Ann: FLLYR: NPX: FINANCIAL RESULTS FOR THE 12 MON

• Release Date: 15/08/13 11:10
• Summary: FLLYR: NPX: FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2013
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NPX
15/08/2013 09:10
FLLYR

REL: 0910 HRS Nuplex Industries Limited

FLLYR: NPX: FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2013

NZX/ASX release       15 August 2013

FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2013

KEY POINTS:
- Reported NPAT  attributable to shareholders (after significant items) $42.9
million, down 31%
- Underlying NPAT2,4 attributable to shareholders (before significant items)
$56.8 million, down 14%
- Reported EBITDA  $126.4 million, down 3.5% from prior year EBITDA of $131.0
million
- Delivered strong cash flows and improved margins in challenging markets
- Realised $17.5 million in benefits via NuLEAP I and II operational
improvement programs
- Integrated Viverso acquisition and delivered EBITDA of EUR12.5 million,
ahead of forecast
- Restructure of ANZ underway to improve returns
- Progressed growth projects to increase presence in China, Indonesia and
Thailand
- Operating cash flow up 131% to $111.8 million
- Earnings per share was 21.7 cents, down 32%
- Maintained full year dividend of 21 cents per share

 NZ$ millions
        Change
  FY2013 FY2012 Actual FX Constant FX
Sales revenue 1,664.9 1,615.9 3.0% 6.4%
EBITDA - reported     126.4 131.0 (3.5)% (0.3)%
       - underlying   132.7 133.0 (0.2)% 3.1%
NPAT attributable to shareholders - reported  42.9 62.5 (31.4)% (29.1)%
             - underlying
56.8 66.2 (14.2)% (11.8)%
Earnings per share (cents) - reported 21.7 31.8 (31.8)% (29.9)%
      - underlying4 28.7 33.7 (14.8)% (12.8)%
Dividend per share (cents) 21.0 21.0 - -
Return on funds employed (ROFE)  11.1 13.0 - -

Financial Result Overview

Nuplex reported NPAT attributable to shareholders after significant items of
$42.9 million. This included the previously announced $13.8 million of
significant items which include to the $5.6 million write down associated
with the restructure of the Australian and New Zealand operations and $5.5
million write down of Nuplex's investment in Fibrelogic.  This compares with
NPAT of $62.5 million in the prior financial year, which included significant
items of $3.6 million.

NPAT attributable to shareholders before significant items was $56.8 million
for the 12 months ended 30 June 2013. Down 14.2% when compared with the prior
financial year result of $66.2 million, this includes the full year impact of
after tax costs of $4.5 million associated with the restructure of Australian
and New Zealand operations.

Reported EBITDA of $126.4 million decreased by 3.5% from $131 million in the
prior financial year. $4.3 million of the $4.6m decline was due to the
strength of the New Zealand dollar over the 12 month period.

Constant currency EBITDA was $130.7 million and largely in line with the
prior year result of $131.0 million. This result included $6.3 million in ANZ
restructure costs and the first full year contribution from the two
acquisitions completed in the prior financial year. Viverso delivered EUR12.5
million as forecast and Nuplex Masterbatch delivered A$4.1 million, slightly
below the A$5 million forecast reflecting the weak market conditions in
Australia.

Constant currency EBITDA, including acquisitions and before accounting for
the ANZ restructure costs was $137.1 million, up 3.1% when compared with the
prior financial year.

Constant currency EBITDA from existing operations (excluding acquisitions)
and before accounting for the ANZ restructure costs of $6.3 million, was
$110.2 million, 8% lower than the prior financial year.

Volumes in the global Resins segment, excluding Viverso, were flat year on
year. New business was generated through NuLEAP initiatives and region
specific sales activities. Volumes in Australia were down throughout the year
due to the continued weakness in construction and manufacturing markets. In
Europe, volumes were down in the second half of the financial year as the
long winter exacerbated the impact of a softer economy. Volumes in New
Zealand were flat, and whilst they were also flat in the Americas, the
ongoing economic recovery in the US underpinned a positive mix shift. In
Asia, volumes were up on the back of steady growth across the region.

Resins segment unit margins were up in all regions reflecting strong price
discipline and the benefits of NuLEAP, Nuplex's operational improvement
program.

Sales in the ANZ based Specialties segment were up due to the full year
contribution from Nuplex Masterbatch while sales in the trading and agency
business, Nuplex Specialties, were flat.

Cashflow from operations was up 131% to $112 million as the working capital
to sales ratio of 14.7% was down from 16.5% at the end of the prior financial
year reflecting tight working capital management.

As at 30 June 2013, Nuplex's gearing  was 26.0%, down from 27.4% as at 31
December 2012 due to the increased cash balance. The gearing ratio remains
within the Board's target gearing range of between 20 to 35%.

CEO Commentary
'During the year we continued to strengthen our operations and take action to
mitigate the impact of challenging markets on earnings while at the same time
positioning Nuplex for growth,' said Emery Severin, CEO of Nuplex.

'It is pleasing to report that despite weaker market conditions in Australia
and Europe, we delivered on a number of stated targets and continued to
progress our strategic initiatives.

'Safety continues to be a priority across the organisation. Our efforts to
improve our safety performance delivered better results as indicated by our
Lost Time Injury Frequency Rate and Total Reportable Injury Rate being at
record low levels. Whilst we still have a way to go to reach global best
practice across Nuplex, we are making good progress and achieving world class
performance in the Americas and Asia.

'Since it was introduced three years ago, NuLEAP I, our operational
improvement program has delivered $33 million in net benefits, exceeding its
total program target of $30 million. Our commitment to improving the way we
work continues with NuLEAP II, which, via its global procurement initiative,
delivered net benefits of $2.3 million in this financial year and is on track
to deliver $12 million next year.

