbon footprint

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Methven 130 Half year on track

STRIDES Good progress in all areas S upply & Operations

Improved stock profile and DIFOT4

T echnology

New innovation in final testing

R etail

New packaging and in-store solutions in second half

I nsight

New test initiative driving 20% growth in trials

D igital & Data

207% increase in website traffic

E mployees

Group-wide performance programme

S ustainability

Carbon impact measured and reduction plan implemented

4. DIFOT is Delivery In Full On Time – 19 –

2016 full year earnings outlook

Guidance

12 months ending 30 June 2016 • Guidance maintained at: ⁻ Group NPAT growth of 15% to 25% • Group revenue growth (constant currency) of 5% or more • Group Net Debt reduction • NPAT growth to be towards upper end of guidance range

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Questions?

mETHvEN Half year results and outlook Half Year for the six months ended 31 December 2015

Disclaimer This presentation contains not only a review of operations, but also some forward-looking statements about Methven Limited and the environment in which the company operates. Because these statements are forward looking, Methven Limited’s actual results could differ materially. Although management and directors may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realised. Please read this presentation in the wider context of material previously published by Methven Limited.

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Non-GAAP Financial Information Reconciliation of Net Debt to the consolidated balance sheet

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Non-GAAP Financial Information Reconciliation of EBIT to EBITDA

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