b)Calculate and discus show Blackmores cash conversion cycle has changed from 2018 and 2019. What is the cause of this change? Do we need any additional comparison data to make our analysis more complete? (provide one references)
REVENUE TURN ONSHOLDERS POUITY $610 million Group and Divisional Results Operating Review Financial Review Group Risks 1 BURE The Group delivered TH f $610 miliar w all civisions and brands a 1% increase on the 2 HSHLIGHTS Group Financial Position Financial Review Operating & CASH CONVERSION RATIO 3 CH $83 million Earnings before incest and taxes of SR3 milion was 1996 the prior year C EC4 Despite a challenging year for the Gims impacted by China regulatory change therandal health of Blackman Termini hadi 2019 financial AT Talal nel in l y $14 milima 20 million June 2019, largely driven by increases in non-current assets and partially ofiset by increased debt levels reflecing higher working capital requirements to support our growth perbes. Current assets increased by S3 milion in the year. driven by inventory and catalyoffset by lower cach levels fortive Group Inary at $125 million was $21 milion higher than the richardus to the building of a fastarklases in MAKRacking aware of the CABARAKA Iranulungarily in October 2019 rokmiigim steps taken toereure continuity of supply and sewingo denundin Chinals in the seconhall at they Nor-cument assets increased by 323 milion to 3185 milion a year end. This reflects the continued investment in our IT systems and the acquisition of the Impronty weight managemenbrand in November 2016 Current labilbes have decreased by 324 milonta $151 milion, Largely due to the timing o r ary purchasing with an intentionally YEAR REVIEW NPAT Aaron Canning $55 million GEARING New INPATNbable to shareholders of Blackmores of 555 million down 219% on the prioryear 5 SESI PROSES EPS & CAESAREM 318 cents Nanteliais $183 milioni hay 536 milione 2018, diven by increased borrowings to fund higher working cocits requirements and the Improrry acquistion. Netdebta: 94 million increased by 545 milon, higher than the increase in grocs boronings due to the lower cach postion. The cash balance of $25 million was $12 milion Ionic than prior yo lalong Succulreparation of cash from China during the second half of the 2019 Cach garancas from orations of $2 million A rvad milion dading on the prior yearly allagher waking capital in the c har. Ne rastik ceratinativt $20 milio with interest and t he outlow beach compared to the prioryer. This also represence 58 million decineon the prior year. The cash conversion ratio of 57% for the rear was below our hisonical levels. Reported NPAT was 553 milion 2017: 570 miliona 24% decrease on the prior year. Ad usingforsgnificant itemarenga restructurnqof $1.6 million post tax the underlying it was $55 miliona 21% d e Rapoadham Sidamar 24% 0309712048.406.4 Cant The EPS autor rantams www: 229.3182 Dividir e220 w 2018: 305 cents reflecting a 71% povostrato restent recurs on the merries of recurr or assers and shareholders equity at 7 and 26% respectively were impacted by prof performance and hghernoring capital Income tax expence was lowcr. rcficcing the dedne in proit with a Grone ofotive tax rate of 29.2%, marginally higher than thaplar yar The Cimw ilissi a separate wountary 2119 Taxation Dilarep oing the details on the type and F inge per shor TEPS) of 310 cents % DIVIDEND PAYOUTRATO 7 the price your ROSES DIFFERENCE DIVIDENDS PER SHARE The ingratia h u dhram 21% 1 31%. The Harbinieks and ATV Iraitind cancer stivelelor heartroom install debat prenant During the 2019 year we undertook a refinancing of our debtiscilities and secured an increase to our faoltes (now a $305 million, up to 3230 milion added new banking partners as well as maroved margins and terms which will provide the business with greater flexibility to fund future granth With higher adoly, the Coup's not worst DATA hard 16. down from 25.9 times Nerwitting the thi t ilmintain Deservative lea t her pengoing interest camilrents 220 cents BFMAN ALTEROT Dividends of 220 unts per H HH 29. to the prior year. R Aaron Carining Chief Financial Officer EU GHTS S'000 2019 2018 2016 2015 2017 552,160 Revenue 609,502 601,136 5 98,659 388,366 Earnings before interest, tax, depreciation and amortisation (EBITDA) Depreciation and amortisation Earnings before interest and tax (EBIT) Net interest expense Profit