'The rollout of our common IT platform continued as planned.  Expected to be
completed in early 2014, it will enable efficiencies to be gained through the
standardization and development of best practice business processes.

'As announced last September, the ANZ manufacturing network is being
restructured. Through decommissioning four inefficient facilities and
increasing the efficiency, flexibility and capacity of the remaining
production sites, we expect to improve the returns from this region.

'The restructure is now expected to deliver total annualised cost savings of
$6.5m in the 2016 Financial Year and is still on track to deliver $5.6m in
the 2015 Financial Year. By the end of September 2013, our sites at Onehunga
in New Zealand and Wangaratta in Australia, as well as the Penrose high
temperature plant in New Zealand will cease operations. The re-investment
program at Penrose in New Zealand, and Botany and Wacol in Australia is now
expected to cost approximately $20 million, ahead of the previous estimate of
$13 million.

'Periods of change are rarely easy. Progress is being made through the hard
work and commitment of the entire ANZ team who are showing the dedication and
strength that has underpinned Nuplex for over 60 years.

'Pleasingly, the acquired Viverso business delivered earnings in line with
management's expectations. With the acquired operations fully integrated into
our EMEA region, we are now focused on optimising the operational performance
of the site in Germany. The acquired technologies and products are also
progressively being incorporated into the global portfolio. They have been
well received particularly in Asia and America and we will be working on
extending these market positions globally in the coming year.

'During the year, we also integrated and restructured Nuplex Masterbatch.
This ANZ based business continued to face weak market conditions and as a
result earnings for the year were A$4.1 million, compared to the A$5 million
initially forecast. Following the integration in 2012 and further
restructuring in 2013, this business has transitioned to a lower cost base
and is expected to deliver EBITDA of A$5m in the 2014 Financial Year.

'Our pipeline of capacity expansion projects in Asia is now well advanced. In
the next 12 to 18 months we will be commissioning the new, third plant in
China, a new reactor at our site in Indonesia and additional capacity at our
powder resin joint venture in Thailand. By the end of 2014 we will have
increased our regional capacity by approximately 75%.

'Russia continues to present an attractive growth opportunity as a number of
our multinational and regional European customers continue to generate demand
for locally produced high quality resins. At this time, the previously
announced joint venture with Kvil Group will not proceed as planned. However,
consistent with our commitment to making a low risk entry into this
geography, we now intend to acquire and upgrade an existing resins factory
from Kvil for EUR7 million. We expect to follow this with our previously
announced greenfield development.'

'Return on funds employed was 11.1% for the year, in line with the decline in
profits, and down from 13% last year. Consistent with our strategy to improve
returns to shareholders, over the past year we have spent over $25 million to
increase the efficiency of our existing operations and on progressing growth
projects in emerging markets. The benefits of these actions are expected to
flow from the 2014 Financial Year.

Strategy and Outlook

'In late 2010, we developed a strategic plan to build upon the significant
potential within Nuplex.  At the time, it was clear that Nuplex was a company
with dedicated and talented people, a truly global presence, an extensive
technology and product portfolio, world class production know-how and
potential for growth in emerging markets.

'At the beginning of 2011, the Board endorsed our strategy to improve
Nuplex's return on funds employed and to grow by pursuing operational
excellence and building market leading positions. We have been investing in
and implementing our strategy focused on improving our safety and operational
performance, engaging our global workforce, targeting our R&D program,
growing in emerging markets and executing strategic, value creating
acquisitions.

'Three years on, our strategic initiatives have delivered tangible benefits
to the bottom line and are on track to deliver growth in returns in the years
ahead. Over this time, our strategy has also shown itself to be robust in
unexpectedly challenging markets and provided the framework to enable us to
take action and adapt to changed conditions, such as we have done in
Australia and New Zealand.

'Looking ahead to the 2014 Financial Year, consistent with what we have seen
in recent months, we are expecting flat trading conditions in Australia and
Europe, modest growth in New Zealand and the Americas and steady growth in
Asia.

'Against these expected market conditions, we will be focused on growing
returns. Growth will come from the NuLEAP II procurement initiative and the
ANZ restructure. In Europe, sales growth is expected as a result of the
introduction of new products for the wood and high end metal markets, and
further development of the Viverso product portfolio globally. In the US
there will be focus on optimizing our product range and growing with the
market. In Asia there will be a focus on growing sales in Vietnam and
Thailand, utilizing the capacity installed in 2012 and 2013 respectively. New
market positions are being developed ahead of the capacity expansions in
China and Indonesia in 2014. Completion of our investments in new capacity
during the 2014 Financial Year will position us for further growth in the
2015 Financial Year and beyond,' concluded Mr Severin.

In the 2014 Financial Year, assuming no unforeseen events, Nuplex expects
reported EBITDA to be higher than reported EBITDA in the 2013 Financial Year
($126.4 million).

Dividend

A final dividend of 11.0 cents per share will be paid, bringing the total
dividend for the year to 21 cents per share and in line with the final
dividend paid in the prior two financial years. There will be no imputation
credits for New Zealand shareholders or franking credits available for
Australian shareholders. The dividend will be paid on 11 October 2013, to all
shareholders on the register on 27 September 2013.

With no requirement to raise equity, the Dividend Reinvestment Plan will not
be active.

For further information, please contact:
Josie Ashton, Investor Relations  +612 8036 0906  [email protected]

ALSO ATTACHED TO THIS ANNOUNCEMENT:

* 2013 Financial Statements
* Management Discussion & Analysis
* Management Presentation
End CA:00239684 For:NPX    Type:FLLYR      Time:2013-08-15 09:10:03