Leading personal care and hygiene Company, Asaleo Care Limited (ASX: AHY) held its Annual general meeting today (i.e., 30 April 2019). The company’s Chairman, CEO & Managing Director and Chair of the Remuneration and Human Resources Committee addressed the shareholders at the AGM.
While addressing the shareholders, the company’s chairman told that in 2018 the company delivered underlying EBITDA of $80.6 million, which was in line with revised guidance, but down 35% as compared to the previous corresponding period (pcp). Excluding the Australian Consumer Tissue business which has been sold, the company’s underlying EBITDA from continuing operations was down by 17% on pcp, driven by a massive $33 million cost increase in pulp prices and continuing high energy costs.
The company sold its Australian Consumer Tissue Business was sold for around $180 million and it is expected that the proceeds of this sale will be used to strengthen the company’s balance sheet, reduce net debt, improve the leverage ratio, and to reduce volatility in future earnings.
During the year, the company also reached in principle Agreement with Essity to extend its Trade Mark and Technology Licence Agreement by a further 5 years, through to 2027.
According to the company’s chairman, 2018 and 2019 are transition years from a cash flow perspective, with the net proceeds from the sale of the Consumer Tissue Australia business used to pay down debt and complete the Kawerau site upgrade.
In 2018, the company invested in its leaders to acquire new talent, promote high performers into senior leadership positions and provide development and coaching support. The company achieved its gender diversity targets of having at least 2 female members in the Executive Leadership Team and increased female representation in the Senior Leadership Team from 28% to 44%.
While addressing the shareholders at the AGM, the company’s CEO and Managing Director told that 2018 was a year of significant challenges, with historically high input costs in what was already a highly competitive market.
He further informed that the revenue growth in the Incontinence Care, Consumer Tissue NZ and the Pacific Islands businesses was insufficient to offset declines in Baby and Feminine Care, with total Retail revenue down 5.2% on pcp.
The company’s focus in Feminine Care was to transition off the “every day” pricing mechanism and reinvest in increased trade spend to support market share and protect the company’s volumes against competitor discounting. The company achieved three consecutive quarters of volume growth, with second half volumes higher than the previous second half.
In 2019, the company is expecting its EBITDA for continuing operations to be in between $80-85 million.
While addressing the shareholders in the AGM, the Chair of the Remuneration and Human Resources Committee told that for FY 2018, the Company did not achieve the gateway hurdle of NPAT at Threshold level approved by the Board. Due to which, no Executive Incentive Plan or discretionary payments will be made to the CEO, Key Management Personnel or the broader Executive team for the 2018 year.
Through its strong management team, the company is trying to establish strong relationship with its customers and working in new ways to create greater value for them and for its consumers.
At the time of writing, i.e., on 30 April 2019 AEST 11:32 AM, the stock of the company was trading at a price of A$0.910, up 0.552% during the day’s trade with the market capitalisation of ~A$491.53 Mn.
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