before tax Income tax expense (Lossgain attributable to non-controlling interests Profit after tax attributable to shareholders of Blackmores Limited (NPAT) 3 CHAIRMAN & CEO 91,414 10,874 80,540 4,995 75,545 22,115 (39) 110,552 8,940 101,612 3,930 97,682 28,459 (782) 94,642 152,266 8,4117 ,045 86,231 145,221 4,180 1,810 82,051 143,411 24,023 43,391 (985) 12 78,655 6,391 72,264 3,432 68,832 22,276 53,469 70,005 59,013 100,008 46,556 4 YEAR IN REVIEW Net debt Shareholders' equity Total assets Current assets Current liabilities Net tangible assets (NTA) Cash generated from operations 94,484 207,292 490,928 305,526 150,509 122,508 51,806 49,532 192,875 464,850 302,507 174,467 123,869 90,131 44,717 177,541 412,174 258,662 142,556 107,369 95,310 17,793 178,263 443,362 294,624 192,279 116,484 123,022 7,069 132,915 293,407 187,844 114,998 90,809 89,791 5 STRATEGIC PRIORITIES Number of shares on issue ('000s) Earnings per share (EPS) - basic (cents) Ordinary dividends per share (DPS) (cents) Share price at 30 June NTA per share 17,362 309.2 220 $89.91 $7.06 17,227 406.4 305 $142.50 $7.19 17,226 342.6 270 $95.84 $6.23 17,225 580.6 410 $131.39 $6.76 17,224 270.7 203 $75.27 $5.27 100.7% 33.2% 6 OPERATING REVIEW 20.2% Cash conversion ratio Return on shareholders' equity? Retum on assets Dividend payout ratio Gearing ratio EBIT to revenue ratio Effective tax rate 56.7% 25.8% 16.9% 71.2% 31.3% 13.2% 29.3% 81.5% 36.3% 23.2% 75.0% 20.4% 16.9% 29.1% 78.8% 20.1% 15.6% 29.3% 80.8% 56.1% 39.4% 70.6% 7.1% 24.3% 30.3% 114.2% 35.0% 27.3% 75.0% 5.1% 18.6% 32.4% 2.03 Current assets to current liabilities (times) Net interest cover (times) Gross interest cover (times) 16.1 1.73 25.9 23.4 1.81 20.6 18.9 1.53 80.2 63.9 1.63 21.1 18.8 7 BLACKMORES DIFFERENCE 15.3 14 % change on prior year Revenue EBITDA EBIT NPAT EPS DPS (17.3) (20.7) (23.6) (23.9) (27.9) 8.9 16.8 17.8 18.6 18.6 13.0 (7.8) (37.8) (40.6) (41.0) (41.0) (34.1) 54.1 93.6 101.0 114.8 114.5 102.0 35.1 70.8 81.6 83.1 81.4 60.0 8 FINANCIAL REPORT 1. Calculated as cash generated from operations divided by EBITDA 2. Calculated as net profit after tax divided by closing shareholders' equity 3. Calculated as EBIT divided by average total assets. 4. Gearing ratio is calculated as net debt divided by the sum of net debt and shareholders' equity 9 REMUNER REVENUE TURN ONSHOLDERS POUITY $610 million Group and Divisional Results Operating Review Financial Review Group Risks 1 BURE The Group delivered TH f $610 miliar w all civisions and brands a 1% increase on the 2 HSHLIGHTS Group Financial Position Financial Review Operating & CASH CONVERSION RATIO 3 CH $83 million Earnings before incest and taxes of SR3 milion was 1996 the prior year C EC4 Despite a challenging year for the Gims impacted by China regulatory change therandal health of Blackman Termini hadi 2019 financial AT Talal nel in l y $14 milima 20 million June 2019, largely driven by increases in non-current assets and partially ofiset by increased debt levels reflecing higher working capital requirements to support our growth perbes. Current assets increased by S3 milion in the year. driven by inventory and catalyoffset by lower cach levels fortive Group Inary at $125 million was $21 milion higher than the richardus to the building of a fastarklases in MAKRacking aware of the CABARAKA Iranulungarily in October 2019 rokmiigim steps taken toereure continuity of supply and sewingo denundin Chinals in the seconhall at they Nor-cument assets increased by 323 milion to 3185 milion a year end. This reflects the continued investment in our IT systems and the acquisition of the Impronty weight managemenbrand in November 2016 Current labilbes have decreased by 324 milonta $151 milion, Largely due to the timing o r ary purchasing with an intentionally YEAR REVIEW NPAT Aaron Canning $55 million GEARING New INPATNbable to shareholders of Blackmores of 555 million down 219% on the prioryear 5 SESI PROSES EPS & CAESAREM 318 cents Nanteliais $183 milioni hay 536 milione 2018, diven by increased borrowings to fund higher working cocits requirements and the Improrry acquistion. Netdebta: 94 million increased by 545 milon, higher than the increase in grocs boronings due to the lower cach postion. The cash balance of $25 million was $12 milion Ionic than prior yo lalong Succulreparation of cash from China during the second half of the 2019 Cach garancas from orations of $2 million A rvad milion dading on the prior yearly allagher waking capital in the c har. Ne rastik ceratinativt $20 milio with interest and t he outlow beach compared to the prioryer. This also represence 58 million decineon the prior year. The cash conversion ratio of 57% for the rear was below our hisonical levels. Reported NPAT was 553 milion 2017: 570 miliona 24% decrease on the prior year. Ad usingforsgnificant itemarenga restructurnqof $1.6 million post tax the underlying it was $55 miliona 21% d e Rapoadham Sidamar 24% 0309712048.406.4 Cant The EPS autor rantams www: 229.3182 Dividir e220 w 2018: 305 cents reflecting a 71% povostrato restent recurs on the merries of recurr or assers and shareholders equity at 7 and 26% respectively were impacted by prof performance and hghernoring capital Income tax expence was lowcr. rcficcing the dedne in proit with a Grone ofotive tax rate of 29.2%, marginally higher than thaplar yar The Cimw ilissi a separate wountary 2119 Taxation Dilarep oing the details on the type and F inge per shor TEPS) of 310 cents % DIVIDEND PAYOUTRATO 7 the price your ROSES DIFFERENCE DIVIDENDS PER SHARE The ingratia h u dhram 21% 1 31%. The Harbinieks and ATV Iraitind cancer stivelelor heartroom install debat prenant During the 2019 year we undertook a refinancing of our debtiscilities and secured an increase to our faoltes (now a $305 million, up to 3230 milion added new banking partners as well as maroved margins and terms which will provide the business with greater flexibility to fund future granth With higher adoly, the Coup's not worst DATA hard 16. down from 25.9 times Nerwitting the thi t ilmintain Deservative lea t her pengoing interest camilrents 220 cents BFMAN ALTEROT Dividends of 220 unts per H HH 29. to the prior year. R Aaron Carining Chief Financial Officer EU GHTS S'000 2019 2018 2016 2015 2017 552,160 Revenue 609,502 601,136 5 98,659 388,366 Earnings before interest, tax, depreciation and amortisation (EBITDA) Depreciation and amortisation Earnings before interest and tax (EBIT) Net interest expense Profit before tax Income tax expense (Lossgain attributable to non-controlling interests Profit after tax attributable to shareholders of Blackmores Limited (NPAT) 3 CHAIRMAN & CEO 91,414 10,874 80,540 4,995 75,545 22,115 (39) 110,552 8,940 101,612 3,930 97,682 28,459 (782) 94,642 152,266 8,4117 ,045 86,231 145,221 4,180 1,810 82,051 143,411 24,023 43,391 (985) 12 78,655 6,391 72,264 3,432 68,832 22,276 53,469 70,005 59,013 100,008 46,556 4 YEAR IN REVIEW Net debt Shareholders' equity Total assets Current assets Current liabilities Net tangible assets (NTA) Cash generated from operations 94,484 207,292 490,928 305,526 150,509 122,508 51,806 49,532 192,875 464,850 302,507 174,467 123,869 90,131 44,717 177,541 412,174 258,662 142,556 107,369 95,310 17,793 178,263 443,362 294,624 192,279 116,484 123,022 7,069 132,915 293,407 187,844 114,998 90,809 89,791 5 STRATEGIC PRIORITIES Number of shares on issue ('000s) Earnings per share (EPS) - basic (cents) Ordinary dividends per share (DPS) (cents) Share price at 30 June NTA per share 17,362 309.2 220 $89.91 $7.06 17,227 406.4 305 $142.50 $7.19 17,226 342.6 270 $95.84 $6.23 17,225 580.6 410 $131.39 $6.76 17,224 270.7 203 $75.27 $5.27 100.7% 33.2% 6 OPERATING REVIEW 20.2% Cash conversion ratio Return on shareholders' equity? Retum on assets Dividend payout ratio Gearing ratio EBIT to revenue ratio Effective tax rate 56.7% 25.8% 16.9% 71.2% 31.3% 13.2% 29.3% 81.5% 36.3% 23.2% 75.0% 20.4% 16.9% 29.1% 78.8% 20.1% 15.6% 29.3% 80.8% 56.1% 39.4% 70.6% 7.1% 24.3% 30.3% 114.2% 35.0% 27.3% 75.0% 5.1% 18.6% 32.4% 2.03 Current assets to current liabilities (times) Net interest cover (times) Gross interest cover (times) 16.1 1.73 25.9 23.4 1.81 20.6 18.9 1.53 80.2 63.9 1.63 21.1 18.8 7 BLACKMORES DIFFERENCE 15.3 14 % change on prior year Revenue EBITDA EBIT NPAT EPS DPS (17.3) (20.7) (23.6) (23.9) (27.9) 8.9 16.8 17.8 18.6 18.6 13.0 (7.8) (37.8) (40.6) (41.0) (41.0) (34.1) 54.1 93.6 101.0 114.8 114.5 102.0 35.1 70.8 81.6 83.1 81.4 60.0 8 FINANCIAL REPORT 1. Calculated as cash generated from operations divided by EBITDA 2. Calculated as net profit after tax divided by closing shareholders' equity 3. Calculated as EBIT divided by average total assets. 4. Gearing ratio is calculated as net debt divided by the sum of net debt and shareholders' equity 9 REMUNER
