Asaleo Care has announced its full year results for 2019 with an underlying EBITDA of $82.4 million and a statutory net profit after tax of $22.1m.
The result is within the underlying EBITDA guidance previously provided of between $80m – $85m.
A final FY19 unfranked dividend of 2 cents per share has been declared with a record date of 6 March, 2020 and payable on 3rd April, 2020.
Asaleo Care CEO and managing director, Sid Takla, said the business has returned to revenue growth, up 3 per cent, which was achieved across both its business segments: retail and B2B.
“I am pleased with our company’s progress, which has enabled us to reinvest for future growth. This result demonstrates that putting the needs of our customers and consumers first delivers results,” Takla said.
“Whilst the reported underlying EBITDA reflects growth of 1.1 per cent, after adjusting for the lease accounting change in FY19, underlying EBITDA declined 11 per cent.
“This was driven by:
- Major step change in brand investment with increased advertising and trade promotional activity;
- Increased product costs, notably from energy, insurance and foreign exchange; and
- Increased investment in sales and marketing resources to drive future growth.”
“We will continue to bring to market world-leading innovation, research and technology, marketing materials and a pipeline of new product development for our Tork, TENA and Libra brands.
“Our major capital investment to upgrade the Kawerau, New Zealand manufacturing facility was successfully completed during 2019 and will deliver substantial operating efficiencies and additional products from 2020.
Takla said following the completion of the sale of the Australian consumer tissue business during the year, the company has reduced its debt and strengthened its balance sheet for future growth.
“Today’s result shows the strategic foundations we put in place over a year ago are starting to take effect. In 2020, we will build on this momentum to launch more new products, continue to invest in our brands, leverage our new equipment investment at Kawerau, NZ and deliver on our new contract wins, including the contract with the Victorian government.”
“With continuing sales growth and the easing of pulp prices sheltering other cost increases, the outlook for FY20 Underlying EBITDA is projected to be in the range of $84 – $87 million. ”
Business segments results
The B2B segment delivered revenue growth of 2.8 per cent v pcp in the second half, primarily due to increased sales of high margin, proprietary systems in its professional hygiene business.
Full year revenue growth was up 1.6 per cent to $221.6 million. However, profit margins were adversely impacted by high input costs such as energy and insurance, as well as investment in incremental sales resources to drive future growth.
For the year, sales of its Tork Professional Hygiene products increased 1 per cent, whilst sales of its TENA incontinence products in the healthcare sector increased by 3 per cent due to underlying growth in demand from the residential aged care and inhome care sectors.
Revenue growth has been strong in the retail segment, up 4.7 per cent to $198.6 million. Volume and value growth were delivered across all categories except our New Zealand Baby business.
Retail EBITDA was down at $35.6 million due to increased investment in brand advertising, shopper promotional activity and increased input costs including energy and insurance.
Revenue from the New Zealand consumer tissue business rose 17 per cent largely due to new product launches for Sorbent and Handee.
Libra sales volume increased 7 per cent assisted by the launch of the new Libra Girl product range and the successful launch of the #Bloodnormal advertising campaign, heralding the return of brand investment in Libra.
However, branded sales value increased by 1 per cent due to higher investment in shopper promotional activity.
Revenue from the TENA incontinence products climbed 6 per cent following the launch of several new products and the TENA Carnivale marketing campaign.
Asaleo Care’s portfolio of brands includes Libra, TENA, Tork, Treasures, Viti and Orchid. The Purex, Sorbent, Handee Ultra and Deeko brands are not owned in Australia.
The company has 15 manufacturing and distribution facilities throughout Australia, New Zealand and the Pacific Islands.